-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NYQOFlVqVOh6OFCcB9cTiSWwaBD0BSE1lCAfhMkC+BRcic+utwTdPw0QMnfjBRhx RpT7ftjqoFmDDwzMONjyHw== 0000950136-98-000971.txt : 19980518 0000950136-98-000971.hdr.sgml : 19980518 ACCESSION NUMBER: 0000950136-98-000971 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 17 FILED AS OF DATE: 19980515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: L 3 COMMUNICATIONS CORP CENTRAL INDEX KEY: 0001039101 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 133937436 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-46983 FILM NUMBER: 98624768 BUSINESS ADDRESS: STREET 1: 600 THIRD AVENUE STREET 2: 34TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 1216971111 MAIL ADDRESS: STREET 1: 600 THIRD AVENUE STREET 2: 34TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 FILER: COMPANY DATA: COMPANY CONFORMED NAME: L 3 COMMUNICATIONS ILEX SYSTEMS INC CENTRAL INDEX KEY: 0001059160 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 133992952 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-46983-01 FILM NUMBER: 98624769 BUSINESS ADDRESS: STREET 1: 600 THIRD AVENUE STREET 2: 34TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2126971111 MAIL ADDRESS: STREET 1: 600 THIRD AVENUE STREET 2: 34TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HYGIENETICS ENVIRONMENTAL SERVICES CENTRAL INDEX KEY: 0001059161 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 133992505 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-46983-02 FILM NUMBER: 98624770 BUSINESS ADDRESS: STREET 1: 600 THIRD AVENUE STREET 2: 34TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2126971111 MAIL ADDRESS: STREET 1: 600 THIRD AVENUE STREET 2: 34TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN CALIFORNIA MICROWAVE INC CENTRAL INDEX KEY: 0001059162 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 130478540 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-46983-03 FILM NUMBER: 98624771 BUSINESS ADDRESS: STREET 1: 600 THIRD AVENUE STREET 2: 34TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2126971111 MAIL ADDRESS: STREET 1: 600 THIRD AVENUE STREET 2: 34TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 S-1/A 1 AMENDED REGISTRATION STATEMENT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 15, 1998 REGISTRATION NOS. 333-46983 333-46983-01 333-46983-02 333-46983-03 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- AMENDMENT NO. 4 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------
L-3 COMMUNICATIONS HYGIENETICS ENVIRONMENTAL CORPORATION SERVICES, INC. (Exact name of registrant (Exact name of registrant as specified in its charter) as specified in its charter) DELAWARE DELAWARE (State of incorporation) (State of incorporation) 3812, 3663, 3679 3812, 3663, 3679 (Primary Standard Industrial (Primary Standard Industrial Classification Code Number) Classification Code Number) 13-3937436 13-3992505 (I.R.S. Employer (I.R.S. Employer Identification Number) Identification Number) 600 THIRD AVENUE 600 THIRD AVENUE NEW YORK, NEW YORK 10016 NEW YORK, NEW YORK 10016 (212) 697-1111 (212) 697-1111 (Address, including zip code, (Address, including zip code, and and telephone number, including telephone number, area code, of registrant's including area code, of registrant's principal executive offices) principal executive offices)
(RESTUBBED TABLE CONTINUED FROM ABOVE)
L-3 COMMUNICATIONS L-3 COMMUNICATIONS SOUTHERN CALIFORNIA CORPORATION ILEX SYSTEMS, INC. MICROWAVE, INC. (Exact name of registrant (Exact name of registrant (Exact name of registrant as specified in its charter) as specified in its charter) as specified in its charter) DELAWARE DELAWARE CALIFORNIA (State of incorporation) (State of incorporation) (State of incorporation) 3812, 3663, 3679 3812, 3663, 3679 3812, 3663, 3679 (Primary Standard Industrial (Primary Standard Industrial (Primary Standard Industrial Classification Code Number) Classification Code Number) Classification Code Number) 13-3937436 13-3992952 13-0478540 (I.R.S. Employer (I.R.S. Employer (I.R.S. Employer Identification Number) Identification Number) Identification Number) 600 THIRD AVENUE 600 THIRD AVENUE 600 THIRD AVENUE NEW YORK, NEW YORK 10016 NEW YORK, NEW YORK 10016 NEW YORK, NEW YORK 10016 (212) 697-1111 (212) 697-1111 (212) 697-1111 (Address, including zip code, (Address, including zip code, and (Address, including zip code, and and telephone number, including telephone number, including area telephone number, including area area code, of registrant's code, of registrant's principal code, of registrant's principal principal executive offices) executive offices) executive offices)
CHRISTOPHER C. CAMBRIA L-3 COMMUNICATIONS CORPORATION 600 THIRD AVENUE NEW YORK, NEW YORK 10016 (212) 697-1111 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------------- COPIES TO: VINCENT PAGANO JR. KIRK A. DAVENPORT SIMPSON THACHER & BARTLETT LATHAM & WATKINS 425 LEXINGTON AVENUE 885 THIRD AVENUE NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10022 (212) 455-2000 (212) 906-1200
------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. ------------------- If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, 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(c) 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. - 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. - If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. - ------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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 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. - -------------------------------------------------------------------------------- This filing contains only the exhibits that have not been previously filed. PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
DESCRIPTION AMOUNT - ---------------------------------------------------------------------- ------------ Securities and Exchange Commission registration fee .................. $ 44,250 National Association of Securities Dealers, Inc. filing fee .......... 15,500 Legal fees and expenses .............................................. 200,000 Accounting fees and expenses ......................................... 100,000 Printing and engraving fees and expenses ............................. 300,000 Blue Sky fees and expenses ........................................... 10,000 Trustee fees and expenses ............................................ 9,000 Miscellaneous expenses ............................................... 121,250 -------- Total .............................................................. $800,000 ========
- ---------- * To be provided by amendment. ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law (the "DGCL") provides for, among other things: (i) 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; (ii) 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; (iii) 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 (i) and (ii) above; and (iv) 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") provides that the Registrant shall, to the fullest extent permitted by the DGCL, (i) indemnify its officers and directors and (ii) advance expenses incurred by such officers or directors in relation to any action, suit or proceeding. The Registrant's Bylaws (the "Bylaws") require 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 Bylaws provide that indemnification shall include not only reasonable expenses, but also judgments, fines, penalties and amounts paid in settlement. The Bylaws provide that the Registrant 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. II-1 The Bylaws purport to confer upon officers and directors contractual rights to indemnification and advancement of expenses as provided therein. The Certificate of Incorporation limits the personal liability of directors to the Registrant or its stockholders for monetary damages for breach of the fiduciary 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 15. RECENT SALES OF UNREGISTERED SECURITIES. On April 30, 1997, L-3 Communications issued 100 shares of its common stock to Holdings for aggregate consideration of $125 million. The securities were sold directly by L-3 Communications and did not involve any underwriter. L-3 Communications considers these securities to have been offered and sold in a transaction not involving any public offering and, therefore, to be exempted from registration under Section 4(2) of the Securities Act. ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Exhibits: The following exhibits are filed pursuant to Item 601 of Regulation S-K.
EXHIBIT NO. DESCRIPTION OF EXHIBIT - ------------------ --------------------------------------------------------------------------------------- 1.1 Form of Underwriting Agreement among L-3 Communications Corporation and the Underwriters named therein 3.1 Certificate of Incorporation of L-3 Communications Corporation. 3.2 By-Laws of L-3 Communications Corporation. 3.3 Certificate of Incorporation of Hygienetics Environmental Services, Inc. 3.4 By-laws of Hygienetics Environmental Services, Inc. 3.5 Certificate of Incorporation of L-3 Communications ILEX Systems, Inc. 3.6 By-laws of L-3 Communications ILEX Systems, Inc. 3.7 Certificate of Incorporation of Southern California Microwave, Inc. 3.8 By-laws of Southern California Microwave, Inc. 4.1 Form of Indenture between L-3 Communications Corporation and the Trustee, including the form of Note and Guarantee. 5 Opinion of Simpson Thacher & Bartlett. **10.1 Credit Agreement, dated as of April 30, 1997 among L-3 Communications Corporation and lenders named therein, as amended. **10.2 Indenture dated as of April 30, 1997 between L-3 Communications Corporation and The Bank of New York, as Trustee. 10.3 Stockholders Agreement dated as of April 30, 1997 among L-3 Communications Corporation and the stockholders parties thereto. 10.4 Transaction Agreement dated as of March 28, 1997, as amended, among Lockheed Martin Corporation, Lehman Brothers Capital Partners III, L.P., Frank C. Lanza, Robert V. LaPenta and L-3 Communications Holdings, Inc. **10.5 Employment Agreement dated April 30, 1997 between Frank C. Lanza and L-3 Communications Holdings, Inc. **10.51 Employment Agreement dated April 30, 1997 between Robert V. LaPenta and L-3 Communications Holdings, Inc.
II-2
EXHIBIT NO. DESCRIPTION OF EXHIBIT - ------------------------ ------------------------------------------------------------------------------------------ **10.6 Lease dated as of April 29, 1997 among Lockheed Martin Tactical Systems, Inc., L-3 Communications Corporation and KSL, Division of Bonneville International. **10.61 Lease dated as of April 29, 1997 among Lockheed Martin Tactical Systems, L-3 Communications Corporation and Unisys Corporation. **10.62 Sublease dated as of April 29, 1997 among Lockheed Martin Tactical Systems, Inc., L-3 Communications Corporation and Unisys Corporation. **10.7 Limited Noncompetition Agreement dated April 30, 1997 between Lockheed Martin Corporation and L-3 Communications Corporation. **10.8 Asset Purchase Agreement dated as of December 19, 1997 between L-3 Communications Corporation and California Microwave, Inc. **10.81 Asset Purchase Agreement dated as of February 10, 1998 between FAP Trust and L-3 Communications Corporation. 10.82 Asset Purchase Agreement dated as of March 30, 1998 among AlliedSignal Inc., AlliedSignal Technologies, Inc., AlliedSignal Deutschland GMBH and L-3 Communications Corporation. **10.9 Form of Stock Option Agreement for Employee Options. **10.91 Form of 1997 Stock Option Plan for Key Employees. 10.10 L-3 Communications Corporation Pension Plan. **12 Ratio of earnings to fixed charges. 23.1 Consent of Simpson Thacher & Bartlett (included as part of its opinion filed as Exhibit 5 hereto). **23.2 Consent of Coopers & Lybrand L.L.P., independent certified public accountants. **23.3 Consent of Ernst & Young LLP, independent certified public accountants. **23.31 Consent of Ernst & Young LLP, independent certified public accountants. **23.4 Consent of KPMG Peat Marwick LLP, independent certified public accountants. **24 Powers of Attorney of L-3 Communications Corporation. **24.1 Power of Attorney of Hygienetics Environmental Services, Inc., L-3 Communications ILEX Systems, Inc. and Southern California Microwave, Inc. 25 Statement of Eligibility of Trustee on Form T-1.
- ---------- ** Previously filed. (b) Financial Statement Schedules Not applicable II-3 ITEM 17. UNDERTAKINGS. (a) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant 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 Registrant will, unless in the opinion of its 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 Act and will be governed by the final adjudication of such issue. (b) The undersigned Registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus 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. II-4 SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant has duly caused the Registration Statement or amendments thereto to be signed on its behalf by the undersigned, thereunto duly authorized, on May 14, 1998. L-3 COMMUNICATIONS CORPORATION By: /s/ Christopher C. Cambria ------------------------------------ Vice President, Secretary and General Counsel Pursuant to the requirements of the Securities Act, the Registration Statement has been signed on the 14th day of May, 1998 by the following persons in the capacities indicated:
SIGNATURE TITLE - -------------------------------------- -------------------------------------------------------- * Chairman, Chief Executive Officer and Director --------------------------------- (Principal Executive Officer) Frank C. Lanza * President, Chief Financial Officer (Principal Financial --------------------------------- Officer) and Director Robert V. LaPenta * Vice President -- Finance and Controller (Principal --------------------------------- Accounting Officer) Michael T. Strianese * Director --------------------------------- David J. Brand * Director --------------------------------- Thomas A. Corcoran * Director --------------------------------- Alberto M. Finali * Director --------------------------------- Eliot M. Fried * Director --------------------------------- Frank H. Menaker, Jr. * Director --------------------------------- Robert B. Millard * Director --------------------------------- John E. Montague * Director --------------------------------- Alan H. Washkowitz *By: /s/ Christopher C. Cambria ----------------------------- Attorney-in-Fact
II-5 SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant has duly caused the Registration Statement or amendments thereto to be signed on its behalf by the undersigned, thereunto duly authorized, on May 14, 1998. HYGIENETICS ENVIRONMENTAL SERVICES, INC. By: /s/ Christopher C. Cambria ---------------------------------------- Vice President, Secretary and Director Pursuant to the requirements of the Securities Act, the Registration Statement has been signed on the 14th day of May, 1998 by the following persons in the capacities indicated:
SIGNATURE TITLE - -------------------------------------- ------------------------------------------------------ * Chief Executive Officer and Director (Principal --------------------------------- Executive Officer) Frank C. Lanza * Chief Financial Officer (Principal Financial Officer) --------------------------------- and Director Robert V. LaPenta * Vice President, Principal Accounting Officer --------------------------------- and Director Michael T. Strianese /s/ Christopher C. Cambria Director --------------------------------- Christopher C. Cambria *By: /s/ Christopher C. Cambria ----------------------------- Attorney-in-Fact
II-6 SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant has duly caused the Registration Statement or amendments thereto to be signed on its behalf by the undersigned, thereunto duly authorized, on May 14, 1998. L-3 COMMUNICATIONS ILEX SYSTEMS, INC. By: /s/ Christopher C. Cambria ------------------------------------ Vice President, Secretary and Director Pursuant to the requirements of the Securities Act, the Registration Statement has been signed on the 14th day of May, 1998 by the following persons in the capacities indicated:
SIGNATURE TITLE -------------------------------------- ------------------------------------------------------ * Chief Executive Officer and Director (Principal --------------------------------- Executive Officer) Frank C. Lanza * Chief Financial Officer (Principal Financial Officer) --------------------------------- and Director Robert V. LaPenta * Vice President, Principal Accounting Officer --------------------------------- and Director Michael T. Strianese /s/ Christopher C. Cambria Director --------------------------------- Christopher C. Cambria *By: /s/ Christopher C. Cambria ----------------------------- Attorney-in-Fact
II-7 SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant has duly caused the Registration Statement or amendments thereto to be signed on its behalf by the undersigned, thereunto duly authorized, on May 14, 1998. SOUTHERN CALIFORNIA MICROWAVE, INC. By: /s/ Christopher C. Cambria ------------------------------------ Vice President, Secretary and Director Pursuant to the requirements of the Securities Act, the Registration Statement has been signed on the 14th day of May, 1998 by the following persons in the capacities indicated:
SIGNATURE TITLE -------------------------------------- ------------------------------------------------------ * Chief Executive Officer and Director (Principal --------------------------------- Executive Officer) Frank C. Lanza * Chief Financial Officer (Principal Financial Officer) --------------------------------- and Director Robert V. LaPenta * Vice President, Principal Accounting Officer --------------------------------- and Director Michael T. Strianese /s/ Christopher C. Cambria Director --------------------------------- Christopher C. Cambria * Director --------------------------------- William Kirk *By: /s/ Christopher C. Cambria ----------------------------- Attorney-in-Fact
II-8 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT - ------------------------ ------------------------------------------------------------------------------------------ 1.1 Form of Underwriting Agreement among L-3 Communications Corporation and the Underwriters named therein 3.1 Certificate of Incorporation of L-3 Communications Corporation. 3.2 By-Laws of L-3 Communications Corporation. 3.3 Certificate of Incorporation of Hygienetics Environmental Services, Inc. 3.4 By-laws of Hygienetics Environmental Services, Inc. 3.5 Certificate of Incorporation of L-3 Communications ILEX Systems, Inc. 3.6 By-laws of L-3 Communications ILEX Systems, Inc. 3.7 Certificate of Incorporation of Southern California Microwave, Inc. 3.8 By-laws of Southern California Microwave, Inc. 4.1 Form of Indenture between L-3 Communications Corporation and the Trustee, including the form of Note and Guarantee. 5 Opinion of Simpson Thacher & Bartlett. **10.1 Credit Agreement, dated as of April 30, 1997 among L-3 Communications Corporation and lenders named therein, as amended. **10.2 Indenture dated as of April 30, 1997 between L-3 Communications Corporation and The Bank of New York, as Trustee. 10.3 Stockholders Agreement dated as of April 30, 1997 among L-3 Communications Corporation and the stockholders parties thereto. 10.4 Transaction Agreement dated as of March 28, 1997, as amended, among Lockheed Martin Corporation, Lehman Brothers Capital Partners III, L.P., Frank C. Lanza, Robert V. LaPenta and L-3 Communications Holdings, Inc. **10.5 Employment Agreement dated April 30, 1997 between Frank C. Lanza and L-3 Communications Holdings, Inc. **10.51 Employment Agreement dated April 30, 1997 between Robert V. LaPenta and L-3 Communications Holdings, Inc. **10.6 Lease dated as of April 29, 1997 among Lockheed Martin Tactical Systems, Inc., L-3 Communications Corporation and KSL, Division of Bonneville International. **10.61 Lease dated as of April 29, 1997 among Lockheed Martin Tactical Systems, L-3 Communications Corporation and Unisys Corporation. **10.62 Sublease dated as of April 29, 1997 among Lockheed Martin Tactical Systems, Inc., L-3 Communications Corporation and Unisys Corporation. **10.7 Limited Noncompetition Agreement dated April 30, 1997 between Lockheed Martin Corporation and L-3 Communications Corporation. **10.8 Asset Purchase Agreement dated as of December 19, 1997 between L-3 Communications Corporation and California Microwave, Inc. **10.81 Asset Purchase Agreement dated as of February 10, 1998 between FAP Trust and L-3 Communications Corporation. 10.82 Asset Purchase Agreement dated as of March 30, 1998 among AlliedSignal Inc., AlliedSignal Technologies, Inc., AlliedSignal Deutschland GMBH and L-3 Communications Corporation. **10.9 Form of Stock Option Agreement for Employee Options. **10.91 Form of 1997 Stock Option Plan for Key Employees. 10.10 L-3 Communications Corporation Pension Plan. **12 Ratio of earnings to fixed charges. 23.1 Consent of Simpson Thacher & Bartlett (included as part of its opinion filed as Exhibit 5 hereto). **23.2 Consent of Coopers & Lybrand L.L.P., independent certified public accountants. **23.3 Consent of Ernst & Young LLP, independent certified public accountants. **23.31 Consent of Ernst & Young LLP, independent certified public accountants. **23.4 Consent of KPMG Peat Marwick LLP, independent certified public accountants. **24 Powers of Attorney of L-3 Communications Corporation. **24.1 Power of Attorney of Hygienetics Environmental Services, Inc., L-3 Communications ILEX Systems, Inc. and Southern California Microwave, Inc. 25 Statement of Eligibility of Trustee on Form T-1.
- ---------- ** Previously filed. EX-1.1 2 FORM OF UNDERWRITING AGREEMENT Exhibit 1.1 L-3 COMMUNICATIONS CORPORATION __% SENIOR SUBORDINATED NOTES FORM OF DEBT UNDERWRITING AGREEMENT May __, 1998 LEHMAN BROTHERS INC. BANCAMERICA ROBERTSON STEPHENS c/o Lehman Brothers Inc. Three World Financial Center New York, New York 10285 Dear Sirs: L-3 Communications Corporation, a Delaware corporation (the "Company"), proposes to issue and sell to you (the "Underwriters") $150,000,000 in aggregate principal amount of its ___% Senior Subordinated Notes due 2008 (the "Notes") guaranteed (the "Guarantees") by Hygienetics Environmental Services, Inc., a Delaware corporation, L-3 Communications ILEX Systems, Inc., a Delaware corporation, and Southern California Microwave, Inc., a California corporation (collectively, the "Guarantors"), pursuant to the terms of an Indenture (the "Indenture") between the Company and The Bank of New York as trustee (the "Trustee"), relating to the Notes. As described in the Prospectus (hereinafter defined), the Company will use the net proceeds from the sale of the Notes to repay a substantial portion of its existing indebtedness and for general corporate purposes, including potential acquisitions. This is to confirm the agreement concerning the purchase of the Notes from the Company by the Underwriters and the guarantee of such Notes by the Guarantors. It is understood by all parties that, L-3 Communications Holdings, Inc., the sole shareholder of the Company (the "Parent"), and the Company, are concurrently entering into (i) an agreement dated the date hereof (the "U.S. Underwriting Agreement") providing for the sale by the Company of 4,400,000 shares (the "Firm Stock") of the Parent's Common Stock, par value $.01 per share ("Common Stock"), through arrangements with certain underwriters inside the United States (the "U.S. Underwriters"), for whom Lehman Brothers Inc., Bear, Stearns & Co. Inc., Credit Suisse First Boston Corporation, Morgan Stanley & Co. Incorporated and C.E. Unterberg, Towbin are acting as representatives and (ii) an agreement dated the date hereof (the "International Underwriting Agreement") providing for the sale by the Company of 1,100,000 shares of the Parent's Common Stock (the "International Stock") through arrangements with certain underwriters outside the United States (the "International Managers"), for whom Lehman Brothers International (Europe), Bear, Stearns International Limited, Credit Suisse First Boston (Europe) Limited, Morgan Stanley & Co. International Limited and C.E. Unterberg, Towbin are acting as lead managers. In addition, the Parent proposes to grant to the U.S. Underwriters an option under the U.S. Underwriting Agreement to purchase up to an additional 825,000 shares of Common Stock ("the Option Stock" and, together with the Firm Stock, the "U.S. Stock") on the terms and for the purposes set forth in Section 2 of the U.S. Underwriting Agreement. The U.S. Underwriters and the International Managers simultaneously are entering into an agreement between the U.S. and international underwriting syndicates (the "Agreement Between U.S. Underwriters and International Managers") which provides for, among other things, the transfer of shares of Common Stock between the two syndicates. Except as the context may otherwise require, references herein to the Stock shall include all the shares of Common Stock which may be sold pursuant to either the U.S. Underwriting Agreement or the International Underwriting Agreement. 1. Representations, Warranties and Agreements of the Company and the Guarantors. The Company and the Guarantors, jointly and severally represent, warrant and agree that: (a) A registration statement on Form S-1, and amendments No. 1, No. 2, No. 3 and No. 4 thereto, with respect to the Notes and the Guarantees have (i) been prepared by the Company and the Guarantors in conformity with the requirements of the United States Securities Act of 1933, as amended (the "Securities Act") and the rules and regulations (the "Rules and Regulations") of the United States Securities and Exchange Commission (the "Commission") thereunder, (ii) been filed with the Commission under the Securities Act and (iii) become effective under the Securities Act; and the Indenture shall be qualified under the Trust Indenture Act of 1939 (the "Trust Indenture Act") and the applicable rules and regulations thereunder. Copies of such registration statement and the amendments thereto have been delivered by the Company to you. As used in this Agreement, "Effective Time" means the date and the time as of which such registration statement, or the most recent post-effective amendment thereto, if any, was declared effective by the Commission; "Effective Date" means the date of the Effective Time; "Preliminary Prospectus" means each prospectus included in such registration statement, or amendments thereof, before it became effective under the Securities Act and any prospectus filed with the Commission by the Company and the Guarantors with the consent of the Underwriters pursuant to Rule 424(a) of the Rules and Regulations; "Registration Statement" means such registration statement, as amended at the Effective Time, including all information contained in the final prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations in accordance with Section 5 hereof and deemed to be a part of the registration statement as of the Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and Regulations; and "Prospectus" means such final prospectus, as first filed with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and Regulations. If the Company and the Guarantors have filed or are required 2 pursuant to the terms hereof to file a registration statement pursuant to Rule 462(b) under the Securities Act registering additional Notes and Guarantees (a "Rule 462(b) Registration Statement"), then, unless otherwise specified, any reference herein to the term "Registration Statement" shall be deemed to include such Rule 462(b) Registration Statement. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus; and no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. Any Rule 462(b) Registration Statement filed after the effectiveness of this Agreement will become effective no later than 10:00 P.M., New York City time, on the date of this Agreement. (b) The Registration Statement (other than any Rule 462(b) Registration Statement to be filed by the Company and the Guarantors after the effectiveness of this Agreement) conforms, and the Prospectus and any further amendments or supplements to the Registration Statement (including, if the Company and the Guarantors are required to file a Rule 462(b) Registration Statement after the effectiveness of this Agreement, such Rule 462(b) Registration Statement and any amendments thereto) or the Prospectus will, when they become effective or are filed with the Commission, as the case may be, conform in all respects to the requirements of the Securities Act and the Rules and Regulations and do not and will not, as of the applicable effective date (as to the Registration Statement and any amendment thereto) and as of the applicable filing date (as to the Prospectus and any amendment or supplement thereto) contain 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; provided that no representation or warranty is made as to information contained in or omitted from the Registration Statement or the Prospectus in reliance upon and in conformity with written information furnished to the Company by any Underwriter specifically for inclusion therein; and the Indenture conforms in all material respects to the requirements of the Trust Indenture Act and the applicable rules and regulations thereunder. (c) The market-related and customer-related data and estimates included in the Prospectus are based on or derived from sources which the Company believes to be reliable and accurate. (d) The Company, the Parent and each of its subsidiaries (as defined in Section 15) have been duly incorporated and are validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification except for such qualification and good standing the failure of which, individually or in the aggregate, would not result in a material adverse effect on the condition (financial or other), business, prospect, properties, stockholders' equity or results of operations of 3 the Company and its subsidiaries taken as a whole (a "Material Adverse Effect"), and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged; and none of the subsidiaries of the Company is a "significant subsidiary," as such term is defined in Rule 405 of the Rules and Regulations. (e) All of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and conform to the description thereof contained in the Prospectus; and all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and (except for directors' qualifying shares) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims, other than (i) liens, encumbrances, equities or claims described in the Prospectus and (ii) such other liens, encumbrances, equities or claims as are not, individually or in the aggregate, material to the Company and its subsidiaries, taken as a whole. (f) This Agreement has been duly authorized, executed and delivered by the Company and the Guarantors. (g) The Indenture has been duly authorized, and when duly executed by the proper officers of the Company (assuming due execution and delivery by the Trustee) and delivered by the Company, will constitute a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) or an implied covenant of good faith and fair dealing. (h) The Notes have been duly and validly authorized by the Company and when duly executed by the Company in accordance with the terms of the Indenture and, assuming due authentication of the Notes by the Trustee, upon delivery to the Underwriters against payment therefor in accordance with the terms hereof, will constitute valid and binding obligations of the Company entitled to the benefits of the Indenture and enforceable in accordance with their terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) or an implied covenant of good faith and fair dealing; and the Notes, when issued and delivered, will conform to the description thereof contained in the Prospectus. (i) The Guarantees have been duly and validly authorized by the Guarantors and when duly endorsed on the Notes in accordance with the terms of the Indenture and, assuming due authentication of the Notes by the Trustee, upon 4 delivery to the Underwriters against payment therefor in accordance with the terms hereof, will constitute valid and binding obligations of each of the Guarantors entitled to the benefits of the Indenture and enforceable in accordance with their terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) or an implied covenant of good faith and fair dealing. (j) The execution, delivery and performance of this Agreement and the Indenture by the Company and the Guarantors and the consummation of the transactions contemplated hereby and thereby will not conflict with or constitute a breach of, or a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, that is material to the financial condition or prospects of the Company and its subsidiaries, taken as a whole (collectively, the "Material Agreements"), except for breach of which, individually, or in the aggregate, would not result in a Material Adverse Effect, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company or any of its subsidiaries or any material law, statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets, provided, that the provisions for indemnification and contribution hereunder and thereunder may be limited by equitable principles and public policy consideration; and except for the registration of the Notes and the Guarantees under the Securities Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the United States Securities Exchange Act of 1934, as amended (the "Exchange Act") and applicable state securities laws in connection with the purchase and distribution of the Notes and the Guarantees by the Underwriters, no consent, approval, authorization or order of, or filing or registration with, any such court or governmental agency or body is required for the execution, delivery and performance of this Agreement, or the Indenture by the Company and the Guarantors and the consummation of the transactions contemplated hereby and thereby. (k) Except as described in the Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right (other than rights which have been waived or satisfied or rights not exerciserable in connection with the Registration Statement) to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Securities Act. 5 (l) Except as described in the Registration Statement, the Company and the Guarantors have not sold or issued any Securities with terms that are substantially similar to the Notes and the Guarantees during the six-month period preceding the date of the Prospectus, including any sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act. (m) Neither the Company nor any of its subsidiaries has incurred, since the date of the latest audited financial statements included in the Prospectus, any liability or obligation, direct or contingent, or entered into any transaction, in each case not in the ordinary course of business, that is material to the Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated in the Prospectus; and, since such date, there has not been any material change in the capital stock or material increase in the short-term or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving or which would reasonably be expected to involve a Material Adverse Effect, otherwise than as described or contemplated in the Prospectus. (n) The historical and pro forma financial statements, together with related notes, set forth in the Prospectus comply as to form in all material respects with the requirements of Regulation S-X under the Securities Act applicable to registration statements on Form S-1 under the Securities Act. The historical financial statements of the Company fairly present the financial position of the Company (or its predecessors) at the respective dates indicated and the results of operations and cash flows of the Company (or its predecessors) for the respective periods indicated, in accordance with generally accepted accounting principals consistently applied throughout such periods. Such pro forma financial statements have been prepared on a basis consistent with such historical statements of the Company, except for the pro forma adjustments specified therein, and give effect to assumptions made on a reasonable basis and in good faith and present fairly the historical and proposed transactions contemplated by the Prospectus and this Agreement. The other financial and statistical information and data included in the Prospectus, historical and pro forma, have been derived from the financial records of the Company (or its predecessors) and, in all material respects, have been prepared on a basis consistent with such books and records of the Company (or its predecessor), except as disclosed therein. (o) Coopers & Lybrand L.L.P., who have certified certain financial statements of the Company, whose report appears in the Prospectus and who have delivered the initial letter referred to in Section 7(g) hereof, are independent public accountants as required by the Securities Act and the Rules and Regulations; and Ernst & Young LLP and KPMG Peat Marwick LLP, whose reports appear in the Prospectus and who have delivered the initial letters referred to in Sections 7(h) and 7(i) hereof, are independent accountants as required by the Securities Act and the Rules and Regulations. 6 (p) The Company and each of its subsidiaries have good and marketable title to all property (real and personal) described in the Prospectus as being owned by them, free and clear of all liens, claims, security interests or other encumbrances except such as are described in the Prospectus or, to the extent that any such liens, claims, security interests or other encumbrances would not have a Material Adverse Effect (individually or in the aggregate) and all the material property described in the Prospectus as being held under lease by the Company and its subsidiaries is held by them under valid, subsisting and enforceable leases, with only such exceptions as would not have a Material Adverse Effect (individually or in the aggregate). (q) The Company and each of its subsidiaries own or possess adequate rights to use all material patents, trademarks, service marks, trade names, copyrights, licenses, inventions, trade secrets and other rights, and all registrations or applications relating thereto, described in the Prospectus as being owned by them or necessary for the conduct of their business, except as such would not have a Material Adverse Effect (individually or in the aggregate), and the Company is not aware of any pending or threatened claim to the contrary or any pending or threatened challenge by any other person to the rights of the Company and its subsidiaries with respect to the foregoing which, if determined adversely to the Company and its subsidiaries, would have a Material Adverse Effect (individually or in the aggregate). (r) Except as described in the Prospectus, there are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened, against the Company or any of its subsidiaries or to which the Company or any of its subsidiaries is a party or of which any property or assets of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, are reasonably likely to cause a Material Adverse Effect. (s) There are no contracts or other documents which are required to be described in the Prospectus or filed as exhibits to the Registration Statement by the Securities Act or by the Rules and Regulations which have not been described in the Prospectus or filed as exhibits to the Registration Statement or incorporated therein by reference as permitted by the Rules and Regulations. (t) No material relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company on the other hand, except as described in the Prospectus. (u) The Company is not involved in any strike, job action or labor dispute with any group of employees that would have a Material Adverse Effect, and, to the Company's knowledge, no such action or dispute is threatened. 7 (v) Except as disclosed in the Prospectus, the Company is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for which the Company would have any material liability; the Company has not incurred and does not expect to incur any material liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the "Code") (other than contributions in the normal course which are not in default); and each "pension plan" for which the Company would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would reasonably be expected to cause the loss of such qualification. (w) The Company and its subsidiaries have filed all federal, state and local income and franchise tax returns required to be filed through the date hereof and have paid all taxes due thereon, and no tax deficiency has been determined adversely to the Company or any of its subsidiaries nor does the Company have any knowledge of any tax deficiency which, if determined adversely to the Company and its subsidiaries, might have a Material Adverse Effect. (x) Neither the Company nor any of its subsidiaries (i) is in violation of its charter or by-laws, (ii) is in default in any material respect, and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any Material Agreement or (iii) is in violation in any material respect of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject or has failed to obtain any material license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its property or to the conduct of its business, except as would not, individually or in the aggregate, have a Material Adverse Effect. (y) To the best of the Company's knowledge, neither the Company nor any of its subsidiaries, nor any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries, has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds or violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; except as such that would not have a Material Adverse Effect. (z) There has been no storage, disposal, generation, manufacture, refinement, transportation, handling or treatment of toxic wastes, medical wastes, 8 hazardous wastes or hazardous substances by the Company or any of its subsidiaries (or, to the knowledge of the Company, any of their predecessors in interest) at, upon or from any of the property now or previously owned or leased by the Company or its subsidiaries in violation of any applicable law, ordinance, rule, regulation, order, judgment, decree or permit or which would require remedial action under any applicable law, ordinance, rule, regulation, order, judgment, decree or permit, except for any violation or remedial action which would not have, or would not be reasonably likely to have, singularly or in the aggregate with all such violations and remedial actions, a Material Adverse Effect; there has been no material spill, discharge, leak, emission, injection, escape, dumping or release of any kind onto such property or into the environment surrounding such property of any toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous substances due to or caused by the Company or any of its subsidiaries or with respect to which the Company has knowledge, except for any such spill, discharge, leak, emission, injection, escape, dumping or release which would not have or would not be reasonably likely to have, singularly or in the aggregate with all such spills, discharges, leaks, emissions, injections, escapes, dumpings and releases, a Material Adverse Effect; and the terms "hazardous wastes," "toxic wastes," "hazardous substances" and "medical wastes" shall have the meanings specified in any applicable local, state, federal and foreign laws or regulations with respect to environmental protection. (aa) Neither the Company nor any subsidiary is an "investment company" within the meaning of such term under the United States Investment Company Act of 1940 and the rules and regulations of the Commission thereunder. (ab) All of the representations and warranties of the parties to the International Underwriting Agreement and the U.S. Underwriting Agreement, are true and correct. 2. Purchase of the Notes and Guarantees by the Underwriters. On the basis of the representations and warranties contained in, and subject to the terms and conditions of, this Agreement, the Company agrees to sell the Notes (and cause the Guarantors to issue the Guarantees) to the several Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase the aggregate principal amount of Notes set opposite that Underwriter's name in Schedule 1 hereto. Each Underwriter will purchase such aggregate principal amount of Notes at an aggregate purchase price equal to ___% of the principal amount thereof (the "Purchase Price"). The Company shall not be obligated to deliver any of the Notes and Guarantees to be delivered on the Delivery Date (as hereinafter defined), except upon payment for all the Notes and Guarantees to be purchased on the Delivery Date as provided herein. 3. Offering of Notes and Guarantees by the Underwriters. Upon authorization by the Underwriters of the release of the Notes and Guarantees, the several Underwriters propose to offer the Notes and Guarantees for sale upon the terms and conditions set forth in the Prospectus. 9 4. Delivery of and Payment for the Notes and Guarantees. Delivery of and payment for the Notes and Guarantees shall be made at the office of Latham & Watkins, 885 Third Avenue New York, New York 10022 at 10:00 A.M., New York City time, on the third full business day following the date of this Agreement or at such other date or place as shall be determined by agreement between the Underwriters and the Company. This date and time are sometimes referred to as the "Delivery Date." On the Delivery Date, the Company shall deliver or cause to be delivered certificates representing the Notes and Guarantees to the Underwriters for the account of each Underwriter against payment to or upon the order of the Company of the purchase price by wire transfer in immediately available funds. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder. Upon delivery, the Notes and Guarantees shall be registered in such names and in such denominations as the Underwriters shall request in writing not less than two full business days prior to the Delivery Date. For the purpose of expediting the checking and packaging of the certificates for the Notes and Guarantees, the Company shall make the certificates representing the Notes and Guarantees available for inspection by the Underwriters in New York, New York, not later than 2:00 P.M., New York City time, on the business day prior to the Delivery Date. 5. Further Agreements of the Company. The Company agrees: (a) To prepare the Prospectus in a form approved by the Underwriters and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not later than Commission's close of business on the second business day following the execution and delivery of this Agreement or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Securities Act; to make no further amendment or any supplement to the Registration Statement or to the Prospectus except as permitted herein; to advise the Underwriters, promptly (i) after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and (ii) if the Company is required to file a Rule 462(b) Registration Statement after the effectiveness of this Agreement, when the Rule 462(b) Registration Statement has become effective and, in the case of each of (i) and (ii), to furnish the Underwriters with copies thereof; to advise the Underwriters, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, of the suspension of the qualification of the Notes and Guarantees for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus or suspending any such qualification, to use promptly its reasonable best efforts to obtain its withdrawal; 10 (b) To furnish promptly to each of the Underwriters and to counsel for the Underwriters a conformed copy of the Registration Statement as originally filed with the Commission, and each amendment thereto filed with the Commission, including all consents and exhibits filed therewith; (c) To deliver promptly to the Underwriters such number of the following documents as the Underwriters shall reasonably request each Preliminary Prospectus, the Prospectus and any amended or supplemented Prospectus; and, if the delivery of a prospectus is required at any time after the Effective Time in connection with the offering or sale of the Notes or any other securities relating thereto and if at such time any events shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary to amend or supplement the Prospectus in order to comply with the Securities Act, to notify the Underwriters and, upon their request, to file such document and to prepare and furnish (without charge for the 9 month period following the Delivery Date) to each Underwriter and to any dealer in securities as many copies as the Underwriters may from time to time reasonably request of an amended or supplemented Prospectus which will correct such statement or omission or effect such compliance. (d) To file promptly with the Commission any amendment to the Registration Statement or the Prospectus or any supplement to the Prospectus that may, in the judgment of the Company or the Underwriters, be required by the Securities Act or requested by the Commission; (e) Prior to filing with the Commission any amendment to the Registration Statement or supplement to the Prospectus or any Prospectus pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to the Underwriters and counsel for the Underwriters and not to file any such document to which the Underwriters shall reasonably object after having been given reasonable notice of the proposed filing thereof; (f) As soon as practicable after the Effective Date, (it being understood that the Company shall have until at least 410 days after the end of the Company's current fiscal quarter) to make generally available to the Company's security holders and to deliver to the Underwriters an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act and the Rules and Regulations (including, at the option of the Company, Rule 158); (g) Promptly from time to time to take such action as the Underwriters may reasonably request to qualify the Notes and the Guarantees for offering and sale 11 under the securities laws of such jurisdictions as the Underwriters may request (provided, however, that the Company shall not be obligated to qualify as a foreign corporation in any jurisdiction in which it is not now so qualified or to take any action that would subject it to general consent to service of process in any jurisdiction in which it is not now so subject) and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Stock; (h) To apply the net proceeds from the sale of the Notes being sold by the Company as set forth in the Prospectus; (i) To take such steps as shall be necessary to ensure that neither the Company nor any subsidiary shall become an "investment company" within the meaning of such term under the United States Investment Company Act of 1940 and the rules and regulations of the Commission thereunder; and (j) If the Registration Statement at the time of the effectiveness of this Agreement does not cover all of the Notes and Guarantees, to file (and cause the Guarantors to file) a Rule 462(b) Registration Statement with the Commission registering the Notes and Guarantees not so covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the date of this Agreement and to pay to the Commission the filing fee for such Rule 462(b) Registration Statement at the time of the filing thereof or to give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Securities Act. 6. Expenses. The Company agrees to pay (a) the costs incident to the authorization, issuance, sale and delivery of the Notes and Guarantees and any taxes payable in that connection; (b) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement and any amendments and exhibits thereto; (c) the costs of distributing the Registration Statement as originally filed and each amendment thereto and any post-effective amendments thereof (including, in each case, exhibits), any Preliminary Prospectus, the Prospectus and any amendment or supplement to the Prospectus, all as provided in this Agreement; (d) the filing fees incident to securing any required review by the National Association of Securities Dealers, Inc. of the terms of sale of the Notes and Guarantees; (e) any applicable listing or other fees; (f) the fees and expenses of qualifying the Notes and Guarantees under the securities laws of the several jurisdictions as provided in Section 5(h) and of preparing, printing and distributing a Blue Sky Memorandum (including related fees and expenses of counsel to the Underwriters); (g) any fees charged by securities rating services for rating the Notes and Guarantees; (h) all costs and expenses incident to the performance of the Company's obligations under Section 9 and (i) all other costs and expenses incident to the performance of the obligations of the Company and the Guarantors; provided, that (x) the Company and the Underwriters will bear their own "road show" expenses and (y) the Company on the one hand, and the Underwriters on the other hand, will each bear one half of the cost of the charter air craft used in connection with the "road show." 12 7. Conditions of Underwriters' Obligations. The respective obligations of the Underwriters hereunder are subject to the accuracy, when made and on the Delivery Date, of the representations and warranties of the Company contained herein, to the performance by the Company of its obligations hereunder, and to each of the following additional terms and conditions: (a) The Prospectus shall have been timely filed with the Commission in accordance with Section 5(a); no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; any request of the Commission for inclusion of additional information in the Registration Statement or the Prospectus or otherwise shall have been complied with; and any 462(b) Registration Statement required by this Agreement to be filed shall have been so filed and become effective. (b) No Underwriter shall have discovered and disclosed to the Company on or prior to the Delivery Date that the Registration Statement or the Prospectus or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of Latham & Watkins, counsel for the Underwriters, is material or omits to state a fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading. (c) All corporate proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Indenture, the Notes, the Registration Statement and the Prospectus, and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters. (d) Simpson Thacher & Bartlett shall have furnished to the Underwriters its written opinion, as counsel to the Company, addressed to the Underwriters and dated the Delivery Date, in form and substance reasonably satisfactory to the Underwriters, to the effect that: (i) The Company and each of its Delaware subsidiaries have been duly incorporated and are validly existing as corporations and in good standing under the laws of Delaware, and have all corporate power and authority necessary to conduct their respective businesses as described in the Registration Statement and the Prospectus; (ii) The Parent has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company (including the shares of Stock and International Stock being delivered on the Delivery Date) have been duly and validly authorized and issued, are fully paid and non-assessable and conform to the description thereof contained in 13 the Prospectus; and all of the issued shares of capital stock of each Delaware subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable (except for directors' qualifying shares) and, based solely on our examination of each such subsidiary's stock ledger and minute book, all such shares are held of record by the Company and/or a subsidiary of the Company; (iii) The Registration Statement has become effective under the Securities Act, the Indenture was qualified under the Trust Indenture Act and the Prospectus was filed pursuant to Rule 424(b)__ of the rules and regulations of the Commission under the Act and, to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued or proceeding for that purpose has been instituted or threatened by the Commission; (iv) The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and assuming due authorization, execution and delivery thereof by the Trustee, constitutes a valid and, legally binding obligation of the Company enforceable against the Company in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) or an implied covenant of good faith and fair dealing. (v) The Notes have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with the terms of the Underwriting Agreement, will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) or an implied covenant of good faith and fair dealing; and the Notes, when issued and delivered, will conform to the description thereof contained in the Prospectus. (vi) The Guarantees have been duly authorized, executed and issued by the respective Guarantors and, assuming due authentication of the Notes by the Trustee, upon payment and delivery in accordance with the terms of the Underwriting Agreement will constitute valid and legally binding obligations of each of the Guarantors enforceable in accordance with their terms, subject to the effects of bankruptcy, insolvency, fraudulent 14 conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) or an implied covenant of good faith and fair dealing. (vii) The statements contained in the Prospectus under the captions "Risk Factors-Subordination," "Risk Factors-Restrictions Imposed by the Senior Credit Facilities and the Indentures," "Business-Pension Plans," "Certain Relationships and Related Transactions," "Management-Limitations on Liability and Indemnification Matters," "Management-1997 Stock Option Plan," "Management-Employment Agreements," "Description of Certain Indebtedness," and "Description of the Notes," insofar as they describe charter documents, contracts, statutes, rules and regulations and other legal matters, constitute an accurate summary thereof in all material respects; (viii) The statements made in the Prospectus under the caption "United States Federal Tax Considerations," insofar as they purport to constitute summaries of matters of United States federal tax law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects. (ix) To such counsel's knowledge, there are no contracts or documents of a character required by the Securities Act or by the rules and regulations thereunder to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement which are not described or filed as required by the Securities Act or by the rules and regulations thereunder; (x) This Agreement has been duly authorized, executed and delivered by the Company and the Guarantors; (xi) The issue and sale of the Notes and Guarantees being delivered on the Delivery Date by the Company and the Guarantors and the compliance by the Company, the Guarantors or the Parent, as applicable, with all of the provisions of this Agreement, the Indenture, the International Underwriting Agreement and the U.S. Underwriting Agreement and the consummation of the transactions contemplated hereby and thereby will not breach or result in a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument filed as an exhibit to the Registration Statement nor will such actions violate the Certificate of Incorporation or By-Laws of the Company, the Parent or any of their subsidiaries or any federal or New York statute or the Delaware General Corporation Law or any rule or regulation that has been issued pursuant to any federal or New York statute or the Delaware General Corporation Law 15 or any order known to such counsel issued pursuant to any federal or New York statute or the Delaware General Corporation Law by any court or governmental agency or body or court having jurisdiction over the Company, the Parent or any of their subsidiaries or any of their properties or assets; and no consent, approval, authorization, order, registration or qualification of or with any federal or New York governmental agency or body or any Delaware governmental agency or body acting pursuant to the Delaware General Corporation Law or, to such counsel's knowledge, any federal or New York court or any Delaware court acting pursuant to the Delaware General Corporation Law is required for the issue and sale of the Stock and International Stock by the Parent and the issuance and sale of the Notes by the Company (and the guarantee of such Notes by the Guarantors), except for the registration under the Act and the Exchange Act of the Stock, International Stock, Notes and Guarantees, and such consents, approvals, authorizations, registrations or qualifications as may be required state securities or Blue Sky laws in connection with the purchase and distribution of the Stock by the U.S. Underwriters and the International Managers and the Notes and Guarantees by the Underwriters. The opinions set forth in this paragraph are based upon our consideration of only those statutes, rules and regulations which, in such counsel's experience, are normally applicable to securities underwriting transactions. In rendering such opinion, such counsel may state that its opinion is limited to matters governed by the federal laws of the United States and the laws of the State of New York and the Delaware General Corporation Law. Such counsel shall also have furnished to the Underwriters a written statement, addressed to the Underwriters and dated the Delivery Date. Such counsel has not independently verified the accuracy, completeness or fairness of the statements made or included in the Registration Statement or the Prospectus and take no responsibility therefor, except as and to the extent set forth in paragraph (viii) above. In the course of the preparation by the Company of the Registration Statement and the Prospectus, such counsel participated in conferences with certain officers and employees of the Company, with representatives of Coopers & Lybrand L.L.P., Ernst & Young LLP, KPMG Peat Marwick LLP and with counsel to the Company. Based upon our examination of the Registration Statement and the Prospectus, our investigations made in connection with the preparation of the Registration Statement and the Prospectus and our participation in the conferences referred to above, (i) such counsel is of the opinion that the Registration Statement, as of its effective date, and the Prospectus, as of _______, 1998, complied as to form in all material respects with the requirements of the Act and the applicable rules and regulations of the Commission thereunder, except that in each case such counsel need not express opinion with respect to the financial statements or other financial 16 data contained or incorporated by reference in the Registration Statement or the Prospectus, and (ii) such counsel has no reason to believe that the Registration Statement, as of its effective date, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the Prospectus contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that in each case such counsel need not express belief with respect to the financial statements or other financial data contained in the Registration Statement or the Prospectus. (e) Christopher C. Cambria, General Counsel of the Company, shall have furnished to the Underwriters his written opinion, as General Counsel to the Company, addressed to the Underwriters and dated the Delivery Date, in form and substance reasonably satisfactory to the Underwriters, to the effect that: (i) To such counsel's knowledge, the Company and each of its subsidiaries have good and marketable title to all property (real and personal) described in the Prospectus as being owned by them, free and clear of all liens, claims, security interests or other encumbrances except such as are described in the Prospectus or, to the extent that any such liens, claims, security interests or other encumbrances would not have a Material Adverse Effect (individually or in the aggregate) and all the material property described in the Prospectus as being held under lease by the Company and its subsidiaries is held by them under valid, subsisting and enforceable leases, with only such exceptions as would not have a Material Adverse Effect (individually or in the aggregate); (ii) To such counsel's knowledge and except as otherwise disclosed in the Prospectus, there are no legal or governmental proceedings pending or threatened, against the Company or any of its subsidiaries or to which the Company or any of its subsidiaries is a party or of which any property or assets of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, are reasonably likely to cause a Material Adverse Effect; (iii) To such counsel's knowledge and except as otherwise disclosed in the Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to include such person's securities in the securities registered pursuant to the Registration Statement; (iv) None of the issue and sale of the Notes and Guarantees being delivered on such Delivery Date by the Company and the Guarantors and 17 the compliance by the Company, the Guarantors and the Parent, as applicable, with all of the provisions of this Agreement, the International Underwriting Agreement and the U.S. Underwriting Agreement and the consummation of the transactions contemplated hereby and thereby requires any consent, approval, authorization or other order of, or registration or filing with, any federal court, federal regulatory body, federal administrative agency or other federal governmental official having authority over government procurement matters (provides), that the opinion contained in this paragraph (iv) may be delivered by other counsel reasonably satisfactory to the Underwriters). (f) The Underwriters shall have received from Latham & Watkins, counsel for the Underwriters, such opinion or opinions, dated the Delivery Date, with respect to the issuance and sale of the Notes and Guarantees, the Registration Statement, the Prospectus and other related matters as the Underwriters may reasonably require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters. (g) At the time of execution of this Agreement, the Underwriters shall have received from Coopers & Lybrand L.L.P. a letter, in form and substance satisfactory to the Underwriters, addressed to the Underwriters and dated the date hereof (i) confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date hereof (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five days prior to the date hereof), the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants' "comfort letters" to underwriters in connection with registered public offerings. (h) At the time of execution of this Agreement, the Underwriters shall have received from Ernst & Young LLP a letter, in form and substance satisfactory to the Underwriters, addressed to the Underwriters and dated the date hereof (i) confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date hereof (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five days prior to the date hereof), the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants' "comfort letters" to underwriters in connection with registered public offerings. 18 (i) At the time of execution of this Agreement, the Underwriters shall have received from KPMG Peat Marwick LLP a letter, in form and substance satisfactory to the Underwriters, addressed to the Underwriters and dated the date hereof (i) confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date hereof (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five days prior to the date hereof), the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants' "comfort letters" to underwriters in connection with registered public offerings. (j) With respect to the letters referred to in the preceding three paragraphs and delivered to the Underwriters concurrently with the execution of this Agreement (the "initial letters"), the Company shall have furnished to the Underwriters letters (the "bring-down letters") of such accountants, in form and substance satisfactory to the Underwriters, addressed to the Underwriters and dated the Delivery Date (i) confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down letters (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five days prior to the date of the bring-down letter), the conclusions and findings of such firms with respect to the financial information and other matters covered by the initial letters and (iii) confirming in all material respects the conclusions and findings set forth in the initial letters. (k) The Company and the Guarantors shall have furnished to the Underwriters a certificate, dated the Delivery Date, of their respective Chairman of the Board, their respective President or a Vice President and their respective chief financial officer stating that: (i) The representations and warranties of the Company and the Guarantors in Section 1 are true and correct as of the Delivery Date; the Company and the Guarantors have complied with all their agreements contained herein; and the conditions set forth in Sections 7(a) and 7(l) have been fulfilled; and (ii) They have carefully examined the Registration Statement and the Prospectus and, in their opinion (A) as of the Effective Date, the Registration Statement and Prospectus did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, 19 and (B) since the Effective Date no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement or the Prospectus. (l) (i) Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included in the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus or (ii) since such date there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the business, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated in the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is, in the judgment of the Underwriters, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Notes and the Guarantees being delivered on the Delivery Date on the terms and in the manner contemplated in the Prospectus. (m) Subsequent to the execution and delivery of this Agreement (i) no downgrading shall have occurred in the rating accorded the Company's debt securities by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities. (n) Subsequent to the execution and delivery of this Agreement there shall not have occurred any of the following: (i) trading in securities generally on the New York Stock Exchange or the American Stock Exchange or in the over-the-counter market, or trading in any securities of the Company on any exchange or in the over-the-counter market, shall have been suspended or minimum prices shall have been established on any such exchange or such market by the Commission, by such exchange or by any other regulatory body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been declared by Federal or state authorities, (iii) the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the United States or there shall have been a declaration of a national emergency or war by the United States or (iv) there shall have occurred such a material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such) as to make it, in the judgment of a majority in interest of the several Underwriters, impracticable or inadvisable to proceed with the public offering or delivery of the Stock being delivered on the 20 Delivery Date on the terms and in the manner contemplated in the Prospectus. (o) The closings under the U.S. Underwriting Agreement and the International Underwriting Agreement shall have occurred prior to the closing hereunder on the Delivery Date. All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters. 8. Indemnification and Contribution. (a) The Company and the Guarantors shall jointly and severally indemnify and hold harmless each Underwriter and C.E. Unterberg, Towbin in its role as qualified independent underwriter pursuant to the rules of the National Association of Securities Dealers, Inc., their officers and employees and each person, if any, who controls any Underwriter 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 and sales of Notes and Guarantees), to which that Underwriter, 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 in any Preliminary Prospectus, the Registration Statement or the Prospectus or in any amendment or supplement thereto, (ii) the omission or alleged omission to state in any Preliminary Prospectus, the Registration Statement or the 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 Underwriter in connection with, or relating in any manner to, the Notes and Guarantees 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 Underwriter through its gross negligence or willful misconduct), and shall reimburse each Underwriter and each such officer, employee or controlling person promptly upon demand for any legal or other expenses reasonably incurred by that Underwriter, 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 Preliminary Prospectus, the Registration Statement or the Prospectus, or in any such amendment or supplement, in reliance upon and in conformity with written information concerning such Underwriter furnished to the Company behalf of any Underwriter specifically for inclusion therein; provided further, that the indemnification contained in this paragraph (a) with respect to the Preliminary Prospectus shall not 21 inure to the benefit of any Underwriter (or to the benefit of any officers or employees of any Underwriter or of any person controlling such Underwriter) on account of any such loss, claim, damage, liability or action arising from the sale of Notes and Guarantees by such Underwriter to any person if the untrue statement or alleged untrue statement or omission or alleged omission of a material fact contained in the Preliminary Prospectus was corrected in the Prospectus and the Underwriter sold Notes and Guarantees to that person without sending or giving at or prior to the written confirmation of such sale, a copy of the Prospectus (as then amended or supplemented) if the Company has previously furnished sufficient copies thereof to the Underwriter on a timely basis to permit such sending or giving which information consists solely of the information specified in Section 8(e). The foregoing indemnity agreement is in addition to any liability which the Company and Guarantors may otherwise have to any Underwriter or to any officer, employee or controlling person of that Underwriter. (b) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the Company, the Guarantors, their officers and employees, each of their directors, and each person, if any, who controls the Company and 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 Preliminary Prospectus, the Registration Statement or the 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 Preliminary Prospectus, the Registration Statement or the 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 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 Underwriter furnished to the Company by or on behalf of that Underwriter specifically for inclusion therein, and shall reimburse the Company and any such director, officer or controlling person for any legal or other expenses reasonably incurred by the Company 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 Underwriter may otherwise have to the Company, the Guarantors or any such director, officer, employee or controlling person. (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 22 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 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 Underwriters 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 or any of the Company's 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 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 on the one hand and the Underwriters on the other from the offering of the Notes and Guarantees or (ii) if the allocation provided by clause (i) above is not 23 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, on the one hand and the Underwriters 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, on the one hand and the Underwriters 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 Stock purchased under this Agreement (before deducting expenses) received by the Company, on the one hand, and the total underwriting discounts and commissions received by the Underwriters with respect to the Notes and Guarantees purchased under this Agreement, on the other hand, bear to the total gross proceeds from the offering of the Notes and Guarantees under this Agreement, in each case as set forth in the table on the cover page of the Prospectus. 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 or the Underwriters, 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 Underwriters agree that it would not be just and equitable if contributions pursuant to this Section were to be determined by pro rata allocation (even if the Underwriters 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 Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Stock underwritten by it and distributed to the public was offered to the public exceeds the amount of any damages which such Underwriter 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 8(e) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute as provided in this Section 8(d) are several in proportion to their respective underwriting obligations and not joint. (e) The Underwriters severally confirm and the Company and the Guarantors acknowledge that the statements with respect to the public offering of the Notes and Guarantees by the Underwriters and the last sentence of the fourth paragraph on the cover page of, the legend concerning stabilization on page (i) of, and the fourth, fifth, sixth and seventh paragraphs appearing under the caption "Underwriting" in, the Prospectus are correct and constitute the only information concerning such Underwriters furnished in writing to the Company by or on behalf of the Underwriters specifically for inclusion in the Registration Statement and the Prospectus. 24 9. Market-Maker Prospectus. (a) The Company acknowledges that any broker or dealer registered under the Exchange Act (a "Broker-Dealer") that is an affiliate of the Company and that the holds Notes and Guarantees that are acquired for its own account as a result of market-making activities or other trading activities (such Notes and Guarantees are referred to herein as "Broker-Dealer Transfer Restricted Securities" and such Broker-Dealers are referred to herein as "Restricted Broker-Dealers") may not resell such Broker-Dealer Transfer Restricted Securities without delivering a prospectus. Consequently, the Company and the Guarantors shall cause the Registration Statement to include alternate prospectus pages (in a form included in the Registration Statement) relating to such market-making activities. The prospectus included in such Registration Statement, as it may be amended or supplemented from time-to time, including such alternate pages, is referred to in this Agreement as a "Market-Maker Prospectus." (b) Following the Effective Time and until such time as all Restricted Broker-Dealers determine in their judgment that they are no longer required to deliver a prospectus in connection with sales of Broker-Dealer Transfer Restricted Securities, the Company and the Guarantors shall: (i) use all commercially reasonable efforts to deliver Market-Maker Prospectuses to all Restricted Broker-Dealers immediately after the Delivery Date and from time to time thereafter upon request, in such quantities as such Restricted Broker-Dealer shall require; (ii) use all commercially reasonable efforts to keep the Registration Statement continuously effective and provide all requisite financial statements, including, if required by the Securities Act or the Rules and Regulations, financial statements of any guarantors of the Notes; (iii) upon the occurrence of any event that would cause the Registration Statement or any Market-Maker Prospectus (A) contain 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 or (B) not to be effective and usable for resale of Broker-Dealer Transfer Restricted Securities, file promptly, an appropriate amendment to the 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 the Registration Statement and the Market-Maker Prospectus to become usable for their intended purpose as soon as practicable thereafter. Notwithstanding anything to the contrary herein, at any time after the Delivery Date, the Company may allow the Market-Maker Prospectus and the related Registration Statement to cease to be effective and usable if (x) 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 Company notifies all Restricted Broker-Dealers within two business days after the board of directors makes such determination, or (y) the Market-Maker Prospectus and the related Registration Statement 25 contain 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; (iv) prepare and file with the Commission such post-effective amendments to the Registration Statement and related Market-Maker Prospectuses as may be necessary to keep them effective, to the extent necessary to ensure that they are available for sales of Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers, and to ensure that they conform with the requirements of this Agreement and the Securities Act and the Rules and Regulations; cause the Market-Maker Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the Registration Statement; (v) advise the Restricted Broker-Dealers, promptly and, if requested by such Restricted Broker-Dealers, to confirm such advice in writing, (A) when the Market-Maker Prospectus or any Market-Maker Prospectus supplement or post-effective amendment has been filed, and, with respect to any post-effective amendment with respect to the Registration Statement, 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 Market-Maker 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 Securities Act or of the suspension by any state securities commission of the qualification of the Broker-Dealer 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 Registration Statement, the Market-Maker 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 Broker-Dealer Transfer Restricted Securities, as applicable, 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; (vi) furnish to each Restricted Broker-Dealer before filing with the Commission, copies of any Registration Statement or any Market-Maker Prospectus included therein or any amendments or supplements to any such Registration Statement or Market-Maker Prospectus (including all documents incorporated by reference), which documents will be subject to the review of such Restricted Broker-Dealers for a period of at least five business days, and the Company and the Guarantors will not file any amendment or supplement to any such Registration Statement or Market-Maker 26 Prospectus (including all such documents incorporated by reference) if the Restricted Broker-Dealers shall not have had an opportunity to participate in the preparation thereof; (vii) promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Market-Maker Prospectus, provide copies of such document to each Restricted Broker-Dealer, make the Company's 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 Restricted Broker-Dealers reasonably may request; (viii) make available at reasonable times at the Company's principal place of business for inspection by the Restricted Broker-Dealers, and any attorney or accountant retained by such Restricted Broker-Dealers, such financial and other information of the Company and the Guarantors as reasonably requested and cause the Company's officers, directors and employees to respond to such inquiries as shall be reasonably necessary, in the reasonable judgment of counsel to such Restricted Broker-Dealers, 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 Market-Maker Prospectus included therein or in an amendment to such Registration Statement or an amendment or supplement to such Market-Maker Prospectus in order that such Registration Statement, Market-Maker Prospectus, amendment or supplement, as the case may be, does not contain 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; (ix) if requested by any Restricted Broker-Dealer, promptly incorporate in any Registration Statement or Market-Maker Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such Restricted Broker-Dealer may reasonably request to have included therein and make all required filings of such Market-Maker Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Market-Maker Prospectus supplement or post-effective amendment; (x) furnish to each Restricted Broker-Dealer each amendment and supplement to the Registration Statement at least one conformed copy, including all documents incorporated by reference therein and all exhibits, including exhibits incorporated therein by reference; 27 (xi) deliver to each Restricted Broker-Dealer, as many copies of any amendment or supplement to the Market-Maker Prospectus as such Restricted Broker-Dealers reasonably may request; the Company and the Guarantors hereby consent to the use of any Market-Maker Prospectus and any amendment or supplement thereto by each Restricted Broker-Dealer in connection with the offering and the sale of Broker-Dealer Transfer Restricted Securities covered by such Market-Maker Prospectus or any amendment or supplement thereto; (xii) take all such other actions to expedite or facilitate the disposition of the Broker-Dealer Transfer Restricted Securities pursuant to the Registration Statement to such extent as may be requested by a Restricted Broker-Dealer; provided, that, the Company and the Guarantors shall not be required to enter into any agreement more than once with respect to all of the Broker-Dealer Restricted Securities; and the Company and the Guarantors shall, if requested by Lehman Brothers Inc.: (A) furnish to each Restricted Broker-Dealer, 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 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 such amendment or supplement and substantially in the form of the certificate specified by Section 7(k), provided that such certificate shall speak as of its date; (2) an opinion of counsel of the Company and the Guarantors, dated the date of such amendment or supplement and covering the matters set forth in paragraphs (d) and (e) of Section 7 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 Underwriters' representatives and the Underwriters' counsel in connection with the preparation of such amendment or supplement 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 Registration Statement, at the time any post-effective amendment thereto became effective, contained an untrue statement of a material fact or omitted to state a material fact required to 28 be stated therein or necessary to make the statements therein not misleading, or that the Market-Maker Prospectus contained in such Registration Statement amendment as of its date, 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 Market-Maker Prospectus; and (3) customary comfort letter(s), dated the date of such amendment or supplement 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 underwritten offerings, and affirming the matters set forth in the comfort letters delivered pursuant to Section 7 of the Purchase Agreement, without exception; and (B) deliver such other documents and certificates as may be reasonably requested by such Restricted Broker-Dealers to evidence compliance with clause (A) above. (xiii) cooperate with the Restricted Broker-Dealers and their respective counsel in connection with the registration and qualification of the Broker-Dealer Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the Restricted Broker-Dealers may reasonably request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Broker-Dealer Transfer Restricted Securities the Registration Statement; 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; (c) Each Restricted Broker-Dealer agrees by acquisition of Broker-Dealer Transfer Restricted Securities that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 9(b)(iii) hereof, such Restricted Broker-Dealer will forthwith discontinue disposition of Broker-Dealer Transfer Restricted Security pursuant to the applicable Registration Statement until such Restricted Broker-Dealer's receipt of the copies of the supplemented or amended Market-Maker Prospectus contemplated by this Section 9, or until it is advised in writing (the "Advice") by the Company that the use of the Market-Maker Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Market-Maker Prospectus. If so directed by the Company, each Restricted Broker-Dealer will deliver to the Company (at the Company's 29 expense) all copies, other than permanent file copies then in such Restricted Broker-Dealers' possession, of the Market-Maker Prospectus covering such Broker-Dealer Transfer Restricted Security that was current at the time of receipt of such notice. The Company may require each Restricted Broker-Dealer to furnish to the Company such information regarding such Restricted Broker-Dealer and such Restricted Broker-Dealers' intended method of distribution of the applicable Broker-Dealer 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 Securities Act. Each such Restricted Broker-Dealer agrees to notify the Company as promptly as practicable of (i) any inaccuracy or change in information previously furnished by such Restricted Broker-Dealer to the Company or (ii) the occurrence of any event, in either case, as a result of which any Market-Maker Prospectus contains or would contain an untrue statement of a material fact regarding such Restricted Broker-Dealer or such Restricted Broker-Dealers' intended method of distribution of the applicable Broker-Dealer Transfer Restricted Securities or omits to state any material fact regarding such Restricted Broker-Dealer or such Restricted Broker-Dealers' intended method of distribution of the applicable Broker-Dealer 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 Market-Maker Prospectus shall not contain, with respect to such Restricted Broker-Dealer or the distribution of the applicable Broker-Dealer 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. (d) For the purposes of Section 8, the term "Underwriter" shall include Restricted Broker-Dealers and the terms "Prospectus" and "Registration Statement" shall include Market-Maker Prospectuses and related Registration Statements and all amendments and supplements thereto. 10. Termination. The obligations of the Underwriters hereunder may be terminated by the Underwriters by notice given to and received by the Company prior to delivery of and payment for the Notes and Guarantees if, prior to that time, any of the events described in Sections 7(l), 7(m) or 7(n), shall have occurred or if the Underwriters shall decline to purchase the Notes for any reason permitted under this Agreement. 11. Reimbursement of Underwriters' Expenses. If (a) the Company and the Guarantors shall fail to tender the Notes and the Guarantees for delivery to the Underwriters by reason of any failure, refusal or inability on the part of the Company and the Guarantors to perform any agreement on its part to be performed, or because any other condition of the Underwriters' obligations hereunder required to be fulfilled by the Company and the Guarantors is not fulfilled, the Company and the Guarantors will reimburse the Underwriters for all reasonable out-of-pocket expenses (including fees and disbursements of counsel) incurred by the Underwriters in connection with this Agreement and the proposed purchase of the Notes and Guarantees, and upon demand the 30 Company and the Guarantors shall pay the full amount thereof to the Underwriter(s). If this Agreement is terminated pursuant to Section 10 by reason of the default of one or more Underwriters, the Company and the Guarantors shall not be obligated to reimburse any defaulting Underwriter on account of those expenses. 12. Notices, etc. All statements, requests, notices and agreements hereunder shall be in writing, and: (a) if to the Underwriters, shall be delivered or sent by mail, telex or facsimile transmission to Lehman Brothers Inc., Three World Financial Center, New York, New York 10285, Attention: Syndicate Department (Fax: 212-526-6588), with a copy, in the case of any notice pursuant to Section 8(c), to the Director of Litigation, Office of the General Counsel, Lehman Brothers Inc., 3 World Financial Center, 10th Floor, New York, NY 10285; (b) if to the Company and the Guarantors, shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Christopher C. Cambria (Fax: 212-805-5494); provided, however, that any notice to an Underwriter pursuant to Section 8(c) shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its acceptance telex to the Underwriters, which address will be supplied to any other party hereto by the Underwriters upon request. Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof. The Company shall be entitled to act and rely upon any request, consent, notice or agreement given or made on behalf of the Underwriters by Lehman Brothers Inc. 13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the Underwriters, any Restricted Broker-Dealers, the Company, the Guarantors and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (A) the representations, warranties, indemnities and agreements of the Company and the Guarantors contained in this Agreement shall also be deemed to be for the benefit of (i) the person or persons, if any, who control any Underwriter within the meaning of Section 15 of the Securities Act (and controlling persons thereof) who offers or sells any Notes and Guarantees in accordance with the terms of the Agreement Between Underwriters and International Managers and (ii) C. E. Unterberg, Towbin, solely in its role as qualified independent underwriter pursuant to the rules of the National Association of Securities Dealers, Inc., and (B) the indemnity agreement of the Underwriters contained in Section 8(c) of this Agreement shall be deemed to be for the benefit of directors of the Company and the Guarantors, officers of the Company and the Guarantors who have signed the Registration Statement and any person controlling the Company and the Guarantors within the meaning of Section 15 of the Securities Act. Nothing in this Agreement is intended or shall be construed to give any person, other than the persons referred to in this Section 13, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. 31 14. Survival. The respective indemnities, representations, warranties and agreements of the Company, the Guarantors and the Underwriters contained in this Agreement or made by or on behalf on them, respectively, pursuant to this Agreement, shall survive the delivery of and payment for the Notes and Guarantees and shall remain in full force and effect, regardless of any investigation made by or on behalf of any of them or any person controlling any of them. 15. Definition of the Terms "Business Day" and "Subsidiary." For purposes of this Agreement, (a) "business day" means each Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules and Regulations. 16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK. 17. Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original but all such counterparts shall together constitute one and the same instrument. 18. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. [Signature pages follow] 32 If the foregoing correctly sets forth the agreement among the Company, the Guarantors and the Underwriters, please indicate your acceptance in the space provided for that purpose below. Very truly yours, L-3 COMMUNICATIONS CORPORATION By -------------------------------------- Name: Title: HYGIENETICS ENVIRONMENTAL SERVICES, INC. By -------------------------------------- Name: Title: L-3 COMMUNICATIONS ILEX SYSTEMS, INC. By -------------------------------------- Name: Title: SOUTHERN CALIFORNIA MICROWAVE, INC. By -------------------------------------- Name: Title: Accepted: LEHMAN BROTHERS INC. BANCAMERICA ROBERTSON STEPHENS By LEHMAN BROTHERS INC. By ----------------------------- Authorized Representative SCHEDULE 1 Principal Underwriters Amount of Notes - ------------ --------------- Lehman Brothers Inc.......................................... BancAmerica Robertson Stephens............................... _______________ Total $150,000,000 34 EX-3.1 3 CERTIFICATE OF INCORPORATION OF L-3 COMMUNICATIONS CORPORATION Exhibit 3.1 CERTIFICATE OF INCORPORATION OF L-3 COMMUNICATIONS CORPORATION The undersigned, in order to form a corporation for the purpose hereinafter stated, under and pursuant to the provisions of the Delaware General Corporation Law, hereby certifies that: FIRST: The name of the Corporation is L-3 Communications Corporation. SECOND: The registered office and registered agent of the Corporation is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law. FOURTH: The total number of shares of stock that the Corporation is authorized to issue is 100 shares of Common Stock, par value $.01 each. FIFTH: The name and address of the incorporator is Janet Lapidus, 425 Lexington Avenue, New York City, New York 10017-3954. SIXTH: The Board of Directors of the Corporation, acting by majority vote, may alter, amend or repeal the By-Laws of the Corporation. SEVENTH: Except as otherwise provided by the Delaware General Corporation Law as the same exists or may hereafter be amended, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of this Article SEVENTH by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. IN WITNESS WHEREOF, the undersigned has signed this Certificate of Incorporation on April 8, 1997. ------------------------------ Janet Lapidus EX-3.2 4 BY-LAWS OF L-3 COMMUNICATIONS CORPORATION Exhibit 3.2 BY-LAWS OF L-3 COMMUNICATIONS CORPORATION (hereinafter called the "Corporation") ARTICLE I OFFICES AND RECORDS Section 1.1 Delaware Office. The principal office of the Corporation in the State of Delaware shall be located in the City of Wilmington, County of New Castle, and the name and address of its registered agent is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. Section 1.2 Other Offices. The Corporation may have such other offices, either within or without the State of Delaware, as the Board of Directors may designate or as the business of the Corporation may from time to time require. Section 1.3 Books and Records. The books and records of the Corporation may be kept outside the State of Delaware at such place or places as may from time to time be designated by the Board of Directors. ARTICLE II STOCKHOLDERS Section 2.1 Annual Meeting. The annual meeting of the stockholders of the Corporation shall be held on such date, and at such place and time, as may be fixed by resolution of the Board of Directors. Section 2.2 Special Meeting. Special meetings of the stockholders may be called only by the Chairman of the Board, if there be one, or the President, and shall be called by the Chairman of the Board or the President at the request in writing of a majority of the Board of Directors. Such request shall state the purpose or purposes of the proposed meeting. Section 2.3 Place of Meeting. The Board of Directors may designate the place of meeting for any meeting of the stockholders. If no designation is made by the Board of Directors, the place of meeting shall be the principal office of the Corporation. Section 2.4 Notice of Meeting. Written or printed notice, stating the place, day and hour of the meeting and, in the case of special meetings, the purpose or purposes for 2 which the meeting is called, shall be prepared and delivered by the Corporation not less than ten days nor more than sixty days before the date of the meeting, either personally or by mail, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with postage thereon prepaid, addressed to the stockholder at his address as it appears on the stock transfer books of the Corporation. Such further notice shall be given as may be required by law. Meetings may be held without notice if all stockholders entitled to vote are present, or if notice is waived by those not present. Any previously scheduled meeting of the stockholders may be postponed by resolution of the Board of Directors upon public notice given prior to the date previously scheduled for such meeting of stockholders. Section 2.5 Quorum and Adjournment. Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the outstanding shares of the Corporation entitled to vote generally in the election of directors, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders, except that when specified business is to be voted on by a class or series voting as a class, the holders of a majority of the shares of such class or series shall constitute a quorum for the transaction of such business. The chairman of the meeting or a majority of the shares so represented may adjourn the meeting from time to time, whether or not there is such a quorum. No notice of the time and place of adjourned meetings need be given except as required by law. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Section 2.6 Voting. Except as otherwise provided by the Certificate of Incorporation or these Bylaws, any questions brought before any meeting of stockholders shall be decided by a majority vote of the number of shares entitled to vote and present in person or represented by proxy. Such votes may be cast in person or by proxy but no proxy shall be voted on after three years from its date, unless such proxy provides for a longer period. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his discretion, may require that any votes cast at such meeting shall be cast by written ballot. Section 2.7 Inspectors of Elections; Opening and Closing the Polls. (A) The Board of Directors by resolution may appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives of the Corporation, to act at the meeting and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act, or if all inspectors or alternates who have been appointed are unable to act, at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her 3 ability. The inspectors shall have the duties prescribed by the General Corporation Law of the State of Delaware. (B) The chairman of the meeting shall fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting. ARTICLE III BOARD OF DIRECTORS Section 3.1 General Powers. The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors. In addition to the powers and authorities by these Bylaws expressly conferred upon them, the Board of Directors may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders. Section 3.2 Number, Tenure and Qualifications. The number of directors shall be fixed from time to time exclusively pursuant to a resolution adopted by Board of Directors. Each director elected shall hold office until such director's successor is elected and qualified, except as otherwise provided herein or in the Certificate of Incorporation or as required by law. Section 3.3 Regular Meetings. A meeting of the Board of Directors shall be held without other notice than this Bylaw immediately after, and at the same place as, each annual meeting of stockholders. The Board of Directors may, by resolution, provide the time and place for the holding of additional regular meetings without other notice than such resolution. Section 3.4 Special Meetings. Special meetings of the Board of Directors shall be called at the request of the Chairman of the Board, the President or a majority of the Board of Directors. The person or persons authorized to call special meetings of the Board of Directors may fix the place and time of the meetings. Section 3.5 Notice. Notice of any special meeting shall be given to each director at his business or residence in writing or by telephone or facsimile communication. If mailed, such notice shall be deemed adequately delivered when deposited in the United States mails so addressed, with postage thereon prepaid, at least three days before such meeting. If by telephone or facsimile, the notice shall be given at least twenty-four hours prior to the time set for the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice of such meeting, except for amendments to these Bylaws, as provided under Section 7.1 of Article VII hereof. A meeting may be held at any time without notice if all the directors are 4 present or if those not present waive notice of the meeting in writing, either before or after such meeting. Section 3.6 Quorum. A majority of the Board of Directors shall constitute a quorum for the transaction of business, but if at any meeting of the Board of Directors there shall be less than a quorum present, a majority of the directors present may adjourn the meeting from time to time without further notice. The act 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. The directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough directors to leave less than a quorum. Section 3.7 Vacancies. Unless the Board of Directors otherwise determines, vacancies resulting from death, resignation, retirement, disqualification, removal from office, an increase in the authorized number of directors or other cause may be filled only by the affirmative vote of a majority of the remaining directors, though less than a quorum of the Board of Directors, or by a sole remaining director. Any director elected in accordance with the preceding sentence of this Section 3.7 shall hold office for a term expiring at the next annual meeting of stockholders and until such director's successor shall have been duly elected and qualified. No decrease in the number of authorized directors constituting the Board of Directors shall shorten the term of any incumbent director. Section 3.8 Executive and Other Committees. The Board of Directors may, by resolution adopted by a majority of the Board of Directors, designate an Executive Committee to exercise, subject to applicable provisions of law, all or part of the powers of the Board in the management of the business and affairs of the Corporation when the Board is not in session, including without limitation the power to declare dividends and to authorize the issuance of the Corporation's capital stock, and may, by resolution similarly adopted, designate one or more other committees. The Executive Committee and each such other committee shall consist of two or more 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. Any such committee may, to the extent permitted by law, exercise such powers and shall have such responsibilities as shall be specified in the designating resolution. In the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Each committee shall keep written minutes of its proceedings and shall report such proceedings to the Board when required. A majority of any committee may determine its action and fix the time and place of its meetings, unless the Board shall otherwise provide. Notice of such meetings shall be given to each member of the committee in the manner provided for in Section 3.5 of these Bylaws. The Board shall have power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee. Except as otherwise provided by law, the presence of a majority of the then appointed members of a committee shall constitute a quorum for the transaction of business by that committee, and in every case where a quorum 5 is present the affirmative vote of a majority of the members of the committee present shall be the act of the committee. ARTICLE IV OFFICERS Section 4.1 Elected Officers. The elected officers of the Corporation shall be a Chairman of the Board, a President, a Secretary, a Treasurer, and such other officers as the Board of Directors from time to time may deem proper, including one or more vice presidents, assistant treasurers and assistant secretaries. The Chairman of the Board shall be chosen from the directors. All officers chosen by the Board of Directors shall each have such powers and duties as from time to time may be conferred by the Board of Directors. Section 4.2 Election and Term of Office. The elected officers of the Corporation shall be elected annually by the Board of Directors at the regular meeting of the Board of Directors held after each annual meeting of the stockholders. If the election of officers shall not be held at such meeting such election shall be held as soon thereafter as convenient. Subject to Section 4.5 of these By-Laws, each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign. Section 4.3 Secretary. The Secretary shall give, or cause to be given, notice of all meetings of stockholders and Directors and all other notices required by law or by these Bylaws, and in case of his or her absence or refusal or neglect so to do, any such notice may be given by any person thereunto directed by the Chairman of the Board or the President, or by the Board of Directors, upon whose request the meeting is called as provided in these Bylaws. The Secretary shall record all the proceedings of the meetings of the Board of Directors, any committees thereof and the stockholders of the Corporation in a book to be kept for that purpose, and shall perform such other duties as may be assigned to him or her by the Board of Directors, the Chairman of the Board or the President. The Secretary shall have the custody of the seal of the Corporation and see that the same is affixed to all instruments requiring it. Section 4.4 Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate account of receipts and disbursements in books belonging to the Corporation. The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation in the depository or depositaries of the Corporation. The Treasurer shall disburse the funds of the Corporation, taking proper vouchers for such disbursements. The Treasurer shall render to the Chairman of the Board, the President and the Board of Directors, whenever requested, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond for the faithful discharge of his duties in such amount and with such surety as the Board of Directors shall prescribe. 6 Section 4.5 Removal. Any officer elected by the Board of Directors may be removed by a majority of the Board of Directors, with or without cause, whenever, in their judgment, the best interests of the Corporation would be served thereby. No elected officer shall have any contractual rights against the Corporation for compensation by virtue of such election beyond the date of the election of his successor, his death, his resignation or his removal, whichever event shall first occur, except as otherwise provided in an employment contract or under an employee deferred compensation plan. Section 4.6 Vacancies. A newly created office and a vacancy in any office because of death, resignation, or removal may be filled by the Board of Directors for the unexpired portion of the term at any meeting of the Board of Directors. ARTICLE V STOCK CERTIFICATES AND TRANSFERS Section 5.1 Stock Certificates and Transfers. (A) The interest of each stockholder of the Corporation shall be evidenced by certificates for shares of stock in such form as the appropriate officers of the Corporation may from time to time prescribe. The shares of the stock of the Corporation shall be transferred on the books of the Corporation by the holder thereof in person or by his attorney, upon surrender for cancellation of certificates for the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof of the authenticity of the signature as the Corporation or its agents may reasonably require. (B) The certificates of stock shall be signed, countersigned and registered in such manner as the Board of Directors may by resolution prescribe, which resolution may permit all or any of the signatures on such certificates to be in facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has 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. ARTICLE VI MISCELLANEOUS PROVISIONS Section 6.1 Fiscal Year. The fiscal year of the Corporation shall be fixed by the Board of Directors. Section 6.2 Dividends. The Board of Directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its Certificate of Incorporation. 7 Section 6.3 Seal. The corporate seal shall be in such form as the Board of Directors shall prescribe. Section 6.4 Waiver of Notice. Whenever any notice is required to be given to any stockholder or director of the Corporation under the provisions of the General Corporation Law of the State of Delaware, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the stockholders or the Board of Directors need be specified in any waiver of notice of such meeting. Section 6.5 Audits. The accounts, books and records of the Corporation shall be audited upon the conclusion of each fiscal year by an independent certified public accountant, and it shall be the duty of the Board of Directors to cause such audit to be made annually. Section 6.6 Resignations. Any director or any officer, whether elected or appointed, may resign at any time by serving written notice of such resignation on the Chairman of the Board, the President or the Secretary, and such resignation shall be deemed to be effective as of the close of business on the date said notice is received by the Chairman of the Board, the President, or the Secretary, unless otherwise specified in said notice. No formal action shall be required of the Board of Directors or the stockholders to make any such resignation effective. Section 6.7 Indemnification and Insurance. (A) Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit, or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, against all expense, liability and loss (including, without limitation, attorneys' fees, judgments, fines, penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in paragraph (B) of this Section 6.7 of this Bylaw with respect to proceedings seeking to enforce rights to indemnification, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. 8 (B) If a claim under paragraph (A) of this Section 6.7 of this Bylaw is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. (C) The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Bylaw shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise. (D) The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware. (E) The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and rights to be paid by the Corporation the expenses incurred in defending any proceeding in advance of its final disposition, to any agent of the Corporation to the fullest extent of the provisions of this Bylaw with respect to the indemnification and advancement of expenses of directors, officers and employees of the Corporation. (F) The right to indemnification conferred in this Bylaw shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if the General Corporation Law of the State of Delaware requires the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, 9 including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, such advancement shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Bylaw or otherwise. ARTICLE VII AMENDMENTS Section 7.1 Amendments. These Bylaws may be altered, amended, rescinded or repealed in whole or in part, or new Bylaws may be adopted by the affirmative vote of a majority of the Board of Directors or a majority of the votes entitled to be cast by the stockholders on the matter, provided that the affirmative vote of two-thirds of the Board of Directors or of two-thirds of the votes entitled to be cast by the stockholders on the matter is required to amend Sections 2.5, 2.6, 3.2, 3.6, 3.7, 6.2, 6.7 and 7.1 of the Bylaws, and provided that notice of the proposed change was given in the notice of the meeting. EX-3.3 5 CERTIFICATE OF INCORPORATION OF HYGIENETICS ENVIRONMENTAL SERVICES, INC. Exhibit 3.3 CERTIFICATE OF INCORPORATION OF Hygienetics Environmental Services, Inc. ---------------------------------------- The undersigned, in order to form a corporation for the purpose hereinafter stated, under and pursuant to the provisions of the Delaware General Corporation Law, hereby certifies that: FIRST: The name of the Corporation is Hygienetics Environmental Services, Inc. SECOND: The registered office and registered agent of the Corporation is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law. FOURTH: The total number of shares of stock that the Corporation is authorized to issue is 100 shares of Common Stock, par value $.01 each. FIFTH: The name and address of the incorporator is Callistus Udalor, 425 Lexington Avenue, New York City, New York 10017. SIXTH: The Board of Directors of the Corporation, acting by majority vote, may alter, amend or repeal the By-Laws of the Corporation. SEVENTH: Except as otherwise provided by the Delaware General Corporation Law as the same exists or may hereafter be amended, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of this Article SEVENTH by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. IN WITNESS WHEREOF, the undersigned has signed this Certificate of Incorporation on March 2, 1998. /s/ Callistus Udalor ------------------------- Callistus Udalor Incorporator EX-3.4 6 BY-LAWS OF HYGIENETICS ENVIRONMENTAL SERVICES, INC. Exhibit 3.4 HYGIENETICS ENVIRONMENTAL SERVICES, INC. BY-LAWS ARTICLE I MEETINGS OF STOCKHOLDERS -------------------------- Section 1. Place of Meeting and Notice. Meetings of the stockholders of the Corporation shall be held at such place either within or without the State of Delaware as the Board of Directors may determine. Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by the President for any purpose and shall be called by the President or Secretary if directed by the Board of Directors or requested in writing by the holders of not less than 25% of the capital stock of the Corporation. Each such stockholder request shall state the purpose of the proposed meeting. Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder. Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Corporation's issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present. Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Corporation's issued and outstanding capital stock. ARTICLE II DIRECTORS --------- Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall not be less than one or more than fifteen. The first Board of Directors shall consist of one Director. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or the stockholders. The Directors shall be elected by stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the 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 or by the stockholders. A Director may be removed with or without cause by the stockholders. Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Section 3. Quorum. One-third of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Corporation, these By-Laws or any contract or agreement to which the Corporation is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including, without limitation, an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. 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 Director to act at the absent or disqualified member. ARTICLE III OFFICERS -------- The officers of the Corporation shall consist of a President, a Vice President, a Secretary and a Treasurer, and may consist of one or more Assistant Secretaries and Assistant Treasurers and such other additional officers with such titles as the Board of Directors shall determine, all of which shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Corporation may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause. ARTICLE IV INDEMNIFICATION AND INSURANCE Section 1. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit, or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, against all expense, liability and loss (including, without limitation, attorneys' fees, judgments, fines, penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in Section 2 of this Article IV of this Bylaw with respect to proceedings seeking to enforce rights to indemnification, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. Section 2. If a claim under Section 1 of this Article IV of this Bylaw is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 3. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Bylaw shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise. Section 4. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware. Section 5. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and rights to be paid by the Corporation the expenses incurred in defending any proceeding in advance of its final disposition, to any agent of the Corporation to the fullest extent of the provisions of this Bylaw with respect to the indemnification and advancement of expenses of directors, officers and employees of the Corporation. Section 6. The right to indemnification conferred in this Bylaw shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if the General Corporation Law of the State of Delaware requires the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, such advancement shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Bylaw or otherwise. ARTICLE V GENERAL PROVISIONS ------------------ Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these By-Laws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears in the records of the Corporation, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by telegram. Section 2. Fiscal Year. The fiscal year of the Corporation shall be fixed by the Board of Directors. EX-3.5 7 CERTIFICATE OF INCORPORATION OF L-3 COMMUNICATIONS ILEX SYSTEMS, INC. Exhibit 3.5 CERTIFICATE OF INCORPORATION OF L-3 Communications ILEX Systems, Inc. ------------------ The undersigned, in order to form a corporation for the purpose hereinafter stated, under and pursuant to the provisions of the Delaware General Corporation Law, hereby certifies that: FIRST: The name of the Corporation is L-3 Communications ILEX Systems, Inc. SECOND: The registered office and registered agent of the Corporation is The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law. FOURTH: The total number of shares of stock that the Corporation is authorized to issue is 100 shares of Common Stock, par value $.01 each. FIFTH: The name and address of the incorporator is Regan Fad, 425 Lexington Avenue, New York City, New York 10017. SIXTH: The Board of Directors of the Corporation, acting by majority vote, may alter, amend or repeal the By-Laws of the Corporation. SEVENTH: Except as otherwise provided by the Delaware General Corporation Law as the same exists or may hereafter be amended, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of this Article SEVENTH by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. IN WITNESS WHEREOF, the undersigned has signed this Certificate of Incorporation on March 6, 1998. /s/ Regan Fad ---------------------------- Regan Fad Incorporator EX-3.6 8 BY-LAWS OF L-3 COMMUNICATIONS ILEX SYSTEMS, INC. Exhibit 3.6 L-3 COMMUNICATIONS ILEX SYSTEMS, INC. BY-LAWS ARTICLE I MEETINGS OF STOCKHOLDERS ------------------------ Section 1. Place of Meeting and Notice. Meetings of the stockholders of the Corporation shall be held at such place either within or without the State of Delaware as the Board of Directors may determine. Section 2. Annual and Special Meetings. Annual meetings of stockholders shall be held, at a date, time and place fixed by the Board of Directors and stated in the notice of meeting, to elect a Board of Directors and to transact such other business as may properly come before the meeting. Special meetings of the stockholders may be called by the President for any purpose and shall be called by the President or Secretary if directed by the Board of Directors or requested in writing by the holders of not less than 25% of the capital stock of the Corporation. Each such stockholder request shall state the purpose of the proposed meeting. Section 3. Notice. Except as otherwise provided by law, at least 10 and not more than 60 days before each meeting of stockholders, written notice of the time, date and place of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder. Section 4. Quorum. At any meeting of stockholders, the holders of record, present in person or by proxy, of a majority of the Corporation's issued and outstanding capital stock shall constitute a quorum for the transaction of business, except as otherwise provided by law. In the absence of a quorum, any officer entitled to preside at or to act as secretary of the meeting shall have power to adjourn the meeting from time to time until a quorum is present. Section 5. Voting. Except as otherwise provided by law, all matters submitted to a meeting of stockholders shall be decided by vote of the holders of record, present in person or by proxy, of a majority of the Corporation's issued and outstanding capital stock. ARTICLE II DIRECTORS --------- Section 1. Number, Election and Removal of Directors. The number of Directors that shall constitute the Board of Directors shall not be less than one or more than fifteen. The first Board of Directors shall consist of one Director. Thereafter, within the limits specified above, the number of Directors shall be determined by the Board of Directors or the stockholders. The Directors shall be elected by stockholders at their annual meeting. Vacancies and newly created directorships resulting from any increase in the 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 or by the stockholders. A Director may be removed with or without cause by the stockholders. Section 2. Meetings. Regular meetings of the Board of Directors shall be held at such times and places as may from time to time be fixed by the Board of Directors or as may be specified in a notice of meeting. Section 3. Quorum. One-third of the total number of Directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, the Directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such a quorum is present. Except as otherwise provided by law, the Certificate of Incorporation of the Corporation, these By-Laws or any contract or agreement to which the Corporation is a party, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. Section 4. Committees. The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees, including, without limitation, an Executive Committee, to have and exercise such power and authority as the Board of Directors shall specify. 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 Director to act at the absent or disqualified member. ARTICLE III OFFICERS -------- The officers of the Corporation shall consist of a President, a Vice President, a Secretary and a Treasurer, and may consist of one or more Assistant Secretaries and Assistant Treasurers and such other additional officers with such titles as the Board of Directors shall determine, all of which shall be chosen by and shall serve at the pleasure of the Board of Directors. Such officers shall have the usual powers and shall perform all the usual duties incident to their respective offices. All officers shall be subject to the supervision and direction of the Board of Directors. The authority, duties or responsibilities of any officer of the Corporation may be suspended by the President with or without cause. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause. ARTICLE IV INDEMNIFICATION AND INSURANCE Section 1. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit, or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, against all expense, liability and loss (including, without limitation, attorneys' fees, judgments, fines, penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in Section 2 of this Article IV of this Bylaw with respect to proceedings seeking to enforce rights to indemnification, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. Section 2. If a claim under Section 1 of this Article IV of this Bylaw is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 3. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Bylaw shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise. Section 4. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware. Section 5. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and rights to be paid by the Corporation the expenses incurred in defending any proceeding in advance of its final disposition, to any agent of the Corporation to the fullest extent of the provisions of this Bylaw with respect to the indemnification and advancement of expenses of directors, officers and employees of the Corporation. Section 6. The right to indemnification conferred in this Bylaw shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if the General Corporation Law of the State of Delaware requires the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, such advancement shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Bylaw or otherwise. ARTICLE V GENERAL PROVISIONS ------------------ Section 1. Notices. Whenever any statute, the Certificate of Incorporation or these By-Laws require notice to be given to any Director or stockholder, such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears in the records of the Corporation, with postage thereon prepaid. Such notice shall be deemed to have been given when it is deposited in the United States mail. Notice to Directors may also be given by telegram. Section 2. Fiscal Year. The fiscal year of the Corporation shall be fixed by the Board of Directors. EX-3.7 9 ARTICLES OF INCORPORATION OF SOUTHERN CALIFORNIA MICROWAVE, INC. Exhibit 3.7 ARTICLES OF INCORPORATION OF SOUTHERN CALIFORNIA MICROWAVE, INC. I The name of this corporation is Southern California Microwave, Inc. II The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business, or the practice of a profession permitted to be incorporated by the California Corporations Code. III The name and address in the State of California of this corporation's initial agent for the service of process is: Bruce Scheurenbrand 2732 Via Orange Way, Suite E Spring Valley, CA 92021 IV This corporation is authorized to issue only one class of capital stock designated "Common Stock." The number of shares of Common Stock is 100,000. V The liability of the directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under California law. VI The corporation is authorized to provide indemnification of agents (as defined in Section 317 of the Corporations Code) for breach of duty to the corporation and its stockholders through by law provisions or through agreements with agents, or both, in excess of the indemnification otherwise permitted by Section 317 of the Corporations Code, subject only to the applicable limits set forth in Section 204 of the Corporations Code with respect to actions for breach of duty to this corporation and its shareholders. IN WITNESS WHEREOF, the undersigned Incorporator of this corporation has executed these Articles of Incorporation on 20 June 1991 /s/ Bruce Scheurenbrand ----------------------- Bruce Scheurenbrand I declare that I am the person who executed the above Articles of Incorporation, and this instrument is my act and deed. Date: 20 June 1991 /s/ Bruce Scheurenbrand ----------------------- Bruce Scheurenbrand - - 2 - CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF SOUTHERN CALIFORNIA MICROWAVE, INC. Bruce Scheurenbrand and James C. Scheurenbrand certify that: 1. Bruce Scheurenbrand is the President and Chief Executive Officer of Southern California Microwave, Inc., a California corporation (the "Corporation"). 2. James C. Scheurenbrand is the Secretary of the Corporation. 3. Article IV of the Articles of Incorporation of this Corporation is amended to read as follows: "This corporation is authorized to issue only one class of shares of stock which shall be designated common stock, and the total number of shares which the corporation is authorized to issue is One Million (1,000,000)." 4. The foregoing amendment of Articles of Incorporation has been duly approved by the board of directors. 5. The foregoing amendment of articles of incorporation has been duly approved by the required vote of shareholders in accordance with Section 902 of the Corporations Code. The total number of outstanding shares of the corporation is 100,000. The number of shares voting in favor of the amendment equaled or exceeded the vote required. The percentage vote required was more than 50%. We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge. Dated as of July 1, 1997. /s/ Bruce Scheurenbrand ------------------------ Bruce Scheurenbrand, President and Chief Executive Officer /s/ James C. Scheurenbrand -------------------------- James C. Scheurenbrand, Secretary EX-3.8 10 BY-LAWS OF SOUTHERN CALIFORNIA MICROWAVE, INC. Exhibit 3.8 BY LAWS OF SOUTHERN CALIFORNIA MICROWAVE, INC. A CALIFORNIA CORPORATION INDEX TO BYLAWS
PAGE -------- ARTICLE I--OFFICES Section 1. Principal Executive or Business Offices ..................................... 1 Section 2. Other Offices ............................................................... 1 ARTICLE II--MEETINGS OF SHAREHOLDERS Section 1. Place of Meetings ........................................................... 1 Section 2. Annual Meeting .............................................................. 1 Section 3. Special Meeting ............................................................. 2 Section 4. Notice of Shareholders' Meetings ............................................ 2 Section 5. Manner of Giving Notice: Affidavit of Notice ................................ 3 Section 6. Quorum ...................................................................... 3 Section 7. Adjourned Meeting; Notice ................................................... 4 Section 8. Voting ...................................................................... 4 Section 9. Waiver of Notice or Consent by Absent Shareholders .......................... 5 Section 10. Shareholder Action by Written Consent without a Meeting ..................... 6 Section 11. Record Date for Shareholder Notice of Meeting, Voting, and Giving Consent ... 7 Section 12. Proxies ..................................................................... 7 Section 13. Inspectors of Election ...................................................... 8 ARTICLE III--DIRECTORS Section 1. Powers ...................................................................... 9 Section 2. Number and Qualification of Directors ....................................... 9 Section 3. Election and Term of Office of Directors .................................... 9 Section 4. Vacancies ................................................................... 10 Section 5. Place of Meetings; Telephone Meetings ....................................... 10 Section 6. Annual Directors' Meeting ................................................... 11 Section 7. Other Regular Meetings ...................................................... 11 Section 8. Special Meetings ............................................................ 11 Section 9. Quorum ...................................................................... 11 Section 10. Waiver of Notice ............................................................ 12 Section 11. Adjournment to Another Time or Place ........................................ 12 Section 12. Notice of Adjourned Meeting ................................................. 12 Section 13. Action without a Meeting ..................................................... 12 Section 14. Fees and Compensation of Directors .......................................... 12 ARTICLE IV--COMMITTEES Section 1. Executive and Other Committees of the Board ................................. 13 Section 2. Meetings and Actions of Committees .......................................... 13 - i - PAGE -------- ARTICLE V--OFFICERS Section 1. Officers .................................................................... 14 Section 2. Election of Officers ........................................................ 14 Section 3. Subordinate Officers ........................................................ 14 Section 4. Removal and Resignation of Officers ......................................... 14 Section 5. Vacancies in Offices ........................................................ 15 Section 6. Chairman of the Board ....................................................... 15 Section 7. President ................................................................... 15 Section 8. Vice Presidents ............................................................. 16 Section 9. Secretary ................................................................... 16 Section 10. Chief Financial Officer ..................................................... 17 ARTICLE VI--INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS Section 1. Agents, Proceedings, and Expenses ........................................... 17 Section 2. Actions Other than by the Corporation ....................................... 18 Section 3. Action by the Corporation ................................................... 18 Section 4. Successful Defense by Agent ................................................. 19 Section 5. Required Approval ........................................................... 19 Section 6. Advance of Expenses ......................................................... 19 Section 7. Other Contractual Rights .................................................... 19 Section 8. Limitations ................................................................. 20 Section 9. Insurance ................................................................... 20 Section 10. Fiduciaries of Corporate Employee Benefit plan .............................. 20 ARTICLE VII--RECORDS AND REPORTS Section 1. Maintenance of Shareholder Record and Inspection by Shareholders ........... 21 Section 2. Maintenance and Inspection by Bylaws ........................................ 21 Section 3. Maintenance and Inspection of Minutes and Accounting Records ............... 22 Section 4. Inspection by Directors ..................................................... 22 Section 5. Annual Report to Shareholders ............................................... 22 Section 6. Financial Statements ........................................................ 23 Section 7. Annual Statement of General Information ..................................... 24 ARTICLE VIII--GENERAL CORPORATE MATTERS Section 1. Record Date for Purposes Other Than Notice and Voting ....................... 24 Section 2. Authorized Signatories for Checks ........................................... 25 Section 3. Executing Corporate Contracts and Instruments ............................... 25 Section 4. Certificates for Shares ..................................................... 25 Section 5. Lost Certificates ........................................................... 26 Section 6. Shares of Other Corporations: How Voted ..................................... 26 Section 7. Reimbursement of Corporation if Payment Not Tax Deductible .................. 26 Section 8. Construction and Definitions ................................................ 27 - ii - PAGE -------- ARTICLE IX--AMENDMENTS Section 1. Amendment by Board of Directors or Shareholders ............................. 27 Section 2. Record of Amendments ........................................................ 27
- iii - BYLAWS OF SOUTHERN CALIFORNIA MICROWAVE, INC. A California Corporation ARTICLE I OFFICES Section 1. PRINCIPAL EXECUTIVE OR BUSINESS OFFICES. The board of directors shall fix the location of the principal executive office of the corporation at any place within or outside the State of California. If the principal executive office is located outside California and the corporation has one or more business offices in California, the board shall fix and designate a principal business office in California. Section 2. OTHER OFFICES. Branch or subordinate offices may be established at any time and at any place by the board of directors. ARTICLE II MEETINGS OF SHAREHOLDERS Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held at any place within or outside the State of California designated by the board of directors. In the absence of a designation by the board, shareholders' meetings shall be held at the corporation's principal executive office. Section 2. ANNUAL MEETING. The annual meeting of shareholders shall be held each year on a date and at a time designated by the board of directors. The date so designated shall be within five months after the end of the corporation's fiscal year, and within fifteen months after the last annual meeting. At each annual meeting, directors shall be elected and any other proper business within the power of the shareholders may be transacted. Section 3. SPECIAL MEETING. A special meeting of the shareholders may be called at any time by the board of directors, by the chairman of the board, by the president, or by one or more shareholders holding shares that in the aggregate are entitled to cast ten percent or more of the votes at that meeting. If a special meeting is called by anyone other than the board of directors, the person or persons calling the meeting shall make a request in writing, delivered personally or sent by registered mail or by telegraphic or other facsimile transmission, to the chairman of the board or the president, vice president, or secretary, specifying the time and date of the meeting (which is not less than 35 nor more than 60 days after receipt of the request) and the general nature of the business proposed to be transacted. Within 20 days after receipt, the officer receiving the request shall cause notice to be given to the shareholders entitled to vote, in accordance with Sections 4 and 5 of this Article II, stating that a meeting will be held at the time requested by the person(s) calling the meeting, and stating the general nature of the business proposed to be transacted. If notice is not given within 20 days after receipt of the request, the person or persons requesting the meeting may either give the notice in accordance with Sections 4 and 5 of this Article II or apply to the superior court for a summary order requiring the notice to be given after notice to the corporation giving it an opportunity to be heard. Nothing contained in this paragraph shall be construed as limiting, fixing, or affecting the time when a meeting of shareholders called by action of the board may be held. Section 4. NOTICE OF SHAREHOLDERS' MEETINGS. All notices of meetings of shareholders shall be sent or otherwise given to each shareholder entitled to vote thereat in accordance with Section 5 of this Article II not fewer than 10 nor more than 60 days before the date of the meeting. Shareholders entitled to notice shall be determined in accordance with Section 11 of this Article II. The notice shall specify the place, date, and hour of the meeting, and (i) in the case of a special meeting, the general nature of the business to be transacted, and that no other business may be transacted, or (ii) in the case of the annual meeting, those matters which the board of directors, at the time of giving the notice, intends to present for action by the shareholders. If directors are to be elected, the notice shall include the names of all nominees whom the board intends, at the time of the notice, to present for election. The notice shall also state the general nature of any proposed action to be taken at the meeting to approve any of the following matters: (i) A transaction in which a director has a financial interest, within the meaning of section 310 of the General Corporation Law of the California Corporations -2- Code, effective January 1, 1977, as amended, (the "Code"); (ii) An amendment of the Articles of Incorporation under section 902 of the Code; (iii) A reorganization under section 1201 of the Code; (iv) A voluntary dissolution under section 1900 of the Code; or (v) A distribution in dissolution that requires approval of the outstanding shares under section 2007 of the Code. Section 5. MANNER OF GIVING NOTICE: AFFIDAVIT OF NOTICE. Notice of any shareholders' meeting or any written report to shareholders shall be given either personally or by first-class mail or telegraphic or other written communication, charges prepaid, addressed to the shareholder at the address appearing on the corporation's books or given by the shareholder to the corporation for purposes of notice. If no address appears on the corporation's books or has been given as specified above, notice shall be either (1) sent by first-class mail addressed to the shareholder at the corporation's principal executive office, or (2) published at least once in a newspaper of general circulation in the county where the corporation's principal executive office is located. Notice is deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication. If any notice or report mailed to a shareholder at the address appearing on the corporation's books is returned marked to indicate that the United States Postal Service is unable to deliver the document to the shareholder at that address, all future notices or reports shall be deemed to have been duly given without further mailing if the corporation holds the document available for the shareholder on written demand at the corporation's principal executive office for a period of one year from the date the notice or report was given to all other shareholders. An affidavit of the mailing, or other authorized means of giving notice or delivering a document, of any notice of shareholders' meeting, report, or other document sent to shareholders, may be executed by the corporation's secretary, assistant secretary, or transfer agent, and shall be filed and maintained in the minute book of the corporation. Section 6. QUORUM. Unless otherwise provided in the Articles of Incorporation, the presence in person or by proxy of the holders of a majority of -3- the shares entitled to vote at any meeting of the shareholders shall constitute a quorum for the transaction of business. The shareholders 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 shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. Section 7. ADJOURNED MEETING; NOTICE. Any shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the majority of the shares represented at that meeting, either in person or by proxy, but in the absence of a quorum, no other business may be transacted at that meeting, except as provided in Section 6 of this Article II. When any meeting of shareholders, either annual or special, is adjourned to another time or place, notice of the adjourned meeting need not be given if the time and place are announced at the meeting at which the adjournment is taken, unless a new record date for the adjourned meeting is fixed, or unless the adjournment is for more than 45 days from the date set for the original meeting, in which case the board of directors shall set a new record date. Notice of any such adjourned meeting, if required, shall be given to each shareholder of record entitled to vote at the adjourned meeting, in accordance with Sections 4 and 5 of this Article II. At any adjourned meeting, the corporation may transact any business that might have been transacted at the original meeting. Section 8. VOTING. Except as provided in this Section 8 and except as may be otherwise provided in the Articles, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote of shareholders. The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with Section 11 of this Article II, subject to the provisions of sections 702 through 704 of the Code (relating to voting shares held by a fiduciary, in the name of a corporation, or in joint ownership). The shareholders' vote may be by voice vote or by ballot, provided, however, that any election for directors must be by ballot if demanded by any shareholder before the voting has begun. On any matter other than the election of directors, any shareholder may vote part of the shares in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, but, if the shareholder fails to specify the number of shares that the shareholder is voting affirmatively, it will be conclusively presumed that the shareholder's approving vote is with respect to all shares that the shareholder is entitled to vote. If a quorum is present (or -4- if a quorum has been present earlier at the meeting but some shareholders have withdrawn), the affirmative vote of a majority of the shares represented and voting, provided such shares voting affirmatively also constitute a majority of the number of shares required for a quorum, shall be the act of the shareholders unless the vote of a greater number or voting by classes is required by law or by the Articles of Incorporation. At a shareholders' meeting at which directors are to be elected, no shareholder shall be entitled to cumulate votes (i.e., cast for any candidate a number of votes greater than the number of votes which that shareholder normally would be entitled to cast), unless the candidates' names have been placed in nomination before commencement of the voting and a shareholder has given notice at the meeting, before the voting has begun, of the shareholder's intention to cumulate votes. If any shareholder has given such a notice, then all shareholders entitled to vote may cumulate their votes for candidates in nomination, and may give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which that shareholder's shares are normally entitled, or distribute the shareholder's votes on the same principle among any or all of the candidates, as the shareholder thinks fit. The candidates receiving the highest number of affirmative votes of the shares entitled to be voted for them, up to the number of directors to be elected by such shares, shall be elected; votes against a director and votes withheld shall have no legal effect. Section 9. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The transactions of any meeting of shareholders, either annual or special, however called and noticed and wherever held, shall be as valid as though they were had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if each person entitled to vote who was not present in person or by proxy, either before or after the meeting, signs a written waiver of notice or a consent to holding the meeting or an approval of the minutes of the meeting. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special meeting of the shareholders, except that if action is taken or proposed to be taken for approval of any of those matters specified in section 601(f) of the Code, the waiver of notice or consent is required to state the general nature of the action or proposed action. All waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. A shareholder's attendance at a meeting also constitutes a waiver of notice of that meeting, unless the shareholder at the beginning of the meeting objects to the transaction of any business on the ground that the meeting was not lawfully called or convened. In addition, attendance at a meeting does not -5- constitute a waiver of any right to object to consideration of matters required by law to be included in the notice of the meeting which were not so included, if that objection is expressly made at the meeting. Section 10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Unless otherwise provided in the Articles of Incorporation, any action that could be taken at an annual or special meeting of shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take that action at a meeting at which all shares entitled to vote on that action were present and voted. Directors may be elected by written consent of the shareholders without a meeting only if the written consents of all outstanding shares entitled to vote are obtained, except that vacancies on the board (other than vacancies created by removal) not filled by the board may be filled by the written consent of the holders of a majority of the outstanding shares entitled to vote. All consents shall be filed with the secretary of the corporation and shall be maintained in the corporate records. where applicable, the form of any written consent shall comply with the requirements of section 604 of the Code. Any shareholder or other authorized person who has given a written consent may revoke it by a writing received by the secretary of the corporation before written consents of the number of shares required to authorize the proposed action have been filed with the secretary but may not do so thereafter. Any such revocation shall be effective upon its receipt by the secretary. Unless the consents of all shareholders entitled to vote have been solicited in writing, prompt notice shall be given of any corporate action approved by shareholders without a meeting by less than unanimous consent, to those shareholders entitled to vote who have not consented in writing. As to approvals required by Code section 310 (transactions in which a director has a financial interest), section 317 (indemnification of corporate agents), section 1201 (corporate reorganization), or section 2007 (certain distributions on dissolution), notice of the approval shall be given at least ten days before the consummation of any action authorized by the approval. Notice shall be given in the manner specified in Section 5 of this Article II. Section 11. RECORD DATE FOR SHAREHOLDER NOTICE OF MEETING, VOTING, AND GIVING CONSENT. (a) For purposes of determining the shareholders entitled to receive notice of and vote at a shareholders' meeting or give -6- written consent to corporate action without a meeting, the board may fix in advance a record date that is not more than 60 nor less than 10 days before the date of a shareholders' meeting, or not more than 60 days before any other action. (b) If no record date is fixed: (i) The record date for determining shareholders entitled to receive notice of and vote at a shareholders' meeting shall be the business day next preceding the day on which notice is given, or if notice is waived as provided in Section 9 of this Article II, the business day next preceding the day on which the meeting is held. (ii) The record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, if no prior action has been taken by the board, shall be the day on which the first written consent is given. (iii) The record date for determining shareholders for any other purpose shall be as set forth in Section 1 of Article VIII of these bylaws. (c) A determination of shareholders of record entitled to receive notice of and vote at a shareholders' meeting shall apply to any adjournment of the meeting unless the board fixes a new record date for the adjourned meeting. However, the board shall fix a new record date if the adjournment is to a date more than 45 days after the date set for the original meeting. (d) Only shareholders of record on the corporation's books at the close of business on the record date shall be entitled to any of the notice and voting rights listed in subsection (a) of this section, notwithstanding any transfer of shares on the corporation's books after the record date, except as otherwise provided in the Articles of Incorporation, or by agreement, or by law. Section 12. PROXIES. Every person entitled to vote for directors or on any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the person and filed with the secretary of the corporation. A proxy shall be deemed signed if the shareholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission, or otherwise) by the shareholder or the shareholder's attorney in fact. A validly executed proxy that does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, before the vote pursuant to that proxy, by a writing delivered to -7- the corporation stating that the proxy is revoked, or by attendance at the meeting and voting in person by the person executing the proxy or by a subsequent proxy executed by the same person and presented at the meeting; or (ii) written notice of the death or incapacity of the maker of that proxy is received by the corporation before the vote pursuant to that proxy is counted; provided, however, that no proxy shall be valid after the expiration of 11 months from the date of the proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of sections 705(e) and 705(f) of the Code. where applicable, the form of any proxy shall comply with the requirements of section 604 of the Code. Section 13. INSPECTORS OF ELECTION. Before any meeting of shareholders, the board of directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If no inspectors of election are so appointed, the chairman of the meeting may, and on the request of any shareholder or a shareholder's proxy shall, appoint inspectors of election at the meeting. The number of inspectors shall be either one or three. If inspectors are appointed at a meeting on the request of one or more shareholders or proxies, the holders of a majority of shares or their proxies present at the meeting shall determine whether one or three inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may, and upon the request of any shareholder or a shareholder's proxy shall, appoint a person to fill that vacancy. These inspectors shall: (a) determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity, and effect of proxies; (b) receive votes, ballots, or consents; (c) hear and determine all challenges and questions in any way arising in connection with the right to vote; (d) count and tabulate all votes or consents; (e) determine when the polls shall close; (f) determine the result; and (g) do any other acts that may be proper to conduct the election or vote with fairness to all shareholders. If there are three inspectors of election, the decision, act, or certificate of a majority is effective in all respects as the decision, act, or certificate of all. -8- ARTICLE III DIRECTORS Section 1. POWERS. Subject to the provisions of the Code and any limitations in the Articles of Incorporation and these bylaws relating to action required to be approved by the shareholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board of directors. Each director shall exercise his powers and otherwise perform his duties in good faith, in the manner he believes to be in the best interests of the corporation and its shareholders, and with such care, including reasonable inquiry, using ordinary prudence, as a person in a like position would use under similar circumstances. Section 2. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number of directors shall be not less than three nor more than five; provided, however, whenever the corporation has fewer than three shareholders, the minimum number of directors shall be equal to the number of shareholders. The exact number of authorized directors shall be one until changed, within the limits specified above, by an amendment to this section duly adopted by the board of directors or by the shareholders. After the issuance of shares, the maximum or minimum number of directors cannot be changed, nor can a fixed number be substituted for the maximum and minimum numbers, except by approval of the outstanding shares, as defined in Section 152 of the Code. Any amendment of the Bylaws or Articles that would reduce the minimum number to a number less than five, however, cannot be adopted if the votes cast against its adoption at a shareholders' meeting or the shares not consenting to an action by written consent are equal to more than 16-2/3% of the outstanding shares entitled to vote. No amendment may change the stated maximum number of authorized directors to a number greater than two times the stated minimum number minus one. Section 3. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be elected at each annual meeting of the shareholders to hold office until the next annual meeting. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified. No reduction of the authorized number of directors shall have the effect of removing any director before that director's term of office expires. -9- Section 4. VACANCIES. A vacancy in the board of directors shall be deemed to exist (a) if a director dies, resigns, or is removed by the Shareholders or an appropriate court, as Provided in sections 303 or 304 of the Code; (b) if the board of directors declares vacant the office of a director who has been convicted of a felony or declared of unsound mind by an order of court; (c) if the authorized number of directors is increased; or (d) if at any Shareholders' meeting at which one or more directors are elected the Shareholders fail to elect the full authorized number of directors to be voted for at that meeting. Any director may resign effective on giving written notice to the chairman of the board, the president, the secretary, or the board of directors, unless the notice specifies a later effective date. If the resignation is effective at a future time, the board may elect a successor to take office when the resignation becomes effective. Unless otherwise Provided in the Articles of Incorporation and except for a vacancy caused by the removal of a director, vacancies on the board may be filled by a majority of the directors then in office, whether or not they constitute a quorum, or by a sole remaining director. A vacancy on the board caused by the removal of a director may be filled only by the Shareholders, except that a vacancy created when the board declares the office of a director vacant as Provided in clause (b) of the first Paragraph of this Section 4 may be filled by the board of directors. The Shareholders may elect a director at any time to fill a vacancy not filled by the board of directors. The term of office of a director elected to fill a vacancy shall run until the next annual meeting of the Shareholders, and such a director shall hold office until a successor is elected and qualified. Section 5. PLACE OF MEETINGS; TELEPHONE MEETINGS. Regular meetings of the board of directors may be held at any place within or outside the State of California as designated from time to time by the board. In the absence of a designation, regular meetings shall be held at the Principal executive office of the corporation. Special meetings of the board shall be held at any place within or outside the State of California designated in the notice of the meeting, or if the notice does not state a place, or if there is no notice, at the Principal executive office of the corporation Any meeting, regular or special, may be held by conference telephone or similar communication equipment, Provided that all directors Participating can hear one another. -10- Section 6. ANNUAL DIRECTORS' MEETING. Immediately after each annual Shareholders' meeting, the board of directors shall hold a regular meeting at the same place, or at any other place that has been designated by the board of directors, to consider matters of organization, election of officers, and other business as desired. Notice of this meeting shall not be required unless some place other than the place of the annual shareholders' meeting has been designated. Section 7. OTHER REGULAR MEETINGS. Other regular meetings of the board of directors shall be held without call at times to be fixed by the board of directors from time to time. Such regular meetings may be held without notice. Section 8. SPECIAL MEETINGS. Special meetings of the board of directors may be called for any purpose or purposes at any time by the chairman of the board, the president, any vice president, the secretary, or any two directors. Special meetings shall be held on four days' notice by mail or 48 hours' notice delivered personally or by telephone or telegraph. Oral notice given Personally or by telephone may be transmitted either to the director or to a person at the director's office who can reasonably be expected to communicate it promptly to the director. Written notice, if used, shall be addressed to each director at the address shown on the corporation~s records or, if the secretary has reason to believe any such address is not current, at the current address of each director if such address is readily ascertainable. The notice need not specify the purpose of the meeting, nor need it specify the place if the meeting is to be held at the Principal executive office of the corporation. Section 9. QUORUM. A majority of the authorized number of directors shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 11 of this Article III. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the board of directors, subject to the Provisions of Code section 310 (as to approval of contracts or transactions in which a director has a direct or indirect material financial interest, section 311 (as to appointment of committees), and section 317(e) (as to indemnification of directors). A meeting at which a quorum is initially present may continue to transact business, notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting. -11- Section 10. WAIVER OF NOTICE. Notice of a meeting, although otherwise required, need not be given to any director who (a) either before or after the meeting signs a waiver of notice or a consent to holding the meeting without being given notice, (b) signs an approval of the minutes of the meeting, or (c) attends the meeting without Protesting the lack of notice before or at the beginning of the meeting. Waivers of notice or consents need not specify the purpose of the meeting. All waivers, consents, and approvals of the minutes shall be filed with the corporate records or made a part of the minutes of the meeting. Section 11. ADJOURNMENT TO ANOTHER TIME OR PLACE. whether or not a quorum is present, a majority of the directors present may adjourn any meeting to another time or place. Section 12. NOTICE OF ADJOURNED MEETING. Notice of the time and place of resuming a meeting that has been adjourned need not be given unless the adjournment is for more than 24 hours, in which case notice shall be given, before the time set for resuming the adjourned meeting, to the directors who were not present at the time of the adjournment Notice need not be given in any case to directors who were Present at the time of adjournment. Section 13. ACTION WITHOUT A MEETING. Any action required or Permitted to be taken by the board of directors may be taken without a meeting, if all members of the board of directors shall individually or collectively consent in writing to that action. Any action by written consent shall have the same force and effect as a unanimous vote of the board of directors. All written consents shall be filed with the minutes of the Proceedings of the board of directors. Section 14. FEES AND COMPENSATION OF DIRECTORS. Directors and members of committees of the board may be compensated for their services, and shall be reimbursed for expenses, as fixed or determined by resolution of the board of directors. This section shall not be construed to Preclude any director from serving the corporation in any other capacity, as an officer, agent, employee, or otherwise, and receiving compensation for those services. -12- ARTICLE IV COMMITTEES Section 1. EXECUTIVE AND OTHER COMMITTEES OF THE BOARD. The board of directors may, by resolution adopted by a majority of the authorized number of directors, designate an executive committee or one or more other committees, each consisting of two or more directors. The board may designate one or more directors as alternate members of any committee, to replace any absent member at a committee meeting. The appointment of committee members or alternate members requires the vote of a majority of the authorized number of directors. A committee may be granted any or all of the powers and authority of the board, to the extent Provided in the resolution of the board of directors establishing the committee, except with respect to: (a) Approving any action for which the Code also requires the approval of the shareholders or of the outstanding shares; (b) Filing vacancies on the board of directors or any committee of the board; (c) Fixing directors' compensation for serving on the board or a committee of the board; (d) Adopting, amending, or repealing bylaws; (e) Amending or repealing any resolution of the board of directors which by its express terms is not so amendable or repealable; (f) Making distributions to Shareholders, except at a rate or in a periodic amount or within a price range set forth in the Articles of Incorporation or determined by the board of directors; or (g) Appointing other committees of the board or their members. Section 2. MEETINGS AND ACTIONS OF COMMITTEES. Meetings and actions of committees shall be governed by, and held and taken in accordance with, bylaw provisions applicable to meetings and actions of the board of directors, as Provided in Section 5 and Sections 7 through 13 of Article III of these bylaws, as to the following matters: place of meetings Section 5; regular meetings - Section 7; special meetings and notice - Section 8; quorum - Section 9; waiver of notice Section 10; adjournment - Section 11; notice of adjournment Section 12; and action without meeting - Section 13, with such changes in the context of those bylaws as are necessary to substitute the committees and their members for the board of -13- directors and its members, except that (a) the time of regular meetings of committees may be determined either by resolution of the board of directors or by resolution of the committees; (b) special meetings of committees may also be called by resolution of the board of directors; and (c) notice of special meetings of committees shall also be given to all alternative members who shall have the right to attend all meetings of the committees. The board of directors may adopt rules for the governance of any committee not inconsistent with the provisions of these bylaws. ARTICLE V OFFICERS Section 1. OFFICERS. The officers of the corporation shall be a president, a secretary, and a chief financial officer. The corporation may also have, at the discretion of the board of directors, a chairman of the board, one or more vice presidents, one or more assistant secretaries, one or more assistant treasurers, and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article V. Unless otherwise provided in the Articles of Incorporation, any number of offices may be held by the same person. Section 2. ELECTION OF OFFICERS. The officers of the corporation, except for subordinate officers appointed in accordance with the provisions of Section 3 of this Article V, shall be chosen by the board of directors, and each shall hold his office until he resigns, is removed, is otherwise disqualified to serve, or until his successor is elected and qualified. Section 3. SUBORDINATE OFFICERS. The board of directors may appoint, and may empower the president to appoint, other officers as required by the business of the corporation, each of which officers shall hold office for such period, have such authority, and perform such duties as are provided in the bylaws, or as the board of directors or the president may determine from time to time. Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Any officer chosen by the board of directors may be removed at any time, with or without cause or notice, by the board of directors. Subordinate officers appointed by persons other than the board under Section 3 of this Article V may be removed at any time, with or without cause or notice, by the board of directors or by the officer by whom appointed. Officers may be employed -14- for a specified term under a contract of employment if authorized by the board of directors; such officers may be removed from office at any time under this section, and shall have no claim against the corporation or individual officers or board members because of the removal except any right to monetary compensation to which the officer may be entitled under the contract of employment. Any officer may resign at any time by giving written notice to the board of directors, or to the president, or to the secretary of the corporation. Resignations shall take effect on the date of receipt of the notice, unless a later time is specified in the notice. Unless otherwise specified in the notice, acceptance of the resignation is not necessary to make it effective. Any resignation or acceptance thereof is without prejudice to the rights, if any, of the corporation to monetary damages under any contract of employment to which the officer is a party. Section 5. VACANCIES IN OFFICES. A vacancy in any office resulting from an officer's death, resignation, removal, disqualification, or from any other cause shall be filled in the manner prescribed in these bylaws for regular election or appointment to that office. Section 6. CHAIRMAN OF THE BOARD. The board of directors may elect a chairman, who shall preside, if present, at board meetings and shall exercise and perform such other powers and duties as may be assigned from time to time by the board of directors. If there is no president, the chairman of the board shall in addition be the chief executive officer of the corporation, and shall have the powers and duties as set forth in Section 7 of this Article V. Section 7. PRESIDENT. Except to the extent that the bylaws or the board of directors assign specific powers and duties to the chairman of the board (if any), the president shall be the corporation's general manager and chief executive officer and, subject to the control of the board of directors, shall have general supervision, direction, and control over the corporation's business and its officers. The managerial powers and duties of the president shall include, but are not limited to, all the general powers and duties of management usually vested in the office of president of a corporation, and the president shall have other powers and duties as prescribed by the board of directors or the bylaws. The president shall preside at all meetings of the shareholders and, in the absence of the chairman of the board or if there is no chairman of the board, shall also preside at meetings of the board of directors. -15- Section 8. VICE PRESIDENTS. If desired, one or more vice presidents may be chosen by the board of directors in accordance with the provisions for electing officers set forth in Section 2 of this Article V. In the absence or disability of the president, the president's duties and responsibilities shall be carried out by the highest ranking available vice president if vice presidents are ranked, or if not, by a vice president designated by the board of directors. When so acting, a vice president shall have all the powers of and be subject to all the restrictions on the president. Vice presidents of the corporation shall have such other powers and perform such other duties as prescribed from time to time by the board of directors, the bylaws, or the president (or chairman of the board if there is no president). Section 9. SECRETARY. (a) Minutes. The secretary shall be present at all shareholders' meetings and all board meetings and shall take the minutes of the meeting. If the secretary is unable to be present, the secretary or the presiding officer of the meeting shall designate another person to take the minutes of the meeting. The secretary shall keep, or cause to be kept, at the principal executive office or such other place as designated by the board of directors, a book of minutes of all meetings and actions of the shareholders, of the board of directors, and of committees of the board. The minutes of each meeting shall state the time and place the meeting was held; whether it was regular or special; if special, how it was called or authorized; the names of directors present at board or committee meetings; the number of shares present or represented at shareholders' meetings; and an accurate account of the proceedings. (b) Record of Shareholders. The secretary shall keep, or cause to be kept, at the principal executive office or at the office of the transfer agent or registrar, a record or duplicate record of shareholders. This record shall show the names of all shareholders and their addresses, the number and classes of shares held by each, the number and date of share certificates issued to each shareholder, and the number and date of cancellation of any certificates surrendered for cancellation. (c) Notice of Meetings. The secretary shall give notice, or cause notice to be given, of all shareholders' meetings, board meetings, and meetings of committees of the board for which notice is required by statute or by the bylaws. If the secretary or other person authorized by the secretary to give notice fails to act, notice of any meeting may be given by any other officer of the corporation. -16- (d) Other Duties. The secretary shall keep the seal of the corporation, if any, in safe custody. The secretary shall have such other powers and perform other duties as prescribed by the board of directors or by the bylaws. Section 10. CHIEF FINANCIAL OFFICER. The chief financial officer shall keep or cause to be kept adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and shares. The books of account shall at all reasonable times be open to inspection by any director. The chief financial officer shall (1) deposit corporate funds and other valuables in the corporation's name and to its credit with depositories designated by the board of directors; (2) make disbursements of corporate funds as authorized by the board; (3) render a statement of the corporation's financial condition and an account of all transactions conducted as chief financial officer whenever requested by the president or the board of directors; (4) have other powers and perform other duties as prescribed by the board of directors or the bylaws. Unless the board of directors has elected a separate treasurer, the chief financial officer shall be deemed to be the treasurer for purposes of giving any reports or executing any certificates or other documents. ARTICLE VI INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS Section 1. AGENTS, PROCEEDINGS, AND EXPENSES. For the purposes of this Article VI, "agent" means any person who is or was a director, officer, employee, or other agent of this corporation, or is or was serving at the request of this corporation as a director, officer, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation which was a predecessor corporation of this corporation or of another enterprise at the request of such predecessor corporation; "proceeding" means any threatened, pending, or completed action or proceeding, whether civil', criminal, administrative, or investigative; and ~"expenses' includes, without limitation, attorneys' fees and any expenses of establishing a right to indemnification under Section 4 or Section 5(c) of this Article VI. -17- Section 2. ACTIONS OTHER THAN BY THE CORPORATION. This corporation shall have the power to indemnify any person who was or is a party, or is threatened to be made a party, to any proceeding (other than an action by or in the right of this corporation to procure a judgment in its favor) by reason of the fact that such person is or was an agent of this corporation, against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with such proceeding if that person acted in good faith and in a manner that that person reasonably believed to be in the best interests of this corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of that person was unlawful. The termination of any 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 that the person reasonably believed to be in the best interests of this corporation or that the person had reasonable cause to believe that the person's conduct was unlawful. Section 3. ACTIONS BY THE CORPORATION. This corporation shall have the power to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action by or in the right of this corporation to procure a judgment in its favor by reason of the fact that such person is or was an agent of this corporation, against expenses actually and reasonably incurred by such person in connection with the defense or settlement of that action, if such person acted in good faith, in a manner such person believed to be in the best interests of this corporation and its shareholders. No indemnification shall be made under this Section 3 for any of the following: (a) In respect of any claim, issue, or matter as to which such person has been adjudged to be liable to this corporation in the performance of such person's duty to this corporation and its shareholders, unless and only to the extent that the court in which that proceeding is or was pending shall determine upon application that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for expenses and then only to the extent that the court shall determine; (b) Of amounts paid in settling or otherwise disposing of a pending action without court approval; or (c) Of expenses incurred in defending a pending action that is settled or otherwise disposed of without court approval. -18- Section 4. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of this corporation has been successful on the merits in defense of any proceeding referred to in Sections 2 or 3 of this Article VI, or in defense of any claim, issue, or matter therein, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith. Section 5. REQUIRED APPROVAL. Except as provided in Section 4 of this Article VI, any indemnification under this Article VI shall be made by this corporation only if authorized in the specific case, upon a determination that indemnification of the agent is proper in the circumstances because the agent has met the applicable standard of conduct set forth in Sections 2 or 3 of this Article VI by any of the following: (a) A majority vote of a quorum consisting of directors who are not parties to the proceeding; (b) If such a quorum of directors is not obtainable, by independent legal counsel in a written opinion; (c) (i) The affirmative vote of a majority of the shares of this corporation entitled to vote represented at a duly held meeting at which a quorum is present; or (ii) the written consent of holders of a majority of the outstanding shares entitled to vote (for purposes of this subsection 5(c), the shares owned by the person to be indemnified not being entitled to vote thereon); or (d) The court in which the proceeding is or was pending, on application made by this corporation or the agent or the attorney or other person rendering services in connection with the defense, whether or not such application by the agent, attorney, or other person is opposed by this corporation. Section 6. ADVANCE OF EXPENSES. Expenses incurred in defending any proceeding may be advanced by this corporation before the final disposition of the proceeding on receipt of an undertaking by or on behalf of the agent to repay the amount if it shall be determined ultimately that the agent is not entitled to be indemnified as authorized in this Article VI. -19- Section 7. OTHER CONTRACTUAL RIGHTS. The indemnification provided by this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office, to the extent such additional rights to indemnification are authorized in the Articles. The rights to indemnity hereunder 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 the person. Nothing contained in this Article VI shall affect any right to indemnification to which persons other than directors and officers of this corporation or any subsidiary hereof may be entitled by contract or otherwise. Section 8. LIMITATIONS. No indemnification or advance shall be made under this Article VI, except as provided in Section 4 or Section 5(c)(ii), in any circumstance where it appears: (a) That it would be inconsistent with a provision of the Articles, Bylaws, a resolution of the shareholders, or an agreement in effect at the time of the accrual of the alleged cause of action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or (b) That it would be inconsistent with any condition expressly imposed by a court in approving a settlement. Section 9. INSURANCE. If so decided by the board of directors, this corporation may purchase and maintain insurance on behalf of any agent of the corporation insuring against any liability asserted against or incurred by the agent in that capacity or arising out of the agent's status as such, whether or not this corporation would have the power to indemnify the agent against that liability under the provisions of this Article VI. Section 10. FIDUCIARIES OF CORPORATE EMPLOYEE BENEFIT PLAN. This Article VI does not apply to any proceeding against any trustee, investment manager, or other fiduciary of an employee benefit plan in that person's capacity as such, even though that person may also be an agent of the corporation. The corporation shall have the power to indemnify, and to purchase and maintain insurance on behalf of, any such trustee, investment manager, or other fiduciary of any benefit plan for any or all of the directors, officers and employees of the corporation or any of its subsidiary or affiliated corporations. -20- ARTICLE VII RECORDS AND REPORTS Section 1. MAINTENANCE OF SHAREHOLDER RECORD AND INSPECTION BY SHAREHOLDERS. The corporation shall keep at its principal executive office or at the office of its transfer agent or registrar, as determined by resolution of the board of directors, a record of the names and addresses of all shareholders and the number and class of shares held by each shareholder. A shareholder or shareholders holding at least five percent in the aggregate of the outstanding voting shares of the corporation have the right to do either or both of the following: (a) inspect and copy the record of shareholders' names and addresses and shareholdings during usual business hours, on five days' prior written demand on the corporation, or (b) obtain from the corporation's transfer agent, on written demand and tender of the transfer agent's usual charges for this service, a list of the names and addresses of shareholders who are entitled to vote for the election of directors, and their shareholdings, as of the most recent record date for which a list has been compiled or as of a specified date later than the date of demand. This list shall be made available within five days after (i) the date of demand, or (ii) the specified later date as of which the list is to be compiled. The record of shareholders shall also be open to inspection and copying on the written demand of any shareholder or holder of a voting trust certificate, at any time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or holder of a voting trust certificate. Any inspection and copying under this Section 1 may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making the demand. Section 2. MAINTENANCE AND INSPECTION OF BYLAWS. The corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California, at its principal business office in this state, the original or a copy of the bylaws as amended to date, which shall be open to inspection by the shareholders at all reasonable times during office hours. If the principal executive office of the corporation is outside the State of California and the corporation has no principal business office in this state, the -21- secretary shall, upon the written request of any shareholder, furnish to that shareholder a copy of the bylaws as amended to date. Section 3. MAINTENANCE AND INSPECTION OF MINUTES AND ACCOUNTING RECORDS. The minutes of proceedings of the shareholders, board of directors, and committees of the board, and the accounting books and records shall be kept at the principal executive office of the corporation, or at such other place or places as designated by the board of directors. The minutes shall be kept in written form, and the accounting books and records shall be kept either in written form or in a form capable of being converted into written form. The minutes and accounting books and records shall be open to inspection on the written demand of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to the holder's interests as a shareholder or holder of a voting trust certificate. The inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. These rights of inspection shall extend to the records of each subsidiary of the corporation. Section 4. INSPECTION BY DIRECTORS. Every director shall have the absolute right at any reasonable time to inspect all books, records, and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations. This inspection by a director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents. Section 5. ANNUAL REPORT TO SHAREHOLDERS. (a) The board of directors shall cause an annual report to be sent to the shareholders not later than 120 days after the close of the fiscal year adopted by the corporation. This report shall be sent at least 15 days (if third class mail is used, 35 days) before the annual meeting of shareholders to be held during the next fiscal year and in the manner specified for giving notice to shareholders in Section 5 of Article II of these bylaws. The annual report shall contain a balance sheet as of the end of the fiscal year and an income statement and a statement of changes in financial position for the fiscal year prepared in accordance with generally accepted accounting principles applied on a consistent basis and accompanied by any report of independent accountants, or, if there is no such report, the certificate of an authorized officer of the corporation that the statements were prepared without audit from the corporation's books and records. -22- (b) So long as and for any fiscal year throughout which the corporation has less than 100 shareholders, the foregoing requirement of an annual report to shareholders shall be waived; provided, however, nothing in this subsection 5(b) shall be interpreted as prohibiting the board of directors from issuing annual or other periodic reports to the shareholders as the board considers appropriate. (c) So long as and for any fiscal year throughout which the corporation has less than 100 shareholders, any reports and financial statements furnished by the board of directors pursuant to subsection 5(b) above or to Section 6 of this Article VII are not required to be prepared in conformity with generally accepted accounting principles if they reasonably set forth the assets and liabilities and the income and expense of the corporation and disclose the accounting basis used in their preparation. Section 6. FINANCIAL STATEMENTS. The corporation shall keep a copy of each annual financial statement, quarterly or other periodic income statement, and accompanying balance sheets prepared by the corporation on file in the corporation's principal executive office for 12 months; these documents shall be exhibited at all reasonable times, or copies provided, to any shareholder on demand. If no annual report for the last fiscal year has been sent to shareholders, on written request of any shareholder made more than 120 days after the close of the fiscal year the corporation shall deliver or mail to the shareholder, within 30 days after receipt of the request, a balance sheet as of the end of that fiscal year and an income statement and statement of changes in financial position for that fiscal year. A shareholder or shareholders holding five percent or more of the outstanding shares of any class of stock of the corporation may request in writing an income statement for the most recent three month, six-month, or nine-month period (ending more than 30 days before the date of the request) of the current fiscal year, and a balance sheet of the corporation as of the end of that period. If such documents are not already prepared, the chief financial officer shall cause them to be prepared and shall deliver the documents personally or mail them to the requesting shareholders within 30 days after receipt of the request. A balance sheet, income statement, and statement of changes in financial position for the last fiscal year shall also be included, unless the corporation has sent the shareholders an annual report for the last fiscal year. Quarterly income statements and balance sheets referred to in this section shall be accompanied by the report, if any, of -23- independent accountants engaged by the corporation or the certificate of an authorized corporate officer stating that the financial statements were prepared without audit from the corporation's books and records. Section 7. ANNUAL STATEMENT OF GENERAL INFORMATION. (a) Every year, during the calendar month in which the original Articles If Incorporation were filed with the California Secretary of State, or during the preceding five calendar months, the corporation shall file a statement with the Secretary of State on the prescribed form, setting forth the authorized number of directors; the names and complete business or residence addresses of all incumbent directors; the number of vacancies on the board of directors, if any; the names and complete business or residence addresses of the chief executive officer, the secretary, and the chief financial officer; the street address of the corporation's principal executive office or principal business office in this state; a statement of the general type of business constituting the principal business activity of the corporation; and a designation of the agent of the corporation for the purpose of service of process, all in compliance with section 1502 of the Code. (b) Notwithstanding the provisions of subsection 7(a) above, if there has been no change in the information contained in the corporation's last annual statement on file in the Secretary of State's office, the corporation may, in lieu of filing the annual statement described in subsection 7(a), advise the Secretary of State, on the appropriate form, that no changes in the required information have occurred during the applicable period. ARTICLE VIII GENERAL CORPORATE MATTERS Section 1. RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING. For purposes of determining the shareholders entitled to receive payment of dividends or other distributions or allotment of rights, or entitled to exercise any rights in respect of any other lawful action (other than voting at and receiving notice of shareholders' meetings and giving written consent of the shareholders without a meeting), the board of directors may fix in advance a record date which shall be not more than 60 nor less than 10 days before the date of the dividend payment, distribution, allotment, or other action. If a record date is so fixed, only shareholders of record at the close of business on that date shall be entitled to receive the dividend, distribution, or allotment of rights, or to exercise the other -24- rights, as the case may be, notwithstanding any transfer of shares on the corporation's books after the record date, except as otherwise provided by statute. If the board of directors does not so fix a record date in advance, the record date shall be at the close of business on the later of (1) the day on which the board of directors adopts the applicable resolution or (2) the 60th day before the date of the dividend payment, distribution, allotment of rights, or other action. Section 2. AUTHORIZED SIGNATORIES FOR CHECKS. All checks, drafts, other orders for payment of money, notes, or other evidences of indebtedness issued in the name of or payable to the corporation shall be signed or endorsed by such person or persons and in such manner authorized from time to time by resolution of the board of directors. Section 3. EXECUTING CORPORATE CONTRACTS AND INSTRUMENTS. Except as otherwise provided in the Articles of Incorporation or in these bylaws, the board of directors by resolution may authorize any officer, officers, agent, or agents to enter into any contract or to execute any Instrument in the name of and on behalf of the corporation. This authority may be general or it may be confined to one or more specific matters. No officer, agent, employee, or other person purporting to act on behalf of the corporation shall have any power or authority to bind the corporation in any way, to pledge the corporation's credit, or to render the corporation liable for any purpose or in any amount, unless that person was acting with authority duly granted by the board of directors as provided in these bylaws, or unless an unauthorized act was later ratified by the corporation. Section 4. CERTIFICATES FOR SHARES. A certificate or certificates for shares of the capital stock of the corporation shall be issued to each shareholder when the shares are fully paid. In addition to certificates for fully paid shares, the board of directors may authorize the issuance of certificates for shares that are partly paid and subject to call for the remainder of the purchase price, provided that the certificates representing partly paid shares shall state the total amount of the consideration to be paid for the shares and the amount actually paid. All certificates shall certify the number of shares and the class or series of shares represented by the certificate. All certificates shall be signed in the name of the corporation by (1) either the chairman of the board of directors, the vice -25- chairman of the board of directors, the president, or any vice president, and (2) either the chief financial officer, any assistant treasurer, the secretary, or any assistant secretary. Any or all of the signatures on the certificate may be facsimile. If any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed on a certificate shall have ceased to be that officer, transfer agent, or registrar before that certificate is issued, the certificate may be issued by the corporation with the same effect as if that person were an officer, transfer agent, or registrar at the date of issue. Section 5. LOST CERTIFICATES. Except as provided in this Section 5, no new certificates for shares shall be issued to replace old certificates unless the old certificate is surrendered to the corporation for cancellation at the same time. If share certificates or certificates for any other security have been lost, stolen, or destroyed, the board of directors may authorize the issuance of replacement certificates on terms and conditions as required by the board, which may include a requirement that the owner give the corporation a bond (or other adequate security) sufficient to indemnify the corporation against any claim that may be made against it (including any expense or liability) on account of the alleged loss, theft, or destruction of the old certificate or the issuance of the replacement certificate. Section 6. SHARES OF OTHER CORPORATIONS: HOW VOTED. Shares of other corporations standing in the name of this corporation shall be voted by one of the following persons, listed in order of preference: (1) chairman of the board, or person designated by the chairman of the board; (2) president, or person designated by the president; (3) first vice president, or person designated by the first vice president; (4) other person designated by the board of directors. The authority to vote shares granted by this Section 6 includes the authority to execute a proxy in the name of the corporation for purposes of voting the shares. -26- Section 7. REIMBURSEMENT OF CORPORATION IF PAYMENT NOT TAX DEDUCTIBLE. If all or part of the compensation, including expenses, paid by the corporation to a director, officer, employee, or agent is finally determined not to be allowable to the corporation as a federal or state income tax deduction, the director, officer, employee, or agent to whom the payment was made shall repay to the corporation the amount disallowed. The board of directors shall enforce repayment of each such amount disallowed by the taxing authorities. Section 8. CONSTRUCTION AND DEFINITIONS. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in sections 100 through 195 of the Code shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term ~"person" includes both a corporation and a natural person. ARTICLE IX AMENDMENTS Section 1. AMENDMENT BY BOARD OF DIRECTORS OR SHAREHOLDERS. Except as otherwise required by law or by the Articles of Incorporation or by Section 2 of Article III of these bylaws, these bylaws may be amended or repealed, and new bylaws may be adopted, by the board of directors or by the holders of a majority of the outstanding shares entitled to vote. Section 2. RECORD OF AMENDMENTS. Whenever a bylaw amendment or a new bylaw is adopted, a copy of it shall be placed in the bylaws by the secretary. If any bylaw is repealed, the fact and date of repeal shall be noted in the bylaws by the secretary. -27- SOUTHERN CALIFORNIA MICROWAVE, INC. AMENDMENT TO BY-LAWS (Adopted January 12 1997) Article III, Section 2 of the Bylaws of Southern California Microwave, Inc. is amended to read in its entirety as follows: "The authorized number of directors shall be three." SOUTHERN CALIFORNIA MICROWAVE, INC. AMENDMENT TO BY-LAWS (Adopted January 14, 1998) Article III, Section 2 of the Bylaws of Southern California Microwave, Inc. is amended to read in its entirety as follows: "The authorized number of directors shall be four." EX-4.1 11 FORM OF INDENTURE BETWEEN L-3 COMMUNICATIONS CORPORATION AND THE TRUSTEE, INCLUDING THE FORM OF NOTE AND GUARANTEE Exhibit 4.1 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ L-3 COMMUNICATIONS CORPORATION, As Issuer $250,000,000 ____% SENIOR SUBORDINATED NOTES DUE 2008 ------------------------------ INDENTURE Dated as of ___________, 1998 ----------------------------- ----------------------------- The Bank of New York, As Trustee ----------------------------- - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................1 SECTION 1.01. DEFINITIONS.........................................................................................1 SECTION 1.02. OTHER DEFINITIONS..................................................................................16 SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT..................................................16 SECTION 1.04. RULES OF CONSTRUCTION..............................................................................17 ARTICLE 2. THE NOTES.............................................................................................17 SECTION 2.01. FORM AND DATING....................................................................................17 SECTION 2.02. EXECUTION AND AUTHENTICATION.......................................................................18 SECTION 2.03. REGISTRAR AND PAYING AGENT.........................................................................18 SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST................................................................19 SECTION 2.05. HOLDER LISTS.......................................................................................19 SECTION 2.06. TRANSFER AND EXCHANGE..............................................................................19 SECTION 2.07. REPLACEMENT NOTES..................................................................................23 SECTION 2.08. OUTSTANDING NOTES..................................................................................23 SECTION 2.09. TREASURY NOTES.....................................................................................24 SECTION 2.10. TEMPORARY NOTES....................................................................................24 SECTION 2.11. CANCELLATION.......................................................................................24 SECTION 2.12. DEFAULTED INTEREST.................................................................................25 SECTION 2.13. CUSIP NUMBERS......................................................................................25 ARTICLE 3. REDEMPTION AND PREPAYMENT.............................................................................25 SECTION 3.01. NOTICES TO TRUSTEE.................................................................................25 SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED..................................................................25 SECTION 3.03. NOTICE OF REDEMPTION...............................................................................26 SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.....................................................................27 SECTION 3.05. DEPOSIT OF REDEMPTION PRICE........................................................................27 SECTION 3.06. NOTES REDEEMED IN PART.............................................................................27 SECTION 3.07. OPTIONAL REDEMPTION................................................................................27 SECTION 3.08. MANDATORY REDEMPTION...............................................................................28 SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS................................................28 ARTICLE 4. COVENANTS.............................................................................................30 SECTION 4.01. PAYMENT OF NOTES...................................................................................30 SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY....................................................................30 SECTION 4.03. REPORTS............................................................................................31 SECTION 4.04. COMPLIANCE CERTIFICATE.............................................................................31 SECTION 4.05. TAXES..............................................................................................32 SECTION 4.06. [INTENTIONALLY OMITTED]............................................................................32 SECTION 4.07. RESTRICTED PAYMENTS................................................................................32 SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.....................................35 SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.........................................35 SECTION 4.10. ASSET SALES........................................................................................38 SECTION 4.11. TRANSACTIONS WITH AFFILIATES.......................................................................39 SECTION 4.12. LIENS..............................................................................................40 SECTION 4.13. FUTURE SUBSIDIARY GUARANTEES.......................................................................40 SECTION 4.14. CORPORATE EXISTENCE................................................................................41 SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.........................................................42 i SECTION 4.16. NO SENIOR SUBORDINATED DEBT........................................................................43 SECTION 4.17. PAYMENTS FOR CONSENT...............................................................................43 ARTICLE 5. SUCCESSORS............................................................................................43 SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS...........................................................43 SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED..................................................................44 ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................44 SECTION 6.01. EVENTS OF DEFAULT..................................................................................44 SECTION 6.02. ACCELERATION.......................................................................................46 SECTION 6.03. OTHER REMEDIES.....................................................................................47 SECTION 6.04. WAIVER OF PAST DEFAULTS............................................................................47 SECTION 6.05. CONTROL BY MAJORITY................................................................................47 SECTION 6.06. LIMITATION ON SUITS................................................................................48 SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT......................................................48 SECTION 6.08. COLLECTION SUIT BY TRUSTEE.........................................................................48 SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM...................................................................48 SECTION 6.10. PRIORITIES.........................................................................................49 SECTION 6.11. UNDERTAKING FOR COSTS..............................................................................49 ARTICLE 7. TRUSTEE...............................................................................................50 SECTION 7.01. DUTIES OF TRUSTEE..................................................................................50 SECTION 7.02. RIGHTS OF TRUSTEE..................................................................................51 SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.......................................................................52 SECTION 7.04. TRUSTEE'S DISCLAIMERS..............................................................................52 SECTION 7.05. NOTICE OF DEFAULTS.................................................................................52 SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.........................................................52 SECTION 7.07. COMPENSATION AND INDEMNITY.........................................................................53 SECTION 7.08. REPLACEMENT OF TRUSTEE.............................................................................54 SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC...................................................................55 SECTION 7.10. ELIGIBILITY; DISQUALIFICATION......................................................................55 SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY..................................................55 ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE..............................................................55 SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE...........................................55 SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.....................................................................55 SECTION 8.03. COVENANT DEFEASANCE................................................................................56 SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.........................................................56 SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS...................................................................................58 SECTION 8.06. REPAYMENT TO COMPANY...............................................................................58 SECTION 8.07. REINSTATEMENT......................................................................................59 ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER.....................................................................59 SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES................................................................59 SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES...................................................................60 SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT................................................................61 SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS..................................................................61 SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES...................................................................62 SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC....................................................................62 ARTICLE 10. SUBORDINATION........................................................................................62 SECTION 10.01. AGREEMENT TO SUBORDINATE..........................................................................62 SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY..............................................................62 SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.................................................................63 ii SECTION 10.04. ACCELERATION OF SECURITIES........................................................................63 SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER...............................................................64 SECTION 10.06. NOTICE BY COMPANY.................................................................................64 SECTION 10.07. SUBROGATION.......................................................................................64 SECTION 10.08. RELATIVE RIGHTS...................................................................................65 SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY......................................................65 SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE..........................................................65 SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT................................................................66 SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.............................................................66 SECTION 10.13. AMENDMENTS........................................................................................66 ARTICLE 11. MISCELLANEOUS........................................................................................66 SECTION 11.01. TRUST INDENTURE ACT CONTROLS......................................................................66 SECTION 11.02. NOTICES...........................................................................................66 SECTION 11.03. COMMUNICATIONS BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES....................................68 SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT................................................68 SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.....................................................68 SECTION 11.06. RULE BY TRUSTEE AND AGENTS........................................................................68 SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS..........................69 SECTION 11.08. GOVERNING LAW.....................................................................................69 SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.....................................................69 SECTION 11.10. SUCCESSORS........................................................................................69 SECTION 11.11. SEVERABILITY......................................................................................69 SECTION 11.12. COUNTERPART ORIGINALS.............................................................................69 SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC..................................................................69
iii EXHIBITS -------- EXHIBIT A FORM OF NOTE EXHIBIT B FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY GUARANTEEING SUBSIDIARY EXHIBIT C FORM OF NOTATION ON SENIOR SUBORDINATED NOTE RELATING TO SUBSIDIARY GUARANTEE CROSS-REFERENCE TABLE*
Trust Indenture Indenture Act Section 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)................................................................................ 11.03 (c)................................................................................ 11.03 313 (a)................................................................................ 7.06 (b)(1)............................................................................. 10.03 (b)(2)............................................................................. 7.07 (c)................................................................................ 7.06;11.02 (d)................................................................................ 7.06 314 (a)................................................................................ 4.03;11.02 (b)................................................................................ 10.02 (c)(1)............................................................................. 11.04 (c)(2)............................................................................. 11.04 (c)(3)............................................................................. N.A. (d)................................................................................ 10.03, 10.04, 10.05 (e)................................................................................ 11.05 (f)................................................................................ N.A. 315 (a)................................................................................ 7.01 (b)................................................................................ 7.05, 11.02 (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 - --------------- * This Cross-Reference Table is not part of the Indenture. v (c)................................................................................ 2.12 317 (a)(1)............................................................................. 6.08 (a)(2)............................................................................. 6.09 (b)................................................................................ 2.04 318 (a)................................................................................ 11.01 (b)................................................................................ N.A. (c)................................................................................ 11.01
N.A. means not applicable. *This Cross-Reference Table is not part of the Indenture. vi This INDENTURE dated as of ________, 1998, between L-3 Communications Corporation, a Delaware corporation (the "Company"),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 ____% Senior Subordinated Notes due 2008: ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. DEFINITIONS. "1997 Indenture" means the indenture, dated as of April 30, 1997, among The Bank of New York, as trustee, and the Company, with respect to the 1997 Notes. "1997 Notes" means the $225,000,000 in aggregate principal amount of the Company's 103/8% Senior Subordinated Notes due 2007, issued pursuant to the 1997 Indenture on April 30, 1997. "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 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 Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. "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 that apply to such transfer or exchange. "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 $1.0 million or (B) for net proceeds in excess of $1.0 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. "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 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 2 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. "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 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 3 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 that is a Guarantor, (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 Issue Date 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 11.02 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 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. 4 "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 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. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Existing Indebtedness" means any Indebtedness of the Company (other than Indebtedness under the Senior Credit Facilities and the Notes) in existence on the date of the Indenture, until such amounts are repaid. 5 "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 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, and (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. 6 "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. "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 April 30, 1997. "Global Notes" means, individually and collectively, each of the Global Notes substantially in the form of Exhibit A hereto issued in accordance with Article 2 hereof. "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 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. "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 7 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. "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 Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect 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. "Issue Date" means the closing date for the sale and original issuance of the Notes under the Indenture. "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. "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 8 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. "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. "Note Custodian" means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto. "Obligations" means any principal, premium (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, 9 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 11.05 hereof. "Opinion of Counsel" means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 11.05 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, a Person who has an account with DTC. "Permitted Investments" 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 4.07 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 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 $15.0 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 10 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 10 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 Issue Date; (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 $5.0 million at any one time outstanding; (x) Liens on assets of Guarantors to secure Senior Debt of such Guarantors that was permitted by 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, 11 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 a Guarantor. "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). "Principals" means any Lehman Investor, Lockheed Martin Corporation, Frank C. Lanza and Robert V. LaPenta. "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. 12 "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 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. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended. "Senior Credit Facilities" means the credit agreement, as in effect on the Issue Date among the Company and a syndicate of banks and other financial institutions led by Lehman Commercial Paper Inc., as syndication 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 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. "Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Act, as such Regulation is in effect on the date hereof. "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 13 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. Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under TIA. "Transaction Documents" means the Indenture, the Notes and the Underwriting Agreement. "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. "Underwriting Agreement" means the Underwriting Agreement, dated as of _______, 1998, by and among the Company and Lehman Brothers Inc. and Bank of America Robertson Stephens. "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: (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 14 director on its board of directors that is not a director or executive officer of the Company or any of its Restricted Subsidiaries and has at least one executive officer 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 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. "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 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. "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. "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. 15 SECTION 1.02. OTHER DEFINITIONS.
Defined in Term Section "Affiliate Transaction"..................................................................4.11 "Asset Sale Offer".......................................................................3.09 "Bankruptcy Law".........................................................................4.01 "Change of Control Offer"................................................................4.15 "Change of Control Payment"..............................................................4.15 "Change of Control Payment Date".........................................................4.15 "Covenant Defeasance"....................................................................8.03 "Event of Default".......................................................................6.01 "Global Note Legend".....................................................................2.06 "Excess Proceeds"........................................................................4.10 "incur"..................................................................................4.09 "Legal Defeasance".......................................................................8.02 "Offer Amount"...........................................................................3.09 "Offer Period"...........................................................................3.09 "Paying Agent"...........................................................................2.03 "Purchase Date"..........................................................................3.09 "Registrar"..............................................................................2.03 "Remaining Excess Proceeds"..............................................................4.10 "Restricted Payments"....................................................................4.07 "Secondary Asset Sale Offer".............................................................4.10
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: "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. 16 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. 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 17 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. SECTION 2.02. EXECUTION AND AUTHENTICATION Two Officers shall sign the Notes for the Company by manual or facsimile signature. The Company's seal shall be reproduced on the Notes and may be in facsimile form. 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 Notes for original issue up to the aggregate principal amount stated in paragraph 4 of the Notes. The aggregate principal amount of Notes outstanding at any time may not exceed such amount except as provided in Section 2.07 hereof. 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. 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. 18 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 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 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 19 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. 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 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 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 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. (c) Transfer or Exchange of Beneficial Interests for Definitive Notes. (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 20 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. (d) Transfer or Exchange of Definitive Notes for Beneficial Interests. (iv) 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 (i) 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 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). (v) 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. (f) Legends. The following Global Note Legend shall appear on the face of all Global Notes issued under this Indenture: 21 "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 THE COMPANY." (g) 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. (h) 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. 22 (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. (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. 23 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. 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. 24 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 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 25 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. 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 26 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. 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 ________, 2003. 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 to the applicable redemption date, if redeemed during the twelve-month period beginning on ________ of the years indicated below: 27
YEAR.......................................................PERCENTAGE 2003..........................................................______% 2004..........................................................______% 2005..........................................................______% 2006 and thereafter..........................................100.000%
(b) Notwithstanding the foregoing clause (a), during the first 36 months after the Issue Date, 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 ______% of the principal amount thereof, plus accrued and unpaid interest 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. 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: 28 (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; (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 29 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. 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 interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% 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 (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. 30 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 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 31 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 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. [INTENTIONALLY OMITTED] 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 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 32 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 (vii) 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 (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 from a contribution to its common equity capital or the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or 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 Unrestricted Subsidiary, and (C) 100% of the net assets of any Unrestricted Subsidiary on the date that it becomes a Restricted Subsidiary. 33 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; and (vii) other Restricted Payments in an aggregate amount since the Issue Date 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 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 Subsidiary, as the case may be, pursuant to the Restricted 34 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 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, except for such 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) this Indenture, the Notes, and the 1997 Indenture and the 1997 Notes, (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) on the property so acquired, (H) Permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive 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 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 Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, 35 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 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 $375.0 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 $150.0 million in aggregate principal amount of the 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 incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv), not to exceed $30.0 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 36 with any other outstanding Indebtedness incurred pursuant to this clause (v), does not exceed $10.0 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 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 37 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 $50.0 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 the Board of Directors with respect to such fair market value in the event such Asset Sale involves aggregate consideration in excess of $5.0 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 38 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, or (ii) to the acquisition of Permitted Securities, all or substantially all of the assets of one or more Similar Businesses, or the making of a capital expenditure or 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 shall make an offer to all holders of 1997 Notes (an "Asset Sale Offer") to purchase the maximum principal amount of 1997 Notes that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest to the date of purchase, in accordance with the procedures set forth in the 1997 Indenture. To the extent that the aggregate amount of 1997 Notes tendered pursuant to an Asset Sale Offer is less than the remaining Excess Proceeds ("Remaining Excess Proceeds") and the sum of (A) such amount of Remaining Excess Proceeds and (B) the Remaining Excess Proceeds from any subsequent Asset Sale Offers exceeds $3.0 million, the Company will be required to make an offer to all Holders of Notes and any other Indebtedness that ranks pari passu with the Notes that, by its terms, requires the Company to offer to repurchase such Indebtedness with such Remaining Excess Proceeds (a "Secondary Asset Sale Offer") to purchase the maximum principal amount of Notes and pari passu Indebtedness that may be purchased out of such Remaining 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 a Secondary Asset Sale Offer is less than the Remaining Excess Proceeds, the Company may use any Remaining 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 Remaining Excess Proceeds in a Secondary 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 the Company or such Restricted 39 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 Lockheed Martin or any of its Subsidiaries or 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 Issue Date; 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 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, except Permitted Liens. 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 Issue Date, then such Subsidiary shall execute a Subsidiary Guarantee, in the form of the Supplemental Indenture attached hereto as Exhibit B, and the Form of Notation on Senior Subordinated Note, attached hereto as Exhibit C, 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 of each Guarantor will be subordinated to the prior payment in full of all Senior Debt of such Guarantor, which would include the 40 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. 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; (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 paragraph, (i) any Guarantor may consolidate with, merge into or transfer all or part of its properties and assets to the Company 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. 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 41 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 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. (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 42 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. 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 corporation, Person or entity unless (i) the Company is the surviving corporation or the entity 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 entity or Person formed by or surviving any such consolidation or merger (if other than the Company) or the entity or 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 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 43 Owned Restricted Subsidiary of the Company, the Company or the entity or 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 (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, and 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 the Notes and such default continues for a period of 30 days (whether or not prohibited by the subordination provisions of this Indenture); 44 (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; (d) the Company fails to observe or perform any other covenant, representation, warranty 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, together with the principal amount of any other such Indebtedness, the maturity of which has been so accelerated, aggregates $10.0 million or more; (f) the Company or any of its Restricted Subsidiaries is subject to a final judgments aggregating in excess of $10.0 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; 45 (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 (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 (iv) 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 the 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 Restricted 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 ________, 2003 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 ________, 2003, then the premium specified below shall also become immediately due and payable to the extent permitted 46 by law upon the acceleration of the Notes during the twelve-month period ending on May 1 of the years indicated below:
YEAR PERCENTAGE 1998..........................................................______% 1999..........................................................______% 2000..........................................................______% 2001..........................................................______% 2002..........................................................______% 2003..........................................................______%
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 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 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. 47 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: (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 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 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 48 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 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 interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium 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. 49 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 man would exercise or use under the circumstances in the conduct of his own 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 50 have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. (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 written 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. 51 (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. 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). 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 52 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 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. 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. 53 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. 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, 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. 54 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. 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) 55 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, 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. 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, 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; (b) in the case of an election under Section 8.02 hereof, the Company shall 56 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 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 57 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 principal, premium, 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, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, 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 58 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. 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; (a) 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; or (b) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA. 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 59 principal of, premium, if any, or interest on the Notes, except a payment default resulting 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 60 default interest, on any Note; (d) waive a Default or Event of Default in the payment of principal of or premium, 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 interest on the Notes; or (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). (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. 61 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, 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 Officer's 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. SUBORDINATION SECTION 10.01. 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 10, 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 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property, an assignment for the benefit of creditors or 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 10.03. 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: 62 (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 to accelerate its maturity 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 (ii) all scheduled payments of principal, premium, 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: (1) the date upon which the default is cured or waived, or (2) in the case of a default referred to in Section 10.03(ii) hereof, 179 days pass after 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 10.04. 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 10.05. 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 10 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 63 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 10, 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 10, except if such payment is made as a result of the willful misconduct or negligence of the Trustee. SECTION 10.06. 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 10, but failure to give such notice shall not affect the subordination of the Notes to the Senior Debt as provided in this Article 10. 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 10, 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 10.07. 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 10 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 10.08. RELATIVE RIGHTS. This Article 10 defines the relative rights of Holders of Notes and holders of Senior Debt. Nothing in this Indenture shall: 64 (1) 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; (2) 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 (3) 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 10 to pay principal of or interest on a Note on the due date, the failure is still a Default or Event of Default. SECTION 10.09. 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 10.10. 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 10, 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 10. SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding the provisions of this Article 10 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 10. Only the Company or a Representative may give the notice. Nothing in this Article 10 shall impair the claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof. 65 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 10.12. 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 10, 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. SECTION 10.13. AMENDMENTS. The provisions of this Article 10 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 11. MISCELLANEOUS SECTION 11.01. 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 11.02. 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: L-3 Communications Corporation 600 Third Avenue, 34th Floor, New York, New York 10016 Attention: Vice President-Finance (Fax: 212-805-5470) With a copy to: Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Attention: Vincent Pagano Jr. (Fax: 212-455-2502) 66 If to the Trustee: The Bank of New York 101 Barclay Street, Floor 21 West New York, New York 10286 Attention: Corporate Trust Administration (Fax: 212-815-5915) 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 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 11.03. 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 11.04. 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 11.05 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 67 the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. SECTION 11.05. 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; (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 11.06. 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 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS. No director, officer, employee, incorporator or stockholder of the Company, as such, shall have any liability for any obligations of the Company under the Notes 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 Commission that such a waiver is against public policy. SECTION 11.08. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. 68 SECTION 11.09. 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 11.10. 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. SECTION 11.11. 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 11.12. 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 11.13. 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] 69 SIGNATURES Dated as of _________, 1998 L-3 COMMUNICATIONS CORPORATION By: Name: __________________________ Title: _________________________ THE BANK OF NEW YORK By: Name: __________________________ Title: _________________________ S-1 EXHIBIT A to Indenture (Face of Note) - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ CUSIP/CINS __________ ____% Senior Subordinated Notes due 2008 No. ___ $_________ L-3 COMMUNICATIONS CORPORATION promises to pay to ________________________________________________ the principal sum of ______________________________________________ Dollars on _____, 2008. Interest Payment Dates: _______, and _______ Record Dates: _______, and _______ Dated: _______________, 199__ L-3 Communications Corporation By: __________________________ Name: Title: By: __________________________ Name: Title: This is one of the [Global] Notes referred to in the within (SEAL) mentioned Indenture: Dated: THE BANK OF NEW YORK as Trustee By: __________________________ - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ A-1 (Back of Note) ____% Senior Subordinated Notes due 2008 [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 THE COMPANY.]1 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 ____% per annum from _______, 1998 until maturity. The Company shall pay interest semi-annually in arrears on ________ and ________, commencing on ________, 1998, 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 the date of issuance; 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 _________. 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 Liquidated Damages (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) to the Persons who are registered Holders of Notes at the close of business on the _________ or _________ 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 - ----------------------- 1 This paragraph should be included only if the Note is issued in global form. A-2 defaulted interest. The Notes will be payable as to principal, premium, 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 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 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 __________, 1998 ("Indenture") between the Company and 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 (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. The Notes issuable under the Indenture are obligations of the Company limited to $250.0 million in aggregate principal amount. 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 ________, 2003. 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 thereon, to the applicable redemption date, if redeemed during the twelve-month period beginning on ______ of the years indicated below:
YEAR PERCENTAGE 2003................................................................ _______% 2004................................................................ _______% 2005................................................................ _______% 2006 and thereafter................................................. 100.000%
(b) Notwithstanding the foregoing, during the first 36 months after the date of the Indenture, the Company may on any one or more occasions redeem up to an aggregate of 35% of A-3 the Notes originally issued at a redemption price of _______% of the principal amount thereof, plus accrued and unpaid interest 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. 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 (in either case, 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 shall commence an offer to all holders of 1997 Notes (as "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to purchase the maximum principal amount of 1997 Notes that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest to the date of purchase, in accordance with the procedures set forth in the 1997 Indenture. To the extent that the aggregate amount of 1997 Notes tendered pursuant to an Asset Sale Offer is less than the remaining Excess Proceeds ("Remaining Excess Proceeds") and the sum of (A) such amount of Remaining Excess Proceeds and (B) the Remaining Excess Proceeds from any subsequent Asset Sale Offers exceeds $3.0 million, the Company will be required to make an offer to all Holders of Notes and any other Indebtedness that ranks pari passu with the Notes that, by its terms, requires the Company to offer to repurchase such Indebtedness with such Remaining Excess Proceeds (a "Secondary Asset Sale Offer") to purchase the maximum principal amount of Notes and pari passu Indebtedness that may be purchased out of such Remaining 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 a Secondary Asset Sale Offer is less than the Remaining Excess Proceeds, the Company may use any Remaining 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 Remaining Excess Proceeds in a Secondary Asset Sale Offer, the Company shall repurchase such Indebtedness on a pro rata basis A-4 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 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 Commission 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 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 A-5 5.10 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 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 $10.0 million or more; (vi) failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $10.0 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; 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 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 Restricted 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 ______, 2003 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 ______, 2003, 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. A-6 13. 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. 14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator or stockholder, of the Company, as such, shall not have any liability for any obligations of the Company under the Notes or the Indenture 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. 15. AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 16. 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). 17. 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. 18. GOVERNING LAW. The internal law of the State of New York shall govern and be used to construe this Note, without regard to the principles of conflicts of laws. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: L-3 Communications Corporation 600 Third Avenue, 34th Floor, New York, New York 10016 Attention: Vice President-Finance (Fax: 212-805-5470) A-7 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-8 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-9 SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE2 The following exchanges of a part of this Global Note 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 following such authorized officer in Principal Amount in Principal Amount decrease of Trustee or Note Date of Exchange of this Global Note of this Global Note (or increase) Custodian - ---------------------- ----------------------- ----------------------- ----------------------- ---------------------
- ----------------------------- 2 This should be included only if the Note is issued in global form. A-10 EXHIBIT B to INDENTURE FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY GUARANTEEING SUBSIDIARY SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of _________________, between ____________________ (the "Guaranteeing Subsidiary"), a subsidiary of L-3 Communications Corporation (or its permitted successor), a Delaware corporation (the "Company"), and __________, 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 _______, 1998 providing for the issuance of an aggregate principal amount of up to $250,000,000 of ____% Senior Subordinated Notes due 2008 (the "Notes"); WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary 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 4.13 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 Subsidiary 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. The Guaranteeing Subsidiary hereby agrees as follows: (a) The Guaranteeing Subsidiary, jointly and severally with all other Guaranteeing Subsidiaries, if any, unconditionally guarantees to each Holder of a Senior 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: B-1 (i) the principal of, premium and interest 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 and interest 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 the 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, the Guaranteeing Subsidiary hereby agrees that a notation of such Subsidiary Guarantee substantially in the form of Exhibit C to the Indenture shall be endorsed by an officer of such Guaranteeing Subsidiary on each Senior Note authenticated and delivered by the Trustee after the date hereof. (b) Notwithstanding the foregoing, the 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 Senior 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 Senior Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be valid nevertheless. (d) The delivery of any Senior 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 the Guaranteeing Subsidiary. (e) The Guaranteeing Subsidiary hereby agrees that its obligations hereunder shall be unconditional, regardless of the validity, regularity or enforceability B-2 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) The 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 the Guaranteeing Subsidiary, or any Custodian, Trustee, liquidator or other similar official acting in relation to either the Company or the 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) The 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. The Guaranteeing Subsidiary further agrees that, as between the 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 the Guaranteeing Subsidiary for the purpose of the Subsidiary Guarantee made pursuant to this Supplemental Indenture. (i) The Guaranteeing Subsidiary shall have the right to seek contribution from any other non-paying Guaranteeing Subsidiary so long as the exercise of B-3 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 the Guaranteeing Subsidiary with or into the Company or any other Guaranteeing Subsidiary or shall prevent any transfer, sale or conveyance of the property of the Guaranteeing Subsidiary as an entirety or substantially as an entirety, to the Company or any other Guaranteeing Subsidiary. (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 the Guaranteeing Subsidiary with or into a corporation or corporations other than the Company or any other Guaranteeing Subsidiary (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 a Guaranteeing Subsidiary as an entirety or substantially as an entirety, to a corporation other than the Company or any other Guaranteeing Subsidiary (in each case, whether or not affiliated with the Guaranteeing Subsidiary) authorized to acquire and operate the same; provided, however, that the 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 Subsidiary, shall be expressly assumed (in the event that the 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 the 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 the Guaranteeing Subsidiary, such successor corporation shall succeed to and be B-4 substituted for the Guaranteeing Subsidiary with the same effect as if it had been named herein as the Guaranteeing Subsidiary; provided that, solely for purposes of computing Consolidated Net Income for purposes of clause (b) of the first paragraph of Section 4.07 in the Indenture, the Consolidated Net Income of any Person other than Central Tractor Farm & Country, Inc. and its Restricted Subsidiaries shall only be included for periods subsequent to the effective time of such merger, consolidation, combination or transfer of assets. 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 the 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 the Guaranteeing Subsidiary or all of the Capital Stock of the 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 of principal B-5 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 Supplemental 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 this Supplemental Indenture, also 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 in Article 10. 6. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder or agent of the 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 Senior 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. 7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. 8. 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. 9. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof. 10. 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 Subsidiary and the Company. B-6 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written. Dated: ______________, ______ [GUARANTEEING SUBSIDIARY] By: __________________________ Name: Title: Dated: ______________, ______ THE BANK OF NEW YORK as Trustee By: ________________________ Name: Title: B-7 EXHIBIT C TO INDENTURE FORM OF NOTATION ON SENIOR SUBORDINATED NOTE RELATING TO SUBSIDIARY GUARANTEE Each Guaranteeing Subsidiary (as defined in the Supplemental Indenture (the "Supplemental Indenture") among _______________ and _________________, (i) has jointly and severally unconditionally guaranteed (a) the due and punctual payment of the principal of, premium and 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 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 this Subsidiary Guarantee. Notwithstanding the foregoing, in the event that the Subsidiary Guarantee of any Guaranteeing Subsidiary 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 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 Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantee, Indenture, any supplemental indenture delivered pursuant to the Indenture by such Guaranteeing Subsidiary or any 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. This Subsidiary Guarantee shall be binding upon each Guaranteeing Subsidiary 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. This Subsidiary Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Note upon which this Subsidiary Guarantee is noted have 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. C-1 [GUARANTEEING SUBSIDIARY] By:_________________________________ Name: Title: C-2 EX-5 12 OPINION OF SIMPSON THACHER & BARTLETT EXHIBIT 5 May 14, 1998 L-3 Communications Corporation 600 Third Avenue New York, New York 10016 Ladies and Gentlemen: We have acted as special counsel for L-3 Communications Corporation, a Delaware corporation (the "Company"), in connection with the Registration Statement on Form S-1 (No. 333-46983) and any related registration statement that may be filed pursuant to Rule 462(b) (together, the "Registration Statement") filed by the Company with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), relating to the issuance by the Company of its Senior Subordinated Notes due 2008 (the "Notes"). The payment of principal, premium, if any, and interest on the Notes will be guaranteed (the "Guarantees") on a senior subordinated basis by Hygienetics Environmental Services, Inc., L-3 Communications ILEX Systems, Inc. and Southern California Microwave, Inc. (collectively, the "Guarantors"). The Notes will be issued under an Indenture (as supplemented or amended, the "Indenture") between the Company and the Bank of New York, as Trustee (the "Trustee"). We have examined the Registration Statement and the form of Indenture which has been filed with the Commission as an Exhibit to the Registration Statement. In addition, we have examined, and have relied as to matters of fact upon, the originals L-3 Communications Corporation -2- May 14, 1998 or copies, certified or otherwise identified to our satisfaction, of such corporate records, agreements, documents and other instruments and such certificates or comparable documents of public officials and of officers and representatives of the Company, and have made such other and further investigations, as we have deemed relevant and necessary as a basis for the opinion hereinafter set forth. In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as certified or photostatic copies, and the authenticity of the originals of such latter documents. Based upon the foregoing, and subject to the qualifications and limitations stated herein, assuming the Indenture has been duly authorized and validly executed and delivered by the parties thereto, when (i) the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), (ii) the Board of Directors of the Company, a duly constituted and acting committee thereof or duly authorized officers thereof has taken all necessary corporate action to approve the issuance and terms of the Notes, (iii) the Board of Directors of each of the Guarantors, duly constituted and acting committees thereof or duly authorized officers thereof has taken all necessary corporate action to approve the issuance and terms of the Guarantees and (iv) the Notes and the Guarantees have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture, we are of the opinion L-3 Communications Corporation -3- May 14, 1998 that (A) the Notes will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms and (B) the Guarantees will constitute valid and legally binding obligations of each of the respective Guarantors, enforceable against such Guarantor in accordance with its terms. Our opinion set forth in the preceding sentence is subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. We are members of the Bar of the State of New York and we do not express any opinion herein concerning any law other than the law of the State of New York, the General Corporation law of the State of Delaware and the federal law of the United States. We hereby consent to the use of this opinion as an Exhibit to the Registration Statement and to the reference to our firm under the caption "Legal Matters" in the Prospectus included herein. Very truly yours, /s/ SIMPSON THACHER & BARTLETT SIMPSON THACHER & BARTLETT EX-10.3 13 STOCKHOLDERS AGREEMENT EXHIBIT 10.3 STOCKHOLDERS AGREEMENT DATED AS OF APRIL 30, 1997 Among L-3 COMMUNICATIONS HOLDINGS, INC. LOCKHEED MARTIN CORPORATION, LEHMAN BROTHERS CAPITAL PARTNERS III, L.P., LEHMAN BROTHERS HOLDINGS INC., FRANK C. LANZA, and ROBERT V. LAPENTA TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1.1. Definitions . . . . . . . . . . . . . . . . . . 2 ARTICLE II RESTRICTIONS ON TRANSFERS Section 2.1. Transfers in Accordance with this Agreement . . 6 Section 2.2. Agreement to be Bound . . . . . . . . . . . . . 6 Section 2.3. Legend . . . . . . . . . . . . . . . . . . . . 6 Section 2.4. Transfers to Permitted Transferees and the Company . . . . . . . . . . . . . . . . . . . 6 Section 2.5. No Transfer Period; Rights of First Offer . . . 7 Section 2.6. Tag Along Right . . . . . . . . . . . . . . . . 8 Section 2.7. Bring Along Right . . . . . . . . . . . . . . . 9 Section 2.8. Registration Rights . . . . . . . . . . . . . . 10 ARTICLE III CLOSING Section 3.1. Closing . . . . . . . . . . . . . . . . . . . . 10 Section 3.2. Deliveries at Closing; Method of Payment of Purchase Price . . . . . . . . . . . . . . 10 ARTICLE IV ADDITIONAL RIGHTS AND OBLIGATIONS OF STOCKHOLDERS AND THE COMPANY Section 4.1. Preemptive Rights . . . . . . . . . . . . . . . 11 Section 4.2. Future Services . . . . . . . . . . . . . . . . 11 Section 4.3. Regulatory Event . . . . . . . . . . . . . . . 12 Section 4.4. Regulatory Compliance . . . . . . . . . . . . . 12 Section 4.5. Standstill Agreement . . . . . . . . . . . . . 13 Section 4.6. Certain Other Agreements . . . . . . . . . . . 13 ARTICLE V CERTAIN VOTING AGREEMENTS Section 5.1. Board of Directors of the Company . . . . . . . 13 Section 5.2. Charter Documents . . . . . . . . . . . . . . . 15 Section 5.3. Consent to an Initial Public Offering; Required IPO . . . . . . . . . . . . . . . . 15 ARTICLE VI TERMINATION Section 6.1. Termination . . . . . . . . . . . . . . . . . . 15 2 ARTICLE VII MISCELLANEOUS Section 7.1. No Inconsistent Agreements . . . . . . . . . . 16 Section 7.2. Recapitalization, Exchanges, etc . . . . . . . 16 Section 7.3. Successors and Assigns . . . . . . . . . . . . 16 Section 7.4. No Waivers, Amendments . . . . . . . . . . . . 16 Section 7.5. Notices . . . . . . . . . . . . . . . . . . . . 16 Section 7.6. Inspection . . . . . . . . . . . . . . . . . . 17 SECTION 7.7. GOVERNING LAW . . . . . . . . . . . . . . . . . 17 Section 7.8. Section Headings . . . . . . . . . . . . . . . 17 Section 7.9. Entire Agreement . . . . . . . . . . . . . . . 17 Section 7.10. Severability . . . . . . . . . . . . . . . . . 17 Section 7.11. Counterparts . . . . . . . . . . . . . . . . . 17 Section 7.12. Option Plan . . . . . . . . . . . . . . . . . . 18 Exhibit A Bylaws Exhibit B Certificate of Incorporation Exhibit C Registration Rights Exhibit D Form of Agreement to be Bound Exhibit E 1997 Option Plan for Key Employees of L-3 Communications Holdings, Inc. 3 STOCKHOLDERS AGREEMENT STOCKHOLDERS AGREEMENT dated as of April 30, 1997 among L-3 Communications Holdings, Inc., a Delaware corporation (the "Company"), Lockheed Martin Corporation, a Maryland corporation ("Lockheed Martin"), Lehman Brothers Capital Partners III, L.P., a Delaware limited partnership ("Lehman"), Lehman Brothers Holders Inc., a Delaware corporation and the general partner of Lehman ("LBHI"), Frank C. Lanza ("Lanza") and Robert V. LaPenta ("LaPenta" and, together with Lanza, the "Management Investors"). Each of the parties to this Agreement (other than the Company) and any other Person (as hereinafter defined) who or which shall become a party to or agree to be bound by the terms of this Agreement after the date hereof is sometimes hereinafter referred to as a "Stockholder." WITNESSETH WHEREAS, this Agreement shall become effective (the "Effective Date") on the date of, and simultaneously with, the Closing under the Subscription Agreements (as hereinafter defined); WHEREAS, as of the Effective Date, the Company will have an authorized capital stock consisting of 25,000,000 shares of Class A common stock, par value $0.01 per share (the "Class A Common Stock"), 3,000,000 shares of Class B common stock, par value $0.01 per share (the "Class B Common Stock") and 3,000,000 shares of Class C common stock, par value $0.01 per share (the "Class C Common Stock") and, together with the Class A Common Stock, the "Common Stock"). WHEREAS, the Company, Lockheed Martin, Lehman and the Management Investors have entered into a Transaction Agreement dated as of March 28, 1997 (the "Transaction Agreement") pursuant to which, among other things, the Company has agreed, subject to the terms and conditions thereof, to purchase certain assets and assume certain related liabilities of Lockheed Martin; WHEREAS, in connection with the consummation of the transactions pursuant to the Transaction Agreement, each of Lockheed Martin, Lehman and LBHI has entered into a Common Stock Subscription Agreement with the Company dated as of the date of this Agreement pursuant to which each such Stockholder has agreed, subject to the terms and conditions thereof, to purchase shares of Class A Common Stock; WHEREAS, in connection with the consummation of the transactions pursuant to the Transaction Agreement, each of the Management Investors has entered into a Common Stock Subscription Agreement with the Company dated as of the date of this Agreement (such Common Stock Subscription Agreements, together with the Common Stock Subscription Agreements referred to in the preceding recital, the "Subscription Agreements") pursuant to which each such Management Investor has agreed, subject to the terms and conditions thereof, to purchase shares of Class B Common Stock; and WHEREAS, the parties hereto desire to restrict the sale, assignment, transfer, encumbrance or other disposition of the Shares (as hereinafter defined) and to provide for certain rights and obligations and other agreements in respect of the Shares, all as hereinafter provided. 4 NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.1. Definitions. As used in this Agreement, the following terms have the following meanings: "Acquisition Transaction" shall have the meaning set forth in Section 4.6. "Adverse Clearance Status" shall have the meaning set forth in Section 4.3. "Affiliate", as applied to any Person, shall mean any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, Lockheed Martin shall not be considered an Affiliate of Lehman or of either of the Management Investors and the employee benefit plans of Lockheed Martin and its Subsidiaries shall not be considered Affiliates of Lockheed Martin. "Board of Directors" shall mean the Board of Directors of the Company. "Business" shall have the meaning set forth in the Transaction Agreement. "Buyer's Notice" shall have the meaning set forth in Section 2.5(c). "Buyout Notice" shall have the meaning set forth in Section 2.7. "Bylaws" shall mean the Bylaws of the Company, in the form of Exhibit A, as amended from time to time, consistent with the terms hereof. "Certificate of Incorporation" shall mean the Amended and Restated Certificate of Incorporation of the Company, in the form of Exhibit B, as amended from time to time, consistent with the terms hereof. "Charter Documents" shall have the meaning set forth in Section 5.2(a). "Class A Common Stock" shall have the meaning set forth in the recitals of this Agreement. "Class B Common Stock" shall have the meaning set forth in the recitals of this Agreement. 5 "Class C Common Stock" shall have the meaning set forth in the recitals of this Agreement. "Common Stock" shall have the meaning set forth in the recitals of this Agreement. "Company" shall have the meaning set forth in the preamble of this Agreement. "Effective Date" shall have the meaning set forth in the recitals of this Agreement. "FOCI" shall have the meaning set forth in Section 4.3. "Initial Public Offering" shall mean the initial Public Offering (other than pursuant to a registration statement on Form S-8 or otherwise relating to equity securities issuable under any employee benefit plan of the Company). "Lanza" shall have the meaning set forth in the preamble of this Agreement. "LaPenta" shall have the meaning set forth in the preamble of this Agreement. "Lehman" shall have the meaning set forth in the preamble of this Agreement. "LBHI" shall have the meaning set forth in the preamble of this Agreement. "Lehman Nominees" shall have the meaning set forth in Section 5.1(a). "Lockheed Martin" shall have the meaning set forth in the preamble of this Agreement. "Lockheed Martin Nominees" shall have the meaning set forth in Section 5.1(a). "Management Investors" shall have the meaning set forth in the preamble of this Agreement. "Offer Price" shall have the meaning set forth in Section 2.5(b). "Offered Shares" shall have the meaning set forth in Section 2.5(b). "Option Plan" shall mean the 1997 Option Plan for Key Employees of L-3 Communications Holdings, Inc., in the form of Exhibit E hereto. "Payment in Full of the Preference Amount" shall have the meaning given such term in the Certificate of Incorporation. "Permitted Transferee" shall mean: 6 (i) in the case of Lehman or LBHI and Permitted Transferees of Lehman and LBHI, (A) LBHI or Lehman, as the case may be, or any controlled Affiliate (other than an individual) of LBHI, (B) any general or limited partner, director, officer or employee of Lehman, LBHI or any controlled Affiliate (other than an individual) of LBHI, (C) the heirs, executors, administrators, testamentary trustees, legatees or beneficiaries of any of the individuals referred to in clause (B), (D) any trust, the beneficiaries of which include only (1) Lehman, (2) Permitted Transferees referred to in clauses (A), (B) and (C) and (3) spouses and lineal descendants of Permitted Transferees referred to in clause (B) and (E) a corporation or partnership, a majority of the equity of which is owned and controlled by Lehman and/or Permitted Transferees referred to in clauses (A), (B), (C) and (D); (ii) in the case of Lockheed Martin and Permitted Transferees of Lockheed Martin, any controlled Affiliate of Lockheed Martin; and (iii) in the case of each Management Investor and Permitted Transferees of such Management Investor, his or her spouse or any of his or her lineal descendants or legatees or a testamentary trust for such legatees, or a trust or individual retirement account, the beneficiaries of which or a corporation or partnership the stockholders or partners of which include only such Stockholder, his or her spouse and his or her lineal descendants or a corporation or partnership wholly owned by them; provided, that any such Permitted Transferee referred to in clauses (i)(iii) agrees in writing to be bound by the terms of this Agreement in accordance with Section 2.2. "Person" shall mean an individual, partnership, corporation, business trust, joint stock company, limited liability company, unincorporated association, joint venture or other entity of whatever nature. "Proposed Transferee" shall have the meaning set forth in Section 2.6. "Public Offering" shall mean any underwritten public offering of equity securities of the Company pursuant to an effective registration statement under the Securities Act. "Put" shall have the meaning set forth in Section 4.3. "Reduced Transfer Price" shall have the meaning set forth in Section 2.5(d). "Reduced Transfer Price Notice" shall have the meaning set forth in Section 2.5(d). "Regulatory Event Notice" shall have the meaning set forth in Section 4.3. "Regulatory Portion" shall have the meaning set forth in Section 4.3. "Restriction Lapse" shall have the meaning given such term in the Certificate of Incorporation. 7 "Second Reduction Transfer Price" shall have the meaning set forth in Section 2.5(e). "Second Reduction Transfer Price Notice" shall have the meaning set forth in Section 2.5(e). "Securities Act" shall mean the Securities Act of 1933, as amended. "Seller" shall have the meaning set forth in Section 2.5(b). "Seller's Notice" shall have the meaning set forth in Section 2.5(b). "Share Equivalents" shall mean securities of any kind issued by the Company convertible into or exchangeable for Shares or options, warrants or other rights to purchase or subscribe for Shares or securities convertible into or exchangeable for Shares. "Shares" shall mean, with respect to any Stockholder, shares of Common Stock, whether now owned or hereafter acquired (including upon exercise of options, preemptive rights or otherwise), held by such Stockholder. "Shares Subject to Forfeiture" shall have the meaning given such term in the Certificate of Incorporation. "Stockholder" shall have the meaning set forth in the preamble of this Agreement. "Subscription Agreements" shall have the meaning set forth in the recitals of this Agreement. "Subsidiary" shall mean, with respect to any Person, any corporation or other entity of which a majority of the capital stock or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar function at the time directly or indirectly owned by such Person. "Third Party" shall mean any prospective Transferee of Shares (other than the Company) that is not a Permitted Transferee of the Stockholder proposing the Transfer of such Shares to such prospective Transferee. "Transaction Agreement" shall have the meaning set forth in the recitals of this Agreement. "Transfer" shall have the meaning set forth in Section 2.1. "Transfer Closing Date" shall have the meaning set forth in Section 3.1. "Transferee" shall mean any Person who or which acquires Shares from a Stockholder or a Transferee (including Permitted Transferees) of a Stockholder subject to this Agreement. 8 ARTICLE II RESTRICTIONS ON TRANSFERS Section 2.1. Transfers in Accordance with this Agreement. No Stockholder shall, directly or indirectly, transfer, sell, assign, pledge, hypothecate, encumber, or otherwise dispose of all or any portion of any Shares or any economic interest therein (including without limitation by means of any participation or swap transaction) (each, a "Transfer") to any Person, except in compliance with the Securities Act, applicable state and foreign securities laws and this Agreement. No Stockholder shall Transfer any Shares if the consummation of such Transfer may result in the Company becoming subject to FOCI or Adverse Clearance Status. Any attempt to Transfer any Shares in violation of the terms of this Agreement shall be null and void, and neither the Company, nor any transfer agent shall register upon its books any Transfer of Shares by a Stockholder to any Person except a Transfer in accordance with this Agreement. Section 2.2. Agreement to be Bound. No Transfer of Shares (other than Transfers (i) in the Initial Public Offering, if any, or (ii) to the Company) shall be effective unless (i) the certificates representing such Shares issued to the Transferee shall bear the legend provided in Section 2.3 and (ii) the Transferee, if not already a party hereto, shall have executed and delivered to each other party hereto, as a condition precedent to such Transfer, an instrument or instruments substantially in the form of Exhibit D or otherwise reasonably satisfactory to such parties confirming that the Transferee agrees to be bound by the terms of this Agreement with respect to the Shares so Transferred to the same extent applicable to the Transferor thereof. Section 2.3. Legend. A copy of this Agreement shall be filed with the Secretary of the Company and kept with the records of the Company. Each Stockholder hereby agrees that each certificate representing Shares issued to any Stockholder, or any certificate issued in exchange for any similarly legended certificate, shall bear a legend reading substantially as follows: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THE SHARES REPRESENTED BY THIS CERTIFICATE ALSO ARE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCKHOLDERS AGREEMENT, DATED AS OF APRIL 30, 1997, COPIES OF WHICH MAY BE OBTAINED FROM L-3 COMMUNICATIONS HOLDINGS, INC. (THE "COMPANY"). NO TRANSFER OF SUCH SHARES WILL BE MADE ON THE BOOKS OF THE COMPANY UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF SUCH AGREEMENT. Section 2.4. Transfers to Permitted Transferees and the Company. (a) None of the restrictions contained in this Agreement with respect to Transfers of Shares (other than Sections 2.2, 2.3 and 2.4(b)) shall apply to any Transfer of Shares by any Stockholder (i) to a Permitted Transferee of such Stockholder or (ii) to the Company. (b) Each Permitted Transferee of any Stockholder shall, and such Stockholder shall cause such Permitted Transferee to, transfer back to such 9 Stockholder any Shares it owns prior to such Permitted Transferee ceasing to be a Permitted Transferee of such Stockholder. Section 2.5. No Transfer Period; Rights of First Offer. (a) The Stockholders may not Transfer Shares prior to the first anniversary of the Effective Date, except for Transfers referred to in Section 2.4. Commencing on the first anniversary of the Effective Date, with the exception of Transfers in accordance with Section 2.4, each Stockholder may Transfer Shares only following compliance and in accordance with the provisions of this Section 2.5 and, as applicable, Sections 2.6 or 2.7. (b) Any Stockholder desiring to Transfer Shares to any Third Party (such Stockholder, in such capacity, a "Seller") shall give written notice (a "Seller's Notice") to the other Stockholders and to the Company (i) stating that such Seller desires to make such Transfer and (ii) setting forth the number of Shares proposed to be Transferred (the "Offered Shares") and the cash price per share that such Seller proposes to be paid for such Offered Shares (the "Offer Price") and, to the extent then known, the other terms and conditions of such Transfer, including the identity of any proposed transferee. Each Seller's Notice shall constitute an irrevocable offer by the Seller to the other Stockholders and to the Company of the Offered Shares at the Offer Price in cash and in accordance with the terms of this Agreement. (c) Within 60 days after receipt of a Seller's Notice, each other Stockholder may elect to purchase, on a pro rata basis based upon the total number of outstanding Shares then held by such other Stockholders (provided that any Offered Shares thereby offered to any other Stockholder that does not elect to purchase such Offered Shares shall be reallocated (on a pro rata basis based on the total number of Offered Shares each other Stockholder elected to purchase) among the remaining other Stockholders who have elected to exercise their option to purchase Offered Shares) all (but not less than all) of the Offered Shares allocated to it at the Offer Price in cash. The Company may elect, within 10 days following the expiration of such 60-day period, to purchase at the Offer Price in cash all (but not less than all) of the Offered Shares as to which no election to purchase is made by the other Stockholders within such 60-day period. The election to purchase such Offered Shares shall be exercisable by delivery of a notice (a "Buyer's Notice") to the Seller, with a copy to the Company (where the Company is not the electing party), stating (i) that such electing party elects to purchase such Offered Shares at the Offer Price in cash, (ii) that such election is irrevocable and (iii) the source of financing for such purchase, which financing shall not be subject to any material contingencies. Delivery of a Buyer's Notice shall constitute a contract among the Seller and the electing party that has delivered such Buyer's Notice for the sale and purchase of the Offered Shares at the Offer Price in cash and upon the other applicable terms and conditions set forth in the Seller's Notice. (d) If the other Stockholders and the Company fail to elect to purchase all of the Offered Shares within the time periods specified in Section 2.5(c), then the Seller may, within a period of 90 days following the expiration of such time periods specified in Section 2.5(c), complete the Transfer of all or any of the Offered Shares not purchased by the other Stockholders or the Company to one or more Third Parties at a price per share not less than 95% of the Offer Price; provided that if the purchase price per share (the "Reduced Transfer Price") proposed to be paid by any such Third Party for Offered Shares is less than 95% of the Offer Price, the Seller 10 shall promptly provide written notice (the "Reduced Transfer Price Notice") to the other Stockholders and the Company of such intended Transfer (including the material terms and conditions thereof) and the other Stockholders and the Company shall have the right, exercisable by delivery of a written election notice to the Seller within 30 days of receipt of such notice, to purchase such Offered Shares at the Reduced Transfer Price and otherwise substantially in accordance with the terms and conditions of the intended Transfer to such Third Party, following which 30-day period, if no such election is made, Section 2.5(e) shall apply. (e) If the other Stockholders and the Company fail to elect to purchase all of the Offered Shares at the Reduced Transfer Price in cash within the 30-day period specified in Section 2.5(d), then the Seller may, within a period of 90 days following the expiration of such 30-day period, complete the Transfer of all or any of the Offered Shares to one or more Third Parties at a price per share not less than 95% of the Reduced Transfer Price; provided that if the purchase price per share (the "Second Reduced Transfer Price") proposed to be paid by any such Third Party for Offered Shares is less than 95% of the Reduced Transfer Price, the Seller shall promptly provide written notice (the "Second Transfer Price Notice") to the other Stockholders and the Company of such intended Transfer (including the material terms and conditions thereof) and the other Stockholders and the Company shall have the right, exercisable by delivery of a written election notice to the Seller within 30 days of receipt of such notice, to purchase such Offered Shares at the Second Reduced Transfer Price and otherwise substantially in accordance with the terms and conditions of the intended Transfer to such Third Party. (f) If the other Stockholders and the Company fail to elect to purchase all of the Offered Shares at the Offer Price (or, if applicable, the Reduced Transfer Price or Second Reduced Transfer Price) in cash and the Seller shall not have Transferred the Offered Shares to any Transferee prior to the expiration of the 90-day period specified in Section 2.5(e), the rights of first offer under this Section 2.5 shall again apply in connection with any subsequent Transfer or offer to Transfer shares of Common Stock by such Sellers. Section 2.6. Tag Along Right. (a) If at any time on or after the first anniversary of the Effective Date and prior to the consummation of an Initial Public Offering, Lehman and/or LBHI (and/or their Permitted Transferees) proposes to Transfer Shares to any Person (other than a Permitted Transferee) (each, a "Proposed Transferee") in any transaction or series of related transactions and as a result of such Transfer, Lehman and LBHI (with their Permitted Transferees) would no longer own at least 35% of the issued and outstanding Common Stock, then Lehman shall send written notice to each Management Investor and Lockheed Martin which shall state (i) that Lehman and/or LBHI and/or their Permitted Transferees desires to make such a Transfer, (ii) the identity of the Proposed Transferee and the number of Shares proposed to be sold or otherwise transferred, (iii) the proposed purchase price per Share to be paid and the other terms and conditions of such Transfer and (iv) the projected closing date of such Transfer, which in no event shall be prior to 30 days after the giving of such written notice to each Management Investor and Lockheed Martin. (b) For a period of 30 days after the giving of the notice pursuant to clause (a) above, each Management Investor and Lockheed Martin shall have the right to sell to the Proposed Transferees in such Transfer at 11 the same price and upon the same terms and conditions as Lehman, LBHI (and/or their Permitted Transferees) that percentage of the total number of Shares held by such Management Investor or Lockheed Martin, as the case may be, equal to the percentage of the total number of Shares then held by Lehman, LBHI and their Permitted Transferees proposed to be Transferred to such Proposed Transferee; provided that neither Management Investor shall have the right to sell any of its Shares Subject to Forfeiture pursuant to this Section 2.6(b) if the price per share to be obtained by Lehman in such Transfer is less than $6.47. (c) The rights of each Management Investor and Lockheed Martin under Section 2.6(b) shall be exercisable by delivering written notice thereof, prior to the expiration of the 30-day period referred to in clause (b) above, to Lehman with a copy to the Company; provided that Lockheed Martin shall not be entitled to exercise any rights under this Section 2.6 if neither of the Management Investors exercises his rights under this Section 2.6. The failure of such Management Investor or Lockheed Martin to respond within such period to Lehman shall be deemed to be a waiver of rights under this Section 2.6. (d) In the event that any Management Investor or Lockheed Martin exercises rights under Section 2.6(b) and following such exercise there is a change in the price or terms of the proposed transaction between Lehman and the Proposed Transferee, then Lehman shall promptly notify such Management Investor and Lockheed Martin of the revised price or terms and such Management Investor or Lockheed Martin, as the case may be, shall have the right to exercise its rights under Section 2.6(b) by notice to Lehman within two business days of receipt of the notice from Lehman. The failure of such Management Investor or Lockheed Martin to respond within such two-day period to Lehman shall be deemed to be a waiver of his or its rights under this Section 2.6. (e) For purposes of determining the number of Shares a Management Investor may Transfer pursuant to this Section 2.6, such Management Investor shall be deemed to hold the shares of Common Stock issuable upon exercise of any outstanding options to purchase Common Stock he holds so long as (i) such options have vested and (ii) the exercise price of such options is below the proposed price to be paid by the Proposed Transferee in the Transfer to which such determination relates. Section 2.7. Bring Along Right. (a) If at any time on or after the first anniversary of the Effective Date and prior to the consummation of an Initial Public Offering, Lehman and/or LBHI (and/or their Permitted Transferees) proposes to sell Shares to a Third Party other than an Affiliate in any bona fide arm's-length transaction or series of related transactions and as a result of such sale Lehman and LBHI with their Permitted Transferees would cease to own at least 35% of the issued and outstanding Common Stock, then Lehman shall have the right to deliver a written notice (a "Buyout Notice") to each Management Investor (with a copy to Lockheed Martin) which shall state (i) that Lehman proposes to effect such transaction, (ii) the identity of the Third Party, the number of Shares to be sold and the proposed purchase price per Share to be paid and any other terms and conditions, and (iii) the projected closing date of such sale. Each such Management Investor agrees that, upon receipt of a Buyout Notice, each such Management Investor (and his Permitted Transferees) shall be obligated to sell in such transaction that percentage of the total number of Shares held by such Management Investor (determined on the basis set forth in Section 2.6(e)) 12 equal to the percentage of the total number of Shares then held by Lehman and LBHI and their Permitted Transferees to be sold in such transaction upon the terms and conditions of such transaction (and otherwise take all necessary action to cause consummation of the proposed transaction; provided, however, that each such Management Investor shall only be obligated as provided above in this Section 2.7 if each such Management Investor receives the same per Share consideration as Lehman and LBHI (and/or their Permitted Transferees); and provided further that in no event shall any Management Investor be required to make any representations or provide any indemnities other than on a proportionate basis and other than with respect to matters relating solely to Lehman and LBHI (and/or its Permitted Transferees), such as representations as to title to Shares to be transferred by Lehman and LBHI or their Permitted Transferees. (b) At any time that Lehman exercises its rights under this Section 2.7, Lockheed Martin shall have the right, but not the obligation, to sell in the transaction specified in the Buyout Notice at the same price and upon the same terms and conditions as Lehman and/or LBHI (and/or their Permitted Transferees) and the Management Investors that percentage of the total number of Shares held by Lockheed Martin equal to the percentage of the total number of Shares then held by Lehman and LBHI and their Permitted Transferees to be sold in such transaction. The rights of Lockheed Martin under this Section 2.7(b) shall be exercisable by delivering written notice thereof at least 10 days prior to the proposed closing date of such transaction. Section 2.8. Registration Rights. The Company hereby grants to each Stockholder the registration and other rights set forth in, and each Stockholder agrees to comply with the terms and conditions contained in, Exhibit C. ARTICLE III CLOSING Section 3.1. Closing. Any Stockholders acquiring or Transferring any Shares pursuant to Section 2.5 shall mutually determine a closing date (the "Transfer Closing Date") which, subject to any applicable regulatory waiting periods, shall not be more than 60 days after the last notice is given with respect to such Transfer pursuant to Section 2.5 or after the expiration of the last notice period pursuant to Section 2.5 applicable to such Transfer. The closing shall be held at 10:00 a.m., local time, on the Transfer Closing Date at the principal office of the Company, or at such other time and/or place as the parties may mutually agree. Section 3.2. Deliveries at Closing; Method of Payment of Purchase Price. On the Transfer Closing Date, each selling Stockholder shall deliver (i) certificates representing the Shares being sold, free and clear of any lien, claim or encumbrance, and (ii) such other documents, including evidence of ownership and authority, as the Transferees may reasonably request. The purchase price shall be paid by wire transfer of immediately available funds no later than 2:00 p.m. on the Transfer Closing Date. 13 ARTICLE IV ADDITIONAL RIGHTS AND OBLIGATIONS OF STOCKHOLDERS AND THE COMPANY Section 4.1. Preemptive Rights. If the Company shall (other than in connection with the issuance of Shares or Share Equivalents (i) to employees, officers and directors of or any of its direct or indirect subsidiaries with respect to any employee benefit plan, incentive award program or other compensation arrangement approved by the affirmative vote of a majority of the outstanding shares and (ii) as all or a portion of the consideration for the purchase of capital stock or assets of another Person) (A) issue any Shares, (B) issue any Share Equivalents or (C) enter into any contracts, commitments, agreements, understandings or arrangements of any kind relating to the issuance of any Shares or Share Equivalents (in each case other than in connection with the Initial Public Offering), each Stockholder shall have the right to purchase that number of Shares (or Share Equivalents, as the case may be) at the same purchase price as the price for the additional Shares (or Share Equivalents) to be issued so that, after the issuance all of such Shares (or Share Equivalents), together with all Shares (or Share Equivalents) to be issued pursuant to this Section 4.1 in connection therewith, the Stockholder would, in the aggregate, hold the same proportional interest of the outstanding Shares (assuming, in the case of an issuance of Share Equivalents, the conversion, exercise or exchange thereof) as was held by such Stockholder prior to the issuance of such additional Shares (or Share Equivalents). Section 4.2. Future Services. The Company agrees that Lehman Brothers Inc. ("Lehman Brothers") shall have the right, but not the obligation, which right shall be exercisable in Lehman Brothers' sole discretion, to provide investment banking services to the Company on an exclusive basis for a period of five years from the Effective Date (the "Exclusivity Period"); provided that as to acquisitions undertaken by the Company for cash, the Exclusivity Period shall be the three year period after the Effective Date. Such services may include arranging senior and subordinated debt financing for the Company, underwriting on a sole managed basis or acting as the sole initial purchaser or placement agent for the Company's or its affiliates' debt and/or equity securities, acting as the exclusive financial advisor to the Company with respect to any mergers, acquisitions or divestitures for which the services of an investment banking firm are utilized and providing other financial advisory services on an exclusive basis. In the event that Lehman Brothers agrees to provide any investment banking services to the Company, Lehman Brothers shall be paid fees to be mutually agreed upon based on fees which are competitive based upon similar transactions and practices in the investment banking industry. The Company acknowledges that Lehman Brothers may determine in its sole discretion for any reason (including, without limitation, the results of its due diligence investigation, a material change in the Company's financial condition, business, management, prospects or value, the lack of appropriate internal Lehman Brothers' committee approvals or then current market conditions) not to provide such investment banking services to the Company. In the event that Lehman Brothers elects not to provide such services to the Company with respect to any particular transaction, nothing contained herein shall be deemed to prevent the Company from utilizing the services of another investment banking firm for such transaction or to require the Company to pay a fee to Lehman Brothers with respect to such transaction, but such retention of another investment banking firm shall be without prejudice to Lehman Brothers' rights hereunder with respect to subsequent transactions. 14 Section 4.3. Regulatory Event. If (a) the Company receives notification from a representative of the Department of Defense or any other U.S. government department, agency or authority that the ownership of Shares by Lehman and/or LBHI or the terms and provisions of this Agreement or the Charter Documents (i) causes the Company to be under impermissible foreign ownership, control or influence ("FOCI") within the meaning of Section 721 of Title VII of the Defense Production Act of 1950, as amended by Section 5021 of the Omnibus Trade and Competitiveness Act of 1988, or (ii) materially adversely affects the ability of the Company to maintain or obtain Department of Defense or other U.S. government department, agency or authority security clearance of the level held by the Business and their employees on the Effective Date or which are necessary or desirable for the Company to perform and to bid competitively on U.S. government contracts and to participate in joint ventures formed to bid on or perform U.S. government contracts of the type the Business is eligible to bid on or participate in, respectively, on the Effective Date (any of the matters described in this clause (ii) being referred to as "Adverse Clearance Status"), and such FOCI or Adverse Clearance Status is not a result of a change in (A) the ownership of Lehman or LBHI from the ownership thereof as it exists as of the Effective Date or (B) applicable law, regulations and decrees as in effect as of the Effective Date, Lehman and/or LBHI may, within 60 days of becoming aware of such notification, upon delivery of a written notice (a "Regulatory Event Notice") to the Company, require the Company (i) to repurchase (the "Put") such portion of the Shares then held by Lehman and/or LBHI required to eliminate such FOCI or Adverse Clearance Status (the "Regulatory Portion") for an amount in cash equal to the fair market value of the shares subject to the Put as determined by an investment bank of national reputation which is mutually acceptable to the Company (as determined by the Board of Directors of the Company without the participation by any directors designated by Lehman pursuant to this Agreement) and Lehman or (ii) to commence a Public Offering which shall include the registration and offering of the Regulatory Portion in accordance with the registration procedures contained in Exhibit C; provided, that prior to delivery of any Regulatory Event Notice Lehman and/or LBHI shall have complied with Section 4.4; and provided further, that the Company shall not be required to take any action under this Section 4.3 that it is prohibited from taking under the terms of any of its financing agreements or under applicable law. Section 4.4. Regulatory Compliance. (a) If any of the circumstances described in Section 4.3 occur and would (x) cause the Company to be under FOCI or (y) result in Adverse Clearance Status and such FOCI and Adverse Clearance Status, if any, may be eliminated to the complete satisfaction of all applicable U.S. government departments, agencies or authorities solely by the adoption by Lehman or LBHI or the Board of Directors of the Company of governance procedures or board resolutions insulating the Company from impermissible control or influence of any foreign entity in accordance with the National Industrial Security Program Operating Manual (DOD 5220.22M), then Lehman or LBHI or the Board of Directors of the Company, shall adopt such procedures or board resolutions, provided that such procedures and/or board resolutions do not contravene and are consistent with applicable law and do not materially and adversely affect the governance and other rights (whether exercised directly or in accordance with such procedures) of Lehman or LBHI contained in this Agreement and the Charter Documents and any other agreements or documents relating thereto. (b) If such FOCI and Adverse Clearance Status, if any, are not eliminated following compliance with paragraph (a) above, and such FOCI and 15 Adverse Clearance Status, if any, may be eliminated by a Transfer of Shares held by Lehman or LBHI to an Affiliate, Lehman or LBHI, as the case may be, shall use its reasonable efforts to effectuate such Transfer, provided that any such Transfer shall not contravene, and is made in compliance with, Lehman's and/or LBHI's customary business practices. (c) If there is a change in the ownership of Lehman from the ownership thereof as it exists as of the Effective Date and such change in ownership causes the Company to be under impermissible FOCI or otherwise results in an Adverse Clearance Status, and such FOCI or Adverse Clearance Status, as the case may be, cannot be eliminated through the procedures contemplated by Section 4.4(a) or Section 4.4(b), the Company shall have the option, exercisable within 30 days after it concludes that the measures contemplated by Section 4.4(a) and Section 4.4(b) are not sufficient to eliminate the FOCI or Adverse Clearance Status, to purchase (the "Call") the Regulatory Portion of the Shares then held by Lehman and/or LBHI for an amount in cash equal to the fair market value of the Shares subject to the Call as determined by an investment bank of national reputation which is mutually acceptable to the Company (as determined by the Board of Directors of the Company without the participation by any directors designated by Lehman pursuant to this Agreement) and Lehman. Section 4.5. Standstill Agreement. Lockheed Martin agrees that it will not, and it will cause its Permitted Transferees not to, directly or indirectly (through Affiliates or otherwise), acquire any shares of Common Stock if immediately following such acquisition of shares of Common Stock, Lockheed Martin and its Affiliates would own more than 34.9% of the outstanding shares of Common Stock; provided that this Section 4.5 shall not limit any of Lockheed Martin's rights under Section 2.5 or Section 4.1 of this Agreement. Section 4.6. Certain Other Agreements. If at any time prior to Payment in Full of the Preference Amount a merger or other similar transaction is consummated pursuant to which 90% or more of the outstanding equity interests in the Company are acquired by a Person other than an Affiliate of Lehman at a price per share which is less than $6.47 (an "Acquisition Transaction"), then each of the Stockholders agrees to enter into such other agreements or other arrangements as may be required in order that the proceeds to the Stockholders from such Acquisition Transaction are distributed as among the holders of each class of Common Stock in a manner comparable to the manner in which such proceeds would be distributed in a distribution of assets of the Company in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company in accordance with the terms of the Certificate of Incorporation. ARTICLE V CERTAIN VOTING AGREEMENTS Section 5.1. Board of Directors of the Company. (a) The Company's Board of Directors shall be initially composed of eleven members. Lehman shall be entitled, but not required, to designate six members (the "Lehman Nominees") of the Board of Directors. Lockheed Martin shall be entitled, but not required, to designate three members (the "Lockheed Martin Nominees") of the Board of Directors. In addition, each of Lanza and LaPenta shall be entitled, but not required, to designate themselves as members of the Board of Directors for so long as they are employees of the Company or 16 any of its Subsidiaries (the "Lanza Nominee" and "LaPenta Nominee", respectively). (b) (i) Each of the Stockholders agrees to vote all of the Shares of Class A Common Stock owned or held of record by such Stockholder at any regular or special meeting of the stockholders of the Company called for the purpose of filling positions on the Board of Directors, or in any written consent executed in lieu of such a meeting of stockholders, and agrees to take all actions otherwise necessary, to ensure the election to the Board of Directors of the Lehman Nominees, the Lockheed Martin Nominees, the Lanza Nominee and the LaPenta Nominee in accordance with the terms hereof. (ii) Each of the Company and each Stockholder hereby agrees to use its or his best efforts to call, or cause the appropriate officers and directors of the Company to call, a special meeting of stockholders of the Company and to vote all of the Shares of Class A Common Stock owned or held of record by such Stockholder for, or to take all actions by written consent in lieu of any such meeting necessary to cause, the removal (with or without cause) of (i) any Lehman Nominee if Lehman requests such director's removal for any reason and (ii) any Lockheed Martin Nominee if Lockheed Martin requests such director's removal for any reason. Lehman and Lockheed Martin shall have the right to designate a new nominee in the event any Lehman Nominee or Lockheed Martin Nominee, respectively, shall be so removed or shall vacate his or her directorship for any reason. (c) Except as provided in Section 5.1(b)(ii) hereof, each Stockholder hereby agrees that, at any time that it or he is then entitled to vote for the election or removal of directors, it will not vote in favor of the removal of any Lehman Nominee, Lockheed Martin Nominee, Lanza Nominee or LaPenta Nominee, unless such removal shall be for Cause. For the purposes of this Section 5.1(c), "Cause" shall mean (i) as to any Lehman Nominee or Lockheed Martin Nominee, the gross neglect of or willful and continuing refusal to substantially perform his duties as a director, the willful engaging by a director in conduct which is demonstrably and materially injurious to the Company or the director's conviction of any crime constituting a felony and (ii) as to any Management Investor, gross neglect of or willful and continuing refusal to substantially perform his duties as a director or employee, any breach of the restrictive covenants contained in such Management Investor's employment agreement with the Company or any of its Subsidiaries, willful engaging in conduct which is demonstrably injurious to the Company or the Company's subsidiaries or affiliates or conviction or plea of guilty or nolo contendere to a felony or a misdemeanor involving moral turpitude. (d) The number of directors which Lehman and Lockheed Martin have the right to designate pursuant to Section 5.1(a) shall be reduced from time to time to take into account any reduction in Lehman's and Lockheed Martin's (in either case, together with its Permitted Transferees) ownership level in the issued and outstanding shares of Common Stock so that the percentage of the total number of directors designated by each such party corresponds as nearly as practicable to the percentage ownership of such party (with its Permitted Transferees) of the issued and outstanding shares of Common Stock; provided that so long as Lehman (with its Permitted Transferees) continues to own at least 35% of the issued and outstanding Common Stock, the directors designated by Lehman pursuant to Section 5.1(a) shall constitute a majority of the Board of Directors so long as Lehman (with its Permitted Transferees) continues to represent the largest single stockholder of the Company. The 17 Stockholders' obligations under Section 5.1(b) and (c) shall remain in effect with respect to the Lehman Nominees and Lockheed Martin Nominees, as reduced pursuant to the preceding sentence. (e) The rights of Lehman, Lockheed Martin, Lanza and LaPenta to designate Board members under Section 5.1(a) shall not be assignable (including to any Transferee of Shares). Section 5.2. Charter Documents. (a) Exhibits A and B set forth copies of the Certificate of Incorporation and By-laws of the Company, each in the form in which it is to be in effect on the Effective Date (the "Charter Documents"). (b) The Company covenants and agrees that it will act in accordance with the Charter Documents. Each Stockholder covenants and agrees that it will vote all the Shares owned or held of record by such Stockholder at any regular or special meeting of stockholders of the Company or in any written consent executed in lieu of such a meeting of stockholders, and shall take all action necessary, to ensure that the Charter Documents do not, at any time, conflict with the provisions of this Agreement. Section 5.3. Consent to an Initial Public Offering; Required IPO. (a) Prior to the first anniversary of the Effective Date, the Company shall not commence an Initial Public Offering without the affirmative vote of (i) a majority of the Lehman Nominees, (ii) a majority of the Lockheed Martin Nominees, (iii) the Lanza Nominee and (iv) the LaPenta Nominee. (b) At any time on or after the fifth anniversary of the Effective Date, if an Initial Public Offering shall not have been consummated prior to such date, Lehman or Lockheed Martin (in each case, provided that it and its Permitted Transferees then own at least 50% of the issued and outstanding Common Stock owned by such party on the Effective Date) may require the Company promptly to commence an Initial Public Offering and to complete such Initial Public Offering as soon as reasonably practicable in accordance with the registration procedures contained in Exhibit C. The rights of Lehman and Lockheed Martin under this Section 5.3(b) shall not be assignable (including to any Transferee of Shares). ARTICLE VI TERMINATION Section 6.1. Termination. The provisions of this Agreement, other than Sections 2.8, 4.2 and 4.5 shall terminate upon the consummation of an Initial Public Offering. Section 2.8 and the registration rights contained in Exhibit C shall continue to apply following such consummation with respect to all Registrable Securities (as defined in Exhibit C) in accordance with the terms thereof. Section 4.2 shall continue to apply following the consummation of an Initial Public Offering until the earlier of the expiration of the Exclusivity Period or the date on which Lehman (together with its Permitted Transferees) ceases to own at least 10% of the outstanding shares of Common Stock. Section 4.5 shall continue to apply following such consummation until the fifth anniversary of the Effective Date. 18 ARTICLE VII MISCELLANEOUS Section 7.1. No Inconsistent Agreements. The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Stockholders in this Agreement. Section 7.2. Recapitalization, Exchanges, etc. In the event that any capital stock or other securities are issued in respect of, in exchange for, or in substitution of, any Shares by reason of any reorganization, recapitalization, reclassification, merger, consolidation, spin-off, partial or complete liquidation, stock dividend, split-up, sale of assets, distribution to stockholders or combination of the Shares or any other change in capital structure of the Company, appropriate adjustments shall be made with respect to the relevant provisions of this Agreement so as to fairly and equitably preserve, as far as practicable, the original rights and obligations of the parties hereto under this Agreement and the term "Shares," as used herein, shall be deemed to include shares of such capital stock or other securities, as appropriate. Section 7.3. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Section 7.4. No Waivers, Amendments. (a) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. (b) No amendment, modification or supplement to this Agreement shall be enforced against any holder unless such amendment, modification or supplement is signed by (i) where such holder is Lehman or LBHI or one of their Permitted Transferees, a majority of the Shares held by Lehman and LBHI and its Permitted Transferees, (ii) where such holder is Lockheed Martin or one of their Permitted Transferees, a majority of the Shares held by Lockheed Martin and its Permitted Transferees, (iii) where such holder is Lanza or one of his Permitted Transferees, a majority of the Shares held by Lanza and his Permitted Transferees and (iv) where such holder is LaPenta or one of his Permitted Transferees, a majority of the Shares held by LaPenta and his Permitted Transferees. (c) Any provision of this Agreement may be waived if, but only if, such waiver is in writing and is signed by the party against whom the enforcement of such waiver is sought. Section 7.5. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including telex, telecopier or similar writing) and shall be given to such party at its address, telex or telecopier number set forth below, or such other address, telex or telecopier number as such party may hereinafter specify for the purpose to the party giving such notice. Each such notice, request or other communication shall be effective (i) if given by telex or telecopy, when such telex or telecopy is transmitted to the telex or telecopy number specified in this Section and the appropriate answerback is received or, (ii) if given by mail, 72 hours after such communication is deposited in the mails with first 19 class postage prepaid, addressed as aforesaid or, (iii) if given by any other means, when delivered at the address specified in this Section 7.5. Notices to the Company shall be addressed to the Company at L-3 Communications Holdings, Inc., 600 Third Avenue, New York, New York 10016, Attention: General Counsel (telecopier no. (212) 805-5494) with a copy thereof to Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017, Attention: David B. Chapnick (telecopier (212) 455-2502); notices to Lehman or LBHI shall be addressed to Lehman Brothers Capital Partners III, L.P. or Lehman Brothers Holdings Inc., as the case may be, 3 World Financial Center, New York, New York 10285, Attention: Steven Berkenfeld (telecopier (212) 526-3738) with a copy thereof to Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017, Attention: David B. Chapnick (telecopier (212) 455-2502); notices to Lockheed Martin shall be addressed to Lockheed Martin at Lockheed Martin Corporation, 6801 Rockledge Drive, Bethesda, Maryland 20817, Attention: Marcus C. Bennett (telecopier (301) 897-6083) with a copy thereof to Lockheed Martin Corporation, 6801 Rockledge Drive, Bethesda, Maryland 20817, Attention: Frank H. Menaker, Jr. (telecopier (301) 897-6791) and to Miles & Stockbridge, a Professional Corporation, 10 Light Street, Baltimore, Maryland 21202, Attention: Glenn C. Campbell (telecopier (410) 385-3700); notices to Lanza and LaPenta shall be addressed to Lanza and LaPenta, respectively, at L-3 Communications Holdings, Inc., 600 Third Avenue, New York, New York 10016 (telecopier (212) 949-9879, as to Lanza and (212) 805-5470, as to LaPenta) with a copy thereof to Fried, Frank, Harris, Shriver and Jacobson, 1 New York Plaza, New York, New York 10004 Attention: Robert C. Schwenkel (telecopier (212) 859-8879). Section 7.6. Inspection. So long as this Agreement shall be in effect, this Agreement and any amendments hereto shall be made available for inspection by a Stockholder at the principal offices of the Company. SECTION 7.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Section 7.8. Section Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. Section 7.9. Entire Agreement. This Agreement, together with the Subscription Agreements, constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, written or oral, relating to the subject matter hereof. Section 7.10. Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdictions, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law. Section 7.11. Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original and which together shall constitute one and the same agreement. 20 Section 7.12. Option Plan. Each of the Stockholders agrees to vote all of the Shares of Class A Common Stock owned or held of record by such Stockholder at any regular or special meeting of the stockholders of the Company called for the purpose of approving the Option Plan or in any written consent executed in lieu of such a meeting of stockholders (and the Company agrees to use reasonable efforts to cause such meeting to occur promptly), and agrees to take all actions otherwise necessary, to ensure the approval of the Option Plan in accordance with the terms hereof. 21 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set forth above. L-3 COMMUNICATIONS HOLDINGS, INC. By:_________________________________ Title: LOCKHEED MARTIN CORPORATION By:_________________________________ Title: LEHMAN BROTHERS CAPITAL PARTNERS III, L.P. By: Lehman Brothers Holdings Inc., its general partner By:_________________________________ Title: LEHMAN BROTHERS HOLDINGS INC. By:_________________________________ Title: ------------------------------------ Frank C. Lanza ------------------------------------ Robert V. LaPenta 22 EXHIBIT A to Stockholders Agreement Bylaws -- Please see Exhibit 3.2 to the Registration Statement. EXHIBIT B to Stockholders Agreement Certificate of Incorporation -- Please see Exhibit 3.1 to the Registration Statement EXHIBIT C to Stockholders Agreement ================================================================================ A/B Exchange Registration Rights Agreement Dated as of April __, 1997 by and among L-3 Communications Corporation, Lehman Brothers Inc. and BancAmerica Securities, Inc. ================================================================================ A/B EXCHANGE REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement") is made and entered into as of April 30, 1997 by and among L-3 Communications Corporation, a Delaware corporation (the "Company"), and Lehman Brothers Inc. and BancAmerica Securities, Inc. (together, the "Initial Purchasers"), each of whom has agreed to purchase the Company's 10 3/8% Senior Subordinated Notes due 2007 (the "Series A Notes") pursuant to the Purchase Agreement (as defined below). This Agreement is made pursuant to the Purchase Agreement, dated April 25, 1997 (the "Purchase Agreement"), by and among the Company and the Initial Purchasers. In order to induce the Initial Purchasers to purchase the Series A Notes, the Company has 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. Broker-Dealer: Any broker or dealer registered under the Exchange Act. Broker-Dealer Transfer Restricted Securities: Series B Notes (including any Subsidiary Guarantees) that are acquired by a Restricted Broker-Dealer for its own account as a result of market-making activities or other trading activities. 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 any 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. Guarantor: Any subsidiary of the Company that executes a Subsidiary Guarantee under the Indenture. Holders: As defined in Section 2(b) hereof. Indemnified Holder: As defined in Section 8(a) hereof. Indenture: The Indenture, dated as of the date hereof, 1997, among the Company 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 Indenture and the Notes. Market-Maker Prospectus: As defined in Section 4 hereof. NASD: National Association of Securities Dealers, Inc. Notes: The Series A Notes and the Series B Notes. 2 Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. Prospectus: The prospectus included in a Registration Statement including, without limitation, a Market-Maker Prospectus, 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. 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 Securities pursuant to the Shelf Registration Statement, which is filed pursuant to the provisions of this Agreement including the registration for resale of Broker-Dealer Transfer Restricted Securities, 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. Restricted Broker-Dealer: Any Broker-Dealer that is an affiliate of the Company that the holds Broker-Dealer Transfer Restricted Securities. Series B Notes: The Company's l0 3/8% Senior Subordinated Notes due 2007 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 any Subsidiary Guarantee), until the earliest to occur of (a) the date on which such Note is exchanged in the Exchange Offer and entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Act, (b) the date on which such Note (including any Subsidiary Guarantee) has been effectively registered under the Act and disposed of in accordance with a Shelf Registration Statement and (c) the date on which such Note (including any Subsidiary Guarantee) is distributed to the public pursuant to Rule 144 under the Act or by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the Exchange Offer Registration Statement (including delivery of the Prospectus contained therein). 3 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 and Broker-Dealer Transfer Restricted Securities. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities and Broker-Dealer 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. (c) Holders of Broker-Dealer Transfer Restricted Securities. A Restricted Broker-Dealer is deemed to be a holder of Broker-Dealer Transfer Restricted Securities (each, a "Holder") whenever such Restricted Broker-Dealer owns Broker-Dealer 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 shall (i) cause to be filed with the Commission as soon 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 any Subsidiary Guarantees) and the Exchange Offer, (ii) use all commercially reasonable efforts to cause such Registration Statement to become effective at the earliest possible time, but in no event later than 150 days after the Closing Date (which 150-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 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 any 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 any 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 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 4 days. The Company shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Notes (including any Subsidiary Guarantees) shall be included in the Exchange Offer Registration Statement. The Company shall use its best 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 shall indicate in a "Plan of Distribution" section contained in the Prospectus contained in the Exchange Offer Registration Statement that any Broker-Dealer who holds 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 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(d) 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. The Company 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; MARKET-MAKER PROSPECTUS (a) Shelf Registration. If (i) the Company is not required to file an Exchange Offer Registration Statement or 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) if 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 business day following the Consummation of the Exchange Offer that such Holder alone or together with holders who 5 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 one of its affiliates, then the Company shall (x) cause to be filed 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 (1) 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 (2) 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 (y) 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 shall use all commercially reasonable to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(b) and (d) 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 Liquidated Damages 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. 6 (c) Market-Maker Prospectus. The Company acknowledges that any Restricted Broker-Dealer holding Broker-Dealer Transfer Restricted Securities may not resell such Broker-Dealer Transfer Restricted Securities without delivering a Prospectus. Consequently, on the date that the Exchange Offer Registration Statement is filed with the Commission, the Company shall file a Registration Statement (which may be the Exchange Offer Registration Statement or the Shelf Registration Statement if permitted by the rules and regulations of the Commission) and shall use their best efforts to cause such Registration Statement to be declared effective by the Commission on or prior to the Consummation of the Exchange Offer. The Company shall use all commercially reasonable efforts to keep such Registration Statement continuously effective, supplemented and amended as required by the provisions of Sections 6(c) and (d) hereof to the extent necessary to ensure that it is available for resales of Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers, 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, until such time as all Restricted Broker-Dealers determine in their judgment that they are no longer required to deliver a Prospectus in connection with sales of Broker-Dealer Transfer Restricted Securities. The Prospectus included in such Registration Statement is referred to in this Agreement as a "Market-Maker Prospectus." SECTION 5. LIQUIDATED DAMAGES 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), 4(a), and 4(c), 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), 4(a), and 4(c), 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 immediately 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 agrees to pay liquidated damages 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 liquidated damages 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 liquidated damages of $.50 per week per $1,000 principal amount of Transfer Restricted Securities. All accrued liquidated damages shall be paid to Record Holders by the Company 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 liquidated damages with respect to such Transfer Restricted Securities will cease. 7 All payment obligations of the Company 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. SECTION 6. REGISTRATION PROCEDURES (a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company shall comply with all of the provisions of Section 6(d) 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 there is a question as to whether the Exchange Offer is permitted by applicable law, the Company hereby agrees to seek a no-action letter or other favorable decision from the Commission allowing the Company to Consummate an Exchange Offer for such Series A Notes. The Company hereby agrees 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 hereby agrees, however, to (A) participate in telephonic conferences with the Commission, (B) deliver to the Commission staff an analysis prepared by counsel to the Company 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 (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 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 (1) 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, mid similar no-action letters (including any no-action letter obtained pursuant to clause (i) above), and (2) 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 8 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 shall provide a supplemental letter to the Commission (A) stating that the Company is 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 the Company has not 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 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 shall comply with all the provisions of Section 6(d) 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 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) Market-Maker Prospectus. In connection with any Registration Statement filed pursuant to Section 4(c) of this Agreement, the Company will comply with all of the provisions of Section 6(d) below (other than sub-sections (xiii), (xiv), (xv), (xvii) and (xx)) until such time as all Restricted Broker-Dealers determine in their judgment that they are no longer required to deliver Market-Maker Prospectuses in connection with sales of Broker-Dealer Transfer Restricted Securities. The Company shall use all commercially reasonable efforts to deliver Market-Maker Prospectuses to all Restricted Broker-Dealers immediately upon the effectiveness of the Registration Statement and from time to time thereafter upon request, in such quantities as such Restricted Broker-Dealer shall require. (d) 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, without limitation, any Registration Statement and the related Prospectus required to permit resales of Notes by Broker-Dealers) and Broker-Dealer Transfer Restricted Securities, the Company 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 9 usable for resale of Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities during the period required by this Agreement, the Company 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 may allow the Shelf Registration Statement or Market-Maker Prospectus and the related Registration Statement to cease to become effective and usable if (x) 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 Company notifies the Holders within two business days after the Board of Directors makes such determination, or (y) the Prospectus contained in the Shelf Registration Statement or the Market-Maker Prospectus, as the case may be, 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) 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; 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, following the Consummation of the Exchange Offer, Holders of Broker Dealer Transfer Restricted Securities, promptly 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 or Broker-Dealer Transfer Restricted Securities, as applicable, for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the 10 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 or Broker-Dealer Transfer Restricted Securities, as applicable, under state securities or Blue Sky laws, the Company shall use all commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible time; (iv) furnish to each of the selling Holders of Transfer Restricted Securities or Holders of Broker-Dealer 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 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 or a Holder of Broker-Dealer Transfer Restricted Securities, as applicable, covered by such Registration Statement or the underwriter(s), if any, shall not have had an opportunity to participate in the preparation thereof; (v) 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 or the Holders of Broker-Dealer Transfer Restricted Securities, as applicable, and to the underwriter(s), if any, make the Company's 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 the Holders of Broker-Dealer Transfer Restricted Securities, as applicable, or underwriter(s), if any, reasonably may request; (vi) 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 that they have a current intention to sell Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities pursuant to a Shelf Registration Statement or Market-Maker Prospectus, and, following the Consummation of the Exchange Offer, the Holders of Broker-Dealer Transfer Restricted Securities, such financial and other information of the Company as reasonably requested and cause the Company's 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 11 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 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 Holders of Broker-Dealer Transfer Restricted Securities, as applicable, 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 or Broker-Dealer Transfer Restricted Securities, as applicable, information with respect to the principal amount of Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities, as applicable, being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities or Broker-Dealer Transfer-Restricted Securities, as applicable, 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) furnish to each selling Holder of Transfer Restricted Securities or Holders of Broker-Dealer Transfer Restricted Securities, as applicable, 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, and each Holder of Broker-Dealer Transfer Restricted Securities, 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 hereby consents 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, and each Holder of Broker-Dealer Transfer Restricted Securities, in connection with the offering and the sale of the Transfer Restricted Securities and Broker-Dealer Transfer Restricted Securities, as applicable, covered by the Prospectus or any amendment or supplement thereto; 12 (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 and Broker-Dealer Transfer Restricted Securities, as applicable, 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 or, in the case of Broker-Dealer Transfer Restricted Securities, by any Holder of Broker-Dealer Transfer Restricted Securities; provided, that, the Company 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 not to disclose the existence of or facts surrounding any proposed or pending material corporate transaction involving the Company; and whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, the Company shall: (A) furnish to the Initial Purchaser, 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), each Holder of Broker-Dealer Transfer Restricted Securities 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 Offering of Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities, as applicable, 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 Chairman of the Board, the President or any Vice President and (z) the Chief Financial Officer of the Company confirming, as of the date thereof, the matters set forth in paragraph (j) 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) (d) and (e) 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 13 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; (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 pursuant to this clause (x), if any. (xi) prior to any public offering of Transfer Restricted Securities, or Broker-Dealer Transfer Restricted Securities, as applicable, cooperate with the selling Holders of Transfer Restricted Securities, the Holders of Broker-Dealer Transfer Restricted Securities, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities, as applicable, under the securities or Blue Sky laws of such jurisdictions as the 14 selling Holders of Transfer Restricted Securities or Holders of Broker-Dealer 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 or Broker-Dealer Transfer Restricted Securities, as applicable, covered by the Shelf Registration Statement filed pursuant to Section 4 hereof; provided, however, that the Company 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 its best efforts to cause the Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities, as applicable, 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) 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, or Broker-Dealer Transfer Restricted Securities, as applicable, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading; (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; 15 (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 its best 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) cause each Guarantor upon the creation or acquisition by the Company of such 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 or Broker-Dealer Transfer Restricted Securities, as applicable, that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 6(d)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities or Broker-Dealer Transfer Restricted Security pursuant to the applicable Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(d)(xvi) 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 or Broker-Dealer Transfer Restricted Security, as applicable, 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 16 in Section 3 or 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(d)(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 may require each Holder of Transfer Restricted Securities or Broker-Dealer 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 or Broker-Dealer 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 Broker-Dealer 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 or Broker-Dealer 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 or Broker-Dealer 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. SECTION 7. REGISTRATION EXPENSES All expenses incident to the Company's 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 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 internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or 17 accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company. SECTION 8. INDEMNIFICATION (a) The Company shall indemnify and hold harmless each Holder of Transfer Restricted Securities or Broker Dealer 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 based upon any written information furnished by the Company) 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 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 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 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, its officers and employees, each of its directors, and each person, if any, who controls the Company within the meaning of the Securities Act, from and against any loss, 18 claim, damage or liability, joint or several, or any action in respect thereof, to which the Company 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 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 finished to the Company by or on behalf of that Holder specifically for inclusion therein, and shall reimburse the Company and any such director, officer or controlling person for any legal or other expenses reasonably incurred by the Company 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 or any such director, officer, employee or controlling person. (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 such 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 judgement 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 shall not, in connection with any one such action or separate but substantially similar or related 19 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, 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 or any of the Company's directors, officers, employees or controlling persons. Each indemnified party, as a condition of the indemnity agreements contained in Section 8, shall use all commercially reasonable efforts to cooperate with the indemnifying party in the defense of any such action or claim. 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 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) 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, 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 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 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, 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, in each case as set forth in the table on the cover page of the Offering Memorandum. 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 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 and the Holders agree that it would not be just and 20 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 hereby agrees with each Holder of Transfer Restricted Securities, during any period in which the Company is not subject to Section 13 or 15(d) of the Exchange Act within the two-year period following the Closing Date, and each Holder of Broker-Dealer Transfer Restricted Securities, for so long as any Broker-Dealer Transfer Restricted Securities remain outstanding, to make available to any Holder or beneficial owner of Transfer Restricted Securities or any Holder or Broker-Dealer Transfer Restricted Securities, in connection with any sale thereof and 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 or Broker-Dealer Transfer Restricted Securities, as applicable, 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 21 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 agrees that monetary damages (including the liquidated damages 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. The Company will not, 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 Final Offering Memorandum, the Company has not previously entered into any agreement granting any registration rights with respect to its securities to any Person. 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 securities under any agreement in effect on the date hereof. (c) Adjustments Affecting the Notes. The Company 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 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 22 (ii) if to the Company: L-3 Communications Corporation 600 Third Avenue, 34th Floor, New York, New York 10016, Attention: Chief Financial Officer (Fax: 212-805-5470), With a copy to: Simpson Thacher & Bartlett 425 Lexington Avenue New York, NY, 10017 Attention: Andrew R. Keller (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 or Restricted Broker Dealers; 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 or Broker Dealer 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, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF. 23 (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. (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 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] 24 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. L-3 COMMUNICATIONS CORPORATION By: ----------------------------------- Name: Title: LEHMAN BROTHERS INC. BANCAMERICA SECURITIES, INC. BY LEHMAN BROTHERS INC. By: ------------------------------ Authorized Representative S-1 Annex A Counterpart To Registration Rights Agreement The undersigned hereby absolutely, unconditionally and irrevocably agrees (as a "Guarantor") to make all commercially reasonable efforts to include its Subsidiary Guarantee in any Registration Statement required to be filed by the Company pursuant to the Registration Rights Agreement, dated as of April 30, 1997, (the "Registration Rights Agreement") by and among L-3 Communications Corporation, a Delaware corporation, Lehman Brothers Inc. and BancAmerica Securities, Inc.; to make 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 ______, 1997. [NAME] By: --------------------------------- Name: Title: A-1 EXHIBIT D to Stockholders Agreement FORM OF AGREEMENT TO BE BOUND [DATE] To the Parties to the Stockholders Agreement dated as of April 30, 1997 Dear Sirs: Reference is made to the Stockholders Agreement dated as of April 30, 1997 (the "Stockholders Agreement"), among L-3 Communications Holdings, Inc., Lockheed Martin Corporation, Lehman Brothers Capital Partners III, L.P., Lehman Brothers Holdings Inc., Frank C. Lanza and Robert V. LaPenta and each other Stockholder who or which shall become parties to the Stockholders Agreement as provided therein. Capitalized terms used herein and not defined have the meanings ascribed to them in the Stockholders Agreement. In consideration of the representations, covenants and agreements contained in the Stockholders Agreement, the undersigned hereby confirms and agrees that it shall be bound by all of the provisions thereof. This letter shall be construed and enforced in accordance with the laws of the State of New York. Very truly yours, [Permitted Transferee] 23 EXHIBIT E to Stockholders Agreement 1997 Option Plan for Key Employees -- Please see Exhibit 10.91 to the Registration statement. EX-10.4 14 TRANSACTION AGREEMENT EXHIBIT 10.4 TRANSACTION AGREEMENT Dated as of March 28, 1997 By and Among LOCKHEED MARTIN CORPORATION LEHMAN BROTHERS CAPITAL PARTNERS III, L.P. FRANK C. LANZA ROBERT V. LAPENTA and L-3 COMMUNICATIONS HOLDINGS, INC. TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II TRANSACTIONS AND CLOSING Section 2.01 Closing Transactions . . . . . . . . . . . . . . . . 1 Section 2.02 Exchange Consideration . . . . . . . . . . . . . . . 4 Section 2.03 Adjustment of Exchange Consideration . . . . . . . . 4 Section 2.04 Closing . . . . . . . . . . . . . . . . . . . . . . 6 Section 2.05 Cash True-Up . . . . . . . . . . . . . . . . . . . . 7 ARTICLE III REPRESENTATIONS AND WARRANTIES OF LOCKHEED MARTIN Section 3.01 Representations and Warranties of Lockheed Martin . 8 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LEHMAN Section 4.01 Representations and Warranties of Lehman . . . . . . 8 ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE INDIVIDUAL PURCHASERS Section 5.01 Representations and Warranties of the Individual Purchasers . . . . . . . . . . . . . . . . . . . . . 8 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF NEWCO Section 6.01 Representations and Warranties of Newco . . . . . . 8 ARTICLE VII COVENANTS OF LOCKHEED MARTIN Section 7.01 Conduct of Business . . . . . . . . . . . . . . . . 8 Section 7.02 Access to Information; Confidentiality . . . . . . . 10 Section 7.03 Non-Solicitation of Offers . . . . . . . . . . . . . 12 Section 7.04 Non-Solicitation of Employees . . . . . . . . . . . 12 Section 7.05 Change of Lockbox Accounts . . . . . . . . . . . . . 13 Section 7.06 Access to Information; Cooperation After Closing . . 13 Section 7.07 Maintenance of Insurance Policies . . . . . . . . . 13 3 Section 7.08 Novation of Government Contracts . . . . . . . . . . 14 Section 7.09 Financial Statements . . . . . . . . . . . . . . . . 14 ARTICLE VIII COVENANTS OF NEWCO AND THE PURCHASERS Section 8.01 Confidentiality . . . . . . . . . . . . . . . . . . 15 Section 8.02 Provision and Preservation of and Access to Certain Information; Cooperation . . . . . . . . . . . . . . 16 Section 8.03 Insurance; Financial Support Arrangements . . . . . 17 Section 8.04 Non-Solicitation of Employees . . . . . . . . . . . 20 Section 8.05 Financing . . . . . . . . . . . . . . . . . . . . . 21 Section 8.06 Use of Certain Trademarks, etc . . . . . . . . . . . 21 Section 8.07 Government Contract Novation; Cooperation . . . . . 21 Section 8.08 Reimbursement of Damages . . . . . . . . . . . . . . 22 ARTICLE IX COVENANTS OF THE PARTIES Section 9.01 Further Assurances . . . . . . . . . . . . . . . . . 22 Section 9.02 Certain Filings; Consents . . . . . . . . . . . . . 22 Section 9.03 Public Announcements . . . . . . . . . . . . . . . . 22 Section 9.04 Intellectual Property; License Agreements . . . . . 23 Section 9.05 HSR Act . . . . . . . . . . . . . . . . . . . . . . 24 Section 9.06 Operation of Newco . . . . . . . . . . . . . . . . . 24 Section 9.07 Maintenance of Insurance Policies . . . . . . . . . 24 Section 9.08 Legal Privileges . . . . . . . . . . . . . . . . . . 25 Section 9.09 Non-Compete . . . . . . . . . . . . . . . . . . . . 25 ARTICLE X TAX MATTERS Section 10.01 Tax Matters . . . . . . . . . . . . . . . . . . . . 26 ARTICLE XI EMPLOYEE BENEFIT MATTERS Section 11.01 Employee Benefit Matters . . . . . . . . . . . . . . 26 4 ARTICLE XII CONDITIONS TO CLOSING Section 12.01 Conditions to the Obligations of Each Party . . . . 26 Section 12.02 Conditions to Obligation of Newco and the Purchasers 27 Section 12.03 Conditions to Obligation of Lockheed Martin . . . . 28 Section 12.04 Effect of Waiver . . . . . . . . . . . . . . . . . . 28 ARTICLE XIII SURVIVAL; INDEMNIFICATION Section 13.01 Survival . . . . . . . . . . . . . . . . . . . . . . 29 Section 13.02 Indemnification. . . . . . . . . . . . . . . . . . . 30 Section 13.03 Procedures . . . . . . . . . . . . . . . . . . . . . 31 Section 13.04 Limitations . . . . . . . . . . . . . . . . . . . . 34 ARTICLE XIV TERMINATION Section 14.01 Termination . . . . . . . . . . . . . . . . . . . . 35 Section 14.02 Effect of Termination . . . . . . . . . . . . . . . 36 ARTICLE XV MISCELLANEOUS Section 15.01 Notices . . . . . . . . . . . . . . . . . . . . . . 37 Section 15.02 Amendments; Waivers . . . . . . . . . . . . . . . . 39 Section 15.03 Expenses . . . . . . . . . . . . . . . . . . . . . . 39 Section 15.04 Successors and Assigns . . . . . . . . . . . . . . . 40 Section 15.05 Disclosure . . . . . . . . . . . . . . . . . . . . . 40 Section 15.06 Construction . . . . . . . . . . . . . . . . . . . . 40 Section 15.07 Entire Agreement . . . . . . . . . . . . . . . . . . 41 Section 15.08 Governing Law . . . . . . . . . . . . . . . . . . . 41 Section 15.09 Counterparts; Effectiveness . . . . . . . . . . . . 41 Section 15.10 Jurisdiction . . . . . . . . . . . . . . . . . . . . 41 Section 15.11 Captions . . . . . . . . . . . . . . . . . . . . . . 42 Section 15.12 Bulk Sales . . . . . . . . . . . . . . . . . . . . . 42 Section 15.13 Delivery of Disclosure Schedules; Certain Attachments . . . . . . . . . . . . . . . . . . . . 42 5 EXHIBITS EXHIBIT A Definitions EXHIBIT B Representations and Warranties of Lockheed Martin EXHIBIT C Representations and Warranties of Lehman EXHIBIT D Representations and Warranties of the Individual Purchasers EXHIBIT E Representations and Warranties of Newco EXHIBIT F Tax Matters EXHIBIT G Employee Benefit Matters 6 ATTACHMENTS Attachment I Audited Business Financial Statements Attachment II December Statement Attachment III Transfer Agreement Attachment IV Forms of Common Stock Subscription Agreements Attachment V Form of Stockholders Agreement Attachment VI Additional Matters Relating to the Calculation of Net Tangible Assets Attachment VII Form of Exchange Consideration Schedule Attachment VIII Certificate of Incorporation of Newco Attachment IX Bylaws of Newco Attachment X Consents and Approvals Required Prior to Closing Attachment XI Exceptions to Non-Solicitation of Employees Attachment XII Lockheed Martin Legal Opinions Attachment XIII Newco Legal Opinions Attachment XIV Certain Employee Benefit Matters Attachment XV Patents and Patent Applications Constituting Transferred Assets 7 TRANSACTION AGREEMENT This Transaction Agreement (together with the Exhibits, Schedules and Attachments hereto, this "Agreement") is made as of the 28th day of March, 1997, by and among Lockheed Martin Corporation, a Maryland corporation ("Lockheed Martin"), Lehman Brothers Capital Partners III, L.P., a Delaware limited partnership ("Lehman"), Frank C. Lanza ("Lanza"), Robert V. LaPenta ("LaPenta"; and together with Lanza, the "Individual Purchasers") and L-3 Communications Holdings, Inc., a Delaware corporation ("Newco"). For purposes of this Agreement, Lehman, Lanza and LaPenta each are individually referred to as a "Purchaser" and collectively referred to as the "Purchasers." W I T N E S S E T H: WHEREAS, Lockheed Martin, in its own right and through certain of its direct and indirect Subsidiaries is engaged in the Business; WHEREAS, Lockheed Martin and the Purchasers, upon the terms and subject to the conditions of this Agreement have agreed to the formation and organization of Newco; and WHEREAS, upon the terms and subject to the conditions of this Agreement, Lockheed Martin desires to transfer, or to cause the Affiliated Transferors to transfer, substantially all of the assets held or owned by, or used to conduct, the Business and to assign certain liabilities associated with the Business to Newco, and Newco desires to receive such assets and assume such liabilities; NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties contained herein, the parties agree as follows: ARTICLE I DEFINITIONS Section 1.01 Definitions. Defined terms used in this Agreement shall have the meanings specified in this Agreement or in Exhibit A. ARTICLE II TRANSACTIONS AND CLOSING Section 2.01 Closing Transactions. Upon the terms and subject to the conditions set forth in the Transaction Documents, the parties agree that at the Closing, among other things: (i) Lockheed Martin will transfer or cause to be transferred to Newco all Transferred Assets and Newco will assume all Assumed Liabilities in accordance with this Agreement and the terms of the Transfer Agreement attached as Attachment III; (ii) Newco will issue to Lehman 10,020,000 shares of Newco Class A Stock in exchange for $64,835,000 in cash; (iii) Newco will issue to Lanza 1,500,000 shares of Newco Class B Stock in exchange for $7,500,000 in cash; 8 (iv) Newco will issue to LaPenta 1,500,000 shares of Newco Class B Stock in exchange for $7,500,000 in cash; and (v) Newco, Lockheed Martin and the Purchasers, as the case may be, will enter into Common Stock Subscription Agreements and a Stockholders Agreement in substantially the forms attached as Attachments IV and V, will enter into License Agreements in the forms contemplated by Section 9.04, and will enter into an Exchange Agreement in substantially the form attached to the Transfer Agreement attached as Attachment III; (vi) Lockheed Martin and Newco will enter into a services agreement for a term expiring on December 31, 1997 (other than with respect to certain services to the Communications Systems Business Unit the term for which shall be mutually agreed upon up to one year with a six-month option exercisable by Newco) (which may be terminated (in whole or in part, provided that related services may not be terminated in part) by the party receiving such services upon 60 days advance written notice to the other party at any time, it being understood that each party will use reasonable commercial efforts to transition away from the other party as the source for such services as soon as practicable) relating to the provision by the Lockheed Martin Companies to Newco (or by Newco to the Lockheed Martin Companies, as the case may be) following the Closing of certain services (which may include making limited space and equipment available) of a type provided by the Lockheed Martin Companies (other than services provided by the Business Units or personnel at the location covered by the NY Leases) to the Business (or services provided by the Business Units or the personnel at the location covered by the NY Leases to the Lockheed Martin Companies) as of the date of this Agreement, at costs consistent with past practices (the "Interim Services Agreement"), which agreement is to be negotiated by the parties in good faith prior to the Closing; (vii) Lockheed Martin and Newco will enter into one or more supply agreements to document intercompany work transfer agreements existing as of the Closing or intercompany work transfer agreements or similar support arrangements contemplated as of the Closing in connection with Bids in existence as of the Closing between any of the Business Units and any of the Lockheed Martin Companies, at prices and generally upon other terms consistent with existing intercompany work transfer agreements, but including such additional terms and conditions as are appropriate (including indemnification and damage provisions consistent with the underlying contract) to reflect the third-party nature of the agreements (and in any event (1) including profit chargebacks (other than with respect to the Eagle and Raptor programs) to Lockheed Martin of up to $1.9 million in 1997, $1.1 million in 1998, $700,000 in 1999 and $500,000 in 2000 consistent with the Long Range Plan for the Business prepared by Lockheed Martin and previously provided to the Purchasers (the "Long Range Plan"), but only to the extent in backlog at the Closing Date or contemplated as of the Closing in connection with Bids in existence as of the Closing, and in the case of the "Eagle" and "Raptor" (both long lead material award and production award) programs, profit chargebacks to Lockheed Martin of up to an aggregate of $1,000,000 and (2) providing that, notwithstanding the terms of the Long Range Plan, after December 31, 2000 Newco shall not be entitled to any profit chargeback to Lockheed Martin) (the "Supply Agreement"), which agreement is to be negotiated by the parties in good faith prior to the Closing; and 9 (viii) Other than with respect to the matters referenced in clause (ix) below, Lockheed Martin (and/or other Lockheed Martin Companies, as appropriate) and Newco will enter into lease, sublease or assignment agreements, as the case may be, in respect of those facilities used by the Business Units on such terms and subject to such conditions as may be negotiated by the parties in good faith prior to the Closing, it being understood that such terms and conditions shall be consistent with existing agreements; and (ix) Lockheed Martin and Newco will enter into an agreement pursuant to which (A)(1) Lockheed Martin will agree for a period beginning on the Closing Date and ending on December 31, 1999, to lease 67,400 square feet of space in Building 1 at the Communications Systems Business Unit at an "all in" annual cost of $36.25 per square foot, (2) Newco will grant Lockheed Martin an option (exercisable on or prior to December 31, 1998) to continue to lease all of the space contemplated by the preceding clause (A)(1) for the period from January 1, 2000 until March 14, 2003 at an "all in" annual cost of $18.12 per square foot, and (3) Newco will agree to pay Lockheed Martin $2,000,000 on the first Business Day of January 2000 in the event that Lockheed Martin exercises the option contemplated by the preceding clause (A)(2), and (B) Lockheed Martin will agree to lease on behalf of its existing MAC-MAR business its current space in Building 1 at the Communications Systems Business Unit at the current lease rates through December 31, 1998, and will grant Newco the right, on a year-to-year basis, to match any competing offer to provide space and related services to MAC-MAR thereafter until the end of the current lease term, it being understood that Newco must continue to use the services of the MAC-MAR business as long as the MAC-MAR business is using Newco's receiving services at the Communications Systems Business Unit. Section 2.02 Exchange Consideration. The consideration to be paid to Lockheed Martin and the Affiliated Transferors for the Transferred Assets (the "Exchange Consideration") shall consist of the following: (i) Subject to adjustment in accordance with Section 2.03 and Section 2.04, $479,835,000 in cash; (ii) 6,980,000 shares of Newco Class A Stock; and (iii) Newco's assumption of the Assumed Liabilities in accordance with this Agreement. Section 2.03 Adjustment of Exchange Consideration. (a) At least two Business Days prior to the Closing Date, Lockheed Martin shall, in good faith and after consultation with the Individual Purchasers, prepare an estimate of the Net Tangible Assets of the Business as of March 30 (if the Closing shall occur in April 1997) or April 27 (if the Closing shall occur in May 1997) (such date being the date on which Lockheed Martin closes its accounting books and records for the respective month and referred to as the "Effective Date"; and such estimate being the "Estimated Final Net Tangible Asset Amount") and shall provide a copy of its calculation of the Estimated Final Net Tangible Asset Amount to Newco and the Purchasers. (b) Promptly following the Closing Date, but in no event later than 60 days after the Closing Date, Lockheed Martin shall, at its expense, with the 10 assistance of Newco prepare and submit to Newco an audited combined statement of net tangible assets setting forth, in reasonable detail, Lockheed Martin's calculation of the Net Tangible Assets of the Business as of the close of business on the Effective Date (the "Proposed Final Net Tangible Asset Amount") together with an opinion of Ernst & Young LLP stating that such audited combined statement of Net Tangible Assets presents fairly, in all material respects, the Net Tangible Assets of the Business as of the close of business on the Effective Date in accordance with the provisions of this Agreement. In the event Newco disputes the correctness of the Proposed Final Net Tangible Asset Amount, Newco shall notify Lockheed Martin of its objections within 45 days after receipt of Lockheed Martin's calculation of the Proposed Final Net Tangible Asset Amount and shall set forth, in writing and reasonable detail, the reasons for Newco's objections. If Newco fails to deliver such notice of objections within such time, Newco shall be deemed to have accepted Lockheed Martin's calculation. Lockheed Martin and Newco shall endeavor in good faith to resolve any disputed items within 20 days after Lockheed Martin's receipt of Newco's notice of objections. If they are unable to do so, Lockheed Martin and Newco shall select a nationally known independent accounting firm (other than Ernst & Young LLP or Coopers & Lybrand L.L.P.) to resolve the dispute (in a manner consistent with Section 2.03(c) and with any items not in dispute), and the determination of such firm in respect of the correctness of each item remaining in dispute shall be conclusive and binding on Lockheed Martin and Newco. The Net Tangible Assets of the Business as of the close of business on the Effective Date as finally determined pursuant to this Section 2.03(b) (whether by failure of Newco to deliver notice of objection, by agreement of Lockheed Martin and Newco or by determination of the accountants selected as set forth above) is referred to herein as the "Final Net Tangible Asset Amount." (c) The Estimated Final Net Tangible Asset Amount, the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount shall be determined in accordance with the accounting principles, policies, practices and methods utilized in the preparation of the December Statement, as disclosed in the notes to the December Statement, except as otherwise set forth in Attachment VI. (d) If the Final Net Tangible Asset Amount is greater than the Estimated Final Net Tangible Asset Amount, the difference shall be paid to Lockheed Martin by Newco with interest thereon from the Closing Date to the date of payment at a rate per annum equal to the per annum interest rate announced from time to time by Bank of America National Trust and Savings Association as its reference rate in effect. If the Final Net Tangible Asset Amount is less than the Estimated Final Net Tangible Asset Amount, the difference shall be paid to Newco by Lockheed Martin with interest thereon from the Closing Date to the date of payment at a rate per annum equal to the per annum interest rate announced from time to time by Bank of America National Trust and Savings Association as its reference rate in effect. Such payment shall be made in immediately available funds not later than five Business Days after the determination of the Final Net Tangible Asset Amount by wire transfer to a bank account designated in writing by the party entitled to receive the payment; provided, however, if Newco is prohibited from making such payment by the financing arrangements of Newco in effect as of the Closing Date, then, in lieu of making any payment in excess of the sum of (i) the difference between $479,835,000 and the amount of the payment actually made pursuant to Section 2.04(i) and (ii) $5,000,000 by wire transfer in immediately available funds, Newco may deliver to Lockheed Martin in satisfaction of its obligation in excess of such sum a subordinated note 11 the principal amount of which shall equal such excess and providing for repayment thereof in eight consecutive equal quarterly payments of principal together with interest thereon, with an interest rate and such other terms and conditions that reflect the financial condition of Newco and would be available to Newco for similar subordinated debt on the date the subordinated note is delivered to Lockheed Martin by Newco, which subordinated note is to be negotiated by the parties in good faith in the event such subordinated note is required to be issued pursuant to the terms hereof. (e) Lockheed Martin shall make available and shall cause Ernst & Young LLP to make available, in accordance with reasonable and customary practices and professional standards and subject to such reasonable conditions as Ernst & Young LLP shall impose, the books, records, documents and work papers underlying the preparation and audit of the December Statement and the calculation of the Proposed Final Net Tangible Asset Amount. Newco and the Purchasers shall make available and shall cause Coopers & Lybrand L.L.P. to make available, in accordance with reasonable and customary practices and professional standards and subject to such reasonable conditions as Coopers & Lybrand L.L.P. shall impose, the books, records, documents and work papers created or prepared by or for Newco in connection with the review of the Proposed Final Net Tangible Asset Amount and the other matters contemplated by Section 2.03(b). (f) The fees and expenses, if any, of the accounting firm selected to resolve any disputes between Lockheed Martin and Newco in accordance with Section 2.03(b) shall be paid one-half by Lockheed Martin and one-half by Newco. Section 2.04 Closing. The closing (the "Closing") of the Contemplated Transactions shall take place at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York on April 25, 1997, provided, however, that if all of the conditions to Closing set forth in Article XII have not been satisfied (or waived) as of that date and if closing on that date therefore would be impractical, the Closing shall take place on the fifth Business Day following the satisfaction or waiver (by the party entitled to waive the condition) of all conditions to the Closing set forth in Article XII, or at such other time and place as the parties to this Agreement may agree. The Closing will occur at 9:00 a.m. on the Closing Date. At the Closing, among other things: (i) Newco shall pay and deliver to Lockheed Martin, for its own account and as agent for the Affiliated Transferors, $479,835,000 (minus the difference between the Estimated Final Net Tangible Asset Amount and $269,118,000 in the event the Estimated Final Net Tangible Asset Amount is less than $269,118,000) in immediately available funds by wire transfer to an account designated by Lockheed Martin (which account shall be designated by Lockheed Martin by written notice to Newco at least two Business Days prior to the Closing Date, or such shorter notice as Newco shall agree to accept); (ii) Newco shall issue to Lockheed Martin, for its own account and as agent for the Affiliated Transferors, 6,980,000 shares of Newco Class A Stock; (iii) Newco shall issue to Lehman 10,020,000 shares of Newco Class A Stock in exchange for Lehman paying and delivering to Newco $64,835,000 in immediately available funds by wire transfer to an account designated 12 by Newco (which account shall be designated by Newco by written notice to Lehman at least two Business Days prior to the Closing Date, or such shorter notice as Lehman shall agree to accept); (iv) Newco shall issue to Lanza 1,500,000 shares of Newco Class B Stock in exchange for Lanza paying and delivering to Newco $7,500,000 in immediately available funds by wire transfer to an account designated by Newco (which account shall be designated by Newco by written notice to Lanza at least two Business Days prior to the Closing Date, or such shorter notice as Lanza shall agree to accept); and (v) Newco shall issue to LaPenta 1,500,000 shares of Newco Class B Stock in exchange for LaPenta paying and delivering to Newco $7,500,000 in immediately available funds by wire transfer to an account designated by Newco (which account shall be designated by Newco by written notice to LaPenta at least two Business Days prior to the Closing Date, or such shorter notice as LaPenta shall agree to accept). Section 2.05 Cash True-Up. Within fifteen Business Days after the Closing Date, Lockheed Martin shall prepare and deliver to Newco a schedule setting forth, on a daily basis, the cash generated by the Business from 12:01 a.m. on the first day following the Effective Date (after subtracting any cash investments made by any of the Lockheed Martin Companies in or for the benefit of the Business after the Effective Date and the amount of any checks drawn on the accounts of any of the Lockheed Martin Companies prior to Closing Date but not yet debited from such accounts as of the close of business on the day prior to the Closing Date). Within five Business Days of receipt of the foregoing schedule, Newco shall make payment to Lockheed Martin if the schedule shows a net cash usage by the Business during the period referenced in the preceding sentence and Lockheed Martin shall make payment to Newco if the schedule shows net cash generation during such period in an amount equal to such net cash usage or net cash generation, as the case may be. Lockheed Martin shall give Newco reasonable access to its books and records for the purpose of confirming the calculations of Lockheed Martin pursuant to this Section 2.05. Any payment made hereunder shall be made in immediately available funds by wire transfer to a bank account designated in writing by the party entitled to receive the payment. ARTICLE III REPRESENTATIONS AND WARRANTIES OF LOCKHEED MARTIN Section 3.01 Representations and Warranties of Lockheed Martin. Lockheed Martin represents and warrants prior to but not after the Closing to the Purchasers, and as of and after the Closing to Newco, as set forth in Exhibit B. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LEHMAN Section 4.01 Representations and Warranties of Lehman. Lehman represents and warrants to Lockheed Martin, Newco and the Individual Purchasers as set forth in Exhibit C. 13 ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE INDIVIDUAL PURCHASERS Section 5.01 Representations and Warranties of the Individual Purchasers. Each of the Individual Purchasers represents and warrants to Lockheed Martin, Newco and Lehman as set forth in Exhibit D. ARTICLE VI REPRESENTATIONS AND WARRANTIES OF NEWCO Section 6.01 Representations and Warranties of Newco. Newco represents and warrants to Lockheed Martin and the Purchasers as set forth in Exhibit E. ARTICLE VII COVENANTS OF LOCKHEED MARTIN Section 7.01 Conduct of Business. From the date of this Agreement until the Closing Date, except with the written consent of either of the Individual Purchasers (which consent may not be unreasonably withheld or delayed) the Lockheed Martin Companies shall conduct the Business in all material respects in accordance with the historical and customary operating practices relating to the conduct of the Business (except that Lockheed Martin and the Affiliated Transferors may sell or otherwise dispose of obsolete Inventory whether or not in accordance with such practices and shall cause its Subsidiaries to use reasonable commercial efforts to preserve intact the Business and its relationships with third parties. Without limiting the generality of the foregoing, from the date of this Agreement through the Closing Date, subject to any exceptions required to comply with Applicable Laws, the Lockheed Martin Companies shall not, without the written consent of either of the Individual Purchasers (which consent may not be unreasonably withheld or delayed): (i) make any capital expenditure, or group of related capital expenditures (other than as contemplated by the Long Range Plan) relating to the Business in excess of $250,000; (ii) sell or dispose of more than an aggregate of $250,000 of assets (other than the sale of Inventory, any sale made in the ordinary course of business, and other than pursuant to Bids or Contracts in existence on the date of this Agreement) that would constitute Transferred Assets if owned, held or used by any of the Lockheed Martin Companies on the Closing Date; (iii) amend, modify, or terminate any Contract where the effect of such amendment, modification or termination would be a decrease in the backlog value of the relevant Contract or a decrease in the payments to be received or made by Newco, in any such case by $250,000 or more; (iv) submit any Bid which, if accepted, would result in a fixed price Contract that would constitute a Transferred Asset with a backlog value in excess of (1) $5,000,000 in the case of a fixed price 14 production Contract, or (2) $1,000,000 in the case of a fixed price development Contract; (v) except as required by Contracts in existence as of the date of this Agreement or in the ordinary course of business, sell, transfer, license or otherwise dispose of, any Intellectual Property relating to the Business; (vi) enter into any (1) fixed price production Contracts (other than pursuant to a Bid in existence as of the date of this Agreement) that would constitute a Transferred Asset if held by any of the Lockheed Martin Companies on the Closing Date with a backlog value in excess of $5,000,000, or (2) fixed price development Contracts (other than pursuant to a Bid in existence as of the date of this Agreement) that would constitute a Transferred Asset if held by any of the Lockheed Martin Companies on the Closing Date with a backlog value in excess of $1,000,000; (vii) terminate the coverage of any policies of title, liability, fire, workers' compensation, property and any other form of insurance covering the Transferred Assets or operations of the Business, except where the termination could not reasonably be expected to have a Material Adverse Effect on the Business; (viii) settle any lawsuit or claim if such settlement imposes a material continuing non-monetary obligation on the Business or any of the Transferred Assets; (ix) except in respect of the Individual Purchasers, grant any new or modified severance or termination arrangement or increase or accelerate in any material respect any benefits payable under its severance or termination pay policies in effect on the date of this Agreement with respect to any Transferred Employee; (x) other than with respect to the Individual Purchasers, except as may be otherwise permitted or required by this Agreement, and except as contemplated by Attachment XIV, adopt or amend in any material respect any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of any Transferred Employee or, other than compensation increases for individuals below the level of vice president in the ordinary course of business or compensation increases for individuals at the level of vice president and above in accordance with nondiscretionary provisions of the Employee Plans or Benefit Arrangements disclosed in Section B.21 of the Disclosure Schedules or referenced in Exhibit G, increase the compensation or fringe benefits of any Transferred Employee or pay any benefit not required by any Employee Plan, Benefit Arrangement or any agreement with respect to any Transferred Employee; and (xi) effectuate a "plant closing" or "mass layoff," as those terms are defined in WARN, affecting in whole or in part any site of employment, facility, operating unit or employee of the Business, without complying with the notice requirements and other provisions of WARN. 15 Section 7.02 Access to Information; Confidentiality. (a) Except as may be necessary to comply with any Applicable Laws (including, without limitation, any requirements with respect to security clearances) and subject to any applicable privileges (including, without limitation, the attorney-client privilege), from the date of this Agreement until the Closing Date, Lockheed Martin will (a) give the Purchasers and their Representatives reasonable access to the records of the Lockheed Martin Companies relating to the Business during normal business hours and upon reasonable prior notice, (b) give the Purchasers and their Representatives reasonable access to any facilities the possession of which will be transferred to Newco at Closing during normal business hours and upon reasonable prior notice for the purpose of Purchasers' conduct of a Phase I Environmental Audit of such facilities or documentary diligence, (c) furnish to the Purchasers and their Representatives such financial and operating data and other information relating to the Business as the Purchasers may reasonably request and (d) instruct the employees and Representatives of the Lockheed Martin Companies to cooperate with the Purchasers in their investigation of the Business. Without limiting the generality of the foregoing, subject to the limitations set forth in the first sentence of this Section 7.02(a), (i) Lockheed Martin shall use reasonable commercial efforts to enable the Purchasers and the Purchasers' Representatives to conduct, at the Purchasers' own expense, business and financial reviews, investigations and studies as to the operation of the various Business Units, including any tax, operating or other efficiencies that may be achieved and (ii) from the date of this Agreement to the Closing Date, Lockheed Martin shall give the Purchasers and their Representatives access to information relating to the Business of the type, and with the same level of detail, as in the ordinary course of business is made available to the presidents or chief financial officers of the Business Units. Notwithstanding the foregoing, the Purchasers shall not have access to personnel records of any of the Lockheed Martin Companies relating to individual performance or evaluation records, medical histories or other information which in Lockheed Martin's good faith opinion is sensitive or the disclosure of which could subject any of the Lockheed Martin Companies to risk of liability. (b) For a period of three years after the Closing Date, the Lockheed Martin Companies will treat and hold as such, any confidential information concerning the operations or affairs of the Business. In the event any of the Lockheed Martin Companies is requested or required (by oral or written request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand or similar process or by Applicable Law) to disclose any such confidential information, then Lockheed Martin will notify Newco promptly of the request or requirement so that Newco, at its expense, may seek an appropriate protective order or waive compliance with this Section 7.02(b). If, in the absence of a protective order or receipt of a waiver hereunder, any of the Lockheed Martin Companies is, on the advice of counsel, compelled to disclose such confidential information the Lockheed Martin Company may so disclose the confidential information, provided that the Lockheed Martin Company will use its reasonable efforts to obtain reliable assurance that confidential treatment will be accorded to such confidential information. The provisions of this Section 7.02(b) will not be deemed to prohibit the disclosure of confidential information concerning the operations or affairs of the Business by any of the Lockheed Martin Companies to the extent reasonably required (i) to prepare or complete any required tax returns or financial statements, (ii) in connection with audits or other proceedings by or on behalf of a Governmental Authority, (iii) in connection 16 with any insurance or benefits claims, (iv) to the extent necessary to comply with any Applicable Laws, (v) to provide services to Newco in accordance with the Interim Services Agreement, or (vi) in connection with any other similar administrative functions in the ordinary course of business. Notwithstanding the foregoing, the provisions of this Section 7.02(b) shall not apply to information that (i) is or becomes publicly available other than as a result of a disclosure by any of the Lockheed Martin Companies, (ii) is or becomes available to a Lockheed Martin Company on a non-confidential basis from a source that, to Lockheed Martin's knowledge, is not prohibited from disclosing such information by a legal, contractual or fiduciary obligation, or (iii) is or has been independently developed by a Lockheed Martin Company (other than solely for the Business or by one of the Business Units). This Section 7.02(b) shall not apply to the disclosure of confidential information concerning the Instrumentation Recorder Product Line of Advanced Recorders in connection with or after the sale thereof to a purchaser or potential purchaser (other than Newco); provided, however, that such disclosure may only be made pursuant to a confidentiality agreement containing reasonable terms and conditions. Section 7.03 Non-Solicitation of Offers. From the date of this Agreement to the earlier of the Closing Date or the termination of this Agreement, Lockheed Martin shall not, and Lockheed Martin shall not authorize or permit any of its Representatives to, directly or indirectly (through Affiliates or otherwise), (i) solicit, initiate or take any action knowingly to facilitate the submission of inquiries, proposals or offers from any Person (other than Newco) relating to any acquisition or purchase of all or a substantial part of the Business, in one transaction or a series of related transactions (whether by asset or stock sale, business combination transaction or otherwise), (collectively, the "Alternative Transaction Proposals"), or (ii) enter into or participate in any discussions or negotiations regarding any of the foregoing, or furnish to any other Person any information with respect to the Business (other than in the ordinary course of operating the Business and in connection with the possible sale of the Instrumentation Recorder Product Line of Advanced Recorders) or otherwise cooperate in any way with, or assist or participate in, facilitate or encourage, any effort or attempt by any other Person to do or seek any of the foregoing. Except to the extent that it is prohibited from doing so by contractual agreements that were in existence as of January 31, 1997 (of which there are two), if Lockheed Martin, directly or indirectly, receives an Alternative Transaction Proposal, Lockheed Martin shall promptly inform the Purchasers of the terms and conditions of the Alternative Transaction Proposal and the identity of the Person making it. Section 7.04 Non-Solicitation of Employees. From and after the date of this Agreement until the second anniversary of the Closing Date, Lockheed Martin shall not, without prior written approval of Newco, directly or indirectly (through Affiliates or otherwise), knowingly solicit any individual (other than individuals identified in Attachment XI) who at that time is an employee of the Business to terminate his or her relationship with the Business and will not knowingly hire any individual inadvertently solicited; provided, however, that the foregoing shall not apply to (i) individuals solicited or hired as a result of the use of an independent employment agency (so long as the agency was not directed to solicit such individual and Lockheed Martin, promptly following execution of this Agreement, advises the Vice President for Human Resources of each Operating Sector of Lockheed Martin of the provisions of this Section 7.04), and (ii) individuals solicited or hired as a result of the use of a general 17 solicitation (such as an advertisement) not specifically directed to employees of the Business. Section 7.05 Change of Lockbox Accounts. Immediately after the Closing, Lockheed Martin shall take such steps as Newco may reasonably request to cause Newco to be substituted as the sole party having control over any lockbox or similar bank account maintained exclusively by the Business Units to which customers of the Business directly make payments in respect of the Business or to direct the bank at which any such lockbox or similar account is maintained to transfer any payments made thereto to an account established by Newco. Section 7.06 Access to Information; Cooperation After Closing. On and after the Closing Date and subject to any applicable privileges (including, without limitation, the attorney-client privilege), Lockheed Martin shall, and shall cause each of the other Lockheed Martin Companies to, at their expense (i) afford Newco and its Representatives reasonable access upon reasonable prior notice during normal business hours, to all employees, offices, properties, agreements, records, books and affairs of the Lockheed Martin Companies to the extent relating to the Business, (ii) provide copies of such information concerning the Business as Newco may reasonably request for any proper purpose, including, without limitation, in connection with any public or private offering of securities by Newco or the preparation of any financial statements or in connection with any judicial, quasi judicial, administrative, or arbitration proceeding or audit (provided, however, that except as otherwise provided in writing signed by an officer of Lockheed Martin specifically approving the use of such information, the specific purpose for which such information is to be used therein and the specific representations and warranties at issue, Lockheed Martin makes no representations or warranties to the Purchasers, Newco or any other Person in respect of any such information) and (iii) cooperate fully with Newco for any proper purpose, including, without limitation, in the defense or pursuit of any Transferred Asset, Assumed Liability or any claim or action that relates to occurrences involving the Business prior to the Closing Date. Section 7.07 Maintenance of Insurance Policies. Except as otherwise provided in Exhibit G, on and after the date of this Agreement and until the Closing Date, Lockheed Martin shall not take or fail to take any action if such action or inaction, as the case may be, would adversely affect the applicability of any insurance (including reinsurance) in effect on the date of this Agreement that covers all or any part of the assets that would constitute Transferred Assets if owned, held or used by any of the Lockheed Martin Companies on the Closing Date, the Business or the Transferred Employees. Except as otherwise provided in Exhibit G or as may otherwise be agreed in writing by the parties, Lockheed Martin shall not have any obligation to maintain the effectiveness of any such insurance policy after the Closing Date or to make any monetary payment in connection with any such policy. Section 7.08 Novation of Government Contracts. As soon as is reasonably practicable following the Closing, Lockheed Martin shall, in accordance with Federal Acquisition Regulations Part 42, Section 42.12, submit in writing to each Responsible Contracting Officer (as such term is defined in Federal Acquisition Regulations Part 42, Section 42.102(a)), a request for the U.S. Government to (i) recognize Newco as the successor in interest to all of the Government Contracts being sold, assigned, transferred and conveyed to Newco in accordance with this Agreement and (ii) enter into a 18 novation agreement (the "Novation Agreement") substantially in the form contemplated by such regulations. Lockheed Martin shall use commercially reasonable efforts to obtain all consents, approvals and waivers required for the purpose of processing, entering into and completing the Novation Agreement with regard to any of the Government Contracts, including responding to any reasonable requests for information by the U.S. Government with regard to such Novation Agreement. Section 7.09 Financial Statements. Lockheed Martin shall, at Lockheed Martin's expense, furnish and shall cause its independent accountants for the Communications Systems Business Unit to audit and furnish their opinion thereon not later than March 28, 1997, financial statements for such Business Unit for the years ended December 31, 1996, December 31, 1995 and December 31, 1994 prepared in accordance with GAAP applied consistently throughout the periods covered thereby in a form meeting the requirements of Regulation S-X of the Securities Act, and, consistent with appropriate terms and conditions and upon receipt of appropriate management representation letters, to furnish the consent of such independent accountants to the inclusion of their report on such financial statements to the extent the financial statements are required to be included in any registration statement of Newco under the Securities Act and any amendments thereto or in any offering memoranda in connection with an offering of securities exempt from registration under the Securities Act, and to provide comfort letters in customary form in connection therewith; and for the purposes of assisting Newco with any such registration statement and subsequent reporting requirements under the Securities Act of 1934, as amended, Lockheed Martin will deliver to Newco unaudited income statements and balance sheets of the Communications Systems Business Unit for each 1996 calendar quarter and each 1997 calendar quarter completed prior to or on the Closing Date. The financial statements and schedules described in the preceding sentence for the first quarter of 1997 and 1996, respectively, will be provided by May 10, 1997. To the extent required, each subsequent 1997 quarter's financial statements and schedules (together with the corresponding 1996 quarter's financial statements) shall be delivered to Newco by Lockheed Martin within 40 days after the last day of such quarter. The parties acknowledge and agree that time is of the essence in the performance of this Section 7.09 and Lockheed Martin shall provide Newco unaudited financial information with respect to the Communications Systems Business Unit for the years 1993 and 1992 meeting the requirements of Item 301 of Regulation S-K (Selected Financial Data) of the Securities Act by April 4, 1997. Lockheed Martin acknowledges that Newco's independent accountants will be performing the audit of the combined financial statements of the Business for the year ended December 31, 1996 (and, if required by applicable SEC regulations, for the period from January 1, 1997 to the Closing Date), and the combined financial statements of the Wideband Systems Business Unit and the Products Group of the Business for the three months ended March 31, 1996 and the years ended December 31, 1995 and December 31, 1994. Lockheed Martin agrees to cooperate and cause its independent accountants to cooperate with Newco's independent accountants, and provide such reasonable representation letters of Lockheed Martin's management to Newco's independent accountants in a form appropriate to enable such accountants to issue an opinion on the financial statements they are auditing in accordance with professional standards. 19 ARTICLE VIII COVENANTS OF NEWCO AND THE PURCHASERS Section 8.01 Confidentiality. (a) Newco and the Purchasers agree that all information provided or otherwise made available in connection with the Contemplated Transactions, to any of the Purchasers, Newco or their Representatives will be treated as if provided, in the case of Newco and Lehman, under the Lehman Confidentiality Agreement (whether or not the Lehman Confidentiality Agreement is in effect or has been terminated) or, in the case of the Individual Purchasers, under paragraph 7 of the Memorandum (whether or not the Memorandum is in effect or has been terminated). In addition, until consummation of the Closing, Newco agrees to be bound by the terms of the Lehman Confidentiality Agreement as if Newco were Lehman thereunder (whether or not the Lehman Confidentiality Agreement is in effect or has been terminated). Upon consummation of the Closing, the Lehman Confidentiality Agreement and paragraph 7 of the Memorandum shall cease to apply. (b) For a period of three years after the Closing Date, the Purchasers, Newco and each of their Affiliates will treat and hold as such, any confidential information concerning the operations or affairs of businesses of the Lockheed Martin Companies (other than the Business). In the event that any of the Purchasers, Newco or any of their Affiliates is requested or required (by oral or written request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand or similar process or by Applicable Law) to disclose any such confidential information, then they will notify Lockheed Martin promptly of the request or requirement so that Lockheed Martin, at its expense, may seek an appropriate protective order or waive compliance with this Section 8.01(b). If, in the absence of a protective order or receipt of a waiver hereunder, any of the Purchasers, Newco or any of their Affiliates is, on the advice of counsel, compelled to disclose such confidential information, they may so disclose the confidential information, provided that they use reasonable efforts to obtain reliable assurance that confidential treatment will be accorded to such confidential information. Notwithstanding the foregoing, the provisions of this Section 8.01(b) shall not apply to information that (i) is or becomes publicly available other than as a result of a disclosure by any of the Purchasers, Newco or any of their Affiliates, (ii) is or becomes available to any of the Purchasers, Newco or any of their Affiliates on a non-confidential basis from a source that, to the Purchasers', Newco's or any of their Affiliates' knowledge, is not prohibited from disclosing such information by a legal, contractual or fiduciary obligation, or (iii) is or has been independently developed by any of the Purchasers, Newco or any of their Affiliates. (c) Nothing in this Section 8.01 shall abrogate or otherwise limit the fiduciary duties of, and any other duties or restrictions imposed by Applicable Law on, the Individual Purchasers by virtue of their service as a director, officer or employee of any of the Lockheed Martin Companies or their predecessors. 20 Section 8.02 Provision and Preservation of and Access to Certain Information; Cooperation. (a) Prior to the Closing Date, each Purchaser shall provide to Lockheed Martin promptly upon its receipt thereof copies of all environmental audit and similar reports with respect to facilities the possession of which will be transferred to Newco at the Closing. (b) The Individual Purchasers acknowledge that effective as of February 3, 1997, Lockheed Martin turned over day-to-day management of the Business Units to the Individual Purchasers. From the date of this Agreement until the Closing Date, the Individual Purchasers agree to take reasonable steps to ensure that the Business Units conduct their business and operations in accordance with the provisions of Section 7.01. Notwithstanding the foregoing, the Individual Purchasers shall not have liability to any Person for the breach of this Section 8.02(b), it being understood that the effects of a breach of this Section 8.02(b) shall be limited to the effects set forth in Section 13.04(d) and Section 14.02. (c) On and after the Closing Date, Newco shall preserve all books and records of the Business for a period of five years commencing on the Closing Date (or in the case of books and records relating to tax, employment and employee benefits matters, until such time as Lockheed Martin notifies Newco in writing that all statutes of limitations to which such records relate have expired), and thereafter, not to destroy or dispose of such records without giving notice to Lockheed Martin of such pending disposal and offering Lockheed Martin the right to copy such records at its expense. In the event Lockheed Martin has not copied such materials within 90 days following the receipt of notice from Newco, Newco may proceed to destroy or dispose of such materials without any liability. From and after the Closing Date and subject to any applicable privileges (including, without limitation, the attorney-client privilege), Newco shall at its expense (i) afford Lockheed Martin and its Representatives reasonable access upon reasonable prior notice during normal business hours, to all employees, offices, properties, agreements, records, books and affairs of Newco, and provide copies of such information concerning the Business as Lockheed Martin may reasonably request for any proper purpose, including, without limitation, in connection with the preparation of any tax returns or financial statements or in connection with any judicial, quasi judicial, administrative, tax, audit or arbitration proceeding and in connection with the preparation of any financial statements or reports in accordance with past practices and procedures and (ii) cooperate fully with Lockheed Martin for any proper purpose, including, without limitation, the defense of or pursuit of any Excluded Liability, Excluded Asset or any claim or action that relates to an Excluded Liability or Excluded Asset. Section 8.03 Insurance; Financial Support Arrangements. (a) Newco and the Purchasers acknowledge and agree that as of the Closing Date, neither Newco, the Business or any of the Business Units, any property owned or leased by any of the foregoing nor any of the directors, officers, employees (including, without limitation, the Transferred Employees) or agents of any of the foregoing will be insured under any insurance policies maintained by Lockheed Martin or any of its Affiliates, except (i) in the case of certain policies, to the extent that a claim has been reported as of the Closing Date, (ii) in the case of a policy that is an occurrence policy, to the extent the accident, event or occurrence that 21 results in an insurable loss occurs prior to the Closing Date and has been, is or will be reported or noticed to the respective carrier by Newco or any of the Lockheed Martin Companies in accordance with the requirements of such policies (which claims Lockheed Martin shall, at Newco's cost and expense, pursue diligently on Newco's behalf and the net proceeds of which claims shall be remitted promptly to Newco upon receipt thereof), and (iii) as otherwise provided in Exhibit G or agreed to in writing by the parties. Except as otherwise provided in Exhibit G or as otherwise may be agreed to in writing by the parties, from and after the Closing Date, Lockheed Martin shall have no obligation of any kind to maintain any form of insurance covering all or any part of the Transferred Assets, the Business or the Transferred Employees. (b) Newco agrees to reimburse Lockheed Martin within 30 days of receipt of an invoice for the items set forth below. (i) The allocated cost to the Business of premiums, costs and expenses (excluding Lockheed Martin risk management department costs and expenses), including general and administrative charges, for all periods prior to the Closing Date in respect of any and all insurance policies that cover or covered the Business, whether or not a claim has been made or ever will be made by the Business or Newco under such policies. The "allocated cost" to the Business shall be determined by Lockheed Martin in a manner consistent with prior practices and in conjunction with the Cost Disclosure Statement filed by Lockheed Martin or any of its Affiliates and their predecessors with the U.S. Government on the portion of the period covered by the respective policies that ends prior to the Closing Date, except that with respect to policies for which no premium rebate or refund is available as a result of the consummation of the Contemplated Transactions, the "allocated cost" to the Business shall be based on the entire policy period. Newco and the Purchasers understand that Lockheed Martin is in the process of reviewing with the U.S. Government the methodology used by Lockheed Martin and its Affiliates to allocate premiums, costs, expenses and reserves to various businesses and divisions, including the Business Units, and acknowledge that any changes to such allocation methodology may result in retroactive adjustments to the allocated cost to the Business of premiums, costs and expenses. In the event of any such change to the allocation methodology, Lockheed Martin and Newco agree to adjust the allocated costs to the Business (either through a special charge or credit to Newco under this Section 8.03(b)(i)) as appropriate. (ii) Any self insurance, retention, deductible, retrospective premium, cash payment for reserves calculated or charged on an incurred loss basis and similar items, including but not limited to associated administrative expenses and allocated loss adjustment or similar expenses (collectively, "Insurance Liabilities") allocated to the Business by Lockheed Martin on a basis consistent with past practices resulting from or arising under any and all current or former insurance policies maintained by Lockheed Martin or any of its Affiliates to the extent that such Insurance Liabilities relate to or arise out of the Business or any activities of Newco. Newco agrees that, to the extent any of the insurers under the insurance policies, in accordance with the terms of the insurance policies, requests or requires collateral, deposits or other security to be provided with respect to claims made against such insurance policies relating to or arising from 22 the Business, Newco will provide the collateral, deposits or other security or, upon request of Lockheed Martin, will replace any collateral, deposits or other security provided by Lockheed Martin or any of its Affiliates. (c) Newco agrees that, for a period of at least six years commencing on the Closing Date, to the extent it maintains insurance coverage, Newco will (at Lockheed Martin's cost to the extent of any additional cost therefor, provided that, in the event there will be such a cost, Newco will give Lockheed Martin a reasonable period of time to determine whether it desires to incur such cost before Newco commits to such coverage with respect to Lockheed Martin) include Lockheed Martin and its Affiliates as an additional insured/loss payee on any policies in respect of which Lockheed Martin or its Affiliates has or may have an insurable interest with respect to the Business, the Transferred Assets, any of the Assumed Liabilities or any facilities the possession of which will be transferred to Newco at the Closing. (d) Newco and the Purchasers agree that, not later than September 30, 1997, and in a manner reasonably satisfactory to Lockheed Martin, Newco will in good faith seek to release Lockheed Martin and its Affiliates from all obligations under all Financial Support Arrangements maintained by Lockheed Martin or any of its Affiliates in connection with the Business. (e) Lockheed Martin will use reasonable commercial efforts to cause each Financial Support Arrangement to remain in full force and effect in accordance with its terms until the earliest of (i) the date (the "Release Date") on which Newco ensures that Lockheed and its Affiliates are released from all obligations of Lockheed Martin and its Affiliates under such Financial Support Arrangement in accordance with Section 8.03(d), (ii) September 30, 1997 and (iii) the date such Financial Support Arrangement terminates in accordance with its terms. After the Closing Date and prior to the Release Date for any such Financial Support Arrangement, Lockheed Martin will not waive any requirements of or agree to amend such Financial Support Arrangement without the prior written consent of Newco. (f) If, after the Closing Date, (i) any amounts are drawn on or paid under any Financial Support Arrangement where Lockheed Martin or any of its Affiliates is obligated to reimburse the Person making such payment or (ii) Lockheed Martin or any of its Affiliates pays any amounts under, or any fees, costs or expenses relating to, any Financial Support Arrangement, Newco shall pay Lockheed Martin such amounts promptly after receipt from Lockheed Martin of notice thereof accompanied by written evidence of the underlying payment obligation. (g) In the event that Newco fails to ensure that Lockheed Martin and its Affiliates are released from all obligations under the Financial Support Arrangements not later than September 30, 1997, Newco shall either (i) promptly deposit with Lockheed Martin cash in an amount equal to the aggregate principal or stated amount, as may be applicable, of the Financial Support Arrangements not so released or (ii) provide back-up letters of credit in form and substance reasonably satisfactory to Lockheed Martin with respect to such Financial Support Arrangements; provided that if Newco has used reasonable commercial efforts to structure its financing arrangements to permit it to comply with the foregoing obligations, Newco shall not be required to take any action under this Section 8.03(g) that it is prohibited from taking under the terms of any financing agreements of Newco in effect on the Closing Date. Any cash deposited with Lockheed Martin in accordance with 23 clause (i) shall be held by Lockheed Martin in a segregated interest-bearing account and shall be used by Lockheed Martin solely to satisfy its payment obligations in respect of such Financial Support Arrangements, and the unused portion of any cash (including interest) relating to a Financial Support Arrangement shall be returned to Newco promptly after the occurrence of the Release Date with respect to, or any other termination of, the Financial Support Arrangement. (h) In the event that Newco fails to ensure that Lockheed Martin and its Affiliates are released from all obligations of Lockheed Martin and its Affiliates under the Disclosed Financial Support Arrangements not later than September 30, 1997, whether as a result of the proviso to the first sentence of Section 8.03(g) or otherwise, and to the extent that Newco has not provided the deposits or letters of credit contemplated by the first sentence of Section 8.03(g), on October 1, 1997 and on the first day of each calendar quarter thereafter Newco agrees to pay to Lockheed Martin an amount equal to (i) .3125% of the maximum aggregate potential liability of Lockheed Martin and its Affiliates under such Disclosed Financial Support Arrangements in the case of performance-related Disclosed Financial Support Arrangements or (ii) .625% of the maximum aggregate potential liability of Lockheed Martin and its Affiliates under such Disclosed Financial Support Arrangements in the case of all other Disclosed Financial Support Arrangements (other than Disclosed Financial Support Arrangements that constitute non-monetary performance guarantees or similar non-monetary obligations) that have not been released or otherwise secured by the deposits or letters of credit contemplated by the first sentence of Section 8.03(g) (determined as of the last day of the preceding calendar quarter). Any such payment by Newco shall be due and payable on October 1, 1997 or on the first day of the applicable calendar month thereafter, and shall be nonrefundable regardless of any subsequent reduction of the liability of Lockheed Martin or any of its Affiliates thereunder. Section 8.04 Non-Solicitation of Employees. From and after the date of this Agreement until the second anniversary of the Closing Date, Newco shall not, without prior written approval of Lockheed Martin, directly or indirectly (through Affiliates or otherwise), knowingly solicit any individual (other than individuals identified in Attachment XI) who at that time is an employee of any of the Lockheed Martin Companies (other than a Transferred Employee) to terminate his or her relationship with the Lockheed Martin Companies and will not knowingly hire any individual inadvertently solicited; provided, however, that the foregoing shall not apply to individuals solicited or hired as a result of the use of an independent employment agency (so long as the agency was not directed to solicit such individual and Newco advises its Manager of Human Resources of the provisions of this Section 8.04) or solicited or hired as a result of the use of a general solicitation (such as an advertisement) not specifically directed to employees of the Lockheed Martin Companies. Section 8.05 Financing. Newco shall use reasonable commercial efforts to obtain (on or prior to the Closing Date) sufficient funds on commercially available terms acceptable to Newco in its sole discretion (i) to pay the cash portion of the Exchange Consideration and (ii) to obtain adequate working capital for the Business, provided that Newco shall not be considered to be in breach of this Agreement if, notwithstanding its use of reasonable commercial efforts as aforesaid, Newco does not have sufficient funds available for such purposes on the Closing Date. 24 Section 8.06 Use of Certain Trademarks, etc. Newco acknowledges and agrees that it is not obtaining any rights or licenses with respect to the names "Lockheed Martin," "Lockheed," "Loral," "Martin Marietta" or any derivative thereof, or to their logos or trade dress, or to any other Intellectual Property not constituting a Transferred Asset or not licensed to it under the License Agreements. As soon as practicable following the Closing, but no later than 180 days after the Closing Date, Newco shall remove and change signage, change and substitute promotional and advertising material in whatever medium, change stationery and packaging and take all such other steps as may be required or appropriate to cease use of all such Intellectual Property not constituting a Transferred Asset or not licensed to it under the License Agreements; provided, however, that nothing in this Agreement shall obligate Newco to change or copy over any engineering drawings, prints or copies of correspondence, invoices and other documents prepared prior to the Closing Date or to replace or alter any tools or dies included in the Transferred Assets. Section 8.07 Government Contract Novation; Cooperation. Newco shall provide to Lockheed Martin and each Responsible Contracting Officer all information necessary to obtain the consent of the U.S. Government to recognize Newco as the successor in interest to all of the Government Contracts being sold, assigned, transferred and conveyed to Newco in accordance with this Agreement. Newco shall use commercially reasonable efforts to obtain all consents, approvals and waivers required for the purpose of processing, entering into and completing the Novation Agreement with regard to any of the Government Contracts, including responding to any requests for information by the U.S. Government with regard to such Novation Agreement. Section 8.08 Reimbursement of Damages. Newco shall use reasonable commercial efforts to obtain reimbursement of any Damages suffered by it that are subject to indemnification by Lockheed Martin hereunder as a reimbursable cost under Government Contracts, provided the reimbursement of such Damages is permitted by Applicable Law. ARTICLE IX COVENANTS OF THE PARTIES Section 9.01 Further Assurances. Subject to the terms and conditions of this Agreement, each party shall use all reasonable commercial efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under Applicable Laws to consummate the Contemplated Transactions. Lockheed Martin, Newco and the Purchasers shall execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the Contemplated Transactions. Except as otherwise expressly set forth in the Transaction Documents, nothing in this Section 9.01 shall require Lockheed Martin, Newco or any of the Purchasers to make any payments in order to obtain any consents or approvals necessary or desirable in connection with the consummation of the Contemplated Transactions. Section 9.02 Certain Filings; Consents. Lockheed Martin, Newco and the Purchasers shall cooperate with one another (i) in determining whether any action by or in respect of, or filing with, any Governmental Authority is 25 required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material Contracts, in connection with the consummation of the Contemplated Transactions and (ii) subject to the terms and conditions of this Agreement, in taking such actions or making any such filings, furnishing information required in connection therewith and seeking timely to obtain any such actions, consents, approvals or waivers. Section 9.03 Public Announcements. Prior to the Closing, Lockheed Martin, Newco and the Purchasers shall consult with each other before issuing any press release or making any public statement or communicating with the U.S. Government as a customer with respect to this Agreement or the Contemplated Transactions and, except as may be required by Applicable Law or any listing agreement with any national or international securities exchange, will not issue any such press release or make any such public statement prior to such consultation. Notwithstanding the foregoing, no provision of this Agreement (except as set forth in Section 8.01) shall relieve Lehman from any of its obligations under the Lehman Confidentiality Agreement, or relieve the Individual Purchasers from any of their respective obligations under paragraph 7 of the Memorandum, or terminate any of the restrictions imposed upon any party by Section 8.01. Section 9.04 Intellectual Property; License Agreements. (a) In consideration of the grant described in Section 9.04(b), Lockheed Martin shall grant to Newco, effective as of the Closing Date and pursuant to a License Agreement, a fully paid-up, worldwide, perpetual, non-exclusive license in respect of all Intellectual Property owned by Lockheed Martin that is used or currently planned for use by the Business (but not constituting Transferred Assets) on the Closing Date, for such uses and currently planned uses by Newco and its Affiliates. Such license shall not be transferable by Newco other than in connection with the sale or transfer of all or a substantial portion (it being understood that the sale of a Business Unit shall be deemed a substantial portion) of the Business by Newco. (b) In consideration of the grant described in Section 9.04(a), Newco shall grant to the Lockheed Martin Companies, effective as of the Closing Date and pursuant to a License Agreement, a fully paid-up, world-wide, perpetual, non-exclusive license in respect of all Intellectual Property constituting Transferred Assets (i) that is used or currently planned for use by the Lockheed Martin Companies (other than the Business Units) on the Closing Date, for such uses and currently planned uses by Lockheed Martin and its Affiliates or (ii) used by Newco after the Closing Date in connection with the manufacture of any products for sale to, or the provision of any services to, any of the Lockheed Martin Companies pursuant to any agreement between Newco and any of the Lockheed Martin Companies that is breached by Newco, for use by Lockheed Martin and its Affiliates in making or using such products or providing such services (other than in the case of clause (ii), the duration for which shall be an appropriate length of time to permit completion of manufacture or services). The license granted pursuant to clause (i) of the preceding sentence shall be effective as of the Closing Date and the license granted pursuant to clause (ii) of the preceding sentence shall be effective as of the date that the agreement described therein is breached by Newco. Such license shall not be transferable by Lockheed Martin other than in connection with the sale or transfer of all or a substantial portion of a business by Lockheed Martin. 26 (c) Newco acknowledges and agrees that it shall hold all Intellectual Property constituting part of the Transferred Assets subject to any licenses thereof granted by Lockheed Martin and its Affiliates prior to the Closing Date. (d) The transfer of Intellectual Property constituting Transferred Assets to Newco shall not affect Lockheed Martin's right to use, disclose or otherwise freely deal with any know-how, trade secrets and other technical information not constituting Transferred Assets that is resident on the Closing Date at businesses of the Lockheed Martin Companies other than the Business. Section 9.05 HSR Act. The parties shall take all actions necessary or appropriate to cause the prompt expiration or termination of any applicable waiting period under the HSR Act in respect of the Contemplated Transactions, including, without limitation, complying as promptly as practicable with any requests for additional information; provided that Newco shall not be required to provide any undertakings or comply with any condition that, in its good faith judgment, would materially and adversely diminish Newco's rights under this Agreement or materially and adversely affect its business, results or operations. Section 9.06 Operation of Newco. From and after the date of this Agreement through the Closing, Newco will not engage in or conduct any activities other than activities that are necessary or appropriate in connection with the consummation of the Contemplated Transactions. Section 9.07 Maintenance of Insurance Policies. Notwith-standing any provision to the contrary in this Agreement, this Section 9.07 shall constitute the parties' agreement regarding the allocation of insurance proceeds with respect to claims for liabilities that arise under or relate to Environmental Laws that are comprised, in whole or in part, of Environmental Liabilities that constitute Assumed Liabilities (the "Environmental Insurance Claims"). Newco and the Purchasers acknowledge that Lockheed Martin shall control the Environmental Insurance Claims and shall have the right to compromise or settle any Environmental Insurance Claims. Lockheed Martin will act in good faith and with reasonable prudence to maximize recovery with respect to the Environmental Insurance Claims and will allocate any recovery received with respect to such Environmental Insurance Claims, first, to the costs it incurred to collect such recovery and all net tax costs related to such recovery, and second, to reimburse any Governmental Authority, prime contractor or subcontractor pursuant to a Government Contract. With respect to any recovery remaining (the "Remaining Recovery"): (i) if the recovery applies to liabilities that are Assumed Liabilities and to liabilities that are not Assumed Liabilities, and the recovery was not designated as arising from specific liabilities (e.g., a global settlement with an insurance carrier), Lockheed Martin will pay Newco an amount equal to the Remaining Recovery multiplied by X multiplied by (one minus Y); where X equals the total of the Environmental Insurance Claims (estimated as of the date of recovery) under said insurance policies divided by the total environmental and other claims by Lockheed Martin under said insurance policies; and Y equals Lockheed Martin's past expenditures on said liabilities divided by the total estimated expenditures made or to be made by Lockheed 27 Martin or Newco in respect of said liabilities (estimated as of the date of recovery), or (ii) if the recovery was designated as arising from a specific liability that is an Assumed Liability, Lockheed Martin will pay Newco the Remaining Recovery multiplied by (one minus Y). Any obligations assumed in any such compromise or settlement of the Environmental Insurance Claims will be apportioned between Lockheed Martin and Newco in the same proportion as a recovery would be allocated pursuant to this Section 9.07. Section 9.08 Legal Privileges. Lockheed Martin and Newco acknowledge and agree that all attorney-client, work product and other legal privileges that may exist with respect to the Transferred Assets or the Assumed Liabilities, shall, from and after the Closing Date, be deemed joint privileges of Lockheed Martin and Newco. Both Lockheed Martin and Newco shall use all commercially reasonable efforts after the Closing Date to preserve all such privileges and neither Lockheed Martin nor Newco shall knowingly waive any such privilege without the prior written consent of the other party (which consent will not be unreasonably withheld or delayed). Section 9.09 Non-Compete. Lockheed Martin, Newco and the Purchasers covenant and agree that prior to the Closing Date they will discuss in good faith the scope and nature of an appropriate non-competition agreement to provide reasonable commercial protection to Newco for periods to be mutually agreed upon of up to three years with respect to the material core businesses of the Business while providing the Lockheed Martin Companies the ability to continue, without impediment, all of its existing businesses and currently planned businesses (other than those conducted only through the Business Units), to enter into businesses reasonably related to its exiting businesses and currently planned businesses, to make acquisitions and to otherwise provide third-party sourced products similar to those manufactured or sold by the Business as part of larger systems manufactured or sold by the Lockheed Martin Companies. The non-competition agreement also will provide reasonable commercial protection to the Lockheed Martin Companies on programs where Newco performs substantial subcontract work for the Lockheed Martin Companies, it being understood that this provision shall not prohibit Newco from entering into subcontract agreements with other Persons on programs that compete against the Lockheed Martin Companies, provided that appropriate safeguards (including, for example, "firewalls" and confidentiality agreements) are implemented and in place to protect the proprietary and confidential information of the Lockheed Martin Companies. For the purposes of any such non-competition agreement, (i) the businesses operated and managed by Lockheed Martin on behalf of the U.S. Government, including the Department of Energy, shall not be included within the prohibitions, and (ii) "currently planned" businesses of the Lockheed Martin Companies shall mean those businesses that Lockheed Martin can demonstrate are affirmatively under consideration as of the Closing Date. ARTICLE X TAX MATTERS Section 10.01 Tax Matters. The parties agree as to tax matters as set forth in Exhibit F. 28 ARTICLE XI EMPLOYEE BENEFIT MATTERS Section 11.01 Employee Benefit Matters. The parties agree as to employee benefit matters as set forth in Exhibit G. ARTICLE XII CONDITIONS TO CLOSING Section 12.01 Conditions to the Obligations of Each Party. The obligations of Lockheed Martin, Newco and the Purchasers to consummate the Closing are subject to the satisfaction (or waiver) of the following conditions: (a) Any applicable waiting period under the HSR Act relating to the Contemplated Transactions shall have expired or been terminated; (b) No provision of any Applicable Law or regulation and no judgment, injunction, order or decree shall prohibit the Closing, and no action or proceeding shall be pending before any court, arbitrator or governmental body, agency or official with respect to which counsel reasonably satisfactory to Lockheed Martin, Newco and the Purchasers shall have rendered a written opinion that there is a substantial likelihood of a determination that would prohibit the Closing; (c) All actions by or in respect of or filings with any Governmental Authority required to permit the consummation of the Closing shall have been obtained; (d) Lockheed Martin, Newco and the Purchasers shall have executed and delivered the Common Stock Subscription Agreements and the Stockholders Agreement in substantially the forms attached as Attachments IV and V, and shall have executed and delivered the Exchange Agreement in substantially the form attached to the Transfer Agreement attached as Attachment III, the Interim Services Agreement, the License Agreements, the Supply Agreement and the leases, subleases and assignment agreements referred to in Section 2.01(viii) and the agreement referred to in Section 2.01(ix); (e) Lockheed Martin and Newco shall have executed and delivered the noncompetition agreement contemplated by Section 9.09; (f) Lockheed Martin or the applicable Affiliated Transferor, as the case may be, shall have obtained the consents, approvals or permits contemplated by Attachment X; and (g) There shall be (i) no conditions requested of Lockheed Martin by the PBGC or of Newco by Lockheed Martin, in connection with the transfer of all of the assets and liabilities of the Spinoff Plans or the Assumed Plans, that are in either party's reasonable good faith judgment unacceptable to either Lockheed Martin (as to conditions requested of Lockheed Martin by the PBGC) or Newco (as to conditions requested of Newco by Lockheed Martin); or (ii) no commencement of proceedings by the PBGC to terminate any Lockheed Martin Pension Plan (or a reasonable good faith determination of Newco or 29 Lockheed Martin that the commencement of such proceedings is reasonably likely). Section 12.02 Conditions to Obligation of Newco and the Purchasers. The obligations of Newco and the Purchasers to consummate the Closing are subject to the satisfaction (or waiver by Newco and the Purchasers) of the following further conditions: (a) (i) Lockheed Martin shall have performed in all material respects all of its obligations under the Transaction Documents required to be performed by it on or prior to the Closing Date, (ii) the representations and warranties of Lockheed Martin contained in the Transaction Documents shall be complete and correct (in all material respects, in the case of those representations and warranties which are not by their express terms qualified by reference to materiality) at and as of the date of this Agreement and as of the Closing Date, as if made at and as of each such date, except that those representations and warranties which are by their express terms made as of a specific date shall be complete and correct (in all material respects, in the case of those representations and warranties which are not by their express terms qualified by reference to materiality) only as of such date, and (iii) Newco shall have received a certificate signed by an executive officer of Lockheed Martin to the foregoing effect; (b) Newco has sufficient funds available to pay the cash portion of the Exchange Consideration for the Transferred Assets, provided that this Section 12.02(b) shall not be a condition to Newco and the Purchasers' obligation to consummate the Closing unless the representations and warranties set forth in Section C.08 of Exhibit C and Section D.06 of Exhibit D shall be, and continue to be, accurate and Newco shall have complied in all material respects with its obligations under Section 8.05; (c) The Purchasers shall have completed their review of the litigation titled Universal Navigation v. Loral Corporation and the results of such review shall be satisfactory to the Purchasers; (d) Since December 31, 1996, there shall not have been any material adverse change in the assets, properties, business, financial condition or results of operations of the Business taken as a whole or any developments that reasonably could be expected to result in such a change; (e) Lockheed Martin, the applicable Affiliated Transferor or Newco, as the case may be, shall have obtained the consents, approvals or permits contemplated by Attachment X; (f) Newco shall have obtained such surveys and title insurance in respect of the Owned Real Property as are sufficient to satisfy Newco's lenders and to enable Newco to obtain financing; and (g) Lockheed Martin shall have furnished Newco with an opinion dated the Closing Date concerning the matters set forth in Attachment XII. Section 12.03 Conditions to Obligation of Lockheed Martin. The obligation of Lockheed Martin to consummate the Closing is subject to the satisfaction (or waiver by Lockheed Martin) of the following further conditions: 30 (a) (i) Newco and the Purchasers shall have performed in all material respects all of their respective obligations under the Transaction Documents required to be performed by them at or prior to the Closing Date, (ii) the representations and warranties of Newco and the Purchasers contained in the Transaction Documents shall be complete and correct (in all material respects, in the case of those representations and warranties which are not by their express terms qualified by reference to materiality) at and as of the date of this Agreement and as of the Closing Date, as if made at and as of each such date, except that those representations and warranties which are by their express terms made as of a specific date shall be complete and correct (in all material respects, in the case of those representations and warranties which are not by their express terms qualified by reference to materiality) only as of such date, and (iii) Lockheed Martin shall have received certificates signed by executive officers of Newco (as to Newco) and Lehman (as to Lehman), and certificates signed by each of the Individual Purchasers, to the foregoing effect; and (b) Newco shall have furnished Lockheed Martin with an opinion dated the Closing Date covering the matters set forth in Attachment XIII. Section 12.04 Effect of Waiver. Any waiver by Newco and the Purchasers of the conditions specified in clause (ii) of Section 12.02(a) and any waiver by Lockheed Martin of the conditions specified in clause (ii) of Section 12.03, if made knowingly, shall also be deemed a waiver by such Person of any claim for Damages as the result of the matters waived. ARTICLE XIII SURVIVAL; INDEMNIFICATION Section 13.01 Survival. None of the representations and warranties of the parties contained in any Transaction Document or in any certificate or other writing delivered pursuant to any Transaction Document or in connection with any Transaction Document shall survive the Closing, except for: (i) the representations and warranties in Sections B.01, B.02, B.07(b) and B.12 shall survive indefinitely; (ii) the representations and warranties in Section B.13 shall not survive the Closing Date; (iii) the representations and warranties in Section B.15 shall survive for a period of three years from the Closing Date; (iv) the representations and warranties in Section B.21 shall survive until 30 days after the expiration of the applicable statute of limitations (or extensions or waivers thereof); (v) the representations and warranties in Exhibit B (other than those Sections of Exhibit B referenced in the preceding clauses (i), (ii), (iii) and (iv)), shall survive for a period of two years from the Closing Date; (vi) the representations and warranties included in Exhibit F shall survive until 30 days after the expiration of the applicable statute of limitations (or extensions or waivers thereof); 31 (vii) the representations and warranties in Sections C.01, C.02 and C.05 shall survive indefinitely; (viii) the representations and warranties in Exhibit C (other than those Sections of Exhibit C referenced in the preceding clause (vii)) shall survive for a period of two years from the Closing Date; (ix) the representations and warranties in Sections D.03 shall survive indefinitely; (x) the representations and warranties in Exhibit D (other than the representations and warranties in Section D.03), shall survive for a period of two years from the Closing Date; (xi) the representations and warranties in Sections E.01, E.02 and E.05 shall survive indefinitely; and (xii) the representations and warranties in Exhibit E (other than those Sections of Exhibit E referenced in the preceding clause (xi)) shall survive for a period of two years from the Closing Date. The covenants and agreements of the parties in the Transaction Documents and the representations and warranties referenced in the preceding clauses (i) and (iii) through (xii) are referred to herein as the "Surviving Representations or Covenants." It is understood and agreed that, (1) before the Closing the remedies expressly set forth in Article XIV are the sole and exclusive remedies for any breach of any representation, warranty or covenant and (2) following the Closing the sole and exclusive remedy with respect to any breach of any representation, warranty or covenant (other than (i) with respect to a breach of the terms of a covenant, as to which Newco or Lockheed Martin, as the case may be, shall be entitled to seek specific performance or other equitable relief and (ii) with respect to claims for fraud or for willful breach of a covenant) shall be a claim for Damages made pursuant to this Article XIII. Section 13.02 Indemnification. (a) Effective as of the Closing and subject to the limitations set forth in Section 13.04(a), Newco hereby indemnifies Lockheed Martin and its Affiliates and their respective directors, officers, employees and agents, against and agrees to hold them harmless from any and all Damages incurred or suffered by any of them arising out of or related in any way to (i) any misrepresentation or breach of any Surviving Representation or Covenant made or to be performed by Newco pursuant to any of the Transaction Documents, (ii) the Assumed Liabilities (including, without limitation, Newco's failure to perform or in due course pay and discharge any Assumed Liability) or (iii) any Financial Support Arrangement referred to in Section 8.03(b). (b) Effective as of the Closing and subject to the limitations set forth in Section 13.04(b), Lockheed Martin hereby indemnifies Newco and its Affiliates and their respective directors, officers, employees and agents against and agrees to hold them harmless from any and all Damages incurred or suffered by any of them arising out of or related in any way to (i) any misrepresentation or breach of any Surviving Representation or Covenant made or to be performed by the Lockheed Martin Companies pursuant to any Transaction Document, (ii) the Excluded Liabilities (including, without limitation, Lockheed Martin's (or any other Lockheed Martin Company's) 32 failure to perform or in due course pay and discharge any Excluded Liability), (iii) the assumption by Newco of Environmental Liabilities arising out of, relating to, based on or resulting from actions taken (or failures to take action), conditions existing or events occurring prior to the Closing, (iv) the Camden CAS 410 Issue, or (v) the Sarasota Asset Step-Up Issue; provided, however, that Newco shall not have suffered or be deemed to have suffered any Damages in the case of the foregoing clauses (iii), (iv), and (v) to the extent that such Damages are recoverable as an allowable cost under Applicable Law or under the terms of any applicable Government Contracts. (c) Effective as of the Closing and subject to the limitations set forth in Section 13.04(c), each of the Purchasers hereby, severally and not jointly with the other Purchasers, indemnifies each of the other parties to this Agreement and their respective Affiliates and their respective directors, officers, employees and agents, against and agrees to hold them harmless from any and all Damages incurred or suffered by any of them arising out of or related in any way to any breach of any Surviving Representation or Covenant made or to be performed by the Purchasers pursuant to any of the Transaction Documents. Section 13.03 Procedures. (a) If Lockheed Martin or any of its Affiliates or any of their directors, officers, employees and agents, shall seek indemnification pursuant to Section 13.02(a) or Section 13.02(c), or if Newco or any of its Affiliates or any of their directors, officers, employees and agents, shall seek indemnification pursuant to Section 13.02(b), such Person seeking indemnification (the "Indemnified Party") shall give written notice to the party from whom such indemnification is sought (the "Indemnifying Party") promptly (and in any event within 30 days) after the Indemnified Party (or, if the Indemnified Party is a corporation, any officer of the Indemnified Party) becomes aware of the facts giving rise to such claim for indemnification (an "Indemnified Claim") specifying in reasonable detail the factual basis of the Indemnified Claim, stating the amount of the Damages, if known, the method of computation thereof, and containing a reference to the provision of the Transaction Documents in respect of which such Indemnified Claim arises. The failure of an Indemnified Party to provide notice pursuant to this Section 13.03 shall not constitute a waiver of that party's claims to indemnification pursuant to Section 13.02 in the absence of, and then only to the extent of, material prejudice to the Indemnifying Party. If the Indemnified Claim arises from the assertion of any claim, or the commencement of any suit, action, proceeding or Remedial Action brought by a Person that is not a party hereto (a "Third Party Claim")any such notice to the Indemnifying Party shall be accompanied by a copy of any papers theretofore served on the Indemnified Party in connection with such Third Party Claim. With respect to any Third Party Claim asserted or brought prior to the Closing Date, notice of such Third Party Claim shall be deemed to have been delivered on the Closing Date. (b) (i) Upon receipt of notice of a Third Party Claim from an Indemnified Party pursuant to Section 13.03(a), the Indemnifying Party will, subject to the other provisions of this Section 13.03(b), assume the defense and control of such Third Party Claim but shall allow the Indemnified Party a reasonable opportunity to participate in the defense thereof with its own counsel and at its own expense. The Indemnifying Party shall select counsel, contractors and consultants of recognized 33 standing and competence after consultation with the Indemnified Party; shall take all steps necessary in the defense or settlement thereof; and shall at all times diligently and promptly pursue the resolution thereof. In conducting the defense thereof, the Indemnifying Party shall at all times act as if all Damages relating to such Third Party Claim were for its own account and shall act in good faith and with reasonable prudence to minimize Damages therefrom. The Indemnified Party shall, and shall cause each of its Affiliates, directors, officers, employees, and agents to, cooperate fully with the Indemnifying Party in the defense of any Third Party Claim defended by the Indemnifying Party. (ii) The Indemnifying Party shall give prompt and continuing notice to the other Indemnified Party of any Third Party Claims that the Indemnifying Party reasonably believes may: (1) result in the assertion of criminal liability on the part of the Indemnified Party or any of its Affiliates, directors, officers, employees or agents; (2) adversely affect the ability of the Indemnified Party to do business in any jurisdiction or in any manner or with any customer; or (3) materially affect the reputation of the Indemnified Party or any of its Affiliates, directors, officers, employees or agents. (iii) Subject to the provisions of Section 13.03(b)(iv) and Section 13.03(b)(v), the Indemnifying Party shall be authorized to consent to a settlement of, or the entry of any judgment arising from, any Third Party Claims, without the consent of any Indemnified Party; provided, that the Indemnifying Party shall (1) pay or cause to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness thereof; (2) shall not encumber any of the assets of any Indemnified Party or agree to any restriction or condition that would apply to such Indemnified Party or to the conduct of that party's business; and (3) shall obtain, as a condition of any settlement or other resolution, a complete release of each Indemnified Party. Except for the foregoing, no settlement or entry of judgment in respect of any Third Party Claim shall be consented to by any Indemnifying Party without the consent of the Indemnified Party, which consent shall not be unreasonably withheld. (iv) An Indemnified Party may elect to share the defense of a Third Party Claim the defense of which has been assumed by the Indemnifying Party pursuant to Section 13.03(b)(ii). In that event, the Indemnified Party will so notify the Indemnifying Party in writing. Thereafter, the Indemnifying Party and the Indemnified Party shall participate on an equal basis in the defense, management and control of any such claim. The Indemnifying Party and the Indemnified Party shall select mutually satisfactory counsel, contractors and consultants to conduct the defense or settlement thereof (the costs and expenses of which shall be shared equally by the Indemnifying Party and the Indemnified Party), and shall at all times diligently and promptly pursue the resolution thereof. Notwithstanding the foregoing, Newco shall manage all Remedial Actions conducted with respect to facilities which constitute Transferred Assets or at which Newco will undertake operations pursuant to this Agreement, provided that Lockheed Martin and its Representatives shall have the right, consistent with Newco's right to manage such Remedial Actions as aforesaid, to participate fully in all decisions regarding any Remedial Action, including reasonable access to sites where any Remedial Action is being conducted, reasonable access to all documents, correspondence, 34 data, reports or information regarding the Remedial Action, reasonable access to employees and consultants of Newco with knowledge of relevant facts about the Remedial Action and the right to attend all meetings and participate in any telephone or other conferences with any government agency or third party regarding the Remedial Action. (v) In the case of the indemnification contemplated by clauses (iii), (iv) and (v) of Section 13.02(b), in the event that either the Indemnified Party or the Indemnifying Party desires to settle the matters referenced therein or consent to the entry of any judgment arising thereunder and the other party does not wish to consent to such settlement, the other party shall have no obligation to consent to the settlement provided that it agrees in writing to pay and be responsible for 100% of any Damages thereafter incurred; provided that no Indemnified Party shall be required to consent to any settlement or agree to be responsible for the payment of Damages thereafter incurred with respect to any matter the settlement of which would require the consent of such Indemnified Party pursuant to Section 13.03(b)(iii). The obligation of the party that rejects any proposed settlement offer or entry of any such judgment to pay and be responsible for 100% of any Damages thereafter incurred in accordance with this Section 13.03(b)(v) shall be conditioned upon and subject to the payment, within five Business Days of the date such party provides the written agreement contemplated by the preceding sentence, of an amount, in immediately available funds, equal to the portion of the total settlement that would have been payable by the party desiring to settle the matter or consent to the entry of any such judgment according to the percentage sharing arrangement contemplated by Section 13.04(b)(ii) or Section 13.04(b)(iii), as the case may be. Thereafter, the party that rejects the proposed settlement shall be solely responsible for the defense of the matter that is the subject of the proposed settlement. (c) If the Indemnifying Party and the Indemnified Party are unable to agree with respect to a procedural matter arising under Section 13.03(b)(iv), the Indemnifying Party and the Indemnified Party shall, within 10 days after notice of disagreement given by either party, agree upon a third-party referee ("Referee"), who shall be an attorney and who shall have the authority to review and resolve the disputed matter. The parties shall present their differences in writing (each party simultaneously providing to the other a copy of all documents submitted) to the Referee and shall cause the Referee promptly to review any facts, law or arguments either the Indemnifying Party or the Indemnified Party may present. The Referee shall be retained to resolve specific differences between the parties within the range of such differences. Either party may request that all oral arguments presented to the Referee by either party be in each other's presence. The decision of the Referee shall be final and binding unless both the Indemnifying Party and the Indemnified Party agree. The parties shall share equally all costs and fees of the Referee. Section 13.04 Limitations. Notwithstanding anything to the contrary in this Agreement or in any of the Transaction Documents: (a) Newco shall only have liability to Lockheed Martin and its Affiliates with respect to the representations and warranties described in clause (i) of Section 13.02(a) if such matters were the subject of a written notice given by the Indemnified Party pursuant to Section 13.03(a) within the 35 period following the Closing Date specified for each respective matter in Section 13.01. (b) Lockheed Martin shall only have liability to Newco or any other Person hereunder: (i) with respect to the representations and warranties described in clause (i) of Section 13.02(b), (y) to the extent that the aggregate Damages of all Indemnified Parties as the result thereof exceed $5,000,000 but are not greater than $55,000,000 (it being understood that Lockheed Martin's maximum liability under Section 13.02(b)(i) with respect to representations and warranties and this Section 13.04(b)(i) shall be $50,000,000), and (z) if such matters were the subject of a written notice given by the Indemnified Party pursuant to Section 13.03(a) within the period following the Closing Date specified for each respective matter in Section 13.01; (ii) with respect to the matters described in clause (iii) of Section 13.02(b) (after giving effect to the proviso thereto), (y) to the extent of 50% of the aggregate Damages incurred within eight years following the Closing Date by all Indemnified Parties as the result thereof, and (z) to the extent of 40% of the aggregate Operation and Maintenance Costs incurred by all Indemnified Parties after the eighth anniversary of the Closing Date and within 15 years following the Closing Date; provided, however, that Lockheed Martin shall only have liability under Section 13.02(b)(iii) or this Section 13.04(b)(ii) for Damages and Operation and Maintenance Costs incurred after the Closing Date in excess of $6,000,000; (iii) with respect to the matters described in clause (iv) of Section 13.02(b) (after giving effect to the proviso thereto), (y) to the extent of 75% of the aggregate Damages incurred by an Indemnified Party as the result thereof, and (z) to the extent such Damages were incurred within three years following the Closing Date; and (iv) with respect to the matters described in clause (v) of Section 13.02(b) (after giving effect to the proviso thereto), (y) to the extent of 75% of the aggregate Damages incurred by an Indemnified Party as the result thereof, and (z) to the extent such Damages were incurred within three years following the Closing Date. (c) The Purchasers shall only have liability to Lockheed Martin and its Affiliates with respect to the representations and warranties described in Section 13.02(c) if such matters were the subject of a written notice given by the Indemnified Party pursuant to Section 13.03(a) within the period following the Closing Date specified for each respective matter in Section 13.01. (d) Lockheed Martin shall not be liable to Newco or any other Person hereunder for any Damages that result from a breach of the provisions of Section 7.01 if such breach results from a breach by either of the Individual Purchasers of Section 8.02(b). (e) Lockheed Martin shall not be liable to Newco or any other Person under this Article XIII for any Damages that result from any breach of any representation or warranty made by Lockheed Martin hereunder to the extent such representation or warranty is expressly qualified by reference to the 36 knowledge of the Individual Purchasers or a substantially similar clause relating to their knowledge if either of the Individual Purchasers had such knowledge as of the Closing. ARTICLE XIV TERMINATION Section 14.01 Termination. The Transaction Documents may be terminated at any time prior to the Closing: (i) by mutual written agreement of Lockheed Martin and the Purchasers; (ii) by Lockheed Martin or the Purchasers (as a group) if the Closing shall not have been consummated by May 30, 1997; provided, however, that neither Lockheed Martin nor a Purchaser may terminate the Transaction Documents pursuant to this clause (ii) if the Closing shall not have been consummated by May 30, 1997, by reason of the failure of such party or any of its Affiliates to perform in all material respects any of its or their respective covenants or agreements contained in the Transaction Documents; provided further, that either Lockheed Martin or Newco and the Purchasers (as a group) shall be entitled to terminate the Transaction Documents prior to May 30, 1997, if such party or parties, as the case may be, shall reasonably conclude that any condition to such party's or parties' obligations hereunder (as set forth in Section 12.01 with respect to Lockheed Martin, Newco and the Purchasers, Section 12.02 with respect to Newco and the Purchasers, and Section 12.03 with respect to Lockheed Martin) cannot reasonably be expected to be satisfied prior to May 30, 1997; and provided, further, that as a condition to the right of a party to elect to terminate the Transaction Documents pursuant to the immediately preceding proviso, the party shall first provide ten Business Days prior notice to the other party specifying in reasonable detail the nature of the condition that such party has concluded will not be satisfied, and the other party shall be entitled during such ten Business Day period to take any actions it may elect consistent with the terms of this Agreement such that the condition reasonably could be expected to be satisfied prior to the expiration of such time period; (iii) by either Lockheed Martin or Newco and the Purchasers (as a group) if there shall be any law or regulation that makes consummation of the Contemplated Transactions illegal or otherwise prohibited or if consummation of the Contemplated Transactions would violate any nonappealable final order, decree or judgment of any court or Governmental Authority having competent jurisdiction; and (iv) in accordance with the provisions of Section 15.13. Any party desiring to terminate this Agreement pursuant to this Section 14.01 shall give written notice of such termination to the other parties to this Agreement. 37 Section 14.02 Effect of Termination. If this Agreement is terminated as permitted by Section 14.01, such termination shall be without liability of any party (or any Affiliate, shareholder, director, officer, employee, agent, consultant or representative of such party) to any other party to this Agreement; provided, however, that if the Contemplated Transactions fail to close as a result of a breach of any Transaction Document by Lockheed Martin, Newco or any of the Purchasers, such party shall be fully liable for any and all Damages incurred or suffered by any other party as a result of all such breaches in an amount not to exceed $2,500,000, except that Lockheed Martin (i) shall be fully liable for any and all Damages incurred or suffered by the Purchasers as a result of any breach by Lockheed Martin of its obligations under Section 7.03, (ii) shall be fully liable for any and all Damages incurred or suffered by the Purchasers as a result of Lockheed Martin's willful failure to consummate the Closing (other than resulting from an unintentional failure of any of the conditions set forth in Section 12.01 or Section 12.03) if Newco and the Purchasers have sufficient funds available, and are ready and willing, to pay the cash portion of the Exchange Consideration for the Transferred Assets, and (iii) shall not be liable to the Purchasers or any other Person hereunder for any Damages that result from a breach of the provisions of Section 7.01 if such breach results from a breach by either of the Individual Purchasers of Section 8.02(b). The provisions of Sections 8.01 and 15.03 and this Section 14.02 shall survive any termination hereof pursuant to Section 14.01. ARTICLE XV MISCELLANEOUS Section 15.01 Notices. All notices, requests and other communications to any party hereunder shall be in writing (including telecopy or similar writing) and shall be given, if to Lockheed Martin: Lockheed Martin Corporation 6801 Rockledge Drive Bethesda, Maryland 20817 Attention: Marcus C. Bennett Telecopy: (301) 897-6083 with a copy to: Lockheed Martin Corporation 6801 Rockledge Drive Bethesda, Maryland 20817 Attention: Frank H. Menaker, Jr. Telecopy: (301) 897-6791 and Miles & Stockbridge, a Professional Corporation 10 Light Street Baltimore, Maryland 21202 Attention: Glenn C. Campbell Telecopy: (410) 385-3700 38 if to Lehman: Lehman Brothers Capital Partners III, L.P. 3 World Financial Center New York, New York 10285 Attention: Steven Berkenfeld Telecopy: (212) 526-2198 with a copy to: Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Attention: David B. Chapnick Telecopy: (212) 455-2502 if to Lanza: Frank C. Lanza 600 Third Avenue New York, New York 10016 Telecopy: (212) 949-9879 with a copy to: Fried, Frank, Harris, Shriver & Jacobson 1 New York Plaza New York, New York 10004 Attention: Robert C. Schwenkel Telecopy: (212) 859-8879 if to LaPenta: Robert V. LaPenta 600 Third Avenue New York, New York 10016 Telecopy: (212) 805-5470 with a copy to: Fried, Frank, Harris, Shriver & Jacobson 1 New York Plaza New York, New York 10004 Attention: Robert C. Schwenkel Telecopy: (212) 859-8879 If to Newco: L-3 Communications Holdings, Inc. 600 Third Avenue New York, New York 10016 Attention: William J. LaSalle Telecopy: (212) 805-5494 39 with copies to: Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Attention: David B. Chapnick Telecopy: (212) 455-2502 and Lehman Brothers Capital Partners III, L.P. 3 World Financial Center New York, New York 10285 Attention: Steven Berkenfeld Telecopy: (212) 526-2198 and Lockheed Martin Corporation 6801 Rockledge Drive Bethesda, Maryland 20817 Attention: Frank H. Menaker, Jr. Telecopy: (301) 897-6791 or to such other address or telecopy number and with such other copies, as such party may hereafter specify for the purpose by notice to the other parties. Each such notice, request or other communication shall be effective (i) if given by telecopy, when such telecopy is transmitted to the telecopy number specified in this Section 15.01 and evidence of receipt is received or (ii) if given by any other means, upon delivery or refusal of delivery at the address specified in this Section 15.01. Section 15.02 Amendments; Waivers. (a) Any provision of the Transaction Documents may be amended or waived prior to the Closing Date if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Lockheed Martin, Newco and the Purchasers, or in the case of a waiver, by the party against whom the waiver is to be effective. (b) No failure or delay by any party in exercising any right, power or privilege under any Transaction Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. Section 15.03 Expenses. Except as otherwise provided in the Transaction Documents and except that if the Closing shall occur the costs and expenses of the Purchasers will be paid by Newco, all costs and expenses incurred in connection with the Transaction Documents shall be paid by the party incurring such cost or expense. Notwithstanding the foregoing, all transfer, sales, use and similar fees and taxes resulting from or relating to the formation and organization of Newco, including but not limited to the transfer of the Transferred Assets to Newco by Lockheed Martin or any of the Affiliated Transferors, shall be borne one-half by Lockheed Martin and one-half by Newco. Each of Newco and Lockheed Martin shall reimburse the other 40 for one-half of such fees and taxes paid by the other promptly upon presentation of a demand therefor. Section 15.04 Successors and Assigns. The provisions of the Transaction Documents shall be binding upon and inure to the benefit of the parties and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its right or obligations under this Agreement without the consent of Lockheed Martin, in the case of Newco or any of the Purchasers, and Newco and the Purchasers in the case of Lockheed Martin. Notwithstanding the foregoing proviso (i) Lehman may assign all or part of its rights to Lehman Brothers Holdings Inc. and (ii) Newco may assign all or part of its rights and obligations (other than the obligation to issue shares of its capital stock) to a wholly owned Subsidiary of Newco, provided that Newco also shall remain liable hereunder as if it had not assigned its rights and obligations. Section 15.05 Disclosure. Certain information set forth in the Disclosure Schedules has been included and disclosed solely for informational purposes and may not be required to be disclosed pursuant to the terms and conditions of the Transaction Documents. The disclosure of any such information shall not be deemed to constitute an acknowledgement or agreement that the information is required to be disclosed in connection with the representations and warranties made in the Transaction Documents or that the information is material, nor shall any information so included and disclosed be deemed to establish a standard of materiality or otherwise used to determine whether any other information is material. Section 15.06 Construction. As used in the Transaction Documents, any reference to the masculine, feminine or neuter gender shall include all genders, the plural shall include the singular, and the singular shall include the plural. With regard to each and every term and condition of the Transaction Documents, the parties understand and agree that the same have or has been mutually negotiated, prepared and drafted, and that if at any time the parties desire or are required to interpret or construe any such term or condition or any agreement or instrument subject hereto, no consideration shall be given to the issue of which party actually prepared, drafted or requested any term or condition of the Transaction Documents. Section 15.07 Entire Agreement. (a) The Transaction Documents and any other agreements contemplated thereby (including, to the extent contemplated herein, the Lehman Confidentiality Agreement and paragraph 7 of the Memorandum) and certain other letter agreements entered into contemporaneously herewith constitute the entire agreement among the parties with respect to the subject matter of such documents and supersede all prior agreements, understandings and negotiations, both written and oral, between the parties with respect to the subject matter thereof. (b) The parties hereto acknowledge and agree that no representation, warranty, promise, inducement, understanding, covenant or agreement has been made or relied upon by any party hereto other than those expressly set forth in the Transaction Documents. Without limiting the generality of the disclaimer set forth in the preceding sentence, neither Lockheed Martin nor any of its Affiliates has made or shall be deemed to have made any representations or warranties, in any presentation or written information relating to the Business given or to be given in connection with 41 the Contemplated Transactions, in any filing made or to be made by or on behalf of Lockheed Martin or any of its Affiliates with any governmental agency, and no statement, made in any such presentation or written materials, made in any such filing or contained in any such other information shall be deemed a representation or warranty hereunder or otherwise. The Purchasers acknowledge that Lockheed Martin has informed them that no Person has been authorized by Lockheed Martin or any of its Affiliates to make any representation or warranty in respect of the Business or in connection with the Contemplated Transactions, unless in writing and contained in this Agreement or in any of the Transaction Documents to which they are a party. (c) Except as expressly provided herein or in any other Transaction Document, no Transaction Document or any provision thereof is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. Section 15.08 Governing Law. Except as otherwise provided in any of the Transaction Documents, this Agreement shall be construed in accordance with and governed by the law of the State of New York. Section 15.09 Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. Section 15.10 Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, any of the Transaction Documents or the Contemplated Transactions may be brought against any of the parties in the United States District Court for the Southern District of New York, and each of the parties hereby consents to the exclusive jurisdiction of such court (and of the appropriate appellate court) in any such suit, action or proceeding and waives any objection to venue laid therein. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the State of New York. Without limiting the foregoing, Lockheed Martin, Newco and the Purchasers agree that service of process upon such party at the address referred to in Section 15.01, together with written notice of such service to such party, shall be deemed effective service of process upon such party. Section 15.11 Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. Section 15.12 Bulk Sales. Newco hereby waives compliance by Lockheed Martin and each Affiliated Transferor, in connection with the Contemplated Transactions, with the provisions of Article 6 of the Uniform Commercial Code as adopted in the States of Georgia, Florida, California, Pennsylvania, New York, Massachusetts, Utah and New Jersey, and as adopted in any other states where any of the Transferred Assets are located, and any other applicable bulk sales laws with respect to or requiring notice to Lockheed Martin's (or any Affiliated Transferor's) creditors, as the same may be in effect on the Closing Date. Lockheed Martin shall indemnify and hold harmless Newco against any and all liabilities (other than liabilities in respect of Assumed 42 Liabilities) which may be asserted by third parties against Newco as a result of noncompliance with any such bulk sales law. Section 15.13 Delivery of Disclosure Schedules; Certain Attachments. (a) The parties acknowledge and agree that the Disclosure Schedules contemplated by this Agreement are not being delivered at the time of signing of this Agreement. Not later than the close of business on April 14, 1997, Lockheed Martin shall deliver to Newco the Disclosure Schedules contemplated by this Agreement, which Disclosure Schedules, once delivered, shall be effective and speak as of the date of this Agreement as if delivered on the date of this Agreement. In the event Newco or the Purchasers object to the Disclosure Schedules, Newco or the Purchasers may, by written notice delivered to Lockheed Martin prior to the close of business on the fifth Business Day following the day on which the Disclosure Schedules are delivered to Newco, terminate this Agreement. In the event Lockheed Martin does not receive such written notice within the time period specified in the preceding sentence, Newco and the Purchasers shall be deemed to have accepted the Disclosure Schedules. In the event that Newco or any of the Purchasers elects to terminate this Agreement in accordance with the provisions of this Section 15.13(a), no party to this Agreement shall have any liability to any of the other parties to this Agreement. (b) The parties acknowledge and agree that Attachment X contemplated by this Agreement is not being delivered at the time of signing of this Agreement. Not later than the close of business on the third Business Day after delivery of the Disclosure Schedules, Newco shall deliver to Lockheed Martin a draft of the portions of Attachment X contemplated by Section 12.01 and Section 12.02. Not later than the close of business on the third Business Day after delivery of the Disclosure Schedules, Lockheed Martin shall deliver to Newco a draft of the portion of Attachment X contemplated by Section 12.01. In the event either Newco or Lockheed Martin objects to any of the matters proposed to be included by the other party in Attachment X, Newco and Lockheed Martin shall in good faith discuss the matters to be included in Attachment X. In the event Newco and Lockheed Martin are unable to reach agreement on the matters to be included in Attachment X prior to the close of business on the sixth Business Day after the delivery of the Disclosure Schedules, Attachment X shall include all matters proposed to be included by each of Newco and Lockheed Martin. (c) The parties acknowledge and agree that Attachments IV, V, VIII, IX, XI and XV as attached to this Agreement at the time of signing of this Agreement are subject to modification by any of the Purchasers or Lockheed Martin at any time not later than the close of business on April 4, 1997. In the event that any of the Purchasers or Lockheed Martin desires to amend either Attachment IV, Attachment V, Attachment VIII, Attachment IX, Attachment XI or Attachment XV, it shall notify the other parties in writing of the proposed amendment and the Purchasers and Lockheed Martin shall, in good faith, discuss the proposed amendment. In the event that, notwithstanding those discussions, the Purchasers and Lockheed Martin are unable to resolve the differences as to the provisions of either Attachment IV, Attachment V, Attachment VIII, Attachment IX, Attachment XI or Attachment XV, any of the parties may terminate this Agreement prior to the close of business on April 11, 1997 by written notice to the other parties to this Agreement and upon any such termination no party to this Agreement shall have any liability to any other parties to this Agreement. If this Agreement shall not have been terminated in accordance with the provisions of this 43 Section 15.13(c) by the close of business on April 11, 1997, the amended versions of Attachments IV, V, VIII, IX, XI and XV shall replace Attachments IV, V, VIII, IX, XI and XV as attached to this Agreement at the time of signing of this Agreement. 44 IN WITNESS WHEREOF, the parties hereto caused this Agreement to be duly executed by their respective authorized officers on the day and year first above written. WITNESS: LOCKHEED MARTIN CORPORATION ____________________________ By:________________________________ Name: Title: LEHMAN BROTHERS CAPITAL PARTNERS III, L.P. By: LEHMAN BROTHERS HOLDINGS INC., its General Partner ____________________________ By:___________________________ Name: Title: FRANK C. LANZA - ---------------------------- ----------------------------------- ROBERT V. LAPENTA - ---------------------------- ----------------------------------- L-3 COMMUNICATIONS HOLDINGS, INC. ____________________________ By:________________________________ Name: Title: 45 EXHIBIT A TO TRANSACTION AGREEMENT DEFINITIONS (a) The following terms have the following meanings: "Affiliate" means, with respect to any Person, any Person directly or indirectly controlling, controlled by, or under common control with such other Person. For purposes of determining whether a Person is an Affiliate, the term "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of securities, contract or otherwise. Notwith-standing the foregoing, for purposes of the Agreement neither Lockheed Martin nor any of the Lockheed Martin Companies shall be considered an Affiliate of Newco or any of the Purchasers. "Affiliated Transferors" means Lockheed Martin Tactical Systems, Inc., Randtron Systems, Inc., Lockheed Martin Fairchild Corporation, Conic Corporation, Lockheed Martin Microcom Corporation, Lockheed Martin Hycor, Inc., The NARDA Microwave Corporation and any other Affiliate of Lockheed Martin that owns any of the assets that would constitute Transferred Assets if owned, held or used by Lockheed Martin or any of the Affiliated Transferors specified above on the Closing Date or is liable for any of the Assumed Liabilities. "Applicable Law" means, with respect to any Person, any domestic or foreign, federal, state or local statute, law, ordinance, rule, administrative interpretation, regulation, order, writ, injunction, directive, judgment, decree or other requirement of any Governmental Authority (including any Environmental Law) applicable to such Person or any of their respective properties, assets, officers, directors, employees, consultants or agents (in connection with such officer's, director's, employee's, consultant's or agent's activities on behalf of such Person). "Assumed Liabilities" means all of the following liabilities and obligations of any of the Lockheed Martin Companies relating to or arising out of the operation and affairs of the Business, the Transferred Assets or the NY Leases: (i) Balance Sheet and Scheduled Liabilities. All liabilities and obligations relating to the Business, the Transferred Assets or the NY Leases whether accrued, liquidated, contingent, matured or unmatured, at or prior to the Closing, which (a) are disclosed in any of the Disclosure Schedules delivered hereunder, (b) would be subject to disclosure in any of the Disclosure Schedules delivered in connection with any of Lockheed Martin's representations and warranties but for the materiality standards contained in such representation and warranty, (c) are reflected in the Final Net Tangible Asset Amount as determined in accordance with Section 2.03 herein (including without limitation accounts payable and reserves reflected as contra-asset accounts, and those reflected in the estimates at completion), (d) are incurred in the ordinary course of business subsequent to the Effective Date, other than with respect to the matters covered by Exhibits F and G, or (e) are otherwise a liability or obligation that Newco is expressly assuming pursuant to this Agreement; 46 (ii) Contracts. All liabilities and obligations arising under the Contracts, whether or not such Contracts have been completed or terminated prior to the Closing Date, including, without limitation, any such liabilities and obligations arising from or relating to the performance or non-performance of the Contracts by the Business Units, Newco or any other party, whether arising prior to, on or after the Closing Date, except to the extent they constitute Excluded Liabilities; (iii) Employment. All liabilities and obligations in respect of employees and former employees of the Business provided in Exhibit G to be assumed by Newco; (iv) Benefit Plans; Workers' Compensation. The liabilities and obligations under the Employee Plans and Benefit Arrangements provided in Exhibit G to be assumed by Newco; (v) Product Warranty and Liability Claims. All liabilities and obligations relating to warranty obligations or services, or claims of manufacturing or design defects, with respect to any product or service sold or provided by the Business whether prior to, on or after the Closing Date; (vi) Taxes. All liabilities and obligations in respect of Taxes provided in Exhibit F to be assumed by Newco; (vii) Environmental Liabilities. All Environmental Liabilities, whether arising prior to, on or after the Closing Date and whether such Environmental Liabilities are "onsite" or "offsite," but only to the extent relating to or arising out of conditions at, or the current or former operations of the Business Units at, the facilities owned or leased by the Business as of the Closing Date and included in the Transferred Assets (whether by fee ownership or leasehold interest), it being understood that the term "Assumed Liabilities" shall not include any Environmental Liabilities included in clause (viii) of the definition of Excluded Liabilities; (viii) NY Leases. All liabilities and obligations relating to the NY Leases, whether arising prior to, on or after the Closing Date; (ix) OSHA Liabilities. All liabilities and obligations relating to the Occupational Safety and Health Act of 1970, as amended, and any regulations, decisions or orders promulgated thereunder, together with any state or local law, regulation or ordinance pertaining to worker, employee or occupational safety or health in effect as of the Closing Date or as thereinafter may be amended or superseded, whether arising prior to, on or after the Closing Date; (x) Litigation. All matters of governmental, judicial or adversarial proceedings (public or private), litigation, arbitration, disputes, claims, causes of action or investigations (collectively, "Proceedings") of a civil nature arising from or directly or indirectly relating to any of the enumerated "Assumed Liabilities" in clauses (i) through (ix), whether or not such matters were accrued, liquidated, contingent, matured, unmatured, or known or unknown to Lockheed Martin at or prior to the Closing; and (xi) Post-Closing Liabilities. All liabilities and obligations relating to Newco's ownership of the Transferred Assets, directly or 47 indirectly relating to or arising under the Employee Plans and Benefit Arrangements or relating to the Transferred Employees, the lease of properties under the NY Leases or otherwise or its conduct of the Business and any related operations, in each case, from and after the Closing Date including, without limitation, any and all Proceedings in respect thereof. "Audited Business Financial Statements" means the audited combined financial statements of the Lockheed Martin Predecessor Businesses, together with the notes thereto, as attached in Attachment I to the Agreement. "Bid" means any quotation, bid or proposal made by Lockheed Martin or any of its Affiliates primarily in connection with the Business that if accepted or awarded would lead to a Contract with the U.S. Government or any other Person for the design, manufacture and sale of products or the provision of services by the Business. "Business" means the businesses conducted by the Business Units (together with their predecessors), which in the aggregate comprise the Products Group (excluding the business of Frequency Sources Inc. (other than its semiconductor products business) and the assembly plant in Goodyear, Arizona), the Wideband Systems business and the Communications Systems business of the Lockheed Martin Companies. "Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close. "Business Units" means (i) Display Systems headquartered in Atlanta, Georgia, (ii) Advanced Recorders headquartered in Sarasota, Florida, (iii) Conic headquartered in San Diego, California, (iv) Microcom headquartered in Warminster, Pennsylvania, (v) Telemetry & Instrumentation headquartered in San Diego, California, (vi) Randtron headquartered in Menlo Park, California, (vii) Microwave--Narda East headquartered in Hauppauge, New York (including the NARDA Semiconductor Products business in Lowell, Massachusetts), (viii) Microwave--Narda West headquartered in Rancho Cordova, California, (ix) Hycor headquartered in Woburn, Massachusetts, (x) Wideband Systems headquartered in Salt Lake City, Utah, (xi) Communications Systems headquartered in Camden, New Jersey, and (xii) the Airport Explosive Detection Business represented by the Grant from the Federal Aviation Administration held by Lockheed Martin Specialty Components, Inc. "Camden CAS 410 Issue" means the assertions raised by the United States Defense Contract Audit Agency that the Communications Systems Business Unit overallocated general and administrative expenses during its transition from a "cost of sales" to a "total cost input" allocation methodology for such expenses in a manner inconsistent with CAS 410. "Closing Date" means the date of the Closing. "Common Stock Subscription Agreements" means the Common Stock Subscription Agreements dated the Closing Date and entered into by each of Lockheed Martin and the Purchasers with Newco (in substantially the forms of Attachment IV to the Agreement), as the same may be amended from time to time. "Contemplated Transactions" means the transactions contemplated by the Transaction Documents. 48 "Contracts" means all contracts, agreements, leases (including leases of real property), licenses, commitments, sales and purchase orders, intercompany work transfer agreements (with respect to work by or for other Lockheed Martin businesses) and other instruments of any kind, whether written or oral, that relate primarily to the Business. "Damages" means (subject in the case of Damages suffered by Newco to Newco's fulfillment of its obligations under Section 8.08 of the Agreement) all demands, claims, actions or causes of action, assessments, losses, damages, costs, expenses, liabilities, judgments, awards, fines, sanctions, penalties, charges and amounts paid in settlement, including, without limitation, reasonable costs, fees and expenses of attorneys, experts, accountants, appraisers, consultants, witnesses, investigators and any other agents or representatives of such Person (with such amounts to be determined net of any resulting tax benefit actually received or realized and net of any refund or reimbursement of any portion of such amounts actually received or realized, including, without limitation, reimbursement by way of insurance, third party indemnification or the inclusion of any portion of such amounts as a cost under Government Contracts), but specifically excluding (i) any costs incurred by or allocated to an Indemnified Party with respect to time spent by employees of the Indemnified Party or any of its Affiliates, (ii) any lost profits or opportunity costs (except to the extent assessed in connection with a third-party claim with respect to which the party against which such damages are assessed is entitled to indemnification hereunder), exemplary or punitive damages and (iii) the decrease in the value of any Transferred Asset to the extent that such valuation is based on any use of such Transferred Asset other than its use as of the Closing Date. Notwithstanding the foregoing, in respect of any breach of the representations and warranties set forth in Section B.05 with respect to the Audited Business Financial Statements, "Damages" shall be limited to (i) the reasonable costs of defense by Newco of any demands, claims, actions or causes of action to the extent related to or arising out of allegations that the Audited Business Financial Statements as included in the offering document used by Newco in the sale of high yield debt securities to finance the Contemplated Transactions (and the related exchange offer registration statement) and (ii) liability of Newco to third parties for violations of the Securities Act or related blue sky or state securities laws in connection with the offerings of securities referenced in the foregoing clause (i) (with such amounts in each case to be determined net of any resulting tax benefit actually received or realized and net of any refund or reimbursement of any portion of such amounts actually received or realized, including, without limitation, reimbursement by way of insurance, third party indemnification or the inclusion of any portion of such amounts as a cost under Government Contracts). "December Statement" means the audited combined statement of net tangible assets of the Business at December 31, 1996, together with the notes thereto, as attached in Attachment II to the Agreement. "Disclosed Financial Support Arrangements" means the Financial Support Arrangements listed or referred to in Section B.10 of the Disclosure Schedules. "Disclosure Schedule" means the Disclosure Schedule dated the date of this Agreement and acknowledged by the parties hereto relating to the Agreement. 49 "Environmental Claim" means any written or oral notice, claim, demand, action, suit, complaint, proceeding or other communication by any third Person alleging liability or potential liability (including without limitation liability or potential liability for investigatory costs, cleanup costs, governmental response costs, natural resource damages, property damage, personal injury, fines or penalties) arising out of, relating to, based on or resulting from (i) the presence, discharge, emission, release or threatened release of any Hazardous Substances at any location, (ii) circumstances forming the basis of any violation or alleged violation of any Environmental Laws, or (iii) otherwise relating to obligations or liabilities under any Environmental Laws. "Environmental Laws" means any and all past, present or future federal, state, local and foreign statutes, laws, regulations, ordinances, judgments, orders, codes, or injunctions, which (i) imposes liability for or standards of conduct concerning the manufacture, processing, generation, distribution, use, treatment, storage, disposal, cleanup, transport or handling of Hazardous Substances including, The Resource Conservation and Recovery Act of 1976, as amended, The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, The Superfund Amendment and Reauthorization Act of 1984, as amended, The Toxic Substances Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, to the extent it relates to the handling of and exposure to hazardous or toxic materials or similar substances, and any other so-called "Superfund" or "Superlien" law or (ii) otherwise relates to the protection of human health or the environment. "Environmental Liabilities" means all liabilities to the extent arising in connection with or in any way relating to the Business or Lockheed Martin's or its Affiliates' use or ownership thereof, whether vested or unvested, contingent or fixed, actual or potential, which arise under or relate to Environmental Laws including, without limitation, (i) Remedial Actions, (ii) personal injury, wrongful death, economic loss or property damage claims, (iii) claims for natural resource damages, (iv) violations of law or (v) any other cost, loss or damage with respect thereto. "Exchange Agreement" means the Exchange Agreement referred to in the Transfer Agreement. "Excluded Assets" means: (i) cash and cash equivalents of Lockheed Martin or any of its Affiliates, including, without limitation, cash and cash equivalents used as collateral for letters of credit, deposits with utilities, insurance companies and other Persons; (ii) all original books and records that Lockheed Martin or any of its Affiliates shall be required to retain pursuant to any Applicable Law (in which case copies of such books and records shall be provided to Newco upon request), or that contain information relating primarily to any business or activity of Lockheed Martin or any of its Affiliates not forming a part of the Business, or any employee of Lockheed Martin or any of its Affiliates that is not a Transferred Employee; (iii) tax assets specified as Excluded Assets in Exhibit F; 50 (iv) all assets of Lockheed Martin or any of its Affiliates not held or owned by or used primarily in connection with the Business (including the Chelmsford, Massachusetts location of Frequency Sources, Inc.), other than the NY Leases; (v) all assets of Lockheed Martin or any of its Affiliates (other than the Business Units) held or used in connection with the provision of services, or the sale of goods, to the Business; (vi) all rights of Lockheed Martin under any of the Transaction Documents and the agreements and instruments delivered to Lockheed Martin by Newco pursuant to any of the Transaction Documents; (vii) "Legacy Intellectual Property" identified as such in Section B.16 of the Disclosure Schedules, including but not limited to income, losses and rights relating thereto; (viii) any accounts receivable, notes receivable or similar claims or rights (whether billed or accrued) of the Business from Lockheed Martin or any Affiliate of Lockheed Martin other than a Business Unit except for accounts receivable, notes receivable or similar claims or rights (whether billed or accrued) relating to materials sold or services rendered by the Business Units to or for Lockheed Martin or any such Affiliates; (ix) capital stock or any other securities of any Subsidiaries of Lockheed Martin; (x) Intellectual Property not used primarily in the Business, it being understood and agreed that the only Intellectual Property consisting of patents and patent applications used primarily in the Business are those listed on Attachment XV; (xi) the leasehold interest of the Lockheed Martin Companies in respect of the Horsham, Pennsylvania property of the Microcom Business Unit; and (xii) any Intellectual Property developed by a Business Unit at the expense of a Lockheed Martin Company (other than a Business Unit) unless such Intellectual Property may fairly be characterized as an immaterial improvement, modification or derivative work to or of Intellectual Property developed by a Business Unit at its own expense, including but not limited to income, losses and rights relating thereto. "Excluded Liabilities" means the following obligations and liabilities: (i) any obligations or liabilities in respect of events occurring prior to the Closing Date and arising out of (1) any criminal investigations, grand jury proceedings, or counts in any causes of action specifically alleging criminal conduct; provided, however, that if such investigations, grand jury proceedings or counts become civil in nature, at such time they will no longer constitute Excluded Liabilities pursuant to this provision or (2) counts or actions alleging civil fraud or intentional misconduct by the Communications Systems Business Unit (or its predecessors) headquartered in Camden, New Jersey; 51 (ii) all obligations and liabilities of Lockheed Martin or any of its Affiliates not arising out of the conduct of the Business, except as otherwise specifically provided in the Transaction Documents; (iii) to the extent set forth in Exhibit F to the Agreement, any obligation or liability for any Tax arising from or with respect to the Transferred Assets or the operations of the Business for the Pre-Closing Tax Period; (iv) any liability whether presently in existence or arising after the date of the Agreement in respect of accounts payable, notes payable (including intercompany promissory notes and similar financing arrangements) or similar obligations (whether billed or unbilled) to or allocated to Lockheed Martin or any Affiliate of Lockheed Martin, except for accounts payable, notes payable or similar obligations (whether billed or unbilled) relating to materials sold or services rendered to, or any insurance procured for, the Business Units by Lockheed Martin or any Affiliate of Lockheed Martin other than a Business Unit; (v) any liability whether presently in existence or arising after the date of the Agreement relating to fees, commissions or expenses owed to any broker, finder, investment banker, accountant, attorney or other intermediary or advisor employed by Lockheed Martin or any of its Affiliates in connection with the Contemplated Transactions; (vi) any obligation or liability retained by Lockheed Martin pursuant to Exhibit G; (vii) all obligations and liabilities related to Excluded Assets; (viii) all Environmental Liabilities whether arising prior to, on or after the Closing Date and whether such Environmental Liabilities are "onsite" or "offsite," (1) relating to or arising out of conditions at or the operations of the Camden Truck Depot located at 1257 2nd Street, Camden, New Jersey, or (2) relating to or arising out of conditions at, or the current or former operations at, any facilities not included in the Transferred Assets (whether by fee ownership or leasehold interest) (including any predecessors to such facilities); and (vi) all obligations and liabilities related to the closing of the assembly plant formerly operated by the Conic Business Unit in Goodyear, Arizona. "Financial Support Arrangements" means any obligations, contingent or otherwise, of a Person in respect of any indebtedness, obligation or liability (including assumed indebtedness, obligations or liabilities) of another Person, including but not limited to remaining obligations or liabilities associated with indebtedness, obligations or liabilities that are assigned, transferred or otherwise delegated to another Person, if any, letters of credit and standby letters of credit (including any related reimbursement or indemnity agreements), direct or indirect guarantees, endorsements (except for collection or deposit in the ordinary course of business), notes co-made or discounted, recourse agreements, take-or-pay agreements, keep-well agreements, agreements to purchase or repurchase such indebtedness, obligation or liability or any security therefor or to provide funds for the payment or discharge thereof, agreements to maintain solvency, 52 assets, level of income or other financial condition, agreements to make payment other than for value received and any other financial accommodations. "GAAP" means Generally Accepted Accounting Principles as in effect on the date of the Agreement. "Government Contract" means any prime contract, subcontract, teaming agreement or arrangement, joint venture, basic ordering agreement, pricing agreement, letter contract, purchase order, delivery order, change order, Bid or other arrangement of any kind relating exclusively to the Business between Lockheed Martin or any of the Affiliated Transferors and (i) the U.S. Government (acting on its own behalf or on behalf of another country or international organization), (ii) any prime contractor of the U.S. Government or (iii) any subcontractor with respect to any contract of a type described in clauses (i) or (ii) above. "Governmental Authority" means any foreign, domestic, federal, territorial, state or local governmental authority, quasi-governmental authority, instrumentality, court, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing. "Hazardous Substances" means substances defined as "hazardous substances," "hazardous materials" or "hazardous waste" in The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or The Resource Conservation and Recovery Act of 1976, as amended, those substances defined as "hazardous wastes" in the regulations adopted and publications promulgated pursuant to any of said laws, those substances defined as "toxic substances" in The Toxic Substances Control Act, as amended, petroleum, its derivatives and petroleum products, and asbestos and asbestos containing materials. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. "Intellectual Property" means all patents, copyrights, technology, know-how, processes, trade secrets, inventions, proprietary data, formulae, research and development data and computer software programs; all trademarks, trade names, service marks and service names; all registrations, applications, recordings, licenses and common-law rights relating thereto, all rights to sue at law or in equity for any infringement or other impairment thereto, including the right to receive all proceeds and damages therefrom, and all rights to obtain renewals, continuations, divisions or other extensions of legal protections pertaining thereto; and all other United States, state and foreign intellectual property owned by Lockheed Martin or the Affiliated Transferors on the Closing Date. "Interim Services Agreement" means the Interim Services Agreement dated the Closing Date by and among Newco and Lockheed Martin as contemplated by Section 2.01, as the same may be amended from time to time. "Inventory" means all items of inventory notwithstanding how classified in Lockheed Martin's financial records, including all raw materials, work-in-process and finished goods, together with costs accumulated under all Contracts in progress. 53 "Lehman Confidentiality Agreement" means the letter agreement dated November 13, 1996, by and between Lockheed Martin and Lehman, as the same has been or may be amended from time to time. "License Agreements" means the license agreements dated the Closing Date by and among Newco and Lockheed Martin as contemplated by Section 9.04, as the same may be amended from time to time. "Lien" means, with respect to any asset, any mortgage, lien, claim, pledge, charge, security interest or other encumbrance of any kind in respect of such asset. "Lockheed Martin Companies" means Lockheed Martin and its Subsidiaries. "Material Adverse Effect" means (i) with respect to the Business, a material adverse effect on the assets, properties, business, financial condition or results of operations of the Business taken as a whole, or (ii) with respect to any other Person, a material adverse effect on the assets, properties, business, financial condition or results of operations of such Person and its Subsidiaries taken as a whole. "Memorandum" means the Memorandum of Understanding dated January 31, 1997, by and among Lockheed Martin and the Purchasers, as the same may be amended from time to time. "Net Tangible Assets" means (i) all Transferred Assets of the Business, (ii) minus all (1) Assumed Liabilities of the Business, (2) goodwill, (3) intangible assets related to contracts and programs acquired, and (4) any reserve, liability or asset resulting from or relating to pension benefits, retirement benefits or other post-employment benefits, (iii) in accordance with the practices and policies of Lockheed Martin on December 31, 1996 and employed in the preparation of the December Statement, determined, in each case, in accordance with the December Statement and Attachment VI. "1933 Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. "Newco Bylaws" means the Bylaws of Newco as attached in Attachment IX. "Newco Certificate of Incorporation" means the Certificate of Incorporation of Newco as attached in Attachment VIII. "Newco Class A Stock" means the Class A Common Stock, par value $.01 per share, of Newco. "Newco Class B Stock" means the Class B Common Stock, par value $.01 per share, of Newco. "NY Leases" means the lease by and between Loral Corporation (now known as Lockheed Martin Tactical Systems, Inc.) and 600 Third Avenue Associates in respect of the property located at 600 Third Avenue, New York, New York, as the same may be amended and supplemented from time to time, including the interests of the Lockheed Martin Companies in any related fixtures, improvements and personal property located therein. "Operation and Maintenance Costs" means the reasonable costs (including routine monitoring and sampling) required to operate and maintain the 54 effectiveness of an environmental response action that, on or prior to the eighth anniversary of the Closing Date, has been constructed or effectuated and, if required, have been approved (or subsequently are approved as constructed or effectuated as of the eighth anniversary of the Closing Date) by the applicable environmental regulatory authority, it being understood that Operation and Maintenance Costs does not include (i) any capital costs (other than replacement in kind) relating to any such action, (ii) any claim for property damage, damages to natural resources or personal injury or similar claims or damages, whether or not arising out of the operation or maintenance of such action or otherwise or (iii) any fines or penalties, whether or not arising out of the operation or maintenance of such action or otherwise. "Permitted Liens" means any of the following: (i) Liens for taxes that (x) are not yet due or delinquent or (y) are being contested in good faith by appropriate proceedings; (ii) statutory Liens or landlords' carriers' warehousemen's mechanic's, suppliers' materialmen's or other like Liens arising in the ordinary course of business with respect to amounts not yet overdue for a period of 45 days or amounts being contested in good faith by appropriate proceedings; (iii) easements, rights of way, restrictions and other similar charges or encumbrances on real property interests, that, individually or in the aggregate, do not materially interfere with the ordinary course of operation of the Business or the use of any such real property for its current uses; (iv) leases or subleases granted to others that do not materially interfere with the ordinary conduct of the Business; (v) with respect to real property, title defects or irregularities that do not in the aggregate materially impair the use of such real property for its current use; (vi) Liens in favor of the U.S. Government or any other customer of the Business arising in the ordinary course of business; (vii) rights and licenses granted to others in Intellectual Property; (viii) with respect to any Real Property Lease where any of the Lockheed Martin Companies is a lessee, any Lien affecting the interest of the landlord thereunder; (ix) Liens, title defects, encumbrances, easements and restrictions, invalidities of leasehold interests (collectively, "Encumbrances") that have not had, and could not reasonably be expected to have, a Material Adverse Effect on the Business; and (x) Encumbrances disclosed in the Disclosure Schedule or taken into account in the December Statement. "Person" means an individual, a corporation, a general partnership, a limited partnership, a limited liability company, an association, a trust or 55 any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. "Prime Government Contract" means any Government Contract relating primarily to the Business in connection with which Lockheed Martin or an Affiliated Transferor is the prime contractor. "Remedial Action(s)" means the investigation, clean-up or remediation of contamination or environmental degradation or damage caused by, related to or arising from the generation, use, handling, treatment, storage, transportation, disposal, discharge, release, or emission of Hazardous Substances, including, without limitation, investigations, response, removal and remedial actions under The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, corrective action under The Resource Conservation and Recovery Act of 1976, as amended, and clean-up requirements under similar state Environmental Laws. "Representatives" means (i) with respect to Lehman, any of the "Representatives" as defined in the Lehman Confidentiality Agreement, (ii) with respect to the Individual Purchasers, any of the "Representatives" as defined in the Memorandum and (iii) with respect to Lockheed Martin or Newco, each of their respective directors, officers, advisors, attorneys, accountants, employees or agents. "Responsible Contracting Officer" means, with respect to any Prime Government Contract, the Person identified as such with respect thereto in Section 42.1202(a) of the Federal Acquisition Regulation, Part 42 of the Code of Federal Regulations. "Sarasota Asset Step-Up Issue" means the position of the U.S. Government that the amendment of the provisions of the Federal Acquisition Regulations relating to the ability of a contractor to include in its overhead the "stepped up" value of acquired assets shall have retroactive effect and the related impact on the Advanced Recorders Business Unit of its agreements in June 1994, April 1995 and January 1997 with the cognizant Administrative Contracting Officer to authorize the Advanced Recorders Business Unit to include in its overhead the "stepped up" assets relating to the acquisition of Advanced Recorders by Loral Corporation in 1989. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended. "Stockholders Agreement" means the Stockholders Agreement dated the Closing Date by and among Newco, Lockheed Martin and the Purchasers (in substantially the form of Attachment V to the Agreement), as the same may be amended from time to time. "Subsidiary" as it relates to any Person, shall mean with respect to any Person, any corporation, partnership, joint venture or other legal entity of which such Person, either directly or through or together with any other Subsidiary of such Person, owns more than 50% of the voting power in the election of directors or their equivalents, other than as affected by events of default. 56 "Supply Agreement" means the Supply Agreement dated the Closing Date by and among Newco and Lockheed Martin as contemplated by Section 2.01, as the same may be amended from time to time. "Transaction Documents" means the Agreement, the Transfer Agreement, the Exchange Agreement, the Common Stock Subscription Agreements, the Stockholders Agreement, the Interim Services Agreement, the Supply Agreement, the License Agreements, the Newco Certificate of Incorporation, the Newco Bylaws and any exhibits or attachments to any of the foregoing, as the same may be amended from time to time. "Transfer Agreement" means the Transfer Agreement dated March 28, 1997, by and between Lockheed Martin and Newco (a copy of which is attached as Attachment III to the Agreement), as the same may be amended from time to time. "Transferred Assets" means all of the assets, properties, rights, licenses, permits, contracts, causes of action and business of every kind and description as the same shall exist on the Closing Date, other than the Excluded Assets, wherever located, real, personal or mixed, tangible or intangible, owned by, leased by or in the possession of Lockheed Martin or any Affiliated Transferor, whether or not reflected in the books and records thereof, and held or used primarily in the conduct of the Business as the same shall exist on the Closing Date, including but not limited to all assets reflected in the December Statement and not disposed of in the ordinary course of business or as permitted or contemplated by the Agreement, and all assets of the Business acquired by Lockheed Martin or any Affiliated Transferor, on or prior to the Closing Date and not disposed of in the ordinary course of business or as permitted or contemplated by the Agreement and including, without limitation, except as otherwise specified herein, all direct or indirect right, title and interest of Lockheed Martin or any Affiliated Transferor in, to and under: (i) all real property and leases (including, without limitation, the NY Leases), whether capitalized or operating, of, and other interests in, real property, owned by Lockheed Martin or any of its Affiliates that are used primarily in the Business, in each case together with all buildings, fixtures, easements, rights of way, and improvements thereon and appurtenances thereto; (ii) all personal property and interests therein, including machinery, equipment, furniture, office equipment, communications equipment, vehicles, storage tanks, spare and replacement parts, fuel and other tangible property (and interests in any of the foregoing) owned by Lockheed Martin or any of its Affiliates that are used primarily in connection with the Business: (iii) all costs accumulated for all Contracts in progress, raw materials, work-in-process, finished goods, supplies and other inventories that are owned by Lockheed Martin or any of its Affiliates and held for sale, use or consumption primarily in the Business; (iv) all Contracts; (v) all Bids (with any Contracts (including, without limitation, Government Contracts) awarded to Lockheed Martin or any of its Affiliates on or before the Closing Date in respect of such Bids to be deemed Contracts); 57 (vi) all accounts, accounts receivable and notes receivable whether or not billed, accrued or otherwise recognized in the December Statement or taken into account in the determination of the Final Net Tangible Asset Amount, together with any unpaid interest or fees accrued thereon or other amounts due with respect thereto, of Lockheed Martin or any of its Affiliates that relate primarily to the Business, and any security or collateral for any of the foregoing; (vii) all expenses that have been prepaid by Lockheed Martin or any of its Affiliates to the extent relating to the operation of the Business, including but not limited to ad valorem taxes, lease and rental payments; (viii) all of Lockheed Martin's or any of its Affiliates' rights, claims, credits, causes of action or rights of set-off against third parties relating prima rily to the Business or the Transferred Assets, including, without limitation, unliquidated rights under manufacturers' and vendors' warranties; (ix) all Intellectual Property (other than Intellectual Property constituting an Excluded Asset) used primarily in the Business, including the goodwill of the Business symbolized thereby (including, without limitation, the rights to the name "Fairchild" when used by or in connection with the Advanced Recorders Business Unit and the names "Narda," "Conic," and "Randtron," but excluding "Lockheed Martin," "Loral," "Lockheed" and "Martin Marietta" and any derivatives thereof together with any logos, trade dress or other intellectual property rights relating thereto); (x) all transferable franchises, licenses, permits or other governmental authorizations owned by, or granted to, or held or used by, Lockheed Martin or any of its Affiliates and primarily related to the Business; (xi) except to the extent Lockheed Martin or any of its Affiliates is required to retain the originals pursuant to any Applicable Law (in which case copies will be provided to Newco upon request), all business books, records, files and papers, whether in hard copy or computer format, of Lockheed Martin or any of its Affiliates used primarily in the Business, including, without limitation, bank account records, books of account, invoices, engineering information, sales and promotional literature, manuals and data, sales and purchase correspondence, lists of present and former suppliers, lists of present and former customers, personnel and employment records of present or former employees, documentation developed or used for accounting, marketing, engineering, manufacturing, or any other purpose relating to the conduct of the Business at any time prior to the closing; (xii) the right to represent to third parties that Newco is the successor to the Business; (xiii) all insurance proceeds, net of any retrospective premiums, deductibles, retention or similar amounts, arising out of or related to damage, destruction or loss of any property or asset of or used primarily in connection with the Business to the extent of any damage or destruction that remains unrepaired, or to the extent any property or asset remains unreplaced at the Closing Date; (xiv) any tax assets specified to be Transferred Assets in Exhibit F; and 58 (xv) all of the Lockheed Martin Companies' right, title and interest in the real property located at 1355 Bluegrass Lakes Parkway, Alpharetta, Georgia. "U.S. Government" means the United States Government and any agencies, instrumentalities and departments thereof. (b) "To the knowledge," "known by" or "known" (and any similar phrase) means (i) with respect to Lockheed Martin, to the actual knowledge of any of the Senior Vice Presidents or higher ranking officers of Lockheed Martin, or the Vice President, Financial Strategies of Lockheed Martin, or the President, Chief Financial Officer and General Counsel of the Lockheed Martin Operating Sector to which each of the Business Units reports, and shall be deemed to include a representation that a reasonable investigation or inquiry of the subject matter thereof has been conducted by or on behalf of the foregoing specified Persons, which investigation shall include inquiries of the President and the Chief Financial Officer of each of the Business Units, and (ii) with respect to the Individual Purchasers, to the actual knowledge of either of the Individual Purchasers as of the date the applicable representation or warranty is made (by Lockheed Martin, in the case of representations in Exhibit B limited by reference to the knowledge of the Individual Purchasers, or by the Individual Purchasers, in the case of representations in Exhibit D), it being understood that if there is any dispute as to whether an Individual Purchaser had actual knowledge of any fact, event or circumstance and Lockheed Martin seeks to assert such knowledge as a defense to any claim under any of the Transaction Documents, Lockheed Martin shall have the burden of proof in connection with any such determination. Notwithstanding the foregoing, the knowledge of Lockheed Martin at any particular time shall not include knowledge of any matters actually known by either of the Individual Purchasers at such time if such matters are not also actually known by one or more of the other individuals specified in clause (i) above (whether by disclosure to them by the Individual Purchasers or otherwise). (c) Each of the following terms is defined in the Section set forth opposite such term: Term Section Accrued Liability . . . . . . . . . . . . . . . . . . . . . . . . . G.05 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble Allocation Tax Loss . . . . . . . . . . . . . . . . . . . . . . . . F.01 Alternative Transaction Proposals . . . . . . . . . . . . . . . . . 7.04 Assumed Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 Basis Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . F.01 Benefit Arrangement . . . . . . . . . . . . . . . . . . . . . . . . G.01 Camden SERPs . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 Camden Transferee . . . . . . . . . . . . . . . . . . . . . . . . . G.01 Camden Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 Cash Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.01 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.01 Controlled Group . . . . . . . . . . . . . . . . . . . . . . . . . B.21 Defending Party . . . . . . . . . . . . . . . . . . . . . . . . . 13.03 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03 Employee Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . G.01 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . A 59 Environmental Insurance Claims . . . . . . . . . . . . . . . . . . 9.07 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.01 Estimated Final Net Tangible Asset Amount . . . . . . . . . . . . . 2.03 Exchange Consideration . . . . . . . . . . . . . . . . . . . . . . 2.02 Exchange Consideration Schedule . . . . . . . . . . . . . . . . . . F.05 Federal Systems Plan . . . . . . . . . . . . . . . . . . . . . . . G.05 Final Determination . . . . . . . . . . . . . . . . . . . . . . . . F.01 Final Net Tangible Asset Amount . . . . . . . . . . . . . . . . . . 2.03 Former GE Employees . . . . . . . . . . . . . . . . . . . . . . . . G.07 GE Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . G.07 GE Reimbursement Obligations . . . . . . . . . . . . . . . . . . . G.07 Government Bid . . . . . . . . . . . . . . . . . . . . . . . . . . B.15 Government Conditions . . . . . . . . . . . . . . . . . . . . . . . G.05 Hycor Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . F.01 Indemnified Claim . . . . . . . . . . . . . . . . . . . . . . . . 13.03 Indemnified Party . . . . . . . . . . . . . . . . . . . . . . . . 13.03 Indemnifying Party . . . . . . . . . . . . . . . . . . . . . . . 13.03 Individual Purchaser . . . . . . . . . . . . . . . . . . . . . Preamble Initial Transfer Amount . . . . . . . . . . . . . . . . . . . . . . G.05 Initial Transfer Date . . . . . . . . . . . . . . . . . . . . . . . G.05 Insurance Liabilities . . . . . . . . . . . . . . . . . . . . . . . 8.03 Lanza . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble LaPenta . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble Leased Real Property . . . . . . . . . . . . . . . . . . . . . . . B.07 Lehman . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble LMC SERPs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 LMTS SERP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 LMTS Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 Lockheed Martin . . . . . . . . . . . . . . . . . . . . . . . . Preamble Lockheed Martin Conditions . . . . . . . . . . . . . . . . . . . . G.05 Lockheed Martin Defined Contribution Plans . . . . . . . . . . . . G.06 Lockheed Martin Pension Plans . . . . . . . . . . . . . . . . . . . G.05 Lockheed Martin Savings Plans . . . . . . . . . . . . . . . . . . . G.06 Lockheed Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 Long Range Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01 Narda Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble Newco Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 Newco's Savings Plans . . . . . . . . . . . . . . . . . . . . . . . G.06 Newco SERP . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 Newco Spinoff Plans . . . . . . . . . . . . . . . . . . . . . . . . G.05 Novation Agreement . . . . . . . . . . . . . . . . . . . . . . . . 7.08 Owned Real Property . . . . . . . . . . . . . . . . . . . . . . . . B.07 PBGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B.21 Post-Closing Tax Period . . . . . . . . . . . . . . . . . . . . . . F.01 Pre-Closing Tax Period . . . . . . . . . . . . . . . . . . . . . . F.01 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . A Program Agreements . . . . . . . . . . . . . . . . . . . . . . . . G.08 Proposed Final Net Tangible Asset Amount . . . . . . . . . . . . . 2.03 Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . B.07 Real Property Leases . . . . . . . . . . . . . . . . . . . . . . . B.07 Referee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03 Release Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.03 Remaining Recovery . . . . . . . . . . . . . . . . . . . . . . . . 9.07 Section 351 Transfer . . . . . . . . . . . . . . . . . . . . . . . F.01 60 Section 4044 Amount . . . . . . . . . . . . . . . . . . . . . . . . G.05 SERP Liability . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 Spinoff Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . . G.08 Supplementary Plan . . . . . . . . . . . . . . . . . . . . . . . . G.05 Surviving Representation and Covenant . . . . . . . . . . . . . . 13.01 Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.01 Tax Basis Shortfall . . . . . . . . . . . . . . . . . . . . . . . . F.01 Third Party Claim . . . . . . . . . . . . . . . . . . . . . . . . 13.03 Transferred Beneficiary . . . . . . . . . . . . . . . . . . . . . . G.01 Transferred Benefit Plans . . . . . . . . . . . . . . . . . . . . . G.10 Transferred Employee . . . . . . . . . . . . . . . . . . . . . . . G.01 Transferred Savings Plans . . . . . . . . . . . . . . . . . . . . . G.06 True-Up Amount . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 True-Up Date . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05 WARN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.02 61 EXHIBIT B TO TRANSACTION AGREEMENT REPRESENTATIONS AND WARRANTIES OF LOCKHEED MARTIN Lockheed Martin hereby represents and warrants prior to but not after the Closing to the Purchasers, and as of and after the Closing to Newco, that: B.01. Corporate Existence and Power. Each of Lockheed Martin and each Affiliated Transferor is a corporation duly incorporated, validly existing and in good standing under the laws of the state of its incorporation and has all corporate powers and all governmental licenses, authorizations, consents and approvals required to carry on the Business as now conducted, except where the failure to have such licenses, authorizations, consents and approvals has not had, and could not reasonably be expected to have, a Material Adverse Effect on the Business. Each of Lockheed Martin and each Affiliated Transferor, as the case may be, is duly qualified to do business as a foreign corporation in each jurisdiction where the character of the property owned or leased by it or the nature of its activities make such qualification necessary to carry on the Business as now conducted, except where the failure to be so qualified has not had, and could not reasonably be expected to have, a Material Adverse Effect on the Business. B.02. Corporate Authorization. The execution, delivery and performance by each of Lockheed Martin and each Affiliated Transferor of each of the Transaction Documents to which it is a party and the consummation by Lockheed Martin and each Affiliated Transferor of the Contemplated Transactions are within its corporate powers and have been duly authorized by all necessary corporate action on its part. Each of the Transaction Documents to which it is a party constitutes a legal, valid and binding agreement of Lockheed Martin and each Affiliated Transferor enforceable against it in accordance with its terms (i) except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers and (ii) subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity). B.03. Governmental Authorization. (a) The execution, delivery and performance by Lockheed Martin and each Affiliated Transferor of the Transaction Documents to which it is a party require no action by or in respect of, or consent or approval of, or filing with, any Governmental Authority other than: (i) compliance with any applicable requirements of the HSR Act; (ii) compliance with any applicable requirements of the New Jersey Industrial Site Recovery Act; 62 (iii) the facilities clearance requirements of the Defense Investigative Service of the United States Department of Defense ("DIS"), as set forth in the DIS Industrial Security Regulation and the DIS Industrial Security Manual, as each may be amended from time to time; (iv) the novation of the Government Contracts as contemplated by Section 7.08 herein; (v) any actions, consents, approvals or filings set forth in Section B.03 of the Disclosure Schedules or otherwise expressly referred to in this Agreement; and (vi) such other consents, approvals, authorizations, permits and filings the failure to obtain or make would not have, in the aggregate, a Material Adverse Effect on the Business. (b) To the knowledge of Lockheed Martin, there are no facts relating to the identity or circumstances of Lockheed Martin or any of its Affiliates that would prevent or materially delay obtaining any of the consents referred to in Section B.03(a). B.04. Non-Contravention. Except as set forth in Section B.04 of the Disclosure Schedules or known to the Individual Purchasers (in the case of clauses (i)(B) and (i)(C) below), the execution, delivery and performance by Lockheed Martin of the Transaction Documents do not and will not (i)(A) contravene or conflict with the charter or bylaws of Lockheed Martin or any Affiliated Transferor, (B) assuming compliance with the matters referred to in Section B.03, contravene or conflict with or constitute a violation of any provisions of any Applicable Law, regulation, judgment, injunction, order, writ or decree binding upon Lockheed Martin or any Affiliated Transferor that is applicable to the Business; (C) assuming compliance with the matters referred to in Section B.03, constitute a default under or give rise to any right of termination, cancellation or acceleration of, or to a loss of any benefit relating primarily to the Business to which Lockheed Martin or any Affiliated Transferor is entitled under, any agreement, Contract or other instrument binding upon Lockheed Martin or any Affiliated Transferor and relating primarily to the Business or by which any of the Transferred Assets is or may be bound or any license, franchise, permit or similar authorization held by Lockheed Martin or any Affiliated Transferor relating primarily to the Business except, in the case of clauses (B) and (C), for any such contravention, conflict, violation, default, termination, cancellation, acceleration or loss that could not reasonably be expected to have a Material Adverse Effect on the Business or (ii) result in the creation or imposition of any Lien on any transferred Asset, other than Permitted Liens and other than such Liens the creation or imposition of which could not reasonably be expected to have a Material Adverse Effect on the Business. B.05. Financial Statements. (a) The December Statement presents fairly, in all material respects, the Net Tangible Assets of the Business (other than the Airport Explosive Detection Business) as of December 31, 1996, in conformity with GAAP (except as set forth in the notes thereto or in Attachment VI applied on a basis consistent in all material respects with the manner in which the Business reported as of December 31, 1996 its financial position for inclusion in the financial statements of Lockheed Martin. 63 (b) The Audited Business Financial Statements have been prepared based upon the books and records of Lockheed Martin and the Affiliated Transferors relating to the Business and present fairly the financial condition, results of operations and cash flows of the Business in conformity with GAAP (except as set forth in the notes thereto) for the periods and as of the dates included therein. B.06. Absence of Certain Changes. Except for matters that would be permitted (without consent of either of the Individual Purchasers) in accordance with Section 7.01 if they occurred after the date of this Agreement, as set forth in Section B.06 of the Disclosure Schedules and except as known to the Individual Purchasers, from December 31, 1996 to the date of this Agreement, there has not been any material adverse change in the business, financial condition or results of operations of the Business and there has not been: (a) any event, occurrence, development or state of circumstances or facts that has had a Material Adverse Effect on the Business, other than those resulting from changes, whether actual or prospective, in general conditions applicable to the industries in which the Business is involved or general economic conditions; (b) any damage, destruction or other casualty loss affecting the Business or any assets that would constitute Transferred Assets if owned, held or used by Lockheed Martin or any of the Affiliated Transferors on the Closing Date that has had a Material Adverse Effect on the Business; (c) any transaction or commitment made, or any contract or agreement entered into, by Lockheed Martin or any Affiliated Transferor relating primarily to the Business or any assets that would constitute Transferred Assets if owned, held or used by Lockheed Martin or any of the Affiliated Transferors on the Closing Date (including the acquisition or disposition of any assets) or any termination or amendment by Lockheed Martin or any Affiliated Transferor of any contract or other right relating primarily to the Business, in either case, material to the Business taken as a whole, other than transactions and commitments in the ordinary course of business and those contemplated by this Agreement; (d) any sale or other disposition of more than an aggregate of $250,000 of assets (other than Inventory or any sale made in the ordinary course of business) that would constitute Transferred Assets if owned, held or used by any of the Lockheed Martin companies on the Closing Date; (e) any increase in the compensation of any current employee of any of the Business Units at a level of vice president or above, other than nondiscretionary increases pursuant to Employee Plans or Benefit Arrangements disclosed in Section B.21 of the Disclosure Schedules or referenced in Exhibit G; and (f) any cancellation, compromise, waiver or release by Lockheed Martin of any claim or right (or a series of related rights and claims) related to the Business, other than cancellations, compromises, waivers or releases in the ordinary course of business. 64 B.07. Sufficiency of and Title to the Transferred Assets. (a) The Transferred Assets, together with the services to be provided to Newco pursuant to the Interim Services Agreement and the Intellectual Property to be licensed to Newco pursuant to the License Agreements, constitute, and on the Closing Date will constitute, all of the assets and services that are necessary to permit the operation of the Business in substantially the same manner as such operations have heretofore been conducted. (b) Upon consummation of the Contemplated Transactions, Newco will have acquired good and marketable title in and to, or a valid leasehold interest in, each of the Transferred Assets that are necessary to permit the operation of the Business in substantially the same manner as operations have heretofore been conducted, free and clear of all Liens, except for Permitted Liens. (c) Section B.07 of the Disclosure Schedules includes a true and complete list of all real property owned by the Lockheed Martin Companies (or property which the Lockheed Martin Companies have a right to acquire in connection with the operation of the Business) which is included in the Transferred Assets (collectively, the "Owned Real Property"; the Owned Real Property and the Leased Real Property, collectively the "Real Property"). Section B.07(c) of the Disclosure Schedules specifies (i) the address of each parcel of Owned Real Property and (ii) the owner of such Owned Real Property. (d) Section B.07 of the Disclosure Schedules includes a true and complete list of all agreements (together with any amendments thereof collectively, the "Real Property Leases") pursuant to which the Lockheed Martin Companies lease, sublease or otherwise occupy (whether as landlord, tenant, subtenant or other occupancy arrangement) any real property used in the Business (collectively, the "Leased Real Property"). Section B.07 of the Disclosure Schedules specifies (i) the address of each parcel of Leased Real Property and (ii) the owner of the leasehold, subleasehold or occupancy interest for each Leased Real Property. B.08. No Undisclosed Liabilities. To the knowledge of Lockheed Martin, there are no liabilities of Lockheed Martin (or any Affiliated Transferor) relating to the Business that constitute Assumed Liabilities of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, other than: (a) liabilities disclosed or provided for in the December Statement and liabilities for matters taken into account in the determination of the Final Net Tangible Asset Amount; (b) liabilities (i) disclosed in Section B.08 of the Disclosure Schedules, (ii) known to the Individual Purchasers, (iii) related to any Contract disclosed in the Disclosure Schedules or (iv) related to any Employee Plan or Benefit Arrangements identified in Exhibit G or disclosed in Section B.08 of the Disclosure Schedules; (c) liabilities incurred in the ordinary course of business since December 31, 1996; (d) liabilities not required to be accrued for or reserved against in accordance with GAAP as of December 31, 1996; and 65 (e) with respect to the bring down of this representation and warranty as of the Closing Date, liabilities not required to be accrued for or reserved against in accordance with GAAP as of the Closing Date. B.09. Litigation; Contract-Related Matters. (a) Except as set forth in Section B.09 of the Disclosure Schedules or reserved against or referred to in the December Statement, there is no action, suit, investigation or proceeding (except for actions, suits or proceedings referred to in Section B.09(b)) pending against, or to the knowledge of Lockheed Martin, threatened against or affecting, the Business or any Transferred Asset before any court or arbitrator or any governmental body, agency, official or authority which could reasonably be expected to have a Material Adverse Effect on the Business. (b) Except as set forth in Section B.09 of the Disclosure Schedules or reserved against or referred to in the December Statement or known to the Individual Purchasers, there is no action, suit, investigation or proceeding relating to any Government Contract or Bid, or relating to any proposed suspension or debarment of the Business or any of its employees, pending against, or to the knowledge of Lockheed Martin, threatened against or affecting the Business or any Transferred Asset before any court or arbitrator or any governmental body, agency, official or authority which could reasonably be expected to have a Material Adverse Effect on the Business. (c) None of the Lockheed Martin Companies is, in connection with the Business, subject to any unsatisfied monetary judgment, order or decree that would materially affect Newco's ability to conduct the business and operations of the Business immediately after Closing as the Lockheed Martin Companies currently conduct them. B.10. Material Contracts and Bids; Backlog. (a) Except as set forth in Section B.10 of the Disclosure Schedules, to the knowledge of Lockheed Martin, as of the date of this Agreement, the Lockheed Martin Companies, with respect to the Business, are not parties to or otherwise bound by or subject to: (i) any written employment, severance, consulting or sales representative Contract which contains an obligation to pay more than $100,000 per year and constitutes an Assumed Liability; (ii) any Contract containing any covenant limiting the freedom of the Lockheed Martin Companies, with respect of the Business or the operations of any of the Business Units, to engage in any line of business or compete with any Person in any geographic area in any material respect if such Contract will be binding on Newco after the Closing; (iii) any Contract in effect on the date of this Agreement relating to the disposition or acquisition of the assets of, or any interest in, any business enterprise which relates to the Business other than in the ordinary course of business; (iv) any Financial Support Arrangements; 66 (v) any indebtedness for borrowed money of the Business that would constitute an Assumed Liability if in existence on the Closing Date, other than indebtedness or borrowed money totaling not more than $100,000 in the aggregate; or (vi) any offset agreement entered into in connection with an international sales transaction and relating to any Contract that imposes on the Business an obligation to perform that will continue in effect on or after the Closing Date. Notwithstanding the foregoing or any other provisions of this Agreement, the failure of Lockheed Martin to include any Financial Support Arrangements in Section B.10 of the Disclosure Schedules shall not constitute a breach of a representation or warranty hereunder and shall have no effect on the rights, duties and obligations of the parties under this Agreement, except that the obligations of Newco under Section 8.03 in respect of Financial Support Arrangements shall not include an obligation to seek the release of or comply with Section 8.03(g) with respect to any Financial Support Arrangements in existence on the date of this Agreement that are not disclosed in Section B.10 of the Disclosure Schedules. (b) Except as disclosed in Section B.10 of the Disclosure Schedules, or known to the Individual Purchasers, to the knowledge of Lockheed Martin all cost or pricing data submitted or certified in connection with Bids and Government Contracts were when filed current, accurate and complete in accordance with the Truth in Negotiation Act, as amended, and the rules and regulations thereunder, except any failures to be current, accurate and complete which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on the Business. (c) Except as disclosed in Section B.10 of the Disclosure Schedules, or known to the Individual Purchasers, each Government Contract and each other material Contract relating to the Business or any of the Transferred Assets is a legal, valid and binding obligation of Lockheed Martin (or the applicable Affiliated Transferor) enforceable against Lockheed Martin (or the applicable Affiliated Transferor) in accordance with its terms (except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers, and subject to the limitations imposed by general equitable principles regardless of whether such enforceability is considered in a proceeding at law or in equity), and Lockheed Martin (or the applicable Affiliated Transferor) is not in default and has not failed to perform any obligation thereunder, and, to the knowledge of Lockheed Martin, there does not exist any event, condition or omission which would constitute a breach or default (whether by lapse of time or notice or both) by any other Person, except for any such default, failure or breach as has not had, and could not reasonably be expected to have, a Material Adverse Effect on the Business. B.11. Licenses and Permits. To the knowledge of Lockheed Martin, Lockheed Martin (or the appropriate Affiliated Transferor) has all licenses, franchises, permits and other similar authorizations affecting, or relating in any way to, the Business required by law to be obtained by Lockheed Martin (or the appropriate Affiliated Transferor) to permit Lockheed Martin to conduct the Business in substantially the same manner as the Business has heretofore been conducted. 67 B.12. Finders' Fees. Except for Bear, Stearns & Co. Inc., whose fees will be paid by Lockheed Martin, there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Lockheed Martin who might be entitled to any fee or commission from Lockheed Martin, Newco or the Purchasers or any of their Affiliates upon consummation of the contemplated Transactions. B.13. Environmental Compliance. Except as disclosed in Section B.13 of the Disclosure Schedules or known to the Individual Purchasers, and except as reserved against or referred to in the December Statement, to the knowledge of Lockheed Martin the Business is and has been in substantial compliance with all applicable Environmental Laws, and has obtained all material permits, licenses and other authorizations that are required under applicable Environmental Laws. Except as set forth in Section B.13 of the Disclosure Schedules or known to the Individual Purchasers, and except as reserved against or referred to in the December Statement, to the knowledge of Lockheed Martin (i) the Business is and has been in material compliance with the terms and conditions under which the permits, licenses and other authorizations referenced in the preceding sentence were issued or granted, (ii) the Lockheed Martin Companies hold all permits required by Environmental Laws that are appropriate to conduct the Business as presently conducted in all material respects and to operate the Transferred Assets in all material respects as they are presently operated; (iii) no suspension, cancellation or termination of any of permit referred to in clause (ii) is pending or to Lockheed Martin's knowledge threatened; (iv) Lockheed Martin has not received written notice of any material Environmental Claim relating to or affecting the Business or the Transferred Assets, and to the knowledge of Lockheed Martin, there is no such threatened Environmental Claim; (v) Lockheed Martin, in connection with the Business or the Transferred Assets, has not entered into, agreed in writing to, or is subject to any judgment, decree, order or other similar requirement of any Governmental Authority under any Environmental Laws. B.14. Compliance with Laws. Except as set forth in Section B.14 of the Disclosure Schedules and, except for violations or infringements of Environmental Laws or orders, writs, injunctions or decrees relating to Contracts or Bids and except for violations or infringements that have not had, and may not reasonably be expected to have, a Material Adverse Effect on the Business, to the knowledge of Lockheed Martin the operation of the Business and condition of the Transferred Assets have not violated or infringed, and do not violate or infringe, in any respect any Applicable Law or any order, writ, injunction or decree of any Governmental Authority. B.15. Government Contracts. (a) Except as set forth in Section B.15 of the Disclosure Schedules or known to the Individual Purchasers, and except for inaccuracies in the following as have not had, and may not reasonably be expected to have a Material Adverse Effect on the Business, with respect to each fixed price Government Contract with a backlog value in excess of $5,000,000, each "cost plus" Government Contract with a backlog value in excess of $7,500,000 and each Bid that, if accepted, would result in such a Government Contract (a "Government Bid") to which Lockheed Martin or any Affiliated Transferor is a party with respect to the Business, (i) to the knowledge of Lockheed Martin, Lockheed Martin (or the applicable Affiliated Transferor) has complied with all terms and conditions of such Government Contract or Government Bid, including all clauses, provisions and requirements incorporated expressly, by 68 reference or by operation of law therein; (ii) to the knowledge of Lockheed Martin, Lockheed Martin (or the applicable Affiliated Transferor) has complied with all requirements of all Applicable Laws or agreements pertaining to such Government Contract or Government Bid; (iii) to the knowledge of Lockheed Martin, all representations and certifications executed, acknowledged or set forth in or pertaining to such Government Contract or Government Bid were complete and correct as of their effective date, and Lockheed Martin (or the applicable Affiliated Transferor) has complied in all respects with all such representations and certifications; (iv) neither the U.S. Government nor any prime contractor, subcontractor or other Person has notified Lockheed Martin (or the applicable Affiliated Transferor) that Lockheed Martin (or the applicable Affiliated Transferor) has breached or violated any Applicable Law, certification, representation, clause provision or requirement pertaining to such Government Contract or Government Bid; (v) no termination for convenience, termination for default, cure notice or show cause notice is currently in effect pertaining to such Government Contract or Government Bid; (vi) to the knowledge of Lockheed Martin, no cost incurred by Lockheed Martin (or the applicable Affiliated Transferor) pertaining to such Government Contract or Government Bid has been questioned or challenged, is the subject of any investigation or has been (or could reasonably be expected to be) disallowed by the U.S. Government; (vii) to the knowledge of Lockheed Martin, no money due to Lockheed Martin (or the applicable Affiliated Transferor) pertaining to such Government Contract or Government Bid has been (or has attempted to be) withheld or set off and Lockheed Martin (or the applicable Affiliated Transferor) is entitled to all progress payments with respect thereto and (viii) each Government Contract is valid and subsisting. (b) Except as set forth in Section B.15 of the Disclosure Schedules or known to the Individual Purchasers, and except as has not had, and may not reasonably be expected to have, a Material Adverse Effect on the Business, with respect to the Business; (i) to the knowledge of Lockheed Martin, none of its respective employees, consultants or agents is (or during the last five years has been) under administrative, civil or criminal investigation, indictment or information by any Governmental Authority, or any audit or investigation by Lockheed Martin with respect to any alleged irregularity, misstatement or omission arising under or relating to any Government Contract or Government Bid; and (ii) during the last five years, Lockheed Martin has not conducted or initiated any internal investigation or, to Lockheed Martin's knowledge, had reason to conduct, initiate or report any internal investigation, or made a voluntary disclosure to the U.S. Government, with respect to any alleged irregularity, misstatement or omission arising under or relating to a Government Contract or Government Bid. Except as set forth in Section B.15 of the Disclosure Schedules or known to the Individual Purchasers, Lockheed Martin has no knowledge of any irregularity, misstatement or omission arising under or relating to any Government Contract or Government Bid that has led or could reasonably be expected to lead, either before or after the Closing Date, to any of the consequences set forth in clause (i) or (ii) of the immediately preceding sentence or any other material damage, penalty assessment, recoupment of payment or disallowance of cost. (c) Except as set forth in Section B.15 of the Disclosure Schedules or known to the Individual Purchasers, and except as has not had, and may not reasonably be expected to have, a Material Adverse Effect on the Business, with respect to the Business, to the knowledge of Lockheed Martin, there exist (i) no outstanding claims against Lockheed Martin or any 69 Affiliated Transferor, either by the U.S. Government or by any prime contractor, subcontractor, vendor or other third party, arising under or relating to any Government Contract or Bid referred to in Section B.15(a) and (ii) no disputes between Lockheed Martin or any Affiliated Transferor and the U.S. Government under the Contract Disputes Act or any other Federal statute or between Lockheed Martin or any Affiliated Transferor and any prime contractor, subcontractor or vendor arising under or relating to any such Government Contract or Government Bid. Except as set forth in Section B.15 of the Disclosure Schedules or known to the Individual Purchasers, Lockheed Martin has no knowledge of any fact that could reasonably be expected to result in a claim or a dispute under clause (i) or (ii) of the immediately preceding sentence. (d) Except as set forth in Section B.15 of the Disclosure Schedules or known to the Individual Purchasers, neither Lockheed Martin (or any Affiliated Transferor) (with respect to the Business), nor to Lockheed Martin's knowledge, any of its employees, consultants or agents is (or during the last five years has been) suspended or debarred from doing business with the U.S. Government or is (or during such period was) the subject of a finding of nonresponsibility or ineligibility for U.S. Government contracting. Except as set forth in Section B.15 of the Disclosure Schedules or known to the Individual Purchasers, Lockheed Martin does not know of any facts or circumstances that would warrant the suspension or debarment, or the finding of nonresponsibility or ineligibility, on the part of Lockheed Martin (or any Affiliated Transferor) or any of Lockheed Martin's (or any Affiliated Transferor's) employees, consultants or agents. Except as set forth in Section B.15 of the Disclosure Schedules or known to the Individual Purchasers, and except as has not had, and may not reasonably be expected to have, a Material Adverse Effect on the Business, to Lockheed Martin's knowledge, the Lockheed Martin Companies have complied with all requirements of all material laws pertaining to all Government Contracts and Bids. (e) Except as set forth in Section B.15 of the Disclosure Schedules or known to the Individual Purchasers, and except for any of the following as has not had, and may not reasonably be expected to have, a Material Adverse Effect on the Business, to the knowledge of Lockheed Martin, all test and inspection results Lockheed Martin (or any Affiliated Transferor) has provided to the U.S. Government pursuant to any Government Contract referred to in Section B.15(a) or to any other Person pursuant to any such Government Contract or as a part of the delivery to the U.S. Government pursuant to any such Government Contract of any article designed, engineered or manufactured in the Business were complete and correct as of the date so provided. Except as set forth in Section B.15 of the Disclosure Schedules or known to the Individual Purchasers, and except for any of the following as has not had, and may not reasonably be expected to have, a Material Adverse Effect on the Business, to the knowledge of Lockheed Martin, Lockheed Martin (or an Affiliated Transferor) has provided all test and inspection results to the U.S. Government pursuant to any such Government Contract as required by Applicable Law and the terms of the applicable Government Contracts. (f) Except as set forth in Section B.15 of the Disclosure Schedules or known to the Individual Purchasers, and except for any of the following as has not had, and may not reasonably be expected to have, a Material Adverse Effect on the Business, to the knowledge of Lockheed Martin, no statement, representation or warranty made by Lockheed Martin (or an Affiliated Transferor) in any Government Contract, any exhibit thereto or in 70 any certificate, statement, list, schedule or other document submitted or furnished to the U.S. Government in connection with any Government Contract or Government Bid (i) contained on the date so furnished or submitted any untrue statement of a material fact, or failed to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading or (ii) contains on the date hereof any untrue statement of a material fact, or fails to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading, except in the case of both clauses (i) and (ii) any untrue statement or failure to state a material fact that would not result in any material liability to the Business as a result of such untrue statement or failure to state a material fact. B.16. Intellectual Property. With respect to Intellectual Property that constitute Transferred Assets, except as set forth in Section B.16 of the Disclosure Schedules, to the knowledge of Lockheed Martin: (a) Lockheed Martin (or an Affiliated Transferor) owns, free and clear of all Liens other than Permitted Liens, and subject to any licenses granted by Lockheed Martin and its Affiliates prior to the Closing Date, all right, title and interest in such Intellectual Property. To the knowledge of Lockheed Martin, the use of such Intellectual Property in connection with the operation of the Business as heretofore conducted does not conflict with, infringe upon or violate the intellectual property rights of any other Persons; (b) Lockheed Martin (or an Affiliated Transferor) has the right to use all Intellectual Property used by the Business and necessary for the continued operation of the Business in substantially the same manner as its operations have heretofore been conducted except where the failure to have any such Intellectual Property has not had, and could not reasonably be expected to have, a Material Adverse Effect on the Business; and (c) Upon the consummation of the Closing hereunder, (i) Newco will be vested with all of Lockheed Martin's (or the Affiliated Transferors') rights, title and interest in, and Lockheed Martin's (or the Affiliated Transferors') rights and authority to use in connection with the Business, all of the Intellectual Property that constitute Transferred Assets and (ii) such Intellectual Property, together with the Intellectual Property licensed to Newco in accordance with Section 9.04 of the Agreement and any other interests in Intellectual Property transferred hereunder will collectively constitute such rights and interests in Intellectual Property which are necessary for the continued operation of the Business as a whole in substantially the same manner as its operations have heretofore been conducted, except where any inaccuracy of clause (ii) has not had, and could not reasonably be expected to have, a Material Adverse Effect on the Business. B.17. Government Furnished Equipment. Section B.17 of the Disclosure Schedules incorporates the most recent schedule delivered to the U.S. Government which identifies by description or inventory number certain equipment and fixtures loaned, bailed or otherwise furnished to or held by each Business Unit by or on behalf of the United States. To Lockheed Martin's knowledge, such schedule was accurate and complete on its date and, if dated as of the Closing Date, would contain only those additions and omit only those deletions of equipment and fixtures that have occurred in the 71 ordinary course of business, except for such inaccuracies that could not reasonably be expected to have a Material Adverse Effect on the Business. B.18. Powers of Attorney. Section B.18 of the Disclosure Schedules lists the names of each person holding powers of attorney from any of the Lockheed Martin Companies in connection with the Business. B.19. Insurance. Section B.19 of the Disclosure Schedules contains a correct and complete list of all material policies of insurance held by any of the Lockheed Martin Companies that have been procured specifically with respect to the operation of the Business, other than workers' compensation policies. B.20. Affiliate Transactions. Except as set forth in Section B.20 of the Disclosure Schedule, (a) there is no ongoing agreement or arrangement between Lockheed Martin or any Affiliated Transferor, on the one hand, and any of the Business Units, on the other hand, having an annual cost to a Business Unit or any of the Lockheed Martin Companies, individually, in excess of $120,000; (b) there is no debt owed by any Business Unit to any of the Lockheed Martin Companies (other than another Business Unit), other than debt which will be eliminated prior to the Closing or otherwise will not be an Assumed Liability; and (c) there is no indemnification or similar obligation owed by any Business Unit to Lockheed Martin or any of its Affiliates (other than another Business Unit), other than in connection with or resulting from the failure of a Business Unit to perform its obligations under any Contracts involving Lockheed Martin or any of its Affiliates. B.21. Employee Benefit Matters. (a) To the knowledge of Lockheed Martin, Section B.21 of the Disclosure Schedule lists each Employee Plan or Benefit Arrangement which covers Transferred Employees or Transferred Beneficiaries and each collective bargaining agreement covering Transferred Employees. (b) Except as set forth in Section B.21 of the Disclosure Schedule and with respect to the Business: (i) Neither Lockheed Martin nor any member of its "Controlled Group" (defined as any organization which is a member of a controlled group of organizations within the meaning of Code Sections 414(b), (c), (m) or (o)) has ever contributed to or had any liability to a multi-employer plan, as defined in Section 3(37) of ERISA, which could reasonably be expected to have a Material Adverse Effect on the Business; (ii) To the knowledge of Lockheed Martin, except to the extent known by the Individual Purchasers with respect to the Business Units other than the Communications Systems Business Unit, no fiduciary of any funded Employee Plan has engaged in a "prohibited transaction" (as that term is defined in Section 4975 of the Code and Section 406 of ERISA) which could subject Newco to a penalty tax imposed by Section 4975 of the Code; (iii) No Employee Plan that is subject to Section 412 of the Code has incurred an "accumulated funding deficiency" within the meaning of Section 412 of the Code, whether or not waived; 72 (iv) To the knowledge of Lockheed Martin, except to the extent known by the Individual Purchasers with respect to the Business Units other than the Communications Systems Business Unit, each Employee Plan and Benefit Arrangement has been established and administered in accordance with its terms and in compliance with Applicable Law; (v) To the knowledge of Lockheed Martin, except to the extent known by the Individual Purchasers with respect to the Business Units other than the Communications Systems Business Unit, no Employee Plan subject to Title IV of ERISA has incurred any material liability under such title other than for the payment of premiums to the Pension Benefit Guaranty Corporation ("PBGC"), all of which to the knowledge of Lockheed Martin and the Individual Purchasers have been paid when due; (vi) No defined benefit Employee Plan has been terminated; nor have there been any "reportable events" (as that term is defined in Section 4043 of ERISA and the regulations thereunder), other than reportable events arising directly from the Contemplated Transactions, which would present a risk that an Employee Plan would be terminated by the PBGC in a distress termination; (vii) Each Employee Plan intended to qualify under Section 401 of the Code has received a determination letter that it is so qualified and to the knowledge of Lockheed Martin, except to the extent known by the Individual Purchasers with respect to the Business Units other than the Communications Systems Business Unit, no event has occurred with respect to any such Employee Plan which could cause the loss of such qualification or exemption; (viii) With respect to each Employee Plan listed on Section B.21 of the Disclosure Schedule, Lockheed Martin has made available to Newco the most recent copy (where applicable) of (A) the plan document; (B) the most recent determination letter; (C) any summary plan description; (D) Form 5500; and (E) actuarial valuation report; and with respect to each Benefit Arrangement that covers any Transferred Employee or Transferred Beneficiary, Lockheed Martin has made available to Newco a current, accurate and complete copy (or, to the extent that no such copy exists, an accurate description) thereof; and (ix) To the knowledge of Lockheed Martin, except to the extent known by the Individual Purchasers with respect to the Business Units other than the Communications Systems Business Unit, no Employee Plan or Benefit Arrangement exists which could result in the payment to any Transferred Employee or Transferred Beneficiary of any money or other property or rights or accelerate or provide any other rights or benefits to any Transferred Employee or Transferred Beneficiary as a result of the transaction contemplated by this Agreement, whether or not such payment would constitute a parachute payment (within the meaning of Section 280G of the Code). 73 EXHIBIT C TO TRANSACTION AGREEMENT REPRESENTATION AND WARRANTIES OF LEHMAN Lehman hereby represents and warrants to Lockheed Martin and the individual Purchasers and, upon the Closing, to Newco that: C.01. Organization and Existence. Lehman is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware and has all partnership powers and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except where the failure to have such licenses, authorizations, consents and approvals has not had and may not reasonably be expected to have, a Material Adverse Effect on Lehman. Lehman is duly qualified to do business as a foreign limited partnership in each jurisdiction where the character of the property owned or leased by it or the nature of its activities make such qualification necessary to carry on its business as now conducted, except for those jurisdictions where failure to be so qualified has not had, and may not reasonably be expected to have, a Material Adverse Effect on Lehman. C.02. Authorizations. The execution, delivery and performance by Lehman of the Transaction Documents and the consummation by Lehman of the Contemplated Transactions are within the partnership powers of Lehman and have been duly authorized by all necessary partnership action on the part of Lehman. Each of the Transaction Documents constitutes a legal, valid and binding agreement of Lehman, enforceable against Lehman in accordance with its terms (i) except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers and (ii) subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity). C.03. Governmental Authorization. (a) The execution, delivery and performance by Lehman of the Transaction Documents require no action by or in respect of, consents or approvals of, or filing with, any governmental body, agency, official or authority other than: (i) compliance with any applicable requirements of the HSR Act; and (ii) compliance with any applicable requirements of the 1933 Act. (b) To the actual knowledge of Lehman, there are no facts relating to the identity or circumstances of Lehman or any of its Affiliates that would prevent or materially delay obtaining the consents or approvals referred to in Section C.03(a). C.04. Non-Contravention. The execution, delivery and performance by Lehman of the Transaction Documents do not and will not (i) contravene or 74 conflict with the certificate of limited partnership or Amended and Restated Agreement of Limited Partnership of Lehman, (ii) assuming compliance with the matter referred to in Section C.03, contravene or conflict with or constitute a violation of any provision of any law, regulation, judgment, injunction, order or decree binding upon or applicable to Lehman, or (iii) constitute a default under or give rise to any right of termination, cancellation or acceleration of any right or obligation of Lehman or to a loss of any benefit to which Lehman is entitled under any provision of any agreement, contract or other instrument binding upon Lehman or any license, franchise, permit or other similar authorization held by Lehman, except, in the case of clauses (ii) and (iii), for any such contravention, conflict, violation, default, termination, cancellation, acceleration or loss that would not have a Material Adverse Effect on Lehman. C.05. Finders' Fees. Except for Lehman Brothers Inc., there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Lehman who might be entitled to any fee or commission from Newco, Lockheed Martin or any of its Affiliates, or either of the Individual Purchasers, upon consummation of the Contemplated Transactions by the Transaction Documents. C.06. Litigation. There is no action, suit, investigation or proceeding pending against, or to the actual knowledge of Lehman, threatened against or affecting, Lehman before any court or arbitrator or any governmental body, agency or official which in any matter challenges or seeks to prevent, enjoin, alter or materially delay the Contemplated Transactions. C.07. Inspections. Lehman is an informed and sophisticated participant in the Contemplated Transactions, and has engaged expert advisors, experienced in the evaluation and purchase of enterprises such as the Business. Lehman has undertaken an investigation and has been provided with, has evaluated and has relied upon certain documents and information to assist Lehman in making an informed and intelligent decision with respect to the execution of the Transaction Documents. Lehman will undertake prior to Closing such further investigation and request such additional documents and information as it deems necessary. Lehman acknowledges that Lockheed Martin has made no representation or warranty as to the prospects, financial or otherwise of the Business. Lehman agrees that Newco shall accept the Transferred Assets and the Assumed Liabilities as they exist on the Closing Date based upon Lehman's and the Individual Purchasers' inspection, examination and determination with respect thereto as to all matters, and without reliance upon any express or implied representations or warranties of any nature, whether in writing, orally or otherwise, made by or on behalf of or imputed to Lockheed Martin except as expressly set forth in the Transaction Documents. C.08. Financing. Lehman has available to it cash, marketable securities or other investments, or presently available sources of credit, to enable it to purchase the shares of Newco Class A Stock contemplated by this Agreement. 75 EXHIBIT D TO TRANSACTION AGREEMENT REPRESENTATIONS AND WARRANTIES OF THE INDIVIDUAL PURCHASERS Each of the Individual Purchasers hereby represents and warrants, with respect to himself, to Lockheed Martin and Lehman and, upon the Closing, to Newco that: D.01. Governmental Authorization. (a) The execution, delivery and performance by each Individual Purchaser of the Transaction Documents require no action by or in respect of, consents or approvals of, or filing with, any governmental body, agency, official or authority other than: (i) compliance with any applicable requirements of the HSR Act; and (ii) compliance with any applicable requirements of the 1933 Act. (b) To the knowledge of each of the Individual Purchasers, there are no facts relating to the identity or circumstances of the Individual Purchasers that would prevent or materially delay obtaining any of the consents or approvals referred to in Section D.01(a). D.02. Non-Contravention. The execution, delivery and performance by each of the Individual Purchasers of the Transaction Documents do not and will not (i) assuming compliance with the matters referred to in Section D.01, contravene or conflict with or constitute a violation of any provision of any law, regulation, judgment, injunction, order or decree binding upon or applicable to the Individual Purchasers or (ii) constitute a default under or give rise to any right of termination, cancellation or acceleration of any right or obligation of either of the Individual Purchasers or to a loss of any benefit to which either of the Individual Purchasers is entitled under any provision of any agreement, contract or other instrument binding upon either of the Individual Purchasers or any license, franchise, permit or other similar authorization held by either of the Individual Purchasers, except for any such contravention, conflict, violation, default, termination, cancellation, acceleration or loss that is immaterial to the Contemplated Transactions and the operation of the Business after Closing. D.03. Finders' Fees. There is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of either of the Individual Purchasers who might be entitled to any fee or commission from Newco, Lockheed Martin or Lehman, or any of their Affiliates, upon consummation of the Contemplated Transactions. D.04. Litigation. There is no action, suit, investigation or proceeding pending against, or to the knowledge of either of the Individual Purchasers, threatened against or effecting, either of the Individual Purchasers before any court or arbitrator or any governmental body, agency or official which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the Contemplated Transactions. 76 D.05. Inspections. Each of the Individual Purchasers is an informed and sophisticated participant in the Contemplated Transactions, and has engaged such expert's advisors as he deems appropriate. Each of the Individual Purchasers has undertaken an investigation and has been provided with, has evaluated and has relied upon certain documents and information to assist him in making an informed and intelligent decision with respect to the execution of the Transaction Documents. Each of the Individual Purchasers will undertake prior to Closing such further investigation and request such additional documents and information as he deems necessary. Each of the Individual Purchasers acknowledges that Lockheed Martin has made no representation or warranty as to the prospects, financial or otherwise of the Business. Each of the Individual Purchasers agrees that Newco shall accept the Transferred Assets and the Assumed Liabilities as they exist on the Closing Date based upon Lehman's and the Individual Purchasers' inspection, examination and determination with respect thereto as to all matters, and without reliance upon any express or implied representations or warranties of any nature, whether in writing, orally or otherwise, made by or on behalf of or imputed to Lockheed Martin, except as expressly set forth in the Transaction Documents. D.06. Financing. Each of the Individual Purchasers has available sufficient cash, marketable securities or other investments, or presently available sources of credit, to enable him to purchase the shares of Newco Class B Stock contemplated by this Agreement. 77 EXHIBIT E TO TRANSACTION AGREEMENT REPRESENTATION AND WARRANTIES OF NEWCO Newco hereby represents and warrants to Lockheed Martin, Lehman and the Individual Purchasers that: E.01. Organization and Existence. Newco is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has (or, prior to the Closing Date, will have) all corporate powers and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted, except where the failure to have such licenses, authorizations, consents and approvals has not had and may not reasonably be expected to have, a Material Adverse Effect on Newco (after giving effect to the Contemplated Transactions). As of the Closing Date, Newco will be duly qualified to do business as a foreign corporation in each jurisdiction where the character of the property owned or leased by it or the nature of its activities (after giving effect to the Contemplated Transactions) make such qualification necessary to carry on its business as now conducted, except for those jurisdictions where failure to be so qualified has not had, and may not reasonably be expected to have, a Material Adverse Effect on Newco (after giving effect to the Contemplated Transactions). E.02. Corporate Authorizations. The execution, delivery and performance by Newco of the Transaction Documents and the consummation by Newco of the Contemplated Transactions are within the corporate powers of Newco and have been (or, prior to the Closing, will have been) duly authorized by all necessary corporate action on the part of Newco. Each of the Transaction Documents constitutes a legal, valid and binding agreement of Newco, enforceable against Newco in accordance with its terms (i) except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers and (ii) subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity). E.03. Governmental Authorization. (a) Except as set forth on Attachment X, the execution, delivery and performance by Newco of the Transaction Documents require no action by or in respect of, consents or approvals of, or filing with, any governmental body, agency, official or authority other than: (i) compliance with any applicable requirements of the HSR Act; and (ii) compliance with any applicable requirements of the 1933 Act. (b) There are no facts relating to the identity or circumstances of Newco known to Newco that would prevent or materially delay obtaining any of the consents or approvals referred to in Section E.03(a). 78 E.04. Non-Contravention. The execution, delivery and performance by Newco of the Transaction Documents do not and will not (i) contravene or conflict with the charter or bylaws of Newco, (ii) assuming compliance with the matters referred to in Section E.03, contravene or conflict with or constitute a violation of any provision of any law, regulation, judgment, injunction, order or decree binding upon or applicable to Newco, or (iii) constitute a default under or give rise to any right of termination, cancellation or acceleration of any right or obligation of Newco or to a loss of any benefit to which Newco is entitled under any provision of any agreement, contract or other instrument binding upon Newco or any license, franchise, permit or other similar authorization held by Newco, except, in the case of clauses (ii) and (iii), for any such contravention, conflict, violation, default, termination, cancellation, acceleration or loss that could not reasonably be expected to have a Material Adverse Effect on Newco. E.05. Finders' Fees. Except for Lehman Brothers Inc., there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Newco who might be entitled to any fee or commission from Lockheed Martin or Lehman (or any of their Affiliates), or from either of the Individual Purchasers, upon consummation of the Contemplated Transactions. 79 EXHIBIT F TO TRANSACTION AGREEMENT TAX MATTERS F.01. Tax Definitions. The following terms shall have the following meanings: "Allocation Tax Loss" means an amount equal to 20% of the first $5,000,000 of the Tax Basis Shortfall and 25% of the next $20,000,000 of the Tax Basis Shortfall. "Basis Liabilities" means Assumed Liabilities which upon the Tax Closing Date give rise to the creation of, or increase in, basis to Newco of one or more Transferred Assets for Income Tax purposes. "Cash Sale" means a transfer of assets to Newco pursuant to the Transaction Agreement whereby Lockheed Martin or any of its Affiliated Transferors, as the case may be, does not receive any Newco Class A Stock as Exchange Consideration for Transferred Assets. "Code" means the Internal Revenue Code of 1986, as amended. "Final Determination" means a determination as defined in Section 1313(a) of the Code or any other event which finally and conclusively establishes the amount of any liability for Taxes. "Income Taxes" means any Taxes determined by reference to net income. "Post-Closing Tax Period" means that portion of any Tax period ending after the Tax Closing Date, which is after the Tax Closing Date. "Pre-Closing Tax Period" means that portion of any Tax period ending on or before the Tax Closing Date, which is on or before the Tax Closing Date. "Section 351 Transfer" means a transfer of assets to Newco pursuant to the Transaction Agreement whereby Lockheed Martin or any of its Affiliated Transferors, as the case may be, receives Newco Class A Stock as part or all of the Exchange Consideration for Transferred Assets. "Tax" means any tax imposed of any nature including federal, state, local or foreign net income tax, alternative or add-on minimum tax, profits or excess profits tax, franchise tax, gross income, adjusted gross income or gross receipts tax, employment related tax (including employee withholding or employer payroll tax, FICA, or FUTA), real or personal property tax or ad valorem tax, sales or use tax, excise tax, stamp tax or duty, any withholding or backup withholding tax, value added tax, severance tax, prohibited transaction tax, premiums tax, occupation tax, together with any interest or any penalty, addition to tax or additional amount imposed by any Governmental Authority responsible for the imposition of any such tax. "Tax Basis Shortfall" means the amount by which Newco's adjusted tax basis in the Transferred Assets (after the recognition of gains pursuant to Section F.07.(a)(i)(C)) is less than $525,000,000 plus or minus any 80 adjustment to the Exchange Consideration in accordance with Sections 2.03 and 2.04 and plus the Basis Liabilities. "Tax Closing Date" means the Effective Date. F.02. Tax Return Packages. Newco will use its reasonable efforts to cause appropriate employees of the Business to prepare usual and customary Tax return packages (in the form provided to the Business Units for the 1996 calendar year) with respect to (1) the taxable period ended December 31, 1996, in the event that such packages have not been prepared prior to Closing and (2) the tax period beginning January 1, 1997 and ending as of the Tax Closing Date. In the event that Tax return packages for the taxable period ended December 31, 1996 have not been prepared prior to Closing, then Newco will use reasonable efforts to cause the Tax return packages for such taxable period to be delivered to Lockheed Martin no later than 30 days subsequent to Closing. Newco will use reasonable efforts to cause the Tax return packages for the period beginning on January 1, 1997 and ending as of the Tax Closing Date to be delivered to Lockheed Martin no later than the last day of the third calendar month succeeding the month in which the Closing occurs. F.03.A. Assumed Liabilities. The term Assumed Liabilities as defined in Exhibit A shall include any and all liabilities and obligations of Lockheed Martin and the Affiliated Transferors for Taxes arising from or with respect to the Transferred Assets or the operation of the Business with respect to any period ending prior to on or after the Tax Closing Date other than (i) income or franchise taxes arising from or with respect to the Transferred Assets or the operations of the Business for the Pre-Closing Tax Period (other than state or local income or franchise taxes attributable to the Business with respect to a Pre-Closing Tax Period to the extent reimbursable (but not actually reimbursed as of the Tax Closing Date) by the U.S. Government pursuant to the principles of Federal Acquisition Regulation Part 31, Contract Cost Principles and Procedures), and (ii) income or franchise taxes imposed on Lockheed Martin or any of the Affiliated Transferors with respect to gain or loss on the disposition of the Transferred Assets pursuant to the Transaction Agreement (other than Taxes borne by Newco pursuant to Section 15.03). Notwithstanding the foregoing, the parties agree that, with respect to Tax liabilities attributable to the Communications Systems Business Unit relating to the Pre-Closing Tax Period, Newco shall not assume any liability or obligation other than and only to the extent (i) disclosed or provided for in the December Statement or taken into account in the determination of the Final Net Tangible Asset Amount or (ii) relating to Tax periods for which Tax returns (including any applicable extensions) are not required to have been filed prior to the Tax Closing Date. F.03.B. Excluded Liabilities. The term Excluded Liabilities as defined in Exhibit A shall include any and all liabilities or obligations for any and all Taxes arising from or with respect to the Transferred Assets or operations of the Business that are not Assumed Liabilities as defined in Section F.03.A. F.04.A. Transferred Assets. The term Transferred Assets as defined in Exhibit A shall include any and all refunds, credits or rights of recovery in respect of any Taxes that are Assumed Liabilities as defined in Section F.03.A. 81 F.04.B. Excluded Assets. The term Excluded Assets as defined in Exhibit A shall include any refund, credit or right of recovery in respect of any Taxes that are not Assumed Liabilities as defined in Section F.03.A. F.05. Allocation of Exchange Consideration. (a) Within 30 days after the appraisal of the Transferred Assets by Coopers & Lybrand L.L.P. as referred to in Section F.07 has been completed, Lockheed Martin shall prepare a schedule (the "Exchange Consideration Schedule") setting forth the allocation of the cash amount of the Exchange Consideration among Lockheed Martin and each of the Affiliated Transferors. The allocation shall be determined based on such appraisal by Coopers & Lybrand L.L.P., and shall take into account the allocation of Newco Class A Stock among Lockheed Martin and the Affiliated Transferors, as determined by Lockheed Martin in its sole discretion. In connection with the preparation of the Exchange Consideration Schedule, Lockheed Martin shall give Newco reasonable access to the books and records of Lockheed Martin in respect of the Transferred Assets and the Basis Liabilities. Lockheed Martin agrees to make reasonable efforts to allocate the Exchange Consideration in the Exchange Consideration Schedule in a manner calculated to allow Newco to obtain a tax basis in the Transferred Assets equal to, but not greater than, $525,000,000 plus or minus any adjustment to the Exchange Consideration in accordance with Sections 2.03 and 2.04 and plus the Basis Liabilities. Lockheed Martin covenants and agrees that the Exchange Consideration will be allocated so that the adjusted tax basis of Newco in the Transferred Assets, based on the allocation in the Exchange Consideration Schedule, will be not less than $500,000,000 plus or minus any adjustment to the Exchange Consideration in accordance with Sections 2.03 and 2.04 and plus the Basis Liabilities. (b) The Allocation Tax Loss shall be determined jointly by Lockheed Martin and Newco within 90 days after the Exchange Consideration Schedule is delivered to Newco. Any dispute with respect to the determination of the Allocation Tax Loss shall be resolved in the manner specified in Section 2.03 (b) (regarding determination of the Final Net Tangible Asset Amount). Within 10 days after the Allocation Tax Loss is determined, Lockheed Martin shall pay to Newco the amount of the Allocation Tax Loss with interest thereon from the Closing Date to the date of payment at a rate per annum equal to the per annum interest rate announced from time to time by Bank of America National Trust and Savings Association as its reference rate in effect. Such payment shall be made in immediately available funds by wire transfer to a bank account designated in writing by Newco. Newco agrees that the aforementioned payment by Lockheed Martin shall satisfy all obligations assumed by Lockheed Martin pursuant to this Section F.05. Lockheed Martin shall have no further obligation to indemnify Newco with regard to any adjustment to the tax basis of the Transferred Assets in the hands of Newco as a result of an audit by the Internal Revenue Service or any other Tax authority, or as a result of any other adjustment which is treated for Tax purposes as an adjustment to the Exchange Consideration. F.06. Representations and Warranties of Lockheed Martin. Lockheed Martin hereby represents prior to but not after the Closing to the Purchasers, and as of and after the Closing to Newco that: (a) there are no liens on any of the Transferred Assets that arose in connection with any failure (or alleged failure) to pay any Tax; 82 (b) neither Lockheed Martin nor any of the Affiliated Transferors will take part in both a Section 351 Transfer and a Cash Sale in the context of the Contemplated Transactions; (c) neither Lockheed Martin nor any of the Affiliated Transferors has transferred or otherwise altered the ownership of any of the Transferred Assets in anticipation of the Contemplated Transactions. F.07. Consistent Reporting. (a) Section 351 Transfers (i) Unless there has been a Final Determination to the contrary, Lockheed Martin, the Affiliated Transferors and Newco covenant and agree, for all Tax purposes including all Tax returns and Tax controversies, to (and to cause any Affiliate or successor to their assets or business to) take each of the positions set forth in subparagraph (A) through (E) below with respect to Section 351 Transfers. (A) The transfer of assets by each transferor will qualify under Section 351(b) of the Internal Revenue Code of 1986. (B) The amount of cash received in exchange for any Transferred Asset will be determined by (A) allocating Basis Liabilities to the Transferred Assets in proportion to the adjusted tax basis of such Transferred Assets, and then (B) allocating the total amount of cash received by the transferor among the Transferred Assets in proportion to the net fair market value of such Transferred Assets (the net fair market value being the fair market value of a Transferred Asset reduced by the amount of any Basis Liabilities allocated to the asset). (C) The tax basis of each Transferred Asset to be received by Newco will be the same as the tax basis of such asset in the hands of the transferor increased by the amount of any gain recognized by the transferor on the transfer of such asset. (D) The fair market value of each category of Transferred Assets will be determined based on an independent appraisal by Coopers & Lybrand L.L.P. (E) Neither Newco, nor any successor to its assets or businesses will be entitled to claim any deduction in respect of any Basis Liability to the extent previously deducted by the transferor, unless such previous deduction is later denied. (ii) Lockheed Martin and the Affiliated Transferors will file with their consolidated federal income tax return for the tax period which includes the Tax Closing Date the information required by Treas. Reg. 1.351-3(a) and will deliver copies of such statements, including attachments, to Newco at least 10 days prior to the date on which such return is filed, and Newco will file with its federal income tax return for the taxable period within which the Tax Closing Date falls the information required by Treas. Reg. 1.351-(b) and will deliver a copy of that statement to Lockheed Martin within ten days thereafter. Within 180 days after the Closing Date, Lockheed Martin will deliver to Newco all of the cost and other basis information relating to the Transferred 83 Assets and Basis Liabilities reasonably required for Newco to prepare the Statement required by Treas. Reg. 1.351-3(b)(2). (iii) Lockheed Martin and Newco will jointly prepare schedules showing (A) the amount of any gain recognized on the transfer of each category of Transferred Assets, (B) the tax basis of each category of Transferred Assets in the hands of the transferor, and (C) the amount previously deducted in respect of each category of Basis Liabilities. Such schedules will be prepared in a manner consistent with each of the positions described in Section F.07.(a)(i). In the event of any adjustment to the tax basis of the Transferred Assets or Basis Liabilities, as the result of an audit or otherwise, Lockheed Martin, the Affiliated Transferors and Newco will jointly prepare any necessary revisions to such schedules. Unless there has been a Final Determination to the contrary, Lockheed Martin, the Affiliated Transferors and Newco covenant and agree, for all Income Tax purposes, including all Income Tax returns and any Income Tax controversies, not to take (and to cause any Affiliate or successors to their assets or businesses not to take) any position inconsistent with the basis in assets shown on such schedules (including any revised schedules from and after the date of revision) prepared pursuant to this Section F.07.(a)(iii). (iv) Lockheed Martin and the Affiliated Transferors covenant and agree to make the election necessary under Section 197(f)(9)(B) of the Code and pay the Tax that is required to be paid thereunder, so that intangible assets will be amortizable to the extent allowable under Section 197 of the Code. Lockheed Martin will deliver a copy of the election to Newco within 10 days of filing or making such election. (b) Cash Sales With respect to Cash Sales, the Exchange Consideration shall be allocated among the Transferred Assets in accordance with Section 1060 of the Code and Treasury Regulations thereunder. Such allocation shall be based on an independent appraisal by Coopers & Lybrand L.L.P. Lockheed Martin, the Affiliated Transferors and Newco shall not take any position on their respective Tax returns that is inconsistent with such allocation of the Exchange Consideration for purposes of determining the amount of gain or loss recognized by Lockheed Martin and/or any of the Affiliated Transferors pursuant to Cash Sales, and Lockheed Martin and Newco shall duly prepare and timely file such reports and information returns as may be required to report the allocation, including Internal Revenue Service Form 8594. Lockheed Martin and Newco will each deliver a copy of Form 8594, including attachments, to the other at least 10 days prior to filing it with its tax return. F.08. Allocation of Income, Deductions and Other Items. For purposes of the Transaction Agreement, income, deductions, and other items will be allocated between the Pre-Closing Tax Period and the Post-Closing Tax Period based on an actual closing of the books of the Business on the Tax Closing Date. Income, deductions and other items attributable to the Pre-Closing Tax Period will be included in the federal and state income and/or franchise tax returns of Lockheed Martin. Income, deductions and other items attributable to the Post-Closing Tax Period will be included in the federal and state income and/or franchise tax returns of Newco. 84 F.09. Allocation of Taxes. Any pre-paid asset or accrued liability for real property tax, personal property tax or any similar ad valorem obligation levied with respect to any Transferred Asset for a Post-Closing Tax Period which includes the Tax Closing Date will be apportioned as of the Tax Closing Date and included in the determination of the Estimated Final Net Tangible Asset Amount, the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount based on the number of days of such taxable period included in the Pre-Closing Tax Period and the number of days of such taxable period included in the Post-Closing Tax Period. F.10. Credit for Increasing Research Activities. Lockheed Martin, the Affiliated Transferors and Newco agree that the transfers of assets pursuant to the Transaction Agreement constitute dispositions of trades or businesses within the meaning of Section 41(f)(3) of the Code. Lockheed Martin and the Affiliated Transferors agree to provide Newco within 150 days after the Closing Date with all information necessary to permit Newco to timely apply the provisions of Section 41(f)(3)(A) of the Code with respect to the Businesses. F.11. Costs and Expenses of Appraisal. The costs and expenses of the appraisal by Coopers & Lybrand L.L.P. which is referred to in Sections F.05., F.07.(a)(i)(D) and F.07.(b) shall be shared equally by Lockheed Martin and Newco. F.12. Resale Certificates. Within 45 days after the Closing Date, where applicable, Newco shall remit to Lockheed Martin such properly completed resale exemption certificates or similar certificates or instruments as are necessary to claim exemptions from the payment of sales, transfer, use or other similar taxes under Applicable Law. 85 EXHIBIT G TO TRANSACTION AGREEMENT EMPLOYMENT AND EMPLOYEE BENEFIT MATTERS G.01. Employee Benefits Definitions. The following terms shall have the following meanings: "Benefit Arrangement" means each employment, severance, continuation pay, termination pay, layoff, or other similar written contract, arrangement or policy and each written plan or arrangement providing for health, medical, life or other welfare or fringe benefit coverage (including any insurance, self-insurance or other arrangements), workers' compensation, severance pay, retention agreements, disability benefits, supplemental unemployment benefits, holiday, education or vacation benefits, retirement benefits or deferred compensation, profit-sharing, benefits in the event of a sale of the Business or other change in the control, management or the ownership of the Business, bonuses, stock options, stock appreciation rights and other forms of incentive compensation or post-retirement insurance, compensation or benefits which (i) is not an Employee Plan, (ii) is or has been entered into, maintained, administered or contributed to, as the case may be, by Lockheed Martin or any of its Affiliates and (iii) covers any Transferred Employee, Transferred Beneficiary and/or his or her dependent, spouse or beneficiary or for which a Transferred Employee would be eligible upon retirement or other termination of service. "Camden Transferee" means each Transferred Employee who worked in the Communications Systems Business Unit immediately prior to Closing and any Transferred Beneficiary related to such Transferred Employee. "Employee Plan" means each "employee benefit plan", as such term is defined in Section 3(3) of ERISA, which (i) is subject to any provision of ERISA, (ii) is or has been entered into, maintained, administered or contributed to by Lockheed Martin or any of its Affiliates and (iii) covers any Transferred Employee and/or Transferred Beneficiary. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "Transferred Employee" means any Person who, (i) on the Closing Date, is actively employed in the Business, or who, with respect to the Business, is on vacation, approved illness absence, long-term disability, authorized leave of absence (including leave under the Family and Medical Leave Act) or military service leave of absence as of the Closing Date, (ii) was laid off from the Business and has recall rights with respect to the Business, or (iii) is identified on Attachment XI, to be delivered to Newco at the same time as the Disclosure Schedules are delivered. "Transferred Beneficiary" means any Person who, at Closing, is not a Transferred Employee but (i) who was formerly employed in the Business (other than at the Communications Systems Business Unit)(whether by Lockheed Martin and/or its Affiliates or by their predecessors with respect to the Business) and to whom or with respect to whom Lockheed Martin or any of its Affiliates now has or may have in the future any obligation or liability (whether or not contingent) arising from that Person's employment in the Business or who is now or may become entitled to any coverage or benefit (whether or not 86 contingent) provided under any Employee Plan or Benefit Arrangement as a result of his or her employment in the Business; (ii) who is the spouse, dependent or beneficiary of a Person who qualifies as a Transferred Employee or a Person described in clause (i), if that spouse, dependent or beneficiary is or may become entitled to any coverage or benefit (whether or not contingent) provided under any Employee Plan or Benefit Arrangement as a result of that Person's employment in the Business. G.02. Employees and Offers of Employment. (a) Newco shall offer employment to commence on the Closing Date to all Transferred Employees; provided that, for any Transferred Employee who is on vacation, approved illness absence, authorized leave of absence (including leave under the Family and Medical Leave Act), long-term disability or military service leave of absence as of the Closing, the offer shall remain open until the date he or she is able to return to active employment to the extent consistent with any applicable collective bargaining agreement and/or existing company policy; provided, further, that any Camden Transferee entitled to recall rights shall be offered employment by Newco in accordance with the terms of the applicable bargaining agreement. Each Transferred Employee shall be offered a position by Newco similar to his or her position immediately prior to the Closing Date, at the same job and salary or wage levels, with non-equity based bonus and incentive plans and other non-equity based employee benefit plans substantially similar to those provided by Lockheed Martin and its Affiliates immediately prior to the Closing Date. Such offers of employment shall be at the same respective locations as those at which such Transferred Employees are employed immediately prior to the Closing. Subject to Applicable Law and this Agreement, Newco shall have the right to dismiss any Transferred Employee at any time, with or without cause, and to change the terms of employment of any Transferred Employee. (b) Lockheed Martin shall provide any notices to Transferred Employees which may be required under the Worker Adjustment Retraining and Notification Act, 29 USC Section 2101 et seq., ("WARN") with respect to events which occur prior to the Closing Date and Newco shall provide any notices to Transferred Employees which may be required under WARN with respect to events which occur on or after the Closing Date. (c) Commencing on the Closing Date, Newco shall assume all responsibility and liability for all matters arising out of or relating to Transferred Employees and Transferred Beneficiaries regardless of whether such matter arises from or relates to events prior to, on or after the Closing Date, including but not limited to (i) accrued but unpaid wages, bonuses and salary; (ii) all liabilities for workers compensation claims made at any time by Transferred Employees or Transferred Beneficiaries whether or not reported as of the Closing Date and all expenses of administration of such claims; (iii) all incurred but not reported claims for life insurance, medical, disability or similar benefits; (iv) all claims relating to the terms and conditions of employment, hiring, firing, supervision, occupational safety and health, workplace, wages and hours promotion, employment practices or treatment of Transferred Employees or Transferred Beneficiaries; provided, however, that with respect to any responsibility and liability relating to a Camden Transferee for a matter described in clause (iv), Newco shall only assume such responsibility and liability if it arises from or relates to (A) a matter described in Section B.09 of the Disclosure Schedule, or (B) events occurring on or after the Closing Date. 87 G.03. Plans Following the Closing. (a) Except to the extent changes are (i) required by Applicable Law; (ii) necessary to maintain the tax favored status of any employee plan or benefit arrangement; (iii) permitted or required under any applicable collective bargaining agreement; or (iv) necessary to eliminate the use of any equity securities as the basis for any equity-based incentive compensation, during the one-year period following the Closing, Newco will maintain employee compensation and employee plans and benefit arrangements for the benefit of the Transferred Employees and Transferred Beneficiaries, in either case, who are not covered by collective bargaining agreements, that are substantially similar to the Employee Plans and Benefit Arrangements (excluding any stock options, stock appreciation or other equity based incentive compensation) in effect on the Closing Date; provided, however, that layoff, severance and retention benefits (including the Special Severance Program) shall be identical during this period; provided, further, that post-retirement benefits for Camden Transferees shall also be provided in accordance with Sections G.03(b) and G.05(f). During such period, for Transferred Employees and Transferred Beneficiaries who are covered by collective bargaining agreements, Newco shall provide such benefits as are required by any and such collective bargaining agreements as are assumed pursuant to Section G.04. Newco will give Transferred Employees full credit for purposes of eligibility, vesting and benefit accrual under any such plans or arrangements maintained by Newco pursuant to this Section G.03 for such Transferred Employees' service recognized for such purposes under the Employee Plans and Benefit Arrangements at Closing; provided, however, that any Newco pension plan may offset pension benefits provided under Newco's pension plan to a Transferred Employee and attributable to service before the Closing Date by any pension benefits provided to that Transferred Employee under any Lockheed Martin pension plan and attributable to that same pre-Closing service. (b) Effective as of the Closing Date, Lockheed Martin and its Affiliates shall cease to have any liability or obligation to provide post-retirement medical and life insurance benefits to Transferred Employees and Transferred Beneficiaries and Newco shall assume all such liabilities and obligations to provide post-retirement life and medical benefits and shall provide post-retirement medical and life insurance benefits in accordance with Section G.03(a). In addition, Newco will provide (i) substantially equivalent post-retirement medical benefits for Camden Transferees who meet the age and service requirements for those benefits (as such requirements are in effect under the applicable Lockheed Martin plan immediately prior to the Closing Date) by the five-year anniversary of the Closing Date and who retire before that 5th year anniversary; (ii) substantially equivalent post retirement life insurance benefits for those Camden Transferees who were at least age 50 as of December 31, 1994 and have ten years of continuous service at retirement; and (iii) post-retirement medical benefits and life insurance for Transferred Employees and Transferred Beneficiaries covered by a collective bargaining agreement in accordance with the terms of that agreement. Notwithstanding the foregoing, nothing herein shall prevent Newco from increasing the cost to Transferred Employees or Transferred Beneficiaries who became participants in such plans to the extent permitted by law, but only if the proportion of any required payments by such participants does not change in relation to the payments made prior to the Closing Date by such participant's employer; provided, however, nothing herein permits the level of benefits provided under the plans to be decreased. 88 (c) Newco's plans that are welfare plans (as defined in Section 3(1) of ERISA) shall not contain a clause excluding coverage for preexisting conditions of Transferred Employees or Transferred Beneficiaries (unless and only to the extent and for the period that such pre-existing condition as of the Closing Date would be excluded from coverage under the welfare plans of the Business) and shall provide that any expenses incurred by a Transferred Employee or Transferred Beneficiary during 1997 on or before the Closing shall be taken into account from the Closing until December 31, 1997 under such welfare plans for the purposes of deductible and coinsurance requirements and satisfaction of maximum out-of-pocket provisions to the same extent as if such expenses had been incurred after the Closing. (d) Effective as of the Closing Date, Newco and Lockheed Martin shall enter into a benefit administration agreement or agreements, whereby Newco shall provide to Lockheed Martin and Lockheed Martin shall provide to Newco, upon reasonable request, assistance in the administration of benefit plans and arrangements after the Closing Date. Newco and Lockheed Martin agree to negotiate in good faith the cost of such services and actual terms of such benefit administration agreement(s). G.04. Collective Bargaining Agreements. Newco shall (i) expressly recognize any collective bargaining representative recognized by Lockheed Martin or any of its Affiliates as of the Closing for bargaining units consisting of Transferred Employees; (ii) expressly assume any and all of Lockheed Martin's and its Affiliates' obligations under the collective bargaining agreements set forth on Section B.21 of the Disclosure Schedules with respect to the Transferred Employees; and (iii) be a successor employer for purposes of such collective bargaining agreements. G.05. Pension Plan Obligations (a) Transferred Employees currently participate in the following defined benefit pension plans: (i) Lockheed Martin Tactical Defense Systems Retirement Plan; (ii) Lockheed Martin Corporation Retirement Income Plan II; (iii) Lockheed Martin Corporation Pension Plan for Employees in Participating Bargaining Units; (iv) The Narda Microwave Corporation Pension Plan; (v) Lockheed Martin Tactical Systems, Inc. Pension Plan; (vi) Lockheed Martin Fairchild Corporation Retirement Plan; (vii) Lockheed Martin Hycor Pension Plan; (viii) Lockheed Martin Retirement Income Plan; (ix) Lockheed Martin Supplemental Retirement Income Plan; (x) Lockheed Martin Retirement Plan for Certain Salaried Employees; (xi) Lockheed Martin Tactical Systems, Inc. Supplemental Executive Retirement Plan; (xii) Lockheed Martin Corporation Supplementary Pension Plan for Employees of Transferred GE Operations; (xiii) Supplemental Executive Retirement Plan for Certain Management Employees of the Narda Microwave Corporation; (xiv) Lockheed Martin Fairchild Corporation Supplemental Benefit Plan; (xv) Lockheed Martin Supplemental Executive Retirement Plan ("Lockheed Martin Pension Plans"). As of the Closing Date, Transferred Employees shall cease to accrue service credit or benefits under Lockheed Martin Pension Plans, other than the Assumed Plans described in Section G.05(b). (b) With respect to The Narda Microwave Corporation Pension Plan ("Narda Plan") and the Lockheed Martin Hycor Pension Plan ("Hycor Plan") (collectively, the "Assumed Plans"), as of the Closing Date, Lockheed Martin and its Affiliates shall cease to sponsor, administer, pay benefits or contribute to the Assumed Plans (other than for contributions due prior to the Effective Date) and thereby cease to be responsible for any acts, 89 omissions and transactions under or in connection with any such Assumed Plan, whether occurring before or after Closing. Effective as of the Closing Date, Newco shall become the sponsor of the Assumed Plans. Contingent upon receipt of the Initial Transfer Amount in the case of the Narda Plan or the transfer of sponsorship of the trust in the case of the Hycor Plan, Newco shall assume all liabilities with respect to such Assumed Plan (including liabilities with respect to Transferred Beneficiaries), shall assume responsibility for paying pension benefits in respect of Transferred Employees and Transferred Beneficiaries, and shall become responsible for all acts, omissions and transactions under or in connection with that Assumed Plan, whether arising before or after the Closing. As soon as practicable after the Closing Date, the parties shall cause the sponsorship of the trust agreement maintained to fund the Hycor Plan to be transferred to Newco and Newco, as of the Closing Date, shall assume all of Lockheed Martin's and its Affiliates rights, obligations and duties under that trust agreement. Lockheed Martin shall cause the trusts holding the assets of the Narda Plan to transfer the assets attributable to the Narda Plan (determined as of the end of the month in which the Closing Date occurs) to be transferred to a trust (or trusts) designated by Newco for the purpose of holding the assets of the Narda Plan. (c) With respect to the (i) Lockheed Martin Tactical Defense Systems Retirement Plan; (ii) Lockheed Martin Corporation Retirement Income Plan II; (iii) Lockheed Martin Corporation Pension Plan for Employees in Participating Bargaining Units; (iv) Lockheed Martin Tactical Systems, Inc. Pension Plan; (v) Lockheed Martin Fairchild Corporation Retirement Plan; and (vi) Lockheed Martin Retirement Income Plan (the "Spinoff Plans"), Newco shall establish a defined benefit plan or plans which provide substantially similar benefits in accordance with Section G.03(a), where applicable,(the "Newco Spinoff Plans") for the benefit of the Transferred Employees and Transferred Beneficiaries participating in the Spinoff Plans. As soon as practicable following the Closing, Lockheed Martin shall cause its actuary to calculate the Accrued Liability of all participants in each of the Spinoff Plans and then to compare, on a plan by plan basis, the Accrued Liability of all the participants in each of the Spinoff Plans to the fair market value of the assets in the respective Spinoff Plan as of the end of the month in which the Closing Date occurs. If the Accrued Liability of all participants in the respective Spinoff Plan is less than the fair market value of the assets in that Spinoff Plan, then Lockheed Martin shall cause assets (determined as of the end of the month in which the Closing Date occurs) to be transferred to a trust established to hold assets of the respective Newco Spinoff Plan equal to such fair market value of the assets multiplied by a fraction the numerator of which is the Accrued Liability of Transferred Employees and Transferred Beneficiaries under such Spinoff Plan and the denominator of which is the Accrued Liability of all participants in such plan. If the Accrued Liability of all participants in the respective Spinoff Plan is equal to or more than the fair market value of the assets in that Spinoff Plan, then Lockheed Martin shall cause its actuary to determine the amount of assets allocable to the liabilities of Transferred Employees and Transferred Beneficiaries participating in that plan based on Section 4044 of ERISA ("Section 4044 Amount"). Lockheed Martin shall cause assets in cash equal to the Section 4044 Amount applicable to Transferred Employees and Transferred Beneficiaries under such Spinoff Plan to be transferred to a trust established by Newco to hold assets of the respective Newco Spinoff Plans. Contingent upon the transfer of the Initial Transfer Amount (as described in Section G.05(b)) to each Newco Spinoff Plan, Newco shall assume all liabilities of Lockheed Martin and its affiliates with respect to Transferred Employees and Transferred Beneficiaries under the Spinoff Plan from which 90 that transfer was made and shall become with respect to such Transferred Employees and Transferred Beneficiaries responsible for all acts, omissions and transactions under or in connection with such Spinoff Plan, whether arising before or after the Closing; provided, however, that in the case of liabilities with respect to Camden Transferees, Newco shall only assume liabilities and shall only become responsible for all acts, omissions and transactions under or in connection with that Spinoff Plan arising on or after the Closing or disclosed in Section B.21 of the Disclosure Schedules. (d) All transfers to the Narda Plan and the Newco Spinoff Plans shall be made in accordance with the provisions of this Section G.05(d). Within 30 days of the Closing Date, or if later, 20 days following the date on which Lockheed Martin has been provided evidence reasonably satisfactory to it that Newco has established a trust (or trusts) to hold the assets of the Narda Plan and the Newco Spinoff Plans and that the Newco Spinoff Plans are qualified under Section 401(a) of the Code and the trusts holding assets of the Newco Spinoff Plans or Narda Plan are tax exempt under Section 501(a) of the Code ("Initial Transfer Date"), Lockheed Martin shall cause its trusts to make an initial transfer of assets in cash equal to 85% of the amount estimated by Lockheed Martin in good faith to be equal to X (as defined below) with respect to each plan (using the same assumptions and methodologies consistent with estimates previously provided to Newco and as set forth in a schedule to be presented at Closing by Lockheed Martin) ("Initial Transfer Amount"). In addition, prior to the Initial Transfer Date Lockheed Martin shall provide Newco with evidence reasonably satisfactory to Newco that the appropriate Lockheed Martin Pension Plans remain qualified under Section 401(a) of the Code. As soon as practicable after the final determination of the amounts to be transferred ("True-Up Date"), Lockheed Martin shall cause a second transfer to be made in cash of the "True-Up Amount." The True-Up Amount shall be equal to the sum of the following amount with respect to the Narda Plan and each Spinoff Plan: (X minus Initial Transfer Amount), minus benefit payments, adjusted for Earnings, where X equals in the case of the Spinoff Plans, the Accrued Liability or the Section 4044 Amount, whichever is applicable, and in the case of the Narda Plan, the fair market value of the assets attributable to the Narda Plan at the end of the month in which the Closing Date occurs. Earnings shall be calculated (i) from the last day of the month following the Closing until the Initial Transfer Date on the amount equal to the Initial Transfer Amount using the rate paid on a 90-day Treasury Bill on the auction date coincident with or immediately preceding the Closing, (ii) from the Initial Transfer Date until the True-Up Date on an amount equal to X minus the sum of the Initial Transfer Amount and the benefit payments using (A) with respect to the period from the Closing Date to the last day of the month preceding the True-Up Date, the cumulative rate of return (considering both gain and loss) earned or lost on the assets of the trust from which the True-Up Amount is being transferred and (B) with respect to the period from the first day of the month in which the True-Up Date occurs and the True-Up Date the rate paid on a 90-Day Treasury Bill on the auction date coincident with or immediately preceding the first day of the month in which the True-Up Date occurs. If the Initial Transfer Amount exceeds X with respect to any plan, as soon as practicable following such determination Newco shall cause a transfer to be made to the respective Lockheed Martin Pension Plan equal to the difference between the Initial Transfer Amount and X, adjusted to reflect Earnings (i) from the last day of the month in which the Closing occurs until the Initial 91 Transfer Date using the rate paid on a 90-day Treasury Bill on the auction date coincident with or immediately preceding the Closing; (ii) from the Initial Transfer Date until the date of transfer, such Earnings shall be calculated using (A) with respect to the period from that Initial Transfer Date to the last day of the month preceding such transfer, the cumulative rate of return (considering both gain and loss) on the assets of the plan from which the transfer is being transferred and (B) with respect to the period from the first day of the month in which the transfer occurs and the date of such transfer, the rate paid on a 90-Day Treasury Bill on the auction date coincident with or immediately preceding the first day of the month in which the transfer occurs. The True-Up Amount shall be transferred in cash except benefits of Transferred Employees and Transferred Beneficiaries attributable to John Hancock Group Annuity Contract 8474 shall be transferred in kind. Unless the parties agree otherwise, all transfers will occur on the last business day of a month. Notwithstanding anything contained herein to the contrary, the transfers contemplated by this section G.05(d) shall be determined in accordance with Section 414(l) of the Code and Treasury Regulation 1.414(l)-1. The amounts to be transferred pursuant to this section G.05(d) shall be reduced to the extent necessary to satisfy Section 414(l) of the Code, and any regulations promulgated thereunder, ERISA Section 4044, and any regulations promulgated thereunder. (e) For the purposes of this Section, the term "Accrued Liability" shall mean the present value of the accrued benefit of the Transferred Employee or Transferred Beneficiary, determined on a termination basis using the interest factors specified by the PBGC for an immediate or deferred annuity as appropriate for such Transferred Employee or Transferred Beneficiary and the other methods and factors specified in the regulations of the PBGC for the valuation of accrued benefits upon plan termination, including, but not limited to, expected retirement ages and expense load assumptions published by the PBGC, and the 1983 Group Annuity Mortality Table. The interest factors shall be those in effect on the Closing Date. The Accrued Liability and Section 4044 Amount shall be determined by an enrolled actuary designated by Lockheed Martin. Lockheed Martin shall provide any actuary designated by Newco with all information reasonably necessary to review the calculation of the Accrued Liability and the Section 4044 Amount in all material respects and to verify that such calculations have been performed in a manner consistent with the terms of this Agreement. If there is a good faith dispute between Lockheed Martin's actuary and Newco's actuary as to the amount to be transferred to any plan, and such dispute remains unresolved for 30 days, the chief financial officers of the respective companies shall endeavor to resolve the issue. Should such dispute remain unresolved for 60 days, Lockheed Martin and Newco shall select and appoint a third actuary who is mutually satisfactory to both of the parties hereto. The decision of such third party actuary shall be rendered within 30 days and shall be conclusive as to any dispute for which it was appointed. The cost of such third party actuary shall be divided equally between Lockheed Martin and Newco. Each party shall be responsible for the cost of its own actuary. (f) Newco shall take all action necessary to qualify each Newco Spinoff Plan under the applicable provisions of the Code and Newco and Lockheed Martin shall cooperate to make any and all filings and submissions to the appropriate governmental agencies required to be made by Newco as are appropriate in effectuating the provisions hereof. The Newco Spinoff Plans and Assumed Plans and any successor plans thereto shall contain appropriate provisions providing that through the first year anniversary of the Closing 92 (fifth anniversary in the case of Lockheed Martin Retirement Income Plan II and Lockheed Martin Retirement Income Plan), each Newco Spinoff Plan shall provide for a benefit formula that is no less favorable than the formula provided in the corresponding Spinoff Plan at Closing. The Newco Spinoff Plans or Assumed Plans receiving a transfer from the Lockheed Martin Corporation Retirement Income Plan II and the Lockheed Martin Corporation Pension Plan for Employees in Participating Bargaining Units and any successor plans thereto shall contain appropriate provisions providing that (i) to the extent assets transferred are attributable to assets transferred from the GE Pension Plan or are governed by collective bargaining agreements, any such assets shall be held by trusts forming a part of such Newco Spinoff Plans (or successor plans) and shall be held for the exclusive benefit of the participants in such Newco Spinoff Plans (or successor plans) and such assets shall not upon termination of those Newco Spinoff Plans (or successor plans) revert to the employer or sponsor of such Newco Spinoff Plans (or successor plans); (ii) the accrued benefits as of the Closing of Transferred Employees under such plans may not be decreased by amendment or otherwise; and (iii) each Transferred Employee retiring under Newco Spinoff Plans (or successor plans) will be entitled to receive pension benefits no less than what would have been received under the GE Pension Plan as in effect as of April 5, 1993, taking into account the Transferred Employee's combined service with Newco, Lockheed Martin, GE, and RCA and each of their Affiliates. (g) With respect to the (i) Lockheed Martin Tactical Systems, Inc. Supplemental Executive Retirement Plan ("LMTS SERP"); (ii) the Lockheed Martin Corporation Supplementary Pension Plan for Employees of Transferred GE Operations ("Supplementary Plan"), the Lockheed Martin Supplemental Executive Retirement Plan, the Lockheed Martin Supplemental Retirement Income Plan (the "Camden SERPs"); and (iii) the Supplemental Executive Retirement Plan for Certain Management Employees of Narda Microwave Corporation, and Lockheed Martin Fairchild Corporation Supplemental Benefit Plan, (the plans in (i), (ii), and (iii) collectively referred to as the "LMC SERPs"), Newco shall establish a nonqualified plan or plans (the "Newco SERP") for the benefit of Transferred Employees and Transferred Beneficiaries participating in the LMC SERPs as of the Closing Date and Newco shall assume all obligations and liabilities under the LMC SERPs, with respect to the Transferred Employees and the Transferred Beneficiaries. Effective as of the Closing Date, all Transferred Employees will cease to accrue benefits under the LMC SERPs. With respect to the Supplementary Plan, Newco will provide an equivalent plan for Transferred Employees and Transferred Beneficiaries eligible to participate in that plan as of the Closing Date that provides equivalent benefits during the entire term of their employment with Newco, its Affiliates and their successors. With respect to the LMC SERPs (other than the Supplementary Plan), Newco shall provide a substantially similar plan in accordance with the provisions of Section G.03(a). As soon as practicable (but not more than 180 days) after the Closing Date, Lockheed Martin shall cause its actuary to calculate the SERP Liability of all participants in the LMTS SERP and the Camden SERPS, respectively, and the SERP Liability for Transferred Employees and Transferred Beneficiaries in the LMTS and Camden SERPS respectively and shall cause the following transfers. As soon as practicable thereafter, but in no event later than the later of (i) the acceptance of the calculation of the SERP Liability by Newco or (ii) 20 days following submission to Lockheed Martin of evidence reasonably satisfactory to it that Newco has established a corresponding rabbi trust or trusts, Lockheed Martin shall cause a transfer of assets from the rabbi trust established in connection with the LMTS SERP ("LMTS Trust") to a rabbi trust established by Newco in an amount equal to the product of the (i) fair market 93 value of the assets of the LMTS Trust as of the last day of the month in which the Closing Date occurs; and (ii) a fraction, the numerator of which is the "SERP Liability" for Transferred Employees and Transferred Beneficiaries participating in the LMTS SERP and the denominator of which is the SERP Liability for all participants in the LMTS SERP. Lockheed Martin shall also cause a transfer of assets from the rabbi trust established in connection with the Camden SERPs ("Camden Trust") to a rabbi trust established by Newco in an amount equal to the product of the (i) fair market value of the assets of the Camden Trust as of the last day of the month in which the Closing Date occurs; and (ii) a fraction, the numerator of which is the "SERP Liability" for Transferred Employees and Transferred Beneficiaries participating in the Camden SERPs and the denominator of which is the SERP Liability for all participants in the Camden SERPs. The amount of the transfer shall be reduced by benefits paid by Lockheed Martin prior to the transfer. If the amount of the benefits paid exceeds the amount of the transfer, Newco shall promptly pay Lockheed Martin such excess. For the purpose of this section, the "SERP Liability" with respect to a participant shall be the lump sum present value (determined as of the end of the month in which the Closing Date occurs) of the accrued benefit of the participant under the applicable SERP calculated utilizing the assumptions used by Lockheed Martin for reporting accrued benefit obligations relative to Seller Pension Plans under FAS No. 87 in its 1996 Annual Report. The calculation of the amount to be transferred shall be subject to the review and dispute resolution procedures contained in subsection (e). (h) No later than the True-Up Date, Lockheed Martin shall also cause the Lockheed Martin Federal Systems, Inc. Retirement Plan ("Federal Systems Plan") to make a transfer to a qualified defined benefit plan designated by Newco in an amount equal to the accrued benefit of the Transferred Employees who participated in the Federal Systems Plan immediately prior to the Closing. For the purposes of this section, the accrued benefit of the Transferred Employees shall mean the present value of the accrued benefit determined on a termination basis using the interest factors for an immediate or deferred annuity as appropriate for each such Transferred Employee. The assumptions used in determining the accrued benefit of each such Transferred Employee shall be the same as the assumptions used to determine Accrued Liability under Section G.05(e). The transfer shall be contingent upon Newco providing evidence reasonably satisfactory to Lockheed Martin that such designated plan is qualified under Section 401(a) of the Code and the trust of which it is a part is exempt from taxation under Section 501(a) of the Code. Lockheed Martin shall also provide to Newco evidence reasonably satisfactory to Newco that the Federal Systems Plan is qualified under Section 401(a) of the Code and the trust of which it is a part is exempt from taxation under Section 501(a) of the Code. Upon receipt of such transfer of assets, Newco shall assume all liabilities of Lockheed Martin and its Affiliates with respect to such Transferred Employees under the Federal Systems Plan and shall become with respect to such Transferred Employees responsible for all acts, obligations, omissions and transactions under or in connection with the Federal Systems Plan, whether arising before or after the Closing. Lockheed Martin shall cause the benefits accrued as of the Closing Date by any Transferred Employee or Transferred Beneficiary under the Lockheed Martin Retirement Plan for Certain Salaried Employees (the "Lockheed Plan") or any other defined benefit pension plan that is not listed in Schedule G.05(a) or this G.05(h) to be fully vested at the Closing Date and any such Transferred Employee or Transferred Beneficiary shall be eligible on the Closing Date to participate in the Newco defined benefit plans (the "Newco Plans") established for other Transferred 94 Employees or Transferred Beneficiaries who were formerly employed in the Communications Systems Business Unit (or such other plan as Newco designates in the case of Transferred Employees covered under any plan other than the Lockheed Plan). Newco shall credit such Transferred Employees and Transferred Beneficiaries with all service recognized under the Lockheed Plan or such other plans as the case may be. If the Transferred Employee participated in the plan for more than one year, Lockheed Martin shall credit such Transferred Employees and Transferred Beneficiaries with all service recognized under the Newco Plans for all purposes, other than benefit accrual and will recognize Newco compensation for calculating pensionable earnings under the Lockheed Plan or any other such plan which is a final average pay plan. G.06. Savings Plan Obligations. (a) Transferred Employees currently participate in the following defined contribution plans: (i) Lockheed Martin Defense Systems Savings and Investment Plan; (ii) Lockheed Martin Salaried Savings Plan; (iii) Lockheed Martin Salaried Savings Plan II; (iv) Lockheed Martin Performance Sharing Plan; (v) Lockheed Martin Supplemental Savings Plan; (vi) Conic Corporation Deferred Income Retirement Plan; (vii) Narda Microwave Supplemental Retirement Savings Plan; (viii) Narda Western Operations 401(k) Deferred Income Retirement Plan; (ix) Lockheed Martin Tactical Systems, Inc. Deferred Income Savings Plan; (x) Lockheed Martin Fairchild Corporation Savings Plan; (xi) Randtron Employees Retirement Savings Plan; (xii) Microcom Corporation 401(k) Plan; (xiii) Profit Sharing Plan and Trust of Lockheed Martin Hycor, Inc., (xiv) Lockheed Martin Tactical Systems Inc. Frequency Sources, Inc. 401(k) Retirement Plan and (xv) Lockheed Martin Federal Systems Deferred Income Retirement Plan (collectively, "Lockheed Martin Defined Contribution Plans"). The plans listed in (i), (vi), (vii), (viii), (ix), (xiv) and (xv) are all sub-plans in the Lockheed Martin Tactical Systems Master Savings Plan. (b) Effective as of the Closing Date, Lockheed Martin and Newco shall cause (i) Randtron Employees Retirement Plan; (ii) Microcom Corporation 401K Plan; (iii) Profit Sharing Plan and Trust of Lockheed Martin Hycor, Inc. ("Transferred Savings Plans") to be amended to provide that sponsorship and maintenance thereof shall be transferred to Newco and Newco shall assume all of the obligations and liabilities of Lockheed Martin and its Affiliates with respect to each such Transferred Plan (including liabilities with respect to Transferred Beneficiaries) and contingent upon receipt of the transferred assets described in Section G.06(c), shall become responsible for all acts, omissions and transactions under or in connection with the Transferred Savings Plan, whether arising before or after Closing. Effective as of the Closing Date, Lockheed Martin and/or its Affiliates shall cease to sponsor, administer or contribute (other than contributions in respect of benefits accrued prior to the Effective Date) to the Transferred Savings Plans and thereby cease to be responsible for any acts, omissions and transactions under or in connection with any such Transferred Savings Plan. (c) With respect to all Lockheed Martin Defined Contribution Plans except the Transferred Savings Plans described in Section G.06(b) (the "Lockheed Martin Savings Plans"), the Transferred Employees shall cease to accrue benefits and service credits under such plans as of the Closing Date and, effective as of the Closing Date, Newco shall establish new savings plans ("Newco's Savings Plans") and associated trusts to hold the assets of those plans for the Transferred Employees, to be effective as of the Closing 95 Date, and shall provide to Lockheed Martin evidence reasonably satisfactory to Lockheed Martin that Newco's Savings Plans and the associated trusts have been established and that the Newco's Savings Plans qualify under the requirements of Section 401(a) of the Code, and that the trusts are exempt from tax under Section 501(a) of the Code. Lockheed Martin shall provide to Newco evidence reasonably satisfactory to Newco that the Lockheed Martin Savings Plans remain qualified under the requirements of Section 401(a) of the Code. Provided Lockheed Martin and Newco have received evidence reasonably satisfactory to them in accordance with the preceding sentences, as soon as is reasonably practicable following the Closing Date, in no event later than 60 days following receipt of such mutually satisfactory evidence, Lockheed Martin shall take or cause to be taken all action required or appropriate to transfer the account balances of all Transferred Employees and Transferred Beneficiaries to the respective trusts associated with Newco's Savings Plans. Such transfers shall be made in cash in an amount equal to the value of the account balances to be transferred, determined as of the close of business on the last business day immediately preceding the transfer, except that (i) to the extent a participant's or beneficiary's account balance in the transferor plan includes one or more promissory notes evidencing a participant loan or loans, such promissory notes shall be transferred in kind for the participant's or beneficiary's credit under the transferee plan and (ii) any assets in the transferor trust consisting of securities issued by Lockheed Martin, Martin Marietta Materials, Inc. or Loral Space & Communications, Ltd. that are allocable to the respective transferee plan shall be transferred in kind. For the period from the Closing Date until the transfer, Newco shall collect by payroll deduction and promptly pay over to the respective Lockheed Martin Defined Contribution Plan all loan payments required on participant loans made by the respective plan to any Transferred Employee and Lockheed Martin shall cause the respective Lockheed Martin Defined Contribution Plan to administer and pay all distributions, withdrawals and loans payable under the terms of the respective plan to any Transferred Employee or Transferred Beneficiary until the transfer. Contingent upon the transfer of the account balances to each of Newco's Savings Plans, Newco shall assume all liabilities of Lockheed Martin and its affiliates with respect to Transferred Employees and Transferred Beneficiaries under the Lockheed Martin Defined Contribution Plan from which that transfer was made and shall become with respect to such Transferred Employees and Transferred Beneficiaries responsible for all acts, omissions and transactions under or in connection with such Lockheed Martin Defined Contribution Plan, whether arising before or after the Closing; provided, however, that in the case of liabilities with respect to Camden Transferees, Newco shall only assume liabilities and shall only become responsible for all acts, omissions and transactions under or in connection with that Lockheed Martin Defined Contribution Plan arising after the Closing or disclosed in Section B.21 of the Disclosure Schedules. G.07. GE Special Benefits Protections. Pursuant to Section V.II of Exhibit V to a Transaction Agreement (the "GE Agreement") dated November 22, 1992, as amended, among GE, Martin Marietta Corporation, a Maryland corporation and Lockheed Martin, Lockheed Martin has agreed to reimburse GE (the "GE Reimbursement Obligations") for certain specified expenses relating to benefits for certain individuals who were formerly employed by GE and who became employees of Lockheed Martin or its Affiliates as a result of the transaction contemplated by the GE Agreement (the "Former GE Employees"). Newco shall assume, effective on the Closing Date, all of the GE Reimbursement Obligations in respect of Transferred Employees and Transferred Beneficiaries for such specified expenses, and shall indemnify and hold 96 harmless Lockheed Martin and its Affiliates from any and all such GE Reimbursement Obligations. Lockheed Martin shall provide Newco with copies of any documentation it receives from GE documenting the basis for such expenses. G.08. Severance and Retention Agreements. In accordance with Section 6.9 of the Agreement and Plan of Merger dated as of January 7, 1996, by and among Loral Corporation, Lockheed Martin Corporation and LAC Acquisition Corporation, Lockheed Martin Tactical Systems, Inc. has adopted the Supplemental Severance Program. Lockheed Martin has entered into Key Employee Supplemental Severance Program and Key Executive Supplemental Severance Program agreements (the "Program Agreements"). In addition, Lockheed Martin has entered into Retention Agreements (collectively with the Supplemental Severance Program and the Program Agreements, the "Supplemental Agreements") with certain Transferred Employees who participate in the Supplemental Severance Program. Other than with respect to the Transferred Employees set forth on Section B.21 of the Disclosure Schedules, Newco assumes all obligations and liabilities of Lockheed Martin and its Affiliates under the Supplemental Agreements for all claims made after the Closing Date by Transferred Employees, including claims based on the Contemplated Transactions, which shall be Assumed Liabilities for purposes of this Agreement. All obligations and liabilities of Lockheed Martin with respect to the Transferred Employees on Section B.21 of the Disclosure Schedules and any other individual covered by a Supplemental Agreement who is not a Transferred Employee shall constitute Excluded Liabilities. G.09. Vacation and Holidays. As of the Closing, Newco shall adopt at its expense, vacation and holiday plans for Transferred Employees to succeed Lockheed Martin's and its Affiliates' vacation and holiday plans. For the 12-month period beginning with the Closing Date, such plans shall provide for accrued vacation and holidays no less favorable than, and in substitution for, those Lockheed Martin and its Affiliates would have provided to such Transferred Employees had they remained employees of Lockheed Martin and its Affiliates, and Lockheed Martin and its Affiliates shall have no liability or obligation to pay or provide any vacation or holiday payments claimed on or after the Closing Date. Thereafter, such plans shall provide vacation, accrued vacation and holidays to each eligible Transferred Employee on the basis of his or her continuous service with Lockheed Martin, Newco and their Affiliates. G.10. Other Employee Plans. (a) Newco shall, as of the Closing Date, assume all obligations and liabilities of Lockheed Martin and its Affiliates in respect of Transferred Employees and Transferred Beneficiaries under the Deferred Management Incentive Compensation Plan. (b) Newco shall, as of the Closing Date, assume all obligations and liabilities (including, without limitation, all obligations and liabilities attributable to the period prior to the Closing Date) of Lockheed Martin and its Affiliates in respect of Transferred Employees and Transferred Beneficiaries under each Employee Plan and Benefit Arrangement not covered under Sections G.05, G.06, G.07, G.08, G.09, G.10(a) and G.10(c) and shall be a successor employer with respect to such plans; provided, however, that with respect to obligations and liabilities to Camden Transferees arising from events occurring prior to the Closing Date, Newco shall assume such obligations and liabilities only to the extent that they (i) arise under a 97 Benefit Arrangement or Employee Plan disclosed in Section B.21 of the Disclosure Schedules; (ii) are reflected in the Final Net Tangible Asset Amount; or (iii) are incurred after the Effective Date. (c) With respect to each Employee Plan and Benefit Arrangement (other than those referred to in Sections G.05, G.06, G.07, G.08, G.09 and G.10(a)), including any employment agreement, that covers only Transferred Employees and/or Transferred Beneficiaries ("Transferred Benefit Plans"), Lockheed Martin and Newco shall cause each Transferred Benefit Plan to be amended to provide that sponsorship and maintenance thereof shall be transferred as of the Closing Date to Newco and Newco shall assume all obligations and liabilities of Lockheed Martin and its Affiliates with respect to each such plan (including liabilities with respect to Transferred Beneficiaries), and shall become responsible for all acts, omissions and transactions under or in connection with the Transferred Benefit Plans, whether arising before or after Closing; provided, however, that with respect to obligations and liabilities to Camden Transferees under or otherwise arising in connection with an Employee Plan or Benefit Arrangement arising from events occurring prior to the Closing Date, Newco shall assume such obligations and liabilities only to the extent that they (i) arise under an Employee Plan or Benefit Arrangement disclosed in Section B.21 of the Disclosure Schedules; (ii) are reflected in the Final Net Tangible Asset Amount; or (iii) are incurred after the Closing Date. Effective as of the Closing Date, Lockheed Martin and/or its Affiliates shall cease to sponsor, administer or contribute to the Transferred Benefit Plans and thereby cease to be responsible for any acts, omissions and transactions under or in connection with any such Transferred Benefit Plan, whether occurring before or after Closing. Except as otherwise agreed to by the parties or as it relates solely to an Individual Purchaser, Lockheed Martin agrees to transfer any assets which are separately identifiable or attributable to the Employee Plans and Benefit Arrangements described in this Section G.10(c). (d) As of the Closing Date, Transferred Employees and Transferred Beneficiaries shall cease to accrue or enjoy benefits under any Employee Plans and Benefit Arrangements (excluding those referred to in Sections G.05(b), G.06(b), G.07, G.08, G.09 and G.10(c)) and shall commence accrual of benefits and participation in those employee compensation and benefit plan and arrangements maintained by Newco pursuant to Section G.03. (e) For any full or partial contract year or plan year prior to the Closing Date of any Employee Plan or Benefit Arrangement covering Transferred Employees or Transferred Beneficiaries (other than Camden Transferees): (i) Lockheed Martin agrees to carve out and transfer to the corresponding Newco plan, any surpluses, refunds or rebates received by or attributable to Lockheed Martin for any Employee Plan or Benefit Arrangement and (ii) Newco agrees to transfer to the corresponding Lockheed Martin Plan an amount equal to any deficit charged to or attributable to Lockheed Martin for any Employee Plan or Benefit Arrangement, in either case that is attributable to Transferred Employees and/or Transferred Beneficiaries. (f) The flexible spending accounts established on behalf of the Transferred Employees and Transferred Beneficiaries in accordance with Section G.03(a) will be maintained through the end of the applicable plan year in which the Closing occurs in a manner that ensures that each Transferred Employee and Transferred Beneficiary receives no more and no less than he or she would have received had the Contemplated Transactions not occurred. Lockheed Martin and Newco shall coordinate management of their 98 respective flexible spending accounts to achieve this result. As soon as practicable following the close of the 1997 plan year, Lockheed Martin and Newco shall reconcile flexible spending account balances so as to achieve an equitable result as between Lockheed Martin and Newco. G.11. Necessary Action. Newco and Lockheed Martin agree to take all action which may be necessary in order to effectuate the transactions contemplated by this Exhibit G, including, without limitation, adopting any necessary amendments to the Employee Plans and Benefit Arrangements and making all filings and submissions to the appropriate governmental agencies required to be made in connection with the segregation and/or transfer of assets contemplated by Sections G.05 and G.06. G.12. Third Party Beneficiaries. No provision of this Exhibit G shall create any third party beneficiary rights in any employee or former employee of the Business (including any beneficiary or dependent thereof) including, without limitation, any right to continued employment or employment in any particular position by Newco for any specified period of time after the Closing Date. G.13. Plan Administration. Newco shall prepare and file all Forms 5500 and other government reports or returns that are required to be filed after the Closing Date with respect to each of the Assumed Plans described in Section G.05(b), the Transferred Savings Plans described in Section G.06(b) and the Transferred Benefit Plans described in Section G.10(c). G.14. Mutual Assistance. At all times after the Closing Date, Newco and Lockheed Martin agree to make reasonably available to each other and each other's agents, employees, accountants and other representatives such actuarial, financial, personnel and related information as may be requested with respect to any Employee Plan or Benefit Arrangement, Transferred Employee or Transferred Beneficiary, including but not limited to benefit records, compensation and employment histories, policies, interpretations and other records relating to the Employee Plans and Benefit Arrangements. G.15. Flanigan v. G.E. Newco shall not by reason of the transactions contemplated by this Agreement or otherwise be deemed to have assumed any liability or obligation with respect to any claim or cause of action asserted against GE or Lockheed Martin in the lawsuit Flanigan v. G.E. filed in the federal district court in Connecticut in March, 1993. All such claims and causes of action shall constitute Excluded Liabilities for purposes of this Agreement. Nothing in this Section G.15. or elsewhere, however, shall be deemed to require Lockheed Martin to indemnify or otherwise to relieve Newco of any liability or obligation it may incur as a result of a purported claim or purported cause of action asserted against Newco which is based on this Agreement, the Contemplated Transactions, or any actions or transactions that occur on or after the date of this Agreement. 99 ATTACHMENT I TO TRANSACTION AGREEMENT LOCKHEED MARTIN PREDECESSOR BUSINESS COMBINED FINANCIAL STATEMENTS as of December 31, 1996 and 1995 and for the three years ended December 31, 1996, 1995 and 1994 [Letterhead of Coopers & Lybrand] REPORT OF INDEPENDENT AUDITORS To the Board of Directors of Lockheed Martin Corporation: We have audited the accompanying combined balance sheets of the Lockheed Martin Predecessor Businesses, as defined in Note 1 to the financial statements, (the "Businesses") as of December 31, 1996 and the related combined statements of operations and changes in invested equity and cash flows for the year then ended. These financial statements are the responsibility of the Businesses' management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of the Communications Systems Division, which statements represent total assets and sales constituting 35 percent and 30 percent of the related combined totals. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Communication Systems Division, is based solely on the report of the other auditors. We conducted our audit in accordance with generally accepted auditing standards. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating overall financial statement presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinion. In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the combined financial position of the Lockheed Martin Predecessor Businesses as of December 31, 1996 and their combined results of operations and cash flows for the year then ended, in conformity with generally accepted accounting principles. /s/ Cooper & Lybrand L.L.P. 1301 Avenue of the Americas New York, New York March 20, 1997 1 [Letterhead of Ernst & Young LLP] REPORT OF INDEPENDENT AUDITORS To the Board of Directors of Lockheed Martin Corporation We have audited the combined balance sheets of Lockheed Martin Communications Systems Division, as defined in Note 1 to the financial statements, as of December 31, 1996 and 1995, and the related combined statements of operations and changes in invested equity, and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Division's and Lockheed Martin Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of Lockheed Martin Communications Systems Division at December 31, 1996 (not presented separately herein) and 1995, and the combined results of its operations and its cash flows for the year ended December 31, 1996 (not presented separately herein), and the results of its operations and its cash flows for each of the two years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. /s/ Ernst & Young LLP March 7, 1997 2 Ernst & Young LLP is a member of Ernst & Young International, Ltd. LOCKHEED MARTIN PREDECESSOR BUSINESSES COMBINED BALANCED SHEETS (In thousands) December 31, ------------------- 1996 1995 -------- -------- ASSETS Current assets: Contracts in process $185,320 $ 42,457 Other current assets 18,414 3,100 -------- -------- Total current assets 201,734 45,557 -------- -------- Property, plant and equipment 116,588 31,657 Less, accumulated depreciation and amortization 24,983 15,018 -------- -------- 91,583 15,839 -------- -------- Intangibles, primarily cost in excess of net assets acquired, net of amortization 282,574 157,560 Other assets 17,307 8,753 -------- -------- $593,298 $228,509 ======== ======== LIABILITIES AND INVESTED EQUITY Current liabilities: Accounts payable, trade $ 24,153 $ 9,583 Accrued employment costs 27,313 6,534 Customer advances and amounts in excess of costs incurred 14,299 1,363 Other current liabilities 27,113 6,983 -------- -------- Total current liabilities 102,888 24,453 -------- -------- Other liabilities 16,801 9,383 Commitments and contingencies (Note 8) Invested equity 473,609 154,563 -------- -------- $593,298 $228,509 ======== ======== See notes to combined financial statements. 3 LOCKHEED MARTIN PREDECESSOR BUSINESSES COMBINED STATEMENTS OF OPERATIONS OF AND CHANGES IN INVESTED EQUITY (In thousands) For the years ended December 31, ---------------------------------- 1996 1995 1994 --------- --------- --------- Sales $ 543,061 $ 186,781 $ 218,845 Cost of sales 499,380 182,132 210,466 --------- --------- --------- Operating income 43,691 4,549 8,379 Allocated interest expenses 24,197 4,475 5,450 --------- --------- --------- Earnings before income taxes 19,494 174 2,929 Income tax expense 7,798 1,186 2,293 --------- --------- --------- Net earings (loan) 11,596 (1,012) 635 Invested equity - beginning of year 194,883 199,506 215,943 Advances from (repayment to) Lockheed Martin 287,250 (3,831) (18,073) --------- --------- --------- Invested equity - end of year $ 473,809 $ 194,663 $ 199,505 ========= ========= ========= See notes to combined financial statements. 4 LOCKHEED MARTIN PREDECESSOR BUSINESSES COMBINED STATEMENTS OF CASH FLOWS (In thousands)
For the years ended December 31, ----------------------------------- 1996 1995 1994 --------- --------- --------- Operating activities: Net income $ 11,596 ($ 1,012) $ 636 Depreciation and amortization 25,039 11,578 11,457 Loss (gain) on disposition of property, plant and equipment 265 25 (1,075) Changes in operating assets and liabilities Contracts in process 26,103 (3,257) 14,002 Other current assets 489 788 1,502 Other assets (5,246) 1,245 2,004 Accounts payable 3,198 (545) (3,099) Accrued employment costs 2,282 (611) (528) Customer advances and amount in excess of cost incurred (11,586) (2,041) 917 Other current liabilities 4,086 4,004 (3,304) Other liabilities (25,327) (698) (751) --------- --------- --------- Net cash from operating activiites 30,999 9,383 21,808 --------- --------- --------- Investing activities: Acquisition of business (287,803) -- -- Capital expenditures (13,528) (5,532) (3,735) Disposition of property, plant and equipment 3,082 -- -- --------- --------- --------- Net cash used in investing activities (298,249) (5,532) (3,735) --------- --------- --------- Financial activities: Advances from (repayment to) Lockheed Martin 267,250 (3,831) (18,073) --------- --------- --------- Net change in cash -- -- -- ========= ========= =========
See notes to combined financial statements. 5 LOCKHEED MARTIN PREDECESSOR BUSINESSES NOTES TO COMBINED FINANCIAL STATEMENTS December 31, 1996 (Dollars in thousands) 1. Background and Description of Businesses On January 31, 1997, Lockheed Martin Corporation ("Lockheed Martin"), Lehman Brothers Holdings Inc. ("Lehman"), Frank C. Lanza ("Lanza") and Robert V. LaPenta ("LaPenta") entered into a Memorandum of Understanding regarding the transfer of certain businesses of Lockheed Martin to a newly formed corporation ("Newco") to be owned by Lockheed Martin, Lehman, Lanza and LaPenta. The businesses proposed to be transferred include Lockheed Martin's Wideband Systems Division, Communications Systems Division and Products Group, comprising eleven autonomous operations (collectively the "Lockheed Martin Predecessor Businesses" or the "Businesses"). Also included in the transaction is the acquisition of a semiconductor product line of another business and certain leasehold improvements in New York City. Effective April 1, 1996, Lockheed Martin acquired substantially all the assets and liabilities of the defense business of Loral Corporation ("Loral"), including the Wideband Systems Division and the Products Group. The acquisition of the Wideband Systems Division and Products Group businesses (the "Acquired Businesses") has been accounted for as a purchase by Lockheed Martin Communications Systems Division ("Division"). The acquisition has been reflected in these financial statements based on the purchase price allocated to those acquired businesses by Lockheed Martin. As such, the accompanying combined financial statements reflect the results of operations of the Division and the acquired businesses from the effective date of acquisition including the effects of an allocated portion of cost in excess of net assets acquired resulting from the acquisition. The assets and liabilities recorded in connection with the purchase price allocation were $400,993 and $113,190, respectively. Had the acquisition of Wideband Systems Division and the Products Group occurred on January 1, 1995, the unaudited pro forma sales and net income for the years ending December 31, 1996 and 1995 would have been $875,596 and $14,351, and $691,136 and $4,790, respectively. The pro forma results, which are based on various assumptions, are not necessarily indicative of what would have occurred had the acquisition been consummated on January 1, 1995. The Businesses are suppliers of sophisticated secure communication systems and specialized communication products including secure, high data rate communication systems, commercial fixed wireless communication products, microwave components, avionic displays and recorders and instrument products. The Company's customers included the Department of Defense, selected U.S. Government intelligence agencies, major aerospace/defense prime contractors and commercial customers. The Businesses operate primarily in one industry segment, electronic components and systems. Substantially all the Businesses' products are sold to agencies of the U.S. Government, primarily the Department of Defense, to foreign government agencies or to prime contractors or subcontractors thereof. All domestic government contracts and subcontracts of the Businesses are subject to audit and various cost controls, and include standard provisions for termination for the convenience of the U.S. Government. Multi-year 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 government. The decline in the U.S. defense budget since the mid 1980s has resulted in program delays, cancellations and scope reduction for defense contracts in general. These events may or may not have an effect on the Businesses' programs; however, in the event that U.S. Government expenditures for products of the type manufactured by the Businesses 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 Businesses. 6 LOCKHEED MARTIN PREDECESSOR BUSINESSES NOTES TO COMBINED FINANCIAL STATEMENTS - (continued) (Dollars in thousands) 2. Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates The accompanying combined financial statements reflect the Businesses' assets, liabilities and operations included in Lockheed Martin's historical financial statements that will be transferred to Newco. Intercompany accounts between Lockheed Martin and the Businesses have been included in invested equity. Significant interbusiness transactions and balances have been eliminated. The assets and operations of the semiconductor product line and certain other facilities, which are not material to the combined financial statements, have been excluded from the combined financial statements. The preparation of financial statements in conformity with generally accepted accounting principles requires the Businesses' 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 revenue and expenses during the reporting period. The most significant of those estimates and assumptions relate to contract estimates of sales and costs, allocations from Lockheed Martin, recoverability of recorded amounts of fixed assets and costs in excess of net assets acquired, litigation and environmental obligations. Actual results could differ from these estimates. Sales and Earnings Sales and profits on cost reimbursable contracts are recognized as costs are incurred. Sales and estimated profits under long-term contracts are recognized under the percentage of completion method of accounting using the cost-to-cost method. Amounts representing contract change orders or claims are included in sales only when they can be reliably estimated and realization is probable. Sales under short-term production-type contracts are recorded as units are shipped; profits applicable to such shipments are recorded pro rata, based upon estimated total profit at completion of the contract. Amounts representing contract change orders or claims are included in sales only when they can be reliably estimated and realization is probable. Losses on contracts are recognized when determined. Revisions in profit estimates are reflected in the period in which the facts which require the revision become known. Contracts In Process Costs accumulated under long-term contracts include direct costs, as well as manufacturing overhead, and for government contracts, general and administrative costs, independent research and development costs and bid and proposal costs. Contracts in process contain amounts relating to contracts and programs for which the related operating cycles are longer than one year. In accordance with industry practice, these amounts are included in current assets. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is provided primarily using an accelerated method over the estimated useful lives (5 to 20 years) of the related assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. Intangibles Intangibles, primarily the excess of the cost of purchased businesses over the fair value of the net assets acquired, is being amortized using a straight-line method primarily over a 40-year period. Other intangibles are 7 LOCKHEED MARTIN PREDECESSOR BUSINESSES NOTES TO COMBINED FINANCIAL STATEMENTS - (continued) (Dollars in thousands) amortized over their estimated useful lives which range form 11-15 years. Amortization expense was $10,115, $6,086 for 1996, 1995, and 1994, respectively. Accumulated amortization was $26,524 and $16,738 at December 31, 1996 and 1995, respectively. Intangibles include costs allocated to the Businesses relating to the Request for Funding Authorization ("RFA"), consisting of over 20 restructuring projects to reduce operating costs, initiated by General Electric ("GE") Aerospace in 1990 and to the REC Advance Agreement ("RAA"), a restructuring plan initiated after Lockheed Martin's acquisition of GE Aerospace. The RAA was initiated to close two regional electronic manufacturing centers. Restructure costs are reimbursable from the U.S. Government, if savings can be demonstrated to exceed costs. The total cost of restructuring under the RFA and the RAA represented approximately 15% of the estimated savings to the U.S. Government and, therefore, a deferred asset has been recorded by Lockheed Martin. The deferred asset is being allocated to all the former GE Aerospace sites, including the Communications Systems Division, on a basis that includes manufacturing labor, overhead, and direct material less non-hardware subcontracts. As of December 31, 1996 and 1995, approximately $4,400 and $7,500, respectively of unamortized RFA and RAA costs were recorded on the Businesses' combined balance sheet in other current assets and other assets. The carrying values of intangible assets are reviewed if the facts and circumstances indicate potential impairment of their value. If this review indicates that intangible assets are not recoverable, as determined based on the undiscounted cash flows of the entity acquired over the remaining amortization period, the Division's carrying values related to the intangible assets are reduced by the estimated shortfall cash flows. Research and Development and Similar Costs Research and development costs sponsored by the Businesses include research and development and bid and proposal effort related to government products and services. These costs are generally are allocated among all contracts and programs in progress under U.S. Government contractual arrangements. Customer-sponsored research and development costs incurred pursuant to contracts are accounted for as contract costs. Financial Instruments At December 31, 1996, the carrying value of the Businesses' financial instruments, such as receivables, accounts payable and accrued liabilities, approximate fair value, based on the short-term maturates of these instruments. New Accounting Pronouncements Effective January 1, 1996, the Business adopted Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of" ("SFAS 121"). SFAS 121 establishes the accounting standards for the impairment of long-lived assets, certain intangible assets and cost in excess of net assets acquired to be held and used for long-lived assets and certain intangible assets to be disposed of. The impact of adopting SFAS 121 was not material. Effective January 1, 1994, the Businesses adopted Statement of Financial Accounting Stands No. 112, "Employers' Accounting for Postretirement Benefits" ("SFAS 112"). SFAS 112 requires that the costs of benefits provided to employees after employment but before retirement be recognized on an accrual basis. The adoption of SFAS 112 did not have a material impact on the combined results of operations of the Businesses. 8 LOCKHEED MARTIN PREDECESSOR BUSINESSES NOTES TO COMBINED FINANCIAL STATEMENTS-(continued) (Dollars in thousands) 3. Transactions with Lockheed Martin The Businesses rely on Lockheed Martin for certain services, including treasury, cash management, employee benefits, taxes, risk management, internal audit, financial reporting, contract administration and general corporate services. Although certain assets, liabilities and expenses related to these services have been allocated to the Businesses, the combined financial position, results of operations and cash flows presented in the accompanying combined financial statements would not be the same as would have occurred had the Businesses been independent entries. The following describes the related party transactions. Sales of Products The Businesses sell products to Lockheed Martin and its affiliates, net sales for which were $70,658, $25,874, and $9,983 in 1996, 1995 and 1994, respectively. Included in Contracts in Process are receivables from Lockheed Martin and its affiliates of $10,924 and $30 at December 31, 1996 and 1995 respectively. Allocation of Corporate Expenses The amount of allocated corporate expenses reflected in these combined financial statements has been estimated based primarily on an allocation methodology prescribed by government regulations pertaining to government contractors. Allocated costs to the Businesses were $10,057, $2,964 and $4,141 in 1996, 1995 and 1994, respectively. Pensions Certain of the Businesses participate in various Lockheed Martin-sponsored pension plans covering certain employees. Eligibility for participation in these plans varies, and benefits are generally based on members' compensation and years of service. Lockheed Martin'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. Since the aforementioned pension arrangements are part of certain Lockheed Martin defined benefit plans, no separate actuarial data is available for the portion allocable to the Businesses. Therefore, no liability or asset is reflected in the accompanying combined financial statements. The Businesses have been allocated pension costs based upon participant employee headcount. Net pension expense included in the accompanying financial statements was $7,027, $4,134, and $3,675 in 1996, 1995 and 1994, respectively. Postretirement Health Care and Life Insurance Benefits In addition to participating in Lockheed Martin-sponsored pension plans, certain of the Businesses provide varying levels of health care and life insurance benefits for retired employees and dependents. Participants are eligible for these benefits when they retire from active service and meet the pension plan eligibility requirements. These benefits are funded primarily on a pay-as-you-go basis with the retirees generally paying a portion of the cost through contributions, deductibles and [ILLEGIBLE] provisions. Since the aforementioned postretirement benefits are part of certain Lockheed Martin postretirement arrangements, no separate actuarial data is available for the portion allocable to the Businesses. Accordingly, no liability is reflected in the accompanying financial statements. The Businesses have been allocated postretirement benefits cost based on participant employee headcount. Postretirement benefits costs included in the accompanying financial statements was $2,787, $2,124 and $1,634 in 1996, 1995 and 1994, respectively. 9 LOCKHEED MARTIN PREDECESSOR BUSINESSES NOTES TO COMBINED FINANCIAL STATEMENTS-(continued) (Dollars in thousands) Employee Savings Plans Under various employee savings plans sponsored by Lockheed Martin, the Businesses match the contributions of participating employees up to a designated level. The extent of the match, vesting terms and the form of the matching contribution vary among the plans. Under these plans, the matching contributions, in cash, common stock or both, for 1996, 1995 and 1994 were $3,940, $1,478, and $1,842 respectively. Interest Expenses Interest expense has been allocated to the Businesses by applying Lockheed Martin's weighted average consolidated interest rate to the portion of the beginning of the period invested equity account deemed to be financed by consolidated debt, which has been determined based on Lockheed Martin's debt to equity ratio on such date, except that the acquisition of the defense business of Loral Corporation ("Loral") has been assumed to be fully financed by debt. Interest expense was calculated using the following balances and interest rates: For the years ended December 31, -------------------------------- 1996 1995 1994 ---------- --------- -------- Invested Equity: Communications Systems Division $194,663 $199,506 $216,943 Wideband Systems Division and Products Group $287,803 Interest Rate 7.20% 7.40% 7.23% Income Taxes The Businesses are included in the consolidated Federal income tax return and certain combined and separate state and local income tax returns of Lockheed Martin. However, for purposes of these financial statements, the provision for income taxes is computed as if the Businesses were a separate taxpayers, accordingly, the provision for income taxes is based upon reported combined income before income taxes. Income taxes, current and deferred, are considered to have been paid or charged to Lockheed Martin and are recorded through the invested equity account with Lockheed Martin. The principal components of the deferred taxes are contract accounting methods, property, plant and equipment, goodwill amortization and timing of actuals. Statement of Cash Flows The Businesses participate in Lockheed Martin's cash management system, under which all cash is received and payments are made by Lockheed Martin. All transactions between the Businesses and Lockheed Martin have been accounted for as settled in cash at the time such transactions were recorded by the Businesses. 10 LOCKHEED MARTIN PREDECESSOR BUSINESSES NOTES TO COMBINED FINANCIAL STATEMENTS-(continued) (Dollars in thousands) 4. Contracts in Process Billings and accumulated costs and profits on contracts, principally with the U.S. Government, comprise the following: December 31, ----------------------- 1996 1995 -------- ------- Billed contract receivables $ 40,299 $10,237 Other billed receivables, principally commercial 28,401 -- Unbilled contract receivables 91,053 23,643 Inventoried costs 61,380 10,380 -------- ------- 221,133 44,710 Loss, unliquidated progress payments (35,813) (2,253) -------- ------- $185,320 $42,457 ======== ======= The U.S. Government has title to, or a security interest in, inventories to which progress payments are applied. Unbilled contract receivables represent accumulated costs and profits earned but not yet billed to customers at year-end. The Businesses believe that substantially all such amounts will be billed and collected within one year. The following data has been used in the determination of cost of sales: 1996 1995 1994 ------- ------ ------ General and administrative costs included in inventoried costs $14,700 $1,156 $ 493 General and administrative costs charged to inventory $25,400 $3,967 $3,640 Independent research and development and bid and proposal costs charged to inventory $33,300 $2,558 $2,134 5. Property, Plant and Equipment December 31, ----------------------- 1996 1995 -------- ------- Land $ 9,200 Buildings and Improvements 27,000 Machinery, equipment, furniture and fixtures 73,137 $29,216 Leasehold improvements 7,229 2,441 -------- ------- $116,566 $31,657 ======== ======= Depreciation and amortization expenses in 1996, 1995 and 1994 was $14,924, $5,492, and $5,381, respectively 11 LOCKHEED MARTIN PREDECESSOR BUSINESSES NOTES TO COMBINED FINANCIAL STATEMENTS-(continued) (Dollars in thousands) 6. Income Taxes The provision for income taxes was calculated by applying statutory tax rates to the reported pretax income after considering items that do not enter into the determination of taxable income and tax credits reflected in the consolidated provision of Lockheed Martin, which are related to the Businesses. For the years ended December 31, 1996, 1995 and 1994, it is estimated that the provision for deferred taxes represent ($2,143), $3,994, and $1,252, respectively. Substantially all the income of the Businesses are from domestic operations. The effective income tax rate differs from the statutory Federal income tax rate for the following reasons: 1996 1995 1994 ---- ---- ---- Statutory Federal income tax rate 35% 34% 34% Amortization of cost in excess of net assets acquired 2 529 31 Research and development and other tax credits (2) State and local income taxes, net of Federal income tax benefit and state and local income tax credits 6 101 12 Foreign sales corporation tax benefit (1) Other, net 17 1 ---- ---- ---- Effective income tax rate 40% 681% 78% ==== ==== ==== The difference between the statutory Federal income tax rate and the effective income tax rate in 1995 and 1994 is primarily due to the amortization of cost in excess of net assets acquired which is not deductible for income tax purposes. 7. Sales to Principal Customers The Businesses operate primarily in one industry segment, electronic components and systems. Sales to principal customers are as follows: December 31, ---------------------------- 1996 1995 1994 -------- -------- -------- U.S. Government Agencies $425,033 $161,617 $216,084 Foreign (principally foreign governments) 33,475 4,945 1,623 Other (principally U.S. Government and [ILLEGIBLE] 84,573 219 1,138 -------- -------- -------- $543,081 $166,781 $218,845 ======== ======== ======== 8. Commitments and Contingencies The Businesses lease certain facilities and equipment under agreements expiring at various dates through 2011. At December 31, 1996, future minimum payments for noncancellable operating leases with initial or remaining terms in excess of one year are $11,400 for each of the years 1992 through 2001, and $12,300 in total thereafter. Leases covering major items of real estate and equipment contain renewal and or purchase options which may be exercised by the Businesses. Rent expense, net of sublease income from other Lockheed Martin entities, was $8,495, $4,772, and $5,597 in 1996, 1995 and 1994, respectively. 12 LOCKHEED MARTIN PREDECESSOR BUSINESSES NOTES TO COMBINED FINANCIAL STATEMENTS-(continued) (Dollars in thousands) Management is continually assessing the Businesses' obligations with respect to applicable environmental protection laws. While it is difficult to determine the timing and ultimate cost to be incurred by the Businesses in order to comply with these laws, based upon available internal and external assessments, with respect to those environmental loss contingencies of which management of the Businesses is aware, the Businesses 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 the Businesses' results of operations. The Businesses accrue for these contingencies when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Businesses are 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 government procurement regulations, an indictment of the Businesses by a federal grand jury could result in the Businesses 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. The Businesses are periodically subject to litigation, claims or assessments and various contingent liabilities (including environmental matters) incidental to its business. With respect to those investigative actions, items of litigation, claims or assessments of which they are aware, management of the Businesses is of the opinion that the probability is remote that, after taking into account certain provisions that gave 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 financial position or results of operations of the Businesses. 13 ATTACHMENT II TO TRANSACTION AGREEMENT L-3 Communications Holdings, Inc. Acquired-Entities Combined Statement of Net Tangible Assets December 31, 1996 With Report of Independent Auditors L-3 Communications Holdings, Inc. Acquired-Entities Combined Statement of Net Tangible Assets December 31, 1996 Contents Report of Independent Auditors.................................................1 Combined Statement of Net Tangible Assets......................................2 Notes to Combined Statement of Net Tangible Assets..........................3-12 [LETTERHEAD OF ERNST & YOUNG LLP] Report of Independent Auditors Board of Directors Lockheed Martin Corporation We have audited the accompanying combined statement of net tangible assets of the L-3 Communications Holdings, Inc. Acquired-Entities (as defined in Note 1) as of December 31, 1996. This combined statement of net tangible assets is the responsibility of Lockheed Martin Corporation's and the L-3 Communications Holdings, Inc. Acquired-Entities' management. Our responsibility is to express an opinion on the combined statement of net tangible assets based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined statement of net tangible assets is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined statement of net tangible assets. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall combined statement of net tangible assets presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1, the accompanying combined statement of net tangible assets as of December 31, 1996 has been prepared for the purpose of complying with, and on the basis of, accounting practices specified in the Transaction Agreement (as defined in Note 1). The combined statement of net tangible assets is not intended to be a presentation in conformity with generally accepted accounting principles, nor is the statement intended to be a complete presentation of the L-3 Communications Holdings, Inc. Acquired-Entities' combined assets, liabilities and net tangible assets. In our opinion, the combined statement of net tangible assets referred to above presents fairly, in all material respects, the net tangible assets of the L-3 Communications Holdings, Inc. Acquired-Entities at December 31, 1996, on the basis of accounting described in the Notes 1 and 2. The accompanying combined statement of net tangible assets has been prepared assuming that the L-3 Communications Holdings, Inc. Acquired-Entities will continue as a going concern. This report is intended solely for the information and use of the parties associated with the Transaction Agreement and should not be used for any other purpose. /s/ Ernst & Young LLP February 28, 1997, except for Note 1, As to which the date is March 31,1997 1 L-3 Communications Holdings, Inc. Acquired-Entities Combined Statement of Net Tangible Assets December 31, 1996 ------------------ (In thousands) Assets Receivables, net $ 69,884 Intercompany accounts receivable, net 10,724 Contracts in process 131,038 Property, plant and equipment, net 95,583 FSI Semiconductor Business net tangible assets 4,800 LMEAP assets 900 Other assets 16,568 -------- 329,487 Liabilities Accounts payable 34,194 Salaries, benefits and payroll taxes 23,113 Other liabilities 35,272 -------- Net tangible assets before Corporate pushdowns 236,918 Corporate pushdowns, net 600 -------- Net tangible assets $237,518 ======== See accompanying notes. 2 L-3 Communications Holdings, Inc. Acquired-Entities Notes to Combined Statement of Net Tangible Assets December 31, 1996 1. Description of Business and Basis of Presentation Description of Business On January 31, 1997, Lockheed Martin Corporation ("Lockheed Martin"), Lehman Brothers Holdings Inc. ("Lehman Holdings"), Frank C. Lanza and Robert V. LaPenta ("Individual Purchasers") entered into a Memorandum of Understanding regarding the transfer of the Products Group, Tactical Communication Systems ("Wideband Systems") and Communications Systems ("Camden") businesses of Lockheed Martin to a newly-formed corporation. L-3 Communications Holdings, Inc. ("L-3 Communications"), to be jointly owned by Lockheed Martin, Lehman Holdings and its affiliates, and the Individual Purchasers. The L-3 Communications Acquired-Entities are engaged in the design, engineering, manufacturing, integration, operation and support of a broad array of products and services for the electronics, command and control and communications industries. The L-3 Communications Acquired-Entities serve consumers in both domestic and international defense, civilian, and commercial markets. The accompanying combined statement of net tangible assets of the L-3 Communications Acquired-Entities include the accounts of the following business units, which are combined for financial reporting purposes: o Wideband Systems headquartered in Salt Lake City, Utah, o Communications Systems headquartered in Camden, New Jersey, o Display Systems headquartered in Atlanta, Georgia, o Advanced Recorders headquartered in Sarasota, Florida, o Conic headquartered in San Diego, California, o Telemetry & Instrumentation headquartered in San Diego, California, o Microcom headquartered in Warminster, Pennsylvania, o Randtron headquartered in Menlo Park, California, o Microwave-Narda East headquartered in Hauppauge, New York, o Microwave-Narda West headquartered in Ranch Cordova, California, o Hycor headquartered in Woburn, Massachusetts, o FSI Semiconductor Business headquartered in Lowell, Massachusetts, and o Airport Explosive Detection Business ("EDS") headquartered in Pinellas, Florida. 3 L-3 Communications Holdings, Inc. Acquired-Entities Notes to Combined Statements of Net Tangible Assets (continued) 1. Description of Business and Basis of Presentation (continued) Basis of Presentation The accompanying combined statement of net tangible assets as of December 31, 1996 has been prepared for the purpose of complying with, and on the basis of accounting practices specified in, the Transaction Agreement and related attachments by and among L-3 Communications, Lockheed Martin, Lehman Brothers Capital Partners III, L.P. ("Lehman"), and the Individual Purchasers dated March 28, 1997 ("Transaction Agreement"). This combined statement is not intended to be a presentation in conformity with generally accepted accounting principles, nor is this combined statement intended to be a complete presentation of the L-3 Communications Acquired-Entities' combined assets, liabilities and net tangible assets. The following intangible amounts are excluded from the accompanying combined statement of net tangible assets, (1) goodwill, and (2) intangible assets related to contracts and programs acquired. All other recorded assets are considered tangible for purposes of this financial statement. The accompanying combined statement of net tangible assets has been prepared after giving effect to the conditions or adjustments specifically referenced in the Transaction Agreement. Certain items were agreed to by and among Lockheed Martin, Lehman, the Individual Purchasers and L-3 Communications including, but not limited to: The combined statement of net tangible assets specifically excludes the following assets and liabilities: cash and cash equivalents; accounts or notes receivable or payable from or to Lockheed Martin except for receivables and payables relating to materials sold or services rendered; all obligations and liabilities of Lockheed Martin not arising out of the conduct of the business of the L-3 Communications Acquired-Entities; any reserve, liability or asset resulting from pension benefits, retirement benefits or other post-employment benefits; all accrued liabilities or benefits for current or deferred or state income taxes. All components of equity, including corporate intercompany advances, have been excluded from the accompanying combined statement of net tangible assets. 4 L-3 Communications Holdings, Inc. Acquired-Entities Notes to Combined Statements of Net Tangible Assets (continued) 1. Description of Business and Basis of Presentation (continued) Basis of Presentation (continued) Pursuant to the Transaction Agreement, any reserves or liabilities for the following matters shall not be considered in the combined statement of net tangible assets: o Camden's CAS 410 Issue, o Management Incentive Compensation Plan (NYHQ), and o Advanced Recorders' Sarasota Asset Step Up Issue. The following items specifically were assigned net tangible asset (liability) values in the Transaction Agreement and are included in the combined statement of net tangible assets before Corporate pushdowns at the stated amount (in thousands): FSI (Lowell, MA) Net Tangible Assets $4,800 LMEAP Assets 900 Microcom Earn Out 0 EDS Net Assets 0 EDS M&DS Subcontract Reserve 0 ------ $5,700 ====== The following net tangible asset increases (decreases) to the historical books and records of the L-3 Communications Acquired-Entities were specifically agreed upon and valued in the Transaction Agreement and are included in the combined statement of net tangible assets before Corporate pushdowns (in thousands): All L-3 Communications Acquired-Entities' Duplicate Pension/Benefit Liabilities $ 6,000 Display Systems' Alphasoft Building 4,000 Conic's LMEAP Reserve Reversal 500 Advanced Recorders' ADC Settlement (300) Wideband Systems' TSS Options (1,000) Telemetry & Instrumentation G&A Costs in Inventory (1,000) Camden's Aegis Power Supply Contract and Option (1,000) All L-3 Communications Acquired-Entities' Cash/Negative Cash (1,600) ------- $ 5,600 ======= 5 L-3 Communications Holdings, Inc. Acquired-Entities Notes to Combined Statements of Net Tangible Assets (continued) 1. Description of Business and Basis of Presentation (continued) Basis of Presentation (continued) The following pushdown assets (liabilities) were specifically agreed upon and valued in the Transaction Agreement and are included in the combined statements of net tangible assets as Corporate pushdowns, net (in thousands): Incurred but not reported Reserve $(4,100) Environmental Reserve (3,200) Workers Compensation (1,200) Deferred Management Incentive Compensation Plan (300) Vacation Accrual (300) NY Overlays 1,800 NY Leasehold Improvements 3,500 RFA and RAA 4,400 ------- $ 600 ======= Net tangible asset changes from the historical books and records of the L-3 Communications Acquired-Entities for the following matters were specifically prohibited in the Transaction Agreement and therefore the historical amounts are carried forward: o All L-3 Communications Acquired-Entities' Building Writedown or Writeup, o Advanced Recorders' Universal Litigation, o Advanced Recorders' G&A in Inventory, o Advanced Recorders' Reversal of Capitalized Certification Costs, o Advanced Recorders' CPS-100 Audit Labor Mischarging Allegations, o Advanced Recorders' Instrumentation Recorder Product Line, o Camden's Unreasonable Indirect Labor Allegations, o Camden's Old Receivables, o Camden's DCAA Rate Close-Out Issues, o Camden's NOAA Contract Defective Pricing Allegations, o Camden's Reversal of Division Reserve, o Camden's Truck Depot Severance Reserve, o Wideband Systems' Fixed Wireless Loop License Agreement, Deferred Cost, and Reserve, o Wideband Systems' Severance, and o Conic's Pendleton Litigation Reserve. The above items are not intended to completely represent the terms and conditions of the Transaction Agreement. 6 L-3 Communications Holdings, Inc. Acquired-Entities Notes to Combined Statements of Net Tangible Assets (continued) 2. Summary of Significant Accounting Policies Assumption Regarding Going Concern The accompanying combined statement of net tangible assets has been prepared assuming the L-3 Communications Acquired-Entities will continue as a going concern. Use of Estimates The preparation of the combined statement of net tangible assets requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at December 31, 1996. The most significant of these estimates and assumptions relate to contract estimates of total costs at completion and revenues in the earnings recognition process, and commitments and contingencies. Actual results could differ from those estimates. As discussed in Note 1, the Transaction Agreement establishes the amount reported for certain assets and liabilities. These amounts have been agreed to by and among Lockheed Martin, Lehman, the Individual Purchasers and L-3 Communications and are not necessarily management's estimate of their value in accordance with generally accepted accounting principles. Revenue Recognition The following L-3 Communications Acquired-Entities generally record revenues and anticipated profits under long-term contracts on a percentage of completion cost-to-cost basis of accounting where revenues and profits are recorded based on the ratio of costs incurred to estimated total costs at completion: o Wideband Systems, o Communications Systems, o Display Systems, o Microcom, and o Hycor. 7 L-3 Communications Holdings, Inc. Acquired-Entities Notes to Combined Statements of Net Tangible Assets (continued) 2. Summary of Significant Accounting Policies (continued) Revenue Recognition (continued) The following L-3 Communications Acquired-Entities generally record revenues and profits on products and services essentially under commercial terms and conditions as units are shipped or specified tasks are completed; or on a percentage of completion basis, using units or delivery as the measurement basis for effort expended: o Advanced Recorders, o Conic, o Telemetry & Instrumentation, o Randtron, o Microwave-Narda East, and o Microwave-Narda West. For all L-3 Communications Acquired-Entities, revenues under cost-reimbursement-type contracts are recorded as costs are incurred. Applicable estimated profits are included in earnings in the proportion that incurred costs bear to total estimated costs. Revenues and earnings on contracts are based, in part, on estimates. These estimates are revised periodically and adjustments to revenues and earnings resulting from such revisions are recorded on a cumulative basis in the period of revision. Incentives or penalties and awards applicable to performance on contracts are considered in estimating revenues and profit rates and are recorded when there is sufficient information to assess anticipated contract performance. Amounts representing contract change orders, claims or other items are included in revenues only when they can be reliably estimated and realization is probable. Any anticipated losses on contracts or programs are charged to earnings when identified. Such losses encompass all costs, including general and administrative expenses for those L-3 Communications Acquired-Entities that include general and administrative expenses in inventory, allocable to the contracts. The L-3 Communications Acquired-Entities that expense general and administrative expenses as incurred exclude such costs in determining anticipated losses. Revenue arising from change orders or the claims process is not recognized either as income or as an offset against a potential loss until it can be reliably estimated and its realization is probable. 8 L-3 Communications Holdings, Inc. Acquired-Entities Notes to Combined Statements of Net Tangible Assets (continued) 2. Summary of Significant Accounting Policies (continued) General and Administrative Expenses The following L-3 Communications Acquired-Entities allocate general and administrative expenses to contracts in process and therefore are included in operating costs and expenses at the time of revenue recognition: o Wideband Systems, o Communications Systems, o Display Systems, o Conic, and o Randtron. The following L-3 Communications Acquired-Entities charge general and administrative expense to operations as incurred: o Advanced Recorders, o Telemetry & Instrumentation, o Microcom, o Hycor, o Microwave-Narda East, and o Microwave-Narda West. Lockheed Martin's corporate general and administrative costs attributed to the L-3 Communications Acquired-Entities are charged to the individual entity in accordance with allocation methodologies determined by Lockheed Martin and applied to Lockheed Martin's various business units. Such expenses could vary significantly if the L-3 Communications Acquired-Entities are operated as an unaffiliated entity. Research and Development Costs Customer-sponsored research and developments costs are accounted for as direct costs. Reimbursable company-sponsored and development costs are accounted for in accordance with the Acquired-Entities' policy for general and administrative expenses. 9 L-3 Communications Holdings, Inc. Acquired-Entities Notes to Combined Statements of Net Tangible Assets (continued) 2. Summary of Significant Accounting Policies (continued) Contracts in Process Contracts in process are stated at the lower of cost or estimated net realizable value, except for those items specifically addressed in the Transaction Agreement. Costs on contracts in Process represent recoverable costs incurred for production; allocable operating overhead; and, based on entity policy, research and development and general and administrative expenses, less amounts attributed to cost of sales. Pursuant to contract provisions, agencies of the U.S. Government and other customers have title to, or a security Interest in, certain inventories as a result of progress payments and advances. In accordance with industry practice, contracts in process contain amounts relating to contracts with long production cycles, a portion of which may not be realized within one year. Property, Plant and Equipment Property, plant and equipment are stated at historical book value. Depreciation is provided primarily using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvement. Certification Costs As part of the normal course of doing business, the Advanced Recorders entity is required to incur certification costs prior to the production of new products. Advanced Recorders' policy is to capitalize these costs and amortize them on a straight-line basis over a 10 year period. As of December 31, 1996, approximately $3.4 million of unamortized certification costs are included in the combined statement of net tangible assets. Financial Instruments At December 31, 1996, the carrying value of the L-3 Communications Acquired-Entities Communications financial instruments such as receivable, accounts payable and accrued liabilities approximate fair value, based on the short-term maturities of these instruments. 10 L-3 Communications Holdings, Inc. Acquired-Entities Notes to Combined Statements of Net Tangible Assets (continued) 2. Summary of Significant Accounting Policies (continued) Concentration of Credit Risk The L-3 Communications Acquired-Entities conduct business with the U.S. Government and commercial enterprises. Financial instruments which potentially expose the L-3 Communications Acquired-Entities to concentrations of credit risk consist primarily of commercial receivable. To minimize this risk, ongoing credit evaluations of commercial customers' financial condition are performed. In addition, the L-3 Communications Acquired-Entities maintain allowances for potential credit losses and such losses, in the aggregate, have not exceeded management expectations. None of the L-3 Communications Acquired-Entities commercial receivables are individually significant. Intercompany Accounts Receivable, Net All Accounts receivable from and accounts payable to Lockheed Martin entities are deemed to be valid and realizable from and payable to the appropriate Lockheed Martin entities. 3. Contracts in Process Contracts in process reflected in the combined statement of net tangible assets consist of the following as of December 31, 1996 (in thousands): Work in process $ 169,667 Progress billing receivable 4,631 Less--Advances and progress payments (43,260) --------- $ 131,038 ========= Work in process includes finished goods and raw materials held in inventory. In addition, work in process includes unbilled costs incurred plus estimated earnings that will be billed to the customer upon the completion of certain milestones. Revenue which has not yet been billed is included in unbilled receivables, some of which will not be billed within one year. Under the contractual arrangements by which progress payments are received, the U.S. Government asserts that it has a security interest in the contracts in process identified by the related contracts. 11 L-3 Communications Holdings, Inc. Acquired-Entities Notes to Combined Statements of Net Tangible Assets (continued) 4. Property, Plant and Equipment, net Property, plant and equipment consists of the following as of December 31, 1996 (in Thousands): Land and improvements $ 10,800 Buildings and improvements 36,666 Machinery, equipment, furniture and fixtures 73,137 -------- 120,603 Less--Accumulated depreciation and amortization (25,020) -------- $ 95,583 ======== 5. Income Taxes The accompanying combined statement of net assets excludes the L-3 Communications Acquired-Entities assets and liabilities relating to federal and state income taxes, as discussed in Note 1. 6. Commitments and Contingencies The L-3 Communications Acquired-Entities are engaged in providing 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 the L-3 Communications Acquired-Entities were and are being conducted in accordance with these requirements. Under government regulations, an indictment of an L-3 Communications Acquired-Entities could result in the L-3 Communications Acquired-Entities 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. The L-3 Communications Acquired-Entities are periodically subject to litigation, claims or assessments and various contingent liabilities (including environmental matters) incidental to their business. With respect to those investigative actions, items of litigation, claims or assessments of which they are aware, management of the L-3 Communications Acquired-Entities are of the opinion that, after taking into account certain provisions that have been made with respect to these matters, pushdowns and matters addressed specifically in the Transaction Agreement, the probability is remote that the ultimate resolution of any such investigative actions, items of litigation, claims or assessments will have a material adverse effect on the combined net tangible assets of the L-3 Communications Acquired-Entities. 12 ATTACHMENT III TO TRANSACTION AGREEMENT TRANSFER AGREEMENT This Agreement is made as of the 28th day of March 1997, by and between Lockheed Martin Corporation, a Maryland corporation ("Lockheed Martin"), and L-3 Communications Holdings, Inc., a Delaware corporation ("Newco"). W I T N E S S E T H: WHEREAS, the parties hereto, together with Lehman Brothers Capital Partners III, L.P., Frank C. Lanza and Robert V. LaPenta, have entered into a Transaction Agreement (the "Transaction Agreement"); and WHEREAS, in connection with the execution of the Transaction Agreement the parties hereto wish to enter into this Transfer Agreement to effect certain transactions referred to in the Transaction Agreement; NOW, THEREFORE, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. Defined terms used in this Transfer Agreement shall have the meanings specified in the Transaction Agreement (including all Exhibits, Schedules and Attachments thereto). ARTICLE II TRANSFER OF ASSETS Section 2.01. Transfer of Assets. Upon the terms and subject to the conditions set forth in this Transfer Agreement and the Transaction Agreement, Newco agrees to receive, acquire and accept from Lockheed Martin (and from each Affiliated Transferor) and Lockheed Martin agrees to transfer, convey, assign and deliver, or cause to be transferred, conveyed, assigned and delivered, to Newco effective at 12:01 a.m. (Eastern Standard Time) on the Closing Date, free and clear of all Liens, other than Permitted Liens, the Transferred Assets. Section 2.02. Assumption of Liabilities. Upon the terms and subject to the conditions of this Transfer Agreement, Newco agrees, II-1 effective at 12:01 a.m. (Eastern Standard Time) on the Closing Date, to assume the Assumed Liabilities. Section 2.03. Assignment of Contracts and Rights. (a) Anything in this Transfer Agreement to the contrary notwithstanding, this Agreement shall not constitute an agreement to assign any Transferred Asset (other than with respect to the Owned Real Property) or any claim or right or any benefit arising thereunder or resulting therefrom if an attempted assignment thereof, without the consent of a third party thereto, would constitute a breach or other contravention thereof, be ineffective with respect to any party thereto or in any way adversely affect the rights of Newco or Lockheed Martin (or any Affiliated Transferor) thereunder. (b) With respect to any Government Contract or any claim, right or benefit arising thereunder or resulting therefrom, Lockheed Martin and Newco will use their best efforts to obtain the written consent of the other parties to such Government Contract for the assignment or novation thereof to Newco or written confirmation from such parties reasonably satisfactory in form and substance to Lockheed Martin and Newco that such consent is not required. As soon as practicable following the date hereof, (i) with respect to each Prime Government Contract to which Lockheed Martin (or any Affiliated Transferor) is a party, Lockheed Martin (or the appropriate Affiliated Transferor) shall either obtain written confirmation reasonably satisfactory in form and substance to Lockheed Martin and Newco that novation of such Prime Government Contract is not required or submit to the relevant Responsible Contracting Officer a written request in compliance with the applicable Federal Acquisition Regulation that the U.S. Government enter into a Government Contract Novation with Lockheed Martin and Newco with respect to such Prime Government Contract; and (ii) with respect to each Government Contract that is not a Prime Government Contract, Lockheed Martin (or the appropriate Affiliated Transferor) shall submit to the parties thereto documentation reasonably satisfactory in form and substance to Lockheed Martin and Newco seeking the written waiver or approval of the other contracting party or parties thereto to the transfer and assignment of all of Lockheed Martin (or the applicable Affiliated Transferor) claims, rights, benefits and obligations thereunder to Newco at the Closing. In this regard, Lockheed Martin (or the applicable Affiliated Transferor) shall take all actions required under the applicable Federal Acquisition Regulation including, without limitation, the guarantee by Lockheed Martin of Newco's obligations under any novated Government Contracts, as may be required by Federal Acquisition Regulation Section 42.104(d). Except as provided in this immediately preceding sentence, in no event shall Lockheed Martin or Newco or any of their respective Affiliates be obligated to pay any money to the U.S. Government or any other Person or to offer or grant other financial or other accommodations to the U.S. Government or any other Person in II-2 connection with obtaining any novation of a Government Contract or any such consent or waiver. (c) With respect to any Contract that is not a Government Contract or any claim, right or benefit arising thereunder or resulting therefrom, promptly after the date hereof, to the extent reasonably requested by Newco, Lockheed Martin and Newco will use their best efforts to obtain the written consent of the other parties to any such Contract for the assignment thereof to Newco, or written confirmation from such parties reasonably satisfactory in form and substance to Lockheed Martin and Newco confirming that such consent is not required. (d) If such consent, waiver or confirmation is not obtained with respect to any such Government Contract or other Contract, as among the parties hereto, Newco will obtain through a subcontracting arrangement or otherwise, and subject to Applicable Law and the terms of such Government Contract or Contract, the claims, rights and benefits of Lockheed Martin (or the applicable Affiliated Transferor) and, to the extent possible, assume the obligations under such Contracts and Government Contracts in accordance with this Transfer Agreement, and Lockheed Martin (or the applicable Affiliated Transferor) will enforce at the request of and for the benefit of Newco, with Newco, to the extent set forth in the Transaction Agreement, assuming Lockheed Martin's (or the applicable Affiliated Transferor's) obligations, any and all claims, rights and benefits of Lockheed Martin (or the applicable Affiliated Transferor) against a third party thereto arising from any such Government Contract or Contract (including the right to elect to terminate such Government Contract or Contract in accordance with the terms thereof upon the request of Newco). Lockheed Martin (or the applicable Affiliated Transferor) will promptly pay to Newco when received all monies received by Lockheed Martin (or the applicable Affiliated Transferor) under any Transferred Asset or any claim, right or benefit arising thereunder not transferred pursuant to this Section 2.03. Section 2.04. Exchange Consideration; Closing. (a) The Exchange Consideration shall be as set forth in Section 2.02 of the Transaction Agreement, and the closing of the Transfer of the Transferred Assets and the assumption of the Assumed Liabilities hereunder shall take place as set forth in the Transaction Agreement. (b) At the Closing, Lockheed Martin and Newco shall enter into an Exchange Agreement substantially in the form of Attachment A, and Lockheed Martin (or the applicable Affiliated Transferor) shall execute, acknowledge (if appropriate) and deliver to Newco with respect to the Real Property, assignments of all of Lockheed Martin' s and the Affiliated Transferors' rights and interests in the Leased Real Property and deeds with respect to all of Lockheed Martin's and the Affiliated Transferors' rights and interests in the Owned Real Property in recordable form sufficient II-3 to convey to Newco all of Lockheed Martin's and the Affiliated Transferors' rights and interests in the Owned Real Property, and bills of sale, endorsements, consents, assignments and other good and sufficient instruments of conveyance and assignment as the Purchasers and their respective counsel may reasonably request (but including, without limitation, affidavits of non-foreign status as required by Section 1445(b) (2) of the Foreign Investment and Real Property Tax Act, as amended and such other documents, affidavits and instruments to facilitate and consummate the transfer of the Owned Real Property to Newco and Newco's obtaining title insurance of the Owned Real Property to Newco and Newco's obtaining title insurance as Purchasers may reasonably request) so as to vest in Newco all of Lockheed Martin's (or the applicable Affiliated Transferor's) right, title and interest in, to and under the Transferred Assets. ARTICLE III EXCLUDED LIABILITIES Section 3.01. Satisfaction of Excluded Liabilities. Lockheed Martin agrees, on behalf of itself and its Affiliates, to pay, discharge and satisfy the Excluded Liabilities. ARTICLE IV CONDITIONS TO CLOSING Section 4.01. Conditions to the Obligations of Each Party. The obligations of Lockheed Martin and Newco to consummate the closing of the Transfer Agreement are as set forth in the Transaction Agreement. ARTICLE V SURVIVAL; INDEMNIFICATION Section 5.01. Survival; Indemnification. The parties agree as to matters of survival and indemnification as set forth in Article XIII of the Transaction Agreement. ARTICLE VI TERMINATION Section 6.01. Grounds for Termination. This Agreement may be terminated as set forth in Article XIV of the Transaction Agreement. II-4 ARTICLE VII MISCELLANEOUS Section 7.01. Miscellaneous. The provisions of Article XV of the Transaction Agreement are incorporated hereby by reference. IN WITNESS WHEREOF, the parties hereto here caused this Transfer Agreement to be duly executed by their respective authorized officers as of the day and year first above written. WITNESS: LOCKHEED MARTIN CORPORATION By: - --------------------------------- ---------------------------------- Name: Title: L-3 COMMUNICATIONS HOLDINGS, INC. By: - --------------------------------- ---------------------------------- Name: Title: II-5 ATTACHMENT IV TO TRANSACTION AGREEMENT See Amendment No. 2 to the Transaction Agreement ATTACHMENT V TO TRANSACTION AGREEMENT See Amendment No. 2 to the Transaction Agreement ATTACHMENT VI TO TRANSACTION AGREEMENT ADDITIONAL MATTERS RELATING TO THE CALCULATION OF NET TANGIBLE ASSETS The Net Tangible Assets on the December Statement and the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount shall be in accordance with the terms and conditions of the Agreement and in accordance with GAAP, except as provided in the December Statement and this Attachment VI. The Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount will be determined on a basis consistent with the manner in which the December Statement was prepared as disclosed in the notes to the December Statement or as otherwise set forth in this Attachment VI. Therefore, the Net Tangible Assets on the December Statement and the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount may differ from the closing balances of Lockheed Martin and the Business Units on December 31, 1996 and at the close of business on the Effective Date or the Closing Date, and the opening balances of Newco on the Closing Date for tax and financial reporting purposes. Except as otherwise set forth in this Attachment VI, all principles, classifications, methods, practices, assumptions and policies used in the preparation of the December Statement (regardless of whether such principles, classifications, methods, practices, assumptions and policies are in accordance with GAAP) will be used or applied in the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount. Accounting pronouncements (as defined in Statement of Auditing Standards No. 69) not used in the preparation of the December Statement will not be used in the determination of the Proposed Final Net Tangible Asset Amount or the Final Net Tangible Asset Amount. Except as otherwise set forth in this Attachment VI, the estimates used in the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount will be made on a basis consistent with the principles, policies, methods, practices, factors and underlying data used in making estimates in the preparation of the December statement. Following are additional agreements and clarifications with respect to the determination of the Net Tangible Assets on the December Statement and the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount: Adjustment of Reserves and Valuation Accounts. In the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount, except as otherwise set forth in this Attachment VI, the amount of any reserves or valuation accounts shall be determined by applying methods, practices, assumptions, policies, factors and underlying data consistent with VI-1 those used in determining the reserves or valuation accounts included in the December Statement, and there shall be no changes made to any reserves or valuation accounts (including, without limitation, contract reserves, purchase accounting reserves, allowances for bad debts, inventory reserves of any kind, warranty reserves and other reserves), except to the extent that such changes are required by changes in facts and events occurring after December 31, 1996 and before the Effective Date, it being further understood that there shall be no increase in the Proposed Final Net Tangible Asset Amount or the Final Net Tangible Asset Amount as a result of any reversal or other usage of reserves unless such reversal or usage arises out of facts or events that occur after December 31, 1996; provided, however, that notwithstanding the foregoing any reversal or other usage of the Advanced Recorders IR & VLDS Inventory Reserve of $1,100,000 million, the Advanced Recorders IR & VLDS Capitalized G&A reserve of $800,000 or the Advanced Recorders IR & VLDS fixed asset reserve of $1,030,000 in connection with any sale of all or a portion of such business to a third party prior to the Effective Date will result in a corresponding increase in the Proposed Final Net Tangible Asset Amount or the Final Net Tangible Asset Amount. Inventory. For purposes of determining the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount, the parties have agreed contractually that an inventory observation, by the independent auditors as of the Effective Date, will not be conducted. Furthermore, in the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount, the raw materials and finished goods inventory relating to the Business shall be recorded at an amount equal to their book value as included in the December Statement, except to the extent that changes are required by normal business activities (purchases, transfers to/from work in process or cost of sales relief resulting from shipment of products) occurring after December 31, 1996 but before the close of business on the Effective Date, in each case calculated in accordance with the policies and practices reflected in the December Statement, it being understood, however, that there shall be no changes relating to the valuation, existence, or lack of existence of raw materials and finished goods inventory. Reserves for Environmental Liabilities. The amount of the reserves for Environmental Liabilities included in the December Statement shall be fixed at $3.2 million and the amount used in the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount shall be fixed at $6.0 million. Exclusion of Certain Reserves and Liabilities. There shall not be included in the Net Tangible Assets in the December Statement or in the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount any reserve or any liability to the extent such reserve or liability (i) arises out of, results from or relates to an Excluded Asset or Excluded Liability, (ii) arises out of, results from or relates to any action taken by Newco or any of the Purchasers, including but VI-2 not limited to any actions taken in connection with the Contemplated Transactions, (iii) arises out of, results from or relates to any actions taken or contemplated to be taken by Newco, Lockheed Martin, any of the Purchasers or any of their Affiliates, contemporaneously with or subsequent to the Closing, or (iv) is indemnified against by Lockheed Martin. Estimates at Completion ("EAC"). In the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount, there shall be no changes made to the EACs from those EACs used in the preparation of the December Statement, except to the extent that such changes are required by changes in facts and events occurring after December 31, 1996 and before the Effective Date. Loss Contracts. In the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount, there shall be no changes made to the provisions for loss contracts from those used in the preparation of the December Statement, except to the extent that such changes are required by changes in facts and events occurring after December 31, 1996 and before the Effective Date. Due Diligence Costs; Organization of Newco. There shall be no amount accrued or reserved for in connection with the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount for any obligations or liabilities incurred in connection with Newco's, Lockheed Martin's or the Purchaser's due diligence efforts in connection with the Contemplated Transactions, including without limitation any fees and expenses of the counsel, independent accountants or other agents, advisors or consultants of Newco, Lockheed Martin or any of the Purchasers, and there shall not be considered in the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount any fees, expenses, reserves (or valuation accounts) or liabilities associated with the incorporation, organization, formation, capitalization or financing of Newco or with any restructuring of the Business or any of the Business Units contemplated or implemented by Newco. Certain Expenses. There shall not be considered in the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount any reserve or any liability to the extent such reserve or liability relates to fees or expenses that, in accordance with the Transaction Documents, are to be shared by Lockheed Martin and Newco including, without limitation, the fees and expenses contemplated by Section 2.03 (f) and Section 15.03 of the Agreement, or in accordance with Section 15.03 of the Agreement are to be paid by Newco if the Closing occurs. Pensions, OPEBs, etc. There shall not be considered in the determination of the Net Tangible Assets on the December Statement or the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount any reserve, VI-3 liability or asset to the extent such reserve, liability or asset arises out of, results from or relates to pension benefits, retirement benefits or other post-employment benefits. Going Concern. For purposes of determining the Net Tangible Assets in the December Statement and determining the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount, Newco and the Business Units, and the businesses conducted and to be conducted by each of them, will be considered a "going concern" and all of the Transferred Assets shall be deemed to be actively used in the Business and not held for sale or disposal. Miscellaneous. The matters referenced below shall be based on the following principles: (i) the Net Tangible Assets in the December Statement and the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount shall not include a reserve relating to the Camden CAS 410 Issue; (ii) there shall not be considered in the Net Tangible Assets in the December Statement and the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount any reserve or liability relating to the Sarasota Asset Step-Up Issue; (iii) there shall not be considered in the Net Tangible Assets in the December Statement any reserve or liability relating to the Management Incentive Compensation Plan with respect to the personnel at the location covered by the NY Leases; (iv) the Net Tangible Assets in the December Statement and the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount shall include assets relating to the LMEAP Assembly Plant in Goodyear, Arizona, which assets shall be recorded at $900,000 prior to the LMEAP reserve recorded by the Conic Business Unit, which reserve shall be retained by Lockheed Martin; (v) in the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount, the property, plant and equipment relating to the Business shall be recorded at an amount equal to their book value as included in the December Statement, except to the extent that changes are required by changes in facts and events occurring after December 31, 1996 (it being understood, however, that there shall be no such changes relating to the valuation of the property, plant or equipment), adjusted for additions or disposals and depreciation and amortization from December 31, 1996 to the close of business on the Effective Date, in each case calculated in accordance with the policies and practices reflected in the December Statement; VI-4 (vi) the Transferred Assets and Assumed Liabilities relating to the Airport Explosive Detection Business shall be included in the Net Tangible Assets in the December Statement at $0 and shall be included in the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount at ($600,000); (vii) the Net Tangible Assets in the December Statement shall include assets for the Instrumentation Recorder Product Line of the Advanced Recorders Business Unit, net of any reserves or liabilities associated with such assets, which net assets shall be recorded at $700,000; (viii) the Net Tangible Assets in the December Statement shall assume that the reserve with respect to the exercise of TSS options at the Wideband Business Unit shall be $1.0 million and such reserve used in the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount shall be assumed to be $2.0 million; (ix) the Net Tangible Assets in the December Statement and the determination of the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount shall include in the inventory of the Advanced Recorders Business Unit general and administrative expenses fixed at $4.5 million with a related reserve of $1.8 million, and such general and administrative expenses net of the related reserve shall be recorded at $0 in the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount; (x) the Net Tangible Assets in the December Statement and the determination of the Proposed Net Tangible Asset Amount and the Final Net Tangible Asset Amount shall assume that the liability, if any, and related asset, if any, with respect to the Microcom Business' earn out obligation to its former stockholders net to $0; and (xi) for purposes of determining the Net Tangible Assets in the December Statement and determining the Proposed Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount, the parties have agreed contractually to the following changes to the books and records of the Business Units as of the referenced dates:
December 31, 1996 Effective Date(a) ----------------- ----------------- (in millions) (in millions) ALL Eliminate Cash/Negative Cash $(1.6) (b) Eliminate Duplicate Pension/Benefit 6.0 (b) Liabilities(c) Building Writedown or Writeup(c) 0.0 $0.0 EDS Net Assets 0.0 0.0 EDS M&DS Subcontract Reserve 0.0 (0.6)(d)
VI-5 ADVANCED RECORDERS Universal Litigation 0.0 0.0 G&A in Inventory Change(c) 0.0 (2.7) Sarasota Asset Step-Up Issue(c) 0.0 0.0 Reversal of Capitalized Certification Costs 0.0 0.0 CPS-100 Audit Labor Mischarging Allegations 0.0 0.0 ADC Settlement (0.3) (b) CAMDEN Aegis Power Supply Contract and Option (1.0) (1.0) Camden CAS 410 Issue(c) 0.0 0.0 Unreasonable Indirect Labor Allegations 0.0 0.0 Old Receivables 0.0 0.0 DCAA Rate Close-Out Issues 0.0 0.0 NOAA Contract Defective Pricing Allegations 0.0 0.0 Reversal of Division Reserve 0.0 0.0 Truck Depot Severance Reserve 0.0 (0.2) WIDEBAND Severance 0.0 0.0 TSS Options (1.0) (3.0) Reverse Fixed Wireless Loop License Agreement 0.0 0.0 Reverse Fixed Wireless Loop Deferred Cost 0.0 0.0 Reverse Fixed Wireless Loop Reserve 0.0 0.0 DISPLAYS Add Alpharetta Building 4.0 (b)(e) NARDA-EAST Add FSI (Lowell, MA) Net Tangible Assets 4.8 (b) TELEMETRY & INSTRUMENTATION G&A Costs in Inventory (1.0) (1.0) CONIC Add LMEAP Assets 0.9 0.9 Pendelton Litigation Reserve 0.0 0.0 LMEAP Reserve Elimination 0.5 0.5 MICROCOM Earn Out 0.0 0.0 CORPORATE PUSHDOWNS NY Leasehold Improvements 3.5 3.5(e) NY Overlays 1.8 1.8 RFA and RAA 4.4 (b) Incurred but not reported Reserve (4.1) (4.1) Environmental Reserve(c) (3.2) (6.0) Workers Compensation (1.2) (1.2) Management Incentive Compensation Plan (NYNQ) 0.0 (b) Deferred Management Incentive Compensation (0.3) (1.2) Plan Vacation Accrual (0.3) (0.3)
(a) Closing reflects the agreed upon changes as of the close of business on the Effective Date. (b) To be recorded based on the actual balance (after giving effect to the December 31, 1996 adjustments) as of the close of business on the Effective Date. (c) As discussed above. (d) As referenced in clause (vi) under "Miscellaneous" above. (e) Subject to the specific provisions of clause (v) under "Miscellaneous" above. VI-6 All amounts in parentheses in the foregoing table represent reductions to Net Tangible Assets; amounts not in parentheses represent increases in Net Tangible Assets. The parties also have agreed that, with respect to the items referenced in the foregoing table, other than as referenced above there will not be any changes to the books and records of the Business Units from December 31, 1996 to the Effective Date. VI-7 ATTACHMENT VII TO TRANSACTION AGREEMENT EXCHANGE CONSIDERATION SCHEDULE Transferor Exchange Consideration ---------- ---------------------- Lockheed Martin Corporation Stock: ______ shares of Newco Class A Stock Cash: $______ Lockheed Martin Tactical Stock: ______ shares of Systems, Inc. Newco Class A Stock Cash: $______ Randtron Systems, Inc. Stock: ______ shares of Newco Class A Stock Cash: $______ Lockheed Martin Fairchild Stock: ______ shares of Corporation Newco Class A Stock Cash: $______ Conic Corporation Stock: ______ shares of Newco Class A Stock Cash: $______ Lockheed Martin Microcom Stock: ______ shares of Corporation Newco Class A Stork Cash: $_____ Lockheed Martin Hycor, Inc. Stock: ______ shares of Newco Class A Stock Cash: $______ The NARDA Microwave Stock: _____ shares of Corporation Newco Class A Stock Cash: $______ (OTHER AFFILIATED TRANSFERORS) Stock: _____ shares of Newco Class A Stock Cash: $ ______ VII-1 ATTACHMENT VIII TO TRANSACTION AGREEMENT See Amendment No. 2 to the Transaction Agreement ATTACHMENT IX TO TRANSACTION AGREEMENT See Amendment No. 2 to the Transaction Agreement ATTACHMENT X TO TRANSACTION AGREEMENT See Amendment No. 2 to the Transaction Agreement ATTACHMENT XI TO TRANSACTION AGREEMENT EXCEPTIONS TO NON-SOLICITATION OF EMPLOYEES Exceptions to Non-Solicitation by Newco Name Division Department - ---- -------- ---------- David Butler Fairchild Defense Systems Finance John Mega TDS - East Finance Robert Leskow TDS - East Finance Richard Nortstrom TDS - East Finance Ken Goldstein Corporate Tax Michael Sanator TDS - East Procurement Robert Hagendorf Corporate Risk Management [ILLEGIBLE] Weet Corporate ES&H [ILLEGIBLE] Shafer TDS - Akron President [ILLEGIBLE] Bailey Washington Office Export Controls Execptions to Non-Solicitation by Lockheed Martin Name Division - ---- -------- Richard Gribble Wideband Systems Boyd Titwell XI-1 ATTACHMENT XII TO TRANSACTION AGREEMENT LOCKHEED MARTIN LEGAL OPINIONS 1. Each of Lockheed Martin and each Affiliated Transferor is a corporation duly incorporated, validly existing and in good standing under the laws of the state of its incorporation and has all corporate powers and all governmental licenses, authorizations, consents and approvals required to carry on the Business as now conducted, except where the failure to have such licenses, authorizations, consents and approvals has not had, and could not reasonably be expected to have, a Material Adverse Effect on the Business. Each of Lockheed Martin and each Affiliated Transferor, as the case may be, is duly qualified to do business as a foreign corporation in each jurisdictior where the character of the property owned or leased by it or the nature of its activities make such qualification necessary to carry on the Business as now conducted, except where the failure to be so qualified has not had, and could not reasonably be expected to have, a Material Adverse Effect on the Business. 2. The execution, delivery and performance by Lockheed Martin and each Affiliated Transferor of each of the Transaction Documents to which it is a party and the consummation by Lockheed Martin and each Affiliated Transferor of the Contemplated Transactions are within its corporate powers and have been duly authorized by all necessary corporate action on its part. Each of the Transaction Documents to which it is a party constitutes a legal, valid and binding obligation of Lockheed Martin and each Affiliated Transferor enforceable against it in accordance with its terms (i) except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers, (ii) subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity, and (iii) except to the extent that indemnification and contribution for securities law liabilities may be unenforceable as against public policy. 3. To such counsel's knowledge, the execution, delivery and performance by Lockheed Martin and each Affiliated Transferor of the Transaction Documents to which it is a party require no action by or in respect of, or consent or approval of, or filing with, any Governmental Authority other than as may have been obtained and other than as may be referenced in Section B.03 of the Transaction Agreement or set forth in Section B.03 of the Disclosure Schedules. 4. The execution, delivery and performance by Lockheed Martin of the Transaction Documents do not and will not contravene XII-1 EXECUTION COPY or conflict with the charter or bylaws of Lockheed Martin or any Affiliated Transferor XII-2 ATTACHMENT XIII TO TRANSACTION AGREEMENT NEWCO LEGAL OPINIONS 1. Newco is a corporation duly incorporated, validly existing and in good standing under the laws the State of Delaware. 2. The execution, delivery and performance by Newco of each of the Transaction Documents to which it is a party and the consummation by Newco of the Contemplated Transactions are within its corporate powers and have been duly authorized by all necessary corporate action on its part. Each of the Transaction Documents to which it is a party constitutes a legal, valid and binding obligation of Newco enforceable against it :r. accordance with its terms (i) except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors' rights generally, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers, (ii) subject to the limitations imposed by general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity, and (iii) except to the extent that indemnification and contribution for securities law liabilities may be unenforceable as against public policy. 3. To such counsel's knowledge, the execution, delivery and performance by Newco of the Transaction Documents to which it is a party require no action by or in respect of, or consent or approval of or filing with, any Governmental Authority other than as may have been obtained and other than as may be referenced in Section B.03 of the Transaction Agreement or set forth in Section B.03 of the Disclosure Schedules. 4. The execution, delivery and performance by Newco of the Transaction Documents do not and will not contravene or conflict with the charter or bylaws of Newco. XIII-1 EXECUTION COPY ATTACHMENT XIV TO TRANSACTION AGREEMENT See Amendment No. 2 to the Transaction Agreement ATTACHMENT XV TO TRANSACTION AGREEMENT PATENTS AND PATENT APPLICATIONS CONSTITUTING TRANSFERRED ASSETS 1. COMMUNICATIONS SYSTEMS 194 Patents (See Attached Listing) 2. WIDEBAND SYSTEMS 34 Patents, 18 Patent Applications (See Attached Listing) 3. DISPLAY SYSTEMS 1 Patent, 2 Patent Applications (See Attached Listing) 4. MICROWAVE NARDA WEST 2 Patent Applications (See Attached Listing) 5. RANDTRON 1 Patent (See Attached Listing) 6. ADVANCED RECORDERS 1 Patent, 2 Patent Applications (See Attached Listing) 7. MICROWAVE NARDA EAST 25 Patents, 5 Patent Applications (See Attached Listing) 8. HYCOR No Patents or Patent Applications 9. MICROCOM No Patents or Patent Applications 10. CONIC No Patents or Patent Applications 11. TELEMETRY & INSTRUMENTATION No Patents or Patent Applications 12. AIRPORT EXPLOSIVE DETECTION BUSINESS 4 Patent Applications (See Attached Listing) XV-1 Communications Systems Patent Portfolio
Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 1. 80AT02339 4856871 Repaceable laser and 2006 recording, optical X lens assembly 2. 80CS02362 4949051 Phase lock clock 2007 radio, digital X recovery with sided frequency acquisition 3. 80CS02559A 5230583 Tracking and reading 2010 recording, optical X system for an optical medium and medium for use therewith 4. 80CS02580 5073982 Apparatus for 2008 fiber optic network X connecting multiple passive users in a fiber optic network 5. 80CS02625 4929284 Water removable 2007 manufacturing, X solder stop process 6. 80CS02760 5062092 Jukebox 2008 Optical Recording X 7. 80CS02769 5239414 Laser astigmatism 2010 recording, optical X EP compensation JP 1939 8. 80CS02789 5432819 DPSK Communications 2014 X CA 2038 with Doppler EP Compensation JP
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- X CA 1743 9. 80CS02792 5425058 MSK Phase Acquisition 2013 EP and Tracking method JP 10. 80CS02797 5070487 Magneto-optic media 2008 optical recording X recording system including a directed magnetic bias flux 11. 80CS02799 Pend Multibeam Optical optical Recording Apparatus & Method for Tracking Control for an Optical Disk Having a Set of Tracks 12. 80CS02810 5001355 Photon Energy 2008 Radio X Activated Radio Frequency Signal Switch 13. 80CS02882 5170089 Two-axis motion 2010 recording X apparatus utilizing piezoelectric material 14. 80CS02898 5900214 Optically activated radio, rf, antenna waveguide type phase 2009 array, optical X shifter and attenuator 15. 80CS03024 5099247 Electronic altering Radio, RF, antenna of pattern of an 2009 array X antenna system
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 16. 80CS03039 5278847 Memory system having 2010 Recording X JP 599 Currently fault tolerance and used in graceful degradation SSR's 17. 80CS03110 5392450 Satellite 2012 radio, system, X EP 1194 Communication System satellite 18. 80CS03135 5194873 Antenna providing a 2010 radio, RF X spherical radiation pattern 19. 80CS03174 5150378 Method & apparatus Radio, system, for coherent 2009 spread spectrum X communications in non-coherent coding and non-coherent frequency hopping systems 20. 80CS03196B 5398821 Rack Mountable 2012 Packaging X chassis with Resilient side Panels 21. 80CS03233 5546421 Self-Compensating 2014 Comm Networks X Spread Spectrum Hybrid 22. 80CS03236 Unrated Intermediate Tab frame stacking of electrical components
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 23. 80CS03237 Unrated Flexible Interconnect stacking of electrical components 24. 80CS02328 Urated SMT adapter facilitates non-invasive VLSI testing 25. 80CS03240 Unrated Internet application design systems and method 26. RD19267 5127053 Low complexity method 2009 Speech, compression X for improving the performance of correlation-based pitch detectors 27. RD20150 5166953 Technique for radio, system, frequency-hopped 2009 spread spectrum X spread spectrum communications 28. RD20186 5177740 Frame/slot 2010 radio, cellular X CA 233 synchronization for US digital cellular tdma radio system 29. RD23348 5440544 Integrated Data Link 2013 Comm Systems X Concept for Air Traffic Control Applications
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 30. RDMM23443 Unrated Frequency estimation algorithm for low power communications models 31. RD21994 Unrated A simple coherent demodulator for digital modulation 32. RD22444 Unrated Three-dimensional magneto-optical storage system 33. RD22456 Unrated Multiple wavelength optical storage method and reader 34. RD22464 Unrated Parallel optical storage system using detector arrays 35. RD22608 Unrated Wavelet-based cryptography 36. RD22635 Unrated A wavelet-based communications system with a lipshitz receiver 37. RD22921 Unrated Ultra low power complimentary metal oxide semiconductor (CMOS) specific integrated circuit
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 38. XRCA00251 4214126 Cadence Suppression 2014 X System 39. XRCA00466 4232186 Method Of and Means 2014 X For Generating Complex Electri 40. XRCA63766 4278977 Range Determining 2015 X System 41. XRCA67089 4203063 Movement Detecting 2014 X Apparatus and Method 42. XRCA68752 4224679 Signal Correlation 2014 X Means 43. XRCA68975 4144579 Arithmetic 2013 X Synthesizer Frequency Generation with Reduced Phase Jitter 44. XRCA69081A 4272197 Apparatus and Method 2015 X for Measuring the Ratio of TW 45. XRCA69528 4222017 Rotatable 2014 X CA Polarization Duplexer 46. XRCA69628A 4313188 Method of Recording 1999 X an Ablative Optical Recording
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 47. XRCA69629 -- Thin Protective -- DE 4870 Overcoat Layer for FR Optical video D GB HK SG JP MY NL SG 48. XRCA69629A 4300143 Thin Protective 2015 X Overcoat Layer for Optical Video 49. XRCA69868 4203002 Code Correlator Loop 2014 X Using Arithmetic Synthesizer 50. XRCA70374 4144572 Accurate 2013 X Phase-Measuring System Using Arithmetic Synthesis 51. XRCA70385 4097895 Multilayer Optical 2012 X FR 5008 Record GB HK JPNL SG 52. XRCA70385A 4190843 Recording Methods for 2014 X a Multiplayer Optical Record
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 53. XRCA70385B 4219848 Optical Record 2014 X Playback Apparatus Employing Light 54. XRCA70385C 5305081 Multilayer Record 2015 X Blank for Use in Optical Recording 55. XRCA70537 4189746 Method and Apparatus 2014 X for Determining Focus Contiti 56. XRCA70862 4300226 Compensation 2015 X FR 3451 Apparatus for a Servo GB System with Peri JP 57. XRCA70683 4142209 Disc Track Servo 2013 X FR 3451 System GB JP 58. XRCA70684 4138741 Disc Eccentricity 2013 X FR 3451 Compensating System GB JP 59. XRCA70687A 4183060 Capacitance Distance 2014 X Sensor Apparatus for Video Disk Player/Recorder 60. XRCA70779 -- Rotating Head -- CA Recorder with Different Recording and Playback Speeds
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 61. XRCA70779A 4167023 Rotating Head 2013 X Recorder with Different Recording Speeds and Playback Speeds 62. XRCA70803 -- Multimode Coupling -- CA System Including a Funnel-Shape Multimode Coupler 63. XRCA70848 4136399 Dynamic Channel 2013 X Allocation Buffer Matrix 64. XRCA70927 -- Information Record -- DE 3298 JP 65. XRCA70927A 4233626 Playback Information 2014 X Record Using Phase Cancellation 66. XRCA70927B 4270132 Information Record 2015 X 67. XRCA71095 4247822 Frequency Translation 2015 X Means 68. XRCA71129 4197011 Defect Detection and 2014 X Plotting System
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 69. XRCA71184 -- Information Record -- FR 1883 GB HK IT JP MY NL SG 70. XRCA71184A 4216501 Optical 2014 X Anti-reflective Information Record 71. XRCA71184B 4329697 Information record 2016 X 72. XRCA71338 4233501 Interference 2014 X Suppression for Imaging Optical System 73. XRCA71361 4138595 Idle-Busy Signalling 2013 X CA Between Telephone System and Radiophone System 74. XRCA71392 4168506 Film Guide for 2013 X Optical Scanners 75. XRCA71401A 4121211 Method and Apparatus 2012 X for Determining Signal
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 76. XRCA71454 4156855 Phase-Locked Loop 2013 X with Variable Gain and Bandwidth 77. XRCA71483 4129826 Circuit Test Apparatus 2012 X 78. XRCA71515 -- Overcoat Structure -- DB 5045 for Optical Video Disc FR GB HK JP MY NL SG 79. XRCA71545 4315269 Thick Protective 2016 X DE 5376 Overcoat Layer for FR Optical Video GB HK JP MY NL SG 80. XRCA71546 4300039 Incremental Encoder 2015 X 81. XRCA71546A 4308500 Incremental Encoder 2015 X for Measuring Positions of Objects such as Rotating Shafts
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 82. XRCA71546B 4328463 Encoder for Recording 2016 X Incremental Changes 83. XRCA71549 4241355 Ablative Optical 2014 X CA 7070 Recording Medium DE FR GB HK IT JP MY NL SG 84. XRCA71573 4180783 Phase Lock Loop Data 2013 X Timing Recovery Circuit 85. XRCA71579 4316177 Optical Waveguide 2013 X with Prism Coupler for Parallel 86. XRCA71616 4316177 Data Classifier 2016 X 87. XRCA71624 4202928 Optical Recording -- CA Medium 88. XRCA71653 4202928 Updateable Optical 2014 X Storage Medium
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 89. XRCA71755 4119807 Digital Time Division 2012 X Multiplex Switching System 90. XRCA71783 4116733 Vapor Phase Growth 2012 X Technique of III-V Compounds Utilizing a Preheating Step 91. CRXA71838 4189735 Record Playback 2014 X DE 13072 Apparatus and FR Information Record GB Therefore HK IT JP NL 92. XRCA71844 4134072 Direct Digital 2013 X Frequency Synthesizer 93. XRCA71889 4284958 Folded-Cascade 2015 X Amplifier Arrangement with Current Mirror Amplifier 94. XRCA71889A 4244959 Folded Cascade 2015 X Amplifier Arrangement with Cascade Load Means 95. XRCA71907 4227769 Planar Optical Waveguide Comprising Thin Metal Oxide Film Incorporating a Relief Phase Grating
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- ------------------------------------------------------------------------------------------------------------------------------------ Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- - ------------------------------------------------------------------------------------------------------------------------------------ 96. XRCA71907A 4343890 Method for Making 2016 X Planar Optical Waveguide Comprising Thin Metal Oxide Film Incorporating a Relief Phase Grating 97. XRCA71946 4191941 Switch matrix for 2014 X Data Transfers 98. XRCA71994 4241423 Optical memory with 2014 X Injection Laser as Light Source and Detector 99. XRCA72024 4195269 Two-Way Single Fiber 2014 X Optical Communication 100. XRCA72102 4242689 Ablative Optical 2014 X Recording Medium 101. XRCA72105 4316282 Multichannel 2016 X Frequency Translation of Sampled Wave 102. XRCA72170 4165459 Time Interval 2013 X Measurement 103. XRCA72170A 4147941 Time Displaced Signal 2013 X Sorting Apparatus
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 104. XRCA72192 4292861 Earth Self-Orienting 2015 X Apparatus 105. XRCAS72207 4195312 Recorder and 2014 X DE 6350 Antireflective Record FR Blank Having an GB Optically Passive HK Transparent Layer IT JP NL 106. XRCA72207A 4195313 Antireflective 2014 X Information Record having an Optical 107. XRCA72258 4218689 Ablatable Medium for 2014 X Optical Recording 108. XRCA72269 4149929 Stripping of 2013 X Protective Coatings from glass Fibers 109. XRCA72276 4237474 Electroluminescent 2014 X Dioxide and Optical Fiber Assembly 110. XRCA72292 4206424 Digitized Phase 2014 X 3 Modulating Means 111. XRCA72272A 4206423 Digitized Phase 2014 X 3 Modulating Means
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 112. XRCA72293 4206425 Digitized Frequency 2014 X Synthesizer 113. XRCA72295 4213088 Voltage Measuring 2014 X Circuit 114. XRCA72296 4319273 Television Signal 2016 X with Encoded Synchronization Signals 115. XRCA72348 4215025 Water Soluble 2015 X Adhesive Coating for Mounting Components to Printed Wiring Boards 116. XRCA72348A 4340167 Coated Printed 2016 X Circuit Wiring Board and Method of Soldering 117. XRCA72352 4291269 System and Method for 2015 X Frequency Discrimination
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 118. XRCA72387 4219826 Optical Recording 2014 X CA 6394 Medium DE FR GB HK IT JP MY NL SG 119. XRCA72396 4317206 On Line Quality 2016 X Monitoring 120. XRCA72532 4157253 Method of Reducing 2013 X Absorption Losses in Fused Quar 121. XRCA72560 4180822 Optical Scanner and 2013 X Recorder 122. XRCA72612 4338528 Optimization Circuit 2016 X for a Serrodyne Frequency TRA 123. XRCA72681 4217613 Magnetic Transducer 2014 X Head Core 124. XRCA72682 4212422 Web Position 2014 X Controller for Web Transport Systems
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 125. XRCA72859 4370653 Phase Comparator 2017 X System 126. XRCA72859A 4374438 Digital Frequency and 2017 X Phase Lock Loop 127. XRCA12894 4295098 Digitally Adjustable 2015 X Phase Shifting Circuit 128. XRCA72965 4204171 Filter Which Tracks 2014 X Changing Frequency of Input Si 129. XRCA72990 4285056 Replicable Optical 2015 X CA 8724 Recording Medium DE FR GB HK IT JP MY NL SG 130. XRCA73008 4273342 Protective Cartridge 2015 X for Optical Discs 131. XRCA73016 4286790 Optical Disc Changer 2015 X Apparatus
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 132. XRCA73051 4271489 Optical Disc Player 2015 X System 133. XRCA73097 4252886 Novel Reists and 2015 X Recording Media 134. XRCA73129 4249119 Digital Drive Circuit 2015 X for Electric Motor or the Like 135. XRCA73140 4274294 Apparatus for 2015 X Converting Rotary Motion to Linear Motion 136. XRCA73174 4265699 Etching of Optical 2015 X Fibers 137. XRCA73199 4378570 Receiver for 2017 X Jam-Resistant TV Signal 138. XRCA73231 4661941 Optical Video or data 2004 optical recording X tape record and playback apparatus 139. XRCA73232 4669070 Signal Format for 2004 optical recording X Optical Tape record/playback system 140. XRCA73261 4333107 Jam-Resistant TV 2016 X System 141. XRCA73273 4340959 Optical Recording 2016 X Medium with A Thick overcoat.
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 142. XRCA73293 4291275 Frequency 2015 X Demodulation System 143. XRCA73345 4222071 Sensitivity 2014 X Information Record 144. XRCA73377A 4306308 Symbols Communication 2015 X System 145. XRCA73381 4320489 Reversible Optical 2016 X Storage Medium and a Method for Recording Information Therein 146. XRCA73198 4263555 Signal Detection 2015 X System 147. XRCA73489 4374428 Expandable FIFO System 2017 X 148. XRCA73536 4485477 Fast Frequency/Code 2001 radio, system, X Search spread spectrum, digital 149. XRCA73833 4365324 Eccentricity Control 2016 X Device 150. XRCA74110 4270221 Phaselocked Receiver 2015 X with Orderwire Channel 151. XRCA74202 4352194 System and Method for 2016 X Frequency Distribution
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 152. XRCA74296 4307549 Skylight Cover 2015 X CA 153. XRCA74474 4300227 Replicable Optical 2015 X CA 8724 Recording Medium DE FR GB HK IT JP MY NL SG 154. XRCA74603 4349887 Precise Digitally 2016 X Programmed Frequency Source 155. XRCA74695 4362367 Miniaturized 2016 X Symmetrization Optics for Junction Laser 156. XRCA74934 4265524 Optical Scanner with 2015 X Variable Scan Line Angle 157. XRCA75198 4325021 Optical Scanner with 2016 X Variable Scan Line Angle
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 158. XRCA75312 4383311 Optical recording 2001 optical recording X DE medium and FR information record GB with indented overcoat JP NL 3876 DE FR GB Information record HK and method of MY 159. XRCA75516 reversibly recording 2001 optical recording SG 160. XRCA75634 4447816 Stiffening clamp for 2001 X Useful self-erecting antenna to REMBASS vendor 7 161. XRCA75918 4404542 Digital Sequency 2017 X Detector 162. XRCA75984 4425570 Reversible Recording 2002 optical recording X DE 6996 medium and FR information record GB NL JP 163. XRCA76211 -- Optical Recording -- DE 4865 Medium and FR Information Record GB and Method of Making JP Same NL
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 164. XRCA76211A 4547876 Optical recording 2002 optical recording X DE 4865 medium & information FR record and method of GB making same NL JP 165. XRCA76278 4387381 Optical Recording 2017 X Medium and Information Record WI 166. XRCA7623 4449212 Multi-beam optical 2001 recording, optical X record and playback apparatus having means for splitting a single beam into a plurality of beams and dithering 167. XRCA76669 Optical Recording 2002 optical recording DE 3029 Medium FR GB JP 168. XRCA77019A 4459690 Multi-beam optical 2001 optical recording X record and playback apparatus having an improved beam splitter 169. XRCA77309 4443869 Track jump servo 2001 optical recording X system for disk player
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 170. XRCA78471 4617674 Synchronizing system 2003 comm systems X for spread spectrum transmission 171. XRCA78472 4587661 Apparatus for 2003 radio, system, synchronizing spread spread spectrum, spectrum satellite transmissions from small earth stations used for satellite transmission 172. XRCA78472 4587661 Apparatus for 2020 X Synchronizing Spread Spectrum Transm 173. XRCA78595 4502133 Automatic handling 2002 recording, optical X mechanism for an optical disk enclosed in a protective cartridge 174. XRCA78701 4532635 System and method 2003 radio, system, X employing two hop spread spectrum, spread spectrum satellite signal transmissions between small earth stations via satellite and a large 175. XRCA79102 4556881 Active, 2002 X Bi-Directional Bus Tap 176. XRCA79158 4581770 Fail Safe Repeater 2003 X for Fiber Optic Bus Distribution System
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 177. XRCA79162 4568952 Optical record blank 2004 recording, optical X and information record 178. XRCA79776 4712207 Apparatus for erasing 2005 recording, optical X information on a reversible optical medium 179. XRCA79779 4558465 Switched bias scheme 2003 optical X CA 2362 communications, laser, recording, DE for high speed laser optical GB transmitter JP SE 180. XRCA79912 4499996 Protective cartridge 2003 recording, optical X for disc record 181. XRCA80136 4646295 Frequency-Division 2005 X Multiplex Communications System 182. XRCA80442A 4641304 Announced 2006 X Retransmission Random Access System 183. XRCA80449 4633202 Local area network 2004 fiber optic X with constant tap communications level
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 184. XRCA80860 4652838 Phase randomization 2005 radio, system, X to reduce spread spectrum detectability of phase or frequency modulated digital signals 185. XRCA81171 4633455 Headwheel for a 2005 recording, optical X multiple beam optical tape playback system 186. XRCA81275 4630283 Fast acquisition 2005 radio, system, X burst mode spread spread spectrum spectrum communications with pilot carrier 187. XRCA81276 4639932 Clock rate spread 2005 radio, system, X spectrum spread spectrum 188. XRCA81346 4636586 Speakerphone with 2005 terminals, telephone X adaptive cancellation of room echoes 189. XRCA81420 4709370 Semiconductor laser 2005 fiber optic X driver circuit communications, laser 190. XRCA82031 4718118 Transparent laser 2006 fiber optic X DE drive current update communications, laser GB for burst mode fiber JP 1284 optic comm system
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Docket Patent Term 1997 Ref. No. No. Title Date Application US For Fee Class* Remarks ---- --- --- ----- ---- ----------- -- --- --- ------ ------- 191. XRCA82419 4709416 Laser bias current 2006 fiber optic DE 1284 stabilization for communications, laser X GB burst module fiber JP optic system 192. XRCA82459 4701894 Magnetic biasing 2006 recording, optical X apparatus for megneto-optic recording including a magnetic circuit 193. XRCA82757 4701895 Magnetic biasing 2006 recording, optical X apparatus for magneto-optic recording including a permanent magnet 194. XRCA83124 5341423 Masked Data 2011 X Transmission
Page 27 of 32 * CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped) WIDEBAND SYSTEMS TRANSFERRED ASSETS TO BE ASSIGNED BY LOCKHEED MARTIN U.S. Patents U.S. Patent No. 4,123,704, "Frequency Deviation Digital Display Circuit" by Kenneth C. Johnson, U.S.S.N. 873,449 U.S. Patent No. 4,164,022, "Electronic Digital Arrangement Computational Apparatus" by Glen D. Rattlingourd and John W. Zscheile, Jr., U.S.S.N. 903,273 U.S. Patent No. 4,209,342, "Dynamic Clearing Method and Apparatus for Removal of Remnant Material", By David B. Workman U.S.S.N. 921,923 U.S. Patent No. 4,225,935 "Coding Method and System with Enhanced Security" by John W. Zscheile, Jr. and Billie M. Spencer, U.S.S.N. 830,274 U.S. Patent No. 4,345,256, "Steerable Directional Antennas" by Lawrence L. Rainwater, U.S.S.N. 216,455 U.S. Patent No. 4,397,034, "Low Probability of Intercept Transmitting Apparatus" by Benjamin V. Cox, Billie M. Spencer and John W. Zscheile, Jr., U.S.S.N. 247,686 U.S. Patent No. 4,429,310, "Random Binary [Illegible] Encoded Ranging Apparatus", by John W. Zscheile, Jr., and Steven L. Barnett, U.S.S.N. 256,448 U.S. Patent No. 4,513,285, "Quasi Coherent Two-way Ranging Apparatus" by Lawrence W. Pike, John W. Zscheile, Jr. and Billie M. Spencer, U.S.S.N. 289,688 U.S. Patent No. 4,573,155, "Maximum Likelihood Sequence Decoder for Linear Cyclic Codes" by Robert J. Currie, Billie M. Spencer, John Zscheile, Jr. and Glen D. Rattlingourd, U.S.S.N. 561,502 U.S. Patent No. 4,613,860, "Coder-Decoder for Purged Binary Block Codes" by Robert J. Curtis, Craig K. Rushforth and John W. Zscheile, Jr., U.S.S.N. 561,503 U.S. Patent No. 4,636,718, "Acoustic-Optical Spectrum Analyzer with Expended Frequency Resolution" by Joseph H. Labrum and Allan Wilcox, U.S.S.N. 632,728 U.S. Patent No. 4,638,261, "Low Noise Amplifier with High Intercept Point" by Charles F. McGuire and John M. Fontaine U.S.S.N. 769,377 U.S. Patent No. 4,638,417, "Power Density Spectrum Controller" by Hubert C. Martin, Jr., Gene D. Hitler and David W. Paraley, U.S.S.N. 766,136 2 U.S. Patent No. 4,638,493, "Adaptive Interference Rejection for Improved Frequency Hop Detection" by F. Avery Bishop and Ronald S. Leahy, U.S.S.N. 745,487 U.S. Patent No. 4,656,484, "Radar Reflection and Scanner with Electromagnetic Programmable Drive" by Ralph A. Brown and Gerald H. Piels, U.S.S.N. 762,415 U.S. Patent No. 4,712,024 "Active Behave Star Mixer" by Charles F. McGuire, David J. Weber and Gordon C. Steynart, U.S.S.N. 766,187 U.S. Patent No. 4,786,912 "Antenna Stabilization and Enhancement by Rotation of Antenna Feed" by Ralph A. Brown and Lowell N. Shestag, U.S.S.N. 882,839 U.S. Patent No. 4,827,269 "Apparatus to Maximum Arbitrary Polarization Stabilization of an Antenna" by Lowell N. Shestag, John W. Zscheile, Jr., Alan E. Lundquist and Glen S. Kirkpatrick, U.S.S.N. 882,838 U.S. Patent No. 4,852,121 "Coherent [Illegible] Code Tracking Loop" by Samuel C. Kingston and John W. Zscheile, Jr., U.S.S.N. 111,372 U.S. Patent No. 4,901,317 "Efficient Maximum-Likelihood Decoder for the Golay (24,12) Code" by Craig K. Rushforth and Ayyoob D. Abbasmdeh, U.S.S.N. 231,125 U.S. Patent No. 4,926,169 "Coder-Decoder for Purged Extended Golay (22,7) Codes" by Po Tong, Elwyn R. [Illegible], Robert J. Currie and Craig K. Rushforth, U.S.S.N. 276,757 U.S. Patent No. 4,942,589 "Channelized Binary-Level Hop Rate Detector" by Patrick J. Smith, Ronald S. Leahy and Scott R. Bullock, U.S.S.N. 417,175 U.S. Patent No. 4,956,644 "Channelized Binary-Level Radiometer" by Ronald S. Leahy, Patrick J. Smith and Scott R. Bullock, U.S.S.N. 417,124 U.S. Patent No. 4,963,425 "Printed Wiring Board Substrata for Surface Mounted Components" by Alan M. Buchanan, Jay S. Abramowitz and Roberta A. Y. Flygare, U.S.S.N. 708,588 U.S. Patent No. 5,008,795 "Switched Capacitor Interleaved Forward Power Converter" by David W. Parsley and Hubert C. Martin, Jr., U.S.S.N. 498,863 U.S. Patent No. 5,048,053 "Detecting and Tracking Circuit for Component FN Codes" by Vaughn L. Mower and John W. Zscheile, Jr., U.S.S.N. 439,133 U.S. Patent No. 5,063,387 "Doppler Frequency Compensation Circuit" by Vaughn L. Mower, U.S.S.N. 439,907 3 U.S. Patent No. 5,063,572 "Channelized Daisy and Mix Chip Rate Detector" by Ronald S. Leahy and Patrick J. Smith, U.S.S.N. 533,183 U.S. Patent No. 5,222,100 "Range Based Acquisition System" by Alan E. Lundquist, John W. Zscheile, Jr. and Samuel C. Kingston, U.S.S.N. 625,407 U.S. Patent No. 5,257,282 "High Speed Code Sequence Generator" by Willis B. Adlkisson, Glen D. Rattingourd, Billie M. Spencer and John W. Zscheile, Jr., U.S.S.N. 625,497 U.S. Patent No. 5,298,908 "Interference Nulling System Antennas" by Gerald H. Piels, U.S.S.N. 125,832 U.S. Patent No. 5,299,229 "High Rate-Low Rate PN Code Tracking System" by John W. Zscheile, Jr., Alan E. Lundquist and Samuel C. Kingston, U.S.S.N. 010,723 U.S. Patent No. 5,495,509 "High Processing Gain Acquisition and Demodulation Apparatus" by Alan E. Lundquist, John W. Zscheile, Jr., and Samuel C. Kingston, U.S.S.N. 216,746 U.S. Patent No. 5,504,787 "Coherent Sequential FN Code Extractor" by John W. Zscheile, Jr., Alan E. Lundquist and Robert A. Wright, U.S.S.N. 216,744 U.S. Patent Applications U.S.S.N. 06/217,378 "A Low Radar Cross Section (RCS) High Gain Lens Antenna" by Samuel C. Kingston, Robert H. Burdoin and David Lemansdorf U.S.S.N. 06/217,379 "Low Radar Cross Section [RCS] Narrow Beam Lens Antenna" by Lawrence L. Rainwater U.S.S.N. 06/389,733 "Shared Energy Signalling Apparatus" by John W. Zscheile, Jr., Samuel C. Kingston and Billie M. Spencer U.S.S.N. 06/626,127 "High Speed M-Sequence Generator and Decoder Circuit" by Robert J. Currie U.S.S.N. 07/244,188 "Fast Acquisition Random Access Network System" by John W. Zscheile, Jr., Samuel C. Kingston, and Billie M. Spencer U.S.S.N. 07/629,506 "Method and Apparatus for Determining Location of a Ground Station" by LaMar K. Timothy, John W. Zscheile, Jr. and Craig S. Maddox U.S.S.N. 08/585,616 "Frequency Discriminator and Method and Receiver Incorporating Sams" by Samuel C. Kingston, Steven T. Barham and Sharon Wirius 4 U.S.S.N. 08/606,285 "A Multi-User Acquisition Procedure for Multipoint-to-Point Synchronous CDMA Systems" by Samuel C. Kingston, Thomas R. Giallorazi, Robert W. Stasgall and David W. Matoiak U.S.S.N. 08/606,378 "A Multi-User Acquisition Procedure for Point-to-Multipoint Synchronous CDMA Systems" by Samuel C. Kingston, Thomas R. Gialloranzi, Randal R. Sylvester, David W. Matoiak and Patrick J. Smith U.S.S.N. 08/684,021 "Coaxial Radio Frequency Test Probe" by James E. Fray U.S.S.N. 08/696,437 "Dielectrically Loaded Wide Band Feed" by Bryant F. Anderson, Mark J. Yamamoto and Douglas H. Ulmer U.S.S.N. 08/698,234 "Shrouded Horn Feed Assembly" by Bryant F. Anderson, Paul J. Gertside, Douglas M. Harrison and Joseph M. Baird U.S.S.N. 08/698,322 "Launcher for Plural Band Feed System" Bryant F. Anderson, Charles A. Demaris, Kevin L. Tauscher, Paul J. Gertaide, Douglas M. Harrison U.S.S.N. 08/698,324 "Plural Band Feed System" by Bryant F. Anderson, Joseph M. Baird Douglas M. Harrison, Charles A. Demaris, Paul J. Gertaide, Friedrich J. Fisher and Mark J. Yamamoto Foreign Patent Applications PCT International Patent Application PCT/US97/02654 (based on U.S.S.N. 08/606,285 Indian Patent Application based on U.S.S.N. 08/606,285 PCT International Patent Application PCT/US97/01154 (based on U.S.S.N. 08/606,378 Indian Patent Application based on U.S.S.N. 08/606,378 DISPLAY SYSTEMS PATENT LISTING: U.S. PATENT NO. 5,168,199 "Horizontal Linearity Correction Circuitry for Cathode Ray Tube Display". U.S. PATENT APPLICATION SERIAL NO. _______ (Loral Ref. 96-15) "Fluorescent Lamps with Current-Mode Driver Control". U.S. PATENT APPLICATION SERIAL NO. _______ (Loral Ref 96-16) "Wide Range Dual Backlight Display Apparatus". MICROWAVE NARDA WEST PATENT LISTING U.S. PATENT APPLICATION SERIAL NO. ______ (PAR 300-006419-US) "Polarity Reversal Network". U.S. PATENT APPLICATION SERIAL NO. ______ (PAR 300-006420-US) "Inductor Ring for Providing Tuning and Coupling in a Microwave Dielector Resonator Filter". RANDTRON PATENT LISTING U.S. PATENT No. 4,658,262 "Dual Polarized Sinuous Antennas". ADVANCED RECORDERS PATENT LISTING U.S. PATENT NO. 5,577,740 "Thermal Activated Self Releasing Seal for Boiler". U.S. PATENT APPLICATION SERIAL NO. ______ "Flight Crash Survivable Storage Unity with Aquarium Container". U.S. PATENT APPLICATION SERIAL NO. ______ "Flight Crash Survivable Storage Unit with Boiler". MICROWAVE NARDA FAST PATENT LISTING U.S. PATENT NO. TITLE - --------------- ----- 4,752,730 "Consumer Radiation Monitor" 4,253,469 "Implantable Temperature Probe" 2,628,283 "Hermetically Sealed Oscillator" 4,789,869 "Dipole Antenna" 4,611,166 "Radiation Hazard Detector" 4,424,483 "Microwave Radiation Monitor" 4,431,965 "Microwave Radiation Monitor" 4,629,978 "Dipole Antenna" 4,605,905 "Amplifier Input Circuitry" 4,518,912 "Radiation Detector" 4,634,968 "Wide Range Radiation Monitor" 5,168,265 "Personal Electromagnetic Radiation Monitor" 5,266,888 "Wide Power Range Radiation Monitor" 5,418,448 "Wide Power Range Radiation Monitor" 5,373,284 "Personal VHF Electromagnetic Radiation Monitor" 5,453,734 "Induced Body Current Metering Workstation Mat" 5,394,164 "Human-Equivalent Antenna for Electromagnetic Fields" 5,381,086 "Wide Power Range Radiation Monitor" 5,373,285 "Personal Electromagnetic Radiation Monitor" FOREIGN PATENT NO. TITLE - ------------------ ----- 1,093,646 Canada "Implantable Temperature Probe" 1,067,411,972 Japan "Radiation Detector" 2,181,562 UK "Electromagnetic Field Sensitive Probe" 2,133,895 UK "Electromagnetic Field Detector" 1,848,773 Japan "Electromagnetic Field Detector for Ind. Energy of Electric Field". 2,083,871 Canada "Electromagnetic Radiation Monitor" PATENT APPLICATIONS TITLE - ------------------- ----- 262,360 U.S. "High Frequency Probe" 280,388 U.S. "Broadband Probe" 07/980,454 U.S. "Contact Hazard Meter" 103,912 Israel "Electromagnetic Radiation Meter" 93,830,152 Italy "Wide Power Range Radiation Monitor" AIRPORT EXPLOSION DETECTION BUSINESS PATENT LISTING U.S. PATENT APPLICATION SERIAL NO. 08/325,145 "X-Ray Computer Tomography (CT) System for Detecting Thin Objects" PCT Application PCT/US95/12629 "X-Ray Computer Tomography (CT) System for Detecting Thin Objects" U.S. PATENT APPLICATION SERIAL NO. 08/332,519 "Inspection System and Spatial Resolution Technique for Detecting Explosives Using Combined Neutron Interrogation and X-Ray Imaging" PCT Application PCT/US95/12631 "Inspection System and Spatial Resolution Technique for Detecting Explosives Using Combined Neutron Interrogation and X-Ray Imaging" - ------------------------------------------------------------------------------- AMENDMENT NO. 1 Dated as of April 11, 1997 to TRANSACTION AGREEMENT Dated as of March 28, 1997 By and Among LOCKHEED MARTIN CORPORATION LEHMAN BROTHERS CAPITAL PARTNERS III, L.P. FRANK C. LANZA ROBERT V. LAPENTA and L-3 COMMUNICATIONS HOLDINGS, INC. - ------------------------------------------------------------------------------- AMENDMENT NO. 1 TO TRANSACTION AGREEMENT This Amendment No. 1 to Transaction Agreement (the "Amendment") is made as of the 11th day of April, 1997, by and among Lockheed Martin Corporation, a Maryland corporation ("Lockheed Martin"), Lehman Brothers Capital Partners III, L.P., a Delaware limited partnership ("Lehman"), Frank C. Lanza ("Lanza"), Robert V. LaPenta ("LaPenta"; and together with Lanza, the "Individual Purchasers") and L-3 Communications Holdings, Inc., a Delaware corporation ("Newco"). For purposes of this Amendment, Lehman, Lanza and LaPenta each are individually referred to as a "Purchaser" and collectively referred to as the "Purchasers." W I T N E S S E T H: WHEREAS, Lockheed Martin, in its own right and through certain of its direct and indirect Subsidiaries is engaged in the Business; WHEREAS, Lockheed Martin and the Purchasers, upon the terms and subject to the conditions of the Agreement have agreed to the formation and organization of Newco; WHEREAS, upon the terms and subject to the conditions of the Agreement, Lockheed Martin has agreed to transfer, or to cause the Affiliated Transferors to transfer, substantially all of the assets held or owned by, or used to conduct, the Business and to assign certain liabilities associated with the Business to Newco, and Newco has agreed to receive such assets and assume such liabilities; and WHEREAS, Lockheed Martin, Newco and the Purchasers desire to amend the Agreement in accordance with the terms of this Amendment; NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties contained herein, the parties agree as follows: Section 1. Capitalized terms used but not defined herein have the meanings given to them in the Transaction Agreement dated as of March 28, 1997, by and among Lockheed Martin, Newco and the Purchasers. Section 2. Section 15.13(a) of the Agreement is amended by deleting the reference to "April 14, 1997" in the second sentence of Section 15.13(a) and inserting in its place and stead "April 17, 1997." Section 3. Section 15.13(c) of the Agreement is amended by deleting the references to "April 11, 1997" in each of the last two sentences of Section 15.13(c) and inserting in its place and stead "April 18, 1997." 2 IN WITNESS WHEREOF, the parties hereto caused this Amendment to be duly executed by their respective authorized officers on the day and year first above written. WITNESS: LOCKHEED MARTIN CORPORATION ____________________________ By:________________________________ Name: Title: LEHMAN BROTHERS CAPITAL PARTNERS III, L.P. By: LEHMAN BROTHERS HOLDINGS INC., its General Partner ____________________________ By:___________________________ Name: Title: FRANK C. LANZA - ---------------------------- ----------------------------------- ROBERT V. LAPENTA - ---------------------------- ----------------------------------- L-3 COMMUNICATIONS HOLDINGS, INC. ____________________________ By:________________________________ Name: Title: 3 - ------------------------------------------------------------------------------- AMENDMENT NO. 2 Dated as of April 30, 1997 to TRANSACTION AGREEMENT Dated as of March 28, 1997 By and Among LOCKHEED MARTIN CORPORATION LEHMAN BROTHERS CAPITAL PARTNERS III, L.P. FRANK C. LANZA ROBERT V. LAPENTA and L-3 COMMUNICATIONS HOLDINGS, INC. - ------------------------------------------------------------------------------- AMENDMENT NO. 2 TO TRANSACTION AGREEMENT This Amendment No. 2 to Transaction Agreement (the "Amendment") is made as of the 30th day of April, 1997, by and among Lockheed Martin Corporation, a Maryland corporation ("Lockheed Martin"), Lehman Brothers Capital Partners III, L.P., a Delaware limited partnership ("Lehman"), Frank C. Lanza ("Lanza"), Robert V. LaPenta ("LaPenta"; and together with Lanza, the "Individual Purchasers") and L-3 Communications Holdings, Inc., a Delaware corporation ("Newco"). For purposes of this Amendment, Lehman, Lanza and LaPenta each are individually referred to as a "Purchaser" and collectively referred to as the "Purchasers." W I T N E S S E T H: WHEREAS, Lockheed Martin, in its own right and through certain of its direct and indirect Subsidiaries is engaged in the Business; WHEREAS, Lockheed Martin and the Purchasers, upon the terms and subject to the conditions of the Agreement have agreed to the formation and organization of Newco; WHEREAS, upon the terms and subject to the conditions of the Agreement, Lockheed Martin has agreed to transfer, or to cause the Affiliated Transferors to transfer, substantially all of the assets held or owned by, or used to conduct, the Business and to assign certain liabilities associated with the Business to Newco, and Newco has agreed to receive such assets and assume such liabilities; and WHEREAS, Lockheed Martin, Newco and the Purchasers desire to amend the Agreement in accordance with the terms of this Amendment; NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties contained herein, the parties agree as follows: Section 1. Capitalized terms used but not defined herein have the meanings given to them in the Transaction Agreement dated as of March 28, 1997, by and among Lockheed Martin, Newco and the Purchasers, as amended by Amendment No. 1 to Transaction Agreement dated as of April 11, 1997 (as amended, the "Agreement"). Section 2. The list of Attachments set forth in the index to the Agreement is revised by amending the description of Attachment XI to read as follows: "Other Transferred Employees". Section 3. Section 2.04(i) of the Agreement is amended by deleting the references to "$269,118,000" in the first parenthetical of that Section and inserting in their place and stead "$272,618,000". Section 4. Notwithstanding the provisions of Section 15.13(c) of the Agreement, for purposes of the Agreement, Attachment IV shall be as set forth in Exhibit A to this Amendment. Section 5. Notwithstanding the provisions of Section 15.13(c) of the Agreement, for purposes of the Agreement, Attachment V shall be as set forth in Exhibit B to this Amendment. 1 Section 6. Notwithstanding the provisions of Section 15.13(c) of the Agreement, for purposes of the Agreement, Attachment VIII shall be as set forth in Exhibit C to this Amendment. Section 7. Notwithstanding the provisions of Section 15.13(c) of the Agreement, for purposes of the Agreement, Attachment IX shall be as set forth in Exhibit D to this Amendment. Section 8. Notwithstanding the provisions of Section 15.13(b) of the Agreement, for purposes of the Agreement, Attachment X shall as set forth in Exhibit E to this Amendment. Section 9. Notwithstanding the provisions of Section 15.13(c) of the Agreement, for purposes of the Agreement, Attachment XI shall be as set forth in Exhibit F to the Amendment. Section 10. For purposes of the Agreement, Attachment XIV shall be as set forth in Exhibit G to this Amendment. Section 11. Notwithstanding the provisions of Section 15.13(c) of the Agreement, for purposes of the Agreement, Attachment XV shall be as set forth in Exhibit H to this Amendment. Section 12. The Disclosure Schedules attached to this Amendment as Exhibit I are, and for all purposes shall be, the Disclosure Schedules referenced in the Agreement. Section 13. Section 7.04 of the Agreement is amended by deleting the reference to "Attachment XI" in the second parenthetical of the first sentence and inserting in its place and stead the phrase "writing by Lockheed Martin and Newco on or prior to the Closing Date". Section 14. Section 8.04 of the Agreement is amended by deleting the reference to "Attachment XI" in the second parenthetical of the first sentence and inserting in its place and stead the phrase "writing by Lockheed Martin and Newco on or prior to the Closing Date". Section 15. Section 13.02(b) of the Agreement is amended by deleting the word "or" before the beginning of clause (v); inserting the phrase ", or (vi) the Universal Litigation" after clause (v) and before the semicolon; deleting the word "and" before "(v)" in the proviso; and inserting the phrase "and (vi)" after "(v)" in the proviso. Section 16. Section 13.04(b)(iii) of the Agreement is amended by deleting the word "and" after the semicolon. Section 17. Section 13.04(b)(iv) of the Agreement is amended by deleting the period at the end and inserting in its place and stead the phrase "; and". Section 18. Section 13.04(b) of the Agreement is amended by adding a new clause (v) as follows: "(v) with respect to the matter described in clause (vi) of Section 13.02(b) (after giving effect to the proviso thereto), to the extent of 50% of the aggregate Damages incurred by all Indemnified Parties as the result thereof in 2 excess of the Reserve Amount but not in excess of the Reserve Amount plus $1,000,000 (it being understood that Lockheed Martin's maximum liability under Section 13.02(b)(vi) and this Section 13.04(b)(v) shall be $500,000)." Section 19. Section 15.01 of the Agreement is amended to change the notice address for notices to Newco to the following: "L-3 Communications Holdings, Inc. 600 Third Avenue New York, New York 10016 Attention: Robert V. LaPenta Telecopy: (212) 805-5470" Section 20. Section (a) of Exhibit A to the Agreement is amended by adding the following after the definition of "Prime Government Contract" and before the definition of "Remedial Action(s)": ""Reserve Amount" means the amount referenced in the letter from Lockheed Martin to Newco dated as of the Closing Date making specific reference to the Agreement and this definition. Section 21. Section (a) of Exhibit A to the Agreement is amended by adding the following after the definition of "Transferred Assets" and before the definition of "U.S. Government": ""Universal Litigation" means the matter titled Universal Navigation Corporation, a California corporation; and Microcomputer Electronics Corporation, a Washington corporation v. Loral Corporation, a New York corporation; and Loral Fairchild Corp., a Delaware corporation (CIV93-743TUC WDB) pending in the United States District Court for the District of Arizona." Section 22. Clause (ii) of the definition of "Transferred Employee" in Section G.01 of Exhibit G to the Agreement is amended by deleting the existing provision in its entirety and inserting in its place and stead the following: "(ii) was laid off from the Business and has recall rights with respect to the Business other than any Person with such rights who is either employed by Lockheed Martin on the Closing Date (other than in the Business) or who has recall rights at another Lockheed Martin facility, or" Section 23. Section G.08 of Exhibit G to the Agreement is amended by deleting the existing provision in its entirety and inserting in its place and stead the following: 3 "G.08. Severance and Retention Agreements. In accordance with Section 6.9 of the Agreement and Plan of Merger dated as of January 7, 1996, by and among Loral Corporation, Lockheed Martin Corporation and LAC Acquisition Corporation, Lockheed Martin Tactical Systems, Inc. has adopted the Supplemental Severance Program. Lockheed Martin has entered into Key Employee Supplemental Severance Program and Key Executive Supplemental Severance Program agreements (the "Program Agreements"). In addition, Lockheed Martin has entered into Retention Agreements (collectively with the Supplemental Severance Program and the Program Agreements, the "Supplemental Agreements") with certain Transferred Employees who participate in the Supplemental Severance Program. Lockheed Martin also sponsors the Lockheed Martin Tactical Systems Severance Plan (the "Tactical Severance Plan"), the Severance Benefit Plan for Employees of Lockheed Martin Corporation (the "LMC Severance Plan") and the Special Supplemental Severance Program relating to the retention (as set forth in a memorandum from Steve Jackson dated October 28, 1996 of C3I and Systems Integration Sector administrative personnel (collectively with the Supplemental Agreements, the Tactical Severance Plan and the LMC Severance Plan, the "Severance Arrangements"). Other than with respect to the Transferred Employees set forth on Section B.21 of the Disclosure Schedules, Newco assumes all obligations and liabilities of Lockheed Martin and its Affiliates under the Severance Arrangements and any other severance benefit obligation (collectively with the Severance Arrangements, the "Severance Obligations") whether oral or written, for all claims made after the Closing Date by Transferred Employees, including claims based on the Contemplated Transactions, which shall be Assumed Liabilities for purposes of this Agreement. All obligations and Liabilities of Lockheed Martin with respect to any Severance Obligation for the Transferred Employees on Section B.21 of the Disclosure Schedules and any other individual covered by a Supplemental Agreement under any Severance Obligation who is not a Transferred Employee shall constitute Excluded Liabilities." 4 IN WITNESS WHEREOF, the parties hereto caused this Amendment to be duly executed by their respective authorized officers on the day and year first above written. LOCKHEED MARTIN CORPORATION By:________________________________ Name: Title: LEHMAN BROTHERS CAPITAL PARTNERS III, L.P. By: LEHMAN BROTHERS HOLDINGS INC., its General Partner By:___________________________ Name: Title: FRANK C. LANZA ----------------------------------- ROBERT V. LAPENTA ----------------------------------- L-3 COMMUNICATIONS HOLDINGS, INC. By:________________________________ Name: Title: 5 AMENDMENT NO. 3 Dated as of May 21, 1997 to TRANSACTION AGREEMENT Dated as of March 28, 1997 By and Among LOCKHEED MARTIN CORPORATION LEHMAN BROTHERS CAPITAL PARTNERS III, L.P. LEHMAN BROTHERS HOLDINGS INC. FRANK C. LANZA ROBERT V. LAPENTA L-3 COMMUNICATIONS HOLDINGS, INC. and L-3 COMMUNICATIONS CORPORATION AMENDMENT NO. 3 TO TRANSACTION AGREEMENT This Amendment No. 3 to Transaction Agreement (the "Amendment") is made as of the 15th day of May, 1997, by and among Lockheed Martin Corporation, a Maryland corporation ("Lockheed Martin"), Lehman Brothers Capital Partners III, L.P., a Delaware limited partnership, Lehman Brothers Holdings Inc., a Delaware corporation (together with Lehman Brothers Capital Partners III, L.P., "Lehman"), Frank C. Lanza ("Lanza"), Robert V. LaPenta ("LaPenta"; and together with Lanza, the "Individual Purchasers"), L-3 Communications Holdings, Inc., a Delaware corporation ("Newco"), and L-3 Communications Corporation, a Delaware corporation. For purposes of this Amendment, Lehman, Lanza and LaPenta each are individually referred to as a "Purchaser" and collectively referred to as the "Purchasers." W I T N E S S E T H WHEREAS, Lockheed Martin, in its own right and through certain of its direct and indirect Subsidiaries previously was engaged in the Business; WHEREAS, Lockheed Martin and the Purchasers, upon the terms and subject to the conditions of the Agreement have formed and organized Newco; WHEREAS, upon the terms and subject to the conditions of the Agreement, Lockheed Martin has transferred or caused the Affiliated Transferors to transfer, substantially all of the assets held or owned by, or used to conduct, the Business and to assign certain liabilities associated with the Business to Newco, and Newco has received such assets and assumed such liabilities; WHEREAS, Lehman Brothers Capital Partners III L.P. has assigned certain of its rights and obligations under the Agreement to Lehman Brothers Holdings Inc., and Newco has assigned certain of its rights and obligations under the Agreement to L-3 Communications Corporation, a Delaware corporation and wholly owned subsidiary of Newco; and WHEREAS, Lockheed Martin, Newco and the Purchasers desire to amend the Agreement in accordance with the terms of this Amendment; NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties contained herein, the parties agree as follows: Section 1. Capitalized terms used but not defined herein have the meanings given to them in the Transaction Agreement dated as of March 28, 1997, by and among Lockheed Martin, Newco and the Purchasers, as amended by Amendment No. 1 to Transaction Agreement dated as of April 11, 1997, and by Amendment No. 2 to the Transaction Agreement dated as of April 30, 1997 (as amended, the "Agreement"). Section 2. Section G.06(c) of the Transaction Agreement shall be amended to read as follows: With respect to all Lockheed Martin Defined Contribution Plans except the Transferred Savings Plans described in Section G.06(b) (the "Lockheed Martin Savings Plans"), the Transferred Employees shall cease to accrue benefits and service credits under such plans as of the Closing Date and, effective as of 1 the Closing Date, Newco shall establish new savings plans ("Newco's Savings Plans") and associated trusts to hold the assets of those plans for the Transferred Employees, to be effective as of the Closing Date, and shall provide to Lockheed Martin evidence reasonably satisfactory to Lockheed Martin that Newco's Savings Plans and the associated trusts have been established and that Newco's Savings Plans qualify under the requirements of Section 401(a) of the Code, and that the trusts are exempt from tax under Section 501(a) of the Code. Lockheed Martin shall provide to Newco evidence reasonably satisfactory to Newco that the Lockheed Martin Savings Plans remain qualified under the requirements of Section 401(a) of the Code. Provided Lockheed Martin and Newco have received evidence reasonably satisfactory to them in accordance with the preceding sentences, as soon as is reasonably practicable following the Closing Date, but in no event later than 60 days following receipt of such mutually satisfactory evidence, (i) Lockheed Martin shall take all action required or appropriate to transfer the account balances of all Transferred Employees and Transferred Beneficiaries (other than account balances in the Lockheed Martin Savings Plan, Lockheed Martin Savings Plan II and Lockheed Martin Performance Sharing Plan, collectively the "Camden Plans") to the respective trust associated with Newco's Savings Plans; and (ii) with respect to account balances in the Camden Plans, Lockheed Martin shall amend the Camden Plans, to the extent permitted by Section 401(k)(10) of the Code, to permit each Transferred Employee or Transferred Beneficiary with an account balance in the Camden Plans during the period between the Closing and the end of the second calendar year following the Closing, to (x) receive a distribution from the Camden Plans; (y) make a direct rollover in accordance with Section 401(a)(31) of the Code; or (z) leave his or her account balances in the Camden Plans. Transfers shall be made in the form of cash in an amount equal to the value of the account balances to be transferred, determined as of the close of business on the last business day immediately preceding the transfer, except that (i) to the extent a participant's or beneficiary's account balance in the transferor plan includes one or more promissory notes evidencing a participant loan or loans, such promissory note shall be transferred in kind for the participant's or beneficiary's credit under the transferee plan and (ii) any assets in the transferor trust consisting of securities issued by Lockheed Martin, Martin Marietta Materials, Inc. and Loral Space & Communications, Ltd. that are allocable to the respective transferee plan shall be transferred in kind. Amounts distributed or rolled over from the Camden Plans shall be payable in cash only. For the period from the Closing Date until such time as the Transferred Employee or Transferred Beneficiary no longer has an account balance in any Lockheed Martin Defined Contribution Plan, Newco shall collect by payroll deduction and promptly pay over to the respective Lockheed Martin Defined Contribution Plan all loan payments required on participant loans made by the respective plan to any Transferred Employee and Lockheed Martin shall cause the respective Lockheed Martin Defined Contribution Plan to 2 administer and pay all distributions, withdrawals and loans payable under the terms of the respective plan. Contingent upon the transfer of an account balance to each of Newco's Savings Plans, Newco shall assume all liabilities of Lockheed Martin and its affiliates with respect to that Transferred Employee or Transferred Beneficiary under the Lockheed Martin Defined Contribution Plan from which that transfer was made and shall become with respect to such Transferred Employee and Transferred Beneficiary responsible for all acts, omissions and transactions under or in connection with such Lockheed Martin Defined Contribution Plan, whether arising before or after the Closing; provided, however, that in the case of any liabilities with respect to Camden Transferees (other than Camden Transferrees for whom no such transfer was made), Newco shall only assume liabilities and shall only become responsible for all acts, omissions and transactions under or in connection with that Lockheed Martin Defined Contribution Plan arising after the Closing or disclosed in Section B.21 of the Disclosure Schedules." 3 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers on the day and year first above written. WITNESS: LOCKHEED MARTIN CORPORATION _______________________________ By: ____________________________ Name: Marian S. Block Title: Associate General Counsel LEHMAN BROTHERS CAPITAL PARTNERS III, L.P. By: LEHMAN BROTHERS HOLDINGS INC., its General Partner _______________________________ By: ____________________________ Name: Robert B. Millard Title: Managing Director LEHMAN BROTHERS HOLDINGS INC. _______________________________ By: ____________________________ Name: Steven J. Berger Title: Managing Director L-3 COMMUNICATIONS HOLDINGS, INC. _______________________________ By: ____________________________ Name: Michael T. Strianese Title: VP Finance and Controller FRANK C. LANZA - ------------------------------- ---------------------------- ROBERT V. LAPENTA - ------------------------------- ---------------------------- 4 L-3 COMMUNICATIONS CORPORATION _______________________________ By: ____________________________ Name: Michael T. Strianese Title: VP Finance and Controller 5 EX-10.82 15 ASSET PURCHASE AGREEMENT EXHIBIT 10.82 ASSET PURCHASE AGREEMENT AMONG ALLIEDSIGNAL NC., ALLIEDSIGNAL TECHNOLOGIES, INC., ALLIEDSIGNAL DEUTSCHLAND GMBH AND L-3 COMMUNICATIONS CORPORATION DATED AS OF MARCH 30, 1998 ASSET PURCHASE AGREEMENT
Page ---- ARTICLE 1. PURCHASE AND SALE ........................................................................ 1 1.1 Purchase and Sale ............................................................ 1 1.2 Non-Assignable Assets ........................................................ 3 1.3 Excluded Assets .............................................................. 3 1.4 Transfer of the Assets ....................................................... 4 1.5 Sale and Transfer of ELAC Shares ............................................. 4 1.6 License Agreement ............................................................ 5 ARTICLE 2. CLOSING; PURCHASE PRICE .................................................................. 5 2.1 Closing Date and Place ....................................................... 5 2.2 Purchase Price ............................................................... 5 2.3 Income Taxes ................................................................. 5 2.4 Cash True-Up ................................................................. 5 2.5 Allocation of Purchase Price ................................................. 6 2.6 Payments ..................................................................... 6 2.7 Transfer Taxes ............................................................... 6 ARTICLE 3. ASSUMPTION OF LIABILITIES AND OBLIGATIONS ................................................ 7 3.1 Assumed Liabilities .......................................................... 7 3.2 Excluded Liabilities ......................................................... 7 ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SELLERS ................................................ 8 4.1 Corporate Status ............................................................. 8 4.2 Authorization ................................................................ 8 4.3 Compliance ................................................................... 9 4.4 [Intentionally left blank] ................................................... 9 4.5 Personal Property ............................................................ 9 4.6 Intellectual Property ........................................................ 10 4.7 Contracts and Binding Commitments ............................................ 10 4.8 Title ........................................................................ 11 4.9 Litigation ................................................................... 11 4.10 Environmental Matters ........................................................ 11 4.11 Employee Benefit Plans and Policies .......................................... 12 4.12 Material Changes ............................................................. 13 4.13 [Intentionally left blank] ................................................... 15 4.14 Compliance with Law .......................................................... 15 4.15 Consents ..................................................................... 15 4.16 Taxes ........................................................................ 15 4.17 Permits and Licenses ......................................................... 16 4.18 Ownership of ELAC Shares ..................................................... 16 4.19 Labor Relations .............................................................. 16 4.20 Brokerage Fees ............................................................... 17
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Page ---- 4.21 Government Contracts ........................................................ 17 4.22 Government Furnished Equipment .............................................. 19 4.23 Entire Business ............................................................. 19 4.24 Real Estate ................................................................. 19 4.25 Insurance ................................................................... 20 4.26 Affiliate Transactions ...................................................... 20 4.27 No Additional Representations ............................................... 21 ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER .............................................. 21 5.1 Corporate Status ............................................................ 21 5.2 Authorization ............................................................... 21 5.3 Compliance .................................................................. 21 5.4 Due Diligence ............................................................... 22 5.5 Financing ................................................................... 22 5.6 Investment Representation ................................................... 22 5.7 Conveyances and Restrictions ................................................ 22 5.8 Brokerage Fees .............................................................. 22 ARTICLE 6. EMPLOYEES AND EMPLOYEE BENEFITS .......................................................... 22 6.1 Employment ................................................................... 22 6.2 Compensation and Benefits - U.S. Employees ................................... 23 6.3 Severance and WARN Act ....................................................... 24 6.4 Health Care Continuation Liability ........................................... 24 6.5 Pension Plan ................................................................. 24 6.6 Savings Plan ................................................................. 26 6.7 Labor Agreements ............................................................. 27 ARTICLE 7. PRE-CLOSING COVENANTS .................................................................... 27 7.1 [Intentionally left blank] ................................................... 27 7.2 [Intentionally left blank] ................................................... 27 7.3 [Intentionally left blank] ................................................... 27 7.4 [Intentionally left blank] ................................................... 27 7.5 Workers' Compensation ........................................................ 27 7.6 Insurance-Primary Casualty Program ........................................... 27 7.6.1 Claims Responsibility and Procedures ............................ 27 7.7 No Inconsistent Action ....................................................... 28 7.8 [Intentionally left blank] ................................................... 28 7.9 Non-Solicitation ............................................................. 28 7.10 Refunds and Remittances ...................................................... 28 7.11 Enforcement of Confidentiality Provisions .................................... 28 7.12 Novation of Government Contracts ............................................. 28 7.13 Further Actions .............................................................. 28 7.14 Letters of Credit ............................................................ 29 7.15 1985 Capitalization of ELAC .................................................. 29 7.16 MCDV Subcontract ............................................................. 29
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Page ---- ARTICLE 8. CONDITIONS TO CLOSING .................................................................... 30 8.1 Conditions to the Obligations of Purchaser .................................. 30 8.2 Conditions to the Obligations of Sellers .................................... 31 ARTICLE 9. TERMINATION AND SURVIVAL ................................................................. 31 9.1 Termination ................................................................. 31 9.2 Effect of Termination ....................................................... 32 ARTICLE 10. CLOSING DOCUMENTS ....................................................................... 32 10.1 Documents to be Delivered by Sellers ........................................ 32 10.2 Documents to be Delivered by Purchaser ...................................... 33 ARTICLE 11. POST CLOSING OBLIGATIONS ................................................................ 34 11.1 Further Assurances .......................................................... 34 11.2 Access to Books and Records ................................................. 34 11.3 Cooperation in Litigation ................................................... 34 11.4 Proprietary Information ..................................................... 34 11.5 Covenant Not to Compete ..................................................... 35 11.6 Change of Name .............................................................. 35 11.7 Tax Election ................................................................ 35 11.8 Research and Experimental Expenses .......................................... 35 11.9 Pooling Arrangement ......................................................... 35 ARTICLE 12. INDEMNIFICATION ......................................................................... 35 12.1 Indemnification by Sellers .................................................. 35 12.2 Tax Indemnification ......................................................... 36 12.3 Indemnification by Purchaser ................................................ 36 12.4 Indemnification Procedure ................................................... 37 12.5 Survival and Limitations .................................................... 38 12.6 Adjustment for Insurance and Taxes .......................................... 38 12.7 Environmental Liabilities ................................................... 39 12.8 Facility Sale Agreement ..................................................... 39 ARTICLE 13. MISCELLANEOUS ........................................................................... 39 13.1 Expenses ....................................................................... 39 13.2 Notices ........................................................................ 39 13.3 Confidentiality ................................................................ 40 13.4 Counterparts ................................................................... 40 13.5 Entire Agreement/Termination of December Agreement ............................. 40 13.6 Construction ................................................................... 41 13.7 Assignment ..................................................................... 41 13.8 Amendment ...................................................................... 41 13.9 Applicable Law ................................................................. 41 13.10 No Third Party Rights .......................................................... 41 13.11 Exhibits and Schedules ......................................................... 41
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Page ---- 13.12 Waivers .............................................................................. 41 13.13 Severability ......................................................................... 42 13.14 Bulk Sales Law ....................................................................... 42 13.15 Knowledge of Sellers ................................................................. 42 13.16 Personal Liability ................................................................... 42 EXHIBIT A -- License Agreement EXHIBIT B -- Transition Services Agreement
iv SCHEDULES 1 Products 1.1(a) Personal Property 1.3(j) Excluded Assets 4.6(a) Intellectual Property 4.6(c) Licensed Intellectual Property 4.6(d) Intellectual Property 4.7 Contracts 4.8 Title and Leases 4.9 Litigation 4.10 Environmental Disclosure 4.11 Benefit Plans and Policies 4.12 Material Changes 4.14 Compliance with Law 4.15 Consents 4.16 ELAC Taxes 4.17 Permits and Licenses 4.19 Labor Relations 4.19(x) Labor Relations 4.21(a) - (e) Government Contracts 4.22 Government Furnished Equipment 4.23 Entire Business 4.25 Insurance v 4.26 Affiliate Transactions 6.2(a) Retention Agreements 6.5(b) Actuarial Methods and Assumptions 7.15 Letters of Credit vi ASSET PURCHASE AGREEMENT ASSET PURCHASE AGREEMENT (the "Agreement") dated as of March 30, 1998 among AlliedSignal Inc., a Delaware corporation ("AlliedSignal"), AlliedSignal Technologies, Inc., an Arizona corporation and a wholly owned subsidiary of AlliedSignal ("ASTI"), AlliedSignal Deutschland GmbH, a German corporation and a wholly owned subsidiary of AlliedSignal ("AS Deutschland" and, collectively with ASTI and AlliedSignal, the "Sellers"), and L-3 Communications Corporation, a Delaware corporation ("Purchaser"). WITNESSETH: WHEREAS, AlliedSignal is engaged exclusively through AlliedSignal's Ocean Systems business unit ("Ocean Systems") and through AlliedSignal ELAC Nautik GmbH ("ELAC"), a wholly owned subsidiary of AS Deutschland, in the business (the "Business") of developing, manufacturing and selling the products and services (the "Products") listed on Schedule 1 hereto, together with services associated with such Products; all of which Products as produced by the Business during the last 24 months are listed in Schedule I hereto; WHEREAS, certain of the intellectual property used by Ocean Systems is owned by ASTI; WHEREAS, AlliedSignal desires to sell and Purchaser desires to purchase the assets of Sellers primarily related to, or used primarily in connection with, the Business as described herein. NOW, THEREFORE, in consideration of the mutual covenants, agreements representations and warranties contained herein, the parties agree as follows: ARTICLE 1. PURCHASE AND SALE 1.1 Purchase and Sale of Assets and Stock. Subject to the terms and conditions of this Agreement and except as otherwise provided herein, at the Closing (as defined in Section 2.1), Sellers shall sell, convey, transfer, assign and deliver to Purchaser, and Purchaser shall purchase and accept from Sellers, all direct or indirect right, title and interest of Sellers in the assets, whether tangible or intangible, real or personal, primarily related to, or used primarily in connection with, the Business prior to the Closing, other than Excluded Assets (as defined in Section 1.3), together with all of AS Deutschland's right, title and interest in the ELAC capital stock described in Section 1.1(o) below (the "Assets"), including, without limitation, the following: (a) all machinery and equipment, fixtures, furniture, office equipment, vehicles, boats, ships, tools and other tangible personal property set forth on Schedule 1.1(a) as of the date indicated thereon (collectively, the "Personal Property"); (b) all accounts receivable and other receivables as of the Closing Date, whether recorded or unrecorded (the "Accounts Receivable"); 1 (c) all inventory and other supplies on hand, in transit or on order as of the Closing Date, wherever located, including raw materials, work-in-process and finished goods (the "Inventory"); (d) subject to the exclusions set forth in Section 1.3(f) and (h), all intellectual property, including without limitation all (i) inventions, discoveries, processes, formulae, designs, methods, techniques, procedures, concepts, developments, technology, new and useful improvements thereof and know-how relating thereto, whether or not patented or eligible for patent protection; copyrights and copyrightable works, including computer applications, programs, software, databases and related items; trademarks, service marks, trade names (including, but not limited to, the "Ocean Systems" trade name), brand names, logos and trade dress, the goodwill of any business symbolized thereby, and all common-law rights relating thereto; trade secrets and other confidential information; (ii) registrations, applications, recordings, and licenses or other similar agreements related to the foregoing; (iii) rights to sue at law or in equity for any infringement or other impairment of the foregoing occurring prior to the Closing Date; and (iv) rights to obtain reissues, re-examinations, continuations, continuations-in-part, divisions, extensions, renewals or other legal protections pertaining to the foregoing (the "Intellectual Property"); (e) all contracts, agreements, arrangements and/or commitments (the "Contracts"); (f) all transferable governmental and other permits, licenses, approvals, certificates of inspection, filings, franchises and other authorizations relating to the Assets including, but not limited to, those listed in Schedules 4.10 and 4.17 hereto (the "Permits and Licenses"); (g) prepaid expenses, except insurance premiums, but only if and to the extent of the benefit conferred by such prepaid expenses to the Business after the Closing Date; (h) all transferable rights of Sellers pursuant to any express or implied warranties, representations or guarantees relating to any Personal Property or made by suppliers furnishing goods or services to Sellers; (i) all lists, files and documents, including, but not limited to, all business records, tangible data, computer software, electronic media and management information systems, disks, files, customer lists, supplier lists, blueprints, specifications, designs, drawings, plans, operation or maintenance manuals, bids, personnel records, policy manuals, invoices, credit reports, sales literature, tax, financial and accounting records and all other books and records (the "Books and Records"). (j) all interests in real estate, whether leased or owned, excluding the land, building and improvements located at Sylmar, California (the "Facility"), (k) all security (including cash) deposited with third parties and all security bonds; 2 (1) all goodwill and going concern value (without any representation as to any value thereof); (m) all claims, causes of action, choses in action, rights of recovery and rights of set-off of any kind against other parties (other than those related to Excluded Assets or Excluded Liabilities); (n) all insurance proceeds arising out of or related to damage, destruction or loss of any property or asset of or used primarily in connection with the Business to the extent of any damage or destruction that remains unrepaired, or to the extent any property or asset remains unreplaced, at the Closing Date; and (o) all the issued and outstanding capital stock and rights in respect of such capital stock of ELAC (the "ELAC Shares"). 1.2 Non-Assignable Assets. Notwithstanding anything to the contrary contained in this Agreement, to the extent the sale, assignment, transfer, conveyance or delivery to Purchaser of any Asset, or any other item to be delivered at Closing, such as a permit, license or consent, is prohibited by any foreign, federal, state or local statutes, laws or regulations applicable to the Assets or the operation of the Business (an "Applicable Law") or would require any governmental or third party authorizations, approvals, consents or waivers which shall not have been obtained prior to the Closing (after Sellers' reasonable best efforts to obtain them), this Agreement shall not constitute a sale, assignment, transfer, conveyance or delivery thereof. Following the Closing, the parties shall use reasonable best efforts and cooperate with each other to obtain promptly such authorizations, approvals, consents or waivers; provided, however, that neither Sellers nor Purchaser shall be required to pay any consideration therefor, other than filing, recordation or similar fees payable to any governmental authority, which fees shall be paid in accordance with Section 2.6. Pending such authorization, approval, consent or waiver, the parties shall cooperate with each other in any commercially reasonable and lawful arrangements designed to provide to Purchaser the benefits of use of such Asset. Once such authorization, approval, consent or waiver is obtained, the Sellers shall promptly assign, transfer, convey and deliver such Asset to Purchaser for no additional consideration. To the extent that any such Asset cannot be transferred or the full benefits of use of any such Asset cannot be provided to Purchaser following the Closing, then Purchaser and Sellers shall enter into such arrangements for no additional consideration from Purchaser (including subleasing or subcontracting if permitted) to provide Purchaser the economic (taking into account tax costs and benefits) and operational equivalent of obtaining such authorization, approval, consent or waiver. 1.3 Excluded Assets. Notwithstanding anything to the contrary contained in this Agreement, the following are not included in the Assets and not intended to be sold, assigned, transferred or conveyed to Purchaser hereunder (the "Excluded Assets"): (a) assets primarily related to, or used primarily in connection with, Sellers' businesses other than the Business, including, but not limited to, the assets primarily related to, or used primarily in connection with, Sellers' avionics repair and overhaul business conducted at the Facility; 3 (b) except as set forth in Section 2.4, cash, cash equivalents and overdrafts; (c) intercompany receivables and intercompany prepaid expenses, other than (i) trade receivables of the Business for goods delivered in the ordinary course of business and (ii) the intercompany note receivable between Ocean Systems and ELAC with respect to cash in the AlliedSignal German cash pool (the "Intercompany Note"); (d) Books and Records which Sellers are required by law to retain; provided, however, that in the event of such legal requirement, Sellers shall retain copies of such Books and Records and deliver the original Books and Records to Purchaser unless Sellers are legally obligated to retain the original records in which case the copies of such Books and Records shall be provided to Purchaser; (e) the basic books and records of account and all supporting vouchers, invoices and other records and materials relating to any or all income taxes of Sellers; other than all such materials relating solely to the Business and located at the Facility or at ELAC's headquarters in Kiel, Germany (the "ELAC Facility"); (f) except as granted pursuant to Section 1.1(d) any right to use any name or logo of Sellers or any Affiliate or any confusingly similar variant or derivative thereof, including but not limited to "Allied-Signal", "AlliedSignal", "Allied", "Allied Chemical," "Signal," "Bendix," "Bendix Oceanics" or "Bendix Oceanics, Inc."; (g) the insurance policies of Sellers, including without limitation those pertaining to the Business and the Facility, and the rights of Sellers thereunder; (h) the Intellectual Property listed in Schedule 4.6 (c) (the "Licensed Property"); (i) assets of employee benefit plans, except as provided in Article 6; (j) the assets listed in Schedule 1.3(j); and (k) the Facility. 1.4 Transfer of the Assets. Sellers shall sell, convey, transfer, assign and deliver the Assets to Purchaser at the Closing by means of deeds, bills of sale, assignments, endorsements, consents, certificates and such other good and sufficient instruments of transfer in form and substance reasonably satisfactory to Purchaser, and all in recordable form, where applicable, as shall be necessary or appropriate to vest in Purchaser all right, title, ownership and interest of Sellers in and to the Assets as provided in this Agreement or in the Schedules hereto. 1.5 Sale and Transfer of ELAC Shares. Sellers shall cause to be delivered to the Purchaser certificates representing the ELAC Shares, duly endorsed, or accompanied by stock powers duly executed, with all necessary stock transfer stamps attached thereto and cancelled, 4 or such other assignments, deeds, share transfer forms, endorsements, notarial deeds of transfer or other instruments or documents, duly stamped where necessary. 1.6 License Agreement. On or prior to the Closing Date, ASTI and Purchaser shall enter into a license agreement in the form attached hereto as Exhibit A, with respect to the intellectual property identified in Schedule 4.6(c). ARTICLE 2. CLOSING; PURCHASE PRICE 2.1 Closing Date and Place. On and subject to the conditions set forth herein, the consummation of the purchase and sale contemplated hereby (the "Closing") will take place at the offices of AlliedSignal in Morristown, NJ at 10:00 a.m., local time, on March 30, 1998, or at such other time and place as shall be agreed upon by the parties hereto. The date upon which the Closing occurs is referred to herein as the "Closing Date". The Closing shall be effective as of 11:59 p.m. on the Closing Date. In addition, subsequent to the Closing, Purchaser and Sellers shall call the notary in Europe in order to perfect the transfer of the ELAC Shares by way of a notarial deed. 2.2 Purchase Price. (a) The purchase price to be paid by Purchaser for the Assets including the ELAC Shares, is Sixty-Seven Million Five Hundred Thousand Dollars ($67,500,000) (the "Purchase Price"). The Purchase Price shall be paid by Purchaser in full at Closing in immediately available funds. (b) The parties acknowledge the existence of a receivable relating to a contract dated December 19, 1997 (the "Turkey Contract") pursuant to which Ocean Systems is to supply to the Turkish Navy four (4) AQS-18A dipping sonar systems, plus spares, ground support equipment and performance testing (the "Turkey Receivable"). In the event that any cash is received by AlliedSignal in respect of the Turkey Receivable, whether before, on or after the Closing Date (each a "Turkey Cash Receipt"), AlliedSignal shall pay to L-3 an amount in cash equal to all Turkey Cash Receipts, on April 1, 1998, or if any Turkey Cash Receipt is received by AlliedSignal after April 1, 1998, on the date of such receipt. 2.3 Income Taxes. As soon as reasonably practicable, the parties shall prepare a calculation of income tax liability or tax benefit based on the income or loss reflected on the books and records of the Business determined on a basis consistent with prior periods (excluding any income or loss attributable to the Turkey Contract) for the period beginning after December 31, 1997 (the "Effective Date") and ending on the close of the Closing Date multiplied by 36.6%. The calculation of book income or loss for such period shall be computed by means of a closing of the books and records of the Business as of the Closing Date, and, to the extent not practical, by apportionment on the basis of elapsed days. Buyer shall pay to Seller any such income tax liability and Seller shall pay to Buyer any such income tax benefit within 60 days thereof. 2.4 Cash True-Up. Within fifteen business days after the Closing Date, AlliedSignal shall prepare and deliver to Purchaser a schedule setting forth, on a daily basis, the cash generated by the Business from 12:01 a.m. on the first day following the Effective 5 Date through and including the Closing Date. Purchaser shall have three business days from receipt to review the schedule and AlliedSignal shall give Purchaser reasonable access to its books and records for the purpose of confirming the calculations of AlliedSignal pursuant to this Section 2.4. Any dispute with respect to the schedule shall be resolved in good faith by the parties. Within three business days after the expiration of such review period (or the resolution of any dispute), Purchaser shall make payment to AlliedSignal if the schedule shows a net cash usage by the Business during such period and AlliedSignal shall make payment to Purchaser if the schedule shows net cash generation during such period in an amount equal to such net cash usage or net cash generation, as the case may be; provided, however, that if AlliedSignal shall pay to Purchaser any amount pursuant to Section 2.2(b) in respect of a Turkey Cash Receipt received on or prior to the Closing Date, and the amount of such Turkey Cash Receipt would have been a cash generation under this Section 2.4 but for this proviso, then the amount of any such Turkey Cash Receipt shall be excluded in calculating net cash generation or a cash usage under this Section 2.4. Any payment to be made pursuant to this Section 2.4 shall be made in immediately available funds by wire transfer to a bank account designated in writing by the party entitled to receive the payment. AlliedSignal shall be responsible for paying any checks outstanding as of the Effective Date. 2.5 Allocation of Purchase Price. The Sellers and the Purchaser agree to allocate the Purchase Price of the Assets including the covenant not to compete, in accordance with the rules under Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations promulgated thereunder. Such allocation shall be mutually agreed between the Sellers and the Purchaser. The Sellers and the Purchaser recognize that the Purchase Price does not include Purchaser's acquisition expenses and that Purchaser will allocate such expenses appropriately. Sellers and the Purchaser agree to act in accordance with the computations and allocations as determined pursuant to this Section 2.5 (including any modifications thereto reflecting any post-Closing adjustments, such adjustments shall be allocated in accordance with the character of each such adjustment, on a basis consistent with the allocation under this Section 2.5) in any relevant Tax Returns or filings, including any forms or reports required to be filed pursuant to Section 1060 of the Code, the Treasury Regulations promulgated thereunder or any provisions of local, state and foreign law ("1060 Forms"), and to cooperate in the preparation of any 1060 Forms and to file such 1060 Forms in the manner required by Applicable Law. 2.6 Payments. All payments required to be made pursuant to this Article 2 and other provisions of this Agreement shall be made in United States dollars in immediately available funds by wire transfer to an account designated by the party to receive payment in writing to the party making payment. 2.7 Transfer Taxes. Purchaser and Sellers shall each bear 50% of all sales, transfer and similar taxes, duties or levies (other than taxes computed on the basis of income) assessed or payable in connection with the transfer of the Assets including the ELAC Shares to Purchaser, including notary fees relating to the transfer of the ELAC Shares; provided that in no event shall Sellers be required to pay more than $500,000 in respect thereof, including any amounts paid by AlliedSignal pursuant to Section 2.4 of the real estate purchase agreement, dated as of December 22, 1997 (the "Facility Sale Agreement"), between AlliedSignal and Purchaser. Purchaser and Sellers agree to cooperate with one another to try 6 to minimize such taxes to the extent practicable without additional costs or liabilities to Purchaser or Sellers. To the extent any exemptions from such taxes are available, Purchaser and Sellers shall cooperate to obtain and prepare all required resale or other exemption certificates with respect to the Assets and the ELAC Shares. ARTICLE 3. ASSUMPTION OF LIABiLITIES AND OBLIGATIONS 3.1 Assumed Liabilities. Except for the Excluded Liabilities, Purchaser shall, without any further responsibility or liability of, or recourse to, Sellers, except as set forth herein, absolutely and irrevocably assume and be solely liable and responsible for any and all liabilities and obligations of any kind or nature, whether foreseen or unforeseen, known or unknown, existing or which may arise in the future, fixed or contingent, matured or unmatured, to the extent primarily related to the Business or the Assets prior to, on, or following the Closing Date (the "Assumed Liabilities") including, but not limited to: (a) obligations to fill purchase orders of customers of the Business to the extent such orders are unfilled on the Closing Date; (b) obligations incurred through the Closing Date to purchase or pay for goods and services for the Business to be received on or after the Closing Date; (c) obligations and liabilities under the Contracts; provided that any Contract as to which consent to assignment is required but has not been obtained shall not be deemed an Assumed Liability until Purchaser has obtained the benefits of such Contract; (d) obligations and liabilities under licenses and permits of the Business that are transferred or assigned to Purchaser (but only to the extent so transferred or to the extent Purchaser receives the benefits thereunder pursuant to Section 1.2); and (e) obligations and liabilities specifically assumed or undertaken by Purchaser hereunder. 3.2 Excluded Liabilities. Notwithstanding anything to the contrary contained in this Agreement, the liabilities and obligations of Sellers which are not to be assumed or retained by Purchaser hereunder (the "Excluded Liabilities") include, but are not limited to, the following: (a) obligations and liabilities for all Taxes relating to the Business for all periods prior to the Effective Date; (b) obligations and liabilities arising out of or related to past, present or future actions, suits, claims, disputes, investigations and other proceedings relating to the ownership or operation of the Assets or the Business on or prior to the Effective Date, including, but not limited to, the items referred to in Schedule 4.9; 7 (c) obligations and liabilities related to employees, including former employees, not expressly assumed by Purchaser pursuant to Article 6 hereof; (d) all obligations and liabilities (whether or not the subject of any claim by a third party), fixed or contingent, known or unknown, under any Environmental Laws as have been, are or may in the future be in effect arising out of or relating to (i) the operation of the Business on or prior to the Effective Date or the use or ownership of any real property (including, without limitation, the Facility) used in the Business on or prior to the Effective Date, including without limitation, the disposal or arrangement for the disposal of Materials of Environmental Concern prior to the Effective Date and (ii) the presence of contamination by Materials of Environmental Concern at or emanating from any real property (whether leased or owned) used in the Business prior to the Effective Date ("Environmental Liabilities"); (e) all obligations and liabilities for non-trade accounts payable to Sellers and their Affiliates (other than the Intercompany Note); (f) all obligations, liabilities, expenses or charges to earnings or reserves taken in connection with any restructuring program of AlliedSignal; (g) all debts, obligations or liabilities whatsoever to the extent not primarily related to the Business or the Assets; and (h) all other obligations and liabilities for which Sellers have expressly assumed responsibility pursuant to this Agreement. ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SELLERS Sellers jointly and severally represent and warrant to Purchaser as follows: 4.1 Corporate Status. AlliedSignal is a corporation duly organized, validly existing and in good standing under the laws of Delaware, and has full power and authority and all governmental licenses, authorizations, material consents and approvals required to carry on the Business as now conducted and own all of its properties and assets. ASTI is a corporation duly organized, validly existing and in good standing under the laws of Arizona. AS Deutschland and ELAC are corporations duly organized, validly existing and in good standing under the laws of the Federal Republic of Germany. Each Seller has all requisite corporate and other power and authority to enter into, execute and deliver this Agreement and any other agreements contemplated hereby (the "Other Agreements") and to perform its respective obligations and consummate the transactions contemplated hereunder and thereunder in accordance with the terms of this Agreement. Each Seller is duly qualified to do business in each jurisdiction in which the failure to be so qualified would have a material adverse effect on the Sellers' conduct of the Business. 4.2 Authorization. All corporate and other proceedings required to be taken by or on the part of each of the Sellers to authorize Sellers to enter into and carry out this Agreement have been, or prior to the Closing will be, duly and properly taken. This 8 Agreement has been, and on the Closing Date each of the Other Agreements will be, duly authorized, executed and delivered by each Seller and this Agreement constitutes, and each Other Agreement will upon execution and delivery thereof constitute, a legal and binding obligation of Sellers, valid and enforceable against each Seller in accordance with their respective terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and the rules of law governing specific performance, injunctive relief and other equitable remedies. 4.3 Compliance. Except for (i) the expiration or termination of all applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and under any similar German national or European Union law and (ii) any novations pursuant to Section 7.12 and any consents listed on Schedule 4.15, the execution, delivery and performance of this Agreement and Other Agreements by Sellers and the consummation of the transactions contemplated hereby and thereby (a) will not violate (with or without giving of notice or the lapse of time or both), or require any consent, approval, filing or notice under any provision of any licenses, permits, approvals, consents, certificates of public convenience, orders, franchises and other authorizations of any federal, state, local or foreign governmental authority (collectively, "Licenses"), law, rule or regulation, court or administrative order, writ, judgement or decree applicable to Sellers, the Business or any of the Assets or the Assumed Liabilities other than the facilities clearance requirements of the Defense Investigative Services of the United States Department of Defense ("DIS"), as set forth in the DIS Industrial Security Regulation and the DIS Industrial Security Manual, as each may be amended from time to time and (b) will not (with or without the giving of notice or the lapse of time or both) (I) violate or conflict with, or result in the breach, suspension or termination of any provision of, or constitute a default under, or result in the acceleration of the performance of the obligations of Sellers under, or (II) result in the creation of any lien, mortgage, pledge, security interest, claim, charge or encumbrance or other material restriction of any kind or nature (collectively, "Liens") upon the Business or the Assets pursuant to, as the case may be, the articles of incorporation, by-laws or other organization documents of any Seller or any material agreement, lease, mortgage, note, deed of trust, lease, bond, indenture, license or other document or undertaking, oral or written, to which any Seller is a party or by which any Seller is bound and by which any of the Assets or the Business may be affected. 4.4 [Interntionally left blank] 4.5 Personal Property. In all material respects, the Personal Property and the machinery and equipment, fixtures, furniture, office equipment, vehicles, boats or ships, tools and other tangible personal property of ELAC have been maintained in accordance with standard industry practices, are in reasonable working condition (normal wear and tear excepted) and are sufficient for the conduct of the Business as it is currently being conducted. 9 4.6 Intellectual Property. (a) Schedule 4.6(a) lists all Intellectual Property owned or used by the Business that is issued or registered by or filed with any governmental agency, and all licenses of Intellectual Property used by the Business to or from third parties. (b) The Sellers own or have the right to use all Intellectual Property necessary to conduct the Business substantially as it is currently conducted and consistent with past practice. (c) Schedule 4.6(c) lists all Intellectual Property not included in the Assets, the use of which is necessary for the Business as it is currently conducted. AlliedSignal and ASTI will grant to Purchaser a license to such Intellectual Property pursuant to the license agreement referred to in Section 1.6 of this Agreement. (d) Except as set forth on Schedule 4.6(d): (i) all material Intellectual Property owned or used by the Business is unexpired, has not been abandoned and, to the Knowledge of Sellers, does not infringe or otherwise impair the intellectual property rights of any third party; (ii) no material Intellectual Property owned or used by the Business is the subject of any license, security interest, Lien or other agreement granting rights therein to any third party other than licenses listed on Schedule 4.6(d); (iii) no judgment, decree, injunction, rule or order has been rendered by any governmental entity, no action, suit or proceeding is currently pending and Sellers have not received written notice, and to the Knowledge of Sellers there are no threatened suits, actions or proceedings, which would limit, cancel or question the validity of, or Sellers' rights in and to any material Intellectual Property; and (iv) the Company and its subsidiaries have taken reasonable steps to protect, maintain and safeguard their material Intellectual Property, including any Intellectual Property for which improper or unauthorized disclosure would impair its value or validity, and have executed appropriate nondisclosure and confidentiality agreements and made appropriate filings and registrations in connection with the foregoing. 4.7 Contracts and Bindin2 Commitments. Schedule 4.7 lists the Contracts and the contracts, agreements and/or commitments of ELAC that are material to the operation of the Business taken as a whole (the "Agreements"). Except as set forth on Schedule 4.7, each of the Agreements is a valid and binding agreement of the Seller which is a party thereto or ELAC and is in full force and effect. True and complete copies of all the Agreements have been delivered to Purchaser or otherwise made available for inspection by Purchaser. All the Agreements are in full force and effect. Except as set forth on Schedule 4.7, to the Knowledge of Sellers neither AlliedSignal nor ELAC, as the case may be, is in default in any material respect under any of the Agreements and to the Knowledge of Sellers there has been no material default under any of the Agreements by any other party thereto. AlliedSignal is not obligated to list in Schedule 4.7 any agreement, contract or commitment identified elsewhere in this Agreement or any Schedule hereto, or if such agreements, individually and together with all such other agreements which are not listed on Schedule 4.7 pursuant to this sentence, are not material to the Business taken as a whole and (a) such agreement, contract or commitment, is related to the sale or furnishing of products or services by AlliedSignal or ELAC and has a price of less than $75,000 in the case of AlliedSignal or DM 100,000 in the 10 case of ELAC; (b) such agreement, contract or commitment, if related to the purchase of materials, supplies, equipment, merchandise or services, imposes a payment obligation on AlliedSignal or ELAC of less than $75,000; or (c) the disclosure of such agreement, contract or commitment is proscribed by the terms of such document or by the provisions of a governmental security agreement or regulation; provided that if such agreements, individually or in the aggregate, are material to the Business, a summary of the material terms of such agreement have been delivered to a properly authorized officer or employee of Purchaser in accordance with Applicable Law. 4.8 Title. Except as set forth in Schedule 4.8, each Seller and ELAC holds the entire legal, equitable and beneficial title in and will transfer to Purchaser good (and, in the case of real property, marketable) title to, or a valid and binding leasehold interest in, its property included in the Assets free and clear of all Liens other than (i) Liens for taxes not yet due and payable or being contested in good faith for which adequate reserves are being maintained in accordance with United States generally accepted accounting principles ("GAAP"), and (ii) encumbrances that do not, and are not reasonably expected to, individually or in the aggregate, materially adversely affect the value of the Assets subject thereto or the ability of AlliedSignal, ELAC or Purchaser to conduct the Business as it is now being conducted (collectively, "Permitted Liens"). 4.9 Litigation. Except as disclosed in Schedule 4.9, there is not any action, suit, proceeding, arbitration or litigation, pending or to the Knowledge of Sellers threatened against Sellers or to the Knowledge of Sellers any investigation pending or threatened, relating to the Business, the Assets, the Assumed Liabilities or the transactions contemplated by this Agreement that could reasonably be expected to result in any material judgment against, material liability of, or have a material adverse effect on the Business taken as a whole. Sellers are not in violation of any term of any judgment, writ, decree, injunction or order entered by any court or governmental authority (domestic or foreign) and outstanding against Sellers or with respect to the Business or any of Sellers' assets (including the Assets) or properties, except for such violations which could not, individually or in the aggregate, have a material adverse effect on the Sellers or the Business. An action, suit, proceeding, investigation, arbitration or litigation shall be considered "threatened" for purposes of this Section 4.9 if any of the persons referred to in Section 13.15 shall have received a written notice or communication reasonably indicating to a business person that an action, suit, investigation, or proceeding will be commenced. 4.10 Environmental Matters. (a) Except as set forth on Schedule 4.10 to the Knowledge of Sellers: (i) the Business complies and has complied in all material respects with all applicable Environmental Laws, and possesses and complies and has possessed and complied in all material respects with all Environmental Permits (all of which are identified accordingly on Schedule 4.10 and are transferrable as a routine matter to Purchaser); (ii) there are and have been no Materials of Environmental Concern, or other conditions, at any property owned, operated, or otherwise used by the Business now or in the past, or at any other location, that could give rise to any material liability to the Business under any Environmental Law or result in material costs to the Business arising out of any Environmental Law; (iii) no judicial, administrative, or arbitral proceeding (including any notice of violation or alleged violation) under any Environmental Law is pending or 11 threatened in writing with respect to the Business, nor is the Business the subject of any investigation or the recipient of any request for information in connection with any such proceeding; (iv) there are no past or present conditions, circumstances, practices, plans, or legal requirements that could be expected to prevent the Business from, or materially increase the burden on the Business of, complying in all material respects with applicable Environmental Laws or obtaining, renewing, or complying in all material respects with all Environmental Permits required under such laws. (b) The Sellers have provided or made available to Purchaser true and complete copies of all Environmental Reports in their possession or control. (c) Any costs, estimates, projections or other predictions contained or referred to in Schedule 4.10 are not, and shall not be deemed to be, representations or warranties of Allied Signal. (d) For purposes of this Agreement, the following terms shall have the following meaning: "Environmental Laws" shall mean any and all laws, rules, orders, regulations, statutes, ordinances, guidelines, codes, decrees, or other legally enforceable requirement (including, without limitation, common law) of the United States or any other national government, or any state, local, municipal or other governmental authority, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or of human health, or employee health and safety as of the Closing Date. "Environmental Permits" shall mean any and all permits, licenses, approvals, registrations, notifications, exemptions and any other authorization required of the Business under any Environmental Law. "Environmental Report" shall mean any report, study, assessment, audit, or other similar document that addresses any issue of actual or potential noncompliance with, or actual or potential liability under or cost arising out of, any Environmental Law that may in any way materially adversely affect the Business. "Materials of Environmental Concern" shall mean any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity, and any other substances or forces of any kind, whether or not any such substance or force is defined as hazardous or toxic under any Environmental Law, that is regulated pursuant to or could give rise to liability under any Environmental Law. 4.11 Employee Benefit Plans and Policies. Schedule 4.11 lists all of the employment, severance, change-of-control, stock purchase, stock option, fringe benefits, incentive, bonus, pension, welfare, shop agreements or other employee benefit plans and policies maintained or contributed to by Sellers or ELAC for the Business or in which employees of the Business or managing directors of ELAC, including employees or managing 12 directors of ELAC on short-term disability, medical, sick or other leave of absence (the "Employees"), are entitled to participate (collectively the "Benefit Plans") and copies of all such written Benefit Plans have been made available to Purchaser. Except as listed on Schedule 4.11, (a) such Benefit Plans that cover U.S. Employees ("U.S. Benefit Plans") comply in all material respects, to the extent applicable, with the requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the Internal Revenue Code of 1986, as amended (the "Code") and all other applicable laws, rules and regulations; (b) none of the U.S. Benefit Plans subject to Part 3 Subtitle B of Title I of ERISA has incurred any "accumulated funding deficiency" within the meaning of Section 302 of ERISA or Section 412 of the Code; (c) no material liability, other than required premium payments, to the Pension Benefit Guaranty Corporation has been incurred with respect to any of the U.S. Benefit Plans subject to Title IV of ERISA; (d) AlliedSignal has not incurred any material liability for any tax imposed under Section 4975 of the Code or Part 4 Subtitle B of Title I of ERISA with respect to any of the U.S. Benefit Plans; (e) none of the U.S. Benefit Plans is a multiemployer plan within the meaning of Section 3(37)(A) of ERISA. Except as otherwise is provided in this Agreement, all contributions to the U.S. Benefit Plans that were required to be made under such U.S. Benefit Plans as of the date hereof have been paid, accrued or otherwise adequately reserved or disclosed in accordance with GAAP as of such date; and (f) each Benefit Plan covering non-U.S. Employees complies in all material respects with all Applicable Laws, rules and regulations. 4.12 Material Changes. Except as set forth on Schedule 4.12 or as communicated to Steven Schorer or any individual who directly reports to Mr. Schorer or Purchaser, since December 31, 1997, there has been no: (a) Lien created on any Asset or ELAC Asset, except Permitted Liens; (b) capital expenditures or commitment to make any such expenditures with respect to the Assets or the ELAC Assets, except with respect to any such expenditures or commitments incurred prior to the date hereof, to the extent such expenditures and commitments do not exceed, when combined with any expenditures permitted under Section 4.7(d) of the Facility Sale Agreement, $2,100,000 in the aggregate; (c) rights of substantial value knowingly waived with respect to the Assets or the Business; or (d) sale or transfer of any Assets or ELAC Assets other than dispositions of inventory and obsolete or worn out equipment in the ordinary course of business. (e) (i) (x) contract, agreement, proposal or other commitment entered into for the purchase of goods or services which is not terminable by the parties upon 30 days' notice or less without penalty or which involves aggregate consideration in excess of $250,000 or (y) agreement, bid, proposal or other commitment entered into for the sale of goods or services which is not terminable by the parties upon 30 days' notice or less without penalty or which involves aggregate consideration in excess of $5 million or which would result in a loss in excess of $100,000 for any individual contract or $250,000 in the aggregate, (ii) amendment, supplement, waiver or modification of any contract or agreement included in 13 the Assets or the ELAC Assets, other than in the ordinary course of business consistent with past practice and (iii) Affiliate that has been permitted to do, or agree, in writing or otherwise, to do, any of the foregoing; (f) except as required by Applicable Law or to the extent required under existing employee and director benefit plans, agreements or arrangements as in effect on the date of this Agreement, (i) increase in the compensation or fringe benefits of any of the President of Ocean Systems and his direct reports or other employees (including any such increase pursuant to any deferred compensation, severance, bonus, pension, profit-sharing or other plan or commitment), except for increases, in the ordinary course of business consistent with past practice, in salary or wages of employees who are not senior managers of the Business, (ii) grant of any severance or termination pay, (iii) hire, except in the ordinary course of business, of any new employees or consultants or (iv) amendment or termination, or any agreement to amend or terminate, any collective bargaining, bonus, profit sharing, thrift, compensation, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of the President of Ocean Systems and his past or present direct reports or any other past or present employees of the Business (except for changes in AlliedSignal benefit plans generally); (g) (i) transaction with or for the benefit of any other division or business of Seller or any Affiliate of Seller except as is set forth in Schedule 4.26 and (ii) Affiliate has been permitted to do, or agree, in writing or otherwise, to do, any of the foregoing; (h) (i) waiver of any material claims or rights relating to the Business or the Assets or (ii) Affiliate has been permitted to do, or agree, in writing or otherwise, to do, any of the foregoing; (i) acquisition of or agreement to acquire, by merging or consolidating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof; (j) except for performance guarantees issued in the ordinary course of business consistent with past practice, incurrence of any indebtedness for borrowed money, or guarantee of any such indebtedness of another person, issuance or sale of any debt securities or warrants or other rights to acquire any debt securities of the Sellers, guarantee of any debt securities of another person, entrance into any "keep well" or other agreement to maintain any financial statement condition of another person or entrance into any arrangement having the economic effect of any of the foregoing, or loans, advances or capital contributions to, or investments in, any other person; or (k) license or agreement entered into with respect to the Intellectual Property. 14 4.13 [Interntionally left blank] 4.14 Compliance with Law. Except as set forth on Schedule 4.14, Sellers and ELAC are not in violation of any Applicable Law which, individually or in the aggregate, would have a material adverse effect on the operation of the Business, and Sellers and ELAC have not received any notice in writing alleging any such defaults or violations or potential defaults or violations. 4.15 Consents. Except as set forth in Schedule 4.15, no action, approval, consent or authorization, including but not limited to any action, approval, consent or authorization by any third party, financial institution, governmental or quasi-governmental agency, commission, board, bureau or instrumentality, is necessary to make this Agreement or any of the Other Agreements or instruments to be executed and delivered pursuant hereto a legal, valid and binding obligation of Sellers or ELAC or to consummate the transactions contemplated hereunder. 4.16 Taxes. All Taxes (as hereinafter defined) with respect to the Business that are due and payable or which relate to tax periods ending on or prior to the Closing Date have been or will be duly and properly computed, reported, fully paid and discharged by Sellers. There are no unpaid Taxes with respect to any period, or a portion thereof, ending on or before the Closing Date which are or could become a Lien on the Assets or the ELAC Assets, except for current Taxes not yet due and payable or reserved for in the Financial Statements. Except as set forth on Schedule 4.16, there has been filed by or on behalf of ELAC all material returns, declarations, statements, reports, schedules, forms and information returns and any amended tax returns relating to any Taxes (the "Tax Returns"). All such material Tax Returns are true, complete and correct in all material respects and all Taxes shown as due on such Tax Returns have been or will be paid in a timely fashion by Sellers prior to Closing or have been accrued for on ELAC's financial statements. Except as set forth on Schedule 4.16, no audit or other proceeding by any Governmental Authority, or similar person is pending, or to the Knowledge of Sellers, is threatened with respect to any material Taxes due from or with respect to ELAC. No material issues relating to Taxes were raised in writing by the relevant taxing authority during any audit or examination. Except as set forth in Schedule 4.16, ELAC is not a party to or bound by (nor will it become a party to or bound by prior to the Closing Date) any tax indemnity, tax sharing, or tax allocation agreement. There is no material agreement or other document extending, or having the effect of extending, the period of assessment or collection of any Taxes and no power of attorney with respect to any material Taxes of ELAC has been executed or filed with any Governmental Authority. ELAC is not, nor has it ever been, a member of a U.S. consolidated, combined unitary tax group. As used herein, the term "Taxes" shall include all federal, state, local and foreign taxes, assessments or other governmental charges (including, without limitation, net income, gross income, excise, franchise, sales and value added taxes, taxes withheld from employees' salaries and other withholding taxes and obligations and all deposits required to be made with respect thereto), levies, assessments, deficiencies, import duties, licenses and registration fees and charges of any nature whatsoever, including any interest, penalties, additions to tax or additional amounts with respect thereto, imposed by any government or taxing authority, provided, however, that the term "Taxes" does not include the taxes, duties and levies referred to at Section 2.6. 15 4.17 Permits and Licenses. Schedule 4.17 attached hereto lists all material governmental or other permits, licenses, approvals, certificates of inspection, filings, franchises and other authorizations, other than those relating to the environment, that are issued to, or held or used by Sellers or ELAC, or for which Sellers or ELAC have applied, in connection with the current operation of the Business, and any limitations thereto. Except as listed in Schedule 4.17, Sellers and ELAC have all material governmental or other permits, licenses, approvals, certificates of inspection, filings, franchises and other authorizations, other than those relating to the environment, that are necessary to own and operate the Assets and the ELAC Assets and to conduct the Business as it is currently being conducted, and Sellers and ELAC have not received notice alleging that any other material governmental or other permits, licenses, approvals, certificates of inspection, filings, franchises and other authorizations, other than those relating to the environment, are required. "Material" for purposes of this Section 4.17 shall include but not be limited to permits, licenses and other authorizations which are required to own or operate the Assets or ELAC Assets owned or operated by Sellers and used for the production of products in the Business. 4.18 Ownership of ELAC Shares. The ELAC Shares constitute all of the issued and outstanding shares of capital stock of ELAC. The ELAC Shares have been duly authorized and validly issued and are fully paid and nonassessable. There are no securities convertible into or exchangeable or exercisable for ELAC Shares or any options, warrants or other rights to acquire ELAC Shares. AS Deutschland is the sole legal and beneficial owner of the ELAC Shares and owns the ELAC Shares free and clear of any Liens, restrictions, options or rights in others, encumbrances or other claims, rights of first offer or first refusal, or voting agreements, and AS Deutschland has full legal right, power and authority to enter into this Agreement and to transfer and deliver good and valid title to the ELAC Shares hereunder. At the Closing, Purchaser shall receive good and valid title to the ELAC Shares free and clear of any Liens other than as created by Purchaser. ELAC does not constitute a material part of the assets of AS Deutschland. 4.19 Labor Relations. Except as set forth on Schedule 4.19, (i) there is no employment agreement, collective bargaining agreement, shop agreement or written personnel policy applicable to Employees of the Business nor are any such agreements or policies presently negotiated; (ii) there is no current labor strike, slowdown or work stoppage or pending lockout, dispute or other labor controversy in effect, or to the Knowledge of Sellers threatened against or otherwise affecting the Business, and the Business has not experienced such labor controversy in the past five years; (iii) there is no unfair labor practice charge or complaint pending or, to the Knowledge of Sellers, threatened against or otherwise affecting the Business; (iv) no representation question exists or has been raised respecting any of the Employees of the Business within the past five years, nor to the Knowledge of Sellers are there any campaigns being conducted to solicit cards from Employees of the Business to authorize representation by any labor organization; (v) no action, suit, complaint, charge, arbitration, grievance, inquiry, proceeding or investigation by or before any court, governmental agency, administrative agency or commission brought by or on behalf of any Employee, prospective employee, former employee, retiree, labor organization or other representative of the Business's Employees is pending or, to the Knowledge of Sellers, threatened against the Business; (vi) the Sellers and ELAC are not party to, or otherwise bound by, any consent decree with, or citation by, any Government agency relating to 16 Employees or employment practices; (vii) the Sellers and ELAC are in compliance in all material respects with all Applicable Laws, agreements, contracts, and policies relating to employment, employment practices, wages, hours, and terms and conditions of employment; (viii) other than to the extent accrued in the financial statements of the Business in accordance with GAAP, the Sellers and ELAC have paid in full to all Employees of the Business all wages, salaries, commissions, bonuses, benefits and other compensation due to such employees or otherwise arising under any policy, practice, agreement, plan, program, statute or other law; (ix) the Sellers and ELAC are not liable for any severance pay or other payments to any Employee, or former employee arising from the termination of employment, nor will the Business have any liability under any benefit or severance policy, practice, agreement, plan, or program which exists or arises, or may be deemed to exist or arise, under any Applicable Law or otherwise, as a result of or in connection with the transactions contemplated hereunder or as a result of the termination by the Business of any persons employed by the Sellers on or prior to the Closing Date except to the extent accrued on the Closing Balance Sheet; (x) except as set forth in Schedule 4.19(x), the Sellers and ELAC have not closed any Business plant or facility, effectuated any layoff of Employees or implemented any early retirement, separation or window program which within the past five years, nor have the Sellers or ELAC planned or announced any such action or program for the future; (xi) the Sellers and ELAC are in compliance with their obligations pursuant to the Worker Adjustment and Retraining Notification Act of 1988, and Sellers and ELAC are in compliance with all other notification and bargaining obligations arising under any collective bargaining agreement, statute or otherwise. 4.20 Brokerage Fees. No person is entitled to any brokerage or finder's fee or other commission from Sellers in respect of this Agreement or the transactions contemplated hereby except Bear, Stearns & Co. Inc. (whose fee shall be paid by Sellers). 4.21 Government Contracts. (a) With respect to each and every Government Contract or bid to obtain a Government Contract to which Sellers or ELAC are a party, and which relates to the Business, and except as set forth in Schedule 4.21(a): (i) Sellers and ELAC have fully complied with all material terms and conditions of such Government Contract or bid for a Government Contract as required as of the date hereof and as of the Closing Date; (ii) Sellers and ELAC have fully complied with all material requirements of statute, rule or regulation pertaining to such Government Contract or bid for a Government Contract; (iii) all representations and certifications executed with respect to such Government Contract were to the Knowledge of Sellers accurate in every material respect as of their effective date and Sellers and ELAC to the Knowledge of Sellers have fully complied with all such representations and certifications in every material respect; and (iv) no termination for default, cure notice or show cause notice has been issued or, to the Knowledge of Sellers will be issued, (v) neither the U.S. Government nor any non-U.S. government nor any prime contractor, subcontractor or other entity person has notified in writing any of the Sellers or ELAC that any of the Sellers or ELAC has breached or violated any Applicable Law, certification, representation, clause provision or requirement pertaining to such Government Contract or bid; (vi) no cost incurred by the Sellers or ELAC pertaining to such Government Contract or bid has been questioned or challenged, is the subject of any investigation or has been disallowed by the U.S. Government or any non-U.S. government; (vii) no money due to the Sellers or ELAC pertaining to such Government Contract or bid has been withheld or set 17 off and the Sellers or ELAC are entitled to all progress payments with respect thereto and (viii) each Government Contract is valid and in full force and effect. As used herein, "Government Contract" means any open contract relating to the Business between any of Sellers or ELAC and (x) the U.S. Government or any non-U.S. government, (y) any prime contractor of the U.S. Government or any non-U.S. government or (z) any subcontractor at any tier with respect to any contract described in clauses (x) and (y) above. (b) To the Knowledge of Sellers, except as set forth in Schedule 4.21(b), with respect to the Business; (i) none of its respective employees, consultants or agents is (or during the last three years has been) under administrative, civil or criminal investigation, indictment or information by any foreign, domestic, federal, territorial, state or local governmental authority, quasi-governmental authority, instrumentality, court, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing ("Governmental Authority"), (ii) there is not any pending audit or investigation by Sellers or ELAC nor within the last three years has there been any audit or investigation by Sellers or ELAC resulting in a material adverse finding with respect to any alleged irregularity, misstatement or omission arising under or relating to any Government Contract or bid; and (iii) during the last three years, the Sellers and ELAC have not made a voluntary disclosure to the U.S. Government or any non-U.S. government, with respect to any alleged irregularity, misstatement or omission arising under or relating to a Government Contract or bid. Except as set forth in Schedule 4.21(b), to the Knowledge of Sellers there are no irregularities, misstatements or omissions arising under or relating to any Government Contract or bid that has led or is expected to lead, either before or after the Closing Date, to any of the consequences set forth in clause (i) or (ii) of the immediately preceding sentence or any other material damage, penalty assessment, recoupment of payment or disallowance of cost. (c) Except as set forth in Schedule 4.21(c), with respect to the Business, there exist (i) no outstanding claims against the Sellers or ELAC, either by the U.S. Government or by any non-U.S. government or by any prime contractor, subcontractor, vendor or other third party, arising under or relating to any Government Contract or bid referred to in Section 4.2 1(a) and (ii) no disputes between the Sellers or ELAC and the U.S. Government or any non-U.S. government under the Contract Disputes Act or any other Federal statute or between the Sellers or ELAC and any prime contractor, subcontractor or vendor arising under or relating to any such Government Contract or bid. Except as set forth in Schedule 4.2 1(c), to the Knowledge of Sellers there are no facts that could reasonably be expected to result in a claim or a dispute under clause (i) or (ii) of the immediately preceding sentence. (d) Except as set forth in Schedule 4.2 1(d), neither the Sellers nor ELAC nor any of their employees, consultants or agents is (or during the last three years has been) suspended or debarred from doing business with the U.S. Government or any non-U.S. government or is (or during such period was) the subject of a finding of nonresponsibility or ineligibility for U.S. Government or non-U.S. government contracting. Except as set forth in Schedule 4.2 1(d), the Sellers, ELAC and their Affiliates have operated the Business in 18 compliance with all requirements of all material laws pertaining to all Government Contracts and bids. (e) Except as set forth in Schedule 4.21(e), no statement, representation or warranty made by the Sellers or ELAC in any Government Contract, any exhibit thereto or in any certificate, statement, list, schedule or other document submitted or furnished to the U.S. Government or any non-U.S. government in connection with any Government Contract or bid (i) contained on the date so furnished or submitted any untrue statement of a material fact, or failed to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading or (ii) contains on the date hereof any untrue statement of a material fact, or fails to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading, except in the case of both clauses (i) and (ii) any untrue statement or failure to state a material fact that would not result in any material liability to the Business as a result of such untrue statement or failure to state a material fact. 4.22 Government Furnished Equipment. Schedule 4.22 incorporates the most recent schedule delivered to the U.S. Government or any non-U.S. Government which identifies by description or inventory number certain equipment and fixtures loaned, bailed or otherwise furnished to or held by the Business by or on behalf of the United States or any foreign country. To the Knowledge of Sellers, such schedule was accurate and complete on its date and, if dated as of the Closing Date, would contain only those additions and omit only those deletions of equipment and fixtures that have occurred in the ordinary course of business, except for such inaccuracies that could not reasonably be expected to have a material adverse effect on the Business. 4.23 Entire Business. Except for the Excluded Assets, and except as set forth on Schedule 4.23, the Assets, together with the License Agreement, constitute all of the assets, properties and rights necessary to conduct the Business in all material respects as currently conducted. Other than ELAC, Sellers have no subsidiaries primarily engaged in the Business. 4.24 Real Estate. Schedule 4.24 accurately lists all real property of the Business owned or leased, indirectly or directly, by the Sellers or ELAC (other than the Facility, the "Real Property"): (a) The Sellers and ELAC have good and marketable title to all such owned Real Property and good and valid leasehold interest in all such leased Real Property, in each case, free and clear of all Liens except for Permitted Liens; (b) There are no condemnation proceedings or eminent domain proceedings of any kind pending or, to the Knowledge of Sellers no written notice of any threatened action has been received against any Real Property; (c) All of the Real Property is occupied under a valid and current certificate of occupation or similar permit, the sale of the Assets hereunder will not require the issuance or any new or amended certificate of occupancy and to the Knowledge of Sellers the Real 19 Property may be occupied and used by Purchaser or ELAC after the Closing Date in the same manner as used by Sellers or ELAC on or before the Closing Date; (d) All improvements on the Real Property constructed by or on behalf of Sellers or any other person were at the time installed constructed in compliance with all applicable federal, state, local or foreign statutes, laws, ordinances, regulations, rules, codes, orders or requirements (including, but not limited to, any building, zoning or environmental laws or codes) affecting the Real Property; (e) All improvements on the Real Property and the present use and conditions thereof do not violate any applicable deed restrictions or applicable covenants, restrictions, agreements, existing site plan approvals, zoning or subdivision regulations or urban redevelopment plans as modified by any duly issued variances, and no permits, licenses or certificates pertaining to the ownership or operation of all improvements on the Real Property, other than those that are transferable with the Real Property, are required by any governmental agency having jurisdiction over the Real Property. Such improvements on the Real Property are wholly within the lot limits of such Real Property and do not encroach on any adjoining premises and there are no encroachments on any Real Property by any improvements located on any adjoining premises; (f) Sellers and ELAC enjoy peaceful and quiet possession of each parcel of Real Property, and there is not under any lease of any of the leased Real Property (a "Lease") any default by any of Sellers or ELAC thereunder or any condition that with notice or the passage of time or both would constitute such a default, and Sellers and ELAC have not received notice asserting the existence of any such default or condition. To the Knowledge of Sellers there are no defaults under any Lease by the landlord thereunder. Sellers have heretofore furnished the Purchaser a true and complete copy of each Lease and all amendments thereto pertaining to any leased Real Property. Each Lease is valid and binding and in full force and effect; (g) The rental set forth in each Lease is the actual rental being paid, and there are not separate agreements or understandings with respect to the same; and (h) Neither the execution of this Agreement nor the sale of the Assets hereunder shall cause a default under any Lease or require prior written consent of any landlord under any Lease. 4.25 Insurance. Schedule 4.25 lists insurance maintained by Sellers and ELAC with respect to the Assets and the ELAC Assets and with respect to the employees and representatives of the Business and the operations of the Business. The coverage under each such policy and binder is in full force and effect, and no notice of cancellation or nonrenewal with respect to any such policy or binder has been received by any of the Sellers or ELAC. 4.26 Affiliate Transactions. Except as set forth in Schedule 4.26, there are no agreements, arrangements, undertakings or other transactions between the Business and any other division or business of Sellers or any person that directly, or indirectly through one or 20 more intermediaries, controls or is controlled by or is under common control with any of Sellers (including, without limitation, any owner of capital stock of Sellers) (an "Affiliate"). 4.27 No Additional Representations. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS ARTICLE 4 OR ANY OTHER PROVISION OF THIS AGREEMENT, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO THAT ALLIEDSIGNAL IS MAKING NO REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, BEYOND THOSE EXPRESSLY GIVEN IN THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OR REPRESENTATION AS TO CONDITION, MERCHANTABILITY OR SUITABILITY AS TO ANY OF THE PROPERTIES OR ASSETS OF THE SELLERS. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, THE ASSETS ARE BEING SOLD ON AN "AS IS, WHERE IS" BASIS. ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser represents and warrants to AlliedSignal as follows: 5.1 Corporate Status. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has full power and all governmental licenses, authorizations, consents and approvals required to carry on its business and to own all of its properties and assets. Purchaser has all requisite corporate and other power and authority to enter into, execute and deliver this Agreement and the Other Agreements and to perform its obligations and consummate the transactions contemplated hereunder and thereunder in accordance with the terms of this Agreement. 5.2 Authorization. All corporate and other proceedings required to be taken by or on the part of Purchaser to authorize Purchaser to enter into and carry out this Agreement have been, or prior to the Closing will be, duly and properly taken. This Agreement has been, and on the Closing Date each of the Other Agreements will be, duly executed and delivered by Purchaser and this Agreement constitutes, and each Other Agreement will upon execution and delivery thereof constitute, a legal and binding obligation of Purchaser, valid and enforceable against Purchaser in accordance with their terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and the rules of law governing specific performance, injunctive relief and other equitable remedies. 5.3 Compliance. The execution, delivery and performance of this Agreement and Other Agreements and the consummation of the transactions contemplated hereby will not result in the breach of any of the terms or conditions of, or constitute a default under, or violate, as the case may be, the articles of incorporation, by-laws or other organization documents of Purchaser or any material agreement, lease, mortgage, note, deed of trust, lease, bond, indenture, license or other document or undertaking, oral or written, to which Purchaser is a party or by which Purchaser is bound or by which any of the Assets may be affected other than the consent required under Purchaser's existing credit facility, which Purchaser believes will be obtained prior to Closing. 21 5.4 Due Diligence. Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the transactions contemplated by this Agreement and the Other Agreements. Purchaser confirms that AlliedSignal provided to Purchaser the opportunity to ask questions of the officers and management employees of AlliedSignal and to acquire such additional information about the business and financial condition of the Business as Purchaser requested and all such information has been received. 5.5 Financing. Purchaser has funds of its own, or has binding commitments from responsible banks or other financial institutions to provide funds, which will be sufficient and available to pay the purchase price as set forth in Section 2.1. 5.6 Investment Representation. Purchaser is acquiring the ELAC Shares for investment and not with a view to the public distribution thereof. 5.7 Conveyances and Restrictions. The performance by Purchaser of its obligations hereunder, whether through the purchase of the Assets, the obtaining of financing to fund the acquisition, and/or the obtaining of financing for the operations of the Business after the Closing, will not violate any provision of the Uniform Fraudulent Conveyance Act as enacted by the United States or any state thereof, or any regulations thereunder or any state fraudulent conveyance or similar statute in a state in which the Business or Purchaser is doing business. 5.8 Brokerage Fees. No person is entitled to any brokerage or finder's fee or other commission from Purchaser in respect of this Agreement or the transactions contemplated hereby. ARTICLE 6. EMPLOYEES AND EMPLOYEE BENEFITS 6.1 Employment. (a) Purchaser shall offer employment effective as of the Closing Date to all Employees (except that Employees on Long Term Disability shall be offered employment when such Employees are medically certified to return to work) employed as of the Closing Date. Nothing herein expressed or implied confers upon any Employee who accepts Purchaser's offer of employment (collectively, "Transferred Employees") any rights or remedies of any nature or kind, including, without limitation, any rights of employment with Purchaser for a specified period of time. (b) Notwithstanding Section 6.1(a) above, the employment of Employees employed by ELAC (collectively, the "German Employees") shall continue following the Closing Date and shall remain the liability of ELAC. 22 6.2 Compensation and Benefits - U.S. Employees. (a) Generally. Purchaser shall continue or shall provide, for a period of at least 12 months immediately subsequent to the Closing Date, for all Transferred Employees who are employed in the United States (collectively, "U.S. Transferred Employees") base salary or applicable rate of pay not less than that provided by Sellers immediately prior to the Closing Date, employee benefits and incentive compensation comparable, in the aggregate, to those in effect as of the Closing Date, except that, with respect to those plans providing a benefit in AlliedSignal stock, Purchaser shall have no obligation to provide such benefits or comparable benefits or to take into account such benefits for purposes of this Section. Purchaser shall assume liability for all deferred compensation, supplemental and excess pension and savings benefits, all bonus amounts, normal and enhanced severance benefits, and relocation benefits (whether or not all such employee benefits are vested on the Closing Date) in respect of all U.S. Transferred Employees incurred or earned, but not paid, on or before the Closing Date, or as incurred in connection with the sale of the Business and not paid as of the Closing Date, to the extent accrued on the Closing Balance Sheet. Purchaser shall assume the retention agreements listed on Schedule 6.2(a). (b) Union Employees. Purchaser shall offer employment on or prior to the Closing Date to each U.S. Employee covered by the Collective Bargaining Agreements between AlliedSignal and the United Auto Workers ("UAW") or UAW Local 179, including the Local Agreement between AlliedSignal and UAW Local 179, the Master Agreement between AlliedSignal and the UAW, and all associated agreements that are part of such Master Agreement, including the letters of understanding and agreements covering pensions, insurance and savings plans (collectively, the "Bargaining Agreements") as described in Schedule 4.7 (such covered Employees being referred to, collectively, as "Union Employees"), provided that such Union Employee is actively at work on the Closing Date. Purchaser shall provide each Union Employee with compensation (base rate of pay and incentive compensation, if any) no less than that required by the applicable Bargaining Agreements and any applicable side letters and schedules immediately prior to the Closing Date. A Union Employee who is absent on the Closing Date due to illness, vacation, paid leave, holiday or union office leave or who is otherwise subject to recall with seniority rights shall to the extent required by the applicable Bargaining Agreement and any applicable side letters and schedules be considered actively at work on the Closing Date. The Union Employees who are actively at work on the Closing Date shall hereafter be called "Union Transferred Employees". Sellers shall retain the obligation to provide any Union Employee who does not become a Union Transferred Employee on the Closing Date with benefits under Sellers' Pension Plans for Union Employees, as defined herein, and all other benefits required to be provided by the Bargaining Agreements. (c) Purchaser agrees to credit each U.S. Transferred Employee service credited with Sellers under the Benefit Plans for participation, retirement eligibility and vesting under such employee benefit plans or policies Purchaser maintains or will maintain for or on behalf of the U.S. Transferred Employees. In addition, such service shall be credited for benefit purposes under welfare plans (including severance plans), vacation plans and qualified retirement plans in respect of which assets and liabilities are transferred to 23 Purchaser's Plans. Sellers shall not in any manner be responsible for any liability, claim or obligation due under any such plan maintained by Purchaser. 6.3 Severance and WARN Act. (a) Sellers shall pay and be responsible for all liability, cost or expense for severance, termination indemnity payments, salary continuation, special bonuses and like costs under Sellers' severance pay plans, policies or arrangements, with respect to any of the Employees that arise from or relate to the transactions described in or contemplated by this Agreement, or of any U.S. Transferred Employees that arise under Sellers' severance plans from the subsequent termination of employment by Purchaser after the Closing Date. Purchaser agrees to pay and be responsible for all liability, cost, expense and sanctions resulting from the Purchaser's failure to comply after the Closing Date with the Worker Adjustment and Retraining Notification Act of 1988 ("WARN Act"), and the regulations thereunder or for any action by Purchaser which causes WARN to apply. (b) The Sellers shall not, at any time within the 60-day period prior to the Closing Date, effectuate a "plant closing" or "mass layoff', as those terms are defined in the WARN Act or any State law, affecting in whole or in part any Ocean Systems site of employment, facility, operating unit or employee. (c) The Sellers shall indemnify, defend and hold Purchaser harmless from and against any and all claims, actions, suits, demands, proceedings, losses, expenses, damages, obligations and liabilities (including costs of collection, attorney's fees and other costs of defense) ("Damages") arising out of or otherwise in respect of (i) termination by the Sellers of any employee of the Business on or prior to the Closing Date; (ii) any claim made by any employee of the Business for severance pay arising prior to, or upon the Closing Date; or (iii) any suit or claim of violation brought against the Purchaser under the WARN Act or any State law for any actions taken by the Sellers in connection with, on or prior to the Closing Date with regard to any site of employment, facility, operating unit or employee affected by this Agreement which action by itself causes WARN to apply. 6.4 Health Care Continuation Liability. With respect to Sellers' plans, Seller agrees to pay and be responsible for all liability, cost, expense, taxes and sanctions under Section 4980B of the Internal Revenue Code (the "Code"), interest and penalties imposed upon, incurred by, or assessed against Purchaser or Sellers that arise by reason of or relate to any failure to comply with the health care continuation coverage requirements of Section 4980B of the Code and Sections 601 through 608 of ERISA, as amended, which failure occurs as a result of the transactions described in or contemplated by this Agreement or which failure occurs on or after the Closing Date with respect to any Employee or any qualified beneficiary (as defined in Section 4980B(g)(l)) of such Employee. 6.5 Pension Plan. (a) AlliedSignal shall amend the Salaried Employees Pension Program for AlliedSignal Inc., the AlliedSignal Inc. Pension Plan for Hourly Employees (provisions relating to UAW Local 179) and the AlliedSignal Inc. Retirement Program (collectively, the "Pension Plans") to fully vest all Employees employed by the Business as of the Closing Date participating in the Pension Plan in their accrued benefit as of the Closing Date. Purchaser 24 shall assume the liabilities and obligations as of the Closing Date of Sellers for the accrued benefits of all U.S. Transferred Employees under the Pension Plans. Purchaser shall have established as of the Closing Date, or shall establish as soon as practicable after the Closing Date, a tax-qualified defined benefit pension plan or plans which shall discharge the pension obligations of Purchaser set forth in this Section ("Purchaser's Plan"). As soon as practicable after the Closing Date, AlliedSignal shall cause a transfer of the pension liabilities and obligations being assumed by Purchaser and of the assets, as calculated below, to Purchaser's Plan. (b) The assets to be transferred from the Pension Plans to Purchaser's Plan shall be an amount equal to the "projected benefit obligation," within the meaning of Financial Accounting Standard No. 87, as of the Closing Date attributable to the U.S. Transferred Employees under Sellers' Pension Plans ("PBO") with adjustments described below. Sellers' actuary shall calculate the transfer amount (the "Transfer Amount") by applying the assumptions, methods and methodologies listed on Schedule 6.5(b) and other actuarial assumptions and methodologies used in the ordinary course in the preparation of the actuarial valuation not inconsistent with those listed in Schedule 6.5(b). Notwithstanding any provision herein to the contrary, the transfer amount shall be subject to the applicable requirements of Sections 4 14(1) and 401(a)(12) of the Code. The amount as so determined shall be adjusted for investment earnings at the short term investment fund rate earned by Sellers' Pension Plans (the "Earnings") for the period between the Closing Date and the actual dates of transfer (see below) and reduced by the amount of any benefit payments to U.S. Transferred Employees and a proportional share of investment and administrative expenses relative to asset values for such period. The amount of assets caused to be transferred pursuant to this Section shall be calculated by Sellers' actuary, and the actuarial calculations shall be subject to review and approval by Purchaser's actuary. In the event that Purchaser's actuary does not agree with the calculation determined by Sellers' actuary, the determination of the amount to be transferred pursuant to this Section shall be made by a third, nationally recognized actuarial firm selected by Sellers' and Purchaser's actuaries (the cost of which shall be borne equally between Sellers and Purchaser), and the determination of such third actuary as to the amount to be transferred shall be binding and conclusive upon all parties hereto. The transfer of assets from Sellers' Pension Plan to Purchaser's Plan shall be made in cash pursuant to Section 6.5(c). The parties shall file any necessary IRS Forms 5310-A with respect to such transfer. (c) All transfers from the Pension Plans to the Purchaser's Plan shall be made in accordance with the provisions of this Section 6.5(c). As soon as is administratively practical, but in no event later than 30 days following the Closing Date, and conditioned upon AlliedSignal having been provided evidence reasonably satisfactory to it that Purchaser has established a trust (or trusts) to hold the assets of the Purchaser's Plan and that Purchaser's Plan is qualified under Section 40 1(a) of the Code and the trusts holding assets of the Purchaser's Plan are tax exempt under Section 501(a) of the Code ("Initial Transfer Date"), AlliedSignal shall cause its trusts to make an initial transfer of assets in cash equal to 85% of the amount reasonably estimated by AlliedSignal in good faith to be equal to the Transfer Amount (the "Initial Transfer Amount"). In addition, prior to the Initial Transfer Date AlliedSignal shall provide Purchaser with evidence reasonably satisfactory to Purchaser that the Pension Plans remain qualified under Section 40 1(a) of the Code. As soon as practicable 25 after the final determination of the amounts to be transferred ("True-Up Date"), AlliedSignal shall cause a second transfer to be made in cash of the "True-Up Amount." The True-Up Amount shall be equal to the following amount: (Transfer Amount minus Initial Transfer Amount), minus benefit payments made to U.S. Transferred Employees since the Closing Date from the Pension Plans, adjusted for Earnings on the excess of the Transfer Amount over the Initial Transfer Amount from the Initial Transfer Date to the True-Up Date, If the Initial Transfer Amount exceeds the Transfer Amount, as soon as practicable following such determination Purchaser shall cause a transfer to be made to the respective Pension Plan equal to the excess of the Initial Transfer Amount over the Transfer Amount, adjusted to reflect earnings at the short term investment fund rate earned by Purchaser's Plan from the Initial Transfer Date until the date of transfer. 6.6 Savings Plan. AlliedSignal shall provide that those Employees participating in the AlliedSignal Savings Plan and AlliedSignal Thrift Plan ("Savings Plans") immediately prior to the Closing Date shall fully vest on the Closing Date in their respective Savings Plans accounts (the "Accounts"). As promptly as practicable following the Closing Date, Sellers and Purchaser shall arrange for the transfer of the Accounts and the corresponding liabilities with respect to the U.S. Transferred Employees, from the Savings Plans to one or more tax-qualified plans established or to be established by Purchaser which provides benefits substantially equivalent to the benefits available under the applicable Savings Plans. With respect to the plan or plans receiving assets from the Savings Plans, to the extent permitted by Applicable Law, such plan or plans shall also (a) provide for tax-deferred contributions and (b) meet all requirements for a qualified cash or deferred arrangement under Section 401(k) of the Code. The transfer of assets from the Savings Plans shall be made in cash, marketable securities, promissory notes presenting participant loans, or a combination thereof, as determined by AlliedSignal and consented to by Purchaser. Without limiting the generality of the foregoing, if AlliedSignal should determine to transfer assets held in Accounts which, immediately prior to the Closing Date, provide for holding AlliedSignal common stock in such form, Purchaser agrees to accept transfer of such Accounts in AlliedSignal's common stock, and, to the extent permitted by law for such reasonable period of time as Purchaser may determine, to provide U.S. Transferred Employees with an election to retain AlliedSignal's common stock in their respective plan accounts or to dispose of such stock and have the proceeds reinvested in other investment alternatives offered under each such plan. Prior to the transfer date, Purchaser shall, to the reasonable satisfaction of AlliedSignal's counsel, present AlliedSignal with such evidence and information (which may include or be provided by an opinion of Purchaser's counsel satisfactory to AlliedSignal) as is reasonably necessary to establish that the tax-qualified plan or plans established or to be established by Purchaser to which the transfer or transfers described in this Section are to be made are in full force and effect and meet all the requirements for qualification under Sections 401 and 411 (d)(6) of the Code and Sellers shall, to the reasonable satisfaction of Purchaser's counsel, present Purchaser with such evidence and information as is reasonably necessary to establish that the Savings Plan meets the requirements of Section 401(a) of the Code. 26 6.7 Labor Agreements. Purchaser shall assume Sellers' obligations under the Bargaining Agreements and any applicable side letters and schedules according to their terms as in effect of and as of the Closing Date, and shall honor such Bargaining Agreements for the remainder of the effective term thereof following the Closing Date. ARTICLE 7. PRE-CLOSING COVENANTS 7.1 [Intentionally left blank]. 7.2 [Intentionally left blank]. 7.3 [Intentionally left blank]. 7.4 [Intentionally left blank]. 7.5 Workers' Compensation. The Seller shall retain responsibility for all workers' compensation events which relate to incidents occurring on or before the Closing Date. The Purchaser shall have responsibility for all workers' compensation events which relate to incidents occurring after the Closing Date. 7.6 Insurance-Primary Casualty Program. Sellers maintain at present a series of insurance programs pursuant to which various insurance carriers have provided and are providing insurance coverage in respect of the Business relating to automobile liability, general liability, employers liability and non-aircraft products liability (the "Primary Casualty Program") and Sellers and Purchaser understand and agree that Sellers are not transferring to Purchaser pursuant hereto any rights or interests in such Primary Casualty Program, nor, except as otherwise set forth herein, shall Sellers be required to maintain any of such coverages or limit in any manner Sellers' right to change deductible levels or other terms or conditions thereof. As between Purchaser and Sellers, however, it is agreed that the following shall apply to claims with a date of occurrence prior to the Closing Date that are covered by the Primary Casualty Program: 7.6.1 Claims Responsibility and Procedures. Purchaser shall promptly notify in writing Sellers of any claims against the Business, Purchaser, Sellers or any of their Affiliates arising from occurrences which took place prior to the Closing Date relating to the Business or its prior assets, business or operations. To the extent coverage is available under the Primary Casualty Program, Purchaser shall handle such claims through the applicable insurance carrier and to the limited extent required therefor is hereby appointed as Sellers' agent in dealing with any such applicable insurance carriers, such agency, however, being subject to revocation at any time if Purchaser fails to comply with the provisions of this Section 7.6. Purchaser through the applicable insurance carrier may settle any such claim on a basis which in its judgment is reasonable provided, however, that Purchaser agrees not to settle any such claims for an amount in excess of $50,000 without prior consultation with AlliedSignal. Sellers and Purchasers shall cooperate with each other in the defense of any such claims and will keep each other informed of significant developments with respect 27 thereto. Neither Purchaser nor Sellers will knowingly take any action that prejudices the other party in the collection of any applicable insurance proceeds. 7.7 No Inconsistent Action. Subject to Sections 9.1 and 9.2, the parties hereto shall not take any action inconsistent with their obligations under this Agreement or which could materially hinder or delay the consummation of the transactions contemplated by this Agreement. None of the parties hereto shall take or omit to take any action that could result in any of their respective representations and warranties not being true in all material respects on the Closing Date. 7.8 [Intentionally left blank]. 7.9 Non-Solicitation. Sellers agree that until December 22, 1999, they shall not, and they shall cause each of their respective Affiliates not to, without the prior consent of Purchaser, employ or solicit for employment any person currently employed by the Business (other than a person solicited or hired as a result of a general solicitation (such as an advertisement) not specifically directed to employees of the Business). 7.10 Refunds and Remittances. In the event that Sellers or their Affiliates receive any amount that is properly due and owing to Purchaser in accordance with the terms of this Agreement, Sellers shall cause same to be promptly remitted to Purchaser at the address specified in Section 13.2. 7.11 Enforcement of Confidentiality Provisions. Sellers agree to use reasonable best efforts to enforce, at the written request of Purchaser, (i) the confidentiality provisions of any agreements related to the sale of the Business (excluding any employee solicitation provisions) and (ii) all confidentiality agreements, if any, entered into between Sellers or any of their Affiliates and any of their employees, in each case to the extent such provisions pertain to the Business as of the Closing Date. 7.12 Novation of Government Contracts. As soon as reasonably practicable following the Closing, AlliedSignal shall, in accordance with Federal Acquisition Regulations Part 42, Section 42.12, submit in writing to each responsible Contracting Officer (as such term is defined in Federal Acquisition Regulations Part 42, Section 42.102(a)), a request for the U.S. Government to (i) recognize Purchaser in accordance with this Agreement and (ii) enter into a novation agreement (the "Novation Agreement") substantially in the form contemplated by such regulations. AlliedSignal shall thereby reasonably assist Purchaser in obtaining all consents, approvals and waivers required for the purpose of processing, entering into and completing the Novation Agreement with regard to any of the Government Contracts, including responding to any reasonable requests for information by the U.S. Government with regard to such Novation Agreement. 7.13 Further Actions. Subject to the terms and conditions hereof, Sellers and Purchaser agree to use their reasonable best efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement, including without limitation, taking all necessary or advisable action (i) in respect of the works council of ELAC and (ii) 28 to terminate the profit/loss pooling arrangement (the "Pooling Arrangement") between AS Deutschland and ELAC not later than December 31, 1998. 7.14 Letters of Credit. Schedule 7.14 identifies letters of credit and other similar obligations in respect of which AlliedSignal will remain as account party ("Retained L/Cs") and other letters of credit and similar obligations ("Assumed L/Cs") in respect of which Purchaser shall, not later than May 31, 1998, either (a) become account party or (b) issue replacement letters of credit, with Purchaser as account party, and obtain the cancellation of the Assumed L/Cs and release Sellers from any obligations under any related credit agreements. In the event that, after using its reasonable best efforts, Purchaser cannot perform its obligations under Section 7.14(a) or (b) with respect to the Assumed L/Cs, Purchaser shall provide back-up letters of credit with respect to such Assumed L/Cs. Any Assumed L/C in respect of which Purchaser has not issued a replacement or back-up letter of credit as aforesaid by May 31, 1998 may be cancelled by AlliedSignal and Purchaser shall reimburse AlliedSignal forthwith for all amounts drawn by the beneficiary under any such cancelled letter of credit; provided, however, that prior to May 31, 1998, AlliedSignal shall not waive any requirements of or agree to amend any such Retained L/C without the prior written consent of Purchaser. The parties acknowledge that the identity of the account party under any Retained L/C and any Assumed L/C and other similar obligations does not alter the terms of this Agreement, meaning, specifically and without limitation, that the provisions of Section 3.1 (Assumed Liabilities), 3.2 (Excluded Liabilities) and Article 12 (Indemnification) are unaffected by the identity of the account party, and if a demand for payment is made under a Retained L/C or an Assumed L/C, the financial responsibility for the circumstances underlying such demand shall be determined by this Agreement and not by the identity of the account party under the letter of credit in question. 7.15 1985 Capitalization of ELAC. AlliedSignal shall ensure that the 1985 capitalization of ELAC is confirmed by German counsel to have been lawful and proper. The parties shall cooperate in any steps that may be necessary to correct the capitalization, at AlliedSignal's expense. 7.16 MCDV Subcontract. Following the Closing, AlliedSignal and Purchaser shall use their reasonable best efforts to prepare a subcontract (the "MCDV Subcontract") to be entered into between AlliedSignal Canada Inc. ("ASC") and Purchaser relating to the contract between ASC and MacDonald, Dettwiler and Associates Ltd. for the maritime coastal defense vessel, as amended (the "MCDV Contract"). The MCDV Subcontract shall be reasonably acceptable to AlliedSignal and Purchaser and shall transfer to Purchaser in U.S. dollars the full economic benefit of the MCDV Contract (based on the exchange rate for U.S. and Canadian dollars as reported in the Wall Street Journal on the date of any payment). Purchaser shall, and AlliedSignal shall cause ASC to, enter into the MCDV Subcontract promptly following the finalization thereof to the reasonable satisfaction of AlliedSignal and Purchaser. In the event that (i) ASC shall be prohibited from making any payment to Purchaser under the MCDV Subcontract, (ii) any Canadian withholding tax would be applicable to any payment to Purchaser by ASC under the MCDV Subcontract or (iii) ASC would lose Canadian content credit as a result of any payment to Purchaser by ASC under the MCDV Subcontract, AlliedSignal shall, on the date any such payment is due and in lieu of such payment from ASC under the MCDV Subcontract, make a payment to Purchaser in an 29 amount equal to the amount of the payment due under the MCDV Subcontract, without regard to any Canadian withholding tax. Purchaser shall not have any liability under the MCDV Subcontract for any obligation or liability relating to the ownership or operation of the Assets or the Business on or prior to the Closing Date relating to (a) the provision of Canadian content, (b) any penalty or excise tax for failure to meet Canadian content obligations or (c) any obligation for liquidated damages for failure to timely deliver. ARTICLE 8. CONDITIONS TO CLOSING 8.1 Conditions to the Obligations of Purchaser. The obligations of Purchaser to consummate the transactions contemplated by this Agreement are subject to the fulfillment prior to or at the Closing of each of the following conditions, any one or more of which may be waived by Purchaser in its sole discretion: (a) On the Closing Date, there shall be no injunction, restraining order or decree of any nature of any court or governmental agency or body of competent jurisdiction that is in effect that restrains or prohibits the consummation of the transactions contemplated by this Agreement or any such injunction, restraining order or decree or any pending lawsuit, claim or legal action relating to the transactions contemplated by this Agreement which would materially adversely affect such transactions or Purchaser's ownership, use or enjoyment of the Business or any part thereof. (b)(i) All of the representations and warranties of Sellers, including those set forth in Section 8.1 (b)(ii) and (iii) below, contained in this Agreement or in any certificate, instrument or other document delivered to Purchaser pursuant hereto shall be complete, true and correct in all respects on and as of the Effective Date, with the same force and effect as though such representations and warranties had been made on and as of the Effective Date, except to the extent that any such representation and warranty is made as of a specified date, in which case, such representation and warranty shall have been true and correct as of such date; (ii) The representations and warranties of Sellers contained in Sections 4.1, 4.2, 4.3, 4.8, 4.10, 4.11, 4.12, 4.15, 4.16, 4.17, 4.18, 4.20, 4.21, 4.22, 4.23, 4.25, 4.26 and 4.27 of this Agreement or in any certificate, instrument or other document delivered to Purchaser pursuant hereto shall be complete, true and correct in all respects on the Closing Date, with the same force and effect as though such representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation and warranty is made as of a specified date, in which case, such representation and warranty shall have been true and correct as of such date; and (iii) To the Knowledge of Sellers, the representations and warranties contained in Section 4.9 of this Agreement or in any certificate, instrument or other document delivered to Purchaser pursuant hereto shall be complete, true and correct in all respects on the Closing Date, with the same force and effect as though such representations and warranties had been made on and as of the Closing Date, except to the extent that any such 30 representation and warranty is made as of a specified date, in which case, such representation and warranty shall have been true and correct as of such date. (c) Sellers shall have performed in all material respects all obligations and agreements and complied in all material respects with all covenants contained in this Agreement to be performed and complied with by them prior to or on the Closing Date. (d) Purchaser shall have received a certificate, dated the Closing Date, from an authorized officer of each of the Sellers to the effect that the conditions specified in (b) and (c) above have been fulfilled. (e) The Transition Services Agreement, attached as Exhibit B hereto, shall have been executed and delivered by the parties thereto. 8.2 Conditions to the Obligations of Sellers. The obligations of Sellers under this Agreement are subject to the fulfillment, prior to or at the Closing, of each of the following conditions, any one or more of which may be waived by Sellers in their sole discretion: (a) On the Closing Date, there shall be no injunction, restraining order or decree of any nature of any court or governmental agency or body of competent jurisdiction that is in effect that restrains or prohibits the consummation of the transactions contemplated by this Agreement. (b) The representations and warranties of Purchaser contained in this Agreement or in any certificates, instruments or other documents delivered to AlliedSignal pursuant hereto shall be complete, true and correct on the Closing Date, with the same force and effect as though such representations and warranties, as updated, had been made on and as of the Closing Date, except to the extent that any such representation and warranty is made as of a specified date, in which case, such representation and warranty shall have been true and correct as of such date. (c) Purchaser shall have performed in all material respects all obligations and agreements and complied in all material respects with all covenants contained in this Agreement to be performed and complied with by the Closing Date. (d) AlliedSignal shall have received a certificate, dated the Closing Date, from an authorized officer of the Purchaser to the effect that the conditions specified in (b) and (c) above have been fulfilled. ARTICLE 9. TERMINATION AND SURVIVAL 9.1 Termination. Notwithstanding anything to the contrary set forth herein, this Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing: (a) by mutual written consent of Purchaser and Sellers; or 31 (b) by Purchaser, on the one hand, or Sellers, on the other hand, upon written notice to the other, if such other party or its Affiliate has breached any representation, warranty or covenant contained in this Agreement in any respect, if the non-breaching party has notified the breaching party of the breach in writing and the breach has continued without cure for a period of thirty (30) days after notice of the breach; or (c) by the Purchaser, on the one hand, or Sellers, on the other hand, if there shall be in effect any law or regulation that prohibits the consummation of the Closing or if the consummation of the Closing would violate any non-appealable final order, decree or judgment of any court or governmental body having jurisdiction over the transactions contemplated hereby; or (d) by either party if the Closing shall not have occurred by April 1, 1998; provided that the terminating party is not in material breach of its obligations under this Agreement. 9.2 Effect of Termination. If this Agreement is terminated pursuant to Section 9.1, this Agreement shall become void and of no further force and effect, and none of the parties hereto (nor their respective Affiliates, directors, shareholders, officers, employees, agents, consultants, attorneys-in-fact or other representatives) shall have any liability in respect of such termination except that the obligations contained in Sections 9.2, 13.1, 13.3 and 13.9 shall survive; provided, however, that if such termination is effected pursuant to Section 9.1(b) or (d) and the failure to consummate the transactions contemplated hereby was the result of any of the conditions to Closing having not been fulfilled by reason of the breach by either Purchaser, on the one hand, or Sellers, on the other hand, of their respective covenants, representations and/or warranties set forth in this Agreement or in any agreement, document or instrument ancillary hereto, the party having so breached shall remain liable to the other party for such breach. ARTICLE 10. CLOSING DOCUMENTS 10.1 Documents to be Delivered by Sellers. At the Closing, Sellers shall deliver to Purchaser the following documents: (i) Copies of resolutions of each of the Sellers certified by a Secretary, Assistant Secretary or other appropriate officer of such entity, authorizing the execution, delivery and performance of this Agreement and the transactions contemplated hereby; (ii) Executed deeds, bills of sale or other appropriate instruments of transfer with respect to all of the Real Property, Personal Property, Inventory, Accounts Receivable and any other Assets not transferred or assigned by any other documents or instruments described in this Section; (iii) Executed and acknowledged Assignments by ASTI sufficient to transfer title to the Intellectual Property; 32 (iv) Executed assignment and assumption agreements with respect to the Contracts; (v) Executed documents of assignment or transfer with respect to each of the permits, licenses and authorizations listed in Schedule 4.17; (vi) One executed assumption of liability agreement by which Purchaser will assume the Assumed Liabilities pursuant to Section 3.1 (the "Assumption of Liability Agreement"); (vii) One executed copy of the License Agreement; (viii) A certificate of an appropriate officer of AlliedSignal relating to the representations, warranties and covenants of AlliedSignal made herein as provided in Section 8.1(b) and (c); (ix) A share transfer agreement in customary form and a certificate in the name of Purchaser representing the ELAC Shares; (x) Any other document reasonably necessary to effectuate the transactions contemplated hereby; (xi) Sellers shall have delivered to Purchaser certificate(s) in form and substance reasonably satisfactory to Purchaser, duly executed and acknowledged, certifying any facts that would exempt the transactions contemplated hereby from withholding pursuant to the provisions of the Foreign Investment Real Property Tax Act (e.g., a certificate of non-foreign status as provided in Treasury Regulation section 1. 1445-2(b)(2)(iii)(B)); and (xii) One executed Transition Services Agreement. 10.2 Documents to be Delivered by Purchaser. At the Closing, Purchaser shall pay the Purchase Price to AlliedSignal and shall execute where applicable and deliver to AlliedSignal the following documents: (i) Copies of resolutions of the Purchaser, certified by the Secretary or Assistant Secretary of Purchaser, authorizing the execution, delivery and performance of this Agreement and the transactions contemplated hereby; (ii) Executed assignment and assumption agreement with respect to the Contracts; (iii) One executed Assumption of Liability Agreement; (iv) A certificate of an appropriate officer of Purchaser relating to the representations, warranties and covenants made herein by Purchaser, as provided in Sections 8.2(b) and (c); 33 (v) One executed copy of the License Agreement; (vi) Any other document reasonably necessary to effectuate the transactions contemplated hereby; (vii) One resale certificate regarding inventory; and (viii) One executed copy of the Transition Services Agreement. ARTICLE 11. POST CLOSING OBLIGATIONS 11.1 Further Assurances. From time to time after the Closing, without further consideration, the parties shall cooperate with each other and shall execute and deliver instruments of transfer or assignment, or such other documents to the other party as such other party reasonably may request to evidence or perfect Purchaser's right, title and interest to the Assets, and otherwise carry out the transactions contemplated by this Agreement, including providing that Purchaser will be able to utilize the AlliedSignal sales office in Canada previously used by the Business. Any cash received by the Sellers after the Closing in respect of any Asset shall be immediately remitted by Sellers to Purchaser. 11.2 Access to Books and Records. After the Closing, Purchaser shall permit AlliedSignal to have reasonable access to and the right to make copies of such of Sellers' books, records and files as constitute part of the Assets or the ELAC Assets for any reasonable purpose at any time during regular business hours, such as for use in litigation or financial reporting, tax return preparation, or tax compliance matters. 11.3 Cooperation in Litigation. The parties shall reasonably cooperate with each other at the requesting party's expense in the prosecution or defense of any dispute or litigation or other proceeding arising from their respective operation of the Business, including but not limited to affording reasonable access to and providing information regarding amounts in dispute, information regarding former employees of the Business and documentation created in the running of the Business relating to such dispute or litigation. Purchaser and Sellers shall cooperate fully, as and to the extent reasonably requested by the other party, and at their own cost and expense, in connection with the filing of Tax Returns, the retention of records and the forwarding of any relevant notices or other information received from any Taxing authority and any audit, litigation or other proceeding with respect to Taxes, and shall fully and accurately submit any tax data packages reasonably requested by Sellers within the time periods established by the Sellers Tax department consistent with past practices. 11.4 Proprietary Information. Prior to the Closing Date, the Business was routinely supplied copies of proprietary and confidential information relating to strategic, technical, and/or marketing plans of AlliedSignal and its Affiliates and their various operations unrelated to the Business. Although AlliedSignal has attempted to recover such information from the Business, some may still be present within the Business. Purchaser therefore agrees that it 34 will not use such information for any purpose whatsoever, and shall destroy any remaining copies. 11.5 Covenant Not to Compete. AlliedSignal and each of its Affiliates agrees that for a period of five years after the Closing Date, neither it nor any of its Affiliates will, directly or indirectly, own, manage, operate, join, control or participate in the ownership, management, operation or control of, any business whether in corporate, proprietorship or partnership form or otherwise competitive with the Business as currently conducted, except for (i) any business, service or product line acquired by AlliedSignal, directly or indirectly, after the Closing Date to the extent the revenues attributable to the competing business do not account for in excess of 20% of the revenues of the business acquired or (ii) any investment by the Savings Plans or the Pension Plans of AlliedSignal. 11.6 Change of Name. To the extent AS Deutschland has not done so prior to Closing, Purchaser covenants that promptly after Closing it will change the legal name of ELAC and its wholly owned pension fund subsidiary in accordance with German law to eliminate the reference therein to "AlliedSignal." 11.7 Tax Election. The Purchaser may at its option make a section 338 election with respect to the ELAC Shares or in the alternative, the Purchaser may purchase the ELAC Shares through a German acquisition vehicle; provided that, in either case, the Seller consents to the making of such election or purchase which such consent shall not be unreasonably withheld. 11.8 Research and Experimental Expenses. Sellers will furnish to the Purchaser as soon as reasonably practicable, but in no event more than 180 days after Closing, at Seller's cost and expense, all information reasonably requested relating to the base period research expenses and any other information to allow Purchaser to claim research and experimental credits in accordance with the relevant sections of the Code and Treasury Regulations promulgated thereunder. 11.9 Pooling Arrangement. As described in Section 7.13, the Pooling Arrangement is to be terminated not later than December 31, 1998. Notwithstanding the existence of the Pooling Arrangement, any net earnings of ELAC during the period from the Effective Date until the date the Pooling Arrangement is terminated (the "Pooling Period") shall be treated as an Asset, and all losses and the consequences thereof shall be treated as an Assumed Liability, for purposes of this Agreement. ARTICLE 12. 1NDEMMFICATION 12.1 Indemnification by Sellers. Sellers shall defend, indemnify and hold harmless Purchaser and Purchaser's directors, shareholders, officers, employees, agents, Affiliates, successors and each of the heirs, executors and successors and assigns of any of the foregoing (collectively, the "Purchaser Indemnified Parties") from and against any and all claims, liabilities, obligations, losses, costs, expenses (including, without limitation, reasonable legal, 35 accounting and similar fees and expenses), fines, damages (individually a "Loss" and collectively "Losses"), arising out of: (a) any breach or violation of any of the covenants or agreements made by Sellers in this Agreement or the Other Agreements; (b) any breach of, or any inaccuracy or misrepresentation in, any of the representation or warranties made by Sellers in this Agreement or in any Schedule, agreement, instrument, certificate or similar document required to be delivered pursuant to the terms hereof; or (c) any of the Excluded Liabilities or Excluded Assets. 12.2 Tax Indemnification. The Sellers shall, jointly and severally, be responsible for, shall pay or cause to be paid, and shall indemnify and hold harmless the Purchaser Indemnified Parties from and against any and all Taxes for or in respect of each of the following: (a) any and all Taxes with respect to any taxable period or a portion thereof, of ELAC (or any predecessor) ending on or before the Closing Date; (b) with respect to any and all Taxes of any member of a consolidated, combined or unitary group of which ELAC (or any predecessor) is or was a member on or prior to the Closing Date by reason of the liability of ELAC pursuant to Treasury Regulation Section 1.1502-6(a) (or any analogous or similar state, local or foreign law or regulation), as a transferee or successor, by contract, or otherwise; (c) any Taxes arising out of a breach of the representations and warranties contained in Section 4.16; and (d) any payments required to be made after the Closing Date under any Tax sharing, Tax indemnity, Tax allocation or similar contracts (whether or not written), including but not limited to the profit/loss pooling arrangement with AS Deutschland set forth on Schedule 4.16, to which ELAC was obligated, or was a party, on or prior to the Closing Date. 12.3 Indemnification by Purchaser. Purchaser shall indemnify and hold harmless AlliedSignal and AlliedSignal's directors, shareholders, officers, employees, agents, consultants, representatives, Affiliates, successors and assigns (the "AlliedSignal Indemnified Parties") from and against any and all Losses arising out of: (a) any breach or violation by Purchaser of any of the covenants or agreements made by Purchaser in this Agreement or the Other Agreements; (b) any breach of, or any inaccuracy in any of the representations or warranties made by Purchaser in this Agreement, or in any Schedule, agreement, certificate, instrument or similar documents required to be delivered pursuant to the terms hereof; or 36 (c) any Assumed Liability. 12.4 Indemnification Procedure. (a) Any party seeking indemnification hereunder (the "Indemnitee") shall notify the party liable for such indemnification (the "Indemnitor") in writing of any event, omission or occurrence which the Indemnitee believes has given or could give rise to Losses which are indemnifiable hereunder (such written notice being hereinafter referred to as a "Notice of Claim"). Any Notice of Claim shall be given promptly after the Indemnitee becomes aware of such event, omission or occurrence; provided, that the failure of any Indemnitee to give notice as provided in this Section 12.4 shall not relieve the Indemnitor of its obligations under this Section 12.4, except to the extent that the Indemnitor is actually prejudiced by such failure to give notice. A Notice of Claim shall specify in reasonable detail the nature and the particulars of the event, omission or occurrence giving rise to a right of indemnification to the extent known by or available to Indemnitee. The Indemnitor shall satisfy its obligations hereunder within thirty (30) days of its receipt of a Notice of Claim. (b) All costs and expenses incurred by the Indemnitor in defending any claim or demand shall be a liability of, and shall be paid by, the Indemnitor. Except as hereinafter provided, in the event that the Indemnitor notifies the Indemnitee within the 30 day period that it desires to defend the Indemnitee against such claim or demand, the Indemnitor shall be deemed to waive its right to contest such Indemnitee's right to indemnification hereunder and shall have the right to defend the Indemnitee by appropriate proceedings and shall have the sole power to direct and control such defense. If any Indemnitee desires to participate in any such defense, it may do so at its sole cost and expense; provided, that such Indemnitee shall have the right to employ separate counsel to represent such Indemnitee in such defense, at the Indemnitor's expense, if (i) in such Indemnitee's reasonable judgement and on the advice of counsel, a conflict of interest between such Indemnitor and such Indemnitee exists with respect to such claim or demand or (ii) the Indemnitor agrees to the retention of such counsel. So long as the Indemnitor is reasonably contesting any such claim or demand in good faith, the Indemnitee shall not pay or settle a claim or demand without the consent of the Indemnitor (unless the Indemnitee waives in writing any right to indemnity therefor). The Indemnitor may settle any claim or demand without the consent of the Indemnitee provided that such settlement includes a full, unconditional and complete release of the Indemnitee, and provided also that no such settlement will, without the prior written consent of the Indemnitee, impose any obligation or restriction on the Indemnitee or any of its assets or businesses. So long as the Indemnitor is defending in good faith any such third party claim, demand, suit, action or proceeding, the Indemnitee shall at all times cooperate in all reasonable ways with, make its relevant files and records available for inspection and copying by, and make its employees available or otherwise render reasonable assistance to, the Indemnitor and shall be reimbursed for its reasonable out-of-pocket expenses related thereto. In the event that the Indemnitor fails to timely defend, contest or otherwise protect against any such third party claim, demand, suit, action or proceeding, the Indemnitee at the Indemnitor's expense shall have the right, but not the obligation, to defend, contest, assert crossclaims or counterclaims, or otherwise protect against, the same and may make any compromise or settlement thereof and be entitled to all amounts paid as a result of such third party claim, demand, suit or action or any compromise or settlement thereof. 37 (c) The Indemnitor, following receipt of any notice from any Indemnitee requesting reimbursement for a Loss (which notice documents in reasonable detail the Loss or portion thereof by the Indemnitee) shall promptly and in any case within thirty days of receipt provide such reimbursement, unless and only to the extent that the Indemnitor disputes in good faith its indemnity obligation with respect to such Loss. (d) Each Indemnitee shall reasonably cooperate in complying with any applicable foreign, federal, state or local laws, rules or regulations or any discovery or testimony necessary to effectively carry out the Indemnitor's obligations hereunder. Such Indemnitee shall be reimbursed for any reasonable out-of-pocket expenses incurred in connection with such compliance. 12.5 Survival and Limitations. Except as otherwise provided herein, the warranties and representations of the parties contained in this Agreement or in any instrument delivered pursuant hereto, as deemed to have been given as of the Effective Date or the Closing Date, as the case may be, pursuant to Section 8.1(b), will survive the Closing Date and will remain in full force and effect thereafter for a period of two years from the Closing Date; provided that the representations and warranties contained in (i) Sections 4.8 and 4.18 shall survive the Closing Date indefinitely and (ii) Sections 4.3, 4.10, 4.11, 4.16 and 4.21 which shall survive the Closing Date until 90 days following the expiration of any statute of limitations (or extensions thereof) applicable to the matters described therein; and provided further that in the event notice of any claim for indemnification is given within the applicable survival period, the representations and warranties that are the subject of such indemnification claim shall survive until such time as such claim is finally resolved. Anything to the contrary contained herein notwithstanding, (a) neither party shall assert any claim against the other for indemnification (not including indemnification for Taxes) hereunder with respect to any inaccuracy or breach of such warranties or representations unless and until the amount of such claim or claims, including any claims deemed made pursuant to Section 12.8, shall exceed $750,000 calculated on a cumulative basis and not a per item basis, and then only in respect to the excess over said $750,000; and (b) neither party shall be entitled to recover from the other more than 50% of the sum of (I) the Purchase Price hereunder and (II) the Purchase Price under the Facility Sale Agreement with respect to all claims for indemnity with respect to any inaccuracy or breach of such warranties or representations. 12.6 Adjustment for Insurance and Taxes. The amount (an "Indemnity Payment") which an Indemnitor is required to pay on behalf of any Indemnitee pursuant to this Article 12 shall be reduced by the amount of any insurance proceeds theretofore or thereafter actually received by or on behalf of the Indemnitee in reduction of the related indemnifiable loss. An Indemnitee which shall have received or on behalf of which there shall be paid an Indemnity Payment and which shall subsequently receive, directly or indirectly, insurance proceeds in respect of the related indemnifiable loss, shall pay to the Indemnitor the amount of such insurance proceeds or, if lesser, the amount of the Indemnity Payment. Where any tax benefit is available to the Indemnitee with respect to an indemnifiable event, the indemnity payment shall be reduced dollar for dollar by the amount of such tax benefit and where any net Tax cost is incurred by the Indemnitee arising from the receipt of indemnity payments hereunder, the indemnity payment shall be increased dollar for dollar by the amount of such Tax cost (grossed up for such increase), provided that such Tax benefit or Tax cost shall be computed 38 at the highest federal, state, local and foreign corporate income tax rate of the jurisdiction in which such Tax benefit or Tax cost so relates. 12.7 Environmental Liabilities. (a) To the fullest extent permitted under (i) the Stock Purchase Agreement pursuant to which AlliedSignal acquired ELAC from Honeywell and (ii) Applicable Law, AlliedSignal agrees to assign its indemnification rights if any in respect of the ELAC facility to Purchaser and to the extent not assignable to enforce such provisions for the benefit of Purchaser and to provide any amounts it receives in connection therewith to Purchaser. (b) Notwithstanding Section 3.2(d), (i) Purchaser shall indemnify the AlliedSignal Indemnified Parties from and against the first $3 million of Losses, in aggregate, in respect of the combined Environmental Liabilities hereunder and under the Facility Sale Agreement and 50% of the next $2 million of such Losses and (ii) AlliedSignal shall indemnify the Purchaser Indemnified Parties from and against any other Losses relating to Environmental Liabilities. 12.8 Facility Sale Agreement. Purchaser agrees to indemnify the Allied Signal Indemnified Parties from and against amounts up to $750,000, calculated on a cumulative basis and not a per item basis, paid by Sellers under Article 11 of the Facility Sale Agreement for claims under the Facility Sale Agreement for indemnification (not including indemnification for Taxes) thereunder with respect to any inaccuracy or breach of the warranties or representations thereunder. If AlliedSignal shall be liable to any party pursuant to the Facility Sale Agreement (a "Facility Sale Liability"), Purchaser shall indemnify AlliedSignal to the extent the amount of such Facility Sale Liability exceeds the amount for which Sellers would have been liable under this Agreement had the Real Estate Assets (as defined in the Facility Sale Agreement) been included in the Assets. Any payments made pursuant to this Section 12.8 shall be deemed "claims" for purposes of the $750,000 threshold set forth in Section 12.5. Sellers shall not be required to pay more than once in respect of any Loss. ARTICLE 13. MISCELLANEOUS 13.1 Expenses. Except as specifically set forth elsewhere herein and except that a party not in breach of this Agreement shall be entitled to recover from a breaching party all expenses and costs incurred by the non-breaching party by reason of such breach (including, without limitation all legal expenses and costs), each of the parties hereto shall pay its own expenses and costs incurred or to be incurred by it in negotiating, closing and carrying out this Agreement, and, in no event, shall any such fees and expenses of the Sellers constitute "Assumed Liabilities" under this Agreement. 13.2 Notices. Any notice or communication given pursuant to this Agreement by a party hereto to the other party shall be in writing and hand delivered, or mailed by registered or certified mail, postage prepaid, return receipt requested (notices so mailed shall be deemed given when mailed), or sent via facsimile, with an original mailed as follows: 39 If to AlliedSignal or Sellers: AlliedSignal Inc. 101 Columbia Road Morristown, New Jersey 07962 Attention: Vice President and Chief Financial Officer Telecopier: 973-455-6039 If to Purchaser: L-3 Communications Corporation 600 Third Avenue New York, New York 10016 Attention: Christopher C. Cambria, Esq. Telecopier: 212-805-5494 with a required copy to: Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Attention: David B. Chapnick, Esq. Telecopier: 212-455-2502 13.3 Confidentiality. AlliedSignal and Purchaser have entered into a Confidentiality Agreement dated September 23, 1997 which notwithstanding any provision herein to the contrary shall survive the execution and delivery of this Agreement and the Closing hereunder. 13.4 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 13.5 Entire Agreement/Termination of December Agreement. Except for the Confidentiality Agreement referred to in Section 13.3, this Agreement and the Other Agreements are the entire agreement between the parties hereto with respect to the subject matter hereof and supersede all prior communications, representations, agreements and understandings between the parties hereto, whether oral or written, including any prior version of this Agreement executed and delivered by the parties hereto. On December 22, 1997, the parties hereto entered into that certain Purchase Agreement (the "December Agreement") regarding the purchase and sale of the Assets. Since the date of the December Agreement, Purchaser has conducted an audit and other examinations of the Business and has asserted certain claims with respect to the December Agreement, relating, inter alia, to the financial position and business prospects of the Business. The parties have resolved all such claims and, for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, have restated their agreement with respect to the purchase and sale of the Business, as set forth in this Agreement. The December Agreement is hereby terminated, is 40 of no further force or effect, and no party shall have any right or obligation, whether as a matter of the law of contract or otherwise, under, arising out of or relating to, the December Agreement or any matter appearing in the December Agreement that does not appear in this Agreement (including, without limitation, the representations and warranties of Sellers that do not appear in this Agreement). The agreement between the parties as to the purchase and sale of the Business is expressed in its entirety in this Agreement. 13.6 Construction. When the context so requires, references herein to the singular number include the plural and vice versa and pronouns in the masculine or neuter gender include the feminine. The headings contained in this Agreement and the tables of contents, exhibits and schedules are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 13.7 Assignment. This Agreement may not be assigned, in whole or in part, by any party hereto without the prior written consent of the other parties hereto, which consent shall not unreasonably be withheld; provided that Purchaser may, without the consent of Sellers, assign its rights and obligations, in whole or in part, to any wholly-owned subsidiary of Purchaser so long as Purchaser remains bound by all the terms of this Agreement. 13.8 Amendment. This Agreement may be amended, supplemented or otherwise modified only by written agreement duly executed by the parties hereto. 13.9 Applicable Law. This Agreement shall be construed in accordance with the laws of the State of New York, disregarding its conflicts of laws principles which may require the application of the laws of another jurisdiction. 13.10 No Third Party Rights. This Agreement is not intended and shall not be construed to create any rights in any parties other than Sellers and Purchaser and no other person shall assert any rights as a third party beneficiary hereunder. 13. 11 Exhibits and Schedules. The Exhibits and Schedules attached hereto are incorporated into this Agreement and shall be deemed a part hereof as if set forth herein in full. References herein to "this Agreement" and the words "herein," "hereof' and words of similar import refer to this Agreement (including Exhibits and Schedules) as an entirety. In the event of any conflict between the provisions of this Agreement and any such Exhibit or Schedule, the provisions of this Agreement shall control. 13.12 Waivers. Any waiver of rights hereunder must be set forth in writing. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained herein, or in any documents delivered or to be delivered pursuant to this Agreement or in connection with the Closing hereunder. A waiver of any breach or failure to enforce any of the terms or conditions of this Agreement shall not 41 in any way affect, limit or waive any party's rights at any time to enforce strict compliance thereafter with every term or condition of this Agreement. 13.13 Severability. If and to the extent that any court of competent jurisdiction holds any provisions (or any part thereof) of this Agreement to be illegal, invalid or unenforceable, such holding shall in no way affect the validity of the remainder of this Agreement. 13.14 Bulk Sales Law. The parties hereto agree to waive compliance with the provisions of the bulk sales law of any jurisdiction. The Sellers agree to indemnify and hold harmless Purchaser from and against any and all liabilities which may be asserted by third parties against Purchaser as a result of such noncompliance. 13.15 Knowledge of Sellers. For purposes of this Agreement, Knowledge of Sellers or any similar expression shall mean the knowledge, after due inquiry, of (i) the executive officers of Sellers; (ii) Robert Johnson; or (iii) Steven Schorer and all individuals who directly report to Mr. Schorer. 13.16 Personal Liability. The directors, officers, stockholders, employees, agents, consultants, representatives and affiliates of each of the parties hereto acting in such capacity shall not in such capacity have any personal liability or obligation arising under this Agreement (including any claims that the other parties may assert). 42 IN WITNESS WHEREOF, Sellers and Purchaser have duly executed and delivered this Agreement as of the day and year first above written. AlliedSignal Inc. By: /s/ R. Carlson ----------------------------- AlliedSignal Technologies, Inc. By: /s/ R. Carlson ----------------------------- AlliedSignal Deutschland GmbH By: /s/ R. Carlson ----------------------------- L-3 Communications Corporation By: /s/ [ILLEGIBLE] ----------------------------- 43 EXHIBIT A TO ASSET PURCHASE AGREEMENT LICENSE AGREEMENT (See Tab 8) 44 EXHIBIT B TO ASSET PURCHASE AGREEMENT TRANSITION SERVICES AGREEMENT (See Tab 13) Schedule 1 - Products Ocean Systems Product List Airborne AQS-18 AQS- 1 8A AQS-1 8VIA AQS- 1 8V(3) AQS-13B (Spares, and R&O only) AQS- 13F AQS-24B Test Bench AWS-18M (Japan) HELRAS SHELRAS Test Adapter Test Set (TATS) Reeling Machine Test Set (RMTS) ASW System Trainer (AST) Related Spares, service, R&O, provisioning, engineering and technical support, documentation and publications. Sea Systems Non-Standard Towed Array (NSTA) TB-23 Towed Array Modules, Tow Cables TB-23 Towed Array Receiver Coupler (TARC) TB- 16 Towed Array AN/SQR-19 Towed Array ADC MK3 Countermeasure TB- 16 Array Module Test Set TB-23 Array Module Test Set Integrated Side Looking Sonar (ISLS) Expendable Mine Destructor (EMD) Low Frequency Active Towed Sonar (LFATS) WLY-1, SSTD Sensors/Telemetry Related spares, service, R&O, provisioning, engineering and technical support, documentation and publications. Engineering Hybrids Various Transducers Fiber Optic Rotating Joint ELAC Product List Navigation Systems Navigation Sounders Echosounders type LAZ 5000, 4400 for depth measurement and recording. Echosounder VE 59 Naval Depth Sounder acc. to military standards for surface ships and submarines. Operating frequencies between 12 kHz and 1 MHZ. For submarines additional Sound Velocity Measurement Bases with or without Temperature Sensor and CTD-Sensors (conductivity, temperature, depth) to compute density, salinity and sound velocity. Fog Horns Foghoms designed for stationary application at the coast or on off-shore platforms, available in directional and non-directional version. Hvdrogravhic Sounding Systems Dual-Frequency Echosounders LAZ 4400/20 LAZ 4400 is a dual-frequency echograph with integrated LCD-display including digital depth information for multi-purpose application, i.e. navigation, fishery and survey. Its successor, the LAZ 4420, offers two echosounders in one housing, each operating completely independently via its own transmitter and transducer. Hydrogranhic Survey Sounder LAZ 4700 LAZ 4700 is ELAC's state-of-the-art graphic echosounder for all types of hydrographic survey. It provides a choice of frequencies, transducers, transmitters, precision digitizers and other peripheral equipment. While suited for stand-alone use it has been designed to form the basis of an integrated computer-based survey system. Hydrogranhic Survey System LAZ 4721 LAZ 4721 is an integrated dual-frequency system (at customer choice, from 12 kHz up to 200 kHz) comprising Echosounder LAZ 4700 and Digitizer STG 721, including two digital displays. Multibeam Mapping System BOTTOMCHART and HDP 4061 The BOTTOMCHART multibeam mapping system is used for commercial and scientific applications and offers real-time wide area bathymetry together with facilities for onboard post-processing. Collected data are used to create a digital terrain model. Graphic output is provided with the Hydrographic Data Processing Software System HDP 4061 on a high resolution color monitor and on color printers/plotter which offer real-time output in the form of a bicolor, ship centered contour chart. Processing of measured data is performed on a high performance computer which allows production of depths charts having already undergone corrections for position, speed, heave, roll and pitch. Additionally the HDP 4061 provides extensive data analysis and graphic presentation, for example presentation of Variance, Density, Heave, Roll, Pitch and Runtime. Navigation System ONCOURSE ONCOURSE is designed as central operating software for an integrated survey system. Main features are: cruise planning, track steering (autopilot interface), calculation of optimum position, acquisition and storage of navigation data from different sources, heave/roll/pitch and depth, acquisition of sound velocity depth, and graphical presentation of track charts, depth profiles, wrecks and other symbols. SEACLASS SEACLASS is a data acquisition and postprocessing software package for sediment analysis according to the Echostrength Measuring Technique. The most famous result of ELAC's efforts was the echostrength measuring unit EMG II which SEACLASS now replaces. The system also provides postprocessing capabilities for calculating different geophysical parameters of the sediment and allows graphical output, e.g. sections, coverage and track plot. Sonar Systems and ComDonents Underwater Communication System UT 2000 A microprocessor-controlled communication system with integrated EL-display for surface ships and submarines. Wide frequency range (from 1 - 60 kHz) and output power (from 0,03 to 300 W), sector and/or omnidirectional operation, includes communication with divers. Operating modes e.g. telephony, telegraphy, pinger, transponder, distance measurement, noise monitoring, emergency mode. Transducers, Hvdronhones and other Wet-Ends A wide range of transducers, hydrophones, baffles, special staves, submarine cables, outboard connectors and pressure hull penetrators is available for installation on submarines in Active-, Passive-, HF-Intercept-, Passive Ranging-, Flank-Array Sonar Systems. Sonar Systems Passive-, HF-Intercept-, Passive Ranging- and Flank Array Sonars are available as standalone systems or as components of integrated systems such as SUBICS (Submarine Integrated Combat System) and ISAACS (Integrated Sensor and Arms Control System). Integrated Systems Following integrated systems can be provided with teaming partners: ISAACS: (Integrated Sensor and Armaments Control System) Terma Elektronik AS SUBICS: (Submarine Integrated Combat System) Lockheed Martin Librascope, US These integrated systems integrate data collection, monitoring and processing as well as combat systems monitoring and control. Low Frequency Active Sonar (LFAS) A towed low frequency sonar for surface ships with high output level for long range transmission. Remote controlled towed body and automatic launching and handling system. LFAS is a part of the German ATAS, Activated Towed Array System. Navigation and Detection Sonar NDS 3070 A supplementary dual-frequency sonar for navigation, detection and obstacle avoidance for use on board of submarines and surface ships. NDS 3070 is a small, microprocessor-controlled high resolution sonar with color display and optional audio channel. Diver Sonar An active/passive sonar for divers with EL-display, search and display sector 64 degrees, max. scale range 200 m, audio channel 1-50 kHz, endurance max. 90 minutes, rechargeable NiCd-batteries. Sonar Beacon Equipment SBE An independent submarine emergency device system with its own power supply that provides acoustic signals which enable rescue sonar systems to detect and locate a submarine in distress situations. SBE is available as mono or dual frequency system with different operating frequencies, pulse repetition rates and pulse lengths. UZG (SUBTAS for export)-Mobile Acoustic Underwater Target System The Mobile Target UZG is a self-propelled underwater vehicle for fleet ASW training. It is operated in open sea without instrumental range. The system is capable of simulating a submarine's dynamic behavior relative to its acoustic characteristics. ELAC has been awarded a development contract by the BWB (Federal Office for Technology and Procurement) to develop the UZG System. The two prototype systems have undergone trials by the German Navy in a one year Operational Evaluation (OPEVAL). The production contract for the German Armed Forces has been given to ELAC in 1997. TOSO The torpedo sonar components have been designed for the new German heavy-weight torpedo DM2A3 to enhance acquisition capabilities. TAU - Torpedo Countermeasure System TAU is a soft-kill torpedo countermeasure system for submarines. TAU was initiated by a feasibility study funded by the German Federal Office for Technology and Procurement (BWB). LCAW LCAW is a low cost weapon for anti-submarine-warfare. ELAC as a member of a team with STN (Vulkan Group) and Rheinmetall has successfully completed the concept phase for a NATO programme. The development phase will start in 1998. Serial production to be expected for 2001. Mine Countermeasure Systems (MCM') Multibeam BOTTOMCHART Mapping System The BOTF~OMCHART system can also be used as a MCM system. Sediment Classifier System SEACLASS SEACLASS, a fast Bottom Classifier System provides differentiated information about structure and nature of upper soft and non-solidified sediments as well as clear, high-contrast detection of buried objects with different reflectivity from surrounding matter. Buried objects detection system SEFAS SEFAS, a fan beam system, enables a fast and extensive sweep of threatened areas to detect and display objects buried in the seabed. Services Spare parts, service, R&O, provisioning, engineering and technical support, and documentation and publications services are provided in connection with the above referenced products. Schedule 1.1(a) - Personal Property The following documents, which hzzve been delivered to Purchaser, are incorporated by reference herein: 1. Schedule of Ocean Systems' Fixed Assets, dated September 30, 1997 2. Schedule of ELAC Fixed Assets dated September 30, 1997 Schedule 1.3(i) - Excluded Assets Excluded Technology Technical and Intellectual Property developed in connection with and related to using sensors to detect occupant's position for passenger side air bags is excluded from the sale. Excluded Services The following services are provided to Ocean Systems and ELAC by AlliedSignal, and are not included in the sale: Contracts and Business Development Offset Administration International Sales Representative Administration Legal Support Services Export Control Administration Government Relations through Allied Signal's Washington, DC Government Relations Office Real estate Purchase and Sales Services Public Relations Services Letter of Credit Management Operations/Purchasing Metrology Commodity Team Support Services (Limited) Negotiation of Long Term Agreements (Limited) Circuit Card Assemblies Financial Payroll Processing Including Check Writing, Payroll Tax Submission and W-2 Processing Income and Property Tax Return Services Consolidating Financial Reporting System Travel and Expense Processing Including American Express Administration Risk Management Services Fixed Property Accounting System and Related Support Walker General Ledger and Support Services Walker Accounts Receivable System and Related Cash Application Function Credit and Collections Support Treasury Services Forward Pricing Rate Proposal Submissions to ACO Government Compliance Support Information Systems Mainframe Computer Processing and Related Support Essbase Server Resident in Tempe, AZ MSMail Gateway Enterprise-Wide Network Electronic Data Interchange Internet Human Resources PeopleSoft Human Resource Management System Pension, Savings Plan and Benefits Management Expatriate Employment Management Schedule 4.6(a) -Intellectual Property See also Schedule 4.6(c). Patents and Patent Applications Ocean Systems Patents
DEPLOYABLE SONAR ARRAY WITH INTERCONNECTED TRANSDUCERS OPERATED IN THE BENDING MODE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4208738 17JEI980 GRANTED EXPIRES 01MY1998 TERMINATION AND METHOD OF TERMINATING ROPES OR CABLES OF ARAMID FIBER OR THE LIKE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4184784 22JA1980 GRANTED EXPIRES 03JL1998 HYDRODYNAMIC CONFIGURATION FOR TOWED SUBMERSIBLE BODY Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ France 7836235 01AP1985 GRANTED EXPIRES 22DE1998 Great Britain 2010764 17MR1982 GRANTED EXPIRES 14DE1998 West Gennany P2855443.0 16JL1987 GRANTED EXPIRES 21DE1998 Japan 1401012 21FE1987 GRANTED EXPIRES 26DE1998 United States 4173195 06N01979 GRANTED EXPIRES 27DE1997 COLLET TYPE CYLINDER SEPARATION DEVICE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4120519 170C1978 GRANTED EXPIRES 030C1997 SPHERICAL VEHICLE FOR OPERATION IN A FLUID MEDIUM Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4377982 29MR1983 GRANTED EXPIRES 29MR2000 PRESSURE-COMPENSATED ACCELERATION INSENSITIVE HYDROPHONE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 860012 12DE1977 SECRECY ORDER HYDRODYNAMIC CONFIGURATION FOR UNDERWATER VEHICLE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 226314 19JA1983 SECRECY ORDER DELAY LINE TIME COMPRESSION CORRELATION CIRCUIT Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4270180 26MY1981 GRANTED EXPIRES 09N01999 FISH COUNTER WITH SCANNING TRANSDUCER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Canada 1129981 17AU1982 GRANTED EXPIRES 17AU1999 United States 4225951 30SE1980 GRANTED EXPIRES 05FE1999 WHEEL SPEED SIGNAL- PRODUCING SYSTEM FOR SKID CONTROL Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4267575 12MY1981 GRANTED EXPIRES 09JL1999 CABLE CONSTRUCTION Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Great Britain 2056157 13AP1983 GRANTED EXPIRES 21JL2000 West Germany P3028113.1 180C1990 GRANTED EXPIRES 24JL2000 Japan 1486221 14MR1989 GRANTED EXPIRES 08AU2000 United States 4250351 10FE1981 GRANTED EXPIRES 08AU1999 PROPULSION SYSTEM FOR AN UNDERWATER VEHICLE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------
United States 4424042 03JA1984 GRANTED EXPIRES 23JL2001
CONNECTOR FOR SMALL DIAMETER ELONGATED SONAR ARRAYS Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4304456 08PE1981 GRANTED EXPIRES 10DE1999 CONNECTOR FOR ELONGATED UNDERWATER TOWED ARRAY Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4346954 31AU1982 GRANTED EXPIRES 31AU1999 FUNNEL CONSTRUCTION FOR A DIPPING SONAR Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 43887091 4JE1983 GRANTED EXPIRES 19JA2001 SONAR TRANSCEIVER SYSTEM AND METHOD Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4442513 10AP1984 GRANTED EXPIRES 05FE2002 SALMON COUNTER WITH SEPARATE KING SALMON TABULATOR Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Canada 1194976 080C1985 GRANTED EXPIRES 080C2002 TUNED CIRCUIT & METHOD FOR SONAR BEAM PAlTERN OPTIMIZATION Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 5309410 03MY1994 GRANTED EXPIRES 03MY2011 CONSTRUCTION AND METHOD FOR ELONGATED TOWED UNDERWATER SONAR ARRAY Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ France EPO113623 07SE1988 GRANTED EXPIRES 15DE2003 Great Britain EPO113623 07SE1988 GRANTED EXPIRES 15DE2003 West Germany P3377954.6 07SE1988 GRANTED EXPIRES 15DE2003 Japan 1727441 19JA1993 GRANTED EXPIRES 27DE2003 United States 4538250 27AUI985 GRANTED EXPIRES 27DE2002 DIGITAL DRIVE SYSTEM FOR PULSE WIDTH MODULATED POWER CONTROL Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Great Britain EP0187282 17MR1993 GRANTED EXPIRES 09DE2005 West Germany P3587191.1 17MR1993 GRANTED EXPIRES 09DE2005 Italy EP0187282 17MR1993 GRANTED EXPIRES 09DE2005 United States 4613933 23SE1986 GRANTED EXPIRES 07JA2005 EXPANDABLE SONAR ARRAY STRUCTURE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ France EP0580808 08JA1997 GRANTED EXPIRES 15AP2012 Great Britain EPO580808 08JA1997 GRANTED EXPIRES 15AP2012 Germany EP0580808 08JA1997 GRANTED EXPIRES 15AP2012 Italy EP0580808 08JA1997 GRANTED EXPIRES 15AP2012 Japan 510286/92 15AP1992 FILED United States 5091892 25FE1992 GRANTED EXPIRES 25FE2009 SYSTEM FOR DEPLOYING AN ARRAY OF SONAR PROJECTORS Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ France EP0205740 29JA1992 GRANTED EXPIRES 17FE2006 Great Britain EP0580808 29JA1992 GRANTED EXPIRES 17FE2006 West Germany P3683692.3 29JA1992 GRANTED EXPIRES 17FE2006 Italy EP0205740 29JA1992 GRANTED EXPIRES 17FE2006 Japan 2017615 19FE1996 GRANTED EXPIRES 28MR2006 United States 4725988 16FE1988 GRANTED EXPIRES 28MR2005 HELRAS MECHANICAL CONFIGURATION AND HYDRAULIC DRIVE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 758909 25JL1985 SECRECY ORDER ELONGATED RETAINING AND ELECTROMAGNETIC SHIELDING MEMBER FOR A TOWED UNDERWATER ACOUSTIC
ARRAY Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4636998 13JA1987 GRANTED EXPIRES 27AU2002 POLYURETHANE HEAT FORM AND BONDING OF CABLE JACKETS Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4533418 06AU1985 GRANTED EXPIRES 21SE2004 VIBRATION ISOLATION MODULE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4628851 16DE1986 GRANTED EXPIRES 24DE2004 SELF THREADING CAPSTAN DRIVE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4634102 06JA1987 GRANTED EXPIRES 23DE2005 ELECTRICAL TILT SWITCH Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4628160 09DE1986 GRANTED EXPIRES 280C2005 UNDERWATER TRANSDUCER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Australia 590050 22FE1990 GRANTED EXPIRES 23FE2007 France EPO243591 14AP1993 GRANTED EXPIRES 09FE2007 Great Britain EPO243591 14AP1993 GRANTED EXPIRES 09FE2007 West Germany P3785384.8 14AP1993 GRANTED EXPIRES 09FE2007 Italy EP0243591 14AP1993 GRANTED EXPIRES 09FE2007 Japan 2033626 19MR1996 GRANTED EXPIRES 30AP2007 Netherlands EPO243591 14AP1993 GRANTED EXPIRES 09FE2007 United States 4764907 16AU1988 GRANTED EXPIRES 30AP2006 FLEXURAL DISK TRANSDUCER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ France EPO265679 22JL1992 GRANTED EXPIRES 28SE2007 Great Britain EPO265679 22JL1992 GRANTED EXPIRES 28SE2007 West Germany P37805592 22JL1992 GRANTED EXPIRES 28SE2007 Italy EPO265679 22JL1992 GRANTED EXPIRES 28SE2007 Japan 2579173 07N01996 GRANTED EXPIRES 280C2007 United States 4709361 24N01987 GRANTED EXPIRES 300C2006 CABLE WIPER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4845683 04JL1989 GRANTED EXPIRES 160C2006 UNDERWATER SONAR ARRAY Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4901287 13FE1990 GRANTED EXPIRES 28MR2008 FIBER OPTIC SENSOR Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Eur. Patent Conv. 94112474.5 10AU1994 FILED United States 5359445 250C1994 GRANTED EXPIRES 250C2011 LEVEL WIND SYSTEM Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4795108 03JA1989 GRANTED EXPIRES 17SE2007 MARINE ACOUSTIC AEROBUOY AND METHOD OF OPERATION Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 5060206 220C1991 GRANTED EXPIRES 25SE2010 PISTON & DRUM DRIVE SYSTEM Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Canada 2069494-7 07N01990 FILED France EP0505437 16MR1994 GRANTED EXPIRES 07N02010
Great Britain EP0505437 16MR1994 GRANTED EXPIRES 07N02010 Germany P69007492.1 16MR1994 GRANTED EXPIRES 07N02010 Italy EP0505437 16MR1994 GRANTED EXPIRES 07N02010 Japan 501453/91 07N01990 FILED United States 4973893 27N01990 GRANTED EXPIRES 12DE2009
SHOCK RESISTANT FLEXTENSIONAL TRANSDUCER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Canada 2007096 O4JA1990 FILED France 9001617 12FE1990 FILED Great Britain 2303760 O3JE1997 GRANTED EXPIRES 04JA2010 United States 5497357 05MR1996 GRANTED EXPIRES 05MR2013 HYDRODYNAMIC CONFIGURATION FOR UNDERWATER VEHICLE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4919066 24AP1990 GRANTED EXPIRES 19JA2009 FIBER OPTIC ROTARY JOINT Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Canada 2107878 25MR1992 FILED France EPO582639 08JA1997 GRANTED EXPIRES 25MR2012 Great Britain EPO582639 08JA1997 GRANTED EXPIRES 25MR2012 Germany P69216603.3 08JA1997 GRANTED EXPIRES 25MR2012 United States 5078466 O7JA1992 GRANTED EXPIRES 19AP2011 LOW FREQUENCY SONAR PROJECTOR AND METHOD Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Australia 664961 07JE1996 GRANTED EXPIRES 04MY2013 France EP0640020 13MR1996 GRANTED EXPIRES 04MY2013 Great Britain EP0640020 13MR1996 GRANTED EXPIRES 04MY2013 Germany P69301819.4 13MR1996 GRANTED EXPIRES 04MY2013 Italy EPO640020 13MR1996 GRANTED EXPIRES 04MY2013 Japan 503624/94 04MY1993 FILED FIBER OPTIC ROTARY JOINT Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 5450509 12SE1995 GRANTED EXPIRES 26JL2014 IMPROVED SENSORS BASED ON STRETCH-DENSIFIED MATERIALS Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 000000 29MY1997 FILED DIGITAL HOMODYNE PROCESSING SYSTEM Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4280202 21JL1981 GRANTED EXPIRES 310C1999 CAGE-ENHANCED SENSORS Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 08/617529 15MR1996 FILED ELAC Patents ELECTRO ACOUSTIC TARGET SEARCHING SYSTEM FOR TORPEDOES Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Great Britain 2265218 22SE1993 GRANTED EXPIRES 05N02001 United States 5341347 23AU1994 GRANTED EXPIRES 23AU2011 ECHO-SOUNDING APPARATUS Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Canada 1210129 19AU1986 GRANTED EXPIRES 19AU2003 SOFT PROTECT LAYER FOR SOUND TRANSDUCER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ West Germany P3422206.5 10SE1987 GRANTED EXPIRES 15JE2004
TUBE-LIKE ELECTROACOUSTIC TRANSDUCER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ France 8708243 24DE1993 GRANTED EXPIRES 12JE2007 West Germany P3620085.9 10MR1994 GRANTED EXPIRES 14JE2006 United States 4823327 18AP1989 GRANTED EXPIRES 01JE2007 ACOUSTIC SIMULATION OF UNDERWATER TARGET Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ West Germany P3809900.4 11JA1989 GRANTED EXPIRES 24MR2008 PAT#P3809900.4 UNDER SECRECY ORDER BROAD BAND OMNIDIRECTIONAL ELECTROACOUSTIC TRANSDUCER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Canada 1310739 24N01992 GRANTED EXPIRES 24N02009 West Germany P3812244.8 09N01989 GRANTED EXPIRES 13AP2008 Italy 1231754 21DE1991 GRANTED EXPIRES 13AP2009 Norway 171700 11JA1993 GRANTED EXPIRES 12AP2009 United States 4916675 10AP1990 GRANTED EXPIRES 01MY2009 DIVER SONAR MONITOR Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Canada 1330587 05JL1994 GRANTED EXPIRES O5JL2O11 France EPO345718 15DE1993 GRANTED EXPIRES 06JE2009 Great Britain EPO345718 15DE1993 GRANTED EXPIRES 06JE2009 Italy EPO345718 15DE1993 GRANTED EXPIRES 06JE2009 Norway 174826 13JL1994 GRANTED EXPIRES 08JE2009 UNDERWATER DIRECTION FINDING Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ France EPO355669 06AP1994 GRANTED EXPIRES 16AU2009 Great Britain EPO355669 06AP1994 GRANTED EXPIRES 16AU2009 Italy EPO355669 06AP1994 GRANTED EXPIRES 16AU2009 Norway 173528 22DE1993 GRANTED EXPIRES 18AU2009 Spain EPO355669 06AP1994 GRANTED EXPIRES 16AU2009 DEFENSE AGAINST TORPEDO ATTACK Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ West Germany P3914248.5 29AP1989 SECRECY ORDER DIGITAL BEAM FORMER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ West Germany P3920705.6 23MY1991 GRANTED EXPIRES 24JE2009 PROTECTION CIRCUIT FOR TRANSDUCER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ West Germany P3939398.4 24JA1991 GRANTED EXPIRES 29N02009 DEFENSE AGAINST TORPEDO ATTACK FROM BACKSIDE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ West Germany P4010475.3 11MR1993 GRANTED EXPIRES 31MR2010 DETERMINATION OF PULSE LENGTH OF ACOUSTIC SIGNALS Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ West Germany P4013684.1 07AP1994 GRANTED EXPIRES 28AP2010 Japan 96665/91 26AP1991 FILED Norway 91.1671 26AP1991 FILED United States 5132691 21JL1992 GRANTED EXPIRES 24AP2011 NOISE SUPPRESSION FOR THE INPUT SIGNAL OF SONAR SYSTEMS Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ West Germany P4017849.8 12MR1992 GRANTED EXPIRES 02JE2010 ELECTROACOUSTIC TRANSDUCER WITH REDUCED BUNDLING Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Denmark 1539/91 02SE1991 FILED
West Germany P4027949.9 20AU1992 GRANTED EXPIRES 04SE2010
SONAR BUOY WITH DRAG CHAIN Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Germany P4039031.4 24MR1994 GRANTED EXPIRES 07DE2010 PASSIVE ACOUSTICAL CAMOUFLAGE MEANS FOR UNDERWATER BODIES Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Germany P4131991.5 18AU1992 GRANTED EXPIRES 26SE2011 PAT# P4131991.5 UNDER SECRECY ORDER SONAR TRANSDUCER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Denmark EP0524371 11AU1994 GRANTED EXPIRES 20MR2012 France EP0524371 I1AU1994 GRANTED EXPIRES 20MR2012 Great Britain EP0524371 11AU1994 GRANTED EXPIRES 20MR2012 Germany P69200439.4 11AU1994 GRANTED EXPIRES 20MR2012 Italy EP0524371 11AU1994 GRANTED EXPIRES 20MR2012 Netherlands EP0524371 11AU1994 GRANTED EXPIRES 20MR2012 Sweden EP0524371 11AU1994 GRANTED EXPIRES 20MR2012 OWNED BY THE KILDARE CORPORATION ACCORDING TO A LICENSE AGREEMENT BETWEEN THE KILDARE CORPORATION, 95 TRUMBULL STREET, SUITE D NEW LONDON, CT 06320-5595 & ALLIEDSIGNAL ELAC NAUTIK GmbH. SONAR SYSTEM TEST APPARATUS Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Germany P4213121.9 21APP1992 FILED METHOD AND CIRCUITRY FOR DETERMINING THE BEGINNING OF ECHO PULSES Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ France 9400492 18OC1996 GRANTED EXPIRES 18JA2014 Great Britain 2274560 11SE1996 GRANTED EXPIRES 29DE2013 Germany P4301341.4 21OC1993 GRANTED EXPIRES 20JA2013 United States 5436580 25JL1995 GRANTED EXPIRES 30DE2013 INTERCONNECTION OF UNDERWATER TRANSDUCER ARRAY Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Germany P4307843.5 19MY1994 GRANTED EXPIRES 12MR2013 PATENT TITLE: UNKNOWN Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Germany P4323212.4 12MR1993 FILED ANTI-SEA MINE EFFECTOR Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Germany P4323904.8 16JL1993 FILED JOINTLY OWNED BY ALUEDSIGNAL ELAC NAUTIK GmbH AND DIEHL GznbH. UNDERWATER TARGET LOCALIZER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Eur. Patent Conv. 94112749.0 16AU1994 FILED Germany P4327841.8 09MR1995 GRANTED EXPIRES 19AU2013 METHOD FOR LOCALIZING AND SWEEPING OF SEA MINES Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Eur. Patent Conv. 95925762.7 26JE1995 FILED Germany P4423235.7 02JL1994 FILED Pat. Coop. Treaty PCT/EP95/02476 26JE1995 FILED United States 000000 26JE1995 FILED ECHO SIGNAL STACK CIRCUIT Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Canada 1095162 03FE1981 GRANTED EXPIRES 03FE1998 ECHO-SOUNDING RECORDER WITH DIFFERENT DEPTH MEASURING RANGES
Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4104643 01AU1978 GRANTED EXPIRES 20JL1997 ABRASION PROTECTION SHIELD FOR ECHO SOUNDER Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Norway 145594 21AP1982 GRANTED EXPIRES 07JL1998 RECEIVER CIRCUIT FOR AN ECHO-SOUNDING SYSTEM Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ United States 4245332 13JA1981 GRANTED EXPIRES 12AP1999 DIVER SONAR MONITOR Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ West Germany P58906406.1 15DE1993 GRANTED EXPIRES 06JE2009 UNDERWATER DIRECTION FINDING Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ West Germany P58907386.9 06AP1994 GRANTED EXPIRES 16AU2009 APPARATUS FOR ULTRA-SOUND TREATMENT OF FLOWING LIQUID Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Great 96221170.0 240C1996 FILED Germany 19541417.9 11N01995 FILED PROGRAMMABLE PLL OSCILLATOR Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Germany P19625970.3 28JE1996 FILED ELECTRONIC FUNCTION GENERATOR USING A STATUS ENGINE Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Germany P19632553.6 13AU1996 FILED BEAM FORMING METHOD FOR DIRECTION FINDING SYSTEMS Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Germany P19648327.1 22N01996 FILED SHOCK ABSORBING BEARING FOR GEAR WHEELS Country Number Date Status Substatus Date ------------------------------------------------------------------------------------------------ Germany P19652143.2 14DE1996 FILED
Trademark, Copyrights and Trade Names Trademarks - Ocean Systems AlliedSignal holds no registered trademarks for Ocean Systems, but the following product names and acronyms may be subject to certain usage rights and protections afforded under common law: Common Law Product Name Trademark ------------ --------- Helicopter Long Range Sonar HELRAS Low Frequency Active Dipping Sonar LFADS Shipboard HELRAS SHELRAS Expendable Mine Detector EMD Light Minehunting Sonar LMHS Integrated Side Looking Sonar ISLS Low Frequency Active Towed Sonar LFATS ASW Systems Trainer AST Trademarks - ELAC ELAC holds the following registered trademarks: Country Registration No. Trademark - ------- ---------------- --------- Germany 1051300 Hydrostar International(1) 480581 Hydrostar Germany 989375 ELAC (black letters on white background) International(2) 458578 ELAC (black letters on white background) Germany 1006999 ELAC (black letters on white background) Internationa1(2) 458579 ELAC (black letters on white background) - ---------- (1) for Belgium, Luxembourg, Netherlands, France and Italy (2) for Egypt, Algeria, Belgium, Luxembourg, Netherlands, Spain, France, Italy, Morocco, Slowenia, Croatia, Yugoslavia, Macedonia, Romania, Russia, Kazakstan, Belorus, Ukrainia, Ouzbekistan, Vietnam Intellectual Property Agreements License and Technical Assistance Agreements. between AlliedSignal and: ELAC, dated July 18, 1995 Compagnia Generale Di Elettricita, dated December 1, 1970 Aero International, Inc., dated April 26,1996, and amendment dated June 10, 1997 Mitsubishi Heavy Industries, Ltd., dated February 2, 1989 Manufacturing License Agreement, between AlliedSignal and: Aeronautica Industrial, S.A., dated July 16, 1990 Technical Assistance and Manufacturing License Agreement, between ELAC and: The Kildare Corporation, dated March 15, 1993 Software Licenses - Ocean Systems
Support Provided by: Local ------------------------------------------ System/Application Version Vendor Platform Infrastructure App. Support - ----------------------------------------------------------------------------------------------- VAX - General/Utilities - ----------------------------------------------------------------------------------------------- Micro Tech CIQBA 2.8 INC. VAX/VMS X - ----------------------------------------------------------------------------------------------- ACCESS 2020 3.02.13 TECH VAX/VMS X - ----------------------------------------------------------------------------------------------- ADA 2.3 DIGITAL VAX/VMS X - -----------------------------------------------------------------------------------------------
Support Provided by: Local ------------------------------------------ System/Application Version Vendor Platform Infrastructure App. Support - ----------------------------------------------------------------------------------------------- BASE-VMS 5.5-2 DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- BASIC 3.5 DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- C 3.1 DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- CDD 5 DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- CDD - PLUS DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- CMS 3.5-05 DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- COBOL DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- DBMS 4.3 DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- DSNLINK l.2B DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- DTM 3.3 DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- DTR 6 DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- DECnet (end node) 5.5-2 DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- DECnet (routing node) 5.5-2 DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- DECWindows MOTIF 1.2-4 DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- FMS DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- FORTRAN DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- GKS DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- LSE DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- MMS DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- RDB DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- RDB -RUNTIME DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- SNA-3270-DSPI DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- SNA-3270-TE DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- SNA-PRE DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- SNA-RJE DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- SNA-VMS DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- SSU DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- STRIPING DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- UCX DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- VAXCLUSTER DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- VMS-USER DIGITAL VAX/VMS X - -----------------------------------------------------------------------------------------------
Support Provided by: Local ------------------------------------------ System/Application Version Vendor Platform Infrastructure App. Support - ----------------------------------------------------------------------------------------------- VOLSHAD DIGITAL VAX/VMS X - ----------------------------------------------------------------------------------------------- VAX - CONTROL Manufacturing and Associated Software - ----------------------------------------------------------------------------------------------- Accounting 7.2.2 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Accounts Payable 7.2.2 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Accounts Receivable 7.2.2 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Bill Of Material 7.2.2 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Cost Accounting 7.3 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Engineering Config. 7.2.2 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Order Management System 7.2.2 Cincorn VAX/VMS X - ----------------------------------------------------------------------------------------------- Inventory Control 7.2.2 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Master Production Scheduling 7.22 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- MRP 7.2.2 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Order Entry Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Project Accounting 7.2.2 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Purchasing 7.2.2 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Shop Floor Control 7.22 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Purchase Part and Quote 7.22 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Soft Pegging Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Interfaces Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Control Link 7.2.2 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- DCLS Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- MANTIS User BRP/BRP 722 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- Spectra Custom 7.2.2 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- QRW 7 Cincom VAX/VMS X - ----------------------------------------------------------------------------------------------- PC NT Series - ----------------------------------------------------------------------------------------------- MlvfrA Microsoft NT X - ----------------------------------------------------------------------------------------------- MSMAIL Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- DNS Microsoft NT X - ----------------------------------------------------------------------------------------------- WINS Microsoft NT X - ----------------------------------------------------------------------------------------------- DHCP Microsoft NT X - -----------------------------------------------------------------------------------------------
Support Provided by: Local ------------------------------------------ System/Application Version Vendor Platform Infrastructure App. Support - ----------------------------------------------------------------------------------------------- Internet Information Server Microsoft NT X - ----------------------------------------------------------------------------------------------- McAfee Anti Virus McAfee NT/W95 X - ----------------------------------------------------------------------------------------------- ArcServer Cheyenne NT X - ----------------------------------------------------------------------------------------------- Remote Access (RAS) Microsoft NT X - ----------------------------------------------------------------------------------------------- Remote Mail Microsoft NT X - ----------------------------------------------------------------------------------------------- System Management Server Microsoft NT X - ----------------------------------------------------------------------------------------------- NetBoy Suite NDG SW NT X - ----------------------------------------------------------------------------------------------- VAX - Database / SW Development - ----------------------------------------------------------------------------------------------- SQL*Forms 3 Oracle VAX/VMS X - ----------------------------------------------------------------------------------------------- Developer/2000 Forms 4.5 Oracle VAX/VMS X - ----------------------------------------------------------------------------------------------- Developer/2000 Reports 2.5 Oracle VAX/VMS X - ----------------------------------------------------------------------------------------------- Oracle Enterprise Manager 1.2.2 Oracle Windows95 X - ----------------------------------------------------------------------------------------------- Oracle SQL*Net 2.3.2.1.3 Oracle VMS/W95 X - ----------------------------------------------------------------------------------------------- Oracle Server Manager 2.03.1 Oracle VAX/VMS X - ----------------------------------------------------------------------------------------------- Oracle SQL*Plus 3.1 Oracle Windows95 X - ----------------------------------------------------------------------------------------------- Oracle SQL*PLus 3.1.3.5.1 Oracle VAX/VMS X - ----------------------------------------------------------------------------------------------- Airborne Sonar R&O Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Applicant Flow Log Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Auto Stock Withdrawal Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Automatic Carousel Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Substitute Part List Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Customer Inquiry Tracking Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- DCMC Inspection System Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Discrepancy Reporting Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Drawing Info System Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Estimating System Custom ln-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Failure and R&O Reporting Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Gov't Property Inventory Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Job Scheduler Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- KITPRINT Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Labor/Timekeeping Custom In-house VAX/VMS X - -----------------------------------------------------------------------------------------------
Support Provided by: Local ------------------------------------------ System/Application Version Vendor Platform Infrastructure App. Support - ----------------------------------------------------------------------------------------------- Lost Time Tracking Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Maint. Work Request Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Payroll Timecard Entry Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Personnel Info System Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- P&D Request System Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Procedure Master Index Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Workstream Product Load Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Production Scheduling Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Proms/Pals Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Rec Inspection Requests Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Repair & Overhaul System Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Risk Anaiysis/Control Plan Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- SSR System Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Tooling System Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- TQM Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- Wire list System Custom In-house VAX/VMS X - ----------------------------------------------------------------------------------------------- PC Desktop - ----------------------------------------------------------------------------------------------- Windows 95 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- PVCS 5.01 PVCS NT/W95 X - ----------------------------------------------------------------------------------------------- MSExcel 7 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- MSWord 7 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- MsPowerpnt 7 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- MSSchedule Plus 7 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- MSWinProject 4 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- MSAccess 2 Microsoft WIYW95 X - ----------------------------------------------------------------------------------------------- MSAccess 7 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- MSExchange Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- MSProject 4 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- Designer 4.1 Micrografix NT/W95 X - ----------------------------------------------------------------------------------------------- MathCAD 6 MathCAD NT/W95 X - ----------------------------------------------------------------------------------------------- Visio 4 Visio NT/W95 X - -----------------------------------------------------------------------------------------------
Support Provided by: Local ------------------------------------------ System/Application Version Vendor Platform Infrastructure App. Support - ----------------------------------------------------------------------------------------------- Photo Magic 1 Micrografix NT/W95 X - ----------------------------------------------------------------------------------------------- Corel 4 Corel NT/W95 X - ----------------------------------------------------------------------------------------------- ABCFlowcharter Micrografix NT/W95 X - ----------------------------------------------------------------------------------------------- Acrobat 3 Adobe NT/W95 X - ----------------------------------------------------------------------------------------------- Netscape 3.01 Netscape NT/W95 X - ----------------------------------------------------------------------------------------------- COMINS 3.1 Custom NT/W95 X - ----------------------------------------------------------------------------------------------- Peoplesoft 5.1 Peoplesoft NT/W95 X - ----------------------------------------------------------------------------------------------- NT 4 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- Interleaf 6.1 Interleaf NT/W95 X - ----------------------------------------------------------------------------------------------- Visio Technical 4.5 Visio NT/W95 X - ----------------------------------------------------------------------------------------------- ASPPP97 3 Corporate NT/W95 X - ----------------------------------------------------------------------------------------------- DOS 6.22 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- AutoCAD 13 AutoDesk NT/W95 X - ----------------------------------------------------------------------------------------------- AutoCAD 12 AutoDesk NT/W95 X - ----------------------------------------------------------------------------------------------- CADStar 222.4 AutoDesk NTIW95 X - ----------------------------------------------------------------------------------------------- DatalO (Futurenet) Futurenet NT/W95 X - ----------------------------------------------------------------------------------------------- Windows 3.1 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- Windows 3.11 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- MSWord 6 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- MSExcel 5 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- MSPowerpnt 4 Microsoft NT/W95 X - ----------------------------------------------------------------------------------------------- HP Unix Desktop - ----------------------------------------------------------------------------------------------- oce3-2/ANSYS 5.3 ANSYS HP 9000 X - ----------------------------------------------------------------------------------------------- oce3OS/UGII 9.1 UGII HP 9000 X - ----------------------------------------------------------------------------------------------- oce3O6/Pro E 18 PTC HP 9000 X - ----------------------------------------------------------------------------------------------- oce3O7/Mentor Graphics B.4 Mentor HP 9000 X - ----------------------------------------------------------------------------------------------- oce3lS/Intercap 7.83 Intercap HP 9000 X - ----------------------------------------------------------------------------------------------- oce3l9/Interleaf 6 Interleaf HP 9000 X - ----------------------------------------------------------------------------------------------- oce322/IDEAS 5 SDRC HP 9000 X - ----------------------------------------------------------------------------------------------- IBM (Ocean Systems Specific) - -----------------------------------------------------------------------------------------------
Support Provided by: Local
System/Application Version Vendor Platform Infrastructure App. Support - ----------------------------------------------------------------------------------------- Payroll Distr. (HP & SP) Custom Corporate IBM X - ----------------------------------------------------------------------------------------- Sun Unix Desktop - ----------------------------------------------------------------------------------------- SW Development VX-Works VX-Works X - ----------------------------------------------------------------------------------------- Signal Processing AP - Labs AP - Labs X - -----------------------------------------------------------------------------------------
GlobalLink Software Licenses ---------------------------- GlobalLink is an AlliedSignal corporate initiative that focused on upgrading the desktop and server infrastructure and software at all divisions to a common level of performance. These upgrades would allow AlliedSignal to roll out corporate based software applications and economize on desktop support given the common software / infrastructure. Ocean Systems did not receive any hardware improvements from this initiative. The division did receive, and is being charged, for software products covered under GlobalLink umbrella. These software products include all of the following (note that some of these products are not actually in use at this division but are being assessed none the less): o 32-bit Desktop Operating System o LANdesk (Electronic Inventory (NT or W95 Tool - NOT USED) o Netscape o Microsoft Exchange (Email o McAfee VirusScan Client Licenses - NOT USED) o Netware 4.1 (Network Operating System o Attachmate (IBM Connectivity - NOT USED) Tools) o Managewise (Remote Desktop o Office97 Management Tool - NOT USED) o Server Tools This software was purchased at $278 / seat in 1996 and is being amortized over three-years ($74,319 per year). If licenses were not part of the sale, the impact to Ocean Systems is as follows: o Little or no impact related to current desktop operating system as most are already owned o Requires procurement of replacement WEB tool (Netscape) and virus protection (McAfee) o Impact related to IBM connectivity would depend on new owner IBM access requirements o Future impact related to desktop upgrades (NT, Office97, Microsoft Exchange) Software Licenses - ELAC Software at ELAC, current through November 6, 1997 - -------------------------------------------------------------------------------- Program Provider Version License - -------------------------------------------------------------------------------- Transcend 3Com 6.0 250 Powerchut Plus APC 4.2.4 2 ACAD AutoDesk 13 1 ACAD AutoDesk 12 1 C++ Borland 3.1 5 Paradox Borland 1 Pascal Borland 7.0 5 Quatropro win Borland 1 Arcserve Cheyenne 6.2 1 Corel Draw Corel Corporation 5.0 10 Corel Flow Corel Corporation 2.0 10 Paisy GSI 3 VPPS Infor 4.5 75 Landesk VirusProtectOOl Intel 3.01 1 Landesk VirusProtect002 Intel 3.01 1 Landesk VirusProtect003 Intel 3.01 1 Landesk VirusProtect004 Intel 3.01 1 Varial isb 2.7 10 Side Meeter McAfee 50 Cobol Microfocus 3.2 5 Informix Microfocus 7.1 5 Foxpro Dos Microsoft 2.0 5 Foxpro Win Microsoft 2.5 5 MS Access Microsoft 2.0 50 MS-Mail Microsoft 3.2 150 MS-Office Microsoft 4.2 50 MS-Projekt Microsoft 4.0 15 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Program Provider Version License - -------------------------------------------------------------------------------- Windows 3.11 Microsoft 3.11 100 Windows 95 Microsoft 4.00950 60 Disc View Microtest 4.lOa 1 LanWorkplac Novell 16 5 ManageWise Novell 2.1 250 ManageWise Novell 2.1 5 ManageWise Novell 2.1 5 ManageWise Novell 2.1 5 Netware001 Novell 4.1 75 NetwareO02 Novell 4.1 50 Netware003 Novell 4.1 50 Netware004 Novell 4.1 250 Netwarel00 Novell 3.12 2 Netwarel0l Novell 4.1 2 Orcad Orcad 4.0 6 Easy-Archiv Recognita 2000 1 Unixl02 SCO 5 PCNFS SunSelect 5.1 5 Rumba SunSelect 4.0 2 PCAnywhere Symantec 1 PS-Gef Weka Verlag 2.1 1 - -------------------------------------------------------------------------------- Confidentiality Agreements - Ocean Systems
Agreement Effective Term/ OS Company Subject Number Date Expiry Contact ADI Limited RAN ASSTASS SEA 11000 96-033 11/6/96 10 years A.J. Garber ADI Limited Underwater Warfare Business 95-007 4/10/95 3 Aero International International Spares 95-010 3 years P.A. Boskovich Agusta/Italy Quality Assurance Survey 4/28/97 1 year L. Daniels Albion Group Intl. Inc. Hellenic Navy Offset 95-013 7/12/95 3 years J. Hall/L. Daniels - ----------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------- Alliant Techsys. Seismic data 96-027 10/16/97 3 years A.J. Garber Atlantic Aero Elect Corp. Various 95-001 1/17/95 3 years A.J. Garber Australian Defense Industries Undersea Warfare Business 95-007 5/10/95 3 years K.D. Adams Atlantic Aero Elect. Corp. Foreign Integrated Sonar Suites 95-017 8/21/95 3 years A.J. Garber AT&T Various Information 8/7/95 2 years D. Samsury Babcock Intl. Sonar 2087 Feasibility Study 3/7/95 5 years J. Caughey BBN US Navy 6152 97-015 5/30/97 1 year A. J. Garber Cambridge Bank Ltd. Sonar Equip. Brazil/Peru 96-017 5/28/96 5 years V. Riehl Celsius Tech Sys. Mine Counter Measurers 94-021 8/19/94 3 years L. Daniels Celsius Tech Sys. Proprietary Info. 11/14/97 5 years J.Devine Chesapeake Sciences TARS 95-018 8/28/95 3 years A. J. Garber Chesapeake Sciences TB 16/BQ 10/18/94 4 years R. Tomlinson Chevron Petroleum Bore Hole Seismic Multi Level 94-037 3/3/94 3 years A. J. Garber Receiver Computing Devices Maritime Helicopter 95-014 7/14/95 3 years J. Anderson C-Tech YS2000 96-029 10/2/96 2 years J. Roscigno DAF Special Products NH-90 96-006 2/15/96 3 years D. Webb DRA Hunt Class Mid Life 11/22/96 1 year A. J. Garber Defense Evaluation Research Agency Defense Hunt Class Mid Life 11/27/96 1 year A.J. Garber Devonport Management Ltd. Sonar 2087/Type 23 Frigates 96-007 2/13/96 3 years A.J. Garber Durodyne, Inc. Epichlorohydrin rubber compound 88- 5/1/88 10 years J. Andersen 014/DA Dynacon, Inc. LFATS Handling System 94-023 6/2/94 3 years A. J. Garber E-Systems Montek Siesmic Receiving 95-012 6/28/95 3 years A. J. Garber Electramotive TB16 Towed Array 11/12/93 3 years J. Proko FIAR NH-90 96-005 1/18/96 3 years D. Webb Fokker Aviation EMD 97-008 2/4/97 1 year S. McDonald Greenblatt MCDV 95-004 3/27/95 3 years L. Daniels Goldstar ATE 11/24/82 5 years B. Polaski Geo Test Inc. AQS-18 Test Equipm 95-032 12/14/95 3 years L. Daniels Hughes Naval Marine Airborne Sonar Sys. 96-026/1 5/13/97 2 years R. Husar Hughes Naval Marine Surface Ship Programs 96-026 8/9/96 2 years R. Husar - -------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------- Hewlett Packard Weapons Replaceable Assy. Test Set 96-002 1/8/96 3 years L. Daniels Hollandse Signaalapparten Alkmaar class mine counter 97-007 1/23/97 2 years S. McDonald Kaman Aerospace AQS-18 Dipping Sonar SH-2G 94-019 7/19/95 5 years L. Daniels Loral Canada Maritime Helicopter Program 7/29/95 10 years J. McDermott Lockheed Martin Canadian Remote Minehunting Sonar 95-024 12/19/95 3 years A. J. Garber Loral ASIC B2TC 5/28/95 10 years A. J. Garber Litton Sys. Acoustic Sensor Array Systems 5/24/96 5 years L. DiRienzo Northop Grumman Hybrids 95-020 9/15/95 3 years J. P. Andersen NUWC Wide-Band Omni Telemetry Sys. 10/31/96 A. J. Garber Optiphase Fiber Optic Technologies 96-003 1/10/96 3 years A. J. Garber Paulsson Geo Svc. Inc. Boreholde Seismic Systems 11/22/96 1 year Penn State LELFAS 96-034 12/17/96 3 years V. Riehl Raytheon Electronics LFATS,Taiwan/Australian/Spanish 10/25/96 2 years V. RiehI Raytheon Electronics YS2000fItalian Navy ASW Frig 7/2/96 5 years STN Atlas Undersea Warfare Business 95-006 4/25/95 3 years K. Adams STN Atlas Australia ASSTASS LFAPS 2/11/97 l year D. MacCulloch Signal Processing Sys. Norwegian Towed Array 97-014 5/23/97 3 years W. Tally Sikorsky Aircraft Job Shoppers 11/22/96 7 years D. Bennett Transfield Defense Sys. SEA 1000 Australian Surface Ship 8/6/96 10 years J. Winters Towed 3M Specialty Optical Fibers Fiber Optic Technologies 95-029 11/30/95 3 years A. J. Garber Taiwan Int Standard S-70C Offset 96-010 5/11/96 5 years J. Corso/ Electronics Ltd. J. Winter Witten Technologies Mine Warfare 94-030 7/11/94 3 years AJ. Garber Whitehead Alenia Sistemi Undersea Warfare Business 95-003 4/27/95 3 years S. Schorer Subacquei - ---------------------------------------------------------------------------------------------------------------------------------
Confidentiality Agreements - ELAC --------------------------------- 95-01-01 Marimatek 95-01-02 SeaBeam 95-01-03 Qubit 95-01-04 95-01-05 Ultra Electronics 95-01-06 BASYS Marine Ltd. 95-01-07 BAeSEMA 95-01-08 Westinghouse 96-01-01 Evia 96-01-02 Mjellum & Carlson 96-01-03 Reson 96-01-04 Raytheon Anschutz 96-01-05 HDW 96-01-06 Elektro-Optik GmbH 97-01-01 SEPA 97-01-02 97-01-06 Sonatech 97-01-07 Nautronix 97-01-08 EdgeTech 97-01-09 Kongsberg 97-01-10 Camber Corp. Schedule 4.6(c) - Licensed Intellectual Property See also Intellectual Property expiration information contained in Schedule 4.6(a). Intellectual Property to be Licensed to Purchaser - ------------------------------------------------- o Armour Cable for Airborne Dipping Sonar o Impact Resistant, Lightweight, Composite Sonar Panels o Improved Clutter Rejection Algorithms o Lead Magnesium Niobate (PMN) Activer Sonar Source Material US Patent No. 5,239,518 o Piezoelectric Ceramic Copolymer US Patent Application No. 08/618690 o Autonomous Underwater Mine Hunting Algorithms o Enhanced Thickness Piezoelectric Polymer/Ceramic Composite Active Transducer Schedule 4.6(d) - Intellectual Property The following Intellectual Property agreements may involve certain third party rights. License and Technical Assistance Agreements, between AlliedSignal and: ELAC, dated July 18, 1995 Compagnia Generale Di Elettricita, dated December 1, 1970 Aero International, Inc., dated April 26, 1996, and amendment dated June 10, 1997 Mitsubishi Heavy Industries, Ltd., dated February 2, 1989 Manufacturing License Agreement. between AlliedSignal and: Aeronautica Industrial, S.A., dated July 16, 1990 Technical Assistance and Manufacturing License Agreement. between ELAC and: The Kildare Corporation, dated March 15, 1993 Confidentiality Agreements - Ocean Systems
- ---------------------------------------------------------------------------------------------------------------------- Agreement Effective Term/OS Company Subject Number Date Expiry Contact - ---------------------------------------------------------------------------------------------------------------------- ADI Limited RAN ASSTASS SEA 11000 96-033 11/6/96 10 years A.J. Garber ADI Limited Underwater Warfare Business 95-007 4/10/95 3 Aero International International Spares 95-010 3 years P.A. Boskovich Agusta/Italy Quality Assurance Survey 4/28/97 1 year L. Daniels Albion Group Intl. Inc. Hellenic Navy Offset 95-013 7/12/95 3 years I. Hall/L. Daniels Alliant Techsys. Seismic data 96-027 10/16/97 3 years A.J. Garber Atlantic Aero Elect Corp. Various 95-001 1/17/95 3 years A.J. Garber Australian Defense Industries Undersea Warfare Business 95-007 5/10/95 3 years K.D. Adams Atlantic Aero Elect. Corp. Foreign Integrated Sonar Suites 95-017 8/21/95 3 years A.J. Garber AT&T Various Information 8/7/95 2 years D. Samsury Babcock Intl. Sonar 2087 Feasibility Study 3/7/95 5 years J. Caughey BBN US Navy 6152 97-015 5/30/97 1 year A.J. Garber Cambridge Bank Ltd. Sonar Equip. Brazil/Peru 96-017 5/28/96 5 years V. Riehl Celsius Tech Sys. Mine Counter Measurers 94-021 8/19/94 3 years L. Daniels Celsius Tech Sys. Proprietary Info. 11/14/97 5 years J. Devine Chesapeake Sciences TARS 95-018 8/28/95 3 years A.J. Garber Chesapeake Sciences TB16/BQ 10/18/94 4 years R. Tomlinson - ----------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------- Chevron Petroleum Bore Hole Seismic Multi Level 94-037 3/3/94 3 years A.J. Garber Receiver Computing Devices Maritime Helicopter 95-014 7/14/95 3 years J. Anderson C-Tech YS2000 96-029 10/2/96 2 years J. Roscigno DAF Special Products NH-90 96-006 2/15/96 3 years D. Webb DRA Hunt Class Mid Life 11/22/96 1 year A.J. Garber Defense Evaluation Research Agency Defense Hunt Class Mid Life 11/27/96 1 year A.J. Garber Devonport Management Ltd. Sonar 2087/Type 23 Frigates 96-007 2/13/96 3 years A.J. Garber Durodyne, Inc. Epichlorohydrin rubber compound 88- 5/1/88 10 years J. Andersen 014/DA Dynacon, Inc. LFATS Handling System 94-023 6/2/94 3 years A.J. Garber E-Systems Montek Siesmic Receiving 95-012 6/28/95 3 years A.J. Garber Electramotive TB16 Towed Array 11/12/93 3 years J. Proko FIAR NH-90 96-005 1/18/96 3 years D. Webb Fokker Aviation EMD 97-008 2/4/97 1 year S. McDonald Greenblatt MCDV 95-004 3/27/95 3 years L. Daniels Goldstar ATE 11/24/82 5 years B. Polaski Geo Test Inc. AQS-18 Test Equipm 95-032 12/14/95 3 years L. Daniels Hughes Naval Marine Airborne Sonar Sys. 96-026/1 5/13/97 2 years R. Husar Hughes Naval Marine Surface Ship Programs 96-026 8/9/96 2 years R. Husar Hewlett Packard Weapons Replaceable Assy. Test Set 96-002 1/8/96 3 years L. Daniels Hollandse Signaalapparten Alkmaar class mine counter 97-007 1/23/97 2 years S. McDonald Kaman Aerospace AQS-l8 Dipping Sonar SH-2G 94-019 7/19/95 5 years L. Daniels Loral Canada Maritime Helicopter Program 7/29/95 10 years J. McDermott Lockheed Martin Canadian Remote Minehunting Sonar 95-024 12/19/95 3 years A.J. Garber Loral ASIC B2TC 5/28/95 10 years A.J. Garber Litton Sys. Acoustic Sensor Array Systems 5/24/96 5 years L. DiRienzo Northop Grumman Hybrids 95-020 9/15/95 3 years J.P. Andersen NUWC Wide-Band Omni Telemetry Sys. 10/31/96 A.J. Garber Optiphase Fiber Optic Technologies 96-003 1/10/96 3 years A.J. Garber Paulsson Geo Svc. Inc. Boreholde Seismic Systems 11/22/96 1 year Penn State LELFAS 96-034 12/17/96 3 years V. Riehl - ---------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------- Raytheon Electronics LFATS/Taiwan/Australian/Spanish 10/25/96 2 years V. Riehl Raytheon Electronics YS2000/Italian Navy ASW Frig 7/2/96 5 years STN Atlas Undersea Warfare Business 95-006 4/25/95 3 years K. Adams STN Atlas Australia ASSTASS LFAPS 2/11/97 1 year D. MacCulloch Signal Processing Sys. Norwegian Towed Array 97-014 5/23/97 3 years W. Tally Sikorsky Aircraft Job Shoppers 11/22/96 7 years D.Bennett Transfield Defense Sys. SEA 1000 Australian Surface Ship 8/6/96 10 years J. Winters Towed 3M Specialty Optical Fibers Fiber Optic Technologies 95-029 11/30/95 3 years A.J. Garber Taiwan Int Standard S-70C Offset 96-010 5/11/96 5 years J. Corso/ Electronics Ltd. J. Winter Witten Technologies Mine Warfare 94-030 7/11/94 3 years A.J. Garber Whitehead Alenia Sistemi Undersea Warfare Business 95-003 4/27/95 3 years S. Schorer Subacquei - ---------------------------------------------------------------------------------------------------------------------
Confidentiality Agreements - ELAC --------------------------------- 95-01-01 Marimatek 95-01-02 SeaBeam 95-01-03 Qubit 95-01-04 95-01-05 Ultra Electronics 95-01-06 BASYS Marine Ltd. 95-01-07 BAeSEMA 95-01-08 Westinghouse 96-01-01 Evia 96-01-02 Mjellum & Carlson 96-01-03 Reson 96-01-04 Raytheon Anschtutz 96-01-05 HDW 96-01-06 Elektro-Optilc GmbH 97-01-01 SEPA 97-01-02 97-01-06 Sonatech 97-01-07 Nautronix 97-01-08 EdgeTech 97-01-09 Kongsberg 97-01-10 Camber Corp. Schedule 4.7 - Contracts See also Schedule 4.12. Ocean Systems - Open Contracts over $75,000 ------------------------------------------- Contract Contract Value Country Status - -------- -------------- ------- ------ N00019-90-G-0200YC94 471117.95 USA OP N00019-90-G-0200YC95 1645386.00 USA OP N00019-93-G-013lUU2K 245635.00 USA OP N00019-97-G-00080001 8299107.00 USA OP N00019-97-G-0008UU01 348023.00 USA OP N00024-89-C-6066 20440163.00 USA OP N00024-91-C-6501 11539100.00 USA OP N00024-92-C-6225 5963263.00 USA OP N00024-92-C-6502 83243508.87 USA OP N00024-92-C-6503 27614976.00 USA OP N00024-94-C-6152 9464260.00 USA OP N00024-96-C-6214 34217858.00 USA OP N00024-97-C-6375 149911.00 USA OP N00104-96-P-G022 81408.00 USA OP N00140-95-D-N083 208958.00 USA OP N00140-97-D-El56 131418.00 USA OP N00383-88-G-K3010108 820326.88 USA OP N00383-88-G-K3010131 9460000.10 USA OP N00383-94-G-700N0020 307778.00 USA OP N00383-94-G-700N0030 2742742.00 USA OP N00383-94-G-700N5045 3218001.12 USA OP N00383-94-G-700N5209 266598.00 USA OP N00383-94-G-700N5212 448500.00 USA OP N00383-94-O-700N5213 77000.00 USA OP N00383-95-G-209N0002 157836.00 USA OP N00383-95-G-209NUUIR 79367.00 USA OP N00383-95-G-2O9NUUIT 75108.00 USA OP N00383~95-G-2O9NUU5l 117108.00 USA OP N00383-95-G-209NUU55 165960.00 USA OP N00383-95-G-2O9NUU57 100500.00 USA OP N00383-95-G-209NUU65 178536.00 USA OP N00383-95-G-209NUU66 153500.00 USA OP N00383~95-G-209NUU68 83060.00 USA OP N0O383~95-G-209NUU69 87888.00 USA OP N00383-95-G~209NUU76 170072.00 USA OP N00383-95-G-209NUU77 164572.00 USA OP N00383-95-G-209NUU91 100500.00 USA OP N00383-95-G-209NUU92 100500.00 USA OP N00383-95-G-209NUU93 134000.00 USA OP N5588983 149111.99 USA OP N66001-96-C-6008 819118.00 USA OP N66604-92-C-1078 288121.00 USA OP N66604-93-C-0788 148716.00 USA OP N66604-97-M-5934 100814.00 USA OP N68335-94-G-OOOIUUO8 153189.00 USA OP N68335-96-G-00471JU02 152100.00 USA OP P015101 106873.00 USA OP P7805158 4862872.00 USA OP P7822564 154500.00 USA OP R9525401 357259.00 USA OP 5P0960-97-M-0936 95880.00 USA OP A1E02546 - Aero International 4697043.00 VAR-NON US OP W8472-5-BGV 1 3309635.27 CAN OP P7900173 25843178.00 CHN OP 0774888 20566000.00 EGY OP GWG864609 378168.00 GBR OP SSDW1/434 429712.00 GBR OP 7/1994 5017476.00 GRC OP P7870275 3879870.00 GRC OP 1248USA 25818944.00 ITA OP 31-1/96 237671.00 ITA OP L40870 1649997.00 ITA OP 1E295 86880.00 JPN OP 1E312 963086.00 JPN OP 1F449 425999.00 JPN OP 1F450 1295177.00 JPN OP 1F458 103293.00 JPN OP 1F480 334691.00 JPN OP 1F481 979628.00 JPN OP 1F483 257503.00 JPN OP 1F485 127123.00 JPN OP 1F496 76584.00 JPN OP 1F509 691160.00 JPN OP 1F511 129420.00 JPN OP 1F514 95524.00 JPN OP 56S265 75754.00 JPN OP 5S0226 1680670.00 JPN OP 5S0227 919541.00 JPN OP 5S250 1751240.00 JPN OP 5S251 3502480.00 JPN OP 5S252 3502480.00 JPN OP 5S253 1751240.00 JPN OP 5S257 75921.00 JPN OP 5S258 252534.00 JPN OP 5S259 398143.00 JPN OP 5S260 163056.00 JPN OP 5S262 919541.00 JPN OP 5S265 75754.00 JPN OP 5S266 619421.00 JPN OP 5S267 78446.00 JPN OP 5S268 158862.00 JPN OP 5S270 86446.00 JPN OP 5S271 92524.00 JPN OP 5S276 99749.00 JPN OP 5S277 267555.00 JPN OP 960050 389850.00 KOR OP 970050 224977.00 KOR OP KFX-DPA-72DA57025 29700000.00 KOR OP MGP-DGM/DAR-95-074 122720.00 PER OP DNO1/96 151793.00 PRT OP TURKEY 1 15548572.00 TWN OP PA2314-C059 272645.00 TWN OP PB4961-C067-P00 281000.00 TWN OP ROCN 25843178.00 TWN OP N00019-90-G-0200YCIF 83400.00 USA OP NOOO19-90-G-0200YC93 715362.76 USA OP Ocean Systems - Open POs Over $75,000 - -------------------------------------
P0 No. P0 Value Status Open Amt Pd Amt Vendor ID Vendor Name - ------ -------- ------ ---- --- ------ --------- ----------- A00458 $ 81,547 Open $ 63,245 $ 18,302 80863 SPECTRUM ENGINEERiNG CORP. A00493 $1,059,969 Open $ 345,849 $714,120 70212 PRECISION INTERCONNECT A00499 $ 731,090 Open $ 255,965 $475,125 00169 AT&T A00573 $ 115,000 Open $ 65,000 $ 50,000 65109 OCEAN PROJECTS ASSOCIATES A01277 $ 185,600 Open $ 185,600 29152 DYNACON, INC. A01597 $ 115,961 Open $ 106,734 $ 9,227 65109 OCEAN PROJECTS ASSOCIATES A46821 $ 178,423 Open $ 1 $178,423 81041 SPIRATEX COMPANY A48903 $5,000,000 Open $5,000,000 16113 CDI CORPORATION WEST A48904 $ 500,000 Open $ 500,000 81750 STANDARD REGISTER B00541 $ 375,000 Open $ 375,000 72749 RAM TEK BUSINESS CO BOl149 $ 333,750 Open $ 333,750 47287 INTERTEK TECHN. SERVICES B01263 $ 200,000 Open $ 200,000 29744 EGGHEAD SOFTWARE BO1742 $ 106,000 Open $ 100,800 $ 5,200 63168 NAVAL UNDERWATER SYSTEMS B03266 $ 155,760 Open $ 155,760 04216 ALLIEDSIGNAL AEROSPACE CO. B04402 $ 436,000 Open $ 436,000 56881 FORSYTHE MCARTHUR B04984 $ 136,751 Open $ - $136,751 64014 NORMALAIR GARRETT LIMITED BOS158 $ 111,000 Open $ 111,000 52284 LAIDLAW ENVIRONMENTAL B05579 $ 152,500 Open $ 152,500 72935 RAWLINGS MECHANICAL CORP. B05829 $ 150,000 Open $ 150,000 27698 DIGITAL SYSTEM RESOURCES B05859 $ 160,000 Open $ 160,000 22781 COMPUDRAFT B06572 $ 98,950 Open $ 98,950 18762 CARRIER BUILDING SERVICES B07260 $ 152,770 Open $ 139,735 $ 13,035 41300 HAMILTON/AVNET ELECTRONIC B07471 $ 240,750 Open $ 35,310 $205,440 72805 RANTEC COMPANY
B07815 $ 432,000 Open $ 432,000 89966 VP AND ASSOCIATES B07816 $ 140,000 Open $ 140,000 83135 STREAMLINE SYSTEM INTEGRA B07875 $ 123,410 Open $ 81,866 $ 41,544 42916 HERMETIC SEAL CORP. COO114 $ 145,000 Open $ 145,000 32469 ENTEX INFORMATION SERVICES C00954 $ 112,975 Open $ 5,575 $107,400 65109 OCEAN PROJECTS ASSOCIATES C01624 $ 139,600 Open $ 139,600 75689 ROMIC ENVIRONMENTAL TECH. C02490 $ 200,000 Open $ 200,000 47873 JAMAR PACKAGING CO., INC. C03546 $ 98,000 Open $ 98,000 19035 CAPTAIN C.J. CAUGHEY RN (RET) C03692 $ 153,400 Open $ 153,400 92011 WACKENHUT CORP. C03842 $ 547,580 Open $ 80,135 $467,447 69973 POWERTECH INC. C04282 $ 160,000 Open $ 160,000 72935 RAWLINGS MECHANICAL CORP. C06070 $ 231,951 Open $ 231,951 52935 R E LEE DESIGN C06215 $ 75,270 Open $ 73,101 $ 2,169 62372 NATEL ENGINEERING CO., IN D00281 $ 200,000 Open $ 200,000 27310 JOHN DEVINE D00401 $ 96,900 Open $ 96,900 19010 CATALINA COMPUTER SOLUTIONS D00522 $ 85,000 Open $ 85,000 89966 VP AND ASSOCIATES D00528 $ 84,450 Open $ 84,450 26748 DELTA CONSULTING SERVICES D00553 $ 85,000 Open $ 85,000 32469 ENTEX INFORMATION SERVICES D00768 $ 77,175 Open $ 77,175 03086 AIRFLYTE ELECTRONICS CO. D00815 $ 190,400 Open $ 27,200 $163,200 23230 CONSOLIDATED PRODUCTS CORP. D00821 $ 99,900 Open $ 99,900 26382 DIS RESEARCH DO1326 $ 189,909 Open $ 20,000 $169,909 72935 RAWLINGS MECHANICAL CORP. D01546 $ 78,000 Open $ 78,000 03955 ALL PHASE ELECTRIC SUPPLY D01619 $ 100,000 Open $ 100,000 28352 DOUBLE "J" PACKAGING CO., INC. D01646 $ 227,916 Open $ 227,916 52935 R E LEE DESIGN D01714 $ 480,585 Open $ 325,962 $154,623 76365 SMTEK, INC. D02115 $ 75,226 Open $ 51,718 $ 23,508 20582 CICON ENGINEERING, INC. D03621 $ 120,000 Open $ 120,000 72935 RAWLINGS MECHANICAL CORP. D04093 $ 96,600 Open $ 96,600 23230 CONSOLIDATED PRODUCTS CORP. D04316 $ 151,265 Open $ 151,265 70212 PRECISION INTERCONNECT D04599 $ 79,468 Open $ 79,468 62372 NATEL ENGINEERING CO., INC. Y23066 $ 143,500 Open $ 143,500 12628 BIG 3 INDUSTRIES, INC. Y27874 $ 422,114 Open $ 81,122 $340,992 56881 FORSYTHE MCARTHUR Z38189 $ 110,000 Open $ 110,000 25171 DVR ENTERPRISE Z40850 $ 250,000 Open $ 250,000 29742 EGGHEAD DISCOUNT SOFTWARE Z40937 $1,012,000 Open $1,012,000 92011 WACKENHUT Z40952 $ 647,220 Open $ 634,685 $ 12,535 56881 FORSYTHE MCARTHUR
Ocean Systems - Marketing Consulting Agreements* ------------------------------------------------ Sigma International, dated June 1, 1995 Guy Reynolds Reynolds Beckwith Kerry Stephen LeeCor, Inc. (Ronald Beckwith) Omicron Corp. John Caughy SMAT, Est. John Devine Kuo-Chun, Henry Feng John McDermott Ocean Systems - International Service Representative Agreements* ---------------------------------------------------------------- C.I.E.R., dated June 30, 1996 Sigma International, dated June 1, 1995 Atkem, A.S., dated July 7, 1997 Ocean Systems - Sales Representative Agreements* ------------------------------------------------ Taewoos LLC, dated January 7, 1995 Hollinda N.V., dated August 1, 1995 Itochu Aviation, Inc., dated October 1, 1994 Siam Aviation Company, Ltd., dated November 1, 1995 Benavia AB, dated October 1, 1995 Panamerica Organization Properties, Inc., dated November 1, 1995 Hovet & Co., dated October 1, 1995 Compania Aeronautica Espanola, S.A., dated October 1, 1995 Aktem A.S., dated March 1, 1997 Top Entity, dated January 1, 1997 Sistemas Electronicos S.A., dated June 1, 1997 J.C. Rangel, Representacoes Ltd., dated June 1, 1997 Alberto Maria Bravo & Filhos, dated July 1, 1997 Southwest Trading Company, dated April 1, 1997 Technica De Electronica Y Metalurgia (TADEM), dated July 1, 1997 Aero Precision Industries, Inc., dated June 1, 1997 BD Miltech Ltd., July 1, 1997 Mereit Lab Corporation, dated August 1, 1997 Ocean Systems - Computer Equipment Leases* -------------------------------------------
Vendor Name Expires Equipment Description ----------- ------- --------------------- Forsythe McArthur Assoc. August 7, 1998 VAX7620 VAX4100 MTICIQBU adaptor high capacity tape drive Forsythe McArthur Assoc. August 31, 1998 VAX661O Forsythe MeArthur Assoc. August 31, 1998 MicroTechnology Raid Disk Farm and associated devices Forsythe McArthur Assoc. January 14, 1999 SUN Spark 20
Ocean Systems - Informatian Technology Service Agreements* ----------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------- Vendor Name Service Agreement Description Type of Expires Coverage - ---------------------------------------------------------------------------------------------------------------- Xerox Corporation HW maintenance (2080/7080 printers) Maintenance 9/26/97 Hewlett - Packard Workstation Operating System Maintenance Maintenance 9/30/97 Cabletron Systems Inc. Network Infrastructure maint (software) Maintenance 9/30/97 Omega Logistics Int Logistics software (DILSA) Maintenance 10/15/97 Sterling Design Engineering Systems Vmetric - EDCAS - System Design Utility Maintenance 10/15/97 Tornado Software Development toolkit Maintenance 10/31/97 - ----------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------- Parametric Technology Corp. Designer software (Pro-E) Maintenance 11/11/97 Cincom MRP utilities USER FEE (QRW) Maintenance 11/20/97 Micro-Frame Technologies PC based estimating (Microfrarne) Maintenance 12/1/97 Executive Software Disk de-fragmentation (Diskeeper) Maintenance 12/14/97 Intersolv Inc Software config mgmt (PVCS) Maintenance 12/30/97 Struct. Dyn. Res. Corp. CAD (IDeas) Maintenance 12/30/97 Digital Equipment Corp. HW & SW maintenance (VAXcluster) Maintenance 12/31/97 Silverado Software & Consultants Analysis SW maintenance (ANSYS) Maintenance 1/2/98 Intercap Graphics System Technical Illustration (Intercap) Maintenance 1/8/98 Barr Systems Remote Printer (XEROX) RJE-RS232 Maintenance 1/9/98 West Coast Terminals, Inc. Xerox FAX machine maintenance Maintenance 1/23/98 Talaris Systems INC. Printer HW maintenance (3290s) Maintenance 1/30/98 Zuken-Redac CAD (CADstar) Maintenance 2/20/98 Datalok Off-site tape storage Maintenance 2/27/98 Select Sfotware Tools, Inc. Select Yordon - FOR SSTO Maintenance 4/15/98 Amtek HW maintewnance (HP 9000) Maintenance 4/30/98 Lasersource/DCI HW maintenance (Talaris 1590s) Maintenance 4/30/98 QMS HW maintenance (QM5860 laser printer) Maintenance 4/30/98 Computer Upgrade Corporation AMASS SW maintenance Maintenance 4/30/98 Mathworks SW maintenance (MATLAB, float license) Maintenance 5/1/98 Cincom MRP software USER FEE (Control) Maintenance 6/24/98 Cabletron Systems Inc. Network Infrastructure maint (hardware) Maintenance 6/30/98 Muzak Music on Hold Maintenance 6/30/98 Interleaf Desktop publishing (Interleaf) Maintenance 8/28/98 Micro-Technologies (SI) HW maintenance (CIQBA Controler) Maintenance 8/31/98 Exide HW maintenance on UPS system Maintenance 9/25/98 Oracle Database software (Oracle) Corporate/ 2Q/each Maintenance year Lasersource/DCI Blanket maintenance for HP printers Blanket 12/30/97 Software Spectrum Supplies (software blanket) Blanket 12/31/97 DIS Research Capital/Supplies (blanket) - replace HW Blanket 12/31/97 Graymar Business Systems Supplies toner) Blanket 3/2/98 - ----------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------- AP Labs Signal processing software (SUNs) Blanket 3/6/98 Walker Richer and Quinn Reflection Blanket 3/10/98 Xerox Corporation HW maintenance (4050,4075,3700) Blanket 3/31/98 - ----------------------------------------------------------------------------------------------------------------
Ocean Systems - Confidentiality Agreements* -------------------------------------------
- ---------------------------------------------------------------------------------------------------------------- Agreement Effective Term/ OS Company Subject Number Date Expiry Contact - ---------------------------------------------------------------------------------------------------------------- ADI Limited RAN ASSTASS SEA 11000 96-033 11/6/96 10 years A.J. Garber ADI Limited Underwater Warfare Business 95-007 4/10/95 3 Aero International International Spares 95-010 3 years P.A. Boskovich Agusta/Italy Quality Assurance Survey 4/28/97 1 year L. Daniels Albion Group Intl. Inc. Hellenic Navy Offset 95-013 7/12/95 3 years J. Hall/L. Daniels Alliant Techsys. Seismic data 96-027 10/16/97 3 years A.J. Garber Atlantic Aero Elect Various 95-001 1/17/95 3 years A.J. Garber Corp. Australian Defense Undersea Warfare Business 95-007 5/10/95 3 years K.D. Adams Industries Atlantic Aero Elect. Foreign Integrated Sonar Suites 95-017 8/21/95 3 years A.J. Garber Corp. AT&T Various Information 8/7/95 2 years D. Samsury Babcock Intl. Sonar 2087 Feasibility Study 3/7/95 5 years J. Caughey BBN US Navy 6152 97-015 5/30/97 1 year A.J. Garber Cambridge Bank Ltd. Sonar Equip. Brazil/Peru 96-017 5/28/96 5 years V. Riehl Celsius Tech Sys. Mine Counter Measurers 94-021 8/19/94 3 years L. Daniels Celsius Tech Sys. Proprietary Info. 11/14/97 5 years J. Devine Chesapeake Sciences TARS 95-018 8/28/95 3 years A.J. Garber Chesapeake Sciences TB16BQ 10/18/94 4 years R. Tomlinson Chevron Petroleum Bore Hole Seismic Multi Level 94-037 3/3/94 3 years A.J. Garber Receiver Computing Devices Maritime Helicopter 95-014 7/14/95 3 years J. Anderson C-Tech YS2000 96-029 10/2/96 2 years J. Roscigno DAF Special Products NH-90 96-006 2/15/96 3 years D. Webb - ----------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------- DRA Hunt Class Mid Life 11/22/96 1 year A.J. Garber Defense Evaluation Research Defense Hunt Class Mid Life 11/27/96 1 year A.J. Garber Agency Devonport Management Ltd. Sonar 2087/Type 23 Frigates 96-007 2/13/96 3 years A.J. Garber Durodyne, Inc. Epichlorohydrin rubber compound 88- 5/1/88 10 years J. Andersen 014/DA Dynacon, Inc. LFATS Handling System 94-023 6/2/94 3 years A.J. Garber E-Systerns Montek Siesmic Receiving 95-012 6/28/95 3 years A.J. Garber Electramotive TB16 Towed Array 11/12/93 3 years J. Proko FIAR NH-90 96-005 1/18/96 3 years D. Webb Fokker Aviation EMD 97-008 2/4/97 1 year S. McDonald Greenblatt MCDV 95-004 3/27/95 3 years L. Daniels Goldstar ATE 11/24/82 5 years B. Polaski Geo Test Inc. AQS-18 Test Equipm 95-032 12/14/95 3 years L. Daniels Hughes Naval Marine Airborne Sonar Sys. 96-026/1 5/13/97 2 years R. Husar Hughes Naval Marine Surface Ship Programs 96-026 8/9/96 2 years R. Husar Hewlett Packard Weapons Replaceable Assy. Test Set 96-002 1/8/96 3 years L. Daniels Hollandse Alkmaar class mine counter 97-007 1/23/97 2 years S. McDonald Signaalapparten Kaman Aerospace AQS-18 Dipping Sonar SH-2G 94-019 7/19/95 5 years L. Daniels Loral Canada Maritime Helicopter Program 7/29/95 10 years J. McDermott Lockheed Martin Canadian Remote Minehunting Sonar 95-024 12/19/95 3 years A.J. Garber Loral ASIC B2TC 5/28/95 10 years A.J. Garber Litton Sys. Acoustic Sensor Array Systems 5/24/96 5 years L. DiRienzo Northop Grumman Hybrids 95-020 9/15/95 3 years J.P. Andersen NUWC Wide-Band Omni Telemetry Sys. 10/31/96 A.J. Garber Optiphase Fiber Optic Technologies 96-003 1/10/96 3 years A.J. Garber Paulsson Geo Svc. Inc. Boreholde Seismic Systems 11/22/96 1 year Penn State LELFAS 96-034 12/17/96 3 years V. Riehl Raytheon Electronics LFATS/Taiwan/Australian./Spanish 10/25/96 2 years V. Riehl Raytheon Electronics YS2000fItalian Navy ASW Frig 7/2/96 5 years STN Atlas Undersea Warfare Business 95-006 4/25/95 3 years K. Adams - ----------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------- STN Atlas Australia ASSTASS LFAPS 2/11/97 1 year D. MacCulloch Signal Processing Sys. Norwegian Towed Array 97-014 5/23/97 3 years W. Tally Sikorsky Aircraft Job Shoppers 11/22/96 7 years D. Bennett Transfield Defense Sys. SEA 1000 Australian Surface Ship 8/6/96 10 years J. Winters Towed 3M Specialty Optical Fiber Optic Technologies 95-029 11/30/95 3 years A.J. Garber Fibers Taiwan Int Standard S-70C Offset 96-010 5/11/96 5 years J. Corso/ Electronics Ltd. J. Winter Witten Technologies Mine Warfare 94-030 7/11/94 3 years A.J. Garber Whitehead Alenia Undersea Warfare Business 95-003 4/27/95 3 years S. Schorer Sistemi Subacquei - ----------------------------------------------------------------------------------------------------------------
Ocean Systems - Retention Agreements* ------------------------------------- oRetention Areements with key management (V. Davisson, V. Riehi, A. Logan, D. Dunlop, J. Roscigno, L. DiRienzo, M. Charley, B. Smith, S. Erdman), aggregate contingent payment of $199,400 for all eight managers (Purchaser responsibility). oRetention Agreement with Steve Schorer (AlliedSignal responsibility). ELAC - Retention Agreements* ---------------------------- oRetention Agreements with key management (L. Hogrefe, W. Tietz, G. Jordt), aggregate contingent payment of $108,200 for all three managers (Purchaser responsibility). ELAC - Contracts Greater Than TDM100.00
- ------------------------------------------------------------------------------------------------------------------------ 3.2 Contracts, Value> TDM 100.0 Status: Cut-off 09/97 - ------------------------------------------------------------------------------------------------------------------------ Customer Enduser Contents Date of Value of Remaining Last Contract Contract Backlog Shipment/Service TDM TDM - ------------------------------------------------------------------------------------------------------------------------ BAZAN, Spanish Navy 4 Echosounders for 9/4/95 442.0 331.5 August 1999 Spain Minehunter - ------------------------------------------------------------------------------------------------------------------------ Blohm und Voss, Turkish Navy 2 Echosounders for 8/15/96 251.0 131.1 May 1998 Germany MEKO - ------------------------------------------------------------------------------------------------------------------------ Blohm und Voss, German Navy 1 Echosounder and UT 7/14/97 281.1 281.1 October 2005 Germany Equipment for F124 - ------------------------------------------------------------------------------------------------------------------------ BWB Koblenz, German Navy Target Simulator 2/29/96 11,217.4 4,581.8 December 2005 Germany (SUBTAS) - ------------------------------------------------------------------------------------------------------------------------ BWB Koblenz, German Navy Advanced Data 9/23/97 398.5 398.5 December 1997 Germany Evaluation System (SUBTAS) - ------------------------------------------------------------------------------------------------------------------------ BWB Koblenz, German Navy Spares (Transducer) 8/20/97 340.6 340.6 December 1997 Germany - ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------ 3.2 Contracts, Value> TDM 100.0 Status: Cut-off 09/97 - ------------------------------------------------------------------------------------------------------------------------ Customer Enduser Contents Date of Value of Remaining Last Contract Contract Backlog Shipment/Service TDM TDM - ------------------------------------------------------------------------------------------------------------------------ BWB Koblenz, German Navy 1000 Transducers 8/28/97 2,047.0 1,647.8 December 1997 Germany LSE 800 - ------------------------------------------------------------------------------------------------------------------------ BWB Koblenz, German Navy LFTASS Development 8/7/95 712.5 0.0 December 1998 Germany and Delivery of 4 ea. Reflexducerelements - ------------------------------------------------------------------------------------------------------------------------ DLA, Korean Navy 2 UT Equipments 12/5/96 404.4 404.4 December 1997 Korea (Training) - ------------------------------------------------------------------------------------------------------------------------ DLA, Korean Navy 2 Echosounders for 2/26/97 329.1 202.4 December 1998 Korea KDX Destroyers - ------------------------------------------------------------------------------------------------------------------------ HDW, Korean Navy 3 Echosounders, 3/1/95 2,541.8 1,673.3 December 1998 Germany UT Equipments, Sonar Beacon, Tape Recorder for Subs U209 - ------------------------------------------------------------------------------------------------------------------------ HDW, Brazilian Navy Echosounder, UT's, 1/12/96 791.2 791.2 March 1999 Germany Sonar Beacon for Sub Tupi mod - ------------------------------------------------------------------------------------------------------------------------ HDW, German Navy 2 Echosounders and UT 8/14/97 1,757.5 1,757.5 December 2005 Germany Equipments md. ILS for Subs U212 - ------------------------------------------------------------------------------------------------------------------------ HDW, German Navy I Echosounder and UT 8/14/97 281.1 281.1 October 2002 Germany Equipment for F124 - ------------------------------------------------------------------------------------------------------------------------ HDW, Turkish Navy 2 Echosounders 7/1/95 861.9 14.4 February 1998 Germany 2 Sonar Beacons for Submarines - ------------------------------------------------------------------------------------------------------------------------ HDW/TNSW, Israel Navy 3 Sonar Beacons 12/17/93 842.0 20.5 June 1999 Germany for Submarine "Dolphin-Class" - ------------------------------------------------------------------------------------------------------------------------ HSA, Taiwan Navy Sonar Spares 4/1/97 111.9 111.9 November 1997 Netherlands - ------------------------------------------------------------------------------------------------------------------------ Intermarine, Thai Navy 21 Echosounders for 6/17/97 225.0 225.0 July 1998 Italy Minehunter - ------------------------------------------------------------------------------------------------------------------------ Lurssen, Turkish Navy 3 Sonar Beacons 10/10/95 321.8 9.3 October 1997 Germany for Patrolers "Dogan-Class" - ------------------------------------------------------------------------------------------------------------------------ NAMRIA, NAMRIA, BCC-SW MK II 8/14/97 791.0 791.0 November 1997 Phillipines Phillippines - ------------------------------------------------------------------------------------------------------------------------ Naval Indian Navy Test Equipment 7/23/97 193.1 193.1 December 1997 Headquarters~ India - ------------------------------------------------------------------------------------------------------------------------ ORCA, French Navy 7 Diver Sonars 6/18/97 966.8 41.5 December 1997 France - ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------ 3.2 Contracts, Value> TDM 100.0 Status: Cut-off 09/97 - ------------------------------------------------------------------------------------------------------------------------ Customer Enduser Contents Date of Value of Remaining Last Contract Contract Backlog Shipment/Service TDM TDM - ------------------------------------------------------------------------------------------------------------------------ Racal Survey, Racal Survey, UK BCC-MW 3/6/97 693.1 90.0 December 1997 UK 3 Upgrades MK I - M II - ------------------------------------------------------------------------------------------------------------------------ SeaBeam, INHO, India 4 SeaBeam 1180 4/17/97 1,784.9 888.7 April 1998 USA ($1=1,75 DM) - ------------------------------------------------------------------------------------------------------------------------ SeaBeam, NAMRIA, 2 SeaBeam 1180 7/31/97 792.2 792.2 November 1997 USA Phillippines MK II - ------------------------------------------------------------------------------------------------------------------------ STN ATLAS, German Navy 2 Echosounders 10/16/95 642.0 46.1 July 1998 Germany 2 UT Equipment for Minehunter MJ332 - ------------------------------------------------------------------------------------------------------------------------ STN ATLAS, Israel Navy 4 UT Equipments for 11/24/93 1,070.3 10.2 June 1999 Germany Submarines "Dolphin-Class" - ------------------------------------------------------------------------------------------------------------------------ STN ATLAS, various 30 Echosounders 9/19/97 139.5 139.5 November 1997 Germany LAZ 5000 - ------------------------------------------------------------------------------------------------------------------------ STN ATLAS, various 30 Echosounders 9/24/97 139.5 139.5 February 1998 Germany LAZ 5000 - ------------------------------------------------------------------------------------------------------------------------ STN ATLAS, German Navy MTW - Mini Torpedo 12/6/95 430.0 30.0 December 1997 Germany Development and Testvehicle - ------------------------------------------------------------------------------------------------------------------------ TNSW, German Navy 2 Echosounders and UT 8/11/97 1,792.5 1,792.5 December 2005 Germany Equipments md. ILS for 2 Subs U212 - ------------------------------------------------------------------------------------------------------------------------ TNSW, German Navy I Echosounder and UT 9/29/97 296.0 296.0 October 2004 Germany Equipment for F124 - ------------------------------------------------------------------------------------------------------------------------ Technical Technical Development of 3/10/97 140.7 140.7 December 1997 University, University High Frequency Berlin, Germany Berlin, Germany Transducers - ------------------------------------------------------------------------------------------------------------------------ Wilton-Fijenoord, Taiwan Navy Sonar Spares 1/22/97 815.6 815.6 December 1997 Netherlands - ------------------------------------------------------------------------------------------------------------------------ WDA WSA Bremerhaven, BCC-SW MK II 9/10/97 428.4 428.4 November 1997 Bremerhaven, Germany Germany - ------------------------------------------------------------------------------------------------------------------------ WTV, Siegburg, Wahnbachtalsperre PIA 2000 Plancton 5/31/96 3,067.1 2,480.5 June 1999 Germany n Inactivation System Verband Germany - ------------------------------------------------------------------------------------------------------------------------
ELAC - Guarantees and Bank Bonds* - ---------------------------------
Bank Bonds Deutsche Bank 02.10.97 item type of guarantee customer no. amount DEM due date 1 A advance payment bond Atlas 431 221.490,00 28.02.1998 2 V performance bond Atlas 363 237.188,00 until further 3 V performance bond Atlas 396 63.945,67 01.03.1999 4 G warranty bond Atlas 463 33.690,00 until further 5 V performance bond Atlas 328 9.589.450,00 -1.436.000,00 -877.800,00 -501.600,00 -836.000,00 -627.000,00 -627.000,00 -1.379.400,00 -543.400,00 -1.170.400,00 ------------- 1.590.850,00 31.12.1999 ============ 6 A advance payment bond Blohm + VoB 460 18.300,00 31.08.1998 7 A advance payment bond Blohm + VoB 461 17.625,00 31.08.1997 8 V performance bond Blohm + VoB 395 26.470,00 until further 9 G warranty bond Blohm + VoB 459 6.110,00 31.08.2000 10 G warranty bond Blohm + VoB 462 7.248,00 31.08.2001 11 G warranty bond Blohm + VoB 485 16.164,00 until further 12 V performance bond Daewoo 353 1.079,00 31.10.1997 13 V performance bond Daewoo 354 1.122,00 31.10.1998 14 A advance payment bond Def. Proc. Agency 391 191.500,00 31.10.1996 15 A advance payment bond Def. Proc. Agency 478 221.600,000 30.09.1998 16 A advance payment bond Def. Proc. Agency 480 82.515,00 31.01.1999 17 V performance bond Def. Proc. Agency 390 38.300,00 30.09.1999 18 V performance bond Def. Proc. Agency 397 3.313,52 09.07.1996 19 G warranty bond Def. Proc. Agency 479 22.160,00 30.11.1999 20 G warranty bond Def. Proc. Agency 481 17.825,00 31.01.2003 21 A advance payment bond Empresa Nacional 423 19.050,00 01.08.1999 22 A advance payment bond Empresa Nacional 425 19.050,00 01.05.1998 23 A advance payment bond Empresa Nacional 426 19.050,00 01.12.1998 24 G warranty bond Empresa Nacional 474 6.370,00 until further 25 A advance payment bond HDW, Kiel 464 41.988,80 until further 26 A advance payment bond HDW, Kiel 465 85.852,10 until further 27 A advance payment bond HDW, Kiel 466 32.223,00 until further 28 A advance payment bond HDW, Kiel 473 72.450,00 30.09.1998 29 A advance payment bond HDW, Kiel 475 88.255,60 until further 30 A advance payment bond HDW, Kiel 476 33.126,90 until further 31 A advance payment bond HDW, Kiel 477 43.164,10 until further 32 A advance payment bond HDW, Kiel 482 41.988,80 until further 33 A advance payment bond HDW, Kiel 483 32.223,00 until further 34 A advance payment bond HDW, Kiel 399 72.450,00 15.10.1998 35 A advance payment bond HDW, Kiel 446 41.988,80 31.01.1998 36 A advance payment bond HDW, Kiel 447 32.223,00 31.01.1998 37 A advance payment bond HDW, Kiel 448 85.852,10 31.01.1998 38 V+G performance bond HDW, Kiel 261 19.654,70 31.08.1998 39 V performance bond HDW, Kiel 388 238.050,00 15.10.1998 40 V+G performance bond HDW, Kiel 401 42.926,00 30.11.2001 41 V+G performance bond HDW, Kiel 402 41.757,00 30.11.2000 42 V+G performance bond HDW, Kiel 403 44.128,00 30.11.2002 43 V+G performance bond HDW, Kiel 404 15.673,00 30.11.2000 44 V+G performance bond HDW, Kiel 405 16.563,00 30.11.2002
45 V+G performance bond HDW, Kiel 406 16.112,00 30.11.2001 46 V+G performance bond HDW, Kiel 407 20.424,00 30.11.2000 47 V+G performance bond HDW, Kiel 408 20.990,00 30.11.2001 48 V+G performance bond HDW, Kiel 409 21.582,00 30.11.2002 49 V+G performance bond HDW, Kiel 410 25.726,00 30.11.2000 50 V+G performance bond HDW, Kiel 411 26.447,00 30.11.2001 51 V+G performance bond HDW, Kiel 412 27.187,00 30.11.2002 52 G warranty bond HDW, Kiel 369 36.397,50 31.01.2000 53 G warranty bond HDW, Kiel 442 36.337,00 31.01.1999 54 G warranty bond HDW, Kiel 443 15.111,00 31.01.1999 55 G warranty bond HDW, Kiel 444 36.967,00 31.12.1999 56 G warranty bond HDW, Kiel 445 15.364,00 31.12.1999 57 A advance payment bond Intermarine 484 35.550,00 until further 58 V performance bond Kockums 265 45.512,90 01.10. 199& 59 V performance bond Kockums 275 13.500,00 01.10.1998 60 G warranty bond Lurssen Werft 456 18.750,00 30.06.1997 61 G warranty bond Lurssen Werft 468 13.214,00 01.05.1999 62 G warranty bond Lurssen Werft 469 13.214,00 01.12.1999 63 G warranty bond P.T. PAL Indonesia 457 38.500,00 31.12.1996 64 G warranty bond President of India 435 4.721,75 until further 65 V performance bond Saudi Arabien 366 17.793,50 10.01.1998 66 G warranty bond Societe d'Armement 379 8.487,50 12.09.1997 67 G warranty bond Societe d'Armement 486 73.433,85 11.07.1998 68 V performance bond Thyssen 385 238.050,00 15.09.1999 69 G warranty bond Thyssen 368 27.772,50 30.06.1999 70 A advance payment bond Wilton 472 400.000,00 until further total 5251.697,59
Foreign currency item type of guarantee customer no. amount Ablauf 1 V performance bond Taneer, Karacki 48.044,00 Pak.R until further 2 V performance bond Def.Proc.Agency, Korea 441 1.870,39 USD 31.05.1997 3 V performance bond SeaBeam 482 49.371,00 USD 31.07.1999
ELAC - Confidentiality Agreements* - ---------------------------------- Date Party ---- ----- 95-01-01 Marimatek 95-01-02 SeaBeam 95-01-03 Qubit 95-01-04 95-01-05 Ultra Electronics 95-01-06 BASYS Marine Ltd. 95-01-07 BAeSEMA 95-01-08 Westinghouse 96-01-01 Evia 96-01-02 Mjellum & Carison 96-01-03 Reson 96-01-04 Raytheon Anschtutz 96-01-05 HDW 96-01-06 Elektro-Optik GmbH 97-01-01 SEPA 97-01-02 97-01-06 Sonatech 97-01-07 Nautronix 97-01-08 EdgeTech 97-01-09 Kongsberg 97-01-10 Camber Corp. ELAC - Other Contracts* - ----------------------- o ELAC Lease, between Honeywell Regelsysteme GMBH and Honeywell ELAC-Nautik, dated April 1, 1994 o Intercompany note between Ocean Systems and ELAC with respect to the cash in the AlliedSignal German cash pool, and related agreements Stock Purchase Agreement by and among AlliedSignal Deutchland GmbH, AlliedSignal, Inc., Honeywell AG and Honeywell, Inc., dated March 30, 1994 o Lease agreement by and between ELAC and Christian-Albrecht Universitat, Kiel, dated April 1995 o Long term agreement for cable repair with AS Aerospace GmbH Ocean Systems - Other Contracts - ------------------------------- o The following pages contain information regarding certain contracts signed between August 1, 1997 and December 19, 1997. o Effective December 19, 1997, Ocean Systems is under contract with the Turkish Navy to provide 4 AQS-18A dipping sonar systems plus spares, ground support equipment and performance testing. o Ocean Systems has an opportunity to propose a significant contract with Egypt. In the event that OS moves forward to compete on that contract, it is likely that OS will retain an in-country representative and will sign a letter of intent with that representative to retain post-contact award services which would likely exceed $250,000. - ---------- * Included without regard to dollar amount. May or may not exceed $75,000 or DM100,000. CONTRACTS RECEIVED 8/97 through 12/97 (Over $250K)
CUSTOMER SALES ORDER CONTRACT # DESCRIPTION VALUE - -------- ----------- ---------- ----------- ----- NAVSEA SS3442 N00024-92-C-6502 TB-23 Spares $279.3K NUWC SU3498 N66604-7225-4BF7 AMTS Upgrade $100.8K ITOCHU SY3591 5S277 Q18M Spares $268K ITOCHU SY3714 5S272 Q18M Spares $3700K ITOCHU SY3717 5SS275 Q18M Spares $1800K ITOCHU SY3726 1F529 Q18M Spares $366K HELLENIC NAVY 1Q18V System $2200K NAVSEA ECP320/325 TB16 Upgrade $660K NAVSEA TB23 Repairs $300K
ASOS-SB-RO10 PAGE NO: 187 ALLIEDSIGNAL OCEAN SYSTEMS RUN DATE: 12/19/97 PURCHASING STATISTIC AWARD REPORT ALL PURCHASE ORDERS FROM 08/01/97 THRU 12/18/97
BUYER VENDOR VENDOR VENDOR AWARD TECH PO LINE DEPT/ACCT/JOB COMM TOTAL ID NAME NUMBER CLASS CODE CODE NUMBER ITEM CODE DOLLARS 12 CONSOLIDATED PRODUCTS CORP. 23230 SB 1A 1A D05064 007 3000-031-01-0-0000-0-0-0 5002 47,600.00 12 CONSOLIDATED PRODUCTS CORP. 23230 SB 1A 1A D05064 008 3000-031-01-0-0000-0-0-0 5002 88,000.00 12 CONSOLIDATED PRODUCTS CORP. 23230 SB 1A 1A D05064 009 3000-031-01-0-0000-0-0-0 5002 54,400.00 TOTAL DOLLARS FOR THIS PO 462,400.00 $500,000 AND UP TOTAL DOLLARS FOR THIS BUCKET 489,909.30 TOTAL NUMBER OF PO's FOR THIS BUCKET 4
Schedule 4.8 - Titles and Leases No items to schedule. Schedule 4.9 - Litigation See also Schedules 4.21(a) and 4.21(b). Ocean Systems Sellers are presently aware of two pending suits: Brown v. AlliedSignal, case no. 15826, filed in the Superior Court of the State of California, County of Los Angeles, North Valley Judicial District on May 28, 1996. Tomlinson v. AlliedSignal, case no. BC 163670, filed in the Superior Court of the State of California, County of Los Angeles, North Valley Judicial District on May 23, 1997. Sellers are presently aware of an international sales matter, which Purchaser acknowledges having had the opportunity to discuss with Sellers' counsel (voluntary disclosure #329, relating to sales to the government of Greece and the United States). ELAC There is one contractual dispute related to a German Government contract. ELAC intends to solve the dispute prior to January 21, 1998. Contract Data: Customer: BWB, Koblenz, Germany Content: Development and delivery of 4 ea. Reflexducers Date of Contract: 8/7/1995 Value: DM 712.5 k Last Shipment: Dec. 1998 Current Status: An agreement with the customer was settled on 5th November, 1997, to close the contract end of December 1997 without shipment of transducers. ELAC agreed to pay back 438 k DM of the total payment of 712.5 k DM that was received end of 1996. BWB accepts the development results. Payback has to be transferred 30 days after written approval of BWB. ELAC confirmed agreement in writing 7th of November, BWB approval expected in the last week of December, 1997, payment to be released January 1998. Schedule 4.10 - Environmental Disclosure The following documents, which have been delivered to Purchaser, are incorporated herein by reference: 1. Environmental, Health and Safety Disclosure Document AlliedSignal Ocean Systems, Sylmar, CA Prepared for AlliedSignal Electronic Systems June 30 to July 2, 1997 2. Phase I Environmental Site Assessment 15825 Roxford Street, Sylmar, CA July 1997 3. Health, Safety and Environmental Disclosure AlliedSignal Electronic Systems - ELAC Nautik GmbH September 29, 1997 4. ELAC Environmental Disclosure Statement Ocean Systems Permits City of Los Angeles, Department of Building and Safety, Certificates of Occupancy Permit No.'s: LA76447/60 VN00435/73 VN50140/76 LA76448/60 LA64337/73 VN39348/76 VN92138/66 LA77430/73 VN89736/79 VN98941/66 VN16035/74 VN93597/79 LA72477/68 LAl6583/75 VN40476/82 LA72479/68 LAl6584/75 LA20231/85 VN87685/72 VN44208/76 VN98937/86 VN83102/72 VN41832176 VN15222/62 VN81765/72 VN43697/76 VN13124-62 VN968742/73 VN39986176 City of Los Angeles, Department of Building and Safety Water Conservation Program Certificate of Compliance No. 310437 City of Los Angeles Fire Permit Permit No.'s 777456-33/F/828 777456-331F/701 City of Los Angeles Office of the City Clerk, Tax and Permit Division Hazardous Material Certificate Renewal No. 587720-23/F/803 City of Los Angeles Certificates of Disclosure of Hazardous Substances Account No. 587720-23/F/206 City of Los Angeles, Department of Building and Safety and Division of Occupational Safety and Health of the State of California, Certificates of Inspection and Permit to Operate Steam Boiler or Pressure Vessel Permit No.'s AC09411 AC09412 AC4018 AC4019 AC4020 City of Los Angeles, Department of Public Works and Bureau of Sanitation, Industrial Wastewater Permit User No. IU000068 Permit No. W482195 City of Los Angeles, Department of Public Works and Bureau of Sanitation, Industrial Waste Permit No. 482195 County of Los Angeles, Hazardous Waste License No. 103 453285 County of Los Angeles, Public Health License, SIC# 3699 13 South Coast Air Quality Management District Permit No.'s M35231 Spray Booth M09716 Spray Booth P19724 Bake Oven D29049 Surface Prep. Tank Application No.'s 327865 Spray Booth/UV Cure 327866 Degreaser ELAC ELAC approval to release waste water dated June 25, 1997 ELAC business and local licenses are listed in Schedule 4.17 See also Schedule 4.15. Schedule 4.11 - Benefit Plans and Policies See also Schedule 6.6. U.S. Pension, Savings and Stock Option Plans Salaried Employees Pension Plan of AlliedSignal, Inc. AlliedSignal, Inc. Pension Plan for Hourly Employees AlliedSignal, Inc. Retirement Program AlliedSignal, Inc. Supplemental Retirement Plan AlliedSignal, Inc. Savings Plan AlliedSignal, Inc. Thrift Plan AlliedSignal, Inc. Supplemental Savings Plan 1993 Stock Plan for Employees of AlliedSignal, Inc. and its Affiliates (option plan for certain managers) U.S. Health and Welfare Plans Medical-Managed Care-HCC-Salaried Blue Cross/Blue Shield - Hourly Dental Plan Vision Plan-VSP-Salaried Sick Days Life Insurance Group Universal Life Insurance Long Term Disability (Salaried provided through pension plan) Short Term Disability Severance Plan Drug Testing Supplemental Unemployment Benefit per UAW Labor Agreement (hourly) Personal Accident Insurance (voluntary) Employment Laws in Germany and Agreements at ELAC German Government Laws Every employee must have insurance for: Health Unemployment Pension (retirement) o Daily working time is limited to 10 hours. o Each employee is entitled to a minimum of 4 weeks vacation annually. o Significant restrictions apply to employee lay-offs, including, without limitation, a 4 week minimum notice requirement prior to lay-off and restrictions on layoffs for pregnant women and employees over 56 years old. Wage and Salary Agreements Agreements between the Metal and Electro Employer Association and the German Metal Union cover the following: Standard wages and salaries. Amount of extra payment for Christmas (50% of monthly salary) Amount of extra payment for holidays (30% of monthly salary) Payment during illness (6 weeks) Annual vacation time (6 weeks) These agreements have the status of laws. Company Agreements There are additional agreements between Sellers and the ELAC work council covering the following: Daily and weekly working time Working rules Pension plan Redundancy payment plan (severance) Employers contribution plans (savings plan) Other German Benefit Programs ELAC Pension Plan Worldwide AlliedSignal Stock Purchase Plan Statutory German Health and Welfare Plans Company Automobiles U.S. Other Programs Education Assistance Holidays Vacation Student Loan Program Matching Gifts Savings Bonds Credit Union Employee Mortgage Program Ride Sharing Incentives Reward and Recognition Financial Planning Seminars Service Awards Bereavement Pay Family Leave Military Pay Jury Duty Adoption Assistance Employee Assistance Company Automobiles Ocean Systems - Retention Agreements o Retention Agreements with Key Management (V. Davisson, V. Riehl, A. Logan, D. Dunlop, J. Roscigno, L. DiRienzo, M. Charley, B. Smith, S. Erdman), aggregate contingent payment of $199,400 (Purchaser responsibility). o Retention Agreement with Steve Schorer (AlliedSignal responsibility) ELAC - Employment Agreements All ELAC employees have employment agreements including temporary employees and Apprentices. Most employees have "standard" agreements ("Anstellungsvereinbarung"). As of November 1, 1997, there were 170 employees, as follows: Category Employment Agreement Form Number -------- ------------------------- ------ Employees Standard 136 Temporary Temporary 3 Apprentices Apprentice 4 Managers AT- Individual 26 Senior Manager GT- Individual 1 The following individuals have "AT-Individual" agreements: Bjornsen, Bohn, Bomhorst, Brundel, Bumbe, Diehl, Eigenbrod, Gumpel, Gnutzmann, Gorl, Heir, Holm, Jordt, Knoop, Kuhn, Maschmann, Olden Gueg, Raether, Schaefer, Schultz, Seibkin, Tietz, Timm, Westerbeck, Wieczorek, Ziegenbein. Dr. Luder Hogrefe has the "GT-Individual" agreement. The following individuals are parties to retention agreements with an aggregate contingent payment of $108,200: Dr L Hogrefe, W. Tietz, G. Jordt (Purchaser responsibility). Schedule 4.12 - Material Changes Pre - Closing Committments ELAC ELAC and STN-ATLAS will sign a Teaming Agreement for the joint development and marketing of a Mine Avoidance Sonar for Submarines Ocean Systems o Effective December 19, 1997, Ocean Systems is under contract with the Turkish Navy to provide 4 AQS-l 8A dipping sonar systems plus spares, ground support equipment and performance testing. o Ocean Systems has an opportunity to propose a significant contract with Egypt. In the event that OS moves forward to compete on that contract, it is likely that OS will retain an in-country representative and will sign a letter of intent with that representative to retain post-contact award services which would likely exceed $250,000. o Additionally, Greece System 6 contract ($2.2M Sales value ) effectivity expected by December 31, 1997, and a $6 million booking is expected on the TB-23 Refurbishment program. o See also Schedule 4.7, containing recent contract information. Pre-Closing Changes in Employment, Compensation and Benefits ELAC ELAC is covered by the "Tarifvertrag" of IG Metall Schleswig-Holstein. This law covers all major employee issues such as salary, vacation, illness, etc. The "Tarifvertrag" is valid for a certain time period and is a topic of collective bargaining events between the Union and industrial representatives. The basic salary is always an important topic for upcoming negotiations. ELAC expects a salary increase of 2.5%, becoming effective on the 1st of April 1998. This increase is covered within the 1998 ADP. Recent Hirings - ELAC ELAC expects to hire a replacement sales manager in December 1997 One additional marketing consultant was contracted in November 1997 Positions Currently Open at Ocean Systems Sr. Transducer Engineer Systems Engineer Advanced Manufacturing Engineer (2) Sr. Staff Electrical Desigzi Engineer (2) Sr. Mechanical Engineer Program Manager Planner, Sr. Sr. Engineer - Tech Process Lead - Towed Array Manager, Contracts Sr. Cost Control Analyst Sr. Financial Analyst Human Resource Generalist Schedule 4.14 - Compliance with Law See Schedules 4.9, 4.10, 4.21(a) and 4.21(b). Schedule 4.15 - Consents The following may not be assigned without the written consent of the contracting party: * Service Agreement #SEROOOO6, dated June 1, 1995, between AlliedSignal and C.I.E.R. Service Agreement #SEROOOO7, dated June 1, 1995, between AlliedSignal and Sigma International Memorandum of Agreement dated October 31, 1996, between AlliedSignal and Celsius Tech Systems AB Teaming Agreement dated February 11, 1997, between AlliedSignal and STN Atlas PTY, Limited The following may be terminated by either party upon the sale of the other party: Cooperation Agreement dated February 19, 1996, between AlliedSignal and FIAR The following may be assigned upon a sale of assets, but Lockheed Martin Librascope Corp. must be notified of the assignment and sale of assets: Teaming Agreement, dated May 31, 1996, by and between AlliedSignal and Lockheed Martin Librascope Corporation. *The lease between Honeywell and ELAC, dated March 31, 1994, may not be assigned without the consent of Honeywell, which may not be unreasonably withheld. Any and all government contracts, U.S. or foreign, may not be assignable without the consent of the government party. Certain of the confidentiality agreements, software licenses, equipment leases, and equipment service agreements listed on Schedule 4.6(a) may not be assignable without the consent of the contracting party. The export licences set forth on schedule 4.17 may not be assignable without consent. The permits, licenses, certificates and registrations referenced in Schedules 4.10 and 4.17 may require action by the Buyer in the form of notification, reapplication or otherwise, upon a change in ownership. - ---------- * Material consent. Schedule 4.16 - ELAC Taxes o Tax audit executed by the Tax Authorities of Kiel for the years 1989 through 1993. During the last tax audit, covering the period ending December 31, 1993, the tax authorities made minor routine findings which are not expected to have a significant impact in subsequent years. Years after 1993 are still open but no specific tax exposure is known. o ELAC is a party to the profit pooling agreement with AlliedSignal Deutschland GmbH for the period 1995 to 1997. o Annual audit of the General Ledger executed by Price Waterhouse for the year 1996. Schedule 4.17 - Permits and Licenses Ocean Systems - Permits City of Los Angeles, Department of Building and Safety, Certificates of Occupancy Permit No.s: LA76447/60 VN00435/73 VNSOl4O/76 LA76448/60 LA64337/73 VN39348/76 VN92138/66 LA77430/73 VN89736/79 VN98941/66 VN16035/74 VN93597/79 LA72477/68 LA16583/75 VN40476/82 LA72479/68 LA16584/75 LA20231/85 VN87685/72 VN44208/76 VN98937/86 VN83102/72 VN41832/76 VN15222/62 VN81765/72 VN43697/76 VN13124-62 VN968742/73 VN39986/76 City of Los Angeles, Department of Building and Safety Water Conservation Program Certificate of Compliance No. 310437 City of Los Angeles Fire Permit Permit No.s 777456-33/F/701 777456-33/F/828 City of Los Angeles Office of the City Clerk, Tax and Permit Division Hazardous Material Certificate Renewal No. 587720-23/F/803 City of Los Angeles Business Tax Registration Certificates Cert. No.s 435532-82/L/190 Profs/Occupations 435532-82/L/167 Retail Sales 435532-82/L/166 Wholesale Sales City of Los Angeles Certificates of Disclosure of Hazardous Substances Account No. 587720-23/F/206 City of Los Angeles, Department of Building and Safety and Division of Occupational Safety and Health of the State of California, Certificates of Inspection and Permit to Operate Steam Boiler or Pressure Vessel Permit No.s AC09411 AC09412 AC4018 AC4019 AC4020 City of Los Angeles, Department of Public Works and Bureau of Sanitation, Industrial Wastewater Permit User No. IU000068 Permit No. W482195 City of Los Angeles, Department of Public Works and Bureau of Sanitation, Industrial Waste Permit No. 482195 County of Los Angeles, Hazardous Waste License No. 103 453285 County of Los Angeles, Public Health License, SIC# 3699 13 South Coast Air Quality Management District Permit No.s M35231 Spray Booth M09716 Spray Booth P19724 Bake Oven D29049 Surface Prep. Tank Application No.s 327865 Spray Booth/UV Cure 327866 Degreaser Ocean Systems - Vessel Registrations U.S. Department of Transportation and U.S. Coast Guard Certificates of Documentation Vessel Official Number ------ --------------- 3 Acres 600022 Sonar Queen 511517 Ocean Systems - Vehicle Registrations (License Plate Numbers) 1PXL24l 5A19782 2SDR083 2MRJ696 1FN4696 2S15252 25DR082 3BGKl8O 1J0E389 ELAC - Permit Approval to release waste water, dated June 25, 1997 Ocean Systems - Export Licenses -------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Country Region License# Date Type Subtype Status Product System ELAC - ------------------------------------------------------------------------------------------------------------------------------------ Abu Dhabi Middle East T071358 8/16/93 Temporary Hardware Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Algeria N. Africa 454071 6/28/90 Technical Data Unclassified Expired AS AQS-18(V)l No - ------------------------------------------------------------------------------------------------------------------------------------ Argentina S. America 707475 7/24/97 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Argentina S. America 612612 8/1/94 Technical Data Unclassified 4 years AS AQS-18(V)IA No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific 696980 4/4/97 Technical Data Unclassified Pending SSLF LFAPS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific 696980 4/4/97 Technical Data Unclassified 4 years SSLF LFAPS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific 684669 1/17/97 Technical Data Unclassified 4 years SSLF LFAPS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific C17445 10/25/95 Technical Data Classified 4 years TA TB-23 No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific 641004 9/20/95 Technical Data Unclassified 4 years SSLF LFATS No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific 622537 12/23/94 Technical Data Unclassified 4 years TA TB-23 No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific 579069 11/16/93 Technical Data Unclassified 4 years WPN LCAW No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific T069558 4/12/93 Temporary Hardware Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific T068072 12/23/92 Temporary Hardware Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific T067456 12/7/92 Temporary Hardware Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific 405452 5/2/89 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific 350699 10/23/87 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific 350699 10/23/87 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific 041582 10/5/77 Technical Data Unclassified Expired AS AQS-13E No - ------------------------------------------------------------------------------------------------------------------------------------ Australia Asia/Pacific C04056 10/5/77 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Bahrain Middle East 659935 3/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Bahrain Middle East 568039 6/28/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Bahrain Middle East 568039 6/28/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Belgium Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Belgium Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Belgium Europe 618756 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes - ------------------------------------------------------------------------------------------------------------------------------------ Belgium Europe 568038 6/28/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Belgium Europe 568038 6/28/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Country Region License# Date Type Subtype Status Product System ELAC - ------------------------------------------------------------------------------------------------------------------------------------ Belgium Europe 450681 5/9/90 Technical Data Unclassified Expired WPN LCAW No - ------------------------------------------------------------------------------------------------------------------------------------ Brazil S. America 706261 7/24/97 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Brazil S. America -- 7/14/97 Technical Data Unclassified Pending AS AQS-18(V)l Yes - ------------------------------------------------------------------------------------------------------------------------------------ Brazil S. America AG 1322-96 2/6/97 TAA DSAM 10 years AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Brazil S. America 647890 9/21/95 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Brazil S. America 543038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)IA No - ------------------------------------------------------------------------------------------------------------------------------------ Brazil S. America 450834 5/24/90 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Brazil S. America 450834 5/24/90 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Brazil S. America 405450 5/2/89 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------ Brazil S. America 344027 9/24/87 Technical Data Unclassified Expired AS AQS-18(V)l No - ------------------------------------------------------------------------------------------------------------------------------------ Brunei Asia/Pacific 568037 7/12/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Brunei Asia/Pacific 568037 7/12/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Canada N. America C04640 Unknown Technical Data Classified Expired AS AQS-13E No - ------------------------------------------------------------------------------------------------------------------------------------ Canada N. America C17445 10/25/95 Technical Data Classified 4 years TA TB-23 No - ------------------------------------------------------------------------------------------------------------------------------------ Canada N. America 622537 12/23/94 Technical Data Unclassified 4 years TA TB-23 No - ------------------------------------------------------------------------------------------------------------------------------------ Canada N. America 553757 2/22/93 Technical Data Unclassified Expired SURV ARCSSS No - ------------------------------------------------------------------------------------------------------------------------------------ Canada N. America C012075 6/21/88 Technical Data Classified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Canada N. America C05342 4/23/79 Technical Data Classified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Chile S. America -- 7/21/97 Technical Data Unclassified Pending SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Chile S. America 679402 10/11/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Chile S. America 569850 7/22/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Chile S. America 569850 7/22/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Chile S. America 499932 8/28/91 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ China PRC Asia/Pacific 342257 8/27/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Colombia S. America 707475 7/24/97 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Colombia S. America 556072 4/1/93 Technical Data Unclassified Expired AS AQS-l8(V)IA No - ------------------------------------------------------------------------------------------------------------------------------------ Denmark Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Denmark Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Denmark Europe 618752 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes - ------------------------------------------------------------------------------------------------------------------------------------ Denmark Europe 568038 6/28/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Denmark Europe 568038 6/28/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Country Region License# Date Type Subtype Status Product System ELAC - ------------------------------------------------------------------------------------------------------------------------------------ Ecuador S. America 663624 3/13/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Ecuador S. America 651988 11/28/95 Technical Data Unclassified 4 years AS AQS-18(V)IA No - ------------------------------------------------------------------------------------------------------------------------------------ Ecuador S. America 344027 9/24/87 Technical Data Unclassified Expired AS AQS-18(V)1 No - ------------------------------------------------------------------------------------------------------------------------------------ Egypt Middle East T081685 8/27/96 Temporary Hardware 4 years ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Egypt Middle East 666411 3/14/96 Technical Data Unclassified 4 years SSLF SADS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Egypt Middle East 663626 3/13/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Egypt Middle East 543038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)IA No - ------------------------------------------------------------------------------------------------------------------------------------ Egypt Middle East 480606 1/23/91 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Egypt Middle East 480606 1/23/91 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Egypt Middle East 344235 8/14/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Finland Europe 337560 8/14/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ France Europe 641139 7/12/95 Technical Data Unclassified 4 years AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ France Europe 641139 7/12/95 Technical Data Unclassified 4 years AS AQS-18(V)IA No - ------------------------------------------------------------------------------------------------------------------------------------ France Europe 618752 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes - ------------------------------------------------------------------------------------------------------------------------------------ France Europe 559494 4/30/93 Technical Data Unclassified Expired CMSR ADO EX-l1 No - ------------------------------------------------------------------------------------------------------------------------------------ France Europe C012678 5/2/89 Technical Data Classified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ France Europe 356157 1/19/88 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ France Europe T043212 6/1/87 Temporary Hardware Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 703020 5/5/97 Technical Data Unclassified 4 years ASLF HELRAS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 693546 2/19/97 Technical Data Unclassified 4 years MWF EMD Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 693546 2/19/97 Technical Data Unclassified 4 years MWF LMHS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe T082205 9/25/96 Temporary Hardware 4 years AS XDUCER Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe T07895C 10/17/95 Temporary Hardware 4 years AS XDUCER Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe AG 124-95C 6/6/95 MLA ELAC 10 years AS AQS-18 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe AG 124-95C 6/6/95 MLA ELAC 10 years AS AQS-18(V) Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe AG 124-95C 6/6/95 MLA ELAC 10 years AS AQS-18A Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe AG 124-95C 6/6/95 MLA ELAC 10 years ASLF HELRAS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe AG 124-95C 6/6/95 MLA ELAC 10 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe AG 124-95C 6/6/95 MLA ELAC 10 years SSLF SADS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 620446 2/14/95 Technical Data Unclassified 4 years SSLF Sonar 90 Yes - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Country Region License# Date Type Subtype Status Product System ELAC - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 618756 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe T072207 11/3/93 Temporary Hardware Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 551381 1/6/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 551381 1/6/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 551381 1/6/93 Technical Data Unclassified Expired MWF SLS No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 533052 7/16/92 Technical Data Unclassified Expired WPN LCAW No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 522678 3/3/92 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 522678 3/3/92 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 450681 5/9/90 Technical Data Unclassified Expired WPN LCAW No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 408204 4/26/89 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 356157 1/19/88 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 318506 1/12/87 Technical Data Unclassified Expired ASLF XDUCER No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 318505 10/31/86 Technical Data Unclassified Expired ASLF XDUCER No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe CO11096 10/20/86 Technical Data Classified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe C010909 8/27/86 Technical Data Classified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 306318 8/26/86 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 300089 5/5/86 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 200603 6/14/83 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe C07892 3/31/82 Technical Data Classified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe C07473 10/19/81 Technical Data Classified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe 136259 4/21/81 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Germany Europe C04056 10/5/77 Technical Data Classified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Greece Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Greece Europe 622832 1124/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Greece Europe 618752 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes - ------------------------------------------------------------------------------------------------------------------------------------ Greece Europe 568038 6/28/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Greece Europe 568038 6/28/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Greece Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Greece Europe 405451 4/19/89 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Country Region License# Date Type Subtype Status Product System ELAC - ------------------------------------------------------------------------------------------------------------------------------------ Greece Europe 397934 1/10/89 Technical Data Unclassified Expired AS AQS-18(V)6 No - ------------------------------------------------------------------------------------------------------------------------------------ Greece Europe 356156 1/19/88 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Greece Europe 344235 8/14/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ India Asia/Pacific 344238 8/7/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ India Asia/Pacific 191510 2/24/83 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ India Asia/Pacific T023031 3/22/82 Temporary Hardware Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Indonesia Asia/Pacific 543038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Indonesia Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Indonesia Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Indonesia Asia/Pacific 405450 5/2/89 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------ Indonesia Asia/Pacific 296001 5/9/86 Technical Data Unclassified Expired AS AQS-18(V)3 No - ------------------------------------------------------------------------------------------------------------------------------------ Israel Middle East 713415 9/12/97 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Israel Middle East 344235 8/14/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Israel Middle East 165784 4/15/82 Technical Data Unclassified Expired AS AQS-13E No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe 707479 7/24/97 Technical Data Unclassified 4 years AS AQS-18A Yes - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe AG 496-96 7/26/96 MLA FIAR 10 years AS AQS-18 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe AG 496-96 7/26/96 MLA FIAR 10 years AS AQS-l8(V) Yes - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe AG 496-96 7/26/96 MLA FIAR 10 years AS AQS-18A Yes - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe AG 496-96 7/26/96 MLA FIAR 10 years ASLF HELRAS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe 674284 7/12/96 Technical Data Unclassified 4 years ASLF HELRAS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe 641314 9/20/95 Technical Data Unclassified 4 years SSLF LFATS No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe T078240 7/19/95 Temporary Hardware 4 years ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe T077737 6/9/95 Temporary Hardware 4 years ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe 618756 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)lA No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe T067349 10/1/92 Temporary Hardware Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe 450834 5/24/90 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe 450834 5/24/90 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe C013453 11/17/89 Technical Data Classified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe 405451 4/19/89 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Country Region License# Date Type Subtype Status Product System ELAC - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe 341967 8/12/87 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe T032482 12/10/84 Temporary Hardware Expired AS AQS-13F No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe 162852 5/27/82 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe Unknown 3/10/82 Technical Data Classified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Italy Europe C04856 10/2/78 Technical Data Classified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Japan Asia/Pacific 703026 7/11/97 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Japan Asia/Pacific 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Japan Asia/Pacific 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)lA No - ------------------------------------------------------------------------------------------------------------------------------------ Japan Asia/Pacific 405452 5/2/89 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------ Japan Asia/Pacific 399819 1/24/89 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Japan Asia/Pacific 396862 10/29/88 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Japan Asia/Pacific 396862 10/29/88 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Japan Asia/Pacific 383356 9/19/88 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Japan Asia/Pacific 123720 1/26/80 Technical Data Unclassified Expired AS AQS-13E No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific 703026 7/11/97 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific 694217 2/6/97 Technical Data Unclassified 4 years AS AQS-18A Yes - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific 584759 12/20/93 Technical Data Unclassified 4 years TA SQR-19 No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific T071257 8/3/93 Temporary Hardware Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific T069585 5/3/93 Temporary Hardware Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific T068073 3/24/93 Temporary Hardware Expired AST AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific 551512 1/25/93 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific 547067 12/2/92 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific 543038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific 405452 5/2/89 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific 347285 9/30/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific 335191 6/15/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Korea Asia/Pacific 196264 6/9/83 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Kuwait Middle East 707480 5/15/97 Technical Data Unclassified Pending AS AQS-18A Yes - ------------------------------------------------------------------------------------------------------------------------------------ Kuwait Middle East 700687 4/8/97 Technical Data Unclassified 4 years ASLF HELRAS Yes - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Country Region License# Date Type Subtype Status Product System ELAC - ------------------------------------------------------------------------------------------------------------------------------------ Kuwait Middle East 659935 3/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Kuwait Middle East 641140 7/12/95 Technical Data Unclassified 4 years AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Kuwait Middle East 641140 7/12/95 Technical Data Unclassified 4 years AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Kuwait Middle East 568039 6/28/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Kuwait Middle East 568039 6/28/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Malaysia Asia/Pacific 682259 10/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Malaysia Asia/Pacific 579069 11/16/93 Technical Data Unclassified 4 years WPN LCAW No - ------------------------------------------------------------------------------------------------------------------------------------ Malaysia Asia/Pacific 543038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Malaysia Asia/Pacific 422198 8/31/89 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Malaysia Asia/Pacific 422198 8/31/89 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Malaysia Asia/Pacific 344233 9/24/87 Technical Data Unclassified Expired As AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Morocco N. Africa 707478 7/24/97 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Morocco N. Africa 543038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Morocco N. Africa 467183 9/27/90 Technical Data Unclassified Expired AS AQS-l8(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Nato HQ NATO 318505 1/12/87 Technical Data Unclassified Expired ASLF XDUCER No - ------------------------------------------------------------------------------------------------------------------------------------ Netherlands Europe 662765 3/21/96 Technical Data Unclassified 4 years ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Netherlands Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Netherlands Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Netherlands Europe 618756 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes - ------------------------------------------------------------------------------------------------------------------------------------ Netherlands Europe 568038 6/28/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Netherlands Europe 568038 6/28/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Netherlands Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Netherlands Europe 357187 11/24/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Netherlands Europe 165784 4/15/82 Technical Data Unclassified Expired AS AQS-13E No - ------------------------------------------------------------------------------------------------------------------------------------ Netherlands Europe C04056 10/5/77 Technical Data Classified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ New Zealand Asia/Pacific 568040 7/12/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ New Zealand Asia/Pacific 568040 7/12/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ New Zealand Asia/Pacific 559491 5/10/93 Technical Data Unclassified Expired AS AQS-18(V)lA No - ------------------------------------------------------------------------------------------------------------------------------------ Nigeria N. Africa 139824 6/3/81 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Norway Europe 707474 8/18/97 Technical Data Unclassified 4 years TA TBE Yes - ------------------------------------------------------------------------------------------------------------------------------------ Norway Europe 641314 9/20/95 Technical Data Unclassified 4 years SSLF LFATS No - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Country Region License# Date Type Subtype Status Product System ELAC - ------------------------------------------------------------------------------------------------------------------------------------ Norway Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Norway Europe 618752 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes - ------------------------------------------------------------------------------------------------------------------------------------ Norway Europe T074459 6/13/94 Temporary Hardware 4 years SSLF SADS No - ------------------------------------------------------------------------------------------------------------------------------------ Norway Europe 533052 7/16/92 Technical Data Unclassified Expired WPN LCAW No - ------------------------------------------------------------------------------------------------------------------------------------ Norway Europe 389416 8/26/88 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Norway Europe 389416 8/26/88 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Norway Europe 356157 1/19/88 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Norway Europe C04856 10/2/78 Technical Data Classified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Oman Middle East 622177 10/4/95 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Oman Middle East 597362 5/27/94 Technical Data Unclassified 4 years SSLF SADS No - ------------------------------------------------------------------------------------------------------------------------------------ Oman Middle East 537957 9/1/92 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Oman Middle East 537957 9/1/92 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Oman Middle East 537957 9/1/92 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Pakistan Asia/Pacific 418823 5/9/89 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Pakistan Asia/Pacific 418823 5/9/89 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Pakistan Asia/Pacific 405450 5/2/89 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------ Pakistan Asia/Pacific 380693 9/9/88 Technical Data Unclassified Expired AS AQS-18(V)3 No - ------------------------------------------------------------------------------------------------------------------------------------ Pakistan Asia/Pacific 344028 6/19/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Pakistan Asia/Pacific 227320 9/24/84 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Peru S. America 707481 8/21/97 Technical Data Unclassified 4 years AS AQS-18A Yes - ------------------------------------------------------------------------------------------------------------------------------------ Peru S. America 658908 3/21/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Peru S. America 662443 3/13/96 Technical Data Unclassified 4 years AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Peru S. America 405450 5/2/89 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------ Peru S. America 344027 9/24/87 Technical Data Unclassified Expired AS AQS-18(V)l No - ------------------------------------------------------------------------------------------------------------------------------------ Philippines Asia/Pacific 568037 7/12/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Philippines Asia/Pacific 568037 7/12/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Portugal Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Portugal Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Portugal Europe 618756 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes - ------------------------------------------------------------------------------------------------------------------------------------ Portugal Europe T072026 10/22/93 Temporary Hardware Expired AST AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Portugal Europe 568038 6/28/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Country Region License# Date Type Subtype Status Product System ELAC - ------------------------------------------------------------------------------------------------------------------------------------ Portugal Europe 568038 6/28/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Portugal Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Portugal Europe 530482 4/14/92 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Portugal Europe 530482 4/14/92 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Portugal Europe 405451 4/19/89 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------ Portugal Europe 367625 2/8/88 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Portugal Europe 143053 7/15/81 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Qatar Middle East 659935 3/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Saudi Arabia Middle East 707480 5/15/97 Technical Data Unclassified Pending AS AQS-18A Yes - ------------------------------------------------------------------------------------------------------------------------------------ Saudi Arabia Middle East 673977 8/27/96 Technical Data Unclassified 4 years ASLF HELRAS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Saudi Arabia Middle East 659935 3/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Saudi Arabia Middle East 572591 7/1/93 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Saudi Arabia Middle East 568039 6/29/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Saudi Arabia Middle East 568039 6/29/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Singapore Asia/Pacific 682259 10/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Singapore Asia/Pacific T077151 2/16/95 Temporary Hardware 4 years ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Singapore Asia/Pacific 616626 9/13/94 Technical Data Unclassified 4 years ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Singapore Asia/Pacific 579069 11/16/93 Technical Data Unclassified 4 years WPN LCAW No - ------------------------------------------------------------------------------------------------------------------------------------ Singapore Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Singapore Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Singapore Asia/Pacific T045433 11/9/87 Temporary Hardware Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Singapore Asia/Pacific 344233 9/24/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Singapore Asia/Pacific 227322 9/24/84 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Spain Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Spain Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Spain Europe 618756 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes - ------------------------------------------------------------------------------------------------------------------------------------ Spain Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)lA No - ------------------------------------------------------------------------------------------------------------------------------------ Spain Europe 450834 5/24/90 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Spain Europe 450834 5/24//90 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Spain Europe 436195 2/16/90 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------ Spain Europe 423778 9/18/89 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Country Region License# Date Type Subtype Status Product System ELAC - ------------------------------------------------------------------------------------------------------------------------------------ Spain Europe 394948 10/13/88 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Spain Europe 371131 3/11/88 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Spain Europe 357187 11/24/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Spain Europe 165784 4/15/82 Technical Data Unclassified Expired AS AQS-13E No - ------------------------------------------------------------------------------------------------------------------------------------ Sweden Europe T081685 8/27/96 Temporary Hardware 4 years ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Sweden Europe 654582 8/15/96 Technical Data Unclassified 4 years TA YS2000 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Sweden Europe 641313 9/20/95 Technical Data Unclassified 4 years SSLF LFATS No - ------------------------------------------------------------------------------------------------------------------------------------ Sweden Europe 394942 10/31/88 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Sweden Europe 394942 10/31/88 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Sweden Europe 356158 1/19/88 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Taiwan Asia/Pacific -- 7/30/97 Technical Data Unclassified Pending SSTD SLQ-25B Yes - ------------------------------------------------------------------------------------------------------------------------------------ Taiwan Asia/Pacific 679403 2/5/97 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Taiwan Asia/Pacific 640109 8/4/95 Technical Data Unclassified 4 years AS AQS-18(V)3 No - ------------------------------------------------------------------------------------------------------------------------------------ Taiwan Asia/Pacific T068073 3/24/93 Temporary Hardware Expired AST AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Taiwan Asia/Pacific 5443038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Taiwan Asia/Pacific 413670 3/31/89 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Taiwan Asia/Pacific 413670 3/31/89 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Taiwan Asia/Pacific 398329 11/14/88 Technical Data Unclassified Expired AS AQS-18(V)3 No - ------------------------------------------------------------------------------------------------------------------------------------ Taiwan Asia/Pacific 288454 3/11/86 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Taiwan Asia/Pacific 215206 3/8/84 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Taiwan Asia/Pacific 196265 6/21/83 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Taiwan Asia/Pacific 161678 7/14/82 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Thailand Asia/Pacific 694217 2/6/97 Technical Data Unclassified 4 years AS AQS-18A Yes - ------------------------------------------------------------------------------------------------------------------------------------ Thailand Asia/Pacific 682259 10/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Thailand Asia/Pacific 637851 5/26/95 Technical Data Unclassified 4 years SSLF SADS No - ------------------------------------------------------------------------------------------------------------------------------------ Thailand Asia/Pacific 543038 10/30/92 Technical Data Unclassified Expired AS QS-l8(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Thailand Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------ Thailand Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Thailand Asia/Pacific 344233 9/24/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ Thailand Asia/Pacific 227321 9/24/84 Technical Data Unclassified Expired AS AQS-18 No - ------------------------------------------------------------------------------------------------------------------------------------ Turkey Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Country Region License# Date Type Subtype Status Product System ELAC - ------------------------------------------------------------------------------------------------------------------------------------ Turkey Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ Turkey Europe 618752 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes - ------------------------------------------------------------------------------------------------------------------------------------ Turkey Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ Turkey Europe 456852 6/29/90 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Turkey Europe 456852 6/29/90 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Turkey Europe 405451 4/19/89 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------ Turkey Europe 344235 8/14/87 Technical Data Unclassified Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ UAE Middle East 647889 10/13/95 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ UAE Middle East 637849 8/4/95 Technical Data Unclassified 4 years SSLF SADS No - ------------------------------------------------------------------------------------------------------------------------------------ UAE Middle East 568039 6/28/93 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ UAE Middle East 568039 6/28/93 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ UAE Middle East 550980 1/21/93 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe C17445 10/25/95 Technical Data Classified 4 years TA TB-23 No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 617076 2/14/95 Technical Data Unclassified 4 years SSLF Sonar 2087 Yes - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 622537 12/23/94 Technical Data Unclassified 4 years TA TB-23 No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 607252 7/7/94 Technical Data Unclassified 4 years SSLF Sonar 2087 No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe T071358 8/16/93 Temporary Hardware Expired AS AQS-18(V) No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 559130 5/18/93 Technical Data Unclassified Expired TA B-T-P No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 533052 7/16/92 Technical Data Unclassified Expired WPN LCAW No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 468501 10/16/90 Technical Data Unclassified Expired FO FO Array No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 455675 6/1/90 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 450681 5/9/90 Technical Data Unclassified Expired WPN LCAW No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe T053927 8/16/89 Temporary Hardware Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe C012679 8/8/88 Technical Data Classified Expired SSTD SSTD No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe C012021 3/3/88 Technical Data Classified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 356157 1/19/88 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 350682 11/23/87 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 350696 10/27/87 Technical Data Unclassified Expired MWF AQS-17 No - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Country Region License# Date Type Subtype Status Product System ELAC - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 350696 10/27/87 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe Various 7/9/86 Temporary Hardware Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 207510 12/8/83 Technical Data Unclassified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe 165784 4/15/82 Technical Data Unclassified Expired AS AQS-13E No - ------------------------------------------------------------------------------------------------------------------------------------ UK Europe C04056 10/5/77 Technical Data Classified Expired ASLF HELRAS No - ------------------------------------------------------------------------------------------------------------------------------------ Venezuela S. America 707475 7/24/97 Technical Data Unclassified 4 years SSLF LFATS Yes - ------------------------------------------------------------------------------------------------------------------------------------ Venezuela S. America 450834 5/24/90 Technical Data Unclassified Expired MWF EMD No - ------------------------------------------------------------------------------------------------------------------------------------ Venezuela S. America 450834 5/24/90 Technical Data Unclassified Expired MWF LMHS No - ------------------------------------------------------------------------------------------------------------------------------------ Venezuela S. America 405450 5/2/89 Technical Data Unclassified Expired AS AST No - ------------------------------------------------------------------------------------------------------------------------------------ Venezuela S. America 344027 9/24/87 Technical Data Unclassified Expired AS AQS-18(V)1 No - ------------------------------------------------------------------------------------------------------------------------------------
ELAC - Export Licenses ----------------------
- --------------------------------------------------------------------------------------------------------- 4.1.2 EXPORT LICENSES Status: Sep. 30. 1997 - --------------------------------------------------------------------------------------------------------- No. Validity Consignee Goods Value DM - --------------------------------------------------------------------------------------------------------- DE/253 7046 27.12.97 Wilton-Fijenoord Sonar Spares 1.075.000,00 Schiedam/Netherlands for export Taiwan - --------------------------------------------------------------------------------------------------------- DE/264 8651 21.01.98 Defence Procurement Agency Underwater Telephone 443.200,00 Seoul, Rep. of Sudkorea UT 2000 - --------------------------------------------------------------------------------------------------------- DE/264 8654 11.02.98 Hollandse Signaalapparaten BV Sonar Cables 231.015,00 Hengelo/Netherlands for export Taiwan - --------------------------------------------------------------------------------------------------------- DE/253 7049 14.02.98 Merkaz Aspaka Spares for Echosounder 8.596,00 Tel Aviv/Israel VE 59 - --------------------------------------------------------------------------------------------------------- DE/264 8660 12.03.98 Chilean Navy Spares for Echosounder 144.679,81 Taleahauno/Chile VE 59 - --------------------------------------------------------------------------------------------------------- DE/264 8659 17.03.98 Naval Headquarters Spares for Echosounder 68.239,30 India VE 59 - --------------------------------------------------------------------------------------------------------- DE/253 7044 24.04.99 Marinha Repair of Dipping Sonar up to Almada/Portugal 1.500.000,00 - --------------------------------------------------------------------------------------------------------- DE/253 7021 29.10.98 Ministeria de Defensa Armada Repair of Dipping Sonar up to Spain 200.000,00 - --------------------------------------------------------------------------------------------------------- DE/253 7036 14.03 .99 AlliedSignal Aerospace Spares for Echosounder up to Canada VE 59 1.500.000,00 - ---------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------ DE/203 7050 07.07.99 Hellenic Navy Spares for Echosounder 107.344,00 Piraeus / Greece VE 59 - ------------------------------------------------------------------------------------ DE/264 8662 10.09.99 ORCA Instrumentation Diver Sonar DSE 1 909.829,40 Brest / France - ------------------------------------------------------------------------------------
ELAC - Vehicle Registrations - ---------------------------- ---------------------------------------------------------------------- Kfz-Kennzeichen Fabrer KSt. Nr. des Kfz-Briefes - ------------------------------------------------------------------------------------ 1 K1-DC409 EX 710 - ------------------------------------------------------------------------------------ 2 K1-AS554 EX 710 - ------------------------------------------------------------------------------------ 3 K1-AS908 EX 710 BB810307 - ------------------------------------------------------------------------------------ 4 K1-AS885 EX 710 BB805514 - ------------------------------------------------------------------------------------ 5 K1-DA605 Dr.L.Hogrefe 210 - ------------------------------------------------------------------------------------ 6 K1-AS 760 G.Jordt 210 BB849466 - ------------------------------------------------------------------------------------ 7 K1 - AS 403 W. Tietz 300 BB847854 - ------------------------------------------------------------------------------------ 8 K1-A5105 H.-J.Maschmann 400 BB911508 - ------------------------------------------------------------------------------------ 9 K1-AS121 EX 710 - ------------------------------------------------------------------------------------ Erprobungsschiff MS "Skjoldnaes" - ------------------------------------------------------------------------------------
ELAC - Business and Local Licenses - ---------------------------------- ELAC business and local licenses are listed on the following pages. ELAC - Vessel Registrations - --------------------------- ELAC vessel registrations are provided on the following pages. L.O.A. .......................... 11.600 F.G.O. .......................... .285 A.G.O. .......................... .450 L.B.G. .......................... 10,865 F.F. ............................ 1.450 F.A. ............................ 1.000 G.S.D.f. ........................ 0.310 G.S.D.a ......................... 0.115 F.S.F.D. ........................ 0.060 A.S.F.D. ........................ 0.02/2 G.D. ............................ y ............................... F.O.C. .......................... 0.249 A.O.C. .......................... 0 L ............................... 10.616 B ............................... 4.000 Q.B.D. .......................... 1.380 F.D. ............................ 1.600 t ............................... 0.045 F.M.D. .......................... 0.740 F.F.D. .......................... 0.980 D. .............................. 2.053 Draft excl. Centre board ___________________ Draft Centre boatd down ____________________ Mast height To height point of measurement 16.050 Rating Formula for Measured Rating L(square root)S M.R. - 0.15 --------------- + 0.2(L + (square root) S) (square root) of BD SAIL AREA FORETRIANGLE Sq.M. Height I 12.10 Base J. 6.10 Penalty Penalty 0.550 Meas'd 34.515 Allowance 0.945 Area I. cor. J cor. 5.705 MAINSAIL (MIZZEN of W'BONE KETCH) b. 7.400 p 14.650 Meas'd 54.205 h ..... d ...... g ........ Area TOPSAIL I ....... p-h ...... Meas'd ...... Area MIZZEN b miz .... p miz .... bs ... Meas'd ...... h miz.... d miz .... g miz .... ps ... Area WISHBONE KETCH ) BETWEEN MASTS SCHOONER ) Meas'd ps .............. bs ....... ps ...... Area ...... Meas'd ...... Other Areas .......................... Area Measured Sail Area (M.S.A.) .......Sum 88.720 A.R.A. 10.093 Rated Sail Area (S.) 70.893 (square root) S...................... 8.420 Mast height Penalty.................. Sum MEASURED RATING ...................... 8.485 Length of Bowsprit ................... 2.500 Penalities are carried on .......................... .................................................... SCANTLINGS All Dimensions are mm Main Frames of Oak Scantlings or ) ) 110.0 Thickness (if metal) sizes of angles ) Intermediate Frames of Oak Scantlings or ) ) 50.0 Reversed Frames, thickn. sizes of angles ) Reinforcement or addt. Scantlings or ) Frames or Stringers of ) ....... sizes of angles ) Dock Beams of Oak Scantlings or ) Thickness (if metal) ) 50.0 sizes of angles ) Topslides of Teak Thickness 0.045 M Deck of Teak Thickness 0.045 M W 6.156 R.D.B. 0.5. BK 0.225 STABILITY ALLOWANCE Scantling Component.............. 16.057 Shallow Draft Component.......... Iron Ballast Component........... Wt. Of Engine Component.......... 2.060 Sum 18.119 Light Alloy Mast Component....... S.T.A. 18.119 Difference If Positive, STA corrected....... 9.506% Schedule 4.19 - Labor Relations See also Schedules 4.11, 4.19(x). Ocean Systems - ------------- Collective Bargaining Agreements -------------------------------- Local Agreement between AlliedSignal Government Electronic Systems, Sylmar, Ca., and UAW Local No. 179, dated May 3, 1995 Master Agreement between Divisions of AlliedSignal, Inc. and UAW, dated May 3, 1995 Supplemental Agreement between AlliedSignal Government Electronic Systems, Sylmar, Ca. and UAW Local No. 179, dated March 4, 1995 Letters of Understanding No.s 1-35, covering Supplemental Agreement dated May 4, 1995 Written Personnel Policies -------------------------- Employee Handbook for Employees Covered Under the Master Bargaining Agreement Salaried Employee Handbook Retention Agreements -------------------- Retention Agreements with key management, V. Davisson, V .Riehl, A. Logan, D. Dunlop, J. Roscigno, L. DiRienzo, M. Charley, B. Smith, S. Erdinan), aggregate contingent payment of $199,400 for all eight managers. ELAC ELAC is covered by the "Tarifvertrag" of IG Metafl Schleswig-Holstein. This law covers all major employee issues such as salary, vacation, illness, etc. The "Tarifvertrag" is valid for a certain time period and is a topic of collective bargaining events between the Union and industrial representatives. Collective Bargaining Agreements -------------------------------- Gu1tige Betriebsvereinbarungen ------------------------------
Nr. Betreff Tag des Inkrafttretens 6/79 Interne Richtlinien fur innerbetriebliche Stellanausschreibungen 01.01.80 1/83 Storzeiten-Erfassungsgeiite an den CNC-Maschinen 01.03.83 1/89 Bildschirm-Arbeitsplatze 12.10.89 1/90 Vorholzeiten 01.04.90 3/90 Schichtzulagen 25.06.90
2/95 Zeiterfassungssystem "Zepem" 01.03.95 3/95 Arbeitszeitabsenkung 01.09.95 4/95 Neuregelung der Arbeitszeit ab 01.10.95 25.09.95 5/95 Einrichtung eines Arbeitszeitkontos fir die Verteilung der regelmaiBigen wochentlichen Arbeitszeit 01.10.95 7/95 Gleitende Arbeitszeit 01.11.95 8/95 Arbeitszeit der Auszubildenden 01.11.95 1/96 IUK-Nutzung BDE 15.07.96 2/96 Vorholzeiten und arbeitsfreie Tage 1997 07.11.96 3/96 Einrichtung einer flexiblen Arbeitszeitregelung 01.12.96 01/97 Betriebliches Vorschlagswesen 01.09.97 Written Personnel Policies -------------------------- Handbuch fur Mitarbeiter, dated May 26, 1997 Retention Agreements -------------------- Retention Agreements with key management (L. Hogrefe, W. Tietz, G. Jordt), aggregate contingent payment of $108,200 for all three managers (Purchaser responsibility). Labor Strikes, Slowdowns or Work Stoppages - ELAC ------------------------------------------------- No significant strikes have taken place in the past five years. Only two hours work stoppage in 1993-1995. Liabilities for Severance Pay - ELAC ------------------------------------ Lay off payment in 1997 DM 271.285,-- liability for 1998 DM 251,660,-- Layoffs - ELAC -------------- 1993 7 1994 15 1995 27 1996 14 1997 12 All layoffs beginning in 1994 were in accordance with the Honeywell ELAC Social Plan provided in the data room. Ocean Systems ------------- 1997 Incentive Compensation has not been paid in full. Prior years~ incentive compensation was deferred at employee's request. Payments for vested, non-exercised stock options remain outstanding. Schedule 4.19(x) - Labor Relations See also Schedule 4.19. Layoffs - ELAC -------------- 1993 7 1994 15 1995 27 1996 14 1997 12 All layoffs beginning in 1994 were in accordance with the Honeywell ELAC Social Plan provided in the data room. Ocean Systems ------------- A production facility in Vista, California was closed effective June, 1997. Involuntary RIF's occurred on the following dates: June 23, 1993 November 5, 1993 March 4, 1993 March 1, 1993 July 1995 August 1995 January 1, 1996 February 1996 July 1996 October 1996 Voluntary RIF's occurred on the following dates: September 1996 November 1996 June 1997 August 1997 See also Local Agreement and Master Agreement between AlliedSignal and the UAW, Article III, Paragraph 21 & 22, Representation of the UAW Master Agreement, provided in data room. Schedule 4.21(a) - Government Contracts Sellers are presently aware of an international sales matter, which Purchaser acknowledges having had the opportunity to discuss with Sellers' counsel (voluntary disclosure #329, relating to sales to the government of Greece and the United States). A dispute relating to the Maritime Coastal Defense Vessel involving the Canadian Navy has recently been settled. There is one contractual dispute related to a German Government contract. ELAC intends to solve the dispute prior to January 21, 1998. Contract Data: Customer: BWB, Koblenz, Germany Content: Development and delivery of 4 ea. Reflexducers Date of Contract: 8/7/1995 Value: DM 712.5 k Last Shipment: Dec. 1998 Current Status: An agreement with the customer was settled on 5th November, 1997, to close the contract end of December 1997 without shipment of transducers. ELAC agreed to pay back 438 k DM of the total payment of 712.5 k DM that was received end of 1996. BWB accepts the development results. Payback has to be transferred 30 days after written approval of BWB. ELAC confirmed agreement in writing 7th of November, BWB approval expected in the last week of December, 1997, payment to be released January 1998. See also Schedules 4.9 and 4.21(b). Schedule 4.21(b) - Government Contracts See also Schedule 4.21(a). Investigations or Audits - Ocean Systems - ---------------------------------------- AlliedSignal Government Compliance Assurance report dated October 27, 1997. Al1iedSignal Internal Audit Sell-Side Due Diligence Review of Ocean Systems in connection with the proposed sale of the Business (Summer 1997) (no written report prepared, except as reflected in Schcdule 4.4.). An Estimating System Audit was performed by DCAA in November 1997 and a draft report has been delivered to Ocean Systems. The Sylmar site is subject to DCAA audits and fact finding in connetion with all forward pricing rate proposals, contract proposals and contract awards with the US Government. The only unusual costs which have not yet been approved for forward pricing rate purposes for the Sylmar site include the Vista, California facility closure severance payments; the 1996 Sylmar Involuntary RIF severance payments and the 1994 earthquake expenses. ELAC Cost estimate audit of hourly pay rates and estimation rates executed by the Federal Authorities for Defense and Procurement (German Government) in Koblenz for the year 1997 Actual cost audit and audit of various cost plus contracts executed by the State Authorities for economy, Technology and Traffic of the State of Schleswig-Holstein for the years prior to 1995. Schedule 4.21(c) - Government Contracts See Schedules 4.21(a) and 4.21(b). Schedule 4.21(d) - Government Contracts See Schedules 4.21(a) and (b). Schedule 4.21(e) - Government Contracts See Schedules 4.21(a) and (b). Schedule 4.22 - Government Furnished Euuinment See following pages.
PROPERTY ADMINISTRATOR WORKSHEET DCRL SUP 1 TO DLAM 8135.1 DCRL FORM 098 PRIME CONTRACTS - ------------------------------------------------------------------------------------------------------------------------------------ Contractor CAGE: 60225 Allied Signal Ocean Systems As of Date: 03/03/97 Page :1 - ------------------------------------------------------------------------------------------------------------------------------------ Estimated Total Value Special Other Agency Indust Material Control Number Completion Government Special Test Plant Peculiar Plant Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks - ------------------------------------------------------------------------------------------------------------------------------------ N00019-97-C-008 821 LI 550 250 21 SDC, AWM-24B ---------------------------------------------------------------------------------------------------- FP $967,601 $ 148373 684284 134944 - ------------------------------------------------------------------------------------------------------------------------------------ N00024-84-C-6074 352 LI 305 47 TB-23 ---------------------------------------------------------------------------------------------------- FP $216,167 $ 65269 150898 - ------------------------------------------------------------------------------------------------------------------------------------ N00024-85-C-6236 207 LI 21 186 TB-23,BQ ASA ---------------------------------------------------------------------------------------------------- FP $920,305 $ 39323 880982 - ------------------------------------------------------------------------------------------------------------------------------------ N00024-89-G-6098 2 LI 2 TARC ---------------------------------------------------------------------------------------------------- FP $3,775 $ 3775 - ------------------------------------------------------------------------------------------------------------------------------------ N00024-89-C-6066 48 LI 46 2 ADC MK3 ---------------------------------------------------------------------------------------------------- FP $43,551 $ 41431 2120 - ------------------------------------------------------------------------------------------------------------------------------------ N00383-88-G-K301 446 LI 307 139 Q13B ---------------------------------------------------------------------------------------------------- FP $ 84488 275242 - ------------------------------------------------------------------------------------------------------------------------------------ N00024-94-C-6152 LI ADC MK3 ---------------------------------------------------------------------------------------------------- FP $ - ------------------------------------------------------------------------------------------------------------------------------------ Total LI 1229 626 21 0 0 0 0 ---------------------------------------------------------------------------------------------------- Total $ $378,884 1,997,301 134,944 0 0 0 0 - ------------------------------------------------------------------------------------------------------------------------------------ GRAND TOTAL LINE ITEMS 1876 GRAND TOTAL $$ 2,511,129 - ------------------------------------------------------------------------------------------------------------------------------------
PROPERTY ADMINISTRATOR WORKSHEET DCRL SUP 1 TO DLAM 8135.1 DCRL FORM 098 PRIME CONTRACTS - ------------------------------------------------------------------------------------------------------------------------------------ Contractor CAGE: 60225 Allied Signal Ocean Systems As of Date: 03/03/97 Page :2 - ------------------------------------------------------------------------------------------------------------------------------------ Estimated Total Value Special Other Agency Indust Material Control Number Completion Government Special Test Plant Peculiar Plant Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks - ------------------------------------------------------------------------------------------------------------------------------------ N00019-92-G-0195 30 LI 30 Q13-F ---------------------------------------------------------------------------------------------------- FP $24,672 $ 24672 - ------------------------------------------------------------------------------------------------------------------------------------ N00024-C-6501 34 LI 34 Q13-F R/M ---------------------------------------------------------------------------------------------------- FP $13,227 $ 13227 - ------------------------------------------------------------------------------------------------------------------------------------ LI ---------------------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI ---------------------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI ---------------------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI ---------------------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI ---------------------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ Total LI 64 0 0 0 0 0 0 ---------------------------------------------------------------------------------------------------- Total $ 37,899 0 0 0 0 0 0 - ------------------------------------------------------------------------------------------------------------------------------------ GRAND TOTAL LINE ITEMS 64 GRAND TOTAL $$ 37,899 - ------------------------------------------------------------------------------------------------------------------------------------
PROPERTY ADMINISTRATOR WORKSHEET DCRL SUP 1 TO DLAM 8135.1 DCRL FORM 098 PRIME CONTRACTS - ------------------------------------------------------------------------------------------------------------------------------------ Contractor CAGE: 60225 Allied Signal Ocean Systems As of Date: 03/03/97 Page :3 - ------------------------------------------------------------------------------------------------------------------------------------ Estimated Total Value Special Other Agency Indust Material Control Number Completion Government Special Test Plant Peculiar Plant Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks - ------------------------------------------------------------------------------------------------------------------------------------ LI ---------------------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI ---------------------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI ---------------------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI ---------------------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI ---------------------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI ---------------------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI ---------------------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ Total LI 0 0 0 0 0 0 0 ---------------------------------------------------------------------------------------------------- Total $ 0 0 0 0 0 0 0 - ------------------------------------------------------------------------------------------------------------------------------------ GRAND TOTAL LINE ITEMS 0 GRAND TOTAL $$ 0 - ------------------------------------------------------------------------------------------------------------------------------------
PROPERTY ADMINISTRATOR WORKSHEET DCRL SUP 1 TO DLAM 8135.1 DCRL FORM 098 PRIME CONTRACTS - ------------------------------------------------------------------------------------------------------------------------------------ Contractor CAGE: 60225 Allied Signal Ocean Systems As of Date: 03/03/97 Page :4 - ------------------------------------------------------------------------------------------------------------------------------------ Estimated Total Value Special Other Agency Indust Material Control Number Completion Government Special Test Plant Peculiar Plant Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ Total LI 1293 626 21 0 0 0 0 ---------------------------------------------------------------------------------------------------- Total $ 416783 1997301 134944 0 0 0 0 - ------------------------------------------------------------------------------------------------------------------------------------ GRAND TOTAL LINE ITEMS 1940 GRAND TOTAL $$ 2,549,028 - ------------------------------------------------------------------------------------------------------------------------------------
PROPERTY ADMINISTRATOR WORKSHEET DCRL SUP 1 TO DLAM 8135.1 DCRL FORM 098 PRIME CONTRACTS - ------------------------------------------------------------------------------------------------------------------------------------ Contractor CAGE: 60225 Allied Signal Ocean Systems As of Date: 03/03/97 Page :4 - ------------------------------------------------------------------------------------------------------------------------------------ Estimated Total Value Special Other Agency Indust Material Control Number Completion Government Special Test Plant Peculiar Plant Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ Total LI 1357 626 21 0 0 0 0 ---------------------------------------------------------------------------------------------------- Total $ 454682 1997301 134944 0 0 0 0 - ------------------------------------------------------------------------------------------------------------------------------------ GRAND TOTAL LINE ITEMS 2004 GRAND TOTAL $$ 2,586,927 - ------------------------------------------------------------------------------------------------------------------------------------
PROPERTY ADMINISTRATOR WORKSHEET DCRL SUP 1 TO DLAM 8135.1 DCRL FORM 098 PRIME CONTRACTS - ------------------------------------------------------------------------------------------------------------------------------------ Contractor CAGE: 60225 Allied Signal Ocean Systems As of Date: 03/03/97 Page :4 - ------------------------------------------------------------------------------------------------------------------------------------ Estimated Total Value Special Other Agency Indust Material Control Number Completion Government Special Test Plant Peculiar Plant Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ LI --------------------------------------------------------------------------------------- $ - ------------------------------------------------------------------------------------------------------------------------------------ Total LI 2650 1252 42 0 0 0 0 ---------------------------------------------------------------------------------------------------- Total $ 871465 3994602 269888 0 0 0 0 - ------------------------------------------------------------------------------------------------------------------------------------ GRAND TOTAL LINE ITEMS 3944 GRAND TOTAL $$ 5,135,955 - ------------------------------------------------------------------------------------------------------------------------------------
4-JUN-97 Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Tool Number Location/Vendor Loc Date PM Date Cal - --------------- -------------------- ----------- ----------- ----- T218510 F2A 03/07/97 07/12/96 N T218511 F2A 03/10/97 07/12/96 N T218512 F3F 02/17/92 07/15/96 N T218515 F3A 03/10/97 07/15/96 N T218516 F2A 03/10/97 07/12/96 N T218518 F2A 03/10/97 07/12/96 N T218520 F2F 03/10/970 07/15/96 N T2186527-1 C6C REPR 06/29/93 07/09/96 N T218527-2 C6C 05/31/96 05/31/96 N T218527-3 C6C 05/31/96 05/31/96 N T218527-4 C6C REPR 06/29/93 07/09/96 N T218527-5 CICON ENG 03/25/97 06/11/96 N T218527-6 C6C 12/18/95 07/09/96 N T218527-7 C6C REPR 07/09/96 07/09/96 N T2186741 C5B 03/09/92 07/01/96 N T2186742 C5B 03/09/92 07/01/96 N T218675A/B C7E5 02/24/92 07/10/96 N T218676 C7E4 02/24/92 07/10/96 N T218677 C7E9 02/26/92 07/10/96 N Page: TOOL MASTER Customer: USN Tool Description Part Number Qty Unit Cost Rework Tot. Cost ------------------------------ ----------------- ----- ------------ ----------- -------------- CABLE BOARD P7 3326505-402 2 411 822 CABLE BOARD P8 3326505-403 2 418 826 CABLE BOARD J1 3326501-401 1 729 729 3326505-401 CABLE BOARD J5 3326501-404 2 118 236 CABLE BOARD J5 3326501-405 2 155 310 CABLE BOARD J7 3326501-407 2 422 844 CABLE BOARD, A37 PWR ASSY 3326501-409 2 244 488 FIXTURE, ENCLOSURE ASSY 3013475-1-801 1 987 987 3326501-801 FIXTURE, ENCOLSURE ASSY 3326501-801 1 987 987 8013475-1-801 FIXTURE, ENCOLSURE ASSY 8013475-1-801 1 987 987 3326501-801 FIXTURE, ENCOLSURE ASSY 801375-1-801 1 987 987 3326501-801 FIXTURE, ENCOLSURE ASSY 8013475-1-001 1 987 987 3326501-801 FIXTURE, ENCOLSURE ASSY 8013475-1-801 1 987 987 3326501-801 FIXTURE, ENCOLSURE ASSY 3326501-801 1 987 987 8013475-1-801 TEMPLATE 3322114-1 1 52 52 TEMPLATE 3322114-2 1 52 52 TEMPLATE 3320165-1 1 379 379 ROUTER PLATE 3320165-1 1 240 240 TEMPLATE 3320165-2 1 135 135 T218678 C7E7 02/26/92 07/10/96 N ROUTER PLATE 3320165-2 1 20 20 T218679 C6E22 02/24/92 07/09/96 N PANTO MASTER 3320162 1 117 117 T218680 C6E22 02/24/92 07/09/96 N PANTO MASTER 3320162 1 435 435 T218681 C6E22 02/24/92 07/09/96 N PANTO MASTER 3320162 1 328 328 T218682 C5B 03/09/92 07/01/96 N TEMPLATE 3320184-5 1 69 69 3320184-6 T218683 C6E7 02/21/92 07/09/96 N TEMPLATE 3320184-1 1 547 647 T218684 C5B 03/09/92 07/01/96 N DRILL TEMPLATE 3320142 1 326 326 T218685 C6E7 02/21/92 07/09/96 N DRILL TEMPLATE 3310793 1 1084 1064 T218686 C5B 03/09/92 07/01/96 N DRILL TEMPLATE 3310794 1 739 739 T218687-A F3F 02/10/92 07/15/96 N CABLE BOARD 3320250 1 707 707 T218687-B F3F 02/10/92 07/15/96 N CABLE BOARD 3320250 1 707 707 T218687-C F2B 02/10/92 07/12/96 N CABLE BOARD, XFMR REV C 3320250-403 1 707 707 T218688 C5B 03/09/92 07/01/96 N DRILL PATTERN 3322018 1 1025 1025 T218689 C8E14 02/24/92 07/09/96 N DRILL PATTERN 3320164-1 1 532 532 T218690 C8E15 02/24/92 07/09/96 N ROUTER BLOCK 3320164-1 1 278 276 T218691 C8E13 02/24/92 07/09/96 N ROUTER BLOCK 3320184-1 1 258 258 T218692 C8E8 02/21/92 07/09/96 N ROUTER BLOCK 3320184-2 1 191 191 T218693 C8E8 02/21/92 07/09/96 N ROUTER BLOCK 3320184-3 1 103 103 T218694 C8E18 02/24/92 07/09/96 N ROUTER BLOCK 3320184-5 1 285 255 3320184-6 T218695 C8E10 02/24/92 07/09/96 N ROUTER BLOCK (2 PC SET) 3322015 1 136 136 T218696 C7E9 02/24/92 07/10/96 N DRILL TEMP 3320248 1 295 295 4-JUN-97 Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number - ----------- ---------------- ---------- ----------- ----- ----------------- ----------------- 218697 C7E9 02/24/92 07/10/96 N DRILL TEMP 3320249 218698 C5B 03/09/92 07/01/96 N SAWADRILL TEMP 3320259 218699 C5B 03/09/92 07/01/96 N DRILL TEMP 3320259 218700 C5B 03/10/92 07/01/96 N DRILL TEMP 3320257 218701 C5B 03/10/92 07/01/96 N DRILL TEMP 3320255 218702 C7E3 02/10/92 07/10/96 N DRILL TEMP 3322033 218703 C6E12 02/24/92 07/09/96 N WALES TEMP 3320254-2 218704 C6E10 02/24/92 07/09/96 N WALES TEMP 3320254-4 218705 C6E16 02/24/92 07/09/96 N ROUTER PLATE 3320254-3 218706 C6E16 02/24/92 07/09/96 N HOLE TEMP 3320254-2 218707 C7F 07/10/96 07/10/96 N DRILL TEMP 3322039-1 218708 C4A 02/10/92 06/27/96 N NCL TAPE 3320254-1 218709 C8E16 02/24/92 07/09/96 N TEMPLATE 3320164-1 218710 C5B 03/10/92 07/01/96 N TEMPLATE 3320164-2 218711 C4A 02/18/92 06/27/96 N NCL TAPE 3322039-1 218712 C5B 03/10/92 07/01/96 N TEMPLATE 3322015 218713 C6E23 02/24/92 07/09/96 N ENGRAVE PLATE 3320254-1 218714 C5B 03/10/92 07/01/96 N TEMPLATE 3320164-3 218747 C5B 03/10/92 07/01/96 N WALES TEMP 3310763 218751 C6E5 05/17/93 07/09/96 N TEMPLATE 3320197-1 3320197-2 02/24/92 ROUTER PLATE 3320197-2 3320197-1 218753 C5B 03/10/92 07/01/96 N PMF TEMPLATE 3322093 218757 C7E10 02/26/92 07/10/96 N TEMPLATE 3320166-1 218758 C5B 03/10/92 07/01/96 N TEMPLATE 3320166-2 218759 C5B 03/10/92 07/01/96 N TEMPLATE 3320168 Page: TOOL MASTER Customer: USN Qty Unit Cost Rework Tot. Cost ----- ------------- ----------- --------------- 1 244 244 1 87 87 1 122 122 1 70 70 1 267 267 1 848 848 1 331 331 1 405 405 1 355 355 1 1190 1190 1 591 591 1 1590 1590 1 1029 1029 1 103 105 1 709 709 1 80 66 1 103 103 1 103 103 1 202 202 1 256 258 1 167 167 1 ?? ?? 1 540 540 1 85 85 1 53 53 1 128 128 218760 C5B 03/10/92 07/01/96 N TEMPLATE 3320171 1 49 49 218772A/B C6E17 02/24/92 07/09/96 N TEMPLATE 3320165-4 1 192 192 3320165-3 218773 C5B 03/10/92 07/01/96 N TEMPLATE 3320165-5 1 179 179 218774 C5B 03/10/92 07/01/96 N TEMPLATE 3320165-6 1 63 63 218775 C5B 03/10/92 07/01/96 N TEMPLATE 3320164-2 1 60 60 218776 C5B 03/10/92 07/01/96 N TEMPLATE 3320164-4 1 149 149 218777 C5B 03/10/92 07/01/96 N TEMPLATE 33204014 1 66 66 218778 C5B 03/10/92 07/01/96 N TEMPLATE 3320193 1 50 50 218779 C5B 03/10/92 07/01/96 N TEMPLATE 3322037 1 119 119 218780 C5B 03/10/92 07/01/96 N TEMPLATE 3310766 1 75 75 218781 MECH-TRONICS 02/11/81 04/27/93 N CHASSIS TOOLING 3320502 1 6000 6000 218783 C6E7 02/21/92 07/09/96 N DRILL TEMP 3320242 1 75 75 218784 C6E7 02/21/92 07/09/6 N ROUTE PLATE 3320242 1 155 155 218791 C7E10 02/26/92 07/10/96 N TEMPLATE 3320167 1 99 99 218796 C5B 07/22/94 07/01/96 N ROUTER BLOCK 3310776 1 99 99 218797 C5B 03/10/92 07/01/96 N TEMPLATE 3320188 1 86 86 218799 C5B 03/10/92 07/01/96 N TEMPLATE 3320172-1 1 135 135 218800 C5B 03/11/92 07/01/96 N TEMPLATE 3320173 1 102 102 218801 F3C 02/11/92 07/15/96 N CABLE BOARD 3322050 1 511 511 218809 F2B 02/10/92 07/12/96 N CABLE BOARD, W10 3822061 1 1173 1173 218810 F2B 02/10/92 07/12/96 N CABLE BOARD, W13 3322062 1 109 109 218814 C5B 03/11/92 07/01/96 N TEMPLATE 3322039-2 1 75 75 4-JUN-97 Page: TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description - -------------- ------------------ ----------- ----------- ----- --------------------------- T218815 C6E15 02/24/92 07/09/96 N TEMPLATE T218818 C5B 03/11/92 07/01/96 N TEMPLATE T218819 C5B 03/11/92 07/01/96 N TEMPLATE T218820 C5B 01/03/94 07/01/96 N DRILL TEMPLATE T218821 C6E14 02/24/92 07/09/96 N ROUTER PLATE T218822 C5B 03/11/92 07/01/96 N DRILL TEMPLATE T218823 C5B 03/11/92 07/01/96 N DRILL & ROUTER FIXTURE T218824 C5B 03/11/92 07/01/96 N DRILL TEMPLATE T218825 C5B 03/11/92 07/01/96 N DRILL TEMPLATE T218826 C5B 05/25/94 07/01/96 N DRILL & ROUTER FIXTURE T218827 C5B 03/11/92 07/01/96 N DRILL & ROUTER FIXTURE T218828 C5B 03/01/93 07/01/96 N DRILL TEMPLATE T218829 C5B 10/29/93 07/01/96 N PUNCH/DIE FIXTURE T218831 C5B 03/11/92 07/01/96 N TEMPLATE T218833 C5B 03/11/92 07/01/96 N DRILL TEMPLATE T218839 C6E6 05/25/94 07/09/96 N TEMPLATE T218840 C5B 08/30/92 07/01/96 N TEMPLATE T218841 C5B 10/08/92 07/01/96 N TEMPLATE T218842 C4A 10/25/92 06/27/96 N STRIPPIT TAPE, W115-1, -2 T218843 C5B 03/11/92 07/01/96 N TEMPLATE T218844 ?? 04/14/93 07/01/96 N TEMPLATE T218845 C5B 01/28/93 07/01/96 N TEMPLATE T218847 C5B 03/11/92 07/01/96 N DRILL TEMPLATE T218848 C5B 03/01/93 07/01/96 N FORM DIE T2188531 TOWSON 04/26/94 09/13/96 N SOLDER FIXTURE T218854 F2B 02/10/92 07/12/96 N HARNESS BOARD, W52 Part Number Qty Unit Cost Rework Tot. Cost -------------- ----- ------------- ----------- --------------- 332239-3 1 75 75 3320254-3 1 75 75 3320254-9 1 75 75 3316024-2 1 171 171 3316024-1 3316023 1 195 195 3316023 1 142 142 3316022 1 182 182 3315902 1 145 145 3315959 1 222 222 3315913 1 245 245 3315929 1 486 436 3316036 1 92 92 3315896 1 519 519 3320184-3 1 0 0 3316022 1 169 169 3326468 1 192 192 3326506-3 1 112 112 3326506-2 1 69 69 3326506-1 1 1356 1356 3325184-4 1 0 0 3326471 1 23 23 3318136 1 129 129 3318133 1 155 155 3318132 1 641 641 20 155 3100 3322052 1 112 112 T218856 F3F 02/17/92 07/15/96 N HARNESS BRD 3320170-405 1 2741 18 2759 T218857 F3C 02/11/92 07/15/96 N HARNESS BRD 3320160-401 1 1295 1295 T218858 F2B 02/10/92 07/12/96 N HARNESS BRD 3320160-402 1 714 714 T218859 F3F 02/18/92 07/15/96 N HARNESS BRD, J18 3320160-404 1 445 446 T218860 F3C 02/11/92 07/15/96 N HARNESS BRD, P16A, 6B, 7A, 7B 3320160-405 1 522 522 T218861 F3C 02/11/92 07/15/96 N HARNESS BROAD 3320170-402 1 4315 4315 T218862 F2B 02/10/92 07/12/96 N HARNESS BRD 3320160-405 1 657 657 T218863 F2B 02/10/92 07/12/96 N HARNESS BRD, K1 (1/8) 3320160-407 1 848 483 T218865 9855A 09/04/85 08/08/95 N HARNESS BRD, K1 (7/12) 3326468 1 1031 1031 T218870 F3F 02/17/92 07/18/95 N LOUVER DIE 3322056 1 1737 1737 T218871 F2C 02/11/92 07/12/96 N HARNESS BOARD 3322557 1 224 224 T218872 F2C 02/11/92 07/12/96 N HARNESS BOARD 3322559 1 221 221 T218873 F3C 02/11/92 07/15/96 N HARNESS BOARD 3322083-407 1 1455 1455 T218874 F3C 02/11/92 07/15/95 N HARNESS BOARD 3322053 1 545 545 T218875 F2C 02/11/92 07/12/96 N HARNESS BOARD 3322054 1 450 450 T218876 F2C 02/11/92 07/12/96 N HARNESS BOARD 3322055 1 109 109 T218877 C4B 03/11/92 06/28/96 N HOLDING FIXT 3320169 1 842 842 T218878 C7E12 02/26/92 07/10/96 N TEMPLATE 3322089-6 1 150 150 T218880 C6E11 08/03/94 07/09/96 N TEMPLATE B/P REV A 3326488-1 1 238 238 T218881 C6E15 08/03/94 07/09/96 N ROUTING FIXTURE B/P REY A 3326488-1 1 248 248 T218882 C6E11 08/21/94 07/09/96 N TEMPLATE B/P REV A 3326484-1 1 152 152 T218883 C6E19 08/07/94 07/09/96 N TEMPLATE B/P REV A 3326484-2 1 73 73 T218884 C6E11 08/19/94 07/09/96 N ROUTING FIXUTURE B/P REV A 3326488-2 1 337 337 4-JUN-97 TOOL MASTER Page: Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- 218885 C6E11 08/03/94 07/09/96 N TEMPLATE B/P REV A 33256488-2 1 178 178 218887 C6E9 10/17/94 07/09/96 N SCREEN, METAL MARKING 3326500 1 170 170 3326505 218890-1 C4A OOS 06/07/94 06/27/96 Y GAGE, HEIGHT, MFG REV A 3320400 1 22 22 218890-2 TOWSON 05/05/94 05/05/94 Y GAGE, HEIGHT, MFG REV A 3326400 1 22 22 218891-1 TOWSON 05/05/94 05/05/94 Y GAGE, HEIGHT, INSP REV A 3326400 1 22 22 218891-2 C4A OOS 05/20/94 06/27/96 Y GAGE, HEIGHT , INSP REV A 3326400 1 22 22 218892-1 C4A OOS 06/26/94 06/27/96 Y HEIGHT GAGE 3326455 1 169 169 218892-2 C4A OOS 03/17/95 06/27/96 Y HEIGHT GAGE 3326455 1 169 169 218893-1 C4A OOS 06/06/94 06/27/96 Y HEIGHT GAGE 3326455 1 104 104 218893-2 C4A OOS 08/06/94 06/27/96 Y HEIGHT GAGE 3326455 1 104 104 218894-1 C4A OOS 06/06/94 06/27/96 Y HEIGHT GAGE 3326475 1 153 153 218894-2 C4A OOS 08/06/94 06/27/96 Y HEIGHT GAGE 3326475 1 153 153 218895-1 C4A OOS 06/06/94 06/27/96 Y INSP HEIGHT GAGE REV A 3326475 1 228 228 218895-2 C4A OOS 06/06/94 06/27/96 Y INSP HEIGHT GAGE REV A 3326475 1 228 228 218896-1 C4A OOS 11/15/94 06/27/96 Y HEIGHT GAGE 3326465 1 169 169 218896-2 C4A OOS 12/05/94 06/27/96 Y HEIGHT GAGE 3326465 1 169 169 218897-1 C4A OOS 06/06/94 06/27/96 Y HEIGHT GAGE 1 316 316 218897-2 C4A OOS 06/06/94 06/27/96 Y HEIGHT GAGE 3326465 1 316 316 218898 C5B 10/19/93 07/01/96 N TEMPLATE 3326483-1 1 116 116 218899 C5B 06/07/94 07/01/96 N TEMPLATE 3326483-2 1 166 165 218990-1 D6F POS ?? 08/23/96 Y GAGE, LEAD, PROTUSION ?? 1 76 76 218992-2 D6F POS ?? 08/23/96 Y GAGE, LEAD, PROTUSION 3326500 1 76 76 218904 C5B 03/11/92 07/01/96 N LEAD CUT PLATE 3326500 1 654 654 218905 C5B 03/11/92 07/01/96 N LEAD CUT PLATE 1 646 646 218909-1 D6F POS 02/14/97 07/15/96 N PLUGGING FIXT, P7 & P8 3326505-302 1 117 117 218909-2 D6F POS 02/14/97 07/15/96 N PLUGGING, FIXT, P7 & P8 3326505-302 1 117 117 218910 F2C 02/11/92 07/12/96 N HARNESS BOARD 3320170-401 1 30 36 218919 F2C 02/11/92 07/12/96 N CABLE BOARD 3322063-405 1 1007 1007 218920 C5B 10/06/92 07/01/96 N WEALES TEMPLATE 3326498-1 1 128 128 218921 D6F 08/23/95 07/15/96 N COMP PREP BRD, R29 & R30 3310776-601 1 109 109 3310775-1 1 218929 TOWSON 04/26/94 09/13/96 N COMP PREP FIXTURE REV A 1 255 255 219028 C6A 03/03/92 07/08/96 N DRILL FIXT 3325371-3 1 215 215 219029 C6A 03/03/92 07/08/96 N ROUTE FIXT 3325371-3 1 215 215 219030 C6A 03/03/92 07/08/96 N DRILL FIXT 3325372-4 1 215 215 219031 C6A 03/03/92 07/08/96 N ROUTE FIXT 3325372-4 1 215 215 219032 C6A 03/03/92 07/08/96 N ROUTE FIXT 3325370-2 1 215 215 219033 C6A 03/03/92 07/08/96 N DRILL FIXT 3325370-2 1 215 215 219036-1 9852B 06/17/96 06/17/96 N ESP HARNESS FIXTURE 3325501-001 1 1076 1076 219038-2 C4D 12/18/95 06/28/96 N ESP HARNESS FIXTURE 3325501-001 1 1076 1076 219051 D6F POS 02/14/97 07/10/96 N SOLDER FIXT 2 245 18 4320 219052 9852B 02/24/95 09/20/96 N NUT DRIVER 3315005 1 4 4 219117-1 C4A OOS 12/04/92 06/27/96 Y QA HEIGHT GAGE 3326515 1 171 171 219117-2 C4A OOS 12/04/92 06/27/96 Y QA HEIGHT GAGE 3326515 1 171 171 219135-3 9852B 03/17/96 06/17/96 N ALIGN TOOL, A33 INTERCONN 3326501 1 148 148 219135-4 9852B 06/17/96 06/17/96 N ALIGN TOOL, A33 INTERCONN 3326501 1 148 148 219135-5 9852B 06/17/96 06/17/96 N ALIGN TOOL, A33 INTERCONN 3326501 1 148 148 219135-6 9852B 06/17/96 06/17/96 N ALIGN TOOL, A33 INTERCONN 3326501 1 148 148 219136-3 9852B 06/18/96 06/18/96 N ALIGN TOOL, A31, 32 3326501 1 144 144 INTERCONN 4-JUN-97 Page: TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T219136-4 9852B 06/18/96 06/18/96 N ALIGN TOOL, A31, 32 INTERCN 3326501 1 144 144 T219136-5 9852B 06/18/96 06/18/96 N ALIGN TOOL, A31, 32 INTERCN 3326501 1 144 144 T219136-6 9852B 06/18/96 06/18/96 N ALIGN TOOL, A31, 32 INTERCN 3326501 1 144 144 T219153-1 9852B 06/12/96 06/12/96 N ESP WIRING FIXT FRT PNL 1 179 179 T219153-2 9852B 06/12/96 06/12/96 N ESP WIRING FIXT FRT PNL 1 179 179 T219153-3 9852B 07/15/96 06/14/96 N ESP WIRING FIXT FRT PNL 1 179 179 T219189 F3F 02/18/96 07/15/96 N PREP BOARD, REV B 3326501-804 1 167 167 T219471 C6A 03/03/96 07/08/96 N WALES TEMP 3312344-1 1 127 127 T219472 C6A 03/03/92 07/08/96 N WALES TEMP 3312339-1 1 127 127 T219473 C7E13 03/02/92 07/10/96 N WALES TEMP 3312346-1 1 475 475 T219474 C6A 03/04/92 07/08/96 N DRILL TEMP 3312346-2 1 212 212 T219475 C7E13 03/02/92 07/10/96 N WALES TEMP 3312346-1 1 410 96 556 T219476 C6E24 02/24/92 07/09/96 N WALES TEMP 3312346-2 1 171 171 T219477 C6A 03/03/92 07/08/96 N WALES TEMP 3312346-3 1 65 85 T219478 C6A 03/03/92 07/08/96 N WALES TEMP BRKT 3312346-4 1 86 86 T219479 C6A 03/03/92 07/08/96 N DRILL FIXT 3312346-5 1 277 277 T219480 C6E24 02/24/92 07/09/96 N WALES TEMP 3312344-1 1 487 487 T219481 C6A 03/04/92 07/08/96 N WALES TEMP 3312344-2 1 127 127 T219482 C6A 03/03/92 07/08/96 N WALES TEMP 3312344-3 1 88 88 T219483 C6A 03/03/92 07/08/96 N WALES TEMP 3312344-4 1 106 106 T219484 C6A 03/04/92 07/08/96 N DRILL FIXT 3312344-1 1 44 44 T220182A ?? 08/13/92 07/01/96 N DRILL TEMP R/S ITEM 1 8014431 1 265 265 T220182B ?? 08/13/92 07/01/96 N DRILL TEMP R/S ITEM 1 8014431 1 274 246 414 T220182C C4E 08/13/96 07/01/96 N DRILL TEMP ITME 3 8014431 1 239 239 T220182D C4E 08/13/96 07/01/96 N TEMP BKSD CTCUT ITEM 1 8014431 1 265 265 T220182E C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 5 8014431 1 304 304 T220182F C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 6 8014431 1 183 183 T220182G C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 2 8014431 1 161 41 202 T220182H C4E 08/13/96 07/01/96 N TEMP CUTOUT ITEM 2 8014431 1 187 187 T220182J C4E 08/13/96 07/01/96 N DRILL TEMP ITEMS 9 & 10 8014431 1 204 189 393 T220182K C4E 08/13/96 07/01/96 N DRILL TEMP ITEMS 2 8014431 1 135 54 199 T220182L C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 3 & 7 8014431 1 174 174 T220182M C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 3 & 8 8014431 1 174 174 T220182N C4E 08/13/96 07/01/96 N DRILL TEMP R /S ITEM 1 8014431 1 134 134 T220182P C4E 08/13/96 07/01/96 N DRILL TEMPLATE 8014431 1 136 136 T220182R C4E 08/13/96 07/01/96 N DRILL TEMPLATE 8014431 1 262 262 T220182S C4E 08/13/96 07/01/96 N DRILL TEMPLATE 8014431 1 262 262 T220182T C4E 08/13/96 07/01/96 N WALES TEMP 8014431-13 1 234 234 T220182U C4E 08/13/96 07/01/96 N DRILL TEMPLATE 8014431 1 234 234 T220183A C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 1 8016664 1 483 483 T220183B C4E 08/13/96 07/01/96 N DRILL TEMP, ITEM 1 8016664 1 186 136 T220183C C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 1 8016664 1 70 70 T220183E C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 3 8016664 1 392 392 T220183F C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 2 8016664 1 225 184 330 T220183G C4E 08/13/96 07/01/96 N DRILL TEMPLATE 8016664-6 1 320 320 T220183H C4E 08/13/96 07/01/96 N DRILL TEMPLATE 8016664-A6 1 207 207 T220184A C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 4 8016683 1 395 395 T220184B C4E 08/13/96 07/01/96 N DRILL TEMP L/S ITEM 1 8016683 1 157 157 T220184C C4E 08/13/96 07/01/96 N DRILL TEMP L/S ITEM 1 8016683 1 448 448 T220184D C4E 08/13/96 07/01/96 N DRILL TEMP L/S ITEM 1 8016683 1 152 152 4-JUN-97 Page: TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- 220191 F3B 03/10/97 05/31/96 N HARNESS BRD, PANEL MATRIX 8014470-400 1 1026 1026 220192 F3B 03/10/97 05/31/96 N HARNESS BOARD, J1 CONN 8014470-401 1 572 572 220193 F3B 03/10/97 07/10/96 N HARN ESS BRD, J2 CONN REV B 8014470-402 1 788 223 1011 220194 F2B 03/10/97 05/31/96 N HARNESS BRD, J3 CONN REV B 8014470-403 1 808 218 1026 221095 F3C 03/10/97 05/31/96 N HARNESS BOARD, J4 CONN 8014470-404 1 2223 2223 220196 F2B 03/10/97 05/31/96 N HARNESS BOARD, J5 CONN 8014470-405 1 56 56 220198 CICON ENG 04/30/96 04/30/96 N HARNESS BRD, FACE PLATE 8016659-401 1 207 267 220199 F3C 03/10/97 05/31/96 N HARNESS BRD, P1 REV C 8016720-401 1 1190 437 1627 220200 F3C 03/10/97 05/31/96 N HARN BRD, XA1 & TB1 REV A 8016720-402 1 1805 158 1463 220201 F2B 03/10/97 07/15/96 N HARNESS BOARD, T2, REV B 8016720-403 1 567 320 887 220203 CICON ENG 04/30/96 04/30/96 N HARNESS BRD, J3 8015660-403 1 683 683 220205 F3C 03/10/97 05/31/96 N HARNESS BRD, PANEL 8016665-401 1 657 657 220206 F2B 03/10/97 07/15/96 N HARNESS BRD, 31 8016665-402 1 634 634 220207 C6A 03/04/92 07/08/96 N WALES TEMPLATE 3310737 1 704 704 220209 C6A 03/04/92 07/08/96 N PUNCH TEMPLATE 8016697 1 252 252 220214 C6A 03/04/92 07/08/96 N DRILL/ROUTING TEMPLATE 3103843 1 509 509 220221 F3C 03/10/97 07/15/96 N HARN BRD, PATCH PNL 8016600-402 1 1694 1594 220222 F3C 03/10/97 05/31/96 N HARN BRD, P16 & P17 8016600-404 1 1551 1551 220223 F3C 03/10/97 05/31/96 N HARN BRD, P14 & P15 REV B 8016600-405 1 1930 68 1998 220224 F2B 03/10/97 07/15/96 N HARN, TEST POINT PANEL 8014440-402 1 2091 282 2373 220225 F2B 03/10/97 05/31/96 N ?? 8015660-401 1 1090 14 1204 220226 ?? ?? 05/31/96 N ?? ?? 1 ?? ?? 1225 220227 F3F 05/21/96 05/31/96 N HARN, BRD, FRNT PNL REV B ?? 1 1739 135 1074 220233 F2B 03/10/97 07/15/96 N HARN BRD, TB2 THRU TB33 8014440-401 1 1567 1567 220234 F3E 05/31/96 05/11/96 N HARN BRD, FRONT PANEL 8014440-403 1 639 639 220235 TOWSON 04/21/94 09/13/96 N CONN LEAD TRIM FIXT REV A 3324070 1 2613 2613 3328485 220235A-1 TOWSON 04/21/97 09/13/96 N CONN LEAD TRIM PLT REV A 1 0 0 220235A-2 TOWSON 04/21/94 09/13/96 N CONN LEAD TRIM PLT REV A 1 0 0 220235B-1 TOWSON 04/21/94 09/13/96 N CON N LEAD TRIM PLT REV A 1 0 0 220235B-2 TOWSON 04/21/94 09/13/96 N CONN LEAD TRIM PLAT REV A 1 0 0 220237 F3C 03/10/97 05/31/96 N HARN BRD/P14A, P14B, P15 8014770-403 1 1993 1993 220238 F3C 03/10/97 05/31/96 N HARN BRD, P16A & P16B 8014771-412 1 1635 1635 220239 C7E22 09/09/96 06/25/96 N DRILL TEMPLATE, FRAME 8016750 1 591 591 220240 C7E28 09/09/96 06/25/96 N DRILL TEMPLATE, FRAME 8016750 1 632 632 220241 C7E18 09/09/96 06/25/96 N DRILL TEMP, RIGHT SIDE 8016750 1 413 413 220243 CICON ENG 07/10/96 05/31/96 N HARND BRD, J1 & J2 REV A 8016705-401 1 531 531 220244 CICON ENG 08/22/96 05/31/96 N HARN BRD, J3 REV B 8016705-403 1 212 155 367 220245 CICON ENG 08/22/96 05/31/96 N HARN BRD, J4 REV NC 8016705-404 1 266 266 220246 F2C 03/10/97 07/15/96 N HARN BRD, P1 8016705-402 1 207 207 220247 CICON ENG 08/22/96 05/31/96 N HARN BRD, LAY-INREV NC 8016705-406 1 531 531 220248 C7E24 01/16/97 05/24/96 N WIRING FIXT, XDCR TEST 8016705 1 1351 486 1837 220249 F2C 03/10/97 05/31/96 N HARN BRD, CHASSIS LAYIN 8014470-415 1 322 322 220253 F2C 03/10/97 05/31/96 N HARN BRD, TB WIRES/TOP 8014445-404 1 613 513 220256 CICON ENG 04/30/96 04/30/96 N HARN BRD, CAB 2 LAY IN 8016660-401 1 419 419 220257 CICON ENG 09/06/96 05/31/96 N HARN BRD, #1 FRONT PNL 8014530-401 1 548 36 684 220258 CICON ENG 08/22/96 05/31/96 N HARN BRD, #2 FRONT PNL 8014535-405 1 513 513 220308-1 9852E 08/24/95 06/21/96 N ALIGHMENT TOOL 8016600 1 284 284 220308-2 9852E 08/24/95 06/21/96 N ALIGNMENT TOOL 8016600 1 284 284 220309-1 9852E 09/14/95 06/21/96 N ALIGHMENT TOOL 8016600 1 423 423 4-JUN-97 Page: TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- 220209-2 9852E 09/14/95 06/21/96 N ALIGNNMENT TOOL 0016600 1 428 428 220359 CICON ENG 03/10/93 07/10/96 N MOLD, CABLE ASSY 0017072 (A) 1 440 441 E252953 9852B 06/18/96 06/10/96 TEST FIXT BD ASSY A7 3320140 1 3000 3000 3320190 E252954 9852E 09/19/95 05/21/96 N TEST FIXT, TONE DECODER AS 3320140 1 2000 2000 3320205 E252955 D6B 02/25/92 07/11/96 N TEST FIXT, TONE DECDR LDG 3320201 1 2500 2500 3320140 E252956 9852B 06/18/95 06/18/96 TEST FIXT 3320140 1 3000 3000 3320210 E252957 9852B 06/18/96 06/18/96 N TEST FIXT FREQ SEL BD A2 3320140 1 2000 2000 3320175 E252959 9852B 06/18/96 06/18/96 TEST FIXT 3320140 1 1800 1800 3322030 E252960 9852B 06/18/96 06/18/96 N TEST FIXT 3320140 1 1800 1800 3320225 E252964 9852B 06/18/96 06/18/96 TEST FIXT 3320180 1 2000 2000 E252965 9852B 06/18/96 06/18/96 TEST FIXT 3320187 1 2000 2000 E252966 9852E 09/19/96 06/21/96 TEST FIXT 3320215 1 2000 2000 E252969 9852B 09/08/92 06/14/96 N TEST FIXT 3320230 1 2000 2000 E252975 9852B ?? 06/18/96 TEST FIXT A6A1 3328222 1 2000 2000 E252976 D6B 07/13/92 06/11/96 N TEST FIXT A4A4 3322088 1 2000 2000 E252977-1 D5B 07/18/95 06/13/96 N TEST FIXT W-56 1 250 250 E252977-2 D5B 07/18/95 06/10/96 N TEST FIXT W-56 1 250 250 E252977-3 D5B 05/24/95 06/24/96 N TEST FIXT W-56 1 250 250 E252977-4 D5B 07/24/95 06/13/96 N TEST FIXT W-56 1 250 250 E252977-5 D5B 07/18/95 06/13/96 N TEST FIXT W-56 1 250 250 E252977-6 D5B 07/18/95 06/13/96 N TEST FIXT W-56 1 250 250 E252978 OAF POS 02/06/97 07/10/96 N ESP FIXTURE 1 3500 3500 E252978 D5B 06/30/93 07/10/96 N TEST FIXT A3 3320173 1 1500 1500 E2529031 D5B 05/01/81 07/10/96 N CABLE ISOLATOR 3320127-2 1 100 100 E2529032 9852B 05/01/81 06/09/96 N CABLE ISOLATOR 3320127-3 1 75 75 E2529033 9852B 05/01/81 06/09/96 N CABLE ISOLATOR 3320127-4 1 90 90 E252984 D4B 07/18/96 06/09/96 N TEST FIXT A3A14-18 1 2000 2000 E253001 9852B 06/18/96 06/13/96 Y TEST STATION 1 3000 3000 E2530011 9852B 05/19/96 06/18/96 Y OSCILLOSCOPE 1 4365 4365 E25300110 9852B 05/19/95 06/19/96 Y FREQUENCY GENERATOR 1 3545 3545 E25300111 9852EL 05/01/84 08/03/96 CRT TERMINAL 1 1450 1450 E25300112 9852 EL 05/01/83 08/12/96 POWER PANEL 1 750 750 E25300114 9852EL 07/23/96 07/23/95 POWER SUPPY 1 1532 1532 E25300115 9852B 06/19/96 06/19/95 BLOWER 1 150 150 E25300116 9852B 06/19/96 06/19/96 BLOWER 1 150 150 E25300117 9852B 06/19/96 06/19/96 TAC/NAV PANEL 1 2000 2000 E25300119 9852B 06/19/96 06/19/96 A/B CARD CAGE 1 10000 10000 E25300120 9852B 06/19/96 06/19/96 Q13B SIMULATOR PANEL 1 2000 2000 E25300121 9852EL 06/05/83 06/09/96 RANGE BEARING PANEL 1 600 600 E25300122 9852EL 07/23/96 07/23/96 SWITCH CONTROL 1 3695 3695 E25300124 9852B 06/19/96 06/19/96 400HZ POWER CONTROL 1 800 800 4-JUN-97 Page: TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- E25300125 9852B 06/19/96 06/19/96 POWER SUPPLY 1 1300 1300 E25300215 9852B 06/19/96 06/19/96 POWER CONTROL 1 900 900 E25300129 9852EL 05/05/93 08/02/96 T BAR RELAY PANEL 1 16000 16000 E2530018 9852B 06/16/96 06/19/96 SIMULATOR CARD CAGE 1 15000 15000 E25300139 9852EL 05/05/93 08/12/96 CABLE INTERFACE 1 2000 2000 E25300132 9852EL 05/05/92 08/02/96 COMMON BUSS 1 800 800 E25300133 9852EL 05/05/83 08/12/96 POWER INTERFACE PANEL 1 650 650 E2530014 9852B 05/19/96 06/18/96 BUOY SIMULATOR PANEL 1 6000 6000 E2530015 9852B 05/19/96 06/19/96 MULTIMETER 1 3570 3570 E2530016 9852EL 05/05/83 08/02/96 CRT DISPLAY 1 2875 2875 E2530017 9852B 05/10/96 06/19/96 BITE CONTROL PANEL 1 6000 6000 E2530018 9852B 06/19/96 06/19/96 COMPUTOR 1 10395 10395 E2530019 TOR REP 05/27/97 08/12/96 Y COUNTER TIMER 1 3289 3289 E253002 9852B 05/19/96 06/19/96 Y TEST STATION 1 4000 4000 E2530021 9852B 06/19/96 06/19/96 N BLOWER 1 150 150 E25300210 9852B 06/19/96 06/19/96 Y POWER SUPPLY PANEL 1 1395 1395 E25300211 9852B 06/19/96 06/19/96 Y POWER SUPPLY PANEL 1 1395 1395 E25300212 D7E 06/30/92 07/11/96 N COMPUTER 1 10500 10500 E25300214 D7E 06/30/93 07/12/96 N TERMINAL DISPLAY 1 1241 1241 E25300215 9852B 06/19/93 08/19/96 SWITCH CONTROLLER 1 2695 2695 E25300216 9852B 04/09/96 08/12/96 MODULAR SWITCH 1 7000 7000 E25300217 9852B 06/19/94 08/13/96 SIGNAL GENERATOR 1 3546 3546 E25300218 9852B 06/17/96 06/19/96 Y SIGNAL GENERATOR 1 3545 3545 E25300219 D7F POS 02/05/97 08/12/96 Y COUNTER TIMER 1 3289 3289 E25300022 9852B 06/19/96 06/19/96 N BLOWER 1 150 150 E25300220 9852B 06/19/96 06/19/96 PHASE METER 1 3415 3415 E25300221 9852B 06/19/96 06/19/96 Y DIGITAL MULTIMER 1 3570 3570 E25300222 C/L IFR 06/12/96 03/12/96 Y WAVEFORM ANALYZER 1 18750 18750 E25300224 9852B 06/19/96 06/19/96 DECADE RESISTOR BOX 1 2050 2050 E2530025 9852B 06/19/96 06/19/96 DECADE RESISTOR BOX 1 2050 2050 E2530023 9852B 06/19/96 06/19/96 N BLOWER 1 150 150 E2530024 9852B 06/19/96 06/19/96 N BLOWER 1 150 150 E2530025 9852B 06/19/96 06/19/96 N POWER PANEL 1 1000 1000 E2530026 9852B 06/19/96 06/19/96 Y POWER SUPPLY ASSY 1 1512 1512 E2530027 9852B 06/19/96 06/19/96 Y POWER SUPPLY PANEL 1 4265 4265 E2530028 9852B 08/19/96 06/19/96 Y POWER SUPPLY PANEL 1 1395 1395 E2530029 9852B 08/19/96 06/19/96 Y POWER SUPPLY PANEL 1 1395 1395 E253002 9852B 08/19/96 06/19/96 RUN-IN TEST SET 3326500 1 25000 25000 E253003-12 9852B 06/19/96 06/19/96 PANEL MANUAL OVERRIDE 1 900 900 E253003-13 9852B 06/19/96 06/19/96 PANEL MANUAL OVERRIDE 1 600 600 E2530031 9852B 06/19/96 06/19/96 CRT DISPLAY 1 2875 2875 E25300310 9852B 06/19/96 06/19/96 BLOWER 1 150 150 E25300311 9852EL 07/23/96 07/23/96 POWER SUPPLY 1 1572 1572 E25300314 9852EL 07/23/96 07/23/96 A/B CARD CAGE 1 9000 9000 E25300315 9852B 06/19/96 06/19/96 Y 400HZ POWER 1 800 800 E25300316 VENDORRP 02/10/97 08/13/96 COUNTER TIMER 1 3289 3289 E25300317 9852B 06/19/96 06/17/96 AUDIO OUTPUT PANEL 1 1000 1000 E2530032 9852B 06/19/96 08/19/96 BITE CONTROL 1 1000 1000 E2530033 9852B 06/20/96 06/20/96 POWER SUPPLY 1 1532 1532 E2530034 9852B 06/20/96 06/20/96 POWER PANEL 1 750 750 4-JUN-97 Page: TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- E2530035 9852EL 08/28/80 08/28/80 BLOWER 1 150 150 E2530036 9852B 06/26/96 06/26/96 COMPUTER 1 18395 18395 E2530037 9852B 06/26/96 06/26/96 OSCILLOSCOPE 1 4365 4365 E2530038 9852EL 07/07/87 07/07/87 N CRT TERMINAL 1 1450 1450 E253004 9852EL 06/12/81 06/12/81 AGREE TEST SET 3326500 1 60000 60000 E25300410 9852EL 07/21/81 07/21/81 POWER SUPPLY 3326430 1 1532 1532 E25300411 9852EL 07/21/81 07/21/81 BLOWER 3326435 1 150 150 E25300413 VENDORRP 02/10/97 02/10/97 Y COUNTER TIMER 3326445 1 3289 3289 E25300414 9852ELOS 08/18/96 08/18/96 Y FREQUENCY GENERATOR 3326450 1 3545 3545 E25300416 9852EL 07/21/81 07/21/81 BLOWER 3326460 1 150 150 E25300417 9852EL 07/21/81 07/21/81 TAC/NAV PANEL 3326465 1 2000 2000 E25300418 9852EL 06/26/81 06/26/81 MODULAR SWITCH 3326470 1 7000 7000 E25300419 9852EL 10/10/81 10/10/81 CARD CAGE 1 10000 10000 E25300420 9852EL 06/04/81 06/04/81 Q13 SIMULATOR PANEL 1 2000 2000 E25300421 9852EL 07/21/85 07/21/85 RANGE BEARING CURSER 1 600 600 E25300422 9852EL 06/20/93 06/20/93 SWITCH CONTROL 1 3695 3695 E25300423 9852EL 07/21/80 07/21/80 POWER SUPPLY 1 1572 1572 E25300424 9852EL 07/23/83 07/23/83 400 HZ POWER 1 800 800 E25300425 9852EL 09/20/80 09/20/80 POWER SUPPLY 1 1300 1300 E25300426 9852EL 05/30/93 05/30/93 MANUAL OVER RIDE PANEL 1 900 900 E25300427 9852EL 07/23/87 07/23/87 C/B PANEL 1 1000 1000 E25300428 9852EL 07/21/81 07/21/81 PANIC & 18Y PANEL 1 500 500 E25300429 9852EL 06/04/81 06/04/81 RELAY & RES PANEL 1 900 900 E2530043 9852EL 06/03/81 06/03/81 SIMULATOR CARD CAGE 1 15000 15000 E25300430 9852EL 06/04/81 06/04/81 400HZ DIXER PANEL 1 1000 1000 E25300431 9852EL 06/04/81 06/04/81 INTERFACE PANEL 1 6000 6000 E25300432 9852EL 06/04/81 06/04/81 POWER INTERFACE PANEL 1 650 650 E25300433 9852EL 06/04/81 06/04/81 AGREE CHAMBER INT 1 2000 2000 E25300434 9852EL 06/04/81 06/04/81 COMMON BUSS 1 800 800 E25300435 9852EL 06/04/81 06/04/81 T-BAR RELAY PANEL 1 25000 25000 E2530044 9852EL 06/03/81 06/03/81 BUDY SIMULATOR PANEL 1 6000 6000 E2530046 9852EL 06/03/81 06/03/81 60 HZ POWER PANEL 1 500 500 E2530047 9852EL 04/09/94 04/09/94 Y DIGITAL MULTIMETER 1 3570 3570 E2530048 9852EL 06/06/93 06/06/93 CRT DISPLAY 1 2875 2875 E2530049 9852EL 07/18/81 07/18/81 BITTE CONTROL PANEL 1 8000 8000 E253005 9852B 05/05/88 05/05/88 N VERTICLE FRAME ADOPTER 1 1000 1000 E25300510 9852B 06/20/90 06/20/90 INTERFACE MODULE 1 1403 1403 E25300511 9852B 06/20/93 06/20/93 INTERFACE MODULE 1 1300 1300 E25300512 9852B 06/20/96 06/20/96 INTERFACE MODULE 1 93.0 93.0 E25300513 9852B 06/20/96 06/20/96 INTERFACE MODULE 1 1250 1250 E25300514 9852B 06/20/96 06/20/96 INTERFACE MODULE 1 1200 1200 E25300515 9852B 06/20/96 06/20/96 INTERFACE MODULE 1 940 940 E25300516 9852B 06/20/96 06/20/96 INTERFACE MODULE 1 800 800 E25300517 9852B 06/20/96 06/20/96 INTERFACE MODULE 1 800 800 E25300518 9852B 07/22/96 07/22/96 INTERFACE MODULE 1 900 900 E2530053 9852B 06/20/96 06/20/96 INTERFACE MODULE 3326400 1 15000 15000 E2530054 D4C 08/14/90 08/14/90 INTREFACE MOD 10 A 30 1 13000 13000 E2530055 9852B 06/20/96 06/20/96 INTERFACE MODULE 3326405 1 12000 12000 E2530056 9852B 06/20/96 06/20/96 INTERFACE MODULE 3326410 1 14000 14000 E2530057 9852B 06/20/96 06/20/96 INTERFACE MODULE 3326415 1 800 800 4-JUN-97 Page: TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- E2530058 9852B 06/20/96 06/20/96 INTERFACE MODULE 3326420 1 940 940 E2530059 9852B 06/20/96 06/20/96 INTERFACE MODULE 3326425 1 1000 1000 E253006 9852B 06/20/96 06/13/96 VERTICLE FRAME ADAPTER 1 10000 10000 E2530061 9852B 06/20/96 06/20/96 N IPM CARD CAGE 1 12000 12000 E25300610 9852B 06/20/96 06/20/96 STATIC PERSON, MODULE 3326495 1 1450 1450 E25300612 D4A 09/25/96 09/20/96 DYNAMIC PERSON, MODULE 3326480 1 2000 2000 E25300613 D4A 09/25/96 09/20/96 DYNAMIC PERSON, MODULE 3326485 1 2000 2000 E25300614 D4A 09/25/96 09/20/96 DYNAMIC PERSON, MODULE 3326490 1 2000 2000 E25300617 9852B 06/20/96 06/20/96 N W6 CABLE 1 300 300 E25300618 9852 06/20/96 06/20/96 N W7 CABLE 1 400 400 E2530062 D4A 09/26/96 09/26/96 DPM/SELF TEST 1 1400 1400 E2530063 9852B 07/22/96 07/22/96 N W1 CABLE 1 300 300 E2530064 9852B 06/05/88 08/13/96 N W2 CABLE 1 320 320 E2530065 9852B 04/04/81 08/12/96 N W3 CABLE 1 340 340 E2530067 9852B 03/25/81 08/13/96 N INTERFACE MODULE 3326480 1 1500 1500 E2530068 9852B 06/20/96 06/20/96 STACTIC PERSON, MODULE 3326485 1 1400 1400 E2530069 9852B 07/22/98 07/22/96 STACTIC PERSON, MODULE 3326499 1 1400 1400 E253025 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A9 3326435 1 2300 2300 E253026 D3F POS 02/03/97 07/11/96 N TEST FIXTURE A10 3326448 1 2300 2300 E253027 D3F POS 02/03/97 07/11/96 N TEST FIXTURE A6 3326438 1 2300 2300 E253028 D3F POS 02/08/97 07/11/96 N TEST FIXTURE A30 3326415 1 2400 2400 E253029 D3F POS 02/06/97 07/11/96 N TEST FIXTURE ESP 3326405 1 2400 2400 E253030 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A33 3326410 1 2800 2800 3326510 E253031 D3F POS 02/05/97 07/11/96 N TEST FIXTURE A12 3326450 1 2400 2400 E253032 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A14, A17 3326480 1 2500 2500 E253033 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A26, A29 3326475 1 2900 2900 E253034 D3F POS 02/05/97 07/11/96 N TEST FIXTURE A32 3325360 1 2500 2500 E253035 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A5 3326415 1 2500 2500 E253036 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A16 A19 3326470 1 2500 2500 E253037 D3F POS 02/06/97 07/11/96 N TEST IXTURE A32 3325365 1 2700 2700 E253038 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A30 3326495 1 2600 2600 E253060 D3F POS 02/06/97 07/11/96 N ESP TEST FIXT A13 3326455 1 2500 2500 E253061 D3F POS 02/06/97 07/11/96 N ESP TEST FIXT A15 3326465 1 2100 2100 E253062 D3F POS 02/06/97 06/11/96 N ESP TEST FIXT A27 3326488 1 2200 2200 E253063 D3F POS 02/06/97 06/13/96 ESP TEST FIXT BUS DAR 3315924 1 500 500 E253064 D3F POS 02/06/97 07/11/96 N ESP TEST FIXT A28 3326485 1 2800 2800 E253075 D6C 02/25/92 07/11/96 N MANUAL CONTROLLER 1 1500 1500 E253083 9852B 05/24/95 07/22/96 E PROM ERASER 1 2200 2200 E254077 D7C OOS 03/24/92 07/11/96 Y LOAD FIXT PWR SUPPLY 3326403-4 1 3000 3000 3326403-2 E254077-1 D4A 02/18/92 07/10/96 N RES LOAD BOX -2 P/S 3326403-2 1 150 150 E254077-2 D4A 02/18/92 07/10/96 N RES LOAD BOX -4 P/S 3326403-4 1 160 160 E254000-1 D7B 03/24/92 07/11/96 N BURN-IN TEST SET 3326403-2 1 4000 4000 E254080-2 D7D 03/24/92 07/11/96 N BURN-IN FIXTURE 3326403-2 1 1000 1000 E254081-1 D7B 03/24/92 07/11/96 N BURN-IN TEST SET 3326403-4 1 4000 4000 E254081-2 D6D 03/24/92 07/11/96 N BURN-IN FIXTURE 3325403-4 1 1000 1000 E254085 C/L IFR 03/13/96 08/13/96 Y BRD BURN-IN STATION 1 15000 15000 E254085-1 9852EL 04/04/84 06/24/96 Y POWER SUPPLY 1 565 565 E254095-10 D6A 02/19/92 07/11/96 N BURN-IN FIXT #4 1 1000 1000 4-JUN-97 Page: TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- TE254085-11 D6A 02/19/92 07/11/96 N BURN- IN FIXT #5 1 1000 1000 TE254085-12 D4C 02/19/92 07/10/96 N BURN- IN FIXT #6 1 1500 1500 TE254085-13 D4C 02/19/92 07/10/96 N BURN- IN FIXT #7 1 1500 1500 TE254085-14 D4C 02/19/92 07/01/96 N BURN- IN FIXT #8 1 1500 1500 TE254085-15 D4C 02/19/92 07/10/96 N BURN- IN FIXT #9 1 1500 1500 TE254085-16 9852EL 08/08/84 06/24/96 N INTERFACE CABLE 8X8 3 150 450 TE254085-17 9852EL 08/08/84 06/24/96 N INTERFACE CABLE SM BD 9 155 1395 TE254085-2 9852EL 04/04/84 06/24/96 POWER SUPPLY 1 565 565 TE254085-3 9852EL 04/04/84 06/25/96 POWER SUPPLY 1 690 690 TE254085-4 9852EL 04/04/84 06/25/96 POWER SUPPLY 1 1175 1175 TE254085-5 9852EL 04/04/84 06/25/96 CONTROL PANEL 1 2000 2000 TE254085-6 9852EL 04/04/84 06/25/96 POWER PANEL 1 500 500 TE254085-7 D6A 02/19/92 07/11/96 N BURN- IN FIXT #1 1 1000 1000 TE254085-8 D4C 02/19/92 07/10/96 N BURN- IN FIXT #2 1 1000 2000 TE254085-9 D6A 02/19/92 07/11/96 N BURN- IN FIXT #3 3331630 1 1000 1000 TE254088 D3F POS 02/05/97 07/10/96 N ESP FIXTURE 1 2700 2700 TE254090 9852EL 04/04/84 06/25/96 INTERFACE MOO A28 BD 1 2500 2500 TE254099 9852B 06/20/96 06/20/96 SELECT LEVER METER 1 9400 9400 TE254262 9852B 06/14/96 06/14/96 N ESP CABLE 20E 1 200 200 TE254263 9852B 06/14/96 06/14/96 N ESP CABLE 21E 1 200 200 TE254264 9852B 06/14/96 06/14/96 N ESP CABLE 22E 1 200 200 TE254266 9852B 06/14/96 06/14/96 N ESP CABLE 25E 1 20 20 TE254267 9852B 06/14/96 06/14/96 N ESP CABLE 31E 1 160 160 TE254268 9852E 10/24/95 09/25/96 N SONAR SIMULATOR T/F 8014470 1 3000 3000 TE254269 9852B 06/14/96 06/14/96 N ESP CABLE 29E 1 125 125 TE254270 9852B 06/14/96 06/14/96 N ESP CABLE 30E 1 130 130 TE254272 9852E 10/27/95 06/21/96 N TEST FIXTURE CAB #2 1 400 400 TE254272-1 9852E 10/30/95 06/21/96 N POWER RESISTOR 8014530-401 1 120 120 TE254273 9852B 06/14/96 06/14/96 N ESP CABLE 33E 1 100 100 TE254274 9852B 12/15/88 06/20/96 N ESP CABLE 34E 1 200 200 TE254275 9852 05/22/95 06/20/96 N TEST FIXTURE, AS BRD 1 1900 1900 TE254276 9852E 10/31/95 06/21/96 N POWER SUPPLY TEST FIXT 8016720 1 1600 1600 TE254277 9852 03/31/92 06/20/96 N TEST FIXT, A2 BRD ASSY 80166720 1 2200 2200 TE254278 9852B 06/14/96 06/14/96 N ESP CABLE 35E 1 75 75 TE254281 9852E 11/03/95 06/21/96 N TEST FIXT SONOBT SIMU 8016600 1 3500 3500 TE254291 9852 05/15/95 06/20/96 N TEST FIXT, TONE DCOR A9 8016610 1 2500 2500 TE254337 9854B 04/12/94 06/20/96 N T/F DEPTH RT SIMU A1A10 3326030 1 1800 1800 TE254338 9852B 05/18/94 06/20/96 N T/F UTILITY LP DVR A1A11 8029230 1 1900 1900 TE254339 9852E 07/13/95 06/21/96 N T/F CABLE CONTROL A1A12 3326040 1 2300 2300 TE254340 9852E 04/27/94 06/21/96 N T/F CABLE TENSION A1A13 8029195 1 2200 2200 TE254341 9852E 04/26/95 06/21/96 N T/F RELAY CO ASSY A1A14 3326050 1 1700 1700 TE254342 9852B 06/14/96 06/14/96 N T/F CBL PAYOUT DVR A1A15 8029225 1 1900 1900 TE254350 9852B 06/14/96 06/14/96 N ESP CABLE, 55 E 1 350 350 TE254351 9852B 06/14/96 06/14/96 N ESP CABLE , 56E 1 280 280 TE254352 9852B 06/04/91 06/14/96 N ESP CABLE , 57E 1 420 420 TE254353 9852B 06/14/96 06/14/96 N ESP CABLE , 58E 1 250 250 TE254354 9852B 06/14/96 06/14/96 N ESP CABLE , 59E 1 260 260 TE254355 9852B 06/14/96 06/14/96 N ESP CABLE , 60E 1 300 300 TE254356 9852B 06/14/96 06/14/96 N ESP CABLE , 61E 1 280 280 TE254357 9852B 06/14/96 06/14/96 N ESP CABLE , 62E 1 210 210 4-JUN-97 Page: TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- ----- E254266 9852E 08/02/95 06/21/98 N T/F RNTS ICAS SWITCH BOX 8029170 1 800 800 E254417 D5D 02/28/97 06/04/96 N TEST FIXTURE (CASTS) 8015029 1 2000 2000 Tooling 550 148373 Test Equip. 250 684284 Total 600 332857 4-JUN-97 Page: TOOL MASTER Contract Number: N00019-97G-0000 Description: ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- TE253080 9852EL 08/22/80 05/24/96 VIBRATION CONTROL SYS 1 1000 1000 TE253080-10 9852EL 01/22/81 05/24/96 N COMPUDESK 1 508 500 TE253080-11 9852EL 01/22/81 05/24/96 N CHAIR 1 123 123 TE253080-2 9852EL 08/22/80 05/24/96 BLANK PANEL 1 100 100 TE253080-3 9852EL 08/22/80 05/24/96 X-Y DISPLAY 1 2500 2500 TE253080-4 9852EL 08/22/80 05/24/96 SYSTEM CONTROL 1 6000 6000 TE253080-5 9852EL 08/22/80 05/24/96 PROCESSION 1 22879 22879 TE253080-6 9852EL 08/22/80 05/24/96 SYSTEM INTERFACE 1 0300 0300 TE253080-7 9852EL 08/22/80 05/24/96 FLEX DISK DRIVE 1 3171 3171 TE253080-8 9852EL 08/22/80 05/24/96 GRAPHICS TERMINAL 1 6000 6000 TE253080-9 9852EL 08/22/80 05/24/96 KEYBOARD FOR 2548A 1 1000 1000 TE253081 9852EL 02/28/81 05/24/96 VIBRATION TEST SYSTEM 1 48510 48510 TE253081-1 9852EL 02/28/81 05/24/96 CONTROL RACK 1 23000 23000 TE253081-10 9852EL 04/10/87 08/12/96 BLOWER ASSEMBLY 1 490 490 TE253081-2 9852EL 05/09/81 06/24/96 CHARGE AMP/D22PMJ(0) 1 2820 2820 TE253081-3 9852EL 05/09/81 06/24/96 CHARGE AMP/D22PMJ(0) 1 2820 2820 TE253081-4 9852EL 05/09/81 06/24/96 VIB NON/LIMIT AM-123 1 5125 5125 TE253081-5 9852EL 08/08/84 06/24/96 Y ACCELEROMETER S/N1405 1 150 150 TE253081-6 CAL LAB 11/04/96 09/27/96 Y ACCELEROMETER S/N2484 1 150 150 TE253081-8 CAL LAB 11/04/96 09/27/96 Y ACCELEROMETER S/N1408 1 150 150 TE253081-3 9852EL 09/26/96 06/24/96 ACCELEROMETER S/N1704 1 150 150 Tooling 0 0 Test Equip. 21 134944 Total 21 134944 4-JUN-97 Page: 1 TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T219879 F2C 03/01/67 07/12/96 N HARNESS BRD, J1 REV B 0007248-4012 1 131 113 244 T219800 F2B 03/10/97 07/12/96 N HARNESS BRD, J2 REV B 0007248-402 1 124 198 322 T219881 F2B 03/10/97 07/12/96 N HARNESS BRD, J3 REV B 0007248-403 1 667 455 1142 T219882 F3B 03/10/97 05/31/96 N HARNESS BRD, P1 REV B 0007255-401 1 1154 257 1411 T219883 F3B 03/10/97 05/31/96 N HARNESS BRD, P2 REV C 0007255-402 1 4627 244 5071 T219884 F2B 03/10/97 05/31/96 N HARNESS BRD, P3 REV C 0007255-403 1 946 153 1099 T219885 F3B 03/10/97 05/31/96 N HARNESS BRD, TB1 REV C 0007255-404 1 2003 163 2166 T219886 F3B 03/10/97 05/31/96 N HARNESS BRD, J1-J5 REV E 0007255-405 1 3279 321 3600 T220014 C5D 02/03/96 07/02/96 Y MOLD, PI W1 CBL ASSY 0007263 1 272 272 T220015-1 9852C 08/23/96 08/14/96 Y MOLD, P1 P2 WC CBL ASSY 0007264 1 257 257 T220015-2 9852C 08/23/95 08/14/96 Y MOLD, P1 P2 WC CBL ASSY 0007264 1 257 257 T220016-1 9282C 02/06/95 06/14/96 Y MOLD, P2 W3 W4 CBL ASSY 0007265 1 261 261 0007266 T220016-2 9232C 02/06/95 06/14/96 Y MOLD, P2 W3 W4 CBL ASSY 0007265 1 261 261 0007266 T220040-1 9852E 03/18/97 05/21/95 N ALIGN TOOL, CARD CAGE 0007248 1 195 195 T220040-2 9852E 03/18/97 06/21/95 N ALIGN TOOL, CARD CAGE 0007248 1 195 195 T220052-1 9852E 05/25/96 05/25/96 N HOLD FIXT, AMTS PNL ASSY 0007255 1 136 136 T220052-2 ?? 01/06/95 01/10/96 N HOLD FIXT, AMTS PNL ASSY 0007255 1 136 136 T220052-3 ?? 05/10/96 06/21/96 N HOLD FIXT, AMTS PNL ASSY 0007256 1 136 136 T220052-4 9852E 09/26/96 07/10/96 N HOLD FIXT, AMTS PNL ASSY 0007255 1 136 136 T220053-1 9862E 04/23/96 05/16/96 N WIRING FIXTURE 1 857 857 T220053-2 9862E 04/23/96 05/16/96 N WIRING FIXTURE 1 702 702 T220070 F3B 03/10/97 07/15/96 N HARN BRD, COUP ASSY A12 1 831 488 1319 T220075-1 C6A 01/20/92 07/08/96 N POTTING FIXT, P1 CLK MOD 007394 1 184 184 T220075-2 C6A 01/20/92 07/08/96 N POTTING FIXT, P1 CLK MOD 007394 1 184 184 T220075-3 C6A 01/20/92 07/08/96 N POTTING FIXT, P1 CLK MOD 007394 1 184 184 T220078-1 9232C 05/14/96 08/14/96 N POTTING FIXT, P1 007394 1 141 141 T220078-2 9232C 05/14/96 06/14/96 N POTTING FIXT, P1 007394 1 141 141 T220078-3 9232C 06/14/96 06/14/96 N POTTING FIXT, P1 CLK MOD 007394 1 141 141 T220306A/B-1 9852E 06/14/96 06/13/96 N SUPPORT BRKT, AMTS ASSY 0007300 1 270 270 T220306A/B-2 9852E 06/13/96 06/14/96 N SUPPORT BRKT, AMTS ASSY 0007300 1 270 270 T402534 SPIRATEX CO. 01/09/81 04/10/96 N REDUCING SLEEVE 3328746 1 1435 1435 T402540 C7D 03/13/92 07/10/96 N TEST FIXT WD BND HYDRO 1 1320 1320 T402542-A D5F POS 02/12/97 09/27/96 N PLUG, BOOTING ASSYTION 3328760 1 433 433 T402542-D D5F POS 02/12/97 09/27/96 N FITTING, HOSE JUNCTION 3328780 1 172 172 7402549 SN1 9234 04/14/93 06/14/96 N SHOCK TEST SLEEVE, XMTR 3328880 1 242 242 T7402549 SN2 C6B 04/14/93 07/03/96 N SHOCK TEST SLEEVE, XMTR 3328880 1 242 242 T402549 SN2 C6B 04/14/93 07/03/96 N SHOCK TEST SLEEVE, XMTR 3328880 1 242 242 T402554-1 9855N 06/14/96 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257 T402554-10 9855N 06/14/96 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257 T402554-2 9855N 06/14/96 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257 T402554-3 CL/ARA 10/15/95 06/09/93 N ASSEMBLY FIXTURE 3333263 1 257 257 T402554-4 C6B 01/28/95 07/08/96 N ASSEMBLY FIXTURE 3333263 1 257 257 T402554-5 9855N 06/14/95 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257 T402554-6 9232C 06/14/95 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257 T402554-7 9232C 06/14/96 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257 T402554-8 9232C 06/14/96 16/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257 T40554-9 9232C 06/14/96 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257 T402567-1 C6D 03/13/92 07/09/96 N TEST HOLD FIXT, HYBRID 1 358 358 4-JUN-97 Page: 2 TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T402567-2 9234 04/14/93 06/14/96 N TEST HOLD FIXT, HYBRID 1 358 358 T402567-3 C6D 03/13/92 07/09/96 N TEST HOLD FIXT, HYBRID 1 358 358 T402567-4 C6D 03/13/92 07/09/95 N TEST HOLD FIXT/HYBRID 1 358 358 T402567-5 C6D 07/08/92 07/09/96 N TEST HOLD FIXT/HYBRID 1 358 358 T402567-6 C6D 03/13/92 07/08/96 N TEST HOLD FIXT/HYBRID 1 358 358 T402576 C6B 03/06/92 07/08/96 N HOLD FIXT/HX-POT 3328865 1 207 207 T402629 C7D 10/25/95 07/10/96 N HOLD FIXT/XMTR 1160 16 2400 T402644 C6B 03/09/92 07/08/95 MOLD MSTR/4 STRAND 3332993 1 219 219 T402645 C6B 10/01/96 10/01/96 N MOLD MSTR/8 STRAND 3332992 1 244 244 T402663-1 C6B 03/02/92 07/09/96 Y MOLD MSTR/RESONATOR, REV A 3332990-1 1 26 26 T402664 FREQUENCY SELECT NET 12/10/84 04/03/96 N MOLD/RESONATOR 1 29 29 T402703-1 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58 T402703-10 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58 T402703-11 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58 T402703-12 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58 T402703-13 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58 T402703-14 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58 T402703-2 C6D 09/27/96 09/27/96 N SPLICE MOLD STAND 3333165 1 58 58 T402703-3 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58 T402703-4 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333155 1 58 58 T402703-5 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333156 1 58 58 T402703-6 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58 T402703-7 C6D 09/19/96 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58 T402703-8 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58 T402703-9 C6D 09/19/95 07/09/96 Y SPLICE MOLD STAND 3333165 1 58 58 T4027041 NPO 11/12/90 09/10/96 Y THERMAL WIRE STRIPPER 1 73 73 T4027042 NPO 11/12/90 10/15/96 Y THERMAL WIRE STRIPPER 1 73 73 T4024043 NPO 11/12/95 09/18/96 Y THERMAL WIRE STRIPPER 1 73 73 T402705-1 9852E 05/16/95 06/21/95 N SPANNER WRENCH 1 174 174 T402714-1 9855E 07/01/93 08/26/95 Y STRAIGHT SCALE/300 LB 1 109 109 T402714-2 9855E 08/29/94 06/26/96 Y STRAIGHT SCALE/300 LB 1 109 109 T402714-3 9855E 07/10/95 05/25/98 Y STRAIGHT SCALE/300 LB 1 109 109 T402714-4 9855W 07/23/90 06/26/96 Y STAIGHT SCALE/300 LB 1 109 109 T402714-6 9855W 07/01/93 06/26/96 Y STRAIGHT SCALE/300 LB 1 109 109 T402749-1&A DISP ARA 10/15/95 07/01/93 Y PRESSURE POT 1 1568 1568 T402754-1 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746 T402754-10 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746 T402754-11 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746 T402754-12 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746 T402754-2 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746 T402754-3 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746 T402754-4 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746 T402754-5 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746 T402754-6 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746 T402754-7 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746 T402754-8 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746 T402754-9 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746 T402761-1 9855W 07/16/90 05/26/95 N HOSE WRAPPING STATION 8004380 1 1008 1008 T402761-2 9855W 07/16/90 06/26/96 N HOSE WRAPPING STATION 8004380 1 757 757 T402761-3 9855E 07/21/93 06/26/96 N HOSE WRAPPING STATION 8004380 1 757 757 4-JUN-97 Page: 3 TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T402761-4 9665E 07/21/93 06/26/96 N HOSE WRAPPING STATION 1 757 757 T402765-1 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49 T402765-2 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49 T402765-3 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49 T402765-4 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49 T402765-5 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49 T402765-6 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49 T402765-7 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49 T402765-8 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49 T402769 CAL LAB 06/02/97 07/09/96 Y DIGITAL THERMOMETER 1 0 0 T402773-1 9855E 07/21/93 06/26/96 N SUPPORT BRACKET 1 131 131 T402773-2 9855W 07/18/90 06/26/96 N SUPPORT BRACKET 1 131 131 T402773-3 9855W 07/18/90 06/26/96 N SUPPORT BRACKET 1 131 131 T402773-4 9855E 07/21/93 06/26/96 N SUPPORT BRACKET 1 131 131 T402774-1 8002 03/13/97 07/12/96 N ACOUSTIC CHAMBER HORIZ 1 2500 2500 T402774-2 8900TL 07/18/90 08/30/96 N ACOUSTIC CHAMBER HORIZ 1 2500 2500 T402777-1 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589 T402777-10 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589 T402777-2 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589 T402777-3 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589 T402777-4 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589 T402777-5 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589 T402777-6 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589 T402777-7 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589 T402777-8 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589 T402777-9 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589 T402798-1 TOOLCRIB 03/14/97 07/12/96 N PREP FIXT/C1 & C3 CAP 1 53 53 T402798-2 TOOLCRIB 03/17/97 07/12/96 N PREP FIXT/C1 & C3 CAP 1 53 53 T402799-1 TOOLCRIB 03/17/97 07/12/96 N PREP FIXT/C2 & C4 CAP 1 53 53 T402799-2 TOOLCRIB 03/17/97 07/12/96 N PREP FIXT/C2 & C4 CAP 1 53 53 T402803-1 C4A 03/10/97 08/30/93 N HOT STRIPPER/SPEC GRND 1 154 154 T402803-2 C6B 04/18/97 09/30/98 N HOT STRIPPER/SPEC GRND 1 154 154 T402803-3 CL/ARA 10/15/96 06/30/98 N HOT STRIPPER/SPEC GRND 1 154 154 T402803-4 C6B 04/18/97 09/30/98 N HOT STRIPPER/SPEC GRND 1 154 154 T402803-5 C6B 04/18/97 09/30/98 N HOT STRIPPER/SPEC GRND 1 154 154 T402803-6 CL/ARA 10/15/96 06/30/93 N HOT STRIPPER/SPEC GRND 1 154 154 T402805-1 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402805-10 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402805-11 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402805-12 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402805-13 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402805-14 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402805-15 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REVNC 8001220 1 48 48 T402805-16 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REVNC 8001220 1 48 48 T402805-2 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402805-3 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402805-4 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402805-5 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402805-6 C3C 03/19/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402805-7 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 4-JUN-97 Page: 4 TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T402605-8 C3C&C4C 03/21/97 03/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402805-9 C3C&C4C 03/21/97 03/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48 T402823 C6B 03/09/92 07/08/96 N WELD FIXT/PTV 7 CLOCK 1 42 42 T402825 D5F POS 02/12/97 07/08/96 N SHOCK TEST FIXTURE 2 60 120 T402828ABCD C4B 07/07/92 06/28/96 PRESSURE TEST FITTING 1 977 977 T402629 9055W 10/10/96 06/26/96 N HOSE GRINDER 1 1099 1099 T402839 C6B 08/19/92 07/08/96 N HOLDING FIXTURE 1 952 952 T402876A-1 C6B 09/17/96 06/26/96 Y MOLD, DROQUE TERM REV E 3333220 1 431 431 T402876B-4 C6B 07/23/96 07/23/96 Y MOLD, DROQUE TERM REV E 1 359 359 TE252990 D5C 02/20/92 07/10/96 N TEST FIXT/XMTR LGC1/2 1 2000 2000 TE252991 D5C 02/20/92 07/10/96 N TEST FIXT/TELE/TLM LOC 1 3000 3000 TE254007 D5B 02/20/92 07/10/96 N PREAP TEST FIXT 1 250 250 TE254018 D5F POS 02/12/97 07/11/96 N HI-POT TEST FIXT 2 1 250 250 TE254019 D6B 02/25/92 07/11/96 N CLOCK TEST FIXT 1 1800 1800 TE254026-1 9855N 06/20/96 06/20/96 Y TEST FIXT, CLOCK TERM 1 200 200 TE254026-2 9855N 10/15/98 06/20/96 Y TEST FIXT, CLOCK TERM 1 200 200 TE254029-1 D5B 02/19/92 07/10/96 N TEST FIXT/FRONT END 3327455 1 1800 1800 TE254029-2 D5B 02/19/92 07/10/96 N TEST FIXT/FRONT END 3327455 1 1800 1800 TE2540311 D6B 02/26/92 07/11/93 N LOGIC TEST PAN/SUBSTRT 3327455 1 3600 3600 TE2540312 D6B 02/26/92 07/11/96 N LOGIC TEST PAN/SUBSTRT 3327455 1 3600 3600 TE254036 D5C 02/2092 07/10/96 N COAX DELAY LINE 1 1625 1625 TE254039 9234 04/14/93 08/17/96 Y ACTIVE TRIM TEST SET 1 27000 27000 TE254040 D5B 02/19/92 07/10/96 N PWR SPLITTER TEST SET 1 400 400 TE254041 D5B 02/19/92 07/10/96 Y LINEARTY PAD 1 25 25 TE254042 9234 04/14/93 06/17/96 N XMTR ADDRESS BOX 1 200 200 TE254044 D5B 02/19/92 07/10/96 N CROWBAR TEST FIXT 1 500 500 TE254045 D5A 08/09/84 07/10/96 N BURN-IN BO/CURRENT REG 1 300 300 TE254046 9234 04/14/93 06/17/96 Y CURRENT MONITOR/CLOCK 1 200 200 TE254050 CNL/ARA 10/15/96 06/22/93 Y LOW PASS FLTR TEST SET 1 500 500 TE254052 D5B 02/19/92 07/10/96 N HYDROPHONE TEST SET 1 1000 1000 TE254052 D4B 02/18/92 07/10/96 TEST FIXT/ACTV TRIM PS 1 250 250 TE254064-1 NPO 07/30/96 07/11/96 N HYDROPHONE EXCITER 1 200 200 TE254064-2 D5A 04/17/97 07/11/96 N HYDROPHONE EXCITER 1 200 200 TE254072 9234 04/14/93 08/17/96 N TEST PAN/DIODE CLAMP 1 250 250 TE254073 9234 04/14/93 08/17/96 TEST PAN/CURRENT REG 1 400 400 TE254074 9234 05/19/93 06/17/96 Y PWR SUPPLY/PTV CUR REG 1 600 600 TE254079 D5A 07/06/93 07/10/96 N ACOUSTIC XMTR/CAL STD 1 5000 5000 TE254086 D7F POS 02/12/97 08/13/96 Y COUNTER/HP5328A/030 1 1550 1550 TE254089-1 FREQUENCY SELECT NET 02/24/94 04/03/96 N TEST COIL RESONATOR 3332990 1 1648 1648 TE254092-1 NPO 08/05/96 07/12/96 N HI-POT TESTER 1 1100 1100 TE254092-2 D5A 04/17/97 09/30/96 HI-POT TESTER 1 1100 1100 TE254092-3 D5A 04/17/97 07/12/96 N HI-POT TESTER 1 1100 1100 TE254100 D6C PM 09/29/95 07/11/96 N REPEATER CLOCK T/S 1 50000 50000 TE254101-1 D4D 10-25-95 07-10-96 N TEST CABLE SWTICH BOX 1 10000 10000 TE254101-2 9234 06/17/96 06/17/96 N TEST CBL SWITCH BOX 1 10000 10000 TE254101-3 9234 06/17/96 06/17/96 N TEST CBL SWITCH BOX 1 10000 10000 TE254160 9852E 06/13/96 06/13/96 Y AMTS PWR SUP TEST FIXT 2 400 800 TE254175 SN 1 9852E 11/14/94 07/11/96 N TEST FIXT, AMTS BRD 8007210 1 1900 1900 8007245 TE254175 SN 2 D6B 09/14/93 07/11/96 N TEST FIXT, AMTS BRD 8007245 1 1900 1900 4-JUN-97 Page: 5 TOOL MASTER Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- TE254296-1 9852D HS 08/25/96 06/26/96 N ADAPTOR CABLE 0007210 1 500 500 TE254296-2 9852D HS 09/27/96 06/27/96 N ADAPTOR CABLE 0018100 1 500 500 TE254296-3 9852D HS 06/26/96 06/26/96 N ADAPTOR CABLE 0018100 1 500 500 TE285295-4 9852D HS 06/27/96 06/26/96 N ADAPTOR CABLE 0018100 1 500 500 TE254297 9852E 08/25/96 06/26/96 N FWD ADAPTOR 0018100 1 325 325 TE254298 9852E 08/25/96 06/26/96 N AFT ADAPTOR 0018100 1 325 325 Tooling 285 65269 Test Equip. 47 150398 Total 352 216167 4-JUN-97 Page: 1 TOOL MASTER Contract Number: N00024-85-C-6236 Description:TB-23/ BQ ASA TOOL/T/E Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T219868 F3B 03/07/97 07/15/95 N HARNESS BRD F1 0009030-401 1 435 436 T219873 F3F 02/10/92 07/15/95 N HARNESS BRD, RCVR PNL 8007625-401 1 1652 1652 T219875 F3D 02/11/92 07/15/95 N HARNESS BRD/PWR SUPPLY 8007620-701 1 2542 177 2819 T219878 F2C POS 02/05/97 07/12/95 N HARNESS BRD, RECEIVER PNL 8007625-402 1 120 120 T219947 F2B 03/10/97 07/15/95 N HARNESS BRD F5 8007625-403 1 516 516 T219953 F3B 03/10/97 07/15/95 N HARNESS BRD F2 8009030-402 1 840 840 T219958 F3B 03/10/97 07/15/95 N HARNESS BRD/TEST POINT 8009035 1 1252 1252 T219962 F3F 02/10/92 07/15/95 N HARNESS BRD/LFRA REV A 8007840 1 2092 2092 T220019 C6B 03/06/92 07/08/96 N SPLIT MOLD 8011516 1 21311 21311 T220020 C6B 03/06/92 07/08/96 N SPLIT MOLD 8011516 1 0 0 T220021 C6B 03/06/92 07/08/96 N TENSILE TEST ADAPTOR 8011516 1 0 0 T220022 C6B 03/06/92 07/08/96 N SPLIT MOLD 8011516 1 0 0 T220023 C6B 03/08/92 07/08/96 N PRESSURE TEST LEAD 8011516 1 0 0 T220024 C6B 03/08/92 07/08/96 N TENSILE TEST LEAD 8011516 1 0 0 T220025 C6B 03/08/92 07/08/96 N PLUG 8011516 1 0 0 T220026 C6B 03/08/92 07/08/96 N SPACER PLATE 8011516 1 0 0 T220027 C6B 03/08/92 07/08/96 N DUMMY RETAINER 8011516 1 0 0 T220028 C6B 03/08/92 07/08/96 N SEAL BACK-UP BAR 8011516 1 0 0 T220029 C6B 03/08/92 07/08/96 N RETAINER POSITION TEMP 8011516 1 0 0 T220053 C6D 04/09/92 07/09/96 N ?? ?? 1 516 506 T402944&-1 TELFRWHS 08/20/93 08/02/96 N VIB TEST FIXTURE 8007600 1 7767 7767 0007800 0008940 TE254114 D7B 03/24/92 07/11/96 N EMULATOR/T.I. CHIP 1 5000 5000 TE254116 9852B 06/20/96 08/20/96 N TEST CD/ESP RCVR/EFMR 0009040 40 400 10000 TE254116 SN 1 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 10 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 11 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 12 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 13 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 14 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 15 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 16 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 17 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 18 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 19 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 2 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 20 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 21 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 22 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 23 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 24 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 25 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 26 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 27 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 28 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 29 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 3 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 30 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 31 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 4-JUN-97 Page: 2 TOOL MASTER Contract Number:N00024-85-6-6336 Description:TB-23/8Q ASA TOOL/T/F Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- TE254116 SN 32 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 33 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 34 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 35 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 36 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 37 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 38 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 39 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 4 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 40 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 5 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 6 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 7 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 8 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254116 SN 9 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400 TE254117 9852B 06/18/96 06/13/96 N ESP CBL RCVR 79 D 8007635 1 300 300 TE254118 SN 1 9852B 05/05/96 06/20/96 N ESP CABLE, RECEIVER 8007635 1 150 150 TE254118 SN 2 9852B 05/05/86 06/20/96 N ESP CABLE, RECEIVER 0007635 1 150 150 TE254118 SN 3 9852B 05/05/86 06/20/96 N ESP CABLE, RECEIVER 0007635 1 150 150 TE254119 9852B 07/22/96 07/22/96 N BRD TEST FIXT FRA 0007635 1 300 300 TE254120 9852B 08/13/96 06/13/96 N ESP CBL RCVR 16D 1 300 300 TE254121 SN 1 9852B 08/13/96 06/13/96 N ADAPTER CABLE 900/94D 1 250 250 TE254121 SN 2 9852B 08/13/96 06/13/96 N ADAPTER CABLE 900/94D 1 250 250 TE254121 SN 3 9852B 08/13/96 06/13/96 N ADAPTER CABLE 900/94D 1 250 250 TE254121 SN 4 9852B 06/18/96 06/13/96 N ADAPTER CABLE 900/94D 1 250 250 TE254121 SN 5 9852B 06/18/96 06/13/96 N ADAPTER CABLE 900/94D 1 250 250 TE254135 D7E 12/07/95 07/12/96 N CLAMP, RANDOM VIB 13 85 1040 TE254137 D6C 05/05/94 07/11/95 N CKT BRD PWR TEST FIXT 1 1500 1500 TE254139 9852B 06/14/96 06/14/96 N ESP CBL DL3-30R 100D 1 150 150 TE254140 9852B 06/14/96 06/14/96 N ESP CBL 14 BNC'S 89D 1 125 125 TE254141 9852B 06/14/96 06/14/96 N ESP CBL DLI-155R 99D 1 250 250 TE254142 D4B 07/18/96 06/14/96 N ESP FIXT RCVR CONT PNL. 1 450 450 TE254143 D4B 07/18/96 07/11/96 ES FIXT CONT PNL BMFR 1 250 350 TE254144-1 9852B 06/14/96 06/14/96 N ESP CABLE 1E HD 78S 1 175 175 TE254144-2 9852B 06/14/96 06/14/96 N ESP CABLE 2E HD 78S 1 175 175 TE254144-3 9852B 06/14/96 06/14/96 N ESP CABLE 3E HD 78S 1 175 175 TE254144-4 9852B 06/14/96 06/14/96 N ESP CABLE 4E HD 78S 1 175 175 TE254145 9852B 06/14/96 06/14/96 N ESP CABLE 5E HD 78P 1 160 160 TE254145 9852B 06/14/96 06/14/96 N ESP CBL 84D 1 250 250 TE254148 9852B 06/14/96 06/14/96 N ESP CBL 8E MOLEX PLUGS 1 150 160 TE254149 D7A 03/17/94 07/11/96 N LFRA BD TESTER 1 2500 2500 TE254150 D5A 03/17/94 07/10/96 N ADAPTER TEST BOX 1 1500 1500 TE254150-1 D5A 03/17/94 07/10/96 N BITE LOGIC CARD 1 2000 2000 TE254150-2 D5A 03/17/94 07/10/96 N CABLE 1 200 200 TE254151 D6A 05/06/94 07/11/96 N LFRA CHANNEL BOX 1 800 800 TE254152 D4B 07/18/96 05/14/96 N ESP CBL LFRA PAOL BRD 1 950 950 TE254153 D5C 02/18/92 07/10/96 N PADDLE-BD CARD GAGE 1 1250 1250 TE254153-1 D5C 02/18/92 07/10/96 N D.C. PWR CABLE 1 50 50 TE254161 9852B 08/14/96 06/14/96 N ESP CABLE 83D 1 100 100 TE254162 9852B 06/14/96 06/14/96 N ESP CABLE 86D 1 100 100 4-JUN-97 Page: 3 TOOL MASTER Contract Number:N00024-85-C-6236 Description:TB-23/BQ ASA TOOL/T/E Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- TE254163 98528 06/14/96 06/14/96 N ESP CABLE 6E 1 100 100 TE254164 98528 06/14/96 06/14/96 N ESP CABLE 10E 50 PIN 1 300 300 TE254165 98528 06/14/96 06/14/96 N ESP CABLE 11E 60 PIN 1 310 310 TE254168 D5F POS 06/15/96 07/11/96 N ESP CABLE 12E 1 250 250 TE254169 9852B 06/14/96 06/14/95 N ESP CABLE 13E 1 250 250 TE254170-1 SN1 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250 TE254170-1 SN2 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250 TE254170-1 SN3 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250 TE254170-1 SN4 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250 TE254170-1 SN5 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250 TE254170-1 SN6 9852B 10/29/86 06/20/96 N ESP CARD LFRA 1 250 250 TE254170-2 SN1 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250 TE254170-2 SN2 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250 TE254176 D6C 02/26/92 07/11/96 N BRKOUT BOX - ASA 1 750 750 TE254176-1 D6A 02/25/92 07/11/96 N J2 INTERFACE CABLE 1 100 100 TE254176-2 D6A 02/25/92 07/11/96 N J3 INTERFACE CABLE 1 120 120 TE254176-3 D6A 02/25/92 07/11/96 N J4 INTERFACE CABLE 1 100 100 TE254176-4 D6A 02/25/92 07/11/96 N J3 INTERFACE CABLE 1 175 175 TE254176-6 D6A 02/25/92 07/11/96 N INTERFACE CABLE 1 150 150 TE254176-7 D7E 02/25/92 07/11/96 N TARGET ARRAY SIMULATOR(??) ?? ?? ?? 00000 TE254195 SN 1 D7A 10/27/95 07/11/96 N CABLE 8DXW7 0008000 1 ?? 50 TE254195 SN 2 D7A 02/28/92 07/11/96 N CABLE 8DXW7 0009000 1 50 50 TE254195 SN 3 D7A 02/28/92 07/11/96 N CABLE 8DXW7 0009000 1 50 50 TE254196 SN 1 D7A 08/29/92 07/11/96 N CABLE 8DXW8 0009000 1 50 50 TE254196 SN 2 D7A 08/29/92 07/11/96 N CABLE 8DXW8 0009000 1 50 50 TE254196 SN 3 D7A 08/29/92 07/11/96 N CABLE 8DXW8 0009000 1 50 50 TE254197 D7A 02/19/92 07/11/96 N PADDLE BOARD 0009000 1 200 300 TE254198 D7A 02/19/92 07/11/96 N ADAPTOR 0009000 1 50 50 TE254199 D7A 11/27/93 07/11/96 LFRA PTR ADAPTOR 0009000 1 50 50 TE254201-1 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30 TE254201-10 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30 TE254201-2 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30 TE254201-3 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30 TE254201-4 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30 TE254201-5 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30 TE254201-6 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30 TE254201-7 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 80 30 TE254201-8 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 80 30 TE254201-9 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 80 30 TE254300 D4B 07/18/96 06/14/96 N T/F ESP LFRA 0007785 1 200 200 TE254301 TOWSON 04/19/94 09/30/96 N T/F SUMMER MEM, PNB 0008960 1 7795 7796 0008980 TE254302 TOWSON 04/19/94 09/30/96 N T/F BMFMR SUMMER SEQ PWB 0008965 1 8135 8135 TE254303 TOWSON 04/19/94 09/30/96 N T/F ARTHMTC BRD ASSY 0007710 1 5293 5293 TE254304 TOWSON 04/19/94 09/30/96 N T/F BFA CONTROL PNB 0007705 1 5342 5342 TE254305 TOWSON 04/19/94 09/30/96 N T/F INTERPOLATOR PNB 000895-4 1 7349 7349 000995-3 0008985 0008995-2 4-JUN-97 Page: 4 TOOL MASTER Contract Number:N00024-86-C-6236 Description: TB-23/BQ ASA TOOL/T/E Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- 80008995-1 TE254306 TOWSON 04/19/94 09/30/96 N T/F LFRA DAC PNB ASSY 8668995-1 1 6867 6867 Toling 21 39323 Test Equip. 186 886982 Total 267 926305 4-JUN-97 Page: TOOL MASTER Contract Number: N00024-89-C-6066 Description: ADC/MK-3-ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T220333 MODERN PATTERN &FOU 08/02/93 10/14/96 N CASTING MOLD, PROPELLER 6667375 1 350 350 T220464 9826 08/05/97 08/17/96 Y TORQUING FIXTURE, VISE 1 1600 1500 T220465-1 9826 06/05/97 09/17/96 Y TORQ WRENCH 75"LB BC50577 1 100 100 T220465-2 C5C 06/05/97 07/18/96 Y TORQ WRENCH 75"LB BC50576 1 100 100 T220466-2 C5C 06/05/97 06/02/97 Y TORQ WRENCH 75" LB BC50576 1 100 100 T220466-3 9820 06/05/97 06/02/97 Y TORQ WRENCH BC51507 1 100 100 T220467ABC-1 9820 06/05/97 09/17/96 N VAC ENCAP CHAMBER UPR STK 1 3000 3000 T220468ABC-1 9820 06/05/97 09/17/96 N VAC ENCAP CHAMBER TOP/LWR 1 3000 3000 T220469A 9820 06/05/97 09/17/96 N VACUUM SYSTEM PUMP 1 2500 2500 T2204698 9820 06/05/97 09/17/96 N VACUUM SYSTEM MANIFOLD 1 350 350 T220470-1 CAL LAB 05/29/97 09/17/96 Y TORQ WRENCH 48"LB BC50581 1 100 100 T220470-2 CAL LAB 05/29/97 09/17/96 Y TORQ WRENCH 48"LB BC50580 1 100 100 T220471 9820 06/05/97 09/17/96 N FEED THRU ASSY BOND FIXT 1 180 180 T220472 C5C 06/04/97 09/17/96 N ULTRASONIC CLEANER 1 1200 1200 T220473 9820 06/05/97 09/17/96 N RING PAD CNTRING/BOND FIX 1 350 350 T220474-1 9820 06/05/97 09/17/96 N BONDING FIXTURE 1 1250 1250 T220474-2 9820 06/05/97 09/17/96 N BONDING FIXTURE 1 1250 1250 T220475-1 9820 06/05/97 09/17/96 N LOWER STACK ASSY FIXTURE 1 250 250 T220475-1 9820 06/05/97 09/17/96 N LOWER STACK ASSY FIXTURE 1 250 250 T220476-? CAL LAB 05/09/97 09/17/96 Y CRIMP TOOL 1 130 130 T220476-2 CAL LAB 05/29/97 09/17/96 Y CRIMP TOOL BC50020 1 130 130 T220477-1 NPO M/A 03/10/94 09/17/96 N MOLD, LWR CLAM SHELL 1 3100 3100 T220477-2 9820 06/05/97 09/17/96 N MOLD, LWR SHELL REY C 8028900 1 1002 1002 8028925-2 T220478-1 C5C 05/30/97 09/17/96 N MOLD, UPPER CLAM SHELL 1 2750 2750 T220478-2 C5C 05/30/97 09/17/96 N MOLD, UPPER CLAM SHELL REV C 8028900 1 965 965 T220479 9820 06/05/97 09/17/96 N LATHE 1 5500 5500 T220480-1 9820 06/05/97 09/17/96 N STACK WIRING ASSY 1 750 750 T220480-2 9820 06/05/97 09/17/96 N STACK WIRING ASSY 1 750 750 T220481 NPO M/A 03/10/94 09/17/96 N UPPER STACK WIRING FIXT 1 150 150 T220482-1 NPO M/A 03/10/94 09/17/96 Y TORQUE WRENCH, 25 LBS 1 125 125 T220482-2 9820 06/05/97 06/02/97 Y TORQ WRENCH 25"LB BC60631 1 125 125 T220483-1 9820 06/05/97 09/17/96 N BUS WIRE FORMING FIXTURE 1 400 400 T220483-2 9820 06/05/97 09/17/96 N BUS WIRE FORMING FIXTURE 1 400 400 T220506 9820 06/05/97 09/17/96 N 30 GAL POLYETHYLENE TANK 1 300 300 T220533 9820 06/05/97 N MOLD, MID COUPLING 1 250 250 T220534-1 9820 06/05/97 N MOLD, COIL BOARD 1 500 500 T220523 9820 06/05/97 09/17/96 N MOLD 8132888-2 1 3000 3000 T220524 9820 06/05/97 09/17/96 N MOLD 8132887-2 1 3000 3000 T404001-1 C5D 01/14/92 07/02/96 N HIOLD FIX, HOVER CONT 4709300 1 125 125 T404001-2 C5D 06/23/93 07/02/96 N HOLD, FIXT HOVER CONT 4709300 1 125 125 T404002 C5D 01/23/92 07/02/96 N PANEL, HOVER CONTROL 4709300 1 275 275 T404003 C5D DOS 01/14/92 07/02/96 Y PANEL ASSY, HOVER ASSY 4709300 1 275 275 T404004-1 C5D 01/14/92 07/02/96 N END CAP, RDT POOL TEST 4709300 1 175 175 T404004-2 C5D 01/14/92 07/02/96 N END CAP, RDT POOL TEST0 4709300 1 175 175 T404006-1 C5D 10/21/96 10/16/96 N ADAPT HOLD FIXT, RDT 4709300 1 421 421 T404006-2 C5D 01/14/92 07/02/96 N ADAPT HOLD FIXT, RDT 4709300 1 421 421 TE254416 9820 06/05/97 09/17/96 N COIL ASSY TEST FIXTURE 1 1170 1170 TE256000-3 C5D DOS 01/23/92 07/02/96 Y GAGE, HELICOID PRESSUR0 4709300 1 950 950 Tooling 46 41431 Test Equip. 2 2120 Total 48 43551 4-JUN-97 Page:1 TOOL MASTER Contract Number: N00383-88-G-K301 Description: Q13B SPEC TOOL/TEST EQUIP Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T207231 C6E 06/17/93 07/02/96 N DRILL JIQ 10872184567 1 321 321 T207232 C6E 06/17/93 07/02/96 N DRILL JIQ 1087218 1 478 478 T207233 C6E 06/17/93 07/02/96 N DRILL JIQ 1087218-2 1 198 198 1087218-1 T207234 C6E 06/17/93 07/02/96 N ALIGNMENT FIXTURE 1087218-3 1 78 78 T207385-ABCD C6D 09/30/93 07/02/96 N PRESSURE TEST FIXTURE 1060394 1 322 322 T207395&A C4D 08/05/96 08/05/96 N PRESSURE TEST FIXTURE 1048920 1 494 494 T207397 C5D 09/30/98 07/02/98 N TEST PLATE 1067248 1 170 170 T207611 C3F 02/28/92 08/27/96 N DRILL JIQ 1043165 1 212 212 T207631 C3F 03/03/92 06/27/96 N MOLD 1057269 1 590 590 T207650 SONFARRELL, INC. 12/04/72 07/12/96 N MOLD 1067222 1 2219 2219 T207664-1 C2B 06/02/98 06/27/96 N BOND & LOCATE FIXTURE 1049927 1 57 57 T207664-2 C2B 06/02/98 08/27/96 N BOND & LOCATE FIXTURE 1049927 1 57 57 T207664-3 C2B 06/02/92 08/27/96 N BOND & LOCATE FIXTURE 1049927 1 57 57 T207664-4 C2B 08/23/94 06/27/96 N LOCATING FIXTURE 1049927 1 57 57 T207727-1 C7A 05/14/96 08/02/96 N BAFFLE HOLDING FIXTURE 3187780 1 63 63 1049928 T207727-2 TELFWHSE 08/01/93 08/02/96 N BAFFLE HOLDING FIXTURE 1049928 1 63 63 3187780 T207727-3 TELFWHSE 08/01/93 08/02/96 N BAFFLE HOLDING FIXTURE 3187780 1 38 38 1049926 T207727-4 TELFWHSE 08/01/93 08/02/96 N BAFFLE HOLDING FIXTURE 3187780 1 63 63 1049928 T207727-5 TELFWHSE 08/01/93 08/02/95 N BAFFLE HOLDING FIXTURE 3187780 1 63 63 1049928 T207727-6 TELFWHSE 08/01/93 08/02/96 N BAFFLE HOLDING FIXTURE 3187780 1 63 63 1049920 T207727-7 TELFWHSE 08/01/93 08/02/96 N BAFFLE HOLDING FIXTURE 3167780 1 63 63 1049928 T207776 9852B 01/10/78 08/09/96 N TANK TEST FIXTURE 1049980 1 159 159 T207965 LINMOLD CO. 03/08/73 07/12/95 N MOLD 1067240-998 1 724 724 T208013 TELFWHSE 08/01/93 08/02/96 N ALUMINUM DIE, FWD END 1050364 1 2970 2970 T208014 TELFWHSE 08/01/93 08/02/96 N ALUMINUM DIE 1050364 1 2359 2309 T208015 TELFWHSE 08/01/93 08/02/96 N PUSHOFF RING 1060364 1 31 31 T208018 TELFWHSE 08/01/93 08/02/96 N STEEL MANDREL 1060384 1 1082 1082 T208118 RUBBERCRAFT 11/11/85 07/17/96 N MOLD, COYER FLANGE 1070522 1 417 417 T208355 C7B 01/30/97 07/10/96 N SHAKE TEST FIXTURE (1 SET) 1049201 1 25 25 T208556 BLOOMERS METAL STAMP 09/21/77 07/10/96 N FORM DIE 1048304 1 862 662 T208557 BLOOMERS METAL STAMP 09/21/77 07/10/96 N FORM DIE 1048364 1 285 285 T208682A/B G & D INDUSTRIES 02/26/87 07/23/96 N DRILL JIG & GAGE 1047160 1 834 834 T209075 J4D 02/20/96 02/20/96 N TANK TEST FIXT 1049928 1 0 0 T209151 C4B 03/11/92 06/28/96 N HYDRO STD ADAPTER 1049928 1 167 167 T211537 C4F 02/27/92 07/01/96 N DRILL JIG 3134269 1 93 93 T211538 C5F 11/02/94 07/02/96 N PERM MOLD 3153771 1 246 246 T211600 C5A 03/05/92 07/01/96 N TEMPLATE 3134276 1 28 28 T211601 C5A 03/05/92 07/01/96 N TEMPLATE 3134272-1 1 16 16 T211602 C5A 03/05/92 07/01/96 N TEMPLATE 3134272-2 1 16 16 T211603 C5A 03/05/92 07/01/96 N TEMPLATE 1 33 33 T211619 C5A 03/05/92 07/01/96 N TEMPLATE 3134263-1 1 97 97 T211620 C6E1 02/28/92 01/09/96 N ROUTER FIXTURE 3134263-1 1 81 81 4-JUN-97 Page: TOOL MASTER Contract Number: N00019-97-G-0008 Description: ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T211623 TURNER CASTING CORP. 07/25/91 07/12/96 N WOOD PATTERN 3153759 1 331 331 T211624 C6F 02/27/92 07/09/96 N WOOD PATTERN 3153766 1 329 329 T211648 C5A 03/05/92 07/01/96 N TEMPLATE 3152716-1 1 45 45 T211664 C5A 03/05/92 07/01/96 N TEMPLATE 3134317 1 41 41 T211665 C5A 03/05/92 07/01/96 N TEMPLATE 3154333-1 1 45 45 T211666 C5A 03/05/92 07/01/96 N TEMPLATE 3154333-2 1 37 37 T211667 C5A 03/05/92 07/01/96 N TEMPLATE 3154271 1 33 33 T211670 ACE RUBBER CO. 04/19/72 07/01/96 N CAVITY MOLD 1060397 1 971 971 T211672 C3F 02/20/92 06/27/96 N CAVITY MOLD 3153078 1 229 229 T211779 C5A 03/05/92 07/01/96 N TEMPLATE 3154340-1 1 113 113 T211780 C5A 03/05/92 07/01/96 N MOLD FIXTURE 3154940-1 1 64 64 T211781 C5A 03/05/92 07/01/96 N TEMPLATE 315340-2 1 33 33 T211782 C5A 11/03/94 07/01/96 N TEMPLATE 3154342 1 28 28 T211812 C5E 06/24/93 07/02/96 N PERMANENT MOLD 3153755 1 487 487 T211813ABCD TEMPCO 09/11/90 07/10/96 N CASTING MOLD 3144273 1 608 608 T211847A/B G & D INDUSTRIES 02/26/87 07/23/96 N FABRIC MODELS 1 639 1270 T211849 G & D INDUSTRIES 02/26/87 07/23/96 N HI-TEMP DIE 3166690 1 749 749 T211860A/B G & D INDUSTRIES 02/26/87 07/23/96 N DRILL/TRIM FIXTURE 3165990 1 555 555 T211851 G & D INDUSTRIES 02/26/87 07/23/96 N FABRIC MODELS 3165990 1 333 333 T211852 G & D INDUSTRIES 02/27/87 07/23/96 N HI TEMP DIE 3165070 1 360 360 T211911 TEL FWHSE 08/01/93 08/02/96 N COMPRESSION MOLD 3149664 1 3692 3692 T212172 F2A 07/31/95 07/12/96 N CABLE HARNESS BRD REV A 3134270 1 43 43 T213144 C3F 02/03/92 06/27/96 N SINGLE CAVITY MOLD 3152816-1 1 322 322 T213322 TELFWHSE 08/01/92 08/02/96 N CHECK FIXTURE 1000365 1 643 643 T213537-1 C5C 09/30/93 07/01/96 N LOCATING TOOL 3167509 1 50 50 T213537-2 C5C 03/09/80 08/09/96 N LOCATING TOOL 3167509 1 50 50 T213537-3 C5C 09/30/93 07/01/96 N LOCATING TOOL 3167689 1 50 50 T213537-4 C5C 08/09/96 08/09/96 N LOCATING TOOL 3167589 1 50 50 T213537-5 C5C 09/30/93 07/01/96 N LOCATING TOOL 3167589 1 50 50 T2136772A C5E 06/17/93 07/02/96 N DRILL FIXTURE 3153200 1 498 498 T215466 C5A 03/05/92 07/01/96 N TEMPLATE 3166495 1 385 385 T216629-1 C5A 03/05/92 07/01/96 N SPANNER WRENCH 3161360 1 54 54 T216629-2 C5A 03/05/92 07/01/96 N SPANNER WRENCH 3103186 1 54 54 T216238 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 147 147 T216239 C5A 08/21/96 07/01/96 N WALES TEMPLATE 1 49 49 T216240 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 134 134 T216241 C6E4 02/20/92 07/09/96 N ROUTER PLATE 1 206 206 T216242 C5A 03/05/92 07/01/96 N ROUTER PLATE 1 79 79 T216243 C5A 03/05/92 07/01/96 N ROUTER PLATE 1 60 60 T216351 C5A 03/05/92 07/01/96 N P. C. TEMPLATE 1 30 30 T216352 C6E4 02/20/92 07/09/96 N ROUTER PLATE 1 243 243 T216354 C5A 03/05/92 07/01/96 N ROUTER PLATE 1 57 57 T216355 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 79 79 T216357 C6E3 02/20/92 07/09/96 N P. C. TEMPLATE 1 42 42 T216358 C5A 10/19/93 07/01/96 N WALES TEMPLATE 1 49 49 T216359 C5A 03/01/93 07/01/96 N WALES TEMPLATE 1 42 42 T216360 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 42 42 T216361 C5A 09/09/96 07/01/96 N WALES TEMPLATE 1 91 91 T216362 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 42 42 T216378 C5A 03/05/92 07/01/96 N DRILL FIXTURE 1 246 246 4-JUN-97 Page: TOOL MASTER Contract Number: N00383-88-G-K301 Desription: ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T216453 C5A 10/29/93 07/01/96 N WALES TEMPLATE 1 85 85 T216455 C5A 03/05/92 07/01/96 N PANTO MASTER 1 198 198 T216415 C5A 05/03/93 07/01/96 N WALES TEMPLATE 1 122 122 T216416 C5A 03/05/92 07/01/96 N DRILL FIXTURE 1 295 295 T216417 C6E3 04/13/94 07/09/96 N WALES TEMPLATE 1 129 129 T216418 C5A 03/09/93 07/01/96 N WALES TEMPLATE 1 122 122 T216419 C6E3 03/09/93 07/09/96 N WALES TEM[LATE 1 262 262 T216420 C6E1 03/09/93 07/09/96 N WALES TEMPLATE 1 246 246 T216421 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 77 77 T216422 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 80 80 T216423 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 160 160 T216439 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 48 48 T216440 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 91 91 T216441 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 142 142 T216443 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 99 99 T216445 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 114 114 T216447 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 83 83 T216448 C6E2 0205/92 0709/96 N WALES TEMPLATE 1 122 122 T216449 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 152 152 T216451 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 236 236 T216452 C6E2 02/20/92 07/09/96 N ROUTER PLATE 1 137 137 T216453 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 293 293 T216454 C6E1 02/20/92 07/09/96 N WALES TEMPLATE 1 129 129 T216455 C6E2 02/28/92 07/09/96 N ROUTER PLATE 1 214 214 T216456 C6E1 02/20/92 07/09/96 N P. C. TEMPLATE 1 297 297 T216457 C6E1 02/20/92 07/09/96 N P. C. TEMPLATE 1 103 103 T216458 C6E1 02/20/92 07/09/96 N P. C. TEMPLATE 1 103 103 T216459 C6E3 09/30/92 07/09/96 N P. C. TEMPLATE 1 73 73 T216460 C6E3 12/05/93 07/09/96 N P. C. TEMPLATE P/N REV C 1 80 80 T216461 C6E3 12/08/93 07/09/96 N P. C. TEMPLATE 1 72 72 T216462?A C6E1 05/07/95 07/09/96 N P. C. TEMPLATE 1 90 90 T216465 C5A 05/10/92 07/01/96 N SPOT WELD FIXTURE 1 77 77 T2164652-A C6E4 04/13/94 07/09/96 N SHEAR & ROUTER TEMP REV A 3184045-2 1 171 171 T216478 C5A 03/05/92 07/01/96 N PREP FIXTURE 1 19 19 T216485 C5A 03/01/93 07/01/96 N WALES TEMPLATE 1 42 42 T216488 TOWSON 04/26/94 09/30/96 N PREP FIXTURE 1 31 31 T216491 C5A 03/0/92 07/01/96 N WALES TEMPLATE 1 49 49 T216500-1 C5A 09/27/96 07/01/96 N PREP BLOCK 1 10 10 T216500-2 C5A 07/01/96 09/27/96 N PREP BLOCK 1 10 10 T216505 C5A 03/21/94 07/01/96 N WALES TEMPLATE 1 54 10 T216522?-A C5A 03/05/92 07/01/96 N PREP FIXTURE 1 245 245 T216567-1 9852B 06/17/96 08/17/96 N ALIGNMENT FIXTURE 3183305-601 1 74 74 T216567-2 9852B 06/17/96 08/17/96 N ALIGNMENT FIXTURE 3183305-601 1 74 74 T217147 C5A 03/06/92 07/01/96 N TEMPLATE 3188469-4 1 127 127 T217828 C5A 03/06/92 07/01/96 N MOLD FIXTURE 1049920 1 201 201 T217829 C4C 03/12/92 08/28/96 N STRAIGHTENING TOOL 1049920 1 440 440 T217835 C5A 03/05/92 07/01/96 N DRILL FIXTURE 1 405 405 T217838-1 C4B 03/11/92 08/28/96 N HOLD FIXT. PRE AMP 3135110 1 137 137 T217838-2 C4B 03/11/92 08/28/96 N HOLD FIXT. PRE AMP 3135110 1 137 137 T217846 C5A 08/24/94 07/01/96 Y STATION HEADER FIXTURE 1 500 500 4-JUN-97 Page: TOOL MASTER Contract Number: N00383-88-G-K301 Description: ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T217913 C5A 03/05/92 07/01/96 N WALES TEMPLATE 3183111 1 30 30 3183111-1&2 T217966 C5A 03/06/92 07/01/95 N DRILL TEMPLATE 3183204-001 1 65 65 T217967 C5A 03/06/92 07/01/96 N DRILL TEMPLATE 3182504-001 1 65 65 T217968 C5A 03/06/92 07/01/96 N DRILL TEMPLATE 31835??-001 1 65 65 T217969 C5A 03/06/92 07/01/96 N DRILL TEMPLATE 3183804-001 1 65 65 T218121 C5B 03/09/92 07/01/96 N TEMPLATE 3198341-2 1 45 45 3198341-1 T218427 C5B 03/09/92 07/01/96 N SHEAR TEMPLATE 3310718-5 1 41 41 3310718-6 T218248-1 CAL LAB 05/04/97 06/14/96 Y CRIMPER 3310700 1 0 0 T218248-2 C4A 03/15/97 07/10/96 Y CRIMP TOOL 3310700 1 70 70 T218248-3 9852E 03/05/96 06/21/96 Y HAND CRIMP TOOL 3310700 1 70 70 T218249-1 9852E 03/16/97 07/01/96 Y HAND CRIMP TOOL 3310700 1 140 140 T218249-2 CAL LAB 06/04/97 05/10/95 Y CRIMP TOOL 3310700 1 70 70 T218249-3 9852E 03/05/96 07/10/96 Y HAND CRIMP TOOL 3310700 1 70 70 T218257 F3A 03/07/97 07/15/96 N CABLE BOARD 3310574-101 1 216 216 T218258 F2A 02/16/92 07/12/96 N CABLE BOARD 331074? 1 104 104 T218259 F3A 03/07/97 07/15/96 N CABLE BOARD 331074? 1 520 520 T2182?? F3A 03/07/97 08/09/96 N CABLE BOARD 3310666-102 1 5350 5350 T218287 C7E6 02/28/92 07/10/96 N TEMPLATE 3310669-1 1 74 74 T218288 C6E17 02/20/92 07/09/96 N TEMPLATE 3310669-2 1 91 91 T218296 C6E21 02/21/92 07/09/96 N PANTO MASTER 3310662-1 1 158 158 T218297 C5B 01/03/94 07/01/96 N TEMPLATE 3183406 1 99 99 T218298 C6E18 02/20/92 07/09/95 N TEMPLATE 3310662-2 1 87 87 T218299 C6E18 02/21/92 07/09/96 N TEMPLATE 3310662-3 1 87 87 T218300 C5B 03/09/92 07/01/96 N DRILL FIXTURE 3195284 1 125 125 T218302 C5B 02/20/92 07/01/96 N SPOT WELDIMG FIXTURE 3192493 1 136 136 T218303 C5B 03/09/92 07/01/96 N TEMPLATE 3192493-3 1 52 52 T218304 C5B 03/09/92 07/01/96 N TEMPLATE 3192493-2 1 52 52 T218305 C5B 03/09/92 07/01/96 N TEMPLATE 3192493-1 1 52 52 T218306 C5B 03/09/92 07/01/96 N TEMPLATE 3195407-? 1 26 26 T218307 C6E14 02/28/92 07/09/96 N TEMPLATE 3194984 1 86 86 T218308 C5B 03/09/92 07/01/96 N TEMPLATE 3194984-2 1 139 139 T218309 C6E6 02/20/92 07/09/96 N WALES TEMPLATE 3310694-1 1 136 136 T218310 C5B 03/09/92 07/01/96 N FORM TEMPLATE 3183778-4 1 61 61 T218311 C5B 03/09/92 07/01/96 N TEMPLATE 3183778-7 1 87 87 T218312 C5B 03/09/92 07/01/96 N TEMPLATE, BRCKT CLMP REV B 3195926 1 71 71 T218313 C6E6 02/20/92 07/09/96 N TEMPLATE 3310693-1 1 184 184 T218314 C5B 03/09/92 07/01/96 N TEMPLATE 3310693-2 1 187 187 T218315 C6E7 02/20/92 07/09/96 N TEMPLATE, REV C 3310772-1 1 124 124 T218316 C5B 03/09/92 07/01/96 N TEMPLATE 3310772-2 1 112 112 T218317 C5B 03/09/92 07/01/96 N TEMPLATE 3310772-3 1 112 112 T218318 C6E19 02/21/92 07/09/96 N TEMPLATE 3310655-1 1 74 74 T218320 C6E6 02/20/92 07/09/96 N TEMPLATE 3310679 1 61 61 T218321 C6E6 02/21/92 07/09/96 N PANTO MASTER 3310679 1 100 100 T218326 C6E9 02/20/92 07/09/96 N TEMPLATE 3310661 1 126 126 T218327 C5B 03/09/92 07/01/96 N TEMPLATE 3310826 1 48 48 T218328 C5B 03/09/92 07/01/96 N TEMPLATE 3310827 1 48 48 T218329 C6E15 02/20/92 07/09/96 N TEMPLATE 3310548-1 1 113 113 4-JUN-97 Page: TOOL MASTER Contract Number: N00383-88-G-K301 Description:Q13B SPEC TOOL/TEST EQUIP Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T218330 C6E12 02/20/92 07/09/96 N TEMPLATE 3310648-2 1 113 113 T218331 C5B 03/09/92 07/01/96 N TEMPLATE 3310648-3 1 26 26 T218332 C6E6 02/21/92 07/09/96 N TEMPLATE, REV D 3310659 1 74 74 T218333 C6E5 02/20/92 07/09/96 N TEMPLATE 3310699 1 74 74 T218334 C5B 03/09/92 07/01/96 N TEMPLATE 3310698 1 61 61 T218335 C5B 03/09/92 07/01/96 N TEMPLATE 3310733 1 61 61 T218336 C5E18 02/21/92 07/09/96 N TEMPLATE 3310708 1 87 87 T218338 C5B 03/09/92 07/01/96 N TEMPLATE, P/N REV D 3310656 1 149 149 T218339 C6E9 02/20/92 07/09/96 N ROUTER PLATE 3310856 1 174 174 T218340 C6E12 02/20/92 07/09/96 N TEMPLATE 3310649-1 1 118 118 T218341 C5E19 02/21/92 07/09/96 N TEMPLATE 3310549-2 1 48 48 T218343 C5B 05/05/93 07/01/96 N TEMPLATE 3310883-2 1 13 13 T218344 C6E5 02/20/92 07/09/96 N TEMPLATE 3310846-7 1 139 139 T218345 C6E12 02/20/92 07/09/96 N TEMPLATE 3310846-10 1 168 168 T218346 C6E5 02/20/92 07/09/96 N TEMPLATE 3310845-11 1 128 128 T218347 C6B 03/09/92 07/01/96 N TEMPLATE 3310852 1 74 74 T218348 C6E7 02/20/92 07/09/96 N TEMPLATE 3310848-1 1 100 100 T218349 C6E6 02/20/92 07/09/96 N TEMPLATE 3310848-9 1 139 139 T218350 C637 02/21/92 07/09/96 N TEMPLATE 3310846-20 1 74 74 T218351&A C7E10 03/02/92 07/10/96 N DRILL TEMPLATE 3310850 1 180 180 3319245 3310546 3319246 T218352A C7E8 03/02/92 07/10/96 N DRILL FIXTURE 3310646 1 180 180 3310246 T218356 C6E9 02/24/92 07/09/96 N TEMPLATE 3310688-1 1 400 400 T218357 C6B 03/09/92 07/01/96 N TEMPLATE, P/N REV F 3310688-1 1 126 126 T218358 C5B 03/09/92 07/01/96 N TEMPLATE 3310688-2 1 21 21 T218359 C5B 03/09/92 07/01/96 N TEMPLATE 3310688-3 1 48 48 T218360 C5B 03/09/92 07/01/96 N TEMPLATE 3310698-4 1 26 26 T218361 C5B 03/09/92 07/01/96 N TEMPLATE 3310714-1 1 100 100 T218362 C6E21 02/24/92 07/09/96 N TEMPLATE 3310714-1 1 129 129 T218363 C5B 03/09/92 07/01/96 N TEMPLATE 3310731 1 48 48 T218364 C6B 12/21/93 07/01/96 N TEMPLATE 3310315 1 74 74 T218365 C5B 03/09/92 07/01/96 N TEMPLATE 3310314 1 65 65 T218366 C6B 03/09/92 07/01/96 N TEMPLATE 3310713 1 48 48 T218367 C5E5 02/21/92 07/09/96 N TEMPLATE 3310817 1 113 113 T218368 C5B 03/09/92 07/01/96 N TEMPLATE, P/N REV C 3310833 1 48 48 T218369 C5B 05/05/93 07/01/96 N TEMPLATE, P.N REV B 3310739 1 49 49 T218370 C838 02/21/92 07/09/96 N ROUTER PLATE, P/N REV B 3310729 1 100 100 T218371 C7E4 02/24/92 07/10/96 N TEMPLATE 3310654-1 1 300 300 T218372 C6E18 02/24/92 07/09/96 N TEMPLATE, 3310654-2 1 74 74 T218373 C58 03/09/92 07/01/96 N TEMPLATE, P/N REV F 3310654-3 1 65 65 T218374 C8E9 02/24/92 07/09/96 N TEMPLATE 3310654-4 1 200 200 T218375 C6E19 02/24/92 07/09/96 N TEMPLATE 3310654-5 1 78 78 T218376 C6E18 02/24/92 07/09/96 N TEMPLATE 3310654-6 1 25 25 T218377 C5B 03/09/92 07/01/96 N TEMPLATE 3310654-8 1 252 252 T218378 C5B 03/09/92 07/01/96 N TEMPLATE 3310654-9 1 103 103 T218379 C6E6 02/21/92 07/09/96 N TEMPLATE 3310654-10 1 74 74 T218380 C6E19 02/24/92 07/09/96 N TEMPLATE 3310737 1 39 39 4-JUN-97 Page: TOOL MASTER Contract Number: N00383-88-G-K301 Description:Q13BSPEC TOLL/TEST EQUIP Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T218381 C6E19 02/24/92 07/09/96 N TEMPLATE 3314162-1 1 87 87 T218382 C5B 03/09/92 07/01/96 N TEMPLATE 3310019 1 95 95 T218383 C7E6 02/24/92 07/10/96 N TEMPLATE 3310736 1 274 274 T218384 C7F 07/10/96 07/10/96 N ROUTER FIXTURE 3310736 1 329 329 T218385 C7E9 03/02/92 07/10/96 N TEMPLATE 3310686 1 213 213 T218386 C5B 05/11/93 07/01/96 N TEMPLATE 3310712-1 1 74 74 T218387 C7E6 03/02/92 07/10/96 N ROUTER FIXTURE 3310689-1 1 352 352 T218388 C7E6 03/02/92 07/10/96 N TEMPLATE ,P/N REV C 3310689-1 1 352 352 T218389 C6E12 02/24/92 07/09/96 N PANTO MASTER 3310689-1 1 74 74 T218390 C5B 03/09/92 07/01/96 N TEMPLATE 3310732 1 61 61 T218399 F2A 02/10/92 07/12/96 N CABLE BOARD 3310760 1 110 110 T218401 F3B 02/10/92 07/15/96 N CABLE BOARD 3310744 1 223 223 T218404 C5B 03/09/92 07/01/96 N LAYOUT TEMPLATE 3310689 1 87 87 T218417 C6E21 02/24/92 07/09/96 N PANTO MASTER 3310689 1 320 320 T218422ABC C7E11 02/26/92 07/16/96 N PANTO MASTER 1 213 213 T218423 C7E6 02/24/92 07/10/96 N TEMPLATE 3310647-1 1 275 275 T218426 C6E9 02/24/92 07/09/96 N TEMPLATE 3310662-1 1 232 232 T218429 C6E21 02/24/92 07/09/96 N PANTO MASTER 3310662-1 1 91 91 T218432 C5B 03/09/92 07/01/96 N TEMPLATE 3314157-1 1 126 126 T218443 C5B 03/09/92 07/01/96 N SHEAR & BRAKE FIXTURE ? 1 39 39 T218444 C5B 03/09/92 07/01/96 N SHEAR & BRAKE FIXTURE ? 1 48 48 T218445 C5B 03/09/92 07/01/96 N TEMP/SH/BR/FIXTURE 3310246-4 1 39 39 T218447 C6E14 02/24/92 07/09/96 N SHEAR & FORM TEMPLATE 3310646-5 1 61 61 T218458 F2A 05/08/94 07/11/96 N HARNESS BOARD 3310770-401 1 215 215 T218459 C5B 03/09/92 07/01/96 N TEMPLAE 8190038-3 1 48 48 T218478 F3A 03/10/97 07/15/96 N HARNESS BOARD, AZAI P1 3310685-401 1 65 65 T218480 F2A 02/10/92 07/12/96 N HARNESS BOARD 3316665-403 1 65 65 T218498 F3A 03/10/97 07/15/96 N HARNESS BOARD J2 3316600-402 1 101 101 T218621 C5B 03/09/92 07/01/96 N DRILL FIXTURE 3310834-1 1 50 50 T218622 C5B 02/12/92 07/16/96 N HOLD FIXTURE 3190099 1 75 75 T218625 C5B 03/09/92 07/01/96 N DRILL FIXTURE 3316686-5 1 60 60 T218632 9234 07/06/87 08/08/96 N MAKS ALIGN FIXT 1 708 708 T218748 C5B 03/10/92 07/01/96 N FORM TEMP 3190082-2 1 75 75 T218754 C5B 03/10/92 07/01/96 N TEMPLATE 3310765 1 135 135 T400300 TELPWHSE 08/01/93 08/02/96 N LAY-IP HOLD 1006364 1 28 28 T400301 TELPWHSE 08/01/93 08/02/96 N FOAM MOLD 1060364-1 1 419 419 T400302 TELPWHSE 08/01/93 08/02/96 N FOAM MOLD 1000364-2 1 335 335 T400303 TELPWHSE 08/01/93 08/02/96 N LAYUP MOLD 1060364-4 1 54 54 T400304 TELPWHSE 08/01/93 08/02/96 N MADREL 1056364-3 1 431 431 T400306ABC TELPWHSE 08/01/93 08/02/96 N DRILL JIG 1000364 1 620 620 T400312 KLUNE 11/22/72 07/12/96 N BLANK DIE 1049920-6 1 110 110 T400411 TELPWHSE 08/01/93 08/02/96 N DRILL JIG 2669401 1 324 324 T400447 ACE TUBE CO. 07/28/71 07/10/96 N CAVITY MOLD 1660301 1 260 260 T401132 C3F 02/28/92 06/27/96 N SINGLE CAVITY MOLD 3051072 1 165 165 T401133 C3F 02/28/92 06/27/96 N SINGLE CAVITY MOLD 3051073 1 180 180 T401143AB C6F 02/28/92 07/09/96 N PATTERN & CORE BOX 3151156 1 1305 1305 0T401144ABC C2F 02/28/92 06/26/96 N PATTEN & 2 CORE BOXES 3151157 1 985 985 T401145ABCD C6F 02/28/92 07/08/96 N PLASTIC PATTERN 3151158 1 795 795 T401421 INDUSTRIAL TUBE 07/02/71 07/17/96 N FORMING TOOL 31655871 1 740 740 4-JUN-97 Page: TOOL MASTER Contract Number: N00383-98-G-K301 Description: ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T401599 G & D INDUSTRIES 02/26/87 07/23/96 N PLASTER MOCKUP 3185355 1 2670 2670 T401600 G & D INDUSTRIES 02/26/87 07/23/96 N MOLD 3185355 1 2636 2636 T401601 G & D INDUSTRIES 02/26/87 07/23/96 N FORNING TOOL A 3185355 1 1115 1115 T401602 G & D INDUSTRIES 02/26/87 07/23/96 N FORNING TOOL B 3185355 0 0 0 T401603 G & D INDUSTRIES 02/26/87 07/23/96 N TRIM DRILL FIXTURE 3185355 1 676 676 T401605 G & D INDUSTRIES 02/26/87 07/23/96 N EPOXY MOLD 3185350 1 1960 1960 T401606 G & D INDUSTRIES 02/26/87 07/23/96 N EPOXY MOLD A 3185350 1 860 860 T401607 G & D INDUSTRIES 02/26/87 07/23/96 N FORNING TOOL B 3185350 0 0 0 T401608 G & D INDUSTRIES 02/26/87 07/23/96 N TRIM DRILL FIXTURE 3185350 1 510 510 T401609 G & D INDUSTRIES 02/26/87 07/23/96 N APPLY ROUTING FIXTURE 3185350 1 150 150 T401611 G & D INDUSTRIES 02/26/87 07/23/96 N EPOXY MOLD 3185350 1 795 795 T402404 D5F POS 02/11/97 06/26/96 N PROTRACTOR, REEL MACHINE 3323471 1 250 250 T402421 G & D INDUSTRIES 02/25/87 07/23/96 N MOLD LOW FUNNEL 3318695 1 3500 3500 T402463 G & D INDUSTRIES 02/26/87 07/23/96 N LAYUP MOLD 3165890 1 2500 2500 T603660-1 CICON 01/26/97 07/10/96 N HARNESS HOLDING FIXTURE 1 258 258 T603660-2 CICON 01/26/97 09/27/96 N HARNESS HOLDING FIXTURE 1 258 258 T603766 C6B 03/11/92 07/08/96 N ROUTER PLATE 3310646 1 120 120 3319246 45 45 T603767 C6B 03/11/92 07/06/96 N SAW TEMPLATE 3319246 1 45 45 T603768 C6B 03/11/92 07/06/96 N SAW TEMPLATE 3310646 1 45 45 T603769 C6B 03/11/92 07/09/96 N SAW TEMPLATE 3319246 1 45 45 3310646 T603770 C6B 03/11/92 07/09/96 N SAW TEMPLATE 3319246 1 45 45 3310646 T603771 C6B 03/11/92 07/09/96 N SAW TEMPLATE 3310646 1 45 45 3319246 T603777 C6B 03/11/92 07/09/96 N DRILL JIG 3310834-2 1 100 100 T603780 C6B 03/11/92 07/09/96 N ROUTER PLATE 3310846 1 120 120 3319246 TE251006 D5A 09/27/96 09/27/96 N POLAR & RES. HYDRO T/F 1 110 110 TE251008 9852D 06/25/96 06/25/96 REEL MACH PANEL 1 344 344 TE251008-4 D4B 06/25/96 06/25/96 N TEST CONNECTOR P5657 1 100 100 TE251008-5 D4B 06/25/92 06/25/96 N TESTCONNECTOR P5019 1 100 100 TE251008-6 D4B 06/25/96 06/25/96 CONTINUITY TEST FIXTURE 1 100 100 TE251010 9852AR/O 05/10/89 06/09/96 N JIFF-LIFT T/F 1 175 175 TE251696 9234 04/12/93 06/17/96 T/F NAFI-4 & HYBRID 4F 3185210 1 875 875 TE251698 9234 04/14/93 06/17/96 T/F NAFI-3 & HYBRID 3F 3185205 1 767 767 TE251705 D6C 02/26/92 07/11/96 N TEST FIXT, HYBRID 1021 3185240 1 324 324 TE251710 9762 06/20/90 09/27/96 T/F CURSOR POSITION CONT 3184674 1 511 511 TE251712 D6A 06/25/97 07/11/96 N TEST FIXTURE 318370 1 347 347 TE251714 DSF POS 02/10/97 07/12/96 N TEST FIXTURE 1 316 316 TE251748 9234 04/13/93 06/17/96 TEST FIXTURE 3185220 1 300 300 TE251754 D7E 07/02/92 07/11/96 N SONAR CABLE, SUPER TESTER 1 439 439 TE251757 9234 04/14/93 06/17/96 TEST FIXTURE 3185075 1 363 363 TE251760 9852BOOS 06/18/96 06/18/96 SYST ATP TEST STATION 1 8450 8450 TE251760-1 9852BOOS 06/16/96 06/18/96 PANEL, METER 1 1000 1000 TE251760-10 D7F POS 02/10/97 07/18/96 Y OSCXLLOSCOPE 1 3600 3600 TE251760-12 9852BOOS 06/10/96 06/18/96 PANEL, POWER CONTROL 1 800 800 4-JUN-97 Page: TOOL MASTER Contract Number: N00383-88-G-K301 Description: Q13B SPEC TOOL/TEST EQUIP Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- TE251760-13 9852B 06/18/96 05/18/96 PANEL, 50HS POWER 1 700 700 TE251760-14 9852B 06/18/95 05/18/96 PANEL, 400HS POWER 1 1500 1500 TE251760-2 9852B 06/18/96 05/18/96 TIMER, COUNTER 1 2500 2500 TE251760-3 9852BOOS 06/18/96 06/18/96 BURST GEN DRANETZ 206A 1 5000 5000 TE251760-4 D7F POS 02/10/97 05/18/96 WAVEFORM SYNTHESIZER 1 3000 3000 TE251760-5 9852B 06/18/96 06/18/96 CONTROL PANEL, MARTIX 1 80000 80000 TE251760-6 9852B 06/18/96 05/18/96 CONTROL PANEL 1 28761 28761 TE251760-7 9852B 06/18/96 06/18/96 BLOWER 1 150 150 TE251760-8 9852BOOS 06/18/96 05/18/96 PANEL, METER 1 1500 1500 TE252142 9762 05/24/82 07/22/96 N T/F K.C. TESTER D/A CONV 3184649 1 355 355 TE252143 D5F POS 02/10/97 07/11/96 N SUPER TEST CABLE SA 1 200 200 TE252144 9852B 12/12/80 06/13/96 N TEST CABLE SB 1 200 200 TE252146 D5F POS 02/10/97 09/27/96 N TEST CABLE 1 200 200 TE252147 D5F POS 02/10/97 06/13/96 N SUPER TEST CABLE TO 1 200 200 TE252162 9852B 07/22/96 07/22/96 N TEST CABLE 1 200 200 TE252167 DSF POS 02/10/97 07/11/96 N SUPER TEST CABLE TF 1 200 200 TE252168 DSF POS 02/10/97 07/11/96 N SUPER TEST CABLE TG 1 200 200 TE252170 9852B 06/13/96 06/13/96 N TEST CABLE 1 200 200 TE252171 9852B 05/13/96 06/13/96 N TEST CABLE 1 200 200 TE252181 9234 04/19/93 06/17/96 TEST FIXTURE 3185110 1 511 511 TE252182 9234 04/14/93 06/17/96 TEST FIXTURE 3185190 1 402 402 TE252184 9234 04/14/93 06/17/96 TEST FIXTURE 3185100 1 411 411 TE252185 9234 04/14/93 06/17/96 TEST FIXTURE 3185085 1 411 411 TE252186 9234 04/14/96 06/17/96 POWER DISTRIBUTOR BOX 3185230 1 411 411 TE252187 9234 04/14/93 06/17/96 POWER DISTRIBUTOR BOX 3185196 1 411 411 TE252188 9234 04/14/93 06/17/96 POWER DISTRIBUTOR BOX 31652.35 1 411 411 TE252189 9234 04/14/93 06/17/96 POWER DISTRIBUTOR BOX 3165000 1 377 377 TE252230 9234 04/14/93 06/17/96 I. F. HYBRID TEST FIXT 3185100 1 753 753 TE252230-1 DTC POS 02/10/97 09/27/96 Y POWER SUPPLY 1 550 550 TE252237 D5C 02/20/92 07/10/96 N TEST FIXTURE, 1026 1 700 700 TE252242 D3F POS 02/10/97 07/10/96 N TEST HEAD 3183370 1 225 225 TE252250 D3F POS 02/10/97 07/10/96 N TEST HEAD 3183450 1 225 225 TE252251 D3F POS 02/10/97 07/10/96 N TEST HEAD 3183355 1 250 250 TE252253 D3F POS 02/10/97 07/10/96 N TEST HEAD 3183225 1 183 183 TE252300 D4B 02/16/92 07/10/96 TEST FIXTURE 1 653 653 TE252301 D5B 02/19/92 07/10/96 N TEST FIXTURE 3185110 1 214 214 TE252304 9234 07/21/88 06/17/96 HYBRID TRIM FIXTURE 1 214 214 TE252406 D3F POS 02/10/97 07/10/96 N ADAPT MULTILAYER BOARD 3194811 1 1500 1500 TE252475 8900XDCR 10/30/79 08/09/96 NULLMETER 1 3566 3566 TE252483 9852B 05/14/82 08/09/96 TEST FIXTURE 3188225 1 540 540 TE252484-1 D6B 02/25/92 07/11/96 N T/F MAD GATING 2A11 3188483 1 1147 1147 TE252493 9852B 06/18/96 06/18/96 SONAR BITE CNTL A11 3196615 1 1500 1500 TE252494 9852B 06/18/96 06/18/96 DOME CONTROL T/F A2 1 750 750 TE252652 9852B 06/18/96 06/18/96 TEST FIXTURE 3190366 1 500 500 TE252656-1 D4A 02/18/92 07/10/96 N TEST FIXTURE A2A12 3188486 1 2703 2703 TE252657 9852B 06/18/96 06/18/96 TEST FIXTURE 3183426 1 3000 3000 TE252659 9852B 06/18/96 06/18/96 TEST FIXTURE 3198205 1 3205 3205 TE252672 9852B 06/18/96 06/18/96 TEST FIXTURE 3182630 1 1721 1721 TE252674 9852B 06/18/96 06/18/96 TEST FIXTURE 3316405 1 2256 2256 TE252675 9852B 06/18/96 06/18/96 TEST FIXTURE 3198740 1 2805 2805 4-JUN-97 Page: TOOL MASTER Contract Number: N00383-88-G-K301 Description: ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- TE252677 9852B 06/18/96 06/18/96 TEST FIXTURE 3163454 1 1721 1721 TE252678 9852B 06/18/95 06/18/95 TEST FIXTURE 3165460 1 1721 1721 TE252679 9852B 06/18/95 06/18/95 TEST FIXTURE 3165445 1 2233 2233 TE252938 D4B 07/18/95 06/18/96 TEST FIXTURE 3163630 1 1900 1900 TE252739 D4A 02/18/92 07/10/96 N TEST FIXTURE 3167820 1 1921 1921 TE252740 D5B 02/19/92 07/10/95 N TEST FIXTURE 3315780 1 2256 2256 TE252747 9852B 06/18/96 06/18/95 TEST FIXTURE 3185435 1 2776 2776 TE252748 9852B 06/18/95 06/1896 N TEST FIXTURE, AMP DRIVER 3188209 1 1577 1577 TE252749 D5C 00S 02/20/92 07/10/96 Y TEST FIXTURE 3315775 1 2050 2050 TE252765 9852B 06/18/96 06/18/96 TEST FIXTURE 31986610 1 2000 2000 TE252778 9852B 06/18/96 06/18/96 TEST FIXTURE 3196270 1 595 595 TE252803 9852B 05/15/96 06/18/96 TEST FIXTURE 3193465 1 1705 1705 TE252815 9852B 05/16/96 06/18/96 TEST FIXTURE 3195510 1 1700 1700 TE252818 9852B 05/18/96 06/18/96 TEST FIXTURE 3195565 1 2138 2138 TE252835 9852B 06/18/96 06/18/96 TEST FIXTURE 3199831 1 743 743 TE252836 9852B 06/18/96 06/18/96 TEST FIXTURE 3196575 1 2132 2132 TE252837 9852B 06/18/96 06/18/96 TEST FIXTURE 3310500 1 1542 1542 TE252846 9852B 06/18/96 06/18/96 TEST FIXTURE 3185430 1 2200 2200 TE252847 9852B 06/18/96 06/18/96 TEST FIXTURE 3183485 1 2200 2200 TE252848 9852B 06/18/96 06/18/96 TEST FIXTURE 3315750 1 2200 2200 TE252??? 9852B 06/18/96 06/18/96 TEST FIXTURE 3315730 1 1700 1700 TE252850 9852B 06/18/96 06/18/96 TEST FIXTURE 3185290 1 2200 2200 TE252851 9852B 06/18/96 06/18/96 TEST FIXTURE 3183?95 1 1700 1700 TE252883 9852B 06/18/96 06/18/96 TEST FIXTURE 3195605 1 2336 2336 TE252855 9852B 06/18/96 06/18/96 TEST FIXTURE 3183270 1 1710 1710 TE252857 9852B 06/18/96 06/18/96 TEST FIXTURE 3183390 1 1100 1100 TE252864 9852B 06/18/96 06/18/96 TEST FIXTURE 3315760 1 2330 2330 TE252866 D3A 11/18/94 07/10/96 N TEST FIXT, SERVO MECHANISM 1 2118 2118 TE252873 9852B 06/18/96 06/18/96 TEST FIXTURE 3183230 1 1502 1502 TE252876 9852B 06/18/96 06/18/96 TEST FIXTURE 3198365 1 2688 2688 TE252881 9852B 06/18/96 06/18/96 TEST FIXTURE 3198255 1 2115 2115 TE252882 9852B 06/18/96 06/18/96 TEST FIXTURE 3183610 1 1542 1542 TE252888-1 TELFWHSE 06/18/93 08/02/96 END BELL TEST FIXTURE 3149654 1 2400 2400 TE252888-2 TELFWHSE 06/18/93 08/02/96 END BELL TEST FIXTURE 3149654 1 2400 2400 TE252896 9852B 06/18/96 06/18/96 TEST FIXTURE A2A? 3310695 1 2000 2000 TE252897 9852B 06/18/96 06/18/96 TEST FIXTSPEECH AMP A4 3190065 1 1800 1800 TE252898 9852B 06/18/96 06/18/96 TEST FIXT FUNCT GEN A4A1 3310715 1 2200 2200 TE252899 9852B 06/18/96 06/18/96 TEST FIXTLOG FILTR A4A2 3310720 1 2200 2200 TE252900 9852B 06/18/96 06/18/96 TEST FIXT MONITOR A5 3190280 1 2000 2000 TE252901 9852B 06/18/96 06/18/96 TEST FIXT MOD CAR GEN A6 3190015 1 2000 2000 TE252903 9852B 06/18/96 06/18/96 TEST FIXT METER SEAL A? 3190085 1 2200 2200 TE25904 9852B 06/18/96 06/18/96 TEST FIXT PHASE DET A9 3190270 1 2000 2000 TE252905 9852B 06/18/96 06/18/96 TEST FIXT/SICCOND A 16 3190095 1 1800 1800 TE252916 9852B 06/18/96 06/18/96 TEST FIXT PHASE SHFTR A11 3190095 1 1800 1800 3190275 TE252917 9852B 06/18/96 06/18/96 T/F PREAMP ATTEN A12 A13 3190023 1 2000 2000 TE252918 9852B 06/18/96 06/18/96 TEST FIXT ECHO PROC A 14 3190045 1 2000 2000 TE252919 9852B 06/18/96 06/18/96 TEST FIXT RANGE DELAY A15 3190025 1 2000 2000 TE252920 9852B 06/18/96 06/18/96 T/F PULSE WIDTH/MSTR TIMR 3190075 1 2200 2200 TE252921 9852B 06/18/96 06/18/96 T/F HI VOLT REG A2A7 3310705 1 2000 2000 4-JUN-97 Page: TOOL MASTER Contract Number: N00383-88-G-K301 Description: 013B SPEC TOOL/TEST EQUIP Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- TE252923 9852B 05/18/96 06/18/96 T/F MAD & SAD OSC A1A1A2 3310675 1 1800 1800 TE252924 9852E 09/19/95 08/21/96 T/F INTERFC BUFFER A1A1A1 3310725 1 2500 2500 TE252930 D6B 04/30/92 07/11/96 N TEST FIXTURE OP 3190055 1 240 240 TE252931 D5B 02/19/92 07/10/96 N TEST FIXT 3162393 1 2350 2350 TE252932 9852B 06/18/96 06/18/96 CAL FIXT A2A8 LOW VOL. REG 3310595 1 1800 1800 TE252938 9852B 06/18/96 06/18/96 N T/F COS SHAPER 4A14 3316150 1 2000 2000 TE252939 9852B 06/18/96 06/18/96 T/F MULTIPLEXER 4A14 3316155 1 2000 2000 TE254182 9234 04/14/93 06/17/95 N TEST FIXT, ALC & LEVEL 3325690 1 1500 1500 TE254183 9234 04/14/93 06/17/95 N TEST FIXT, D/A CONVERTER 3318663 1 1200 1200 TE254185 9234 04/14/93 06/17/96 N TEST FIXT, AUDIO FILTER 3190431 1 800 800 3189110 TE254186 9234 04/14/93 06/17/96 N TEST FIXT, BANDPASS FILTER 1 1200 1200 TE254187 9234 04/14/93 06/17/96 N TEST FIXT, #1 CONTINUITY 1 1500 1500 TE254189 9234 04/14/93 06/17/96 N TEXT FIXT, #2 CONTINUITY 3322393 1 1500 1500 8013841 3326598 8013840 8013845 3326590 TE254245 9234 04/14/93 06/17/96 N TEST FIXTURE 3327394 1 2000 2000 TE254247 9234 04/06/?? 08/17/96 N TEST FIXT ?? PRO #2 3310440 1 4300 4300 TE265146 TELFWHSE 08/01/93 08/02/96 N HYDROPHONE 1 10151 10151 TE265151 D7C 06/24/93 07/11/96 N SONAR CABLE 1 1174 1174 TE265155 D7D 03/24/92 07/11/96 Y RECORD TEST SET 1 5000 5000 TE270001 98520POS 10/28/95 06/25/96 Y TENSIONING MACHINE 3162368 1 5416 5416 TE4251192-1 9284 07/09/87 07/16/96 BURN IN RACK S/N 1 1 851 851 TE45105 C/L IFR 08/12/96 08/12/96 VAR O SHIFT GENERATOR 1046912 1 2722 2722 Tooling 307 84488 Test Equip. 139 275242 Total 446 359730 4-JUN-97 Page: TOOL MASTER Contract Number: N00019-92-G-0195 Description:Q-13F SPEC TOOL/REEL MACH Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- 403012-1 NAS FLA 02/02/95 10/15/96 N DRILL JIG DOME CONT 2 RYA 8030640 1 1342 1342 403012-2 9855A 05/03/95 05/25/96 N DRILL JIG DOME CONT 2 RYA 8030640 1 1342 1342 403012-3 NAS CA 02/02/95 09/18/96 N DRILL JIG DOME CONT 2 RYA 8030640 1 1342 1342 403013-1 NAS FLA 02/02/95 10/15/96 N DRILL JIG DOME CONT 2 RYA 8030640 1 1342 1342 403013-2 9855A 05/03/95 06/25/96 N DRILL JIG DOME CONT 2 RYA 8030640 1 1342 1342 403013-3 NAS CA 02/02/95 09/16/96 N DRILL JIG DOME CONT 2 RYA 8030640 1 1342 1342 403016-1 NAS FLA 02/02/95 10/15/96 N HOLE TEMP CBL RETNR REV A 8030640 1 898 898 403016-2 C5B 12/17/95 06/25/96 N HOLE TEMP CBL RETNR REV A 8030640 1 898 898 403016-3 NAS CA 02/02/95 09/16/96 N HOLE TEMP CBL RETNR REV A 8030640 1 898 898 403017-1 NAS CA 02/02/95 09/16/96 N TOOL, DRIP PAN BRICKT REV A 8030640 1 500 500 403017-2 C5B 08/25/95 06/25/96 N TOOL, DRIP PAN BRICKT REV A 8030640 1 500 500 403017-3 NAS FLA 02/02/95 10/15/96 N TOOL, DRIP PAN BRICKT REV A 8030640 1 500 500 403018-1 NAS CA 02/02/95 09/15/96 N CUTOUT GUIDE UPR PAN RY A 8030640 1 500 500 403018-2 C5B 06/25/95 06/25/96 N CUTOUT GUIDE UPR PAN RY A 8030640 1 500 500 403018-3 NAS FLA 02/02/95 10/15/96 N CUTOUT GUIDE UPR PAN RY A 8030640 1 500 500 403019-1 NAS CA 02/02/95 09/16/96 N TOOL, UPPER DRIP PAN REV A 8030640 1 371 371 403019-2 C5B 06/25/95 06/25/96 N TOOL, UPPER DRIP PAN REV A 8030640 1 371 371 403019-3 NAS FLA 02/02/95 10/15/96 N TOOL, UPPER DRIP PAN REV A 8030640 1 371 371 403020-1 NAS CA 02/02/95 09/16/96 N TOOL, MID DRIP PAN REV A 8030640 1 335 335 403020-2 C5B 05/25/96 06/25/96 N TOOL, MID DRIP PAN REV A 8030640 1 335 335 403020-3 NAS FLA 12/02/95 ?? N TOOL, MID DRIP PAN REV A 8030640 1 335 335 403021-1 NAS CA 12/02/95 09/16/96 N TEMPLATE CBL GUIDE REV A 8030640 1 273 273 403021-2 C5B 12/17/95 06/25/96 N TEMPLATE CBL GUIDE REV A 8030640 1 273 273 403021-3 NAS FLA 02/02/95 10/15/96 N TEMPLATE CBL GUIDE REV A 8030640 1 273 273 403022-1 C5B 05/03/95 07/08/96 N TEMPLATE CBL GUIDE REV A 8030640 1 644 644 403022-2 NAS CA 02/02/95 09/16/96 N TEMPLATE CBL GUIDE REV A 8030640 1 644 644 403022-3 NAS FLA 02/02/95 10/15/96 N TEMPLATE CBL GUIDE REV A 8030640 1 644 644 403023-1 NAS CA 02/02/95 09/16/96 N ALIGN TOOL CBL RETNR REV A 8030640 1 2019 2019 402023-2 9852D 05/03/95 08/25/96 N ALIGN TOOL CBL RETNR REV A 8030640 1 2019 2019 402023-3 NAS FLA 02/02/95 10/15/96 N ALIGN TOOL CBL RETNR REV A 8030640 1 2019 2019 Tooling 34 24672 Test Equip. 0 0 Total 34 24672 4-JUN-97 Page: TOOL MASTER Contract Number: N00024-92-C-6501 Description:TB-23X Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T403048 C7B 10/17/96 10/17/96 N TERMINATION TOOL REV B 1 1364 1364 T403050-1 C7B 06/05/96 06/05/96 N MARKING BRACKET 1 174 131 305 T403050-2 C7B 06/26/96 06/26/96 N MARKING BRACKET 1 174 131 305 T403050-3 C7B 06/26/96 06/26/96 N MARKING BRACKET 1 174 131 305 T403050-4 C7B 06/26/96 06/26/96 N MARKING BRACKET 1 174 131 305 T403054-1 C7B ABC 06/18/96 06/18/96 N MOLD, MASTER 1 192 192 T403054-2 C7B ABC 10/17/96 10/17/96 N MOLD, MASTER 1 192 192 T403055-1 C7B 10/17/96 07/09/96 N CENTERING PIN 1 44 44 T403055-2 C7B 10/17/96 07/09/96 N CENTERING PIN 1 44 44 T403055-3 C7B 10/17/96 07/09/96 N CENTERING PIN 1 44 44 T403055-4 C7B 10/17/96 07/09/96 N CENTERING PIN 1 44 44 T403055-5 C7B 10/17/96 07/09/96 N CENTERING PIN 1 44 44 T403055-6 C7B 10/17/96 07/09/96 N CENTERING PIN 1 44 44 T403056-1 C7B 10/17/96 07/15/96 N TENSION ADAPTER 1 220 226 T403056-2 C7B 10/17/96 07/15/96 N TENSION ADAPTER 1 220 225 T403058/B C7B 10/17/96 07/09/96 N MARKING BRACKET 1 435 435 T4053068 C7B 03/13/96 06/14/96 N LMANDREL, HOSE GRINDER 1 287 237 T403061 C7B 10/17/96 10/17/96 N SLEEVE, COLLET, HOSE TERM 1 208 208 T403062 C7B 10/17/96 10/17/96 N COLLET, HOSE TERM 1 385 385 T403063 C7B 07/10/96 07/10/96 N MOLD, LRH HOSE TERM 1 534 534 T403064 C7B 07/10/96 07/10/96 Y MOLD, HOSE TERM BOND STA 1 534 534 T403068 ?? 12/17/95 04/04/96 N SAGE ASSEMBLY 1 801 301 T403070 ?? 09/25/95 09/14/96 N COUPLER, HOSE 1 237 237 T403071 8600 ENG 09/25/95 09/15/95 N ADAPTER 1 359 359 T403072 8600 ENG 09/25/95 09/14/95 N ADAPTER 1 292 292 T403073 C7B 06/13/96 06/14/96 N ADAPTER 1 267 267 T403074A-1 8600 09/27/95 09/27/95 N FITTING 1 148 148 T403074A-2 8600 09/27/95 09/27/95 N FITTING 1 148 148 T403075 C7B 10/17/96 10/17/95 N PULL PIG 1 208 208 T403078-1 C7B 07/10/96 07/10/96 N TENSION TEST TOOL REY A 1 878 878 T403078-2 C7B 07/10/96 07/10/96 N TENSION TEST TOOL REY A 1 878 878 T403078-3 C7B 07/10/96 07/10/96 N TENSION TEST TOOL REY A 1 876 878 T403078-4 C7B 07/10/96 07/10/96 N TENSION TEST TOOL REY A 1 878 878 T403082 C7B 02/26/97 06/04/86 Y GAGE ASSY REV A 1 1250 1260 Tooling 24 13227 Test Equip. 0 0 Total 34 13227 PROPERTY ADMINISTRATOR WORKSHEET DCRL FORM 098 DCRL SUP 1 TO DLAM 8135.1 - ----------------------------------------------------------------------------------------------------------------------------------- Contractor CAGE: Allied Signal Ocean Systems As of Date: 03/03/97 Page: 1 - ----------------------------------------------------------------------------------------------------------------------------------- Estimated Total Value Special Other Agency Indust Material Control Number Completion Government Special Test Plant Peculiar Plant Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks - ----------------------------------------------------------------------------------------------------------------------------------- N00019-85-C-0148 54 LI 3 51 Sikorsky $127,527 $ 7239 120288 AQS-13F N00024-90-C-6013 364 LI 62 302 Northrop -Grumman $2,932,360 $ 394768 2537592 SQR-19 N00024-90-C-6031 2 LI 1 1 $837 $ 437 400 TARC $12,040 $ 425 11615 TARC N00024-92-C-6225 5 LI 1 4 Northrop -Grumman FP $12,040 $ 425 11615 NSIS 0 LI $0 $ 0 LI $0 $ Total LI 68 362 0 0 0 0 0 Total $ 403,294 2,681,510 0 0 0 0 0 GRAND TOTAL LINE ITEMS 430 GRAND TOTAL $$ 3,084,804 PROPERTY ADMINISTRATOR WORKSHEET DCRL FORM 098 DCRL SUP 1 TO DLAM 8135.1 - ----------------------------------------------------------------------------------------------------------------------------------- Contractor CAGE: Allied Signal Ocean Systems As of Date: 03/03/97 Page: 2 - ----------------------------------------------------------------------------------------------------------------------------------- Estimated Total Value Special Other Agency Indust Material Control Number Completion Government Special Test Plant Peculiar Plant Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks - ----------------------------------------------------------------------------------------------------------------------------------- 0 LI $0 $ 0 LI $0 $ 0 LI $0 $ 0 LI $0 $ 0 LI $0 $ 0 LI $0 $ 0 LI $0 $ Total LI 0 0 0 0 0 0 0 Total $ 0 0 0 0 0 0 0 GRAND TOTAL LINE ITEMS 0 GRAND TOTAL $$ 0 PROPERTY ADMINISTRATOR WORKSHEET DCRL FORM 098 DCRL SUP 1 TO DLAM 8135.1 - ----------------------------------------------------------------------------------------------------------------------------------- Contractor CAGE: Allied Signal Ocean Systems As of Date: 03/03/97 Page: 3 - ----------------------------------------------------------------------------------------------------------------------------------- Estimated Total Value Special Other Agency Indust Material Control Number Completion Government Special Test Plant Peculiar Plant Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks - ----------------------------------------------------------------------------------------------------------------------------------- 0 LI $0 $ 0 LI $0 $ 0 LI $0 $ 0 LI $0 $ 0 LI $0 $ 0 LI $0 $ 0 LI $0 $ Total LI 0 0 0 0 0 0 0 Total $ 0 0 0 0 0 0 0 GRAND TOTAL LINE ITEMS 0 GRAND TOTAL $$ 0 PROPERTY ADMINISTRATOR WORKSHEET DCRL FORM 098 DCRL SUP 1 TO DLAM 8135.1 - ----------------------------------------------------------------------------------------------------------------------------------- Contractor CAGE: Allied Signal Ocean Systems As of Date: 03/03/97 Page: 4 - ----------------------------------------------------------------------------------------------------------------------------------- Estimated Total Value Special Other Agency Indust Material Control Number Completion Government Special Test Plant Peculiar Plant Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks - ----------------------------------------------------------------------------------------------------------------------------------- LI $ LI $ LI $ LI $ LI $ LI $ LI $ Total LI 68 362 0 0 0 0 0 Total $ 403294 2681510 0 0 0 0 0 GRAND TOTAL LINE ITEMS 430 GRAND TOTAL $$ 3,084,804 4-JUN-97 Page: TOOL MASTER Contract Number: N00019-85-C-0148 Description: AQS-13F ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- 402843 STILLMAN SEAL 08/07/92 07/17/96 N MOLD, SOL CAV, ELEMENT 3328838 1 3639 3639 3328838 402898A/B C4B 03/09/92 06/28/96 N U-JOINT TENSILE FIXT 1 300 300 402963 STILLMAN SEAL 02/16/93 07/17/96 N MOLD, BOOT BLADDER 8002763 1 3300 3300 8002763 E254178 9234 04/14/93 06/17/96 N BURN-IN BOARD 8013841 1 1500 1500 E254179 9234 04/14/93 06/17/96 N BURN-IN BOARD 8013845 1 1500 1500 E254203 D4F POS 02/08/97 07/10/96 N ESP TEST FIXT A3 BRD 8011756 1 1613 1613 E254204 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A4 BRD 8011766 1 2419 2419 E254205 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A8 BRD 8009381 1 1723 1723 E254206 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A9 BRD 8011796 1 2266 2266 E254207 D4F POS 02/08/97 07/10/96 N ESP TEST FIXT A12 BRD 8011808 1 2472 2472 E254208 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A13 BRD 8011816 1 1648 1648 E254209 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A7 BRD 8013556 1 2418 2418 E254210 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A14 BRD 8014086 1 1723 1723 E254211 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A27 BRD 8011826 1 5152 5152 E254212 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A28 BRD 8011831 1 4048 4048 E254213 9852B 06/20/98 06/20/96 N AUTO BRD T/S FIXT 4A29 8009235 1 1600 1600 E254214 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A40 BRD 8011841 1 1880 1880 E254215 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A38 BRD 8011836 1 2773 2773 E254216 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A6 BRD 8013955 1 1526 1526 E254217 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A?? BRD ?? 1 1890 1890 E254218 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A1 BRD 8013966 1 1890 1890 E254219 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A4 BRD 8013946 1 1890 1890 E254220 D4F POS 02/08/97 07/11/96 N ESP FIXT DOPPLER PROC 8013878 1 1000 1000 E254222 9852B 06/20/96 06/20/96 N AUTO BRD T/S FIXT 10A3 8011758 1 2500 2500 E254223 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A5 BRD 8013961 1 1820 1820 E254224 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A7 BRD 8011788 1 2220 2220 E254225 D4F POS 02/08/97 07/11/96 N ESP T/F A1 CKT CD 8011381 1 1190 1190 E254226 D4F POS 02/08/97 07/11/96 N ESP T/F I/0-A2 CKT CD 80111388 1 1240 1240 E254227 D4F POS 02/08/97 07/11/96 N ESP T/F LED-A3 CKT CD 80111391 1 1080 1080 E254230 9852B 07/01/88 06/20/96 N IEEE-488 BUS S/N 753 1 5899 5899 E254231 9852EL 07/18/88 07/15/96 N IEEE-488 BUS S/N 759 8013965 1 5899 5899 E254232 9852EL 12/03/92 07/15/96 N IEEE-488 BUS S/N 787 1 5899 5899 E254233 9852EL 10/02/88 08/02/96 N IEEE-488 BUS S/N 789 1 5899 5899 E254234 D4E 07/18/96 08/14/96 N TEST FIXT/ESP DOME CON 8014005 1 2610 2610 E254235 D4F POS 02/06/97 07/11/96 N ESP TEST FIXT A3 BRD 8013951 1 1990 1990 E254239 9852 06/30/88 08/20/96 N INTERFACE MOD PN (A28) 8011830 1 8000 8000 E254242 9852 06/18/88 08/20/96 N AUTO BRD T/F 10A9 BRD 8011795 1 1500 1500 E254243 9852 06/24/88 08/20/96 N AUTO BRD T/F PM 10A12 8011805 1 2000 2000 E254244 9852 06/28/88 08/20/96 N AUTO BRD T/F A40 FRT 8011640 1 1800 1800 E254245 9852 07/05/88 08/20/96 N AUTO BRD T/F DOME A10 8013970 1 2000 2000 E254248 D4F POS 02/05/97 07/11/96 N ESP TEST FIXT A24 BRD 8014026 1 2074 2074 E254250 9852 07/19/88 08/20/96 N AUTO BRD T/F DOME A1 8013955 1 1800 1800 E254251 9852 07/20/88 08/20/96 N AUTO BRD T/F MUX A18 8000190 1 1500 1500 8011890 E254252 9852B 08/14/96 08/14/96 N ESP CABLE 23E 1 250 250 E254253 9852B 08/14/96 08/14/96 N ESP CABLE 24E 1 250 250 E254254 9852B 08/14/96 08/14/96 N ESP CABLE 25E 1 250 250 E254256 9852B 08/14/96 08/14/96 N ESP CABLE 27E 1 100 100 4-JUN-97 Page: TOOL MASTER Contract Number: N00019-85-C-0148 Description: AQS-13F ST/STE Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- E254257 9852 09/12/88 08/20/96 N TEST FIXT/PC BRD 3A24 8014530-401 1 600 600 8014025 E254258 9852 08/26/88 08/20/96 N TEST FIXT A27 BRD 8011825 1 1500 1500 8013990 E254258-1 9852 08/26/88 08/20/96 N TEST CABLE A27 BRD 8011825 1 300 300 8013990 E254259 D4F POS 02/06/97 07/11/96 N ESP CARD HOLD, IND BRD 1 365 365 E254279 9852 01/17/89 08/20/96 N INTERFACE MOD FM (A37) 1 1800 1800 E254280 9852 04/05/89 08/20/96 N AUTO T/F A38 BRD ASSY 8011835 1 2500 2500 E254365 TOWSON 04/19/94 09/13/96 N T/F HP 3085 MUX A10, A17 8014075 1 10522 10522 8014070 Tooling 3 7239 Test Equip. 51 120288 Total 54 127527 ORIGINAL DATE: MARCH 1, 1996 LOCATION: NPO CONTRACT N00024-90-C-6013 SQQ SPECIAL TEST EQUIPMENT Phy. Inv. REQUEST TO KEEP FOR: Found Trans. BarCode CATEGORY DESCRIPTION 3/24/97 CAN VIM PWA TB-16 Number TE NUMBER - ------------------------------------------------------------------------------------------------------------- 0030983.00 1 FITS SUBASSY STE X 0030983.01 TE254358-1 AFT DATA #1 TEST FIXTURE X 0030983.02 TE254358-2 VOLTAGE MONITOR 1213D3903 X 0030983.03 TE254358-3 ?? 1213D3891 X 0030983.04 TE254358-4 AFT DATA #2 1213D3899 X 0030983.05 TE254358-5 CONTROL BOARD ITA PART 1 X 0030983.06 TE254358-6 CONTROL BOARD ITA PART 2 X 0030983.07 TE254358-7 LINE DRIVER #1 1215A3814 X 0030983.08 TE254358-8 LINE DRIVER #2 X 0030983.09 TE254358-9 CABLES 0030984.00 2 T/A PWA FIXTURES X X 0030984.01 TE254359-1 ZEHNTEL IN CIRCUIT TEST FIX. X X 0030984.02 TE254359-2 ZEHNTEL IN CIRCUIT TEST FIX. X X 0030984.03 TE254359-3 ZEHNTEL IN CIRCUIT TEST FIX. X X 0030984.04 TE254359-4 ZEHNTEL IN CIRCUIT TEST FIX. X X 0030984.05 TE254359-5 ZEHNTEL IN CIRCUIT TEST FIX. X X 0030984.06 TE254359-6 ZEHNTEL IN CIRCUIT TEST FIX. X X 0030984.07 TE254359-7 ZEHNTEL IN CIRCUIT TEST FIX. X X 0030984.08 TE254359-8 ZEHNTEL IN CIRCUIT TEST FIX. X X 003098409 TE254359-9 ZEHNTEL IN CIRCUIT TEST FIX. X X 0030984.10 TE254359-10 ZEHNTEL IN CIRCUIT TEST FIX. X X 0030984.11 TE254359-11 ZEHNTEL IN CIRCUIT TEST FIX. X X 0030984.12 TE254359-12 ZEHNTEL IN CIRCUIT TEST FIX. 0031037.00 3 T/A CAN FIXTURES X X 0031037.01 TE254360-1 SN1 VIBRATION TEST FIXTURE X X 0031037.02 TE254360-1 SN2 SOLID DELRIN VIBRATION FIXTURE QTY 1 X X 0031037.03 TE254360-1 SN3 SOLID DELRIN VIBRATION FIXTURE QTY 1 X X 0031037.04 TE254360-2 SN 1 (2PCS) SOLID DELRIN VIBRATION FIXTURE QTY 1 X X 0031037.05 TE254360-2 SN 2 (2PCS) SOLID DELRIN VIBRATION FIXTURE QTY 1 X X 0031037.06 TE254361-1 TDM A11 CAL/CGA COMM RECV X X 0031037.07 TE254361-2 TDM A4 OVERVOLTAGE PROTECTOR X X 0031037.08 TE254361-3 TDM A3 SHUNT REGULATOR X X 0031037.09 TE254361-4 TDM A27 CALIBRATOR X X 0031037.10 TE254361-5 HDTM A7 AFT VOLTAGE MONITOR X X 0031037.11 TE254361-6 TDM A13 AMT D/D X X 0031037.12 TE254361-7 TDM A7 NAD/VLF VOLTAGE REG X X 0031037.13 TE254361-8 TDM A9 FORWARD POWER SUPPLY X X 0031037.14 TE254361-9 TDM A21,A22,A23 GCA/SAMPLE HOLD X X 0031037.15 TE254361-10 TDM A18 AD CONVERTER X X 0031037.16 TE254361-11 HDTM A13 HEADING SENSOR X X 0031037.17 TE254361-12 TDM A24 INVERSE GCA/?? FILTER X X 0031037.18 TE254361-13 VLFM A5 3.1 ACOUSTIC MUX X X 0031037.19 TE254361-14 CABLE LINE DRIVER X X 0031037.20 TE254361-15 TDM A5 A6 + 39V ACOUSTIC REG MAKE MODEL SERIAL # VALUE - ------------------------------------------------------------ $ 38,507.00 BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX SN 1-7 NSP MGB 1418Z 962 $ 6,095.00 MGB 1418Z 939 $ 6,095.00 MGB 1418Z 965 $ 6,095.00 MGB 1418Z 984 $ 6,095.00 MGB 1418Z 987 $ 6,095.00 MGB 1418Z 951 $ 6,095.00 MGB 1418Z 988 $ 6,095.00 MGB 1418Z 955 $ 6,095.00 MGB 1418Z ?? $ 6,095.00 MGB 1418Z 963 $ 6,095.00 MGB 1418Z 980 $ 6,095.00 MGB 1418Z 956 $ 6,095.00 $ 216,892.00 S/N 1 NSP S/N 2 NSP S/N 3 NSP NSP NSP BENDIX 1213D0359 NSP BENDIX 1213D3546 NSP BENDIX 1213D03?? NSP BENDIX 1213D3683 NSP BENDIX 1213D3380 NSP BENDIX 1213D3779 NSP BENDIX 1213D3851 NSP BENDIX 1213D3657 NSP BENDIX 1213D0357 NSP BENDIX 1213D0359 NSP BENDIX 1213D0369 NSP BENDIX 1213D0920 NSP BENDIX 1213D3482 NSP BENDIX 1213D0382 NSP BENDIX 1213D0689 NSP ORIGINAL DATE: MARCH 1, 1996 LOCATION: NPO CONTRACT N00024-90-C-6013 SQQ SPECIAL TEST EQUIPMENT Phy Inv. REQUEST TO KEEP FOR: Found Trans. BarCode CATEGORY DESCRIPTION 3/24/97 CAN VIM PWA TB-16 Number TE NUMBER - ------------------------------------------------------------------------------------------------- X X 0031037.21 TE254361-16 HDTM A2 AFT/A/D CONVERTER X X 0031037.22 TE254361-17 HDTM A8 AFT P/S X X 0031037.23 TE254361-18 LFAM ACOUSTIC MUX LINE DRIVE A2 X X 0031037.24 TE254361-19 LFAM A6 ACOUSTIC LINE DRIVER X X 0031037.25 TE254361-20 HDTM A4 AFT ?? X X 0031037.26 TE254361-21 HDTM A1 8:1 MUX/GCA X 0031037.28 TE254361-23 WORK STATION X 0031037.29 TE254361-24 COMPUTER SYSTEM CONSISTING OF: X 0031037.30 PART OF-24 SEAGATE ST-01 DRIVE CONTROLLER QTY 2 X 0031037.31 PART OF-24 4 OMB REMOVABLE HARD DRIVE DISK X 0031037.32 PART OF-24 IEEE INTERFACE CARD 778092-?? X 0031037.33 PART OF-24 FLOPPY CONTROL X 0031037.34 TE254361-25 COLOR MONITOR X 0031037.35 TE254361-26 KEYBOARD X 0031037.36 TE254361-27 MOUSE X 0031037.37 TE254361-28 PRINTER X 0031037.38 TE254361-29 FREQUENCY RESPONSE ANALYZER X X 0031037.39 TE254361-30 SWITCH CONTROL UNIT AND BELOW X X 0031037.40 PART OF-30 RELAY MULTIPLEXER X X 0031037.41 PART OF-30 ?? X X 0031037.42 PART OF-30 ?? X X 0031037.43 PART OF-30 RACK FLANGE KIT X X 0031037.44 PART OF-30 RACK FLANGE KIT X X 0031037.45 TE254361-31 POWER SUPPLY X X 0031037.46 TE254361-32 40 DB AMPL X X 0031037.47 TE254361-33 PROG DIG MULTIMETER X 0031037.48 TE254361-34A DIGITAL THERMOMETER X X 0031037.?? TE254361-34B DIGITAL THERMOMETER X X 0031037.49 TE254361-35 RAPID COOL REFRIG. RCULATOR X X 0031037.50 TE254361-36 PROM A14 TDM X X 0031037.51 TE254361-37 DATA DECODE STATUS A12 TDM X X 0031037.52 TE254361-38 DIGITAL MULTIPLEXER TDM A15 X X 0031037.53 TE254361-39 PM/FL CAL TONE GEN A26 TDM X X 0031037.54 TE254361-40 12:1 ACOUSTIC MUX A10 X 0031037.55 TE254361-41 AC COUPLER - HTS X X 0031037.56 TE254361-42 ACOUSTIC CAN INTERFACE FIXTURES X 0031037.57 TE254361-43 SPECIAL PNEUMATICS FITTINGS X 0031037.58 PRESSURE CALIBRATOR 5000 BAAB X 0031037.59 TE254361-45 OSCILATOR TEST BOX X 0031037.60 TE254361-46 HDTM TEST FIXTURE X 0031037.61 TE254361-47 CABLE X 0031037.62 TE254361-48 MODULE/CAN INTERFACE BOX X X 0031037.63 TE254361-49 DYNAMIC SIGNAL ANALYZER X X 0031037.64 PART OF-49 RACK MOUNT KIT X 0031037.65 TE254361-50 MODULE/CAN INTERFACE BOX X X 0031037.66 TE254361-51 LFAM A7 6:1 ACOUSTIC MUX MAKE MODEL SERIAL # VALUE - --------------------------------------------------------- BENDIX 1213D4608 NSP BENDIX 1213D3641 NSP BENDIX 1213C0138 NSP BENDIX 1213D1451 NSP BENDIX 1213D3592 NSP BENDIX 1213D3551 NSP NSP NSP NSP NSP NSP 050210 NSP SAMTRON ?? NSP FUJITSU F6033849 NSP ?? NSP PANASONIC 1624 P1624-001 NSP SCHLUMBERGER 302803 NSP HP HP3488A NSP HP HP44470A NSP HP ?? NSP HP ?? NSP HP 50623972 NSP HP 50623974 NSP HP HP6833A S/N 3004A-02831 NSP HP (INSIDE) HP455A S/N 530-01148 NSP HP HP3478A S/N 2911A63677 NSP FLUKE 2180A S/N 5130002 NSP FLUKE NSP S/N 910411 MDL 9500 NSP BENDIX 1213D3612 NSP BENDIX 1213D3673 NSP BENDIX 1213D3664 NSP BENDIX 1213D3584 NSP BENDIX 1213D1449/1450 NSP BENDIX NSP BENDIX NSP BENDIX S/N 1-5 NSP EATON A1239 NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP HP HP3561A NSP NSP BENDIX NSP BENDIX 1213D1448 NSP ORIGINAL DATE: MARCH 1, 1996 LOCATION: NPO CONTRACT N00024-90-C-6013 SQQ SPECIAL TEST EQUIPMENT Phy. Inv. REQUEST TO KEEP FOR: Found Trans. BarCode CATEGORY DESCRIPTION - ----------------------------------------------------------------------------------------------------------------- 3/24/97 CAN VIM PWA TB-16 Number TE NUMBER 0030986.00 4 HARNESS TESTER X 0030986.01 TE254362-1 MONITOR CTX 14" X 0030986.02 TE254362-2 PRINTER X 0030986.03 TE254362-3 COMPUTER X 0030986.04 TE254362-4 TESTER X 0030986.05 TE254362-5 RACK X 0030986.06 TE254362-6 INTERFACE FIXTURE X 0030986.07 TE254362-7 INTERFACE CABLE X 0030986.07 TE254362-7 INTERFACE CABLE X 0030986.07 TE254362-7 INTERFACE CABLE X 0030986.07 TE254362-7 INTERFACE CABLE X 0030986.07 TE254362-7 INTERFACE CABLE X 0030986.07 TE254362-7 INTERFACE CABLE X 0030986.07 TE254362-7 INTERFACE CABLE X 0030986.07 TE254362-7 INTERFACE CABLE X 0030986.08 TE254362-8 INTERFACE CABLE Loss Report Filed 4/22/97 0030986.09 TE254362-9 ECL ADAPTER 0030987.00 ?? CABLES ?? X 0030987.01 ?? ?? X 0030987.02 TE254399-1 BLIND FLANGE PENETRATION CABLE AFT X 0030987.03 TE254399-2 BLIND FLANGE PENETRATION CABLE FWD X 0030987.04 TE254399-2 BLIND FLANGE PENETRATION CABLE FWD X 0030987.05 TE254399-3 PRESSURE BALANCE OIL FILL PENANT CABLE AFT X 0030987.06 TE254399-3 PRESSURE BALANCE OIL FILL PENANT CABLE AFT X 0030987.07 TE254399-4 PRESSURE BALANCE OIL FILL PENANT CABLE FW X 0030987.08 TE254399-4 PRESSURE BALANCE OIL FILL PENANT CABLE FW X X 0030987.09 TE254399-5 BLIND FLANGE PENETRATION CABLE X X 0030987.10 TE254399-5 BLIND FLANGE PENETRATION CABLE X X 0030987.11 TE254399-6 PBOF PENDANT CABLE FWD X X 0030987.12 TE254399-7 PBOF PENDANT CABLE FFT 0030988.00 6 MISC TEST FIXTURE X 0030988.01 TE254401 SN1 MODULE DRUM REEL X 0030988.02 TE254401 SN2 MODULE DRUM REEL X 0030988.03 TE254401-2 MODULE CART X 0030988.04 TE254348 EXTENSION CABLE 50 FT CONTINUITY TEST SET-UP X 0030988.05 TE254349 COMPASS (IN GREEN BAG) X 0030988.06 TE254383 TEST FIXTURE HEADING BENCH (WOODEN) X 0030988.07 TE254367 YOW CABLE IF CABLE PO X 0030988.08 TE254408 LINE DRIVER INTERFACE BOX X X 0030988.09 TE254368 SAMPLE AND HOLD TEST BOX X 0030988.10 TE254381 NPN XSTR FULSE T/F X 0030988.11 TE254385 CABLE FITS BOX X 0030988.12 TE254400 PENDANT CABLE FORWARD MAKE MODEL SERIAL # VALUE - ----------------------------------------------------------------------- $ 74,859.00 CVG5439 DBLCVG5431 NSP PANASONIC KX-P1180 PCJ328KX-P1180 NSP POWER FLEX AIR 0264821 NSP ECYLPSE 501 5011010 NSP NSP BENDIX NSP BENDIX SN1 NSP BENDIX SN2 NSP BENDIX SN3 NSP BENDIX SN4 NSP BENDIX SN5 NSP BENDIX SN6 NSP BENDIX SN7 NSP BENDIX SN8 NSP BENDIX SN1 & 2 NSP BENDIX NSP ?? BENDIX ?? NSP BENDIX SN2 NSP BENDIX SN1 NSP BENDIX SN2 NSP BENDIX SN1 NSP BENDIX SN2 NSP BENDIX SN1 NSP BENDIX SN2 NSP SN1 NSP SN2 NSP NSP NSP $ 71,912.00 NSP NSP NSP NSP STOCKER/YALE DAAK01-89-C-0125 NSP NSP BENDIX (ON CART) NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP ORIGINAL DATE: MARCH 1, 1996 LOCATION: NPO CONTRACT N00024-90-C-6013 SQQ SPECIAL TEST EQUIPMENT Phy. Inv. REQUEST TO KEEP FOR: Found Trans. BarCode CATEGORY 03/24/97 CAN VIM PWA TB-16 Number TE NUMBER DESCRIPTION - ------------------------------------------------------------------------------------------------------------ X X 0030988.13 TE254405-2 CABLE LINE DRIVER Loss Report filed 1/29/97 0030988.14 TE254344 FUNCTIONAL GAIN TEST BOX 0030989.00 7 MISC TEST ADAPTERS 0030989.01 T220396 HDLG FIX. CAROUSEL MODULE TRASPORT REEL X X 0030989.02 T220397 CART ATTACHED TO T220398 X X 0030989.03 T220398 FWD TENSION ADAPTER X X 0030989.04 T220399 AFT TENSION ADAPTER X X 0030989.05 TE254325 SN 1 BREAKOUT BOX AFT X 0030989.06 TE254325 SN 2 BREAKOUT BOX AFT X 0030989.07 TE254326 SN 1 BREAKOUT BOX FWD X 0030989.08 TE254326 SN 2 BREAKOUT BOX FWD X 0030989.09 TE254331 HANGING SCALE HS-284 X 0033415.00 TE254408 CALT BOX X 0 TE254409 REFERENCE PREAMP/POSTAMP X 0 TE254410 TDM D/A FILTER X 0 TE254345 ADAPTER PENDANT, AFT X 0030989.12 TE254413 MSC CHAMBER X 0030989.13 TE254412 INTERFACE CABLE X ?? ?? INTERFACE CABLE X ?? ?? INTERFACE CABLE X 0030989.15 TE254414 INTERFACE CABLE X 0030989.16 TE254413 INTERFACE CABLE X 0 TE254415 INTERFACE CABLE X 0 TE254415 INTERFACE CABLE X 0 TE254416 INTERFACE CABLE X 0031016.01 TE254332 ADAPTER CABLE FWD X 0031016.02 TE254332 ADAPTER CABLE FWD X 0031016.03 TE254332 ADAPTER CABLE FWD X 0031016.04 TE254332 ADAPTER CABLE FWD X 0031016.05 TE254333 ADAPTER CABLE AFT X 0031016.06 TE254333 ADAPTER CABLE AFT Loss Report filed 4/29/97 0031016.07 TE254333 ADAPTER CABLE AFT X 0031016.08 TE254333 ADAPTER CABLE AFT X 0031016.09 TE254389 SN 3 CABLE X 0031016.10 TE254388 SN 3 CABLE 0030990.00 ACOUSTIC TEST SET #1 X 0030990.01 TE254321 ACOUSTIC MODULE TEST SET #1 X 0030990.02 TE254321-1 CONTROL PANEL (AMTS) X 0030990.03 TE254321-2 AC POWER PANEL X 0030990.04 TE254310 DIGITAL STORAGE OSCOPE X 0030990.05 TE254311 DIGITAL MULTIMETER X 0030990.06 TE254318 FREQ RESPONSE ANALYZER X 0030990.07 TE254388 CABLE INTERFACE FWD (S/N 1) X 0030990.08 TE254389 CABLE INTERFACE AFT (S/N 1) MAKE MODEL SERIAL # VALUE - ---------------------------------------------------------- BENDIX NSP BENDIX NSP $12,378.00 NSP NSP BENDIX NSP BENDIX TENSIONING SYSTEM NSP BENDIX TENSIONING SYSTEM NSP BENDIX SN 1 NSP BENDIX SN 2 NSP BENDIX SN 1 NSP BENDIX SN 2 NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX SN 1 NSP BENDIX ?? NSP BENDIX ?? NSP BENDIX SN 1 TO 15 NSP BENDIX SN 1 NSP BENDIX SN 2 NSP BENDIX SN 3 NSP BENDIX SN 4 NSP BENDIX S/N 1 NSP BENDIX S/N 2 NSP BENDIX S/N 3 NSP BENDIX S/N 4 NSP BENDIX S/N 1 NSP BENDIX S/N 2 NSP BENDIX S/N 3 NSP BENDIX S/N 4 NSP BENDIX S/N 3 NSP BENDIX S/N 3 NSP BENDIX NSP BENDIX NSP BENDIX NSP PHILIPS PM3367A 0002003 NSP FLUKES 8842A 6088303 NSP SCHLUMBERGER SI 1250 303083 NSP BENDIX NSP BENDIX NSP ORIGINAL DATE: MARCH 1, 1996 LOCATION: NPO CONTRACT N00024-90-C-6013 SQQ SPECIAL TEST EQUIPMENT Phy. Inv. REQUEST TO KEEP FOR: Found Trans. BarCode CATEGORY 03/24/97 CAN VIM PWA TB-16 Number TE NUMBER DESCRIPTION - -------------------------------------------------------------------------------------------------------- 0030991.00 9 ACOUSTIC TEST SET #2 X 0030991.01 TE254322 ACOUSTIC MODULE TEST SET #2 X 0030991.02 TE254322-1 CONTROL PANEL (AMTS) X 0030991.03 TE254322-2 AC POWER PANEL X 0030991.04 TE254314 DIGITAL STORAGE OSCILLOSCOPE X 0030991.05 TE254316 DIGITAL MULTIMETER X 0030991.06 TE254378 FREQ RESPONSE ANALYZER X 0030991.07 TE254388 CABLE INTERFACE FWD (S/N 2) X 0030991.08 TE254389 CABLE INTERFACE AFT (S/N 2) 0031006.00 10 HTDM TEST SET X 0031006.01 TE254324 HDTM TEST SET X 0031006.02 TE254324-1 CONTROL PANEL HDTM X 0031006.03 TE254324-2 AC POWER PANEL X 0031006.04 TE254324-3 POWER SUPPLY PANEL HDTM X 0031006.05 TE254324-4 CABLE FRONT PANEL./ADAPTER CBL X 0031006.06 TE254372 DIGITAL MULTIMETER X 0031006.07 TE254377 DIGITAL STORAGE OSCILLOSCOPE ?? ?? ?? ?? ?? ?? 0031007.00 BURN-IN TEST EST X 0031007.01 TE254375 BURN-IN TEST SET X 0031007.02 TE254375-1 POWER SUPPLY X 0031007.03 TE254375-2 UNIVERSAL MODULE POWER X 0031007.04 TE254375-3 TDM POWER AND LOAD X 0031007.05 TE254375-4 AC POWER PANEL X 0031007.06 TE254375-5 RESISTIVE LOAD BOX X 0031007.07 TE254375-7 W4 CABLE ASSY X 0031007.08 TE254375-8 W5 CABLE ASSY X 0031007.09 TE254309 SIGNAL ANALYZER X X 0031007.10 TE254404 MONITOR/CAL TEST BOX X X 0031007.11 TE254405 LINE DRIVER TEST BOX X X 0031007.12 TE254405-1 INTERFACE CABLE LINE DRIVER 0031008.00 12 COMPUTER SET-UP X 0031008.01 TE254390 COMPUTER X 0031008.02 TE254390-1 MONITOR X 0031008.03 TE254390-2 KEYBOARD X 0031008.04 TE254390-3 SURGE PROTECTOR X 0031008.05 TE254390-4 MOUSE X 0031008.06 TE254391 LASER JET PRINTER X 0031008.07 TE254392 COMPUTER WORKSTAND X 0031009.00 COMPUTER SET-UP X X 0031009.01 TE254393 COMPUTER MAKE MODEL SERIAL # VALUE - --------------------------------------------------------- BENDIX NSP BENDIX NSP BENDIX NSP PHILIPS PM3367A DO002007 NSP FLUXE 8842A 5071303 NSP SCHLUMBERGER SI1250 303216 NSP BENDIX NSP BENDIX NSP $335,087.00 BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP FLUKE 8842A 5311282 NSP PHILIPS 3367A DM331001 NSP ?? ?? ?? ?? BENDIX NSP EM TCR15054-1-0D 91J-7372 NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP HP 33880A BENDIX BENDIX BENDIX $24,806.00 EVEREX 388/25 EBS10920088 NSP NEC MULTISYNC 3D 11C03788 NSP EVEREX 11692D-001 13046080 NSP RENSINGTON NSP LOGITECH NSP HP 33481A 3103JG0800 NSP NSP $24,806.00 EVEREX 388/25 E8S10920075 NSP ORIGINAL DATE: MARCH 1, 1996 LOCATION: NPO CONTRACT N00024-90-C-6013 SQQ SPECIAL TEST EQUIPMENT Phy. Inv. REQUEST TO KEEP FOR: Found Trans. BarCode CATEGORY 03/24/97 CAN VIM PWA TB-16 Number TE NUMBER DESCRIPTION - --------------------------------------------------------------------------------------------------------------------- X X 0031009.02 TE254393-1 MONITOR X X 0031009.03 TE254393-2 KEYBOARD X X 0031009.04 TE254393-3 SURGE PROTECTOR X X 0031009.05 TE254393-4 MOUSE X X 0031009.06 TE254394 PRINTER X X 0031009.07 TE254395 COMPUTER TABLE 0031010.00 COMPUTER SET-UP X 0031010.01 TE254398 COMPUTER X 0031010.02 TE254398-1 MONITOR X 0031010.03 TE254398-2 KEYBOARD X 0031010.04 TE254398-3 SURGE PROTECTOR X 0031010.05 TE254398-4 MOUSE X 0031010.06 TE254397 PRINTER X 0031010.07 TE254398 COMPUTER STAND 13 MODULE WIRING TESTERS X 0031011.00 TE254327 TEST FIXT VLF MODULE CONTINUITY/SHORT X 0031012.00 TE254328 LF CONTINUITY TEST FIXTURE X X 0031015.00 14 ACOUSTIC SOUND SOURCE X 0031015.01 TE254335 MOBILE ELEXT SOUND SOURCE X 0031015.02 TE254335-1 CABLEMESS X 0031015.03 TE254335-2 SPEAKER ENCLOSURE 0031018.00 15 TDM TEST SET X 0031018.01 TE254323 TOM TEST SET X 0031018.02 TE254315 MULTIMETER X 0031018.03 TE254370 PHILLIPS PM 8662 X 0031018.04 TE254319 DIGITAL STORAGE OSCOPE X 0031018.05 TE254323-1 TOMI PANEL X 0031018.06 TE254312 POWER SUPPLY X 0031018.07 TE254323-3 TEST SET PWR PNC X 0031018.08 TE254323-2 RACK PWR SUPPLY X 0031018.09 TE254323-4 CABLE X 0031018.10 TE254323-5 BLOWER X 0031018.11 TE254376 ADAPTER CABLE 0031019.00 16 ACOUSTIC MODULE TEST SET X 0031019.01 TE254374 ACOUSTIC MODULE TEST SET X 0031019.02 TE254313 DIGITAL STORAGE OSCOPE X 0031019.03 TE254320 DIGITAL MULTIMETER X 0031019.04 TE254374-1 CONTROL PANEL X 0031019.05 TE254374-2 P/S AC CONTROL MAKE MODEL SERIAL # VALUE - -------------------------------------------------------------- NEC MULTISYNC 3D 11C03605 NSP NSP KENSINGTON NSP NSP HP LASER JET 3P 3103JGIHCC NSP NSP $24,808.00 EVEREX 388 EBS10920084 NSP NEC MULTISYNC 04M14708 NSP EVEREX 03758230 NSP KENSINGTON 80120088 NSP LOGITECH LT009122473 NSP HP LASER JET 3P 3103JGIHHI NSP NSP $28,383.00 BENDIX $28,883.00 ?? ?? ?? ?? ?? ?? $38,803.00 BENDIX NSP BENDIX NSP BENDIX NSP $490,709.00 NSP FLUKE 6842A 5071309 NSP PHILLIPS PM6882 528790 NSP PHILLIPS 3387A DQ002008 NSP NSP KEPCOATE ATE 150-7M NSP NSP NSP NSP NSP NSP $212,493.00 BENDIX NSP PHILLIPS PM3367A DQ002008 NSP FLUKE 8842A NSP BENDIX NSP BENDIX NSP ORIGINAL DATE: MARCH 1,1998 LOCATION: NPO CONTRACT N00024-90-C-6013 SQQ SPECIAL TREATMENT EQUIPMENT Phy. Inv. REQUEST TO KEEP FOR: Found Trans. BarCode CATEGORY 03/24/97 CAN VIM PWA TB-16 Number TE NUMBER DESCRIPTION - ---------------------------------------------------------------------------------------------- X X 003101106 TE254317 FREQUENCY RESPONSE ANALYZER X 0031020.01 17 TE254388 CROSSOVER MODULE#1 X 0031021.03 TE254387 CROSSOVER MODULE#2 X 0331022.00 18 TE254407 ESS TEST STATION X 0331022.01 TE254407-1 EMI POWER SUPPLY X 0031022.02 TE254407-2 CONTROL PANEL X 0031022.03 TE254407-3 PATCH PANEL X 0031022.04 TE254407-4 POWER SUPPLY PANEL X 0031022.05 TE254407-5 AC CONTROL PANEL X 0031022.06 TE254407-6 UNIVERSAL MODULE CABLE SN 1-4 X 0031022.07 TE254407-7 TOM CABLE X 0031022.08 TE254407-8 VLF TEST ADAPTER AN 1 & 2 & 3 X 0031022.09 TE254407-9 LF TEST ADAPTER SN 1 & 2 X 0031022.10 TE254407-10 MF TEST ADAPTER SN 1 & 2 X 0031022.11 TE254407-11 HF TEST ADAPTER SN 1 & 2 X 0031022.12 TE254407-12 ROTM TEST ADAPTER SN 1 & 2 X 0031022.13 TE254407-13 CABLE ? X X 0031017.01 TE254334-1 ADAPTER CABLE MSC TEST X 0031017.02 TE254334-2 CABLE X 0031017.03 TE254334-3 CABLE X 0031017.04 TE254334-4 CABLE X 0 TE254334-5 BATTERY CHARGE CABLE Total Count 263 MAKE MODEL SERIAL# VALUE - ----------------------------------------------- SCHLUMBERGER S11250 303059 NSP BENDIX $ 34,703.60 BENDIX $ 34,703.60 BENDIX $ 30,000.00 BENDIX BENDIX BENDIX BENDIX BENDIX BENDIX BENDIX BENDIX BENDIX BENDIX BENDIX BENDIX BENDIX BENDIX $ 32,107.00 BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP BENDIX NSP Total Value: $ 2,045,145.00 ORIGINAL DATE: MARCH 1, 1998 LOCATION: NPO CONTRACT N0002490-C-8013 SQQ SPECIAL TOOLING Phy. Inv. REQUEST TO KEEP FOR: Found Trans. BarCode 03/24/97 CAN VIM PWA TB-16 Number CATEGORY TOOL NUMBER DESCRIPTION - -------------------------------------------------------------------------------------------------------------------------- X 1 SWAGE BUTTON SWAGER 1220368A SWAGER X 1220368B PUMP X 1220368C L?ETER X 1220368D REGULATOR X 2 TENSIONING SYSTEM TENSIONING SYSTEM X 3 TENSION FIXTURE 122037D-1 TENSIONING FIXTURE X 122037D-2 TENSIONING FIXTURE X 4 HOSE TEMPERING SYSTEM 1220371-A TROUGH Loss Report File 5/28/97 1220371B BOILER X ?? 1220371C-1 AIR PURGER X ?? 1220371C-2 AIR PURGER ARMSTRONG X 5 HOSE DRYING RECK 1220072 HOSE DRYING RACK (ON WALL) X 6 HOSE GRINDING SYSTEM 1220073-1 HOSE GRINDING SYSTEM (2) X 1220073-2 X 7 SKOVIL SWAGER 1220074 SKOVIL SWAGER X HEIGHT GAUGE HEIGHT GAUGE ? X FIXTURE X X X X 1220376-1C FIXTURE X X 1220376-1D FIXTURE X X 1220376-1E FIXTURE X X 1220376-1F FIXTURE X X 1220376-1G FIXTURE X 9 MODULE BOOTING SYSTEM 122379 AIR REGULATOR X 1220403-B1 TUBES X 10 ISOPAR FILLING SYSTEM 1220380 ISOPAR FILLING SYSTEM X 11 ISOPAR FILLING FIXTURE 1220381 ISOPAR FILLING SYSTEM X 1220381-1 VACUUM CHAMBER FILL FIXTURE X 1220381-1 VACUUM CHAMBER FILL FIXTURE X 12 REELING HANDLER REELING HANDLER X X 13 RF LOAD COIL 1220386A RF LOAD COIL X X 1220386B RF LOAD COIL X X 14 CAN HLDG/HEATSINK FIX 1220387 CAN HOLDING/HEATSINK FIXTURE X X 15 HEADER HOLDING/HEATSINK 1220388 HEADER HOLDING/HEATSINK FIXTURE MAKE MODEL SERIAL # VALUE - ---------------------------------------------- $13,713.00 NSP NSP NSP $68,545.00 $833.00 $833.00 $53,735.00 NSP NSP NSP $ 6,153.00 $ 12,872.00 $8,327.00 NSP NSP NSP NSP NSP NSP $ 8,052.00 NSP NSP NSP NSP $ 5,998.00 $ 5,998.00 NSP NSP $47,413.00 $ 700.00 $ 700.00 ORIGINAL DATE: MARCH 1, 1995 LOCATION: NPO CONTRACT N00024-90-C-8013 SQQ SPECIAL TOOLING Phy. Inv. REQUEST TO KEEP FOR: Found Trans. BarCode 03/24/97 CAN VIM PWA T8-16 Number CATEGORY TOOL NUMBER DESCRIPTION - ------------------------------------------------------------------------------------------------------------- X X 16 HELIUM LEAK TESTER T220389 HELIUM LEAK TESTER Less Report Filed: 4/28/97 17 TOW ASSY FIXTURES T220390 TORSION TEST ADAPTER X X 18 DESSICATOR SYSTEM T220375 DESSICATOR SYSTEM X X 19 CAN ASSY VACUUM CHAMBER T220377 X X T220377A VACUUM OVEN X X T220377B DIRECT DRIVE VACUUM PUMP X 20 EXTRACT INSERTION TOOLS T220376 X T220378A HYDRAULIC CRIMPER X T220378B HYDRAULIC CRIMPER X T220378C AUTOMATIC CRIMPER X T220378D AUTOMATIC CRIMPER X 21 BOOTING SYSTEM WINCH T220085 BOOTING SYSTEM WINCH X X 22 TAKE-UP REEL T220453 TAKE-UP REEL 9-97 X 23 BUOYANCY TEST SYSTEM T220454 BUOYANCY TEST SYSTEM X T220454A CARDINAL SCALE X T220454B LOAD CELLS X T22O454C LOAD CELLS X T220454D LOAD CELLS X T220454E LOAD CELLS X T220454F SWIMMING BOX X 24 STRINGING ASSY TENSION T220455 STRINGING ASSY TENSION SYSTEM X SYSTEM T220455A MOTOR X 25 DROP TEST PLATFORM T220456 DROP TEST PLATFORM X X 26 VACUUM PUMP T220522 VACUUM PUMP 9-97 BARBEE VALVE MAKE MODEL SERIAL # VALUE - ----------------------------------------------------------- $ 23,877.00 $2,869.00 $3,641.00 $4,145.00 COLE PALMERS INS N05053-10 NSP COLE PALMER INS 5A55KFL-6517 NSP $20,478.00 NSP NSP NSP NSP $ 45,444.00 $8,205.00 738 NSP NSP NSP NSP NSP NSP $ 6,779.00 NSP $5,558.00 $21,000.00 CONTRACT N00024-90-C-6013 LOCATION: NPO SQQ AGENCY PECULIAR Items on this listing are required for further CAN work. Requesting keep. - ------------------------------------------------------------------------------------------------------------------------------------ PART NUMBER OR TE Serial USED Found BARCODE No. NUMBER Number DESCRIPTION ON VALUE PHYSICAL LOCATION - ------------------------------------------------------------------------------------------------------------------------------------ X 0021843.00 1213D0338 133 CAN ASSEMBLY, CAN $2,470.00 TDM Test X 0021844.00 1213D0357 720 CAN ASSEMBLY, GCA SAMPLE AND HOLD CAN $3,700.00 TDM Test X 0021657.00 1213D0358 136 CAN ASSEMBLY, CAL/GCA COMMAND RECEIVER CAN $3,090.00 TDM Test X 0021666.00 1213D0359 085 CAN ASSEMBLY, A/D CONVERTER CAN $4,940.00 GFE LOCK UP X 0021845.00 1213D0359 218 CAN ASSEMBLY, A/D CONVERTER CAN $4,940.00 TDM Test X 0021846.00 1213D0369 043 CAN ASSEMBLY, HEADING SENSOR ELECTRONICS CAN GFE LOCK UP X 0021653.00 1213D0689 549 CAN ASSEMBLY, +39V ACST, VOLTAGE REGULATOR CAN $2,470.00 TDM Test X 0021847.00 1213D0920 137 CAN ASSEMBLY, INVERSE GCA/OUT-OF-BAND FILTER CAN $2,470.00 TDM Test X 0021848.00 1213D1057 273 CAN ASSEMBLY, DEPTH SENSOR ELECTRONICS CAN $3,700.00 GFE LOCK UP X CAN $1,240.00 GFE LOCK UP X 0021849.00 1213D1449 186 CAN ASSEMBLY, ACOUSTIC MULTIPLEXER (12 TO 1) MF CAN $1,240.00 GFE LOCK UP X 0021862.00 1213D1450 385 CAN ASSEMBLY, ACOUSTIC MULTIPLEXER (12 TO 1) HF CAN $1,240.00 GFE LOCK UP X 0021850.00 1213D1451 2552 CAN ASSEMBLY, ACOUSTIC MULTIPLEXER LINE DRIVER CAN $1,240.00 GFE LOCK UP X 0021851.00 1213D3482 742 CAN ASSEMBLY, ACOUSTIC MULTIPLEXER (3 TO 1) VLF CAN $2,470.00 GFE LOCK UP X 0021852.00 1213D3528 2047 CAN ASSEMBLY, PRE-AMPLIFIER (LF) CAN $2,470.00 GFE LOCK UP X 0021853.00 1213D3529 2735 CAN ASSEMBLY, PRE-AMPLIFIER (MF) CAN $2,470.00 GFE LOCK UP X 0021854.00 1213D3530 5361 CAN ASSEMBLY, PRE-AMPLIFER (HF) CAN $2,470.00 GFE LOCK UP X 0021855.00 1213D3531 189 CAN ASSEMBLY, PRE-AMPLIFER (HF) CAN $2,470.00 GFE LOCK UP X 0021652.00 1213D3546 258 CAN ASSEMBLY, OVER VOLTAGE PROTECTION CAN $2,470.00 TDM Test X 0022236.00 1213D3559 0034 CAN ASSEMBLY, CAN $28,930.00 STRING ASSY DAMAGED X 0021656.00 1213D3584 071 CAN ASSEMBLY, PM/FL & CAL SQUARE WAVEGENERA CAN $3,210.00 TDM Test X 0021856.00 1213D3602 033 CAN ASSEMBLY, OSCILLATOR CAN $324.00 GFE LOCK UP LOCK UP X 0021660.00 1213D3612 266 CAN ASSEMBLY, PROM CAN $3,090.00 GFE LOCK UP X 0021661.00 1213D3612 270 CAN ASSEMBLY, PROM CAN $2,470.00 GFE LOCK UP X 0021654.00 1213D3651 264 CAN ASSEMBLY, NAD/VLF VOLTAGE REGULATOR CAN $2,470.00 TDM Test X 0021655.00 1213D3657 071 CAN ASSEMBLY, FORWARD POWER SUPPLY CAN $2,470.00 TDM Test X 0021662.00 1213D3664 048 CAN ASSEMBLY, DIGITAL MULTIPLEXOR CAN $2,470.00 TDM Test X 0021663.00 1213D3664 125 CAN ASSEMBLY, DIGITAL MULTIPLEXOR CAN $2,470.00 GFE LOCK UP - ------------------------------------------------------------------------------------------------------------------------------------ CONTRACT N00024-90-C-6013 LOCATION: NPO SQQ AGENCY PECULIAR Items on this listing are required for further CAN work. Requesting keep. - ------------------------------------------------------------------------------------------------------------------------------------ PART NUMBER OR TE Serial USED Found BARCODE No. NUMBER Number DESCRIPTION ON VALUE PHYSICAL LOCATION - ------------------------------------------------------------------------------------------------------------------------------------ X 0021659.00 1213D3673 253 CAN ASSEMBLY, DATE/DECODER/STATUS CAN $4,270.00 TDM Test X 0021664.00 1213D3683 266 CAN ASSEMBLY, CALIBRATION CAN $2,470.00 TDM Test X 0021857.00 1213D3714 669 CAN ASSEMBLY, PRE-AMPLIFER(LF) CAN $2,470.00 GFE LOCK UP X 0021858.00 1213D3715 557 PRE-AMPLIFER(MF) CAN $2,470.00 GFE LOCK UP X 0022237.00 1213D3759 167 TDM(W/O HOSE ASSEMBLY, STRINGING ASSEMBLY MOD $76,340.00 TDM Test X 0021859.00 1213D3766 2,255 CAN ASSEMBLY, PRE-AMPLIFER(VLF) CAN $1,240.00 GFE LOCK UP X 0021860.00 1213D3826 558 CAN ASSEMBLY, PRE-AMPLIFER(HF) CAN $1,240.00 GFE LOCK UP Total Count: 35 Total Value: $186,584.00 - ------------------------------------------------------------------------------------------------------------------------------------ CONTRACT N00024-90-C-6013 LOCATION: NPO SQQ AGENCY PECULIAR Items on this list are to be returned to USN. - ----------------------------------------------------------------------------------------------------------------------------------- PART NUMBER OR TE Serial USED Found BARCODE No. NUMBER Number DESCRIPTION ON VALUE PHYSICAL LOCATION - ----------------------------------------------------------------------------------------------------------------------------------- X 0022239.00 0411C0042 3282-021 SHIPPING CONTAINER MOD $1,500.00 SHIPPED X 0022240.00 0411C0042 3282-023 SHIPPING CONTAINER MOD $1,500.00 SHIPPED X 0022241.00 0411C0042 3282-024 SHIPPING CONTAINER MOD $1,500.00 SHIPPED X 0022242.00 0411C0042 3282-022 SHIPPING CONTAINER MOD $1,500.00 SHIPPED 0028385.00 0411C0042 None SHIPPING CONTAINER MOD $1,850.00 SHIPPED 0022236.00 1213D3533 0003 ACOUSTIC MODULE, VLF CAN $49,840.00 SHIPPED 0022234.00 1213D2161 0117 VIBRATIONISOLATION MODULE, FORWARD $10,530.00 SHIPPED X 0021665.00 1213D3779 043(0022) CAN ASSEMBLY, TRANSMIT/DRIVE/DECODE CAN $3,700.00 SOLDER TRAINING LAB 0022236.00 1213D4065 0021 ACOUSTIC MODULE, MF $65,240.00 SHIPPED X 002????.00 1214C4044 005 TOW CABLE ASSEMBLY $8,000.00 SHIPPED Total Count: 10 Total Value: $145,160.00 - ----------------------------------------------------------------------------------------------------------------------------------- 4-JUN-97 TOOL MASTER LIST Page: 1 Contract Number: N00024-90-C-6031 Description: ST/STE P.O. 644594 Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- 220181 9752RINS 07/17/96 07/09/96 Y HOLE PSOITION GAGE REV B 8006985 1 437 437 E254158-5 D7A 01/18/92 07/11/96 N CABLE, H5-2 SIGNAL 1 400 400 Tooling 1 437 Test Equip. 1 400 Total 2 837 4-JUN-97 TOOL MASTER LIST Page: 1 Contract Number: N00024-90-C-6031 Description: ST/STE P.O. 644594 Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T219954-1 C4A OOS 03/12/96 06/27/96 Y COMP HGT GAGE .636 8006925 1 69 69 T219954-2 C4A OOS 05/26/94 06/27/96 Y COMP HGT GAGE .030 8006925 1 69 69 T219955-1 C4A 05/25/96 05/28/96 Y COMP HGT GAGE .025 8006925 1 58 58 T219955-2 C4A OOS 10/01/96 06/27/96 Y COMP HGT GAGE .025 8006925 1 58 58 T219955-3 D6F POS 02/14/97 06/27/96 Y COMP HGT GAGE .025 8006925 1 58 58 T219955-4 D6F-POS 02/14/97 06/27/96 Y COMP HGT GAGE .025 8006925 1 59 59 T219956ABC C7C 01/13/97 08/19/96 N BONDING FIXTURE REV B 8006925 1 1320 1320 T219901 TOWSON 04/27/94 09/30/96 N COMP PREP FIXTURE 8006880 1 809 809 8006940 8006960 8006950 8008955 8006925 8006935 8006930 8006945 T219978A/B1 C8A 10/23/95 07/08/96 N BONDING FIXTURE 8006850 1 398 398 T219978A/B2 C8A 10/23/95 07/08/96 N BONDING FIXTURE 8006850 1 398 398 ?? C4A 09/27/96 06/27/96 ?? ?? 8006925 ?? 98 98 ?? 8006930 T219980-2 C4A OOS 02/17/97 08/26/96 Y HGT GAGE .275 X 1.9 8006925 1 96 96 8006930 8008960 T219980-3 D6F POS 02/14/97 06/28/98 Y HGT GAGE .275 X 1.9 8006930 1 96 96 8006925 8006980 T219980-4 D6F POS 02/14/97 06/27/96 Y HGT GAGE .275 X 1.9 8006925 1 96 96 8006930 8006960 T219981-1 C4A OOS 05/26/94 06/28/96 Y HGT GAGE .275 X 2.1 8006925 1 54 54 8006960 8006930 T219981-2 C4A 09/27/96 06/27/96 Y HGT GAGE .275 X 2.1 8008960 1 54 54 8006925 8006930 T219981-3 D6F POS 02/14/97 06/28/96 Y HGT GAGE .275 X 2.1 8006925 1 54 54 8006950 8006930 T219981-4 D6F POS 02/14/97 06/28/96 Y HGT GAGE .275 X 2.1 8006925 1 54 54 8006960 8006930 T219982-1 C4A OOS 05/31/94 06/27/96 Y HGT GAGE .345 X 1.92 8006935 1 17 17 8006955 T219982-2 C4A OOS 05/27/94 08/27/96 Y HGT GAGE .345 X 1.92 8006935 1 17 17 8006955 T219982-3 D6F POS 02/14/97 08/28/96 Y HGT GAGE .345 X 1.92 8006955 1 17 17 8006935 T219982-4 D6F POS 02/14/97 08/28/96 Y HGT GAGE .345 X 1.92 8006935 1 17 17 8006955 4-JUN-97 TOOL MASTER LIST Page: 2 Contract Number: N00024--91-C-6001Description: ST/STE P. O. 844594 Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T219983-1 C4A 03/12/96 06/26/96 Y HGT GAGE .345 X 2.17 8006955 1 102 102 8006935 T219983-2 C4A OOS 10/19/95 06/27/96 Y HGT GAGE .345 X 2.17 8006955 1 102 102 8006935 T219983-3 D6F POS 02/14/97 06/27/96 Y HGT GAGE .345 X 2.17 8006955 1 102 102 8006935 T219983-4 D6F POS 02/14/97 06/26/96 Y HGT GAGE .345 X 2.17 8006935 1 102 102 8006955 T219984-1 C4A OOS 05/27/94 06/27/96 Y HGT GAGE .300 X 2.17 8006945 1 9 9 8006950 8006940 T219984-2 C4A OOS 05/27/94 05/27/96 Y HGT GAGE .380 X 2.17 8006950 1 9 9 8006945 8008940 T219984-3 D6F POS 02/14/97 06/20/96 Y HGT GAGE .380 X 2.17 8008940 1 9 9 8006945 8006950 T219984-4 D6F POS 02/14/97 06/28/96 Y HGT GAGE .380 X 2.17 8006940 1 9 9 8006950 8006945 T219985-1 C4A OOS 05/31/94 06/28/96 Y HGT GAGE .380 X 1.92 8006950 1 87 87 8006940 8006945 T219985-2 C4A 04/10/95 05/21/96 Y HGT GAGE .380 X 1.92 8006945 1 87 87 8006950 8006940 T219985-3 D6F POS 02/14/97 06/28/96 Y HGT GAGE .380 X 1.92 8006940 1 87 87 8006950 8006945 T219985-4 D6F POS 02/14/97 06/28/96 Y HGT GAGE .386 X 1.92 8006945 1 87 87 8006950 8006940 T219986-1 C4A OOS 03/03/95 06/28/96 Y HGT GAGE .493 X 1.950 8006880 1 22 22 T219986-2 C4A OOS 03/03/95 06/28/96 Y HGT GAGE .493 X 1.950 8006880 1 22 22 T219986-2 D6F POS 02/14/97 06/28/96 Y HGT GAGE .493 X 1.950 8006880 1 22 22 T219986-4 D6F POS 02/14/97 06/28/96 Y HGT GAGE .493 X 1.950 8006880 1 22 22 T219997-1 C4A 09/24/96 06/28/96 Y HGT GAGE .045 8006930 1 49 49 8006925 8006880 8006950 8006980 8006945 8006940 T219997-2 C4A 12/17/96 06/28/96 Y HGT GAGE .045 8006940 1 49 49 8006880 8006925 8006950 8006986 8006945 8006930 4-JUN-97 TOOL MASTER LIST Page: 1 Contract Number: N00024-90-C-6031 Description: ST/STE P.O. 644594 Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T219998-1 C4A 09/27/96 06/21/96 Y HGT GAGE .040 8006880 1 49 49 8006950 8006925 8006930 8006940 8006945 8006950 T219998-2 C4A OOS 04/10/96 06/21/96 Y HGT GAGE .040 8006860 1 49 49 8006980 8006980 8006945 8006940 8006950 8006925 T219998-3 D6F POS 02/14/97 06/28/96 Y HGT GAGE .040 8006880 1 49 49 8006925 8006950 8006980 8006940 8006930 8006945 T219998-4 D6F POS 02/14/97 06/2896 Y HGT GAGE .040 8006960 1 49 49 8006950 8006880 8006940 8006925 8006930 8006945 T219999-1 C4A OOS 05/31/94 06/28/96 Y HGT GAGE .325 X 2.17 8006925 1 71 71 T219999-2 C4A OOS 05/31/94 06/28/96 Y HGT GAGE .325 X 2.17 8006925 1 71 71 T219999-3 D6F POS 02/14/97 06/28/98 Y HGT GAGE .325 X 2.17 8006925 1 71 71 T219999-4 D6F POS 02/14/97 06/28/98 Y HEIGHT GAGE 8006925 1 71 71 T220000-1 C4A OOS 06/05/94 06/28/96 Y HGT GAGE .325 X .1.92 8006925 1 65 65 T220000-2 C4A OOS 06/29/92 06/28/96 Y HGT GAGE .325 X .1.92 8006925 1 65 65 T220000-3 D6F POS 02/14/97 06/28/96 Y HGT GAGE .325 X .1.92 8006925 1 65 65 T220000-4 D6F POS 02/14/97 06/28/96 Y HGT GAGE .325 X .1.92 8006925 1 65 65 T220008 C6A 02/26/92 07/08/96 N ROUTER DRILL FIXT REV D 8006900 1 648 648 8006896 T220033-1 9232C 06/14/96 08/14/96 Y MOLD MASTER PATTERN 8006900 1 422 422 T220033-2 9232C 06/14/96 08/14/96 Y MOLD MASTER PATTERN 8006900 1 422 422 T220043 C6A 10/25/96 10/25/96 N CABLE BRD, W4 EXTERNAL 8006965 1 365 365 T402918-1 C6B 03/09/92 07/08/96 N SPANNER WRENCH 1 75 75 T402918-2 C6B 03/09/92 07/08/96 N SPANNER WRENCH 1 73 73 T402918-3 C6B 03/09/92 07/08/96 N SPANNER WRENCH 1 73 73 T402922 9852E 04/30/97 06/26/96 Y CRIMP TOOL 8006917-301 1 158 158 T402931 C4A OOS 11/28/94 06/26/96 Y CRIMP TOOL 1 158 158 TE254115 D3F POS 02/11/97 07/10/96 N T/F MOTHER BOARD 8006910 1 650 650 TE254122 9852B 06/20/96 06/20/96 N TEST FIXT A1&A2 BOARD 8006955 1 1000 1000 TE254123 9852B 06/20/98 06/20/98 N TEST FIXT A3 BOARD 8006935 1 950 950 TE254124 9852B 05/20/96 06/20/96 N TEST FIXT A4 BOARD 8006940 1 950 950 4-JUN-97 TOOL MASTER LIST Page:4 Contract Number: N00024-91-C-6001 Description: ST/STE P.O. 644594 Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- TE254125 9852B 08/20/96 08/20/96 N TEST FIXT A5 BOARD 8006930 1 975 975 TE254126 9852B 08/20/96 08/20/96 N TEXT FIXT A6 BOARD 8008945 1 950 950 TE254127 9852B 06/20/96 06/20/96 N A7/A8 BRD, TEST FIXT 8006980 1 5000 5000 TE254126 9852B 05/20/96 06/20/96 N TEST FIXT A8 BOARD 8006980 1 1000 1000 TE254129 9852E 05/18/90 06/21/96 N T/F A9 BD/XFMR HV COUP 8006980 1 900 1200 2100 TE254130 9852D 08/20/95 06/20/96 PMFL WORD GEN A1/A2BD 1 1500 1500 TE254131 9852E 06/13/96 06/13/96 Y SYSTEM T/S STIMULATOR 1 20000 22000 42000 TE254131-2 9852EHK 06/13/96 06/13/96 Y POWER SUPPLY 1 500 500 TE254131-3 9852B 06/14/96 06/14/96 N CABLE, W4 TARC PWR 1 400 400 TE254131-4 9852E 06/13/96 06/13/96 N CABLE, W5 TARC SIG 1 400 400 TE254131-5 9852E 06/13/96 06/13/96 N CABLE, W8 STIM JUMPER 1 400 400 TE254131-6 9852E 06/18/96 06/13/96 N CABLE, W7 HY/LV P/S 1 400 400 TE254131-7 D7A 03/24/92 07/11/96 N CABLE, W3 HVPS/STIM 1 400 400 TE254131-8 9852E 06/18/96 06/18/96 N CABLE, W10 HYPS/HY FLT 1 400 400 TE254132 9852B 06/13/96 06/13/96 N ESP CABLE 95D 1 150 150 TE254133 9852B 06/14/96 06/14/96 N ESP CABLE 96D 1 170 170 TE254134 9852B 06/14/96 06/14/96 N ESP CABLE 97D 1 175 175 TE254138-1 9852B 06/14/96 06/14/96 N ESP CABLE J1, 1 CONN 8006910 1 160 160 TE254138-2 9852B 06/14/96 06/14/96 N ESP CABLE J2, ?? CONN 8006910 1 150 150 1 160 160 1 150 150 TE254138-5 9852B 06/14/96 06/14/96 N ESP CABLE J5, 17 CONN 8006910 1 150 150 TE254138-6 9852B 06/14/96 06/14/96 N ESP CABLE J6, 22 CONN 8006910 1 150 150 TE254138-7 9852B 06/14/96 06/14/96 N ESP CABLE J7, 27 CONN 8006910 1 150 150 TE254138-8 9852B 06/14/96 06/14/96 N ESP CABLE J8, 32 CONN 8006910 1 150 150 TE254155 D5B 02/26/92 07/11/96 N TEST FIXTURE-A4, A5 UNIT#5 8006930 1 5000 5000 8006940 TE254156 9852B 06/20/96 06/20/96 TEST FIXTURE A6 8006945 1 6000 6000 TE254157 D6B 02/25/92 07/11/96 N TEST FIXTURE A9 8006980 1 4000 4000 TE254158 D7A 03/24/92 07/11/96 SYSTEM TEST SET STIM 1 1 140000 140000 TE254158-1 D6D 02/04/94 07/11/96 N BREAKOUT BOX 1 400 400 TE254158-3 D7A 03/18/92 07/11/96 N CABLE, W4 LOW VOLT P/S 1 300 300 TE254158-4 D7A 03/18/92 07/11/96 N CABLE, WS-1 SIGNAL 1 300 300 TE254158-6 D7A 03/18/92 07/11/96 N CABLE, W7 HV/LV P/S 1 400 400 TE254158-7 9852E 08/13/96 06/13/96 N CABLE, WS-3 SIGNAL 1 200 200 TE264158-8 D7A 08/18/92 07/11/96 N CABLE, INTERFACE W3 1 75 75 TE254159 9852E 04/05/95 05/21/96 Y SYSTEM TEST SET STIM 2 1 37500 37500 TE264159-1 9852E 04/05/95 08/21/96 Z LOAD 1 500 500 TE264171 9852BESP 06/14/98 08/14/96 N ESP CABLE 9E 1 200 200 TE254228-1 TELFWHSE 08/01/93 08/02/96 Y CABLE SIMULATOR (ENG) 1 8500 8500 TE254228-2 9852E 08/13/96 08/13/96 Y CABLE SIMULATOR (PROD) 1 8000 375 8375 TE254241 9855 E/L 10/04/95 07/23/96 N POWER SUPPLY LOW VOLT 1 800 800 TE254255 D5B 08/12/96 08/12/96 N CABLE, STIMULATOR TEST 1 100 100 TE254265 D6D 02/04/94 07/11/96 N BURN-IN T/F A4 BRD 1 1900 1900 TE254271 9852E 05/13/96 08/13/96 N FILTER, HIGH VOLTAGE P/S 8016543 1 250 250 Tooling 61 7875 Test Equip. 48 276350 Total 109 284225 4-JUN-97 TOOL MASTER LIST Page:1 Contract Number: N00024-92-C-6225 Description: NSIS (NORDEN) Customer: USN Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost - ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ---- T220590 D5F POS 02/11/97 07/12/96 N HOLDING FIXTURE 1 425 425 TE254411-1 8002 06/29/93 03/06/96 P. C. S/N 9207054 1 4525 4525 TE254411-2 8002 06/29/93 08/06/96 COLOR MONITOR, ARCUS 1 0 0 TE254411-3 D5D 08/15/96 08/15/96 N DIGITALTAPE RECORDER 1 3695 3695 TE254411-4 8002 08/29/93 08/05/96 DATA TRANSLATION BOARD 1 3395 3395 Tooling 1 425 Test Equip. 4 11615 Total 5 12040 SCHEDULE 4.23 - ENTIRE BUSINESS No items to schedule. SCHEDULE 4.25 - INSURANCE See following pages. See also Schedule 4.11. TITLE: RISK [LOGO] ALLIEDSIGNAL AUTOMOBILE LIABILITY MANAGEMENT DOMESTIC MANUAL SUPERSEDES: DATE: PAGE: 1 5/96 5/97 AUTOMOBILE LIABILITY INSURANCE - U.S. Insurance Company The Travelers Indemnity Company Policy No. TC2EE-CAP-173T4473-TCT-97 Texas Bond 470J1965 Massachusetts TC2J-CAP-201T485-A-TIL-97 Virginia TC2J-CAP-173T445-5-TIL-97 All Others (excluding Texas, Virginia, Massachusetts) TJEAP-225T169-8-97 Massachusetts Excess Coverage This policy covers the legal liability of AlliedSignal Inc. which may result from the ownership, maintenance, or use of any automobile (hired, non-owned, long-term leased, or owned). Coverage includes bodily injury liability, property damage liability, medical payments coverage, no fault coverage and uninsured/underinsured motorists protection. There is no coverage under this policy for physical damage to AlliedSignal Inc. units. This policy will pay first dollar coverage for damages to third parties for which we are legally liable, notwithstanding a $2,000,000 deductible each occurrence, bodily injury and property damage combined, including expense. Travelers is reimbursed via a daily cash transfer system for claims within the deductible area. Policy Period 4/1/97 - 4/1/98 Limits of Liability COVERAGE LIMITS OF LIABILITY Bodily Injury and $2,000,000 per occurrence Property Damage Liability Combined Single Limit Medical Payments $5,000 Each Person Uninsured/Underinsured Motorists Statutory Limits Statutory No-Fault coverage in states where applicable Basis of Premium Charge 1 of 2 Prior to renewal each year, the Risk Management Department sends each operation a form to be completed. The form indicates the number of vehicles by category. Premium is then charged on the number of vehicles in each of five classes (automobiles, vans, trucks, tractors and buses) as well as three experience rate levels relating to the operation's past losses. Short-Term Leased Vehicles (Less than one year) For automobiles rented/leased with the Corporate American Express Card within the United States, no matter which leasing company is used to lease a short-term vehicle, the insurance waiver for the collision deductible should be accepted. If not rented/leased with the Corporate American Express Card, it will be up to the individual operating unit's management to decide whether or not the employee waives or accepts the waiver for collision deductible. This decision should be based on the costs/benefits of the operating unit's rental experience. Use of Personal Automobile on Company Business The AlliedSignal Inc. Corporate Risk Management Program does not provide coverage for physical damage to an employee's vehicle or for the employee's liability to third parties. An employee using their own automobile on company business must look to their own personal insurance carrier for coverage. At the discretion of Corporate Management, the Corporate Automobile Liability Policy will provide liability insurance in excess of the employee's personal automobile liability limits while an employee is using his personal car on company business. Notice and Handling of Claims A. Litigation If you receive a copy of a Summons, Complaint Petition or other legal paper indicating that AlliedSignal Inc., one of its subsidiaries, divisions or employees is involved in a lawsuit, immediately contact your Regional Counsel. Forward legal papers to your counsel with copies to the Corporate Risk Management Department. B. Other Claims The following Motor Vehicle Accident Reporting Form is to be completed in full and returned to the Corporate Risk Management Department. The information is necessary to attempt recovery from the adverse driver and also enable proper credit of any recovery. 2 of 2 TITLE: RISK [LOGO] ALLIEDSIGNAL BLANKET CRIME MANAGEMENT MANUAL SUPERSEDES: DATE: PAGE: 1 2/96 2/97 BLANKET CRIME INSURANCE Insurance Company National Union Fire Insurance Co. Federal Insurance Company Coverage This policy will reimburse AlliedSignal for loss of Money, securities and other property resulting from perils insured, i.e., employee dishonesty, safe burglary, robbery, hold up, and forgery, subject to the limits of liability stated below. Policy Period 12/31/95 - 12/31/98 Limits of Liability TYPE OF LOSS LIMIT DEDUCTIBLE - ------------ ----- ---------- Employee Dishonesty Loss Inside Premises Loss Outside Premises Depositors Forgery Coverage $50,000,000 $1,000,000 Loss of Precious Metals Money Orders, Counterfeit Paper & Credit Card Forgery* * $1,000,000. Limitation on credit card forgery Basis of Premium Charge Premium is based on census and precious metals exposure. Notice an Handling of Claims Report losses to the Risk Management Department, Corporate Controller, the Director of Corporate Services and the Director of Corporate Auditing in accordance with Vol. I Section I.6 of the AlliedSignal Controller's Manual. 1 of 1 TITLE: RISK [LOGO] ALLIEDSIGNAL DIRECTOR & OFFICERS MANAGEMENT LIABILITY MANUAL SUPERSEDES: DATE: PAGE: 1 2/96 2/97 DIRECTORS & OFFICERS LIABILITY For information on this coverage contact Lois Fuchs at (973) 455-5916. 1 of 1 TITLE: RISK [LOGO] ALLIEDSIGNAL FIDUCIARY LIABILITY MANAGEMENT MANUAL SUPERSEDES: DATE: PAGE: 1 2/96 2/97 FIDUCIARY LIABILITY Insurance Company a. National Union b. CNA Insurance c. Reliance Insurance d. ACE Insurance Coverage This coverage will pay on behalf of any individual construed to be a fiduciary under ERISA and AlliedSignal Inc. and its subsidiaries, claims made during the policy period for breach of fiduciary duty in the administration of Employee Benefit Plans as governed under ERISA or similar Canadian, U.K. or other foreign laws. Policy Period 12/31/95 - 12/31/98 Limits of Liability Contact the Risk Management Department for specific limit information. Deductible The Corporate deductible is $250,000 per loss (incl. defense). First dollar coverage is provided to individual fiduciaries. 1 of 1 TITLE: RISK [LOGO] ALLIEDSIGNAL GENERAL & AUTO LIABILITY MANAGEMENT FOREIGN MANUAL SUPERSEDES: DATE: PAGE: 1 5/96 6/97 COMPREHENSIVE GENERAL & AUTOMOBILE LIABILITY - FOREIGN Insurance Company Zurich-American Insurance Company Policy No. CGL 68-63-617-04 Coverage - General Liability This policy pays on behalf of or indemnifies AlliedSignal Inc. for all sums which they shall become obligated to pay by reason of third party liability imposed by law for damages because of bodily injury, sickness or disease, and/or injury to or destruction of property, including the low of use thereof, caused by an occurrence. Coverage under this policy also includes (but is not limited to) the following types of liability claims: products (excluding aircraft products), completed operations and contractual liability. Policy Period 4/1/97 to 4/1/98 Limits of Liability (In US dollars) General Liability $2,000,000 combined single limit, per occurrence $20,000,000 in the aggregate $2,000,000 Products Liability and Completed Operations per occurrence/$4,000,000 in the aggregate Automobile Liability Bodily Injury/Property Damage $2,000,000 combined single limit Hired car and non-ownership coverage included. Deductibles General-Liability None Automobile Liability 1 of 3 For owned automobiles, this coverage is excess and difference in conditions over local statutory limits or $25,000 SIR, whichever is greater. Local Automobile Insurance Guidelines Automobile insurance is broken down into 2 main categories: 1. Automobile Liability for bodily injury and property damage to others 2. Physical damage to the vehicle to include collision, theft, etc. The purchase of physical damage insurance is prohibited by Corporate policy. As respects automobile liability, this subject can be broken down into two more categories: A. Liability arising out of the use of owned or leased vehicles B. Liability arising out of the use of vehicles not owned, hired or leased by AlliedSignal. This category includes vehicles that are owned by AlliedSignal employees and used on company business with the permission of the company. In item "A" above, the owned or leased vehicles must carry local automobile liability insurance. In most countries, the local vehicle registration laws require that the operating unit maintain automobile liability insurance for those vehicles. Non-owned vehicle coverage is provided as an adjunct to our general liability program. Such coverage will also normally be provided on an admitted basis as part of the locally issued general or automobile liability policies. It is important to note, however, that this coverage does not extend to personal use of employees' vehicles. It is intended to protect AlliedSignal and may, depending on the discretion of the Risk Management Department, be extended as excess coverage to its employees as respects liability arising from employees using personal cars on company business. Therefore, it is imperative that all employees continue to maintain their own personal automobile insurance. With respect to the Zurich-American USA policy, it extends on a broader and excess basis to all categories of automobile liability indicated above, over a minimum primary limit of $25,000 or the local statutory limit, whichever is greater. On the subject of rented automobiles, the major rental firms with whom we deal provide liability insurance as part of the rental agreement. Our international program provides insurance protection for both AlliedSignal and the employee, while an company business, for coverage in excess of that offered by the automobile contract. The Zurich-American program does not mandate that the local admitted automobile insurance be placed with the Zurich-American network facility in the various countries. However, with all other factors being equal, we strongly encourage the use of the Zurich-American for the admitted automobile liability program. Whether or not the Zurich-American is used, the J&H local facility is to be the broker for the automobile insurances. Basis of Premium Charge - General & Automobile Liability 2 of 3 Premium is based on non-aircraft sales and number of vehicles. Notice and Handling of Claims The original of each report and of supporting papers are to be submitted to the local Zurich representative servicing the area where the accident occurred, with copies sent to the, Risk Management Department at 101 Columbia Road Morristown, New jersey 07962 3 of 3 TITLE: RISK [LOGO] ALLIEDSIGNAL GENERAL LIABILITY-DOMESTIC MANAGEMENT MANUAL SUPERSEDES: DATE: PAGE: 1 5/96 5/97 GENERAL LIABILITY INSURANCE Insurance Company The Travelers Indemnity Company U.S. Policy No. TC2J-GLSA-199T573-A-TIL-97 Coverage This policy will pay on behalf of AlliedSignal Inc. & subsidiaries all sums the insured is legally liable to pay, for damages arising from bodily injury and property damage liability, resulting from a product or activity of the insured and caused by an occurrence. Coverage under this policy includes (but is not limited to) the following types of liability claims: products (excluding aircraft products), completed operations, contractual liability. This policy will pay first dollar coverage for damages to third parties for which we are legally liable, notwithstanding our current deductible of $3,000,000 each occurrence, bodily injury and property damage combined, including expenses. Travelers is reimbursed via a daily cash transfer system, for claims within the deductible area. Policy Period 4/1/97-4/1/98 Limits of Liability(1) A. General Liability (excl. products) -$3,000,000 each occurrence combined limit for bodily injury, sickness, disease or death or physical injury to or destruction of tangible, property. B. Product Liability (excl. aircraft products) and Completed Operations Liability - $3,000,,000 each occurrence, combined limit for bodily injury and property damage subject to an aggregate(2) of $10,000,000. (1) Defense costs are paid in addition to the limits of liability. (2) Aggregate is eroded by indemnity payment within both the deductible & pure insurance areas. Basis of Premium 8% is based on wages - this covers premises type exposure 60% is based on historical loss experience. 32% is based an non-aircraft sales. 1 of 2 NOTICE AND HANDLING OF CLAIMS A. Litigation If you receive a copy of a Summons, Complaint, Petition or other legal paper indicating that AlliedSignal Inc., one of its subsidiaries, divisions, operating units or employees is involved in a lawsuit, immediately contact the Law Department Forward legal papers to your assigned company Counsel with copies to the Risk Management Department. B. Other Claims and Incidents Report all other claim and incidents under this coverage by submitting a comprehensive narrative report to the Risk Management Department and the Travelers Insurance Company. For serious claims telephone the Risk Management Department and provide all available information. Your written report should include all relevant aspects of the claim, especially the following items: 1. Date of accident or loss 2. Persons involved and extent of their injuries 3. Extent of Property Damage 4. Short narrative of what took place 5. Copies of available accident reports and witness statements The Risk Management Department and the local Travelers office will work with you in every aspect of a claim under this coverage, so that fine disposition is made in the most beneficial and expeditious manner. C. Environmental Claims See Excess Liability Section. GENERAL LIABILITY INSURANCE-CANADA Insurance Company The Guardian Insurance Company Policy No. 1412000 Policy Period 4/1/97-4/1/98 Coverage Coverage is the same as provided in the United States. 2 of 2 TITLE: RISK [LOGO] ALLIEDSIGNAL EMPLOYEE TRIP TRANSIT MANAGEMENT MANUAL SUPERSEDES: DATE: PAGE: 1 5/96 5/97 EMPLOYEE TRIP TRANSIT Insurance Company Fireman's Fund Insurance Company Policy No. OP-18530 Coverage Provides worldwide coverage on household goods and personal effects of AlliedSignal's officers and employees while in transit by any mode of conveyance, including risks while on docks, platforms, wharves, sidings, awaiting transshipments or being transshipped, and held covered while in warehouses. Insured against "All Risks" of physical loss and/or damage from any external cause exclusions considered uninsurable, such as nuclear, wear and tear, insects, inherent vice and gradual deterioration. Coverage does not apply to loss of accounts, bills, currency, deed, evidences of debt, money, notes or securities. Jewelry and watches require prior Risk Management Department approval at rates to be agreed upon. Coverage attaches from the time goods are being packed for shipment and covering continuously until same are safely delivered and unpacked at the final destination, but only at and between the places as reported on AlliedSignal's monthly report required to be made under the policy. For questions on Monthly Reporting, please contact Fran Watkins in Morristown. Policy Period 5/1/97-4/30/98 Limit of Liability $400,000 any one shipment at any one time. Deductible None Notice of Handling of Claims Report to the AlliedSignal Risk Management Department, who shall report prompt notice to the Fireman's Fund Insurance Company. All potential claims in excess of $500 shall be reported to: Mr. Tom Lynch Fireman's Fund Insurance Company 1 of 2 Ocean Marine Claims One Liberty Plaza New York, NY 10006 2 of 2 TITLE: RISK [LOGO] ALLIEDSIGNAL MARINE CARGO MANAGEMENT MANUAL SUPERSEDES: DATE: PAGE: 1 5/96 5/97 OCEAN CARGO INSURANCE INCLUDING WAR RISK Insurance Company Fireman's Fund Insurance Company Policy No. OP-18529 - Ocean Cargo Policy No. OP-18530 - Household and Personal Effects Coverage This policy covers 100% interest in shipments worldwide (excluding shipments within the US & Canada), by vessel and air freight for account of AlliedSignal Inc. and its overseas customers on merchandise incidental to the business of the insured. Valuation of goods normally includes prepaid or advanced or guaranteed freight or other charges incurred prior to shipment, plus 10%. Policy provides for certain alternative valuation clauses. Limits of Liability 1. $15,000,000 per any one vessel or conveyance including aircraft. $400,000 per any one household effects shipment $50,000 per package shipped by mail or parcel post and $50,000 in any one package and/or baggage while in the custody of a messenger whether an employee of AlliedSignal Inc. or otherwise. 2. Shipments originating within the United States and Canada are excluded if the destination is also within the US or Canada. 3. War Risk applies only while goods are carried on overseas vessels or aircraft. It does not apply prior to being on-board or after arrival at intended port of discharge. 4. War Risk does not cover loss or damage caused by or resulting from commandeering, preemption, requisition, nationalization or seizure or destruction under quarantine or customs regulations. 5. Geographical Limits - coverage is on the basis known as "World to World", i.e., from ports and places in the world to ports and places in the world. 6. All merchandise with exception of Dry Bulk Cargo and Liquid Bulk Cargo is insured for "All Risks" conditions. Intracompany shipments are subject to a $5,000 deductible. Note, in view of the sensitive nature of our products, under deck stowage should always be requested from the Steamship Companies. 1 of 6 Dry Bulk Cargo is insured for "All Risks". However, claims for leakage and/or shortage and/or loss in weight are subject to a one-half (.5%) deductible applied to the insured value of the entire shipment. Bulk Liquid Products are insured: "All Risks" excluding shortage, leakage, and/or contamination unless caused by or arising out of the vessel being stranded, sunk, burnt, or in collision. Contamination resulting from stress of weather is covered. Claims are payable subject to deductible for normal shortage. Options are given to cover Bulk Liquid Cargo for: a. "All Risks" excluding unexplained shortage and/or loss in weight. Claims for differences between shipped and outturn weights are subject to a .5% deductible applied to contents of each tank. b. "All Risks" including coverage for all shortage and/or loss in weight subject to deductible of .5% applied to contents of each tank. Warranties are in effect with respect to tank cleanliness, loading and survey requirements. 7. Temporary detention coverage is provided for goods during interruption of transit and in temporary storage for repacking, consolidation, inspection, storage or allocation for up to 60 days. 8. Duty coverage on imports included where required. 9. Sixty (60) days notice of cancellation. 10. Foreign storage coverage is provided for goods in storage up to $500,000 each unnamed location. The risks of Earthquake and Flood are excluded at unnamed locations; but these risks may be restored if location is named within thirty (30) days of receipt of merchandise. A specific endorsement must be secured to name the location and respective limit. Prompt notice must be given when goods are placed in storage indicating location, amount and goods at risk. 11. Contingency - For Exports Only Depending on the Contracts of Sale, the buyer will arrange their own Marine insurance, thus AlliedSignal will not insure the shipment an behalf of the buyer under the Corporation's Ocean Marine Insurance Policy. For one reason or another, title in the goods may revert to the seller, i.e., by exercise of rights of stoppage in transit or rejection of the goods by the buyer. Or the buyer might refuse to pay for the merchandise because of loss and/or damage. In order to protect AlliedSignal's interest in the preceding, AlliedSignal has the option provided such option is exercised prior to any known or reported loss to insure all goods and/or merchandise sold to others whereby AlliedSignal is not obligated to provide Ocean Cargo insurance for the Contingency Interest of AlliedSignal Inc. 2 of 6 This coverage will indemnify AlliedSignal for loss incurred due to perils insured against under the Corporation's Ocean Marine Insurance Policy. 12. Exhibitions All goods and/or merchandise property of AlliedSignal Inc. while on tour and/or display in exhibitions, showrooms and/or trade shows or otherwise including all incidental transit are covered under the Marine Insurance Program. Excluding exhibitions, showrooms and/or trade shows, etc, in the United States. The limit of this coverage is $100,000. Excess coverage provided under foreign property program. 13. Increased. Value/Difference in Conditions - For Imports Only Depending on the Contracts of Sale, AlliedSignal will purchase various merchandise from vendors located outside the United States in which the Seller will arrange the Ocean Marine Insurance. Thus in the event of loss or damage, AlliedSignal will have to rely on the Sellers Insurance to be reimbursed for the loss. In order to fully protect AlliedSignal's interest, AlliedSignal has the option, provided such option is exercised prior to any known or reported loss, to insure all goods and/or merchandise purchased by AlliedSignal on Cost, Insurance, Freight (C.I.F.) or other terms of purchase whereby the Marine insurance is provided by the seller or others for Difference in Conditions and Increased Value as stated in the Corporation's Ocean Marine Insurance Policy. Policy Period 5/1/94 until cancelled. Notice and Handling of Claims In the event of loss: - Make every reasonable effort to minimize the loss. Act as a prudent uninsured cargo owner would. Reasonable expenses incurred in minimizing a loss are recoverable. - Take proper delivery exceptions and file claim against the transportation carrier. Do the necessary to preserve insurer's recovery rights against the carrier. - Promptly report the loss to AlliedSignal's Risk Management Department (domestic shipment and imports) or insurer's settling agent (exports). INTERNATIONAL SHIPMENTS Import Shipments (From Foreign, to U.S.) Inspect Cargo Before accepting your shipment from the carrier, carefully inspect the cargo. If damages or shortages are observed, make the appropriate notation on the delivery receipt. If damage is 3 of 6 suspected but not readily apparent, note on the delivery receipt "Subject to Inspection." At this time, take any practical steps to minimize the loss. File Claim on Carrier Promptly file written claim against the transportation carrier. (See sample claim letter). Prompt notice is very important as claims can be disallowed within a short period. For example, a claim for damage to an air shipment must be filed within seven days. FAILURE TO FILE PROMPTLY AGAINST THE CARRIER MAY PREJUDICE YOUR INSURANCE CLAIM. File Insurance Claim Promptly report the loss to AlliedSignal's Risk Management Department who will in turn notify insurer. If the loss exceeds $5,000 or involves unusual circumstances, the initial report should be made by telephone, so that insurer might arrange to have a surveyor inspect the damages promptly. The surveyor issues his report to insurer relating the nature, cause and extent of loss. Regardless of the amount of the loss, do not dispose of any damaged cargo until settlement is agreed or advised to do so by the surveyor. Claims Documentation Cargo claims are essentially adjusted on the basis of documentation. It is your obligation to demonstrate your claim by providing the Risk Management Department with documentation which shows the loss was incurred during transit and which substantiates the values being claimed. The following documents are required for claims on imports: - - File an itemized statement as to the amount claimed - - Bills of Lading (Ocean, Air and Inland). If claim is for non-delivery of an entire shipment, all original ocean bills of lading are required. - - Commercial Invoice - - Packing List - - Consumption Entry Report (if duty is insured). - - Copy of claim against the carrier and reply, if any. - - Delivery Receipt showing exceptions. - - Trailer Interchange Receipt (for containerized shipments). - - Carrier's confirmation of non-delivery (when claiming non-delivery of an entire shipping package). - - Repair/reconditioning invoices or estimates. This list includes the documents commonly needed to demonstrate a cargo claim. Be me to submit any other documentation which would substantiate your claim. General Average In case a General Average is reported, the Average Adjusters require either a cash deposit or a General Average Guarantee from an Underwriter authorized to do business in the country where security is 4 of 6 taken. The cargo generally will not be released until the Average Adjusters receive the Average Bond or Average Agreement and the General Average Guarantee. Be prepared to furnish identification of the Average, Adjuster, details of the casualty, description and value of cargo, the Bill of Lading number and date, and identification of the insurance declaration. Alexander & Alexander will then arrange for the Underwriter to issue a General Average Guarantee or to post a cash deposit. The documentation required is as follows: a. Invoice b. Bill of Lading c. Copy of the signed Average Bond or Average Agreement d. Insurance Certificate or Insurance Declaration After the cargo is released for delivery and the documentary requirements fulfilled all subsequent claim negotiations will be between the Average Adjuster and Underwriter. Export (U.S. to Foreign) and Foreign (Foreign to Foreign) Shipments On shipments terminating in foreign countries, the consignee basically follows the same claim procedure as you do for imports. Instead of reporting the loss to AlliedSignal's Risk Management Department, however, the consignee contacts the insurer's survey agent as listed on the Special Marine Policy which he receives with the shipping documentation. The consignee pays the survey fee and submits his claim (including the survey fee) to the nearest insurer settling agent shown on the Special Marine Policy. He submits the Special Marine Policy and the survey report in addition to those documents listed above for import shipments. This claim procedure is clearly outlined on the reverse of the Special Marine Policy. HOUSEHOLD AND PERSONAL EFFECTS SHIPMENTS Employees household goods and personal effects moves are insured against all risks of physical loss or damage from an external cause up to the value declared on AlliedSignal's relocation forms. Domestic and Foreign to U.S. Moves Inspect Cargo Before accepting delivery, inspect your goods and note any apparent damages on the delivery receipt. If you do not have an opportunity to make a thorough inspection, sign the receipt with the notation "Subject to further inspection." File Claim Against the Moving Company In the event of damage or shortage, promptly notify the moving company by telephone and then follow-up with a written notice of claim. Under a special arrangement with the insurer, the moving 5 of 6 company will inspect the damages and settle the claim directly with you. Claims Documentation The following documents should usually be submitted to the moving company: - Bill of Lading - Valued Inventory - Packing List/Inventory - Delivery Receipt - Repair Bill or Estimates - Completed Claim Form (supplied by the moving company) Foreign Moves In the event of loss or damage to your goods when delivered to a foreign destination, secure the above claim documentation (Household and Personal Effects Shipments) and forward to the Risk Management Department. GENERAL REMARKS These procedures will serve as a guideline for everyday cargo claims handling. If you encounter any difficulties in handling a particular claim, contact the Risk Management Department for assistance. You should also be sure to promptly notify the Risk Management Department of any serious cargo loss. SAMPLE LETTER FORM FOR NOTICE OF LOSS TO CARRIER TO BE WRITTEN ON YOUR LETTERHEAD Vessel or Carrier's Name Bill of Lading No. - Date Description of Shipment Estimate of Loss Your own Reference No. Gentlemen: The captioned shipment was received short and/or damaged. We hold you fully responsible for an estimated amount of $________. Please forward a copy of your delivery records covering this shipment so we may file claim under our insurance. A formal claim with supporting documents will be submitted when the exact amount of loss has been determined. Very truly yours, [Signature] 6 of 6 TITLE: RISK [LOGO] ALLIEDSIGNAL EXCESS LIABILITY MANAGEMENT MANUAL SUPERSEDES: DATE: PAGE: 1 5/96 5/97 WORLDWIDE MARINE LIABILITIES Insurance Company European, US, Swiss & Bermudian Companies Coverage This insurance will pay on behalf of the Assured all sums for bodily injury and property damage which the Assured shall become legally liable to pay or be liable to pay by reason of contract or agreement including but not limited to Protection and Indemnity Risks, including War Protection and Indemnity Risks for AlliedSignal's barge fleet, collision, towers, removal of wreck, charterers, charterers' demurrage, terminal or wharf owners or operators' liability. Includes seepage and pollution coverage in accordance with Federal Water Quality Improvement Act requirements. Policy Period 4/1/97 - 4/1/98 Limits of Liability* $200,000,000 any one occurrence and in the aggregate**, excess of $3,000,000 (insured and/or self-insured) any one occurrence. * Payment of Loss for joint ventures is determined as follows: Total loss of joint venture times AlliedSignal's percentage of interest, unless otherwise requested and endorsed on the policy. ** Additional limits respond on a "claims-made" excess basis. BROAD FORM UMBRELLA LIABILITIES-WORLDWIDE Insurance Company Alchem Insurance Ltd., Bermudian, European, Swiss & American Companies Coverage Excess Liability Insurance is designed to add an additional amount of coverage over and above some specific limit. Our excess liability policies provide coverage over various primary underlying limits. Underwriters shall indemnify the Assured for all sums which the Assured shall be obligated to pay by 1 of 4 reason of the liability: e. imposed upon the Assured by law, or f. assumed under contract or agreement by the Named Assured and/or any officer, director, stockholder, partner or employee of the Named Assured, while acting in his capacity as such, for damages on account of: i. Personal Injuries ii. Property Damage iii. Advertising Liability iv. Marine Liability caused by or arising out of each occurrence happening anywhere in the world. Policy Period 4/1/97 - 4/1/98 Limits of Liability* $200,000,000 combined single limit attaching excess of the following: US$3,000,000 any one occurrence Ultimate Net Loss whether insured or self-insured as respects general and non-aircraft products liability. US$2,000,000 any one occurrence Ultimate Net Loss whether insured or self-insured as respects Automobile Liability US$2,000,000 any one occurrence Ultimate Net Loss whether insured or self-insured as respects Foreign Liability US$1,000,000 Ultimate Net Loss per person as respects Employer's Liability Occupational Disease (domestic). Excess of non-U.S. and Canada programs declared to Risk Management Department. Basis of Premium Allocation 50% is based on non-aircraft sales. 50% is based on historical loss experience. *Payment of Loss for joint ventures is determined as follows: Total loss of joint venture times AlliedSignal's percentage interest, unless otherwise requested and endorsed on the policy. NOTE: Additional limits respond on a "claims-made" excess basis. SEEPAGE AND POLLUTION LIABILITY 2 of 4 Insurance Company European, US, & Bermudian Companies Coverage To cover the Assured for all liabilities, costs and expenses for which they may be held liable arising from seepage, pollution, contamination, containment, confinement and cleanup expenses, (unless deliberate or resulting directly from willful or conscious violation or non-compliance with rules, regulations or law). Coverage is limited to accidental, unintended and unexpected occurrences. All policies require that the occurrence can be identified as commencing at a specific time and date during the term of the policies, that we learn of the occurrence within a specified time soon after commencement and report same to underwriters within a specified time*. Excludes coverage for claims involving waste sites. Policy Period 4/1/97 - 4/1/98 Limits of Liability** Contact the Risk Management Department for specific limit information. NOTICE AND HANDLING OF CLAIMS Notice of Loss First Notice of Loss should immediately be phoned to the Risk Management Department. All losses must be reported to the Risk Management Department in time for them to report the loss to the insurers within 20 days of commencement of the loss. *Time element wording varies by policy as shown on next page. **Limits of liability for joint ventures we determined as follows: policy limits times AlliedSignal's percentage of interest in the joint venture unless otherwise arranged. Pollution - Time Element Reporting Provisions Discovery Within Reporting Within 7 days 40 days Litigation If you receive a copy of a Summons, Complaint. Petition or other legal paper indicating that AlliedSignal Inc., one of its subsidiaries, divisions, operating units or employees is involved in a lawsuit, immediately contact the Law Department. Forward legal papers to your assigned company Counsel with copies to the Risk Management Department. 3 of 4 Other Claims and Incidents Involving Pollution Report to the Risk Management Department all claims, lawsuits, and incidents relating to waste disposal or plant manufacturing operations and which involve alleged contamination of the environment. All claims are to be reported irrespective of the date upon which the disposal or spillage occurred. Claims and lawsuits that must be reported include the following: o demands from any private party or governmental entity that action be taken to remedy the alleged contamination o information requests from any governmental agency or private party o demands for reimbursement of costs expended and/or damages incurred by any governmental agency or private party o circumstances that involve negotiations with a governmental agency where a written demand has not been made but where a consent order is expected. Reports of these claims to Risk Management should include a copy of the claim or lawsuit, a synopsis of the events, if known, associated with the claim along with an outside counsel recommendation or selection if the Law Department determines that outside counsel is necessary. 4 of 4 TITLE: RISK [LOGO] ALLIEDSIGNAL GLOBAL PROPERTY DAMAGE & MANAGEMENT BUSINESS INTERRUPTION MANUAL SUPERSEDES: DATE: PAGE 1 10/95 10/96 GLOBAL PROPERTY DAMAGE, AND BUSINESS INTERRUPTION Insurance Company The insurance company is American International Underwriters for Allied's International locations. In North America the Primary insurers are Reliance, Houston Casualty, National Union and Protection Mutual. These same insurers, plus other U.S. & European insurers participate both in the primary layer, as well as the excess layers. Coverage This is a blanket policy* covering the Corporation against loss or damage, on a replacement cost basis **, to real and personal property, or the property of others for which the Corporation is responsible at locations worldwide (including while in transit). The policy insures against all risk of direct physical loss or damage from any external cause, including boiler and machinery breakdown and is subject to normal exclusions such as wear and tear, gradual deterioration, extremes of temperature war, nuclear and other exclusions commonly considered uninsurable or the subject of other insurance such as employee dishonesty. The Policy covers Boiler and Machinery up to the full limit per occurrence. This policy also provides business interruption insurance and contingent business interruption insurance which is designed to pay for loss of profits and continuing costs which result from damage to insured property and/or to those of a supplier or receiver by art insured peril. The policy has been extended to cover damage to electronic data processing equipment and for costs of reproducing media from duplicates or originals only. Some limited amount of full reproduction expenses is provided. Included therein is business interruption and/or extra expense coverage which provide for reimbursement for loss of income and/or the assurance of funds to meet the additional expenses incurred in returning to normal operations following an Insured incident. The policy automatically (subject to reporting to underwriters in a certain time frame) covers new and acquired property and the interest of any company or corporation which during the period of the policy is merged with, becomes a subsidiary of, or becomes controlled by Allied or any subsidiary of Allied. *This policy covers all Allied Signal's locations on a blanket basis (except certain EMS locations, which are covered for $1.2 Billion each occurrence) which means the entire amount of insurance can be applied to a single location. **In the event of loss or damage to real and/or personal property which is not repaired rebuilt or replaced, such property will be valued at Actual Cash Value. Policy Period 1 of 6 10/1/96 - 10/1/97 RENEWED 10/1/97 - 10/1/98 Limits of Liability Blanket limit combined on Real and Personal Property Insurance and Business Interruption. $350,000,000 for earthquake per occurrence and in the aggregate except Critical Zone earthquake where it is $200 million per occurrence and in the aggregate for ISO Critical Zone 1 (areas of the states include portions of California, Nevada, Alaska and the Country of Canada) and $150 million per occurrence and in the aggregate for one other Zone 1 equivalent International locations. In Japan Zones 4, 5 or 6 there is a 60% indemnity provision. For Flood the per occurrence and annual aggregate is $350,000,000, except in The Netherlands where the occurrence/aggregate limit is $25,000,000. $150,000,000 per occurrence for the following: a. Extra Expense b. Contingent Extra Expense c. Rental Insurance d. Transit e. Contingent Business Interruption f. Fine Arts g. Valuable Papers and Records (including reproduction cost of media) h. Leasehold Interest i. Off Premises Power - Property Damage and Time Element - excluding losses resulting from flood and earthquake. j. Accounts Receivable k. Debris Removal (except windblown debris) l. Vessel impact damage to piers, wharves and docks m. Expediting Expense n. Installment Sales o. Miscellaneous Unnamed Locations p. Newly acquired property subject to reporting within 180 day of acquisition q. Precious metals r. Fire Department/Brigade Charges s. Electronic Data Processing Equipment t. Property in the course of construction (including testing) Deductible All claims for damage, loss of income, profit or expense arising out of any one occurrence shall be adjusted as one loss and from the amount of such adjusted loss, there shall be deducted the sum of $100,000 combined any one occurrence at all locations, anywhere in the world except $250,000 combined any one occurrence at all locations in the U.S, its territories and possessions, Puerto Rico and Canada. Earthquake Deductibles* $10,000,000 for each loss Insured against the peril of earthquake involving all locations situated within designated critical ISO Zone No. 1 (areas of the states include portions of California, Nevada, Alaska and the Country of Canada). Deductibles: 2 of 6 1. $5,000,000 for each loss at the following locations: Frankford Hopewell Orange 2. $2,500,000 for each loss at the following locations: Chesterfield Columbia Moncure 3. $2.500,000 for each loss at the following locations: Detroit (Tar Plant) Ironton (Tar Plant) Pottsville, PA Longlaville, FR Riedel-de-Haen German Rudolstadt, Germany 4. $100,000 for each loss involving property in transit. *One carrier (Protection Mutual) has an earthquake deductible of 5% of the maximum of $500,000 any one occurrence in Japan or Mexico and a deductible of 5% to a maximum of $1,500,000 any one occurrence in Taiwan. 5. a. 2% for each Property Damage loss insured against by the peril of windstorm in the U.S.A. at each location within designated areas (as defined in Windstorm Endorsement Designated Areas), the amount to be deducted shall be stated percentage of the one hundred percent reported property damage values for each and every location (see Attachment A). b. 5 days for each Time Element loss insured against by the peril of windstorm in the U.S.A. at each location within the designated areas (as defined in Windstorm Endorsement Designated Areas), the amount to be deducted shall be the dollar equivalent of the stated number of days times the daily plant value - computed by dividing the reported annual time element values by the actual number of working days. Notwithstanding 5 a and b above, the minimum amount to be deducted from the total loss arising out of one windstorm occurrence shall in no event be less than $250,000, while the maximum amount to be deducted shall in no event be greater than $5,000,000. Territory Worldwide except Afghanistan, Albania Angola, Bosnia-Herzegovina, Croatia, Cuba, El Salvador, Iran, Iraq, Kampuchea (Cambodia), Laos, Lebanon, Libya, Macedonia, North Korea, Outer Mongolia, Serbia, Syria, Tibet and Montenegro. Those with a $10,000,000 per occurrence limit include Armenia, Azerbaijan, Bulgaria, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldava, Romania, Tajikistan, Tibet, Turkmenistan, Uzbekistan and Russia. Basis of Premium Charge 3 of 6 Values for property damage and business interruption are completed and submitted to the Risk Management Department annually. Premium is determined on the basis of trended building, machinery and equipment replacement values, together with inventory and estimated business interruption values as of December 31 each year. In addition, loss experience is considered in expensing the cost of the Insurance based upon each business area's proportion of total values. Notice of Loss The proper reporting of claims is important as it effects: o The speed of loss settlement o The prejudicing of your rights against the insurance company caused by reporting delays, thereby violating the insurance policy conditions o The proper adjusting of the claim amount. For all losses that may result in an insurable claim you should notify the Corporate Risk Management Department and if the loss occurs outside North America, you should immediately notify your local insurance broker when: o The claims could exceed $10,000 o There is a possibility that the claim will be denied by the local insurance company o There is a dispute as to the settlement amount of the claim All losses should be reported to the local broker and the Corporate Risk Manager. Those claims insured by the Corporate Ocean Maine Cargo program should be reported in accordance with the procedures set forth by the Corporate Risk Management Department and reported to the Corporate ocean marine cargo broker in New York. The claims specialists are: AlliedSignal Inc. Mr. Tim Cummings Morristown, NJ Office Manager, Risk Management Services Telephone: (973) 455-4527 AONNYO Mr. John Rhodes Property/Business Interruption Claims Vice President Telephone: (212) 441-2298 AONNYO Mr. Dante Petrizzo Marine Claims Vice President Telephone: (212) 441-1340 WINDSTORM ENDORSEMENT DESIGNATED AREAS 4 of 6 ALABAMA: Counties of Baldwin and Mobile FLORIDA: Seacoast Zone 1 Seacoast Zone 2 Seacoast Zone 3 All Other Counties (Inland) AlliedSignal: Fort Lauderdale, Lynn Haven GEORGIA: Counties in Brantley, Bryan, Camden, Charlton, Chatham Effingham, Glynn, Liberty, Long, McIntosh, Pierce and Wayne. HAWAII: Entire State LOUISIANA: Parishes of Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Martin, St. Mary, St. Tammany, Tangipanoa, Terrebonne, Vermillion, Washington, West Baton Rouge and West Feliciana. AlliedSignal: Geismar, Darrow - Ascension Baton Rouge - W and E Baton Rouge MISSISSIPPI: Counties of George, Hancock, Harrison, Jackson, Pearl River and Stone. N. CAROLINA: Counties of Besufort, Bertie. Bladen Brunswick, Camden, Carteret, Chowan, Columbus, Craven, Currituck, Dare, Duplin, Gates, Greene, Hartford, Hude, Jones, Lenior, Martin, New Hanover, Onslow, Pamlico, Pasquotank, Pender, Perquimans, Pitt, Tyrell, and Washington. PUERTO RICO: Entire Island including all Caribbean Islands. S. CAROLINA: Counties of Beaufort, Berkeley, Charleston, Colleton, Dorchester, Georgetown, Hampton, Horry, Jasper and Williamsburg. AlliedSignal: Conway, Charleston TEXAS: Counties of Aransas, Bea, Brazoria, Brooks, Calhoun, Cameron, Chambers, Fort Bend, Galveston, Goliad, Hardin, Harris, Hidalgo, Jackson, Jefferson, Jim Wells, Kenedy, Kleberg, Liberty, Live Oak, Matagorda, Nueces, Orange, Refugio, San Patricio, Victoria, Wharton and Willacy. AlliedSignal: Orange, Brownsville 5 of 6 VIRGINIA: Counties of Accomao, Charles City, Chesapeake, Gloucester, Isle of Wright, James City, Lancaster, Mathews, Middlesex, Nansemond, New Kent, Norfolk, Northampton, Northumberland, Prince George, Princess Ann, Southampton, Surry, Sussex, Virginia Beach, Warwich and York. AlliedSignal: Hopewell - Chesterfield County Not in designated areas Petersburg - Grant County 6 of 6 TITLE: RISK [LOGO] ALLIEDSIGNAL WORKERS' COMPENSATION- MANAGEMENT DOMESTIC MANUAL SUPERSEDES: DATE PAGE: 1 7/96 5/97 WORKERS' COMPENSATION - DOMESTIC Insurance Company The Travelers Insurance Company Policy No. Applicable State TC2EEUB-196T365-1-97 Texas TC2JUB-204T578-2-97 Minnesota TDRJ-UB-196T362-6-97 Hawaii, Massachusetts, Oregon, Wisconsin TC2JUB-202T831-8-97 All Others States Self-Insured Excess Policies Policy #: 4155588 Arizona, California, Louisiana, New Jersey, Ohio, Rhode Island, South Carolina, Washington Insurer: National Union Insurance Co. Limits of Liability: Statutory 181000532 Maine - Insured by Maine Employers Insurance Co. Coverage The Travelers Insurance Company will provide coverage for statutory benefits in all states in the United States, except Maine and monopolistic State Fund jurisdictions (Nevada, North Dakota, Ohio, Washington, West Virginia and Wyoming) and self-insured states. Allied is legally self-insured for workers' compensation in Ohio, Arizona, Louisiana, Rhode Island, New Jersey, Floria, California, South Carolina and Washington. Travelers Insurance Company (CSSC) is our claims administrator in Ohio, Louisiana, Rhode Island, California, South Carolina and Washington. Kemper Insurance (NATLSCO) is our claims administrator in New Jersey, Florida and Arizona for claims with a date of occurrence after April 1, 1996. Travelers was the claims administrator for these three states prior to April 1, 1996. Kemper will provide Employer's Liability coverage, as well as coverage for Longshoremen's and Harbor Workers Act Benefits for New Jersey, Florida and Arizona. Travelers will provide these coverages for all other states. Limits of Liability 1 of 8 1. Workers' Compensation - Statutory limits in all insured states of the United States 2. Employer's Liability - $1,000,000 by accident, $1,000,000 by disease 3. Longshoremens'& Harbor Workers' Act including masters and members of crew for all operations worldwide. The Jones Act, Defense Base Act and Outer Continental Shelf Act are also covered subject to terms and conditions of these acts.1.2. Location Retained Limits Per Occurrence Except for Nevada, North Dakota, West Virginia and Wyoming, AlliedSignal is financially self-insured in all states. We retain the first $1 million of each occurrence. Each location is responsible for the first $250,000 per occurrence. Losses from $250,000 to $1 million are retained at Corporate. Policy Period 4/1/97 - 4/1/98 Basis of Premium Charge Workers' compensation premium is allocated in two segments. Payroll and estimated claims costs are the base used in determining administrative cost which is allocated annually. Included in the administrative cost are Travelers' engineering services (inspections, schools, etc.), state taxes, special fund assessments, cost of excess insurance and expense and profit of Travelers. Secondly, there is a quarterly charge that includes claim losses based upon total incurred liability, up to a maximum of $250,000 per occurrence and a claims administration fee. Claim losses include all new claims filed during the current period plus increase and/or decrease in the incurred liability for prior periods. Claims and the incurred liability appear on the quarterly loss run. The claims administration fee is 11% for accidents occurring prior to April 1, 1986, and 8% after April 1, 1986. Locations in State Funds (Wyoming, West Virginia, Nevada, North Dakota) pay premium directly to a division of the respective State Governments. The State Agency is responsible for payment of statutory benefits and administration of the claims. The cost of this premium is allocated based upon payroll and estimated claims costs. For accidents that occur on or after April 1, 1996, Kemper Insurance Company is the workers' compensation claims administrator for locations in Arizona, Florida and New Jersey. Travelers Insurance retains responsibility for claims that occurred in these states before April 1, 1996. Travelers also retains responsibility for claims in all other states. The following Claims Service Requirements (CSR) will be followed by both the Travelers Insurance Company and Kemper Insurance Company in administering our claim files. Travelers refers to these instructions as Special Account Communication (SAC). Kemper uses the title National Account Claim Bulletin. ALLIEDSIGNAL CLAIM SERVICE REQUIREMENTS (CSR) Acknowledgment - Workers' Compensation 2 of 8 The Workers' Compensation system has been programmed to produce a claim acknowledgment printout. All claim acknowledgments will be mailed to: The location submitting the loss. Adjuster Notes - Workers' Compensation Instant access to your claim information is available through our adjuster notes facility. The customer will see the development of the specific claim especially in the two key areas of reserve rationale and action plan for resolution. Sharing of information is the key. Quarterly Contact - Workers' Compensation We have agreed with both AlliedSignal officials and the producer that Workers' Compensation supervisory personnel will maintain a program of open communications between Travelers, Kemper and AlliedSignal personnel in conjunction with our handling of Workers' Compensation cases. Each AlliedSignal location will have a Workers' Compensation coordinator, designated by the plant manager, who will be our contact. The Claim Supervisor/file handler handling Workers' Compensation claims should maintain at least quarterly contact with the Workers' Compensation coordinator designated at each locations so that cases of interest may be reviewed, or any other topics can be discussed. File Review Meetings - Workers' Compensation AlliedSignal Inc. has agreed to hold file review meetings as needed. If requested by AlliedSignal, these file review meetings will be held to discuss open claim files designated by the customer or recommended by Travelers/Kemper as cases significant in nature. After each file is discussed, a joint action plan should be agreed to and made part of the file. These meetings should take place in our office or the AlliedSignal location. Requests for Special Reports or Services Occasionally, the AlliedSignal Workers' Compensation Coordinator will ask for special reports or implementation of a program/service that is beyond the services outlined in these instructions. While close local communications are encouraged, any such arrangement (to be performed an a routine basis) should be submitted to the Claim Account Executive for discussion with AlliedSignal Risk Management. This will assure continuity in the services provided AlliedSignal Inc. Annual Visitations On an annual basis, a personal visit will be made to the AlliedSignal location to review the CSR instructions, application of best practices, communications and any problem areas. During these meetings a detailed review of the CSR instructions should be completed to insure we are in compliance. This visitation should be completed during the first quarter and may be part of a, regular quarterly meeting. The AlliedSignal Inc. annual visitation form must be completed and sent to the Claim Account Executive. "Red Flag" Claims - Workers' Compensation There will be occasions when the field office will receive notification from the customer expressing special interest in a claim. This will be termed a "Red Flag" claim by AlliedSignal. This special interest may be expressed at the time of first notice, or at any other time while the claim remains open. When a claim is submitted by the AlliedSignal location and a form letter is attached to the first report identifying 3 of 8 the claim as a "RED FLAG" case, we have agreed to the following special handling guidelines: o Acknowledge receipt of the case to the AlliedSignal representative who submitted it. o The claim handler will initiate a telephone call to AlliedSignal representative to establish a game plan for investigation and management of the case. The claim handler will outline in a letter to AlliedSignal location the proposed investigation and action to be completed. o As the case develops, we will maintain communications with the AlliedSignal location. o After completion of the investigation, we will discuss the case by telephone with the AlliedSignal location and explain our decision on compensability. If there is a difference of opinion on compensability and agreement cannot be reached, the AlliedSignal location will contact Tim Cummings and Travelers offices should contact the Claim Account Executive. If any problems or disagreements arise, notify the Claim Account Executive. Employer's Liability Claims - Workers' Compensation Any time an employer's liability claim is established, acknowledgment of the claim should be sent to: (I-1). Independent Medical Exams and Medical Consultation Referrals After 60 Days of Disability - Workers' Compensation When an employee has been disabled or is anticipated to be disabled for 60 days or more an independent medical examination or medical consultation referral should be considered. The supervisor managing the claims should discuss the feasibility of an independent exam or consultation with the location submitting the claim. If the location submitting the claim AGREES NOT to schedule IME or refer the employee for a medical consultation the claim file should be documented accordingly. Medical Services Department AlliedSignal Inc. has an in house Medical Services Department which is available for consultation on any claim. This medical staff is a valuable resource and we should take advantage of their service. Members of this department may contact you directly an selected cases. If you or our medical vendor require the assistance of AlliedSignal's medical staff, contact (I-1). Some of the locations, especially the larger ones with a medical representative are interested in receiving copies of the medical reports. We should attempt to accommodate the customers needs for this medical information. Alternative and Modified Work - Workers' Compensation AlliedSignal Inc. has put in place an aggressive alternative and modified work program in all their locations. Before making any lost time benefit payments you should discuss with the AlliedSignal location whether the injured worker has returned or will return to alternative or modified work. Continuous contact with the AlliedSignal Workers' Compensation coordinator should be maintained on any employee who is receiving lost time benefits to return these employees to work. 4 of 8 The process for returning employees to Alternative Work at AlliedSignal is to determine the capabilities of the employee. The AlliedSignal location will determine what restrictions they can accommodate. It is most important the AlliedSignal location know the current capabilities of every disabled employee. The AlliedSignal location representative is to be kept current on the medical status of disabled employees. Every effort should be made to set target dates for return to regular or alternative work. o The purpose of this process is to aggressively track for return to work, employees on temporary total disability. If the nature of the claim allows for a more rapid assessment and finalization of the claim, we would certainly encourage you to identify your recommendations to AlliedSignal. If an employee is paid Temporary Total benefits, we will provide the following: After 90 and 180 days on temporary total disability, identify in a report to the location Workers' Compensation Coordinator, copy T. Cummings the following information. Send a copy of the 90 day report to the Plant Manager. 90 Days of Temporary Total - Basis for disability - Why is the employee out of work? - What efforts have been made to find alternative work? - When will the employee be returning to work? - Identify the chances of the employee ever returning to alternative work, regular job or permanent modified job at AlliedSignal. What can the locations do to provide temporary or permanent job modified job at AlliedSignal. What can the locations do to provide temporary or permanent job modification? - Should we consider Rehabilitation/Retraining? - Provide an action plan to return the employee to work or to resolve the claim. - If the location has determined that they cannot take this employee back to work, we need to identify to the locations the possible cost of this claim. What are the alternatives for resolving this claim and the cost structure of each? 180 of Temporary Total - Same information as in 90 day report. - At this time, the report must identify the specific action with a time table and the financial consequence that will be taken to resolve this claim. - Subsequent reports as determined by the claim and the time table for resolution. Vocational Rehabilitation - Workers' Compensation Before assigning a case for vocational rehabilitation we will discuss the reason(s) for the vocational rehabilitation with the location submitting the loss. The AlliedSignal location may have other pertinent information concerning the injured party that will assist in the vocational rehabilitation process. 5 of 8 Claim Checks - Temporary Total, Permanent Partial & Temporary Partial Workers' Compensation All checks issued in payment of Temporary Total, Permanent Partial and Temporary Partial disability benefits are to be made payable to the injured employee and mailed to the customer at the customer's location reporting the loss. If that practice is not permitted in the state involved, mail the check to the employee and furnish the insured's location the Workers' Compensation payment summary. Serious/Catastrophic Injuries - Workers' Compensation When we learn that a claim involves a serious or catastrophic injury, the AlliedSignal Risk Management Department should be notified immediately. The following injuries are examples, but are not intended to be all encompassing. Fatalities. Amputation.Of One Or More Extremities. Severe Brain Or Brain Stem Injury. Second Or Third Degree Burns. Heart Cases'. Disability Of 60 Days. Occupational Disease. Notify (I-1) by telephone and direct a detailed letter to the insured outlining the diagnosis, facts of the accident and plans for future handling. The letter should be sent to: Reporting Location, Copies to (I-1) and (B). Actuarial Reserve - Workers' Compensation When you are recommending a file for actuarial reserve, send a copy of your recommendation to: Reporting Location, Copies to (I-1) and (B). Reserve/Estimate Advisory Report - Workers' Compensation In all cases wherein claim reserve/estimate of $20,000 or more is established, or at the time of any claim reserve/estimate change of $20,000 or more, immediately direct a letter outlining the factors affecting the reserve amount, including facts of the accident, nature and extent of injuries as well as pertinent investigation details to: The location submitting the loss, copies to (I-1) and (B). Selection of Counsel - Workers' Compensation The insured has agreed to utilize our regular panel and staff attorneys in defense of law suits. However, on certain cases the customer may prefer to use their own outside counsel for cases in litigation. We have, agreed to accommodate these exception requests. If you feel that working with the law firm chosen by the customer will prove, to be a problem, contact the Claim Account Executive. If a decision is made to change and assigned Defense Attorney, concurrence must be received from AlliedSignal's Risk Management Department. Direct a letter outlining the facts for the basis of the proposed change to: (I-1), copy to the Claim Account Executive. 6 of 8 08/13/97 16:06:?? Legal Correspondence - Workers' Compensation You should instruct the defense attorney to send copies of all legal correspondence to: The location submitting the loss. Pre-Settlement Review - Workers' Compensation In any case which way have a settlement value of $1.00 to $24,999, we have agreed to review the case with the customer, before settlement negotiations are initiated. This is to be accomplished by letter, setting forth details of the case, and explaining our intentions for handling. This letter is to be directed to: The location submitting the loss. We will make every effort to consult with the customer prior to settling any Workers' Compensation claim of $25,000 or greater. This review should be accomplished in a letter which outlines the claim in detail, including our rationale for settlement. This letter is to be directed to: The location reporting the loss and (I-1). If a mutually acceptable resolution regarding the settlement value cannot be reached, then contact the Claim Account Executive. Settlements - Workers' Compensation Before entering into settlement negotiations where the claimant is represented by an attorney to settle a Workers' Compensation claim for any former AlliedSignal employee (no longer working at AlliedSignal) or any active employee that is currently disabled and has indicated he or she is going to file or has filed a separate action against AlliedSignal for wrongful termination, ADA violations, etc., contact Patrick McGovern (973) 455-5069 or Lisa Parlato (East Coast) (973) 455-2150 or Joseph Gore (West Coast) (310) 512-2959. If there are any questions on this procedure please contact (I-1), Tim Cummings at (973) 455-4527. Surveillance - Workers' Compensation If a request is made by AlliedSignal for immediate or emergency surveillance or if the claims handler feels there is a need our office will give the assignment to the best surveillance company available that can handle immediate surveillance. There should not be any delay in making the assignment. The surveillance company should confirm the assignment with the AlliedSignal location that made the request. The Workers' Compensation system has been programmed to produce a closing notice printout. All closing notices will be mailed to: The location submitting the loss. Closing Notices - Workers' Compensation The Workers' Compensation system has been programmed to produce a closing notice printout. All closing notices will be mailed to: The location submitting the loss. Lines of Communication 7 of 8 (I-1) Mr. Tim W. Cummings Manager, Risk Management Services AlliedSignal Inc. 101 Columbia Road Morristown, NJ 07962-1219 (973) 455-4527 (973) 455-3866 - FAX (B) Mr. Richard Catarelli J&H/Marsh & McLennan 125 Broad Street New York, NY 10004 (212) 574-8261 (212) 574-8985 - FAX 8 of 8 TITLE: RISK [LOGO] ALLIEDSIGNAL WORKERS' COMPENSATION - MANAGEMENT FOREIGN MANUAL SUPERSEDES: DATE: PAGE: 1 5/96 5/97 WORKERS'COMPENSATION/EMPLOYER'S LIABILITY-FOREIGN Insurance Company Zurich-American Insurance Company Policy No. WC68-63-618-04 - Voluntary Foreign Policy No. WC79-74-372-04 - Defense Base Act Coverage Workers' Compensation - Coverage A 1. Voluntary Foreign Workers' Compensation master US policy coverage provides benefits according to the state statute where the employee was hired on claims filed for all US Nationals and those Foreign Nationals on US dollar payroll anywhere in the world excluding the United States of America, its territories or possessions, Canada, Cuba, Cambodia, Laos, Albania, North Korea, and Viet Nam. 2. Defense Base Act, US Code (1946) Title 42, Sections 1651-54, (Public Law 208, 77th Congress, as amended) and the provisions applicable thereto of the Longshoremens' and Harbor Workers' Compensation Acts. Please contact the Risk Management Department and your Regional Counsel prior to entering into any contract requiring Defense Base Act coverage. Employer's Liability - Coverage B All covered employees, United States and Foreign National, anywhere in the World except excluded countries as mentioned above to a limit of $2,000,000 (US dollars) under the master policy in the US. Excess limits covered under Foreign General Liability and Broad Form Umbrella Liabilities. Policy Period 4/1/97 - 4/1/98 Basis of Premium Payroll is the base used in determining the premium. Loss Limit The losses used in computing the retrospective premium shall be limited to a maximum of $150,000 per occurrence. 1 of 2 Notice and Handling of claims Claims filed under this Policy should be mailed to: Risk Management Department Attn: Tim Cummings 101 Columbia Road Morristown, NJ 07962 973-455-4527 973-455-3866 (FAX) Supporting data, i.e., physician's statement, medical bills. etc. should accompany first notice. Please contact the Risk Management Department for assistance. Local workers' Compensation/Employer's Liability Insurance Guidelines As Workers' Compensation/Employer's Liability Laws vary by country, AlliedSignal operating units must arrange local Employer's Liability and/or Workers' Compensation coverage, as required by statute, through their local J&H/Unison representative. 2 of 2 SCHEDULE 4.26 - AFFILIATE TRANSACTIONS ELAC o Manufacturing Licence and Technical Assistance Agreememtn with Ocean Systems for Dipping Sonar Repair o Tax organic unit with AS Deutchland GmbH o Profit & Loss carry over with AS Deutchland GmbH o Cash pool with AS Deutchland GmbH o Long term agreement for cable repair with AS Aerospace GmbH Ocean Systems See Schedule 1.3(j). OS manufactures hybrids for other AlliedSignal operations. SCHEDULE 6.2(A) - RETENTION AGREEMENTS See Schedule 4.11. SCHEDULE 6.5(B) - ACTUARIAL METHODS AND ASSUMPTIONS See following pages. Schedule 6.5 (b) ACTUARIAL METHODS AND ASSUMPTIONS - ------------------------------------------------------------------------------- Actuarial Valuation for Accounting Purposes Actuarial Cost Method Projected Unit Credit Cost Method*. Market-Related Value of Assets Market-related value equals fair market value adjusted for investment earnings and losses. Such investment experience is reflected in market-related value as follows: o Actual earnings on fixed-income investments are reflected immediately; o Expected earnings on other assets are reflected immediately; o Actual earnings on other assets less expected earnings on other assets are reflected ratably over three years--one-third in the year following the gain or loss, two-thirds in the second year following, and 100% in all subsequent years. The Company reported that fixed income investments represented 28.3% and 29.3% of total trust assets as of December 31, 1996 and December 31, 1995, respectively. The Company also reported 1996 rates of return of 8.2% for the fixed income segment and 16.6% for the total trust. Based on this information, a 1996 rate of return of 19.9% was calculated for the other assets of the trust. Actuarial Assumptions (1) Discount Rate: 1.00% compounded annually. (2) Expected Long-Term Rate of Return on Assets: 10% per year. (3) Compensation Increases**: Present compensation is assumed to increase 5% per year to retirement. (4) Retirement: For Salaried plan, an average retirement age of approximately 61, with incidence at specific ages as follows: ------------------------------------ Age Probability Age Probability ------------------------------------ 55 5% 61 20% 56 6% 62 30% 57 7% 63 20% 58 8% 64 30% 59 9% 65 100% 60 10% *Standard Unit Credit for non-pay-related plan. **Pay-related plan only. Schedule 6.5 (b) ACTUARIAL METHODS AND ASSUMPTIONS (continued) - ------------------------------------------------------------------------------- For Bendix Hourly: The assumed retirement age is based upon the early retirement provisions of the particular location according to the following: (a) For units providing "30-and-out" retirements, the retirement age is the later of age 56 or the completion of 30 years of service but not later than age 62 with ten years of service; (b) Age 64 for units providing unreduced benefits at age 62; (c) Otherwise, age 65. All early retirements are assumed to be voluntary. No involuntary retirements or plant shutdowns are assumed. (5) Mortality: Nondisabled Lives 1971 Group Annuity Disabled Lives 1977 Railroad Board (6) Withdrawal: (a) Salaried Plan: Table B-1 (See Page 3). (b) Hourly Plan: Table B-2 (See Page 3). (7) Disability: Table B-3 (See Page 3). (8) Social Security: Future wage indices are based on an increase of 4.5% per year. Past wages are estimated on the basis of Social Security Index Factors. Future cost of living increases are assumed to be 4% per year. (9) Marital Status: With regard to any preretirement surviving spouse annuity provisions of the plan, the assumption is made that the male of the couple is three years older than the female and that 85% of male participants and 65% of female participants are married. (10) IRC Section 415 Limits: Reflect the single and dual plan limits based on estimated defined contribution account balances, and percentage of employees electing joint and survivor payment forms. This limit is projected at an assumed 4% annual cost-of-living increase rate. (11) IRC Section 401(a)(17) Pay Limit: $160,000 for 1997. This limit is projected at an assumed 4% annual cost-of-living increase rate. Schedule 6.5(b) ACTUARIAL METHODS AND ASSUMPTIONS (continued) - ------------------------------------------------------------------------------- TABLE B-1 Probability of Withdrawal - ------------------ Age Rate - ------------------ 25 12.0% 35 7.5% 45 5.0% 55 0.0% 60 0.0% TABLE B-2 Probability of Withdrawal - ---------------------------------- Age Male Female - ---------------------------------- 25 .099 .149 35 .048 .069 45 .016 .028 55 .000 .000 60 .000 .000 TABLE B-3 Probability of Disability Percentage of Participants at Indicated Age Assumed to Become Disabled in the Next Year ------------------------- Age Male Female - ---------------------------------- 25 .0855% .0490% 35 .1505% .1340% 45 .3305% .2975% 55 .9410% .7615% 60 1.9600% .9300% All participants assumed to become disabled are assumed to become eligible for social security disability benefits and, if applicable, for long-term disability benefits. SCHEDULE 7.15 Letters of Credit Retained L/Cs (AlliedSignal to remain as account party): Bank Ref. Beneficiary Bank Amount* Issue Date Expiry Date - --------- ----------- ---- ------- ---------- ----------- PG634585/ DPA-Korea Chase $87,400 6/19/96 10/30/98 P259525 P 386605 DPA-Korea Chase $1,485,000 6/27/97 7/31/01 P 386610* DPA-Korea Chase $2,970,000* 6/27/97 12/31/00 T 388424 Min. Def. Spain CIBC $818.00 11/12/97 6/30/99 94-NED- MacDonald CIBC Cdn$7,947,595 1/25/94 7/20/99 116441 Dettwiler & Associates 94-NED- MacDonald CIBC Cdn$500,000 1/25/94 7/20/00 116442 Dettwiler & Associates Intercompany Wahnbachtalsperrenverband DM 3,067,150 (re ELAC Watertech.) Any other L/C or similar obligation not listed below as an Assumed L/C shall be a Retained L/C. ASSUMED L/CS (PURCHASER TO BECOME ACCOUNT PARTY): Bank Ref. Beneficiary Bank Amount* Issue Date Expiry Date - --------- ----------- ---- ------ ---------- ----------- P 386610* DPA-Korea Chase $8,910,000* 6/27/97 12/31/00 P 348778 SSM/Turkey Chase $3,107,490.92 12/22/97 3/23/01 P 348779 SSM/Turkey Chase $932,247.28 12/22/97 3/23/04 P 348780 SSM/Turkey Chase $11,433,827.00 12/23/97 3/23/01 The ELAC Guarantees and Bank Bonds set forth in Schedule 4.7 shall be Assumed L/Cs. * NOTE: L/C P-386610 IS A RETAINED L/C AS TO $2,970,000 AND AN ASSUMED L/C AS TO THE REMAINDER OF ITS FACE AMOUNT. Exhibit A to Allied Signal Asset Purchase Agreement TECHNICAL INFORMATION AND PATENT LICENSE AGREEMENT AGREEMENT effective this 30th day of March, 1998 ("Agreement") by and between ALLIEDSIGNAL Inc., a corporation of Delaware, having a place of business at 2525 West 190th Street Torrance, California 90504 and its wholly owned subsidiary AlliedSignal Technologies Inc., having a place of business at 8440 South Hardy Dr., Tempe, Arizona 85285 (hereinafter jointly referred to as "AlliedSignal") and L-3 COMMUNICATIONS CORPORATION, a corporation of Delaware, having a place of business at 600 Third Avenue, New York, New York 10016 (hereinafter referred to as "Purchaser") either or both of which may also hereinafter be referred to respectively as the "Party" or "Parties" to this Agreement. WHEREAS this Agreement is an attachment to an Asset Purchase Agreement between the Parties of even date herewith; WHEREAS Purchaser is purchasing an ongoing business from AlliedSignal and requires a license of certain technology not exclusively used in the business in support of Purchaser continued manufacture of the product line as such product line exists as of the date of the Closing and as such information exists as of the date of the Closing; and WHEREAS AlliedSignal represents that it is the owner of certain technology that a) is used in connection with a business that AlliedSignal is selling to Purchaser and b) is also otherwise used by AlliedSignal (hereinafter "Shared Use Technology"); NOW, THEREFORE, in consideration of the promises and the mutual covenants of this Agreement, the parties hereto agree as follows: ARTICLE I-DEFINITIONS The term "Products" and other capitalized terms not otherwise defined in this Agreement shall have the meaning ascribed to them in the Asset Purchase Agreement dated as of December 22, 1997 between the Parties. The term "Technical Information", as used herein, means all information and assistance (including, but not limited to, data, know-how, technical, manufacturing, marketing information, including designs, drawings, specifications, bills of materials, and documentation of processes) as of the date of the Closing which Purchaser obtains from AlliedSignal and pertains to the Shared Use Technologies identified in Schedule A to this Agreement. The term "Licensed Patents", as used herein, means the patents and applications for patents which are now or hereafter owned or controlled by AlliedSignal and pertain to the Shared Use Technologies identified in Schedule A to this Agreement. ARTICLE II-LICENSES GRANTED AlliedSignal grants and agrees to grant to Purchaser an irrevocable, fully paid-up perpetual, non exclusive, transferable world wide license, with right to sublicense, to make, have made, use and sell the Products under all applicable Technical Information and Licensed Patents. No license, either express or implied, is granted by AlliedSignal to Purchaser hereunder with respect to any patent or information except as specifically stated above. No license, either express or implied, is granted hereunder to use as a trademark or otherwise the trademarks "BENDIX", "AlliedSignal", "SIGNAL", "GARRETT" or any other trademark or trade or product name of AlliedSignal, or any word or mark similar thereto. No license, either express or implied, is granted hereunder to any improvements that-AlliedSignal may make to the Licensed Patents or Technical Information after the date of the Closing. Purchaser may indicate that products of the Products are made under license from AlliedSignal by a suitable legend, if the form of such legend and the extent of Purchaser's use thereof have received prior written approvals from AlliedSignal. AlliedSignal may amend or revoke prior approvals to use such legends at any time during the term of this Agreement, and all rights to use such legends shall terminate with this Agreement. Nothing contained in this Agreement shall constitute, or be construed to be, a limitation or restriction on either Purchaser or AlliedSignal to use existing technologies for future businesses. Nothing contained in this Agreement shall constitute, or be construed to be, to require AlliedSignal to license Purchaser to use AlliedSignal patents or technology for other than the licensed Products. Nothing contained in this Agreement shall constitute, or be construed to be, a limitation or restriction upon any right otherwise possessed by Purchaser or AlliedSignal to make, use or sell any product, or parts therefor, in any country. ARTICLE III-ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS A. AlliedSignal shall at all times have the sole right to take whatever steps it deems necessary or desirable to enforce its rights in the licensed Technical Information, including the filing and prosecution of litigation; and AlliedSignal shall have the right to include Purchaser as a party in such litigation where necessary for the conduct thereof. If AlliedSignal and Purchaser desires to agree to joint participation in any suit or other enforcement action with respect to any of the Licensed Patents or Technical Information, the respective responsibilities of the parties, and their contributions to the costs and participation in any recoveries, will be agreed upon in writing prior to undertaking such joint enforcement action. B. AlliedSignal does not make any representation to Purchaser regarding the scope or enforceability of the Licensed Patents or Technical Information, and does not warrant that any Products manufactured or sold under this Agreement will not infringe patents of others. In the event of any actual or threatened infringement suit against Purchaser or its customers which would affect the manufacture, use or sale of Products, Purchaser shall promptly give written notice thereof to AlliedSignal, and AlliedSignal will make available to Purchaser free of charge any information in its possession which AlliedSignal believes will assist Purchaser in defending or otherwise dealing with such suit. ARTICLE IV-TECHNICAL INFORMATION Purchaser shall be entitled to receive only the data, know-how and assistance as set forth in the Asset Purchase Agreement with respect to any designs or models of Products as it exists on the date of closing. If approval by any government is required in order to render this Agreement fully effective, AlliedSignal shall not be obligated to furnish any information or assistance hereunder until such approval has been obtained and evidence thereof has been supplied to AlliedSignal. All Technical Information covered by this Agreement is property of AlliedSignal and shall be maintained in confidence by Purchaser. Purchaser agrees that it will not at any time knowingly disclose to any third party (except to its employees who reasonably require such information in connection with the performance of their regular duties) any Technical Information which is communicated to Purchaser by AlliedSignal under this Agreement. The foregoing obligation of confidentiality shall not apply to any Technical Information that (a) is or may become generally available to the general public through no act of the receiving party or any of its employees; (b) Purchaser can demonstrate by means of prior documentation was in its unrestricted possession at the time such Technical Information was first communicated to Purchaser by AlliedSignal; or (c) Purchaser received such information from a third party independent of AlliedSignal and such third party having a bona fide right to disclose such information to Purchaser without any obligation of confidentiality. ARTICLE V-MISCELLANEOUS PROVISIONS Waiver: Failure of either party to insist upon the strict performance of any provisions hereof or to exercise any right or remedy shall not be deemed a waiver of any right or remedy with respect to any existing or subsequent breach or default; the election by either party of any particular right or remedy shall not be deemed to exclude any other; and all rights and remedies of either party shall be cumulative. Notice: Any notice required or permitted hereunder shall be in writing and shall be sufficiently given when mailed postpaid first class registered or certified mail and addressed to the party for whom it is intended at its record address, and such notice shall be effective as of the date it is deposited in the mail. The record address of AlliedSignal for this purpose is its address set forth in the preamble and the record address of Purchaser is its address set forth in the preamble of this Agreement. Either party may, at any time substitute for its previous record address any other address by giving written notice of the substitution. Government Approvals: Purchaser shall, at its own expense, take whatever steps are required to satisfy the laws and requirements of the respective countries within respect to declaring, recording and otherwise rendering this Agreement valid. Severability: If any section or provision of this Agreement in any way contravene a law of any state or country in which this Agreement is effective, the remaining section of this Agreement shall not be affected thereby and this Agreement shall be modified to conform with such law. Notwithstanding the foregoing, in the event of any such contravention AlliedSignal may at its option terminate this Agreement forthwith by giving to Purchaser written notice of termination. Arbitration: In the event of any dispute arising out of the terms of this agreement the parties shall attempt to reach an amicable settlement. Failing such settlement the dispute shall be settled by arbitration in accordance with the Rules of the Conciliation and Arbitration of the American Arbitration Association (the "AAA") in effect at the time of arbitration, by one or more arbitrators designated in conformity with these rules, the awards being formal and binding. The place of the arbitration shall be Los Angeles, California. The arbitration shall be conducted in the English language. Governing Law: This Agreement shall be interpreted and construed in accordance with the laws of the State of Delaware except as governed by the trade secret laws of the United States of America. Force Majeure: Neither Party shall be in default under this Agreement for any delay or failure to perform hereunder due to causes beyond its control and without its fault or negligence, including but not limited to acts of nature, acts of any government in its sovereign or contractual capacity, strikes, fires, floods, riots or embargoes; provided, however, that prompt written notice is given to the other Party describing such cause. Export: This agreement transfers to Purchaser, possession of AlliedSignal US origin technology that is governed by the US Export Control laws including the Export Administration regulations, 15 CFR ss. 703-774, promulgated by the Department of Commerce of the United States of America; the International Traffic in Arms Regulations, 22 CFR ss. 122 et seq., promulgated by the Department of State of the United States of America; and the Asset Control and Transaction Regulations, 31 CFR 500 et seq., promulgated by the Department of Treasury of the United States of America. Purchaser is required to fully comply with all applicable export regulations and secure all required export approvals prior to disclosure of any technology conveyed under this license to a non US person either inside or outside the United States of America or prior to the export or sale of a product of the technology conveyed under this license to a non US person either inside or outside the United States of America. Entire Agreement: This Agreement contains all of the terms and conditions agreed upon by AlliedSignal and Purchaser regarding the specific subject matter hereof; and this Agreement may be modified only by an instrument in writing executed on behalf of AlliedSignal and Purchaser by their respective duly authorized representatives. Purchaser and AlliedSignal have caused this Agreement to be executed, in duplicate, by their respective duly authorized representatives the dates and at the places indicated below. ALLIEDSIGNAL INC. L-3 COMMUNICATIONS CORPORATION By /s/ T.L. Carlson By /s/ Christopher C. Cambrin -------------------------------- -------------------------------- Typed T.L. CARLSON Typed Christopher C. Cambrin ---------------------------- ---------------------------- Title DEPUTY GENERAL COUNSEL Title Vice President ---------------------------- ---------------------------- Date March 30, 1998 Date March 30, 1998 ----------------------------- ----------------------------- ALLIEDSIGNAL TECHNOLOGIES INC. By /s/ Gaylord P. Haas, Jr. -------------------------------- Gaylord P. Haas, Jr. Vice President March 24, 1998 SCHEDULE A TO TECHNICAL INFORMATION AND PATENT LICENSE AGREEMENT SHARED USE TECHNOLOGY PURCHASER PRODUCT APPLICATION - ------------------------------------------------------------------------------- Armour Cable for Airborne Dipping Sonar Airborne Sonar Impact Resistant, Lightweight, Composite Sonar Panels LFATS Improved Clutter Rejection Algorithms HELRAS and LFATS Lead Magnesium Niobate (PMN) Active Sonar Source Material U.S. Patent No 5,239518 Flextensional Transducers Piezoelectric Ceramic Copolymer U.S. Patent Application No.08/618690 Towed Array Hydrophones Autonomous Underwater Mine Hunting Algorithms Specific for EMD Product Line Enhanced Thickness Piezoelectric Polymer/Ceramic Composite Active Transducer (Polymer/Ceramic EMD Product Line Composite Piezoelectrics) Exhibit B to Allied Signal Asset Purchase Agreement TRANSITION SERVICE AGREEMENT This Transition Services Agreement (the "Services Agreement") is made as of the 30th day of March, 1998, by and between (i) ALLIEDSIGNAL INC., a Delaware corporation ("AlliedSignal"), and each of the other Seller Entities, and (ii) L-3 COMMUNICATIONS CORPORATION, a Delaware Corporation ("L-3"), and each of the other Purchaser Entities. Pursuant to the Asset Purchase Agreement dated as of March 30, 1998 (as it may be mended from time to time, the "Purchase Agreement"). AlliedSignal and certain of its affiliates (collectively, "Sellers") sold the Business as an ongoing business to L-3 and certain of its affiliates (collectively, "Purchasers"). Prior to the Closing, the Business received certain services from and provided certain services to the Seller Entities. Each of the Seller Entities and Purchaser Entities desires that these services continue to be provided after the Closing upon the terms and conditions set forth in this Services Agreement. In consideration of the mutual covenants and agreements contained in this Services Agreement, the Parties hereto hereby agree as follows: ARTICLE 1. DEFINITIONS 1.1 Definitions Incorporated. All capitalized terms not otherwise defined in this Services Agreement have the meaning ascribed to them in the Purchase Agreement. 1.2 Additional Definitions. Unless the context otherwise requires, the following terms, and their singular or plural, used in this Services Agreement shall have the meanings set forth below: (a) "AlliedSignal" shall have the meaning set forth in the preamble to this Services Agreement. (b) "Business" means the business sold by Sellers to Purchasers pursuant to the Purchase Agreement, as such business is conducted after the Closing by Purchasers and their subsidiaries and affiliates anywhere in the world. (c) "Confidential Information" shall have the meaning set forth in Section 8.1 of this Services Agreement. (d) "Force Majeure" shall have the meaning set forth in Section 6.1 of this Services Agreement. (e) "L-3" shah have the meaning set forth in the preamble to this Services Agreement. 2 (f) "Party" means each of the entities set forth on the signature pages to this Services Agreement. (g) "Person" means an individual, partnership, corporation, trust, unincorporated association, or other entity or association. (h) "Provider" shall mean the particular Seller Entity or Purchaser Entity, in any given location, that is providing services pursuant to this Services Agreement. (i) "Purchasers" shall have the meaning set forth in the preamble to this Services Agreement. (j) "Purchaser Entities" means, collectively, L-3 and its affiliates that are listed as Recipients on Schedule A hereto or as Providers on Schedule B hereto. (k) "Purchaser Provider Services" shall have the meaning set forth in Section 2.2 of this Services Agreement. (l) "Recipient" shall mean the particular Seller Entity or Purchaser Entity, in any given location, that is receiving services or leasing or subleasing property (as tenant) pursuant to this Services Agreement. (m) "Sellers" shall have the meaning set forth in the preamble to this Services Agreement. (n) "Seller Entities" means, collectively, AlliedSignal and its affiliates that are listed as Providers on Schedule A hereto or as Recipients on Schedule B hereto. (o) "Seller Provided Services" shall have the meaning set forth in Section 2.1 of this Services Agreement. (p) "Services" means, collectively, the Seller Provided Services and the Purchaser Provided Services. (q) "Term" shall have the meaning set forth in Section 4.1 of this Services Agreement. Other terms are used as defined elsewhere herein. ARTICLE 2. SERVICES 2.1 Seller Provided Services. Pursuant to the terms of this Services Agreement, the Seller Entities agree to provide, or cause to be provided, to the Business the services described in Schedule A to this Services Agreement (the "Seller Provided Services"). 3 2.2 Purchaser Provided Services. Pursuant to the terms of this Services Agreement, the Purchaser Entities agree to provide, or cause the Business to provide, the services described in Schedule B to this Services Agreement (the "Purchaser Provided Services"). 2.3 Other Services. If, after the execution of this Services Agreement, the parties determine that a service provided by or to the Business as conducted by Sellers prior to the Closing was inadvertently omitted from the Schedules to this Services Agreement, then the Parties shall negotiate in good faith to attempt to agree to the terms and conditions upon which such services would be added to this Services Agreement, it being agreed that the charges for such services should be determined on a basis consistent with the methodology for determining the initial prices provided for herein (i.e., sufficient to cover a Provider's reasonable estimate of its actual costs and, if applicable, consistent with the prices such Provider would charge to an affiliate, in each case without taking into account any profit margin or projected savings from increased efficiency). 2.4 General Intent. The Parties agree that the Services are intended to allow the Recipient the opportunity to obtain the Services from other than the Provider. The party designated as a Recipient agrees to use its reasonable efforts to end its need to use such Services of the Provider (unless the Parties otherwise agree) not later than the end of the Term, including any extension thereof. ARTICLE 3. COMPENSATION 3.1 Compensation for Seller Provided Services. Subject to Section 3.3, the compensation for the Seller Provided Services for the duration of the Term shall be as described for each individual service provided to the Business as set forth on Schedule A plus applicable statutory sales or value-added taxes, if any. 3.2 Compensation for Purchaser Provided Services. Subject to Section 3.3, the compensation for the Purchaser Provided Services for the duration of the Term shall be as described for each individual service provided by the Business as set forth on Schedule B plus applicable statutory sales or value-added taxes, if any. 3.3 Price Adjustments. (a) It is the intent of the parties hereto that the prices set forth on the Schedules hereto are consistent with the methodology for determining prices as described in Section 2.3. If the parties determine (which determination shall be made in good faith) that the initial prices set forth on the Schedules hereto are not consistent with such methodology, then the parties shall negotiate in good faith to adjust such prices in a manner that is consistent with such methodology. Any such price adjustment shall be retroactive and prospective. (b) The Parties shall review the Providers' respective costs of providing Services hereunder as of July 31, 1998, and quarterly thereafter. If it is determined in 4 connection with any such review that (i) a Provider's cost of providing Services hereunder (taken individually) exceeds by at least ten percent (10%) the charge for such Service(s) because of a significant increase in usage by the Recipient or other circumstances beyond the reasonable control of the Provider (including, without limitation, events of Force Majeure) or (ii) a Provider's cost of providing Service(s) hereunder (taken individually) drops by at least 10% below the charge for such Service(s) because of a significant decrease in usage by the Recipient or other circumstances, then, upon request of such Provider or its Recipient, such Provider and its Recipient shall negotiate in good faith to determine an appropriate adjustment to the then-current prices for such Services on a basis consistent with the methodology for determining the initial prices provided for herein (as described in Section 2.3). 3.4 Allocation of Certain Expenses. Notwithstanding anything to the contrary herein or in the Schedules hereto, the Parties agree that the Seller Entities shall pay any costs and expenses, in an amount of up to $400,000 in the aggregate, incurred during the Initial Term (as defined in Section 4.1) in connection with obtaining any and all consents from third party vendors set forth in Schedule C hereto which may be necessary in connection with the Services hereunder and which relate to services set forth in Schedule C hereto, and L-3 shall pay any such costs and expenses in excess of $400,000 in the aggregate which are reasonably incurred to obtain any such consents; provided, however, that the Seller Entities shall provide L-3 with reasonable notice before any such costs and expenses related to such consents are incurred which would exceed $425,000 in the aggregate, which notice shall be deemed reasonable if it permits L-3 to make reasonable alternative arrangements with regard to such Services. Other than for those services set forth in Schedule C which are provided by the vendors set forth therein, the Seller Entities shall pay all costs and expenses incurred in connection with obtaining any and all consents from third parties which may be necessary, in connection with the provision of Seller Provided Services hereunder during the Initial Term. L-3 shall pay all costs and expenses incurred in connection with obtaining any and all consents from third parties which may be necessary in connection with the provision of (i) Purchaser Provided Services hereunder during the Initial Term and (ii) Services which are provided hereunder after the expiration of the Initial Term; provided, however, that if the Purchaser Entities cannot transition the Services in accordance with the terms of Section 5.3 due to material lack of cooperation on the part of the Seller Entities, L-3 shall not be liable for the payment of any cost and expenses incurred in connection with obtaining any such consents. The Parties agree that they shall use reasonable best efforts and work in good faith to minimize any cost and expenses incurred in connection with the obtaining of the consents described in this Section 3.4. 3.5 Terms of Payment; Dispute Resolution. (a) Except as expressly provided otherwise herein, Providers shall invoice Recipients monthly (or, if mutually agreeable to Provider and Recipient, quarterly or semi-annually) in arrears for the services provided by them under this Services Agreement. Payment shall be made by Recipients within 30 days after receipt of any invoice. No Recipient shall unreasonably withhold any payments to its Provider under this Services Agreement and no Provider shall unreasonably withhold any Services from its Recipient under this Services Agreement, notwithstanding any dispute that may be pending between them, whether under this Services Agreement or otherwise (any required adjustment being made on subsequent invoices). 5 (b) All mounts due for services rendered pursuant to this Services Agreement shall be billed and paid in the currency in which the rate for such service is quoted, as stated herein or as shown on the Schedules hereto. (c) If there is a dispute between any Recipient and any Provider regarding the amounts shown as billed to such Recipient on any invoice, such Provider shall furnish to such Recipient reasonable documentation to substantiate the amounts billed including, but not limited to, listings of the dates, times and amounts of the services in question where applicable and practicable. Upon delivery of such documentation, such Recipient and such Provider shall cooperate and use their best efforts to resolve such dispute among themselves. 3.6 Records. The Provider will preserve all records supporting the amounts charged to the Recipient pursuant to this Services Agreement for a period of five years following invoicing of such amounts, and thereafter, not destroy or dispose of such records without giving notice to the Recipient of such pending disposal and offering the Recipient the right to obtain and retain such records at its expense. In the event the Recipient has not obtained such materials within 30 days following the receipt of notice from the Provider, the Provider may proceed to destroy or dispose of such materials without any liability. Subject to any disclosure, copying or limitation imposed by applicable law and to any privileges (including, without limitation, the attorney-client privilege), the Provider shall (i) at its expense afford the Recipient and its representatives reasonable access upon reasonable prior notice during normal business hours to all such records and (ii) at the Recipient's expense provide copies of such records as the Recipient may reasonably request for any proper purpose (including, without limitation, in connection with any judicial, quasi judicial, administrative, tax, audit or arbitration proceeding). ARTICLE 4. TERM 4.1 Term. Except as expressly provided otherwise in this Services Agreement, or with respect to specific services as indicated on the Schedules hereto, the term of this Services Agreement shall be for twelve months commencing at 12:61 a.m. on the date immediately following the date hereof (the "Initial Term"). Effective between the respective Provider and Recipient, such Provider shall in good faith consider requests for the extension of the Initial Term for an additional period of up to six (6) months at the request of a Recipient by written notice from such Recipient to its Provider, with copies to AlliedSignal and L-3; any such notice shall be made at least 39 days prior to the expiration of the Initial Term (the Initial Term plus any extension thereof may be referred to herein as the "Term"). The obligation of any Recipient to make a payment for services previously rendered shall not be affected by the expiration of the Term and shall continue until full payment is made. 4.2 Termination of Individual Services. Effective between the respective Provider and Recipient, a Recipient may terminate at any time during the Term any individual service provided under this Services Agreement on a service-by-service basis (and/or location-by-location basis where an individual service is provided to multiple locations of a Recipient) 6 upon written notice to the Provider identifying the particular service (or location) to be terminated and the effective date of termination, which date shall not be less than 30 days after receipt of such notice unless the Provider otherwise agrees. Effective upon the termination of such service, an appropriate reduction will be made in the fees charged to such Recipient. ARTICLE 5. CERTAIN COVENANTS 5.1 Points of Contact. Each Provider and Recipient shall name a point of contact which shall be added to the Schedules hereto. Such point of contact shall be responsible for the implementation of this Services Agreement between the respective Provider and its Recipient, including resolution of any issues which may arise during the performance hereunder on a day-to-day basis. 5.2 Cooperation; Reasonable Care (a) The Parties will cooperate (using reasonable commercial efforts) to effect a smooth and orderly transition of the services provided hereunder from the Providers to the respective Recipients including, without limitation, the separation of the Business from the businesses retained by AlliedSignal and its affiliates; provided, however, that this Section 5.2 shall not require any Party hereto to incur any out-of-pocket expenses unless and except as expressly provided otherwise herein. (b) Each Provider shall perform the services that it is required to provide to its respective Recipient(s) under this Services Agreement with reasonable skill and care and shall use at least that degree of skill and care that it would exercise in similar circumstances in carrying out its own business. Each Provider shall take necessary measures to protect the respective Recipient's data that is processed by such Provider from destruction, deletion or unauthorized change and allow its recovery in events of Force Majeure; provided, however, that a Provider shall be deemed to have satisfied this obligation if the measures taken to protect and recover Recipient's data are equivalent to what it uses in carrying out its own business. 5.3 Migration Projects. Each Provider will provide the respective Recipient with reasonable support necessary to transition the services, which may include consulting and training and providing reasonable access to data and other information and to Provider's employees; provided, however, that such activities shall not unduly burden or interfere with Provider's business and operations. Where required for transitioning the services, the Recipient's employees will be granted reasonable access to the respective Provider's facilities during normal business hours. 5.4 Systematic Costs. If the provision of a Service or a migration project will result in the Provider's incurring incremental "systematic costs" (such as the costs of partitioning data bases, developing conversion programs or extraordinary management supervision and/or coordination) the Provider shall provide the Recipient with a written explanation of such costs and the reason they will be incurred. Thereafter, the Provider and 7 Recipient shall in good faith discuss the matter. If the Recipient agrees in writing to be responsible for such costs, then the amounts will be included with invoices to the Recipient. If the Recipient fails to agree in writing to be responsible for such costs within five (5) business days of the provision of such written explanation by the Provider, the Recipient shall be deemed to have declined to be responsible for such costs. If the Recipient declines to be responsible for such costs, then, notwithstanding any other provision of this Services Agreement, if such Service cannot be provided in a commercially reasonable manner absent the incurrence of such costs, then the Provider may curtail, limit or eliminate the Provider's provision of the related Service; provided, however, that the extent to which such Service is limited, curtailed or eliminated shall be the minimum action reasonably necessary to allow, if possible, the provision of the related Service in a commercially reasonable manner absent the incurrence of such costs. 5.5 Further Assurances. From time to time after the date hereof, without further consideration, each Party shall execute and deliver such formal lease or license agreements as another Party may reasonably request to evidence any lease or license provided for herein or contemplated hereby. 5.6 Certain Disbursements/Receipts. The parties hereto contemplate that, from time to time on or after the Closing Date, Seller-related entities and/or Purchaser-related entities (any such party, the "Paying Party"), as a convenience to another Purchaser-related entity or Seller-related entity, as the case may be (the "Responsible Party"), in connection with the transactions contemplated by this Services Agreement or the Purchase Agreement, may make certain payments that are properly the responsibility of the Responsible Party (whether pursuant to the Purchase Agreement, this Services Agreement or otherwise) (any such payment made, a "Disbursement"). Similarly, from time to time on or after the Closing Date, Seller-related entities and/or Purchaser-related entities (any such party, the "Receiving Party") may receive from third parties certain payments to which another Purchaser-related entity or Seller-related entity, as the case may be, is entitled (any such Party, the "Other Party", and any such payment received, a "Receipt"). Accordingly, with respect to Disbursements and Receipts, the Parties hereto agree as follows: (a) Disbursements. (i) For Disbursements made by check, the Responsible Party will reimburse the Paying Party within seven (7) business days after written notice of such Disbursement has been given to the Responsible Party. (ii) In case of a Disbursement by wire, if written notice has been given by 2 p.m. of the Responsible Party's local time at least one business day prior to the payment of such Disbursement, the Responsible Party shall reimburse the Paying Party for the amount of such payment (in the local currency equivalent paid by the Paying Party) on the date the Disbursement is made by the Paying Party. If notice as provided above has not been given prior to the payment of such Disbursement, the Responsible Party shall reimburse the Paying Party for the amount of such payment (in the local currency equivalent paid by the Paying Party) within one business day after receipt by the Responsible Party of such notice from the Paying Party. 8 (iii) A Paying Party shall provide such supporting documentation regarding Disbursements for which it is seeking reimbursement as the Responsible Party may reasonably request. (b) Receipts. A Receiving Party shall remit Receipts to the Other Party (in the same currency as such payment is received) within 24 hours of receipt thereof in immediately available funds. (c) Certain Exceptions. Notwithstanding anything to the contrary set forth above, if, with respect to any particular transaction, it is impossible or impracticable under the circumstances to comply with the procedures set forth in subsections (a) and (b) of this Section 5.6 (including the time periods specified therein), the parties will cooperate to find a mutually agreeable alternative that will achieve substantially similar economic results from the point of view of the Paying Party or the Other Party, as the case may be; i.e., an alternative pursuant to which the Paying Party will not incur any material interest expense or the Other Party will not be deprived of any material interest income; provided, however, that if a Receiving Party cannot comply with the procedures set forth in subsection (b) of this Section because it does not become aware of a Receipt on behalf of the Other Party in time (e.g., because of the commingling of funds in an account), such Receiving Party shall remit such Receipt (with interest thereon is such remittance occurs more than 48 hours after such Receipt is paid to the Receiving Party) to the Other Party within 24 hours after it becomes aware of such Receipt. (d) Funding of payroll, Accounts Payable and American Express. Notwithstanding anything which may be to the contrary set forth in Sections 5.6(a), 5.6(b) or 5.6(c) above, the following processes will be funded as set forth below. (i) Payroll. Payroll checks disbursed by or at the direction of a Seller Entity as part of the Services shall be funded in immediately available funds to an account as directed by such Seller Entity on the day the checks are issued to the Purchaser's employees, provided such Seller Entity provides notification and supporting documentation (with a simultaneous copy to the business unit) to the respective Buyer Entity/Recipient by 3:00 p.m. on the business day prior to check issuance of the funding requirement amount. Direct deposit of payroll will have the same notice requirement and be funded on payday (alternately referred to as the settlement date). (ii) Supplier Payment Processing (Accounts Payable). L-3 will establish by the Closing Date a bank account to fund supplier payment checks. AlliedSignal will provide supporting documentation on an agreed upon schedule. (iii) American Express ("AmEx") Payments. All AmEx-related payments for travel and expense and corporate purchasing card payments will continue to be directly funded by AlliedSignal during the transition period. L-3 will wire-transfer payments to AlliedSignal on the day of payment to AmEx. AlliedSignal will provide supporting documentation, with a simultaneous copy to the business unit, 24 hours prior to the required wire-transfer by L-3. 9 (e) Interest Rate. The rate for any interest income or expense that is paid or payable pursuant to Section 5.6(c) shall be LIBOR plus 0.25% per annum. 5.7 Collection of Receivables. If some trade receivables of the Business are retained by the Seller Entities either as owner or as collection agent, the Buyer Entities agree to collect such trade receivables on AlliedSignal's behalf using the same degree of care and diligence as if they were their own. 5.8 Internet Protocol Addresses. AlliedSignal and L-3 acknowledge and agree that during the Term L-3 shall be permitted to use the AlliedSignal-owned TCP/IP subnet addresses 131.127.72.X, 131.127.73.X and 131.127.74.X, and upon expiration or if earlier termination of the Term L-3 shall stop using such addresses and such addresses will be made available for use by AlliedSignal. ARTICLE 6. FORCE MAJEURE 6.1 Force Majeure. No Provider shall bear any responsibility or liability for any losses arising out of any delay, inability to perform or interruption of its performance of obligations under this Services Agreement due to any acts or omissions of its respective Recipient or for events beyond its reasonable control (hereinafter referred to as "Force Majeure") including, without limitation, acts of God, act of governmental authority, act of the public enemy or due to war, riot, flood, civil commotion, insurrection, labor difficulty, severe or adverse weather conditions, lack of or shortage of electrical power, malfunctions of equipment or software programs or any other cause beyond the reasonable control of the Provider whose performance is affected by the Force Majeure event. ARTICLE 7. INDEMNITY 7.1 Indemnity. (a) The Seller Entities and Purchaser Entities, in both instances jointly and severally, will each indemnify and hold harmless the other, their agents, employees and invitees, against all liabilities, claims, losses, damages, death or personal injury whatever nature or kind, arising out of their respective performance of this Services Agreement or the entry of their respective agents, employees or invitees in the premises of the other, to the extent occasioned by their own willful misconduct or negligent actions or omissions or the willful misconduct or negligent actions or omissions of their respective agents, employees or invitees. (b) Notwithstanding the foregoing, no Party shall be entitled to any damages with respect to lost profits or other consequential damages or punitive damages with respect to the performance by any other Party under this Services Agreement. 10 ARTICLE 8. CONFIDENTIALITY 8.1 With respect to any information disclosed by one Party to another Party for the purpose of this Services Agreement or otherwise accessible to such other Party during the performance hereunder and which has been designated in writing as "Confidential Information", the receiving Party agrees that it will use at least that degree of skill and care that it would exercise in similar circumstances in carrying out its own business to prevent the disclosure or accessibility to others of the disclosing Party's Confidential Information and will use such Confidential Information only for the purpose of this Services Agreement. The receiving Party shall limit dissemination of and access to the other's Confidential Information to only such of its employees who have a need to know. 8.2 Specifically excluded from the foregoing obligation is any and all information that: (a) is already known to the receiving Party at the time of disclosure or thereafter is independently developed by the receiving Party without breach of this Services Agreement; (b) is already in the public domain at the time of disclosure, or thereafter becomes publicly known other than as the result of a breach by the receiving Party of its obligations under this Services Agreement; (c) is rightfully received from a third party without breach of this Services Agreement; (d) is furnished by the disclosing Party to a third party without a similar restriction on its rights; or (e) upon advice of counsel, must be produced by the receiving Party as a matter of law; provided, however, that in such case the receiving Party shall promptly notify the disclosing Party and, insofar as is permissible and reasonably practicable without placing the disclosing Party under penalty of law, give it an opportunity to appear and to object to such production before producing the requested information. 11 ARTICLE 9. MISCELLANEOUS 9.1 Notices. Any notice provided or permitted to be given to a Party under this Services Agreement must be in writing, and may be served by depositing same in the mail, addressed to the Person to be notified, postage prepaid, and registered or certified, with a return receipt requested. Notice given by registered or certified mail shall be deemed given and effective on the date of delivery as shown on the return receipt. Notice may be served in any other manner including telex, telecopy or telegram but shall be deemed given and effective as of the time of actual delivery thereof to the addressees. For purposes of the giving of notice, Recipients and Providers shall be notified at the addresses used for billing purposes (which shall be added to the Schedules hereto), and AlliedSignal and L-3 shall be notified at the addresses listed below: If to AlliedSignal: AlliedSignal Inc. 101 Columbia Road Morristown, New Jersey 07962 Fax: (973) 455-4217 Attention: Senior Vice President, General Counsel and Secretary If to L-3: L-3 Communications Corporation 600 Third Avenue New York, New York 10016 Fax: (212) 805-5494 Attention: Vice President and General Counsel with a copy to: Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 Fax: (212) 455-2502 Attention: David Chapnick, Esq. Any Party may change its respective address for notice by the giving of notice of such change in the manner provided above. 9.2 Entire Agreement. Except for those matters provided for in the Purchase Agreement or the other agreements contemplated therein, this Services Agreement sets forth the entire agreement of the Parties with respect to its subject matter. This Services Agreement shall not be modified or amended except by written instrument executed by each 12 Party; provided, however, that a modification or amendment affecting only the relationship between a certain Provider and its Recipient, or between a lessor and its lessee, does not require signature by the other Parties. The Schedules to this Services Agreement shall be deemed incorporated in this Services Agreement and shall form a part of it. 9.3 Waiver. The failure of a Party to insist upon strict performance of any provision of this Services Agreement shall not constitute a waiver of, or estoppel against, asserting the right to require such performance in the future, nor shall a waiver or estoppel in any one instance constitute a waiver or estoppel with respect to a later breach of a similar nature or otherwise. 9.4 Severability. If any of the terms and conditions of this Services Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter of this Services Agreement, such contravention or invalidity shall not invalidate the entire Services Agreement. Instead, this Services Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid, and an equitable adjustment shall be made and necessary provisions added so as to give effect to the intention of the Parties as expressed in this Services Agreement at the time of the execution of this Services Agreement and of any amendments to this Services Agreement. 9.5 Governing Law; Construction; Jurisdiction. This Services Agreement shall be construed and enforced in accordance with and governed by the laws of the State of New York, without reference to its conflicts of law rules or principles. The headings in this Services Agreement are not to be considered part of this Services Agreement and are inserted for convenience, identification and reference only and are not intended to interpret, define, or limit the scope, extent, or intent of this Services Agreement or any provision of this Services Agreement. Whenever the context requires, the gender of all words used in this Services Agreement shall include the masculine, feminine and neuter, and the number of all words shall include the singular and the plural. 9.6 Counterpart Execution. This Services Agreement may be executed in counterparts with the same effect as if all of the Parties had signed the same document. Such counterparts shall be construed together and shall constitute one and the same instrument, notwithstanding that all of the Parties are not signatories to the original or the same instrument, or that signature pages from different counterparts are combined. The signature of any Party to one counterpart shall be deemed to be a signature to and may be appended to any other counterpart. 9.7 Successors and Assigns. (a) This Services Agreement shall inure to the benefit of and shall be binding upon the Parties, their respective legal representatives, successors, and permitted assignees, and all Persons claiming by, through, or under right of any of the aforesaid Persons. This Services Agreement may not be assigned by any Party without the prior written consent of the other Parties; provided, however, that the Seller may assign this Services Agreement in whole or in part to an affiliate, successor or transferee thereof, but only to the extent that a sale or other transfer of a Seller's operations reasonably requires such transfer for performance of its services hereunder and provided, further, that 13 Purchaser may assign this Services Agreement to one of its subsidiaries. No assignment shall relieve any Party of any of its obligations hereunder. (b) At the request of any Provider or Recipient that is a Party hereto, any other Provider or Recipient that is receiving benefits or has obligations hereunder and is not a signatory hereto, shall execute and deliver to the other Parties a counterpart hereof. The failure of any Person that is receiving benefits or has obligations hereunder to execute a counterpart hereof shall not affect the enforceability of this Services Agreement against such Person or against any other Party hereto. 9.8 No Third Party Rights. The provisions of this Services Agreement are intended to bind the Parties to each other and are not intended and do not create rights in any other person, including any employee of the Business or AlliedSignal, and no Person is intended to be or is a third party beneficiary of any of the provisions of this Services Agreement. 14 IN WITNESS WHEREOF, the duly authorized officers or representatives of the parties hereto have duly executed this Services Agreement as of the date first above written. PURCHASER ENTITIES: SELLER ENTITIES: L-3 COMMUNICATIONS ALLIEDSIGNAL INC. CORPORATION /s/ Christopher C. Cambria - ---------------------------------- ---------------------------------- Name: Christopher C. Cambria Name: Title: Vice President Title: L-3 COMMUNICATIONS HOLDING ALLIEDSIGNAL EUROPE SERVICES GMBH TECHNIQUES S.A. /s/ Christopher C. Cambria - ---------------------------------- ---------------------------------- Name: Christopher C. Cambria Name: Title: Managing Director Title: 14 IN WITNESS WHEREOF, the duly authorized officers or representatives of the parties hereto have duly executed this Services Agreement as of the date first above written. PURCHASER ENTITIES: SELLER ENTITIES: L-3 COMMUNICATIONS ALLIEDSIGNAL INC. CORPORATION /s/ T.L. Carlson - ---------------------------------- ---------------------------------- Name: Name: T.L. Carlson Title: Title: Deputy General Counsel L-3 COMMUNICATIONS HOLDING ALLIEDSIGNAL EUROPE SERVICES GMBH TECHNIQUES S.A. /s/ T.L. Carlson - ---------------------------------- ---------------------------------- Name: Name: T.L. Carlson Title: Title: Authorized Signatory Schedule A Seller Provided Services - ------------------------------------------------------------------------------ INDEX TO SCHEDULES TO SERVICES AGREEMENT Schedule A - Seller Provided Services A. United States 1. Human Resources 2. Information Technology Group (ITG) 3. Finance 4. Travel Services 5. Treasury Services Annex 1: United States Services and Charges B. France 1. Information Technology Group Schedule A Seller Provided Services 2 - ------------------------------------------------------------------------------ A. UNITED STATES Sellers will provide to Purchasers at the Facilities located in the United States human resource, information technology, finance, travel and treasury services set forth on Annex 1. The monthly charges for such services for the duration of the Term shall be the fixed rates set forth on Annex 1, plus (if and as applicable) the additional charges provided for in the notes set forth below. All charges to Recipients located in North America will be billed and paid in U.S. dollars. 1. HUMAN RESOURCES A. PROVIDER: AlliedSignal Inc. - Human Resources 101 Columbia Road Morristown, NJ 07962 Contact Person: Dave Sholtis Telephone: 973-455-5017 RECIPIENT: L-3 Communications, Ocean Systems 15835 Roxford Street Sylmar, CA 91342 Contact Person: Anita Logan Telephone: 818-833-2486 Schedule A Seller Provided Services 3 - ------------------------------------------------------------------------------ SERVICES AND CHARGES: See Annex 1. TERM: As provided in Article 4 of this Services Agreement, with the following clarifications: o Savings Plan Administration services will terminate concurrent with the asset transfer to the L-3 Savings Plans. o As provided in Article 5.7 of this Services Agreement, Group Insurance Plan coverage and related administration will be provided under the Sellers' programs through June 30, 1998. Effective July 1, 1998, coverage under the Sellers' plans will be discontinued and replaced by similar plans of the Purchasers. Continued services will be provided for the Purchasers' Plans under this Services Agreement for the remainder of the Term, provided that the Purchasers' plans are comparable to the Sellers' plans and can be accommodated with existing systems and processes. o Term for payroll services shall be up to one year from the closing date, provided that Seller shall, in good faith, consider requests for the extension of such service for an additional six months beyond such one-year period. NOTES: 1. Annex 1 costs exclude reasonable third party costs that are billed to the Provider and will be charged back to Recipient consistent with past practice. 2. Annex 1 costs exclude reasonable incremental expenses incurred to support Purchaser's Benefit Plans (e.g. modifications to benefit plan tables to support the L-3 welfare plans, developing interfaces to L-3 savings plan providers, etc.). 3. THE ALLIEDSIGNAL EMPLOYEES AND ENTITIES ENGAGED IN THE EXECUTION OF THE PENSION PLAN ADMINISTRATION SERVICES AND THE BENEFIT SERVICES ARE NOT ERISA FIDUCIARIES WITH RESPECT TO ANY BENEFIT PLAN SPONSORED BY L-3. THEY DO NOT AND WILL NOT HAVE ANY DISCRETIONARY CONTROL OR AUTHORITY OVER THE MANAGEMENT OF ANY L-3 PLAN OR OF ITS ASSETS, NOR DO THEY OR WILL THEY HAVE ANY DISCRETIONARY AUTHORITY OR RESPONSIBILITY OVER THE ADMINISTRATION OF ANY L-3 PLAN. Schedule A Seller Provided Services 4 - ------------------------------------------------------------------------------- DESCRIPTION OF SERVICES: Human Resources/Employee Systems and Services: TEMPE PAYROLL SERVICES - provide standard payroll services, including check printing and distribution, balancing and reconciliation, direct deposit processing, stop payments requested, reissues, W-4 processing, W-2 processing, garnishments, reporting tax withholding information to L-3*. Continuance of Tempe Payroll services is dependent on the continuance of the AlliedSignal PeoplePower Human Resource System. Continuance of Tempe Payroll beyond October 1, 1998 requires a commitment by the Recipient to participate in the planned 1998 conversion from the current MSA system to a PeopleSoft payroll system. This commitment must be received by May 1, 1998. It will be the Recipient's responsibility to meet the desktop and interface standards required for this conversion. * Note: L-3 will be responsible for the following payroll related items: 1. Payroll Funding, 2. Payroll Tax Deposits and Reporting, 3. Funding 401(k) Contributions to the L-3 Plan Recordkeeper. HR SYSTEMS (PEOPLEPOWER) - provide continued utilization of the centralized reporting database of Employee Data which includes central systems maintenance & operations, on-line inquiry access to employee records, end-user reporting tools, Customer Service Center support and Helpline Support. Continuance of PeoplePower services is dependent on the Recipient meeting upgraded 32 bit desktop standards and participating in data audit and software upgrade activities. * Note: Local L-3 employees will be responsible for the following HRIS related items: 1. Maintaining the accuracy of Employee Records (Processing New Hires, Transfers, Terminations, Compensation Changes, Position Changes, Department Changes, etc.). 2. Answering benefits related questions, and providing basic benefits counseling for salaried and hourly (union) employees. PENSION PLAN ADMINISTRATION: RETIREE BENEFITS ADMINISTRATION - provide pension plan administration, pension plan benefit estimates and retirement calculations, provided Recipient establishes exact mirror plans to the existing AlliedSignal plans for the transferred employees. * Note: L-3 will be responsible for the following pension related items: 1. Creating, valuation, funding and reporting for the mirror plans that they create. 2. Performing actuarial review of pension calculations prior to distribution to employees. (AlliedSignal can not guarantee the accuracy of calculations). 3. 90 days written notice required for cancellation of this service. BENEFIT SERVICES: GROUP INSURANCE PLAN ADMINISTRATION - Continuation of administrative support (e.g. eligibility & enrollment) for transferred employees in the AlliedSignal health and welfare benefit programs will be provided until June 30, 1998. Effective July 1, 1998, continued administrative support services will be available to employees in the L-3 health & welfare plans provided L-3 establishes plans that are comparable to the Existing AlliedSignal plan arrangements. * Note: Effective July 1, 1998, L-3 will be responsible for direct payment of premiums to the carriers for the comparable plans created under their sponsorship. Schedule A Seller Provided Services 5 - ------------------------------------------------------------------------------ Description of Services (continued): SAVINGS PLAN - Until such time as assets are transferred to the L-3 Savings Plans, services with regard to existing plan accounts will include: daily valuation recordkeeping, maintenance of participant's accounts, account allocations, existing plan loan maintenance, quarterly statements, withdrawal processing, Passport IVR System and Customer Service Center support. Also to be provided are services regarding the transfer of assets to the L-3 Plans. Note: Effective with the first full payroll after Closing, no new contributions will be permitted to the AlliedSignal plans. The asset transfers to L-3 plans will include loans outstanding in the in the Allied Plans. Loan repayments will continue to Allied Plans post-closing. Schedule A Seller Provided Services 6 - ------------------------------------------------------------------------------ A. NORTH AMERICA 2. INFORMATION TECHNOLOGY GROUP (ITG) PROVIDER: AlliedSignal Inc. - Computing Technology Center 1300 West Warner Road Tempe, AZ 85285 Contact Person: Bill Busby Telephone: 602-893-4481 RECIPIENT: L-3 Communications, Ocean Systems 15835 Roxford St. Sylmar, CA 91342 Contact Person: Sam Erdman Telephone: 818-833-2493 SERVICES AND CHARGES: See Annex 1. NOTES: 1. Excludes certain third party costs that are billed to Provider that have been approved by and will be charged back to Recipient consistent with past practice. 2. EWN service covers the worldwide network. All EWN services will be billed at actual cost plus network support costs from the Information Technology Center in Tempe (in U.S. dollars). Schedule A Seller Provided Services 7 - ------------------------------------------------------------------------------ DESCRIPTION OF SERVICES: MAINFRAME COMPUTING - provides large scale, IBM like mainframe computing capacity in which Ocean's legacy applications are processed. Responsibility for applications support (including any Year 2000 assessment and remediation) rests with the business unit's I/S applications and production control groups. The ITG services include Help Desk, data systems storage management, capacity planning, disaster recovery and offsite storage, software / hardware maintenance / upgrades, IBM and third party vendor software products, problem resolution, technical support. ELECTRONIC MAIL (E-MAIL) - includes central planning, standards administration, technical support and problem resolution of AlliedSignal's global E-Mail system (Microsoft Mail). ENTERPRISE-WIDE NETWORK (EWN) - provides global network bandwidth connecting over 240 worldwide sites. The EWN is a multi-protocol network allowing any device-to-any device communications ie., mainframe to mainframe, LAN server to LAN server. All locations on the network can communicate with each other allowing access to Corporate - level applications, E-Mail, business unit based applications as well as Intranet and Internet facilities. DATA NETWORK - provides for any circuits or telecommunications equipment dedicated to a specific site or business unit. There are none covered by ITG services to Oceans. The only known Data Network services billed to Oceans are for Virtual Gateway Services (VGS), a dial-up facility used to access applications and E-Mail in a remote environment i.e., travel status). ELECTRONIC DATA INTERCHANGE (EDI) - allows computerized business transactions between Ocean's and its business partners (customers and suppliers) to flow through the ITG using industry EDI standards to meet requirements for reduced cycle time and just-in-time delivery INTERNET - includes technical support, WEB Master support, firewall servers, bandwidth to/from the Internet, software and the external Internet access service provider fees. The firewall provides security to prevent unauthorized access into the company's computer facilities and allows only authorized internal users to exit the company network into the Internet. Schedule A Seller Provided Services 8 - ------------------------------------------------------------------------------ A. NORTH AMERICA 3. FINANCE PROVIDERS: AlliedSignal Inc. - Financial Shared Services 1140 West Warner Road Mail Stop 1233-B Tempe, AZ. 85284 Contact Person: Tim Couvreur Telephone: 313-953-5256 RECIPIENT: L-3 Communications, Ocean Systems 15835 Roxford St. Sylmar, CA 91342 Contact Person: Tom Benecke Telephone: 818-833-2875 SERVICES AND CHARGES: See Annex 1. NOTES: 1. Excludes reasonable third party costs that are billed to Provider and will be charged back to Recipient consistent with past practice. Schedule A Seller Provided Services 9 - ------------------------------------------------------------------------------ DESCRIPTION OF SERVICES: FIXED ASSETS - provide asset accounting services (tax, insurance, & reporting) including transactional processing services to Oceans Systems domestic operations PROJECT TRACKING - provide project accounting services including processing and inputting appropriation requests, processing electronic data feeds, accumulating costs as they are committed and providing project recordkeeping and closure to Oceans Systems domestic operations. GENERAL LEDGER - provide technical and administrative support including support of the closing process, report generation and distribution and system administration to Oceans Systems domestic operations. Schedule A Seller Provided Services 10 - ------------------------------------------------------------------------------- A. NORTH AMERICA 4. TRAVEL SERVICES PROVIDERS: AlliedSignal Inc. - Financial Shared Services 1140 West Warner Road Mail Stop 1233-B Tempe, AZ. 85284 Contact Person: Merrill Sehulster Telephone: 602-496-2464 RECIPIENT: L-3 Communications, Ocean Systems 15835 Roxford St. Sylmar, CA 91342 Contact Person: Tom Benecke Telephone: 818-833-2875 PROVIDERS: AlliedSignal Inc. - Financial Shared Services 1140 West Warner Road Mail Stop 1233-B Tempe, AZ. 85284 Contact Person: Merrill Sehulster SERVICES AND CHARGES: See Annex 1. NOTES: 1. Excludes reasonable third party costs that are billed to Provider and will be charged back to Recipient consistent with past practice. DESCRIPTION OF SERVICES: CORPORATE TRAVEL CARD - provided by American Express and provides the business traveler a vehicle to charge all travel related expenses and obtain cash, if necessary. TRAVEL RESERVATIONS - provided by American Express at a National Reservation Center in Phoenix, AZ. Using this service permits the business traveler to obtain all AlliedSignal negotiated programs with the airline, car rental and hotel industries. EXPENSE PROCESSING AND REPORTING - provides centralized processing of expense reports submitted either on a manual or remote basis. Reimbursements for expense report charges can be directed either to the Corporate credit Card or to the employee. L-3 will be responsible for the funding of all AMEX charges. Note: Current Pricing is based on L-3 remaining on PeoplePower. In the event, L-3 does not continue on PeoplePower, AlliedSignal reserves the right to review the cost to process expense reports and may revise the pricing. Schedule A Seller Provided Services 11 - ------------------------------------------------------------------------------ A. NORTH AMERICA 5. TREASURY SERVICES PROVIDERS: AlliedSignal Inc. - Credit & Treasury Services 1300 West Warner Road Mail Stop 1207-3A Tempe, AZ. 85284 Contact Person: Allen Silberman Telephone: 602-893-5050 RECIPIENT: L-3 Communications Corp. 601 3rd Avenue New York, NY 10016 Contact Person: Kelly Warlan Telephone: 212-805-5251 SERVICES AND CHARGES: See Annex 1. NOTES: 1. Excludes reasonable third party costs that are billed to Provider and will be charged back to Recipient consistent with past practice. DESCRIPTION OF SERVICES: CREDIT & TREASURY SERVICES - Provide Credit, Collection, and Cash Application services which include credit analysis and decisions prior to product sales, collection of open sales invoices (based on information fed into our Walker Accounts Receivable system), and application of cash to customer accounts. Note: - L-3 will be responsible for any recurring and / or non-recurring costs expended by AlliedSignal to transition to newly established lockboxes, necessary to perform transition services under this agreement. These efforts will be billed at the actual costs incurred by AlliedSignal Schedule A Seller Provided Services 12 - ------------------------------------------------------------------------------- ANNEX 1 TO SCHEDULE A UNITED STATES SERVICES AND CHARGES Service Monthly Applicable Notes Billing Amount (in US Dollars) Mainframe processing 3,200 MS Mail 1,200 EWN 6,000 (2) Data Network 450 EDI 100 Internet 2,400 (1) Software 1,000 (2) ------ INFORMATION TECHNOLOGY GROUP 14,350 (3) Property Accounting 2,300 General Ledger 5,900 ------ DOMESTIC FINANCIAL SERVICES 8,200 (3) Tempe Payroll Services 4,600 (4) HR Systems 4,300 (5) Benefit Services 1,400 Pension Administration 1,100 ------ ------ HUMAN RESOURCE SERVICES 11,400 (3) Travel & Expense Processing 2,500 TRAVEL SERVICES 2,500 (3) ------ TOTAL - BUSINESS SERVICES BILLINGS 36,450 (6) CREDIT & TREASURY SERVICES 7,000 (3),(6) TOTAL ALLIEDSIGNAL US BILLINGS 43,450 (1) AlliedSignal owned Internet Protocol addresses to be returned following termination of the transition services agreement period. (2) Billing for EWN, Oracle Software Silver Support from the vendor. Billed at actual cost. (3) Excludes reasonable third party costs that are billed to the Provider and will be charged back to the Recipient consistent with past practice (e.g., pension, consulting services, application software, usage based telephone charges, etc.) (4) Effective October 1, 1998, the ongoing monthly rate for Tempe Payroll will increase by $1,000 to pay for the cost of PeopleSoft Payroll conversion relating to the Recipient location. If L-3 informs AlliedSignal of its intent to discontinue Payroll services before the PeopleSoft Payroll conversion, and later reverses itself, L-3 will be responsible for incremental programming costs incurred. (5) Excludes incremental software licensing fees that may be assessed by third parties (e.g. PeopleSoft, Oracle, etc.) in connection with providing services under this agreement (6) Any incremental costs, incurred to migrate Oceans Systems off of existing AlliedSignal systems, will be charged back at Schedule A Seller Provided Services 13 - ------------------------------------------------------------------------------ actual cost. B. FRANCE PROVIDER: AlliedSignal Business Services ASEST Sofia Antipolis, France Contact Person: Alain Gaudard Telephone: 011-33-1-5546-2143 RECIPIENT: L-3 Communications, Ocean Systems 15835 Roxford St. Sylmar, CA 91342L-3 Contact Person: Sam Erdman Telephone: 818-833-2493 SERVICES AND The cost of such services will be invoiced for the CHARGES: respective areas of assistance at the following rates: MONTHLY RATE (IN FRENCH FRANCS) E-Mail Services (125 users) 8,125 DESCRIPTION OF SERVICES: ELECTRONIC MAIL (E-MAIL) - includes central planning, standards administration, technical support and problem resolution of AlliedSignal's global E-Mail system (Microsoft Mail). Schedule B Buyer Provided Services 1 - ------------------------------------------------------------------------------ Schedule B - Buyer Provided Services 1. FACILITIES USE AND MAINTENANCE a) Provider: L-3 Ocean Systems 15835 Roxford St. Sylmar, CA Contact Person: Richard Howlett (818) 833-2789 b) Recipient: AlliedSignal 15835 Roxford St. Sylmar, CA Contact Person: Bill Pugliese (818) 833-2590 Charges: See Annex 1 Term: Up to one year from Closing as specified in the side letter of even date herewith relating to the lease of space at Sylmar by Purchasers, as landlord, to AlliedSignal Avionics, as tenant. Description: This service includes access to and use of the cafeteria, parking lot, surrounding company grounds, restrooms, Avionics designated manufacturing and repair & overall areas, Avionics designated stockroom, Avionics designated administrative offices, shipping and loading dock and general passageways throughout the facility. Schedule B Buyer Provided Services 2 - ------------------------------------------------------------------------------ 2. Security a) Provider: L-3 Ocean Systems 15835 Roxford St. Sylmar, CA Contact Person: Anita Logan (818) 833-2486 b) Recipient: AlliedSignal 15835 Roxford St. Sylmar, CA Contact Person: Bill Pugliese (818) 833-2590 Charges: See Annex 1 Term: Up to one year from Closing as specified in the side letter of even date herewith relating to the lease of space at Sylmar by Purchasers, as landlord, to AlliedSignal Avionics, as tenant. Description: Security Services include uniformed security guards and personnel assigned to L-3 Ocean Systems, beneficial use of installed security and surveillance cameras, vehicle patrol in parking lot areas and general safekeeping of Avionics assets and facility areas. Schedule B Buyer Provided Services 3 - ------------------------------------------------------------------------------ 3. HUMAN RESOURCES/LABOR MANAGEMENT a) Provider: L-3 Ocean Systems 15835 Roxford St. Sylmar, CA Contact Person: Anita Logan (818) 833-2486 b) Recipient: AlliedSignal 15835 Roxford St. Sylmar, CA Contact Person: Bill Pugliese (818) 833-2590 Charges: See Annex 1 Term: Up to one year from Closing as specified in the side letter of even date herewith relating to the lease of space at Sylmar by Purchasers, as landlord, to AlliedSignal Avionics, as tenant. Description: Services to be provided include: o Approve Requisitions o Source Internal and External Candidates for Hire o Pre-Employment Physical o Benefits Counseling o Resolving Benefit issues o Labor Management o Employee Relations o Reward and Recognition Program o Merit and Lump Sums o Status Changes for Employees o Medical Leaves o Payroll Issues o Stamps o Educational Assistance o Meal Tickets o Employee Activities (Recreational Activities) o Occupational Health o Worker's Compensation Issues o Security o Rideshare Benefits Schedule B Buyer Provided Services 4 - ------------------------------------------------------------------------------ 4. TIMEKEEPING a) Provider: L-3 Ocean Systems 15835 Roxford St. Sylmar, CA Contact Person: Tom Benecke (818) 833-2875 b) Recipient: AlliedSignal 15835 Roxford St. Sylmar, CA Contact Person: Bill Pugliese (818) 833-2590 Charges: See Annex 1 Term: Up to one year from Closing as specified in the side letter of even date herewith relating to the lease of space at Sylmar by Purchasers, as landlord, to AlliedSignal Avionics, as tenant. Description: Timekeeping services include the labor services of local union timekeeping personnel who will provide hourly labor timekeeping support including clock maintenance, labor charge corrections and application to correct Avionics jobs. General support to hourly labor supervisor in resolving issues involving timekeeping anomalies. Schedule B Buyer Provided Services 5 - ------------------------------------------------------------------------------ 5. MAIL & TELEPHONE SWITCHBOARD a) Provider: L-3 Ocean Systems 15835 Roxford St. Sylmar, CA Contact Person: Sam Erdman (818) 833-2493 b) Recipient: AlliedSignal 15835 Roxford St. Sylmar, CA Contact Person: Bill Pugliese (818) 833-2590 Charges: See Annex 1 Term: Up to one year from Closing as specified in the side letter of even date herewith relating to the lease of space at Sylmar by Purchasers, as landlord, to AlliedSignal Avionics, as tenant. Description: Mail service includes delivery of incoming mail to Avionics personnel and pick-up of outgoing mail. Postage expense is the responsibility of Avionics. Telephone Switchboard services includes on-site operator assistance for incoming and outgoing calls involving Avionics personnel including after hours and weekend call routing by on-duty security guards. Schedule B Buyer Provided Services 6 - ------------------------------------------------------------------------------ 6. EDC ASSESSMENT a) Provider: L-3 Ocean Systems 15835 Roxford St. Sylmar, CA Contact Person: Sam Erdman (818) 833-2493 b) Recipient: AlliedSignal 15835 Roxford St. Sylmar, CA Contact Person: Bill Pugliese (818) 833-2590 Charges: See Annex 1 Term: Up to one year from Closing as specified in the side letter of even date herewith relating to the lease of space at Sylmar by Purchasers, as landlord, to AlliedSignal Avionics, as tenant. Description: EDC Assessment includes general use of the L-3 Oceans Systems Business Resource Planning (BPR) system which includes the use of the Manufacturing Resource Planning (MRP-II) module for planning and netting material and labor requirements for manufacturing operations. This is strictly a system use fee and does not include labor support from L-3 personnel to plan and schedule contract requirements. Schedule B Buyer Provided Services 7 - ------------------------------------------------------------------------------ 7. PROCUREMENT - RELATED SERVICES a) Provider: L-3 Ocean Systems 15835 Roxford St. Sylmar, CA Contact Person: Chris Vosse (818) 833-2206 b) Recipient: AlliedSignal 15835 Roxford St. Sylmar, CA Contact Person: Bill Pugliese (818) 833-2590 Charges: See Annex 1 Term: Up to one year from Closing as specified in the side letter of even date herewith relating to the lease of space at Sylmar by Purchasers, as landlord, to AlliedSignal Avionics, as tenant. Description: Services related to purchasing direct and indirect material and supplies for the Avionics group. The expense of procuring materials is included in the prevailing L-3 Ocean Systems procurement burden rate, which will vary, based on site specific negotiated billing rates with the US government. Stockroom and Receiving Inspection labor are included in the procurement burden and material handling burden billing rates which will be applied to purchases on behalf of Avionics. These burden rates will be applied to the direct material procured which will be invoiced at the actual purchase cost. In all cases, the L - 3 Oceans Systems local, General and Administrative secondary billing indirect rate will be applied to the direct material, burden and indirect material or supplies. Schedule B Buyer Provided Services 8 - ------------------------------------------------------------------------------ 8. UTILITIES a) Provider: L-3 Ocean Systems 15835 Roxford St. Sylmar, CA Contact Person: Richard Howlett (818) 833-2789 b) Recipient: AlliedSignal 15835 Roxford St. Sylmar, CA Contact Person: Bill Pugliese (818) 833-2590 Charges: See Annex 1 Term: Up to one year from Closing as specified in the side letter of even date herewith relating to the lease of space at Sylmar by Purchasers, as landlord, to AlliedSignal Avionics, as tenant. Description: Utilities will be billed to Avionics based upon the square footage occupied by the Avionics group. This percentage allocation will be billed as actual expense incurred by L-3 Oceans Systems with the applicable local General and Administrative secondary billing rates applied to direct product cost areas in manufacturing. Schedule B Buyer Provided Services 9 - ------------------------------------------------------------------------------ ANNEX 1 TO SCHEDULE B Services to the Avionics Division at Sylmar - ------------------------------------------------------------------------------- Service Monthly Billing Amount Notes - ------------------------------------------------------------------------------- Facilities Maintenance 15,400 Security 2,000 HR/Labor Management 12,400 Timekeeping1 2,000 Mail & Telephone Switchboard 1,500 EDC Assessment 3,500 - ------------------------------------------------------------------------------- Monthly Assessment 36,800 - ------------------------------------------------------------------------------- In addition to the above Ocean Systems provides the following services to the Avionics business: PROCUREMENT-RELATED SERVICES The expense of procuring materials is included in the prevailing Oceans Systems procurement burden rate that will vary based upon the specific negotiated billing rate with the US government. Stockroom and Receiving Inspection labor are included in the procurement burden and the material handling burden rates which will be applied to all purchases made on behalf of Avionics. These burden rates will be applied to the direct material procured and will be involved at the actual cost of purchase. In all cases the Oceans Systems local General and Administrative secondary billing indirect rate will be applied to the direct material, burden and indirect material or supplies. UTILITIES: Allocated to Avionics monthly in proportion to the factory space occupied. The billing will include applicable local General and Administrative secondary billing rates applied to direct product cost areas in manufacturing. OTHER: Calibration, Machine shop, repairs, maintenance and similar costs not included above will be billed as incurred. Schedule C - ------------------------------------------------------------------------------- Vendor Product Use - ------------------------------------------------------------------------------- Compuware Abendaid/FX CICS Dump formatting for debugging CICS Abendaid/MVS Dump formatting for debuggingbatch Fileaid MVS File and data manipulation Platinum ZEKE Production Scheduler ZEBB Production Restart Sterling SAMS:Disk Data management-backup & archives Syncsort, Inc. SYNCSORT Sort utility TSI International Keymaster Data entry - -------------------------------------------------------------------------------
EX-10.10 16 PENSION PLAN Exhibit 10.10 L-3 COMMUNICATIONS CORPORATION PENSION PLAN Effective April 30, 1997 July 24, 1997
TABLE OF CONTENTS ----------------- INTRODUCTION...........................................................................................1 GENERAL DESCRIPTION ...................................................................................1 ARTICLE I. DEFINITIONS ................................................................................2 Accrual Service ..............................................................................2 Accumulated Contributions ....................................................................2 Actuarial Equivalent .........................................................................2 Affiliate ....................................................................................2 Alternate Payee ..............................................................................2 Annuity Starting Date ........................................................................3 Basic Benefit ................................................................................3 Beneficiary ..................................................................................3 Board ........................................................................................4 Break in Service .............................................................................4 Code .........................................................................................4 Committee ....................................................................................4 Company ......................................................................................4 Contributing Participant .....................................................................4 Contributory Benefit .........................................................................4 Deferred Vested Termination Benefit ..........................................................4 Deferred Vested Termination Date .............................................................4 Early Commencement Factor ....................................................................5 Early Retirement Benefit .....................................................................5 Early Retirement Date ........................................................................5 Earnings .....................................................................................5 Effective Date ...............................................................................6 Election Period ..............................................................................6 Eligibility Service ..........................................................................6 Eligible Spouse ..............................................................................7 Employee .....................................................................................7 Employer .....................................................................................7 Employment Date ..............................................................................7 ERISA ........................................................................................7 Forfeitures ..................................................................................8 Former Participant ...........................................................................8 Highly Compensated Employee ..................................................................8 Hour of Service ..............................................................................8 Late Retirement Benefit ......................................................................8 Late Retirement Date .........................................................................8 Minimum Basic Benefit ........................................................................8 Monthly Accrued Benefit ......................................................................8 L-3 Communications Corporation Pension Plan i Normal Retirement Benefit ....................................................................8 Normal Retirement Date .......................................................................8 Participant ..................................................................................8 Period of Severance ..........................................................................8 Plan .........................................................................................8 Plan Year ....................................................................................9 Prior Employer ...............................................................................9 Prior Plan ...................................................................................9 Proper Application ...........................................................................9 QDRO .........................................................................................9 Qualified Joint and Survivor Annuity .........................................................9 Qualified Pre-Retirement Survivor Annuity ....................................................9 Retirement Date ..............................................................................9 Service ......................................................................................10 Severance From Service Date ..................................................................10 Social Security Wage Base ....................................................................10 Trust Agreement ..............................................................................10 Trust ........................................................................................11 Trustee ......................................................................................11 Vested Participant ...........................................................................11 Vested Percentage ............................................................................11 Vesting Service ..............................................................................11 ARTICLE II. ADMINISTRATION.......................................................................12 2.1 Committee 's Discretionary Power to Interpret and Administer the Plan..................................................................12 2.2 Rules of the Committee ..............................................................13 2.3 Claims Procedure ....................................................................13 2.4 QDRO Claim ..........................................................................15 2.5 Indemnification of Committee Members ................................................15 2.6 Power to Execute Plan and Other Documents ...........................................15 2.7 Conclusiveness of Records ...........................................................15 ARTICLE III. ELIGIBILITY AND HOW TO CALCULATE SERVICE ....................................................................16 3.1 When Participation Starts and Ends ..................................................16 3.2 General Restrictions on Participation ...............................................17 3.3 How to Calculate Eligibility Service ................................................17 3.4 . Rule of Parity o Disregarding Prior Service .........................................19 3.5 How to Calculate Accrual Service ....................................................19 3.6 How to Calculate Vesting Service ....................................................20 L-3 Communications Corporation Pension Plan ii ARTICLE IV. VESTING AND FORFEITURES..............................................................21 4.1 Vesting ............................................................................21 4.2 Changes in Vesting Schedule .........................................................22 4.3 Forfeitures .........................................................................22 4.4 Restoring Forfeitures ...............................................................22 ARTICLE V. AMOUNT OF RETIREMENT BENEFIT.........................................................23 5.1 General Rules for Calculating Amount of Plan Benefits................................23 5.2 The Different Plan Benefits .........................................................23 5.3 Monthly Accrued Benefit .............................................................24 5.4 Special Section 401(a)(17) Provision Regarding Plan Benefits.........................25 5.5 Minimum Basic Benefit for Certain Participants ......................................26 5.6 Normal Retirement Benefit ...........................................................27 5.7 Late Retirement Benefit .............................................................27 5.8 Early Retirement Benefit ............................................................28 5.9 Deferred Vested Termination Benefit .................................................29 5.10 Co-ordination with Prior Plan .......................................................29 5.11 Effect of, Deferred Payment .........................................................30 5.12 Effect of Reemployment After Receipt of Plan Benefits ...............................30 ARTICLE VI. PAYMENT OF RETIREMENT AND DEATH BENEFITS.............................................32 6.1 How to Retire........................................................................32 6.2 Timing of Participant's Benefits ....................................................32 6.3 Normal Form of Benefits .............................................................35 6.4 Notice and Election Period ..........................................................35 6.5 Waiver and Spousal Consent Necessary for Optional Forms of Benefit .............................................................................36 6.6 Optional Forms of Benefit ...........................................................38 6.7 Suspending Plan Payments Upon Reemployment ..........................................39 6.8 Qualified Pre-Retirement Survivor Annuity ...........................................39 6.9 Form of Benefit Fixed as of Annuity Starting Date ...................................41 ARTICLE VII. IN-SERVICE WITHDRAWAL AND RETURN OF CONTRIBUTIONS ...................................................................43 7.1 In-Service Withdrawal of Pre-1970 Employee Contributions.............................43 ARTICLE VIII. THE TRUST, FUNDING AND CONTRIBUTIONS ................................................44 8.1 Contributions to the Trust Fund .....................................................44 8.2 The Trust ...........................................................................44 L-3 Communications Corporation Pension Plan iii ARTICLE IX. AMENDMENT AND TERMINATION............................................................45 9.1 Power to Amend Plan .................................................................45 9.2 Power to Terminate Plan .............................................................45 9.3 Allocation of Assets Upon Termination ...............................................45 9.4 Reversion of Assets Upon Termination ................................................45 ARTICLE X. LIMITATION OF BENEFITS...............................................................47 10.1 Construction ........................................................................47 10.2 Definitions .........................................................................47 10.3 Limitation on Annual Benefits .......................................................48 10.4 Adjustments for Early or Late Payment ...............................................48 10.5 Conditional Exemption for Pensions Under $10,000 ....................................49 10.6 Participants with Fewer Than Ten Years of Service ...................................49 10.7 Participants with Fewer Than Ten Years of Participation .............................50 10.8 Benefits Payable under More Than One Defined Benefit Plan . . .......................50 10.9 Participation in Defined Contribution Plan ..........................................50 10.10 Limitation Year .....................................................................53 10.11 Protection of Current Accrued Benefit ...............................................53 10.12 Rules Regarding 25 Top-Paid Employees ...............................................53 ARTICLE XI. GENERAL PROVISIONS ..................................................................55 11.1 No Contract of Employment ...........................................................55 11.2 Employer Not Liable for Plan Benefits ...............................................55 11.3 Exclusive Benefit and Return of Employer Contributions ..............................55 11.4 Tax Withholding .....................................................................56 11.5 Incompetency or Minority of Payee ...................................................56 11.6 Missing Payees ......................................................................57 11.7 Alienation and QDROs ................................................................57 11.8 Notice to Committee, Elections ......................................................58 11.9 Merger or Transfer With Other Plans .................................................58 11.10 Fiduciaries .........................................................................59 11.11 Plans Shall Comply with Law; and Choice of Law ......................................59 11.12 Deemed Distribution of Unvested Amounts .............................................59 11.13 Gender and Number ...................................................................59 11.14 Headings ............................................................................59 11.15 Illegality of Particular Provisions .................................................60 11.16 Receipt and Release for Payments ....................................................60 11.17 Action by the .......................................................................60 11.18 Mistaken Payments ...................................................................60 11.19 Participants and Beneficiaries Bound by the Plan ....................................60 L-3 Communications Corporation Pension Plan iv 11.20 Direct Rollover Distributions to Other Plans or IRAs ................................60 11.21 Transfers Among Affiliates ..........................................................62 ARTICLE XII. TOP-HEAVY PROVISIONS.................................................................64 12.1 Applicable Plans Included in Determination of "Top Heavy" Status ............................................................................64 12.2 "Key Employee" ......................................................................64 12.3 "Top Heavy" Test ....................................................................65 12.4 Determination Dates .................................................................65 12.5 Add-Back of Prior Distributions .....................................................66 12.6 Former Employees Disregarded after Five Plan Years ..................................66 12.7 Compliance with Section 416 of the Code .............................................66 12.8 Beneficiaries .......................................................................66 12.9 Provisions Applicable in "Top Heavy" Plan Years .....................................66 EXHIBIT A. ACTUARIAL EQUIVALENT FACTORS.........................................................-1- EXHIBIT B. CONTRIBUTORY BENEFITS ...............................................................-3- L-3 Communications Corporation Pension Plan
v L-3 COMMUNICATIONS CORPORATION PENSION PLAN ------------------------------------------- INTRODUCTION ------------ On April 30, 1997, Lockheed Martin Corporation ("Lockheed Martin") sold certain of its businesses (the "Business") to L-3 Communications Holdings, Inc. ("Holdings"). In connection with the sale, certain employees in the information display systems operations of the Lockheed Martin currently located in Alpharetta, Georgia, and certain headquarters employees became employees of L-3 Communications Corporation, a wholly owned subsidiary of Holdings. Lockheed Martin agreed to transfer, and Holdings agreed to accept, the assets under the Lockheed Martin Tactical Defense Systems Pension Plan (Corp. & LMSD) (the "Pension Plan") attributable to the Accrued Benefits of the employees and former employees (the "Transferred Individuals") of the transferred operations. The Transferred Individuals shall be entitled to their Accrued Benefit under the Pension Plan (or a predecessor plan) as of April 30, 1997, provided that the assets are transferred, and future benefits, if any, under the terms of this Plan. A Participant under this Plan, including a Transferred Individual, is entitled to benefits under the terms of the Plan in effect, including the terms of the Pension Plan or any other predecessor plan, when the Participant terminates (or terminated) employment with the Employer. The Plan is intended to be qualified under Internal Revenue Code Section 401 and its Trust is intended to be tax-exempt under Code Section 501. GENERAL DESCRIPTION ------------------- Benefits attributable to Employer contributions are integrated with Social Security, under Code Section 401(l). Such benefits are termed the "Basic Benefit" under the Plan. The Plan also provides for a "Minimum Basic Benefit" for certain Participants. The plan does not charge for QPSA coverage, and does provide for a subsidized early retirement benefit. L-3 Communications Corporation Pension Plan ARTICLE I. DEFINITIONS As used in this Plan, the following terms shall have the following meanings, unless a different meaning is required by the context: "Accrual Service" shall have the meaning set forth in Section 3.5. "Accumulated Contributions" means the after-tax, voluntary employee contributions made by a Participant under the Prior Plan prior to April 1, 1970. These contributions, plus the accrued interest described in this paragraph, constitute a Contributing Participant's Contributory Benefit. The accrued interest shall be computed up to April 1, 1970 as provided under the Prior Plan plus interest thereon at the rate of 4% per year for the period from April 1, 1970 through December 31, 1973, at the rate of 5% per year for the period from January 1, 1974 through December 31, 1987, and at the rate of 120% of the Federal mid-term rate (as in effect under Code Section 1274 for the first month of each Plan Year) for the period beginning January 1, 1988 compounded annually from the last day of the calendar year in which such contributions were made to the first day of the month in which occurs the earliest of (a) withdrawal of such contributions by the Participant prior to or termination of employment, (b) the Participant's Annuity Starting Date, (c) the Participant's death, or (d) the date the Participant becomes a Former Participant. "Actuarial Equivalent" means an amount of equal value as determined in accordance with EXHIBIT A hereto. "Affiliate" means the Company and any corporation, trade or business during any period when it is, along with the Company, a member of a controlled group of corporations or a controlled group of trades or businesses, as described in Code Section 414(b), the common control rules of Code Section 414(c), the affiliated service group rules of Code Section 414(m), or the rules of 414(o), subject to the rules of Code Section 415(h). "Alternate Payee" means any spouse, former spouse, child or other dependent of a Participant who is recognized by a "qualified" court domestic relations order as having a right to receive all, or a portion of, the benefits payable under the Plan with respect to such Participant, as described in Code Section 414(p). The determination of whether a court order is "qualified" shall be made in the sole discretion of the Committee. L-3 Communications Corporation Pension Plan 2 "Annuity Starting Date" shall mean: (a) with respect to any lump sum or installment payment, first day of the month coincident with or next following the date that the Participant is both entitled to and has completed his Proper Application for a Plan distribution, (b) with respect to any one of a series of payments over the life or life expectancy of one or more distributees, the first date for which the benefit is paid, even if this date is not the date of actual payment. (c) The term "Annuity Starting Date" shall be determined with respect to payments made to the Participant, rather than with respect to any survivor benefit payments (excepting only the QPSA). (d) The term "Annuity Starting Date" shall, in all events, be defined by Treasury Regulation Section 1.401(a)-20. "Basic Benefit" for a Participant shall have the meaning set forth in Section 5.3. "Beneficiary" means a Participant's designated beneficiary, under Plan procedures. As required by the context of the Plan, "Beneficiaries" may also include Alternate Payees. (a) The Beneficiary of any married Participant shall normally be his legally married spouse, at the time of death (whether or not she or he is an Eligible Spouse). Married Participants may designate someone other than a spouse as Beneficiary, only if the designation includes the written consent of the Participant's spouse, as set out in Plan Section 6.5. If these requirements are not met, then the designation of a non-spouse Beneficiary is invalid. However, the Committee may not require the spouse's written consent if it is established to the satisfaction of a Plan representative that such consent cannot be obtained because (1) there is no spouse, (2) the spouse cannot be located, or (3) such other circumstances exist as may be prescribed by applicable regulation. Any such written spousal consent or establishment that consent cannot be obtained shall be effective only with respect to that spouse. (b) Beneficiary designations may be changed at any time before the Annuity Starting Date. If no proper Beneficiary is designated or survives, the Participant's Beneficiary shall be, in the following order of L-3 Communications Corporation Pension Plan 3 priority: (1) his spouse, if living at the time of such payment; (2) his children (including adopted children but excluding stepchildren) per stirpes; (3) his estate. (c) If the Committee is in doubt as to the right of any person to receive a Plan benefit, the Committee may direct the Trustee to retain such amount, without liability for any interest thereon, until the rights thereto are determined, or the Committee may direct the Trustee to pay such amount into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Plan and the Trust therefor. "Board" means either the Board of Directors of the Company, or the Executive Committee of the Board of Directors. "Break in Service" is defined in Section 3.3. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and all appropriate regulations and administrative guidance. "Committee" means the committee which administers the Plan in accordance with Article II. As context requires, the term "Committee" shall refer to the Committee or its delegates. "Company" means L-3 Communications Corporation, a Delaware corporation, and any successor thereto which adopts this Plan. The Company shall act by resolution of its Board of Directors. "Contributing Participant" means a Participant who made voluntary after-tax contributions to the Prior Plan prior to April 1, 1970 and has not withdrawn such contributions. "Contributory Benefit" is defined in Section 5.3, and shall equal the amounts set out in Exhibit B. "Deferred Vested Termination Benefit" is defined in Section 5.9. "Deferred Vested Termination Date" means: (a) the first day of the month coincident with or next following the date that a Participant terminates active employment. A Vested Terminated Date will always precede any date that might have been the Participant's Retirement Date. L-3 Communications Corporation Pension Plan 4 (b) Generally, a Deferred Vested Termination Date will arise only with respect to a Participant whose Vested Percentage is more than 0%. However, a Contributing Participant who retains a Contributory Benefit may incur a Deferred Vested Termination Date even if he has no Vested Percentage. (c) A Deferred Vested Termination Date will be the date as of which a Participant's Deferred Vested Termination Benefit is calculated, under Article V. (d) A Deferred Vested Termination Date is not a "Retirement Date" per se. Accordingly, if any benefit under any welfare plan is dependent upon "retirement," then such a benefit may not be available to a Participant who terminates employment as of his Deferred Vested Termination Date. "Early Commencement Factor" is defined in Section 5.8. "Early Retirement Benefit" is defined in Section 5.8. "Early Retirement Date" means the first day of the month (a) coincident with or next following the date a Participant retires under the terms of the Plan, (b) on or after his 55th birthday and completion of ten years of Eligibility Service, and (c) prior to his Normal Retirement Date. For purposes of this definition only, Accrual Service includes any period during which the Employee was an active participant of (1) a qualified defined benefit plan sponsored by an Affiliate (provided that such a plan was in effect and sponsored by the Affiliate during the relevant period) or (2) the Prior Plan. "Earnings" for any Plan Year shall mean: (a) the total cash remuneration actually paid by the Employer, including regular earnings; commissions; overtime pay; bonuses; incentive compensation; fringe benefits; elective employee deferrals or contributions made under any qualified retirement plan; and Code Section 125 elective, payroll deduction contributions. (b) Any compensation that is accrued but not paid during the relevant Plan Year shall not be accounted. The following items shall also be excluded: distributions from any employer qualified retirement or welfare plan; the disposition or granting of stock options; imputed income from life insurance; employer contributions made to any welfare plan, or to any L-3 Communications Corporation Pension Plan 5 qualified retirement plan; any reimbursed expenses such as relocation expenses; all severance pay; and lump sum vacation allowances. (c) In addition to other applicable limits set out in this Plan, and notwithstanding any contrary Plan provisions, Earnings accounted under this Plan shall be capped at $150,000 (adjusted for cost of living, as provided by Code Section 401(a)(17)). (1) If a cost of living adjustment is declared under the Code with respect to any calendar year, it shall affect the Earnings accounted for the Plan Year that begins on the January 1st of that same calendar year. (2) Generally, if Earnings paid for any prior Plan Year are taken into account in determining benefit accruals for the current Plan Year, then the Earnings limit for the prior year will be subject to the Code Section 401(a)(17) limit applicable (adjusted for the cost of living) for that prior year. (3) If a Participant is not actively employed for a full Plan Year, then his credited Earnings under Code Section 401(a)(17) shall not be reduced, prorated, or limited because of his incomplete year of service. (4) However, if this Plan should be amended to base its benefit allocation or accrual formula on compensation paid for a period of less than a Plan Year, then Earnings taken into account under this Plan shall be prorated, to correspond to the period of time used in the Plan formula. For example, if the Plan formula is based on compensation paid each quarter, then the 401(a)(17) limit for that Plan Year shall be divided by four, when applying the Plan benefit formula. (d) To the extent that any Participant's Earnings exceeded $150,000 prior to January 1, 1994, Section 5.4 shall apply to his accrued Plan benefit. "Effective Date" of this Plan means April 30, 1997. Unless specified within the Plan, all Plan provisions are effective as of the Effective Date. However, the terms of the Prior Plan, or any earlier restatement of this Plan, shall apply with respect to periods before the Effective Date. L-3 Communications Corporation Pension Plan 6 "Election Period" refers to a period during which certain elections must be made concerning the form of benefit paid under the Plan. It is described in Section 6.4. "Eligibility Service" is defined in Section 3.3. "Eligible Spouse" means: (a) A participant's legally married spouse. Further, with respect to a spouse's eligibility to receive a QPSA benefit, an Eligible Spouse must have been married to the Participant for at least 12 continuous months before the Participant's date of death. (b) Whether or not an individual is an Eligible Spouse shall in all events be determined under Treasury Regulation Section 1.401(a)-20. "Employee" shall mean: (a) any common-law employee in the service of the Employer, (b) Employees shall, as prescribed by the Code, also include employees of Affiliates, for the limited purposes of determining eligibility to participate, and vesting. (c) Leased employees as described by Code Section 414(n), shall be considered Employees for the sole purpose of Code Section 414(n)(3). Notwithstanding, the preceding provisions, the following shall not be an Employee: (d) any person whose terms of employment is subject to a collective bargaining agreement, to which the Company is a party, unless the agreement specifically provides for the person's participation in this Plan, (e) any common-law employee of an Employer or Affiliate who is employed at a site, unit, or subsidiary whose employees, under Employer or Affiliate policy, are not eligible to participate in a qualified defined benefit. "Employer" means the New York Corporate office of the Company and the L-3 Communications Corporation - Display Systems Division currently located in Alpharetta, Georgia. L-3 Communications Corporation Pension Plan 7 "Employment Date" means the first day of employment with an Employer or Prior Employer, as determined by the Employer's procedures, and within its discretion. "ERISA" means the Employee Retirement Income Security Act of 1974, as enacted or as amended from time to time, and all appropriate regulations and administrative guidance. "Forfeitures" are defined in Section 4.3. "Former Participant" (a) Means an individual who has ceased to be a Participant for any of the reasons set out in Section 3.1, and a former participant in the Prior Plan if the Prior Plan transferred to this Plan assets attributable to his accrued benefit under the Prior Plan. (b) A Former Participant is ineligible to accrue further benefits under the Plan, because he is no longer an active Participant. "Highly Compensated Employee" means any Employee or former Employee who is a highly compensated employee as defined in Code Section 414(q). "Hour of Service" means any hour for which an Employee is paid or is entitled to payment, for the performance of duties for the Employer or Prior Employer. "Late Retirement Benefit" is defined in Section 5.7. "Late Retirement Date" means the first day of the month coincident with or next following the date on which a Participant retires, under the terms of the Plan, after his Normal Retirement Date. "Minimum Basic Benefit" is defined in Section 5.5. "Monthly Accrued Benefit" is defined in Section 5.3. "Normal Retirement Benefit" is defined in Section 5.6. "Normal Retirement Date" means the first day of the month coincident with or next following the later of (i) a Participant's 65th birthday, or (ii) the date a Participant completes five years of Eligibility Service. "Participant" means any Employee who is participating in the Plan, under the terms of the Plan, after meeting the eligibility requirements of Article III. L-3 Communications Corporation Pension Plan 8 "Period of Severance" is defined in Section 3.3. "Plan" means the L-3 Communications Corporation Pension Plan, as amended from time to time, which includes EXHIBITS A and B which are attached, as well as the Trust Agreement. "Plan Year" means the calendar year, except that the first Plan Year shall be the period beginning on April 30, 1997 and ending on December 31, 1997. "Prior Employer" means Lockheed Martin Corporation prior to April 30, 1997, and Loral Corporation. "Prior Plan" means the Lockheed Martin Tactical Systems Inc. Pension Plan (Corp. & LMDS), as in effect from time to time prior to the Effective Date, and the predecessors to that plan, which are the Loral Corporation Pension Plan, established effective April 1, 1970, and restated effective January 1, 1976, January 1, 1984, January 1, 1989 and restated, reflecting amendments made through December 20, 1994, effective January 1, 1989. It was preceded by the Retirement Plan for Non-Union Employees of Loral Corporation established effective January 1, 1963. "Proper Application" is defined in Section 6.1. "QDRO" is an abbreviation for "qualified domestic relations order," defined in Section 11.7. "QJSA" or "Qualified Joint and Survivor Annuity" means an annuity for the life of a Participant with a survivor annuity for the life of his Eligible Spouse, if there is an Eligible Spouse as of his Annuity Starting Date. The amount of the survivor annuity shall be 50% of the amount payable during the lifetime of the Participant. The QJSA shall be calculated to be the Actuarial Equivalent of a single life annuity for the life of the Participant, as of his Normal Retirement Date. In all events, a QJSA shall be as defined by Treasury Regulation Section 1.401(a)-20. "QPSA" or "Qualified Pre-Retirement Survivor Annuity" means an annuity for the life of an Eligible Spouse who survives a Participant, under the circumstances and in the amount described in Section 6.8. In all events a QPSA shall be defined by Treasury Regulation Section 1.401(a)-20. "Retirement Date" means a Participant's Normal, Early or Late Retirement Date, whichever is applicable. A Vested Terminated Participant shall not have a Retirement Date, per se. Accordingly, if any benefit under any welfare plan is conditioned upon "retirement," then such a benefit may not be available to a Vested L-3 Communications Corporation Pension Plan 9 Terminated Participant. "Service" (a) Different Meanings. Service under the Plan has different meanings for different purposes. The Plan accounts three different types of Service: Eligibility Service, Accrual Service, and Vesting Service. The definition of "Service" set out in this Article I applies to all of these different types of Service. (b) General Rule. Service shall generally mean the period for which the Employee is paid or is entitled to payment (including any back pay, irrespective of mitigation of damages), subject to the rules and restrictions of Article III, for the performance of duties for the Employer. For the purposes of calculating Eligibility Service and Vesting Service, "Service" shall also include Service performed for an Affiliate or service credited under a Prior Plan. However, with respect to crediting Service during any period during which the Prior Plan was in effect, then the provisions of the Prior Plan shall control. Service shall never be double-credited. (c) Military Service (1) An employee or Participant shall be credited with Service for any period of military service to the extent required by any Federal veteran reemployment laws. (2) Notwithstanding the foregoing, if a Participant who leaves employment with the Employer for the sole purpose of entering the armed forces of the United States returns to active employment with the Employer within the period his re-employment rights are protected by applicable law, his Service shall include the period of such absence and solely for the purpose of the Plan during such period he shall be deemed to have received Earnings from the Employer equal to his basic remuneration rate immediately prior to the commencement of such absence (subject to escalation to the extent required under applicable laws and regulations). "Severance From Service Date" is defined in Section 3.3. "Social Security Wage Base" means, for any Plan Year, the maximum amount of a L-3 Communications Corporation Pension Plan 10 Participant's annual remuneration which may be treated as wages under Section 3121(a) of the Federal Insurance Contributions Act for such year, indexed to the extent required by Code Section 401(l). "Trust Agreement" The agreement between the Company and Trustee concerning the assets of this Plan. The Trust Agreement is fully a part of the Plan. "Trust" or Trust Fund" means the fund held by the Trustee into which contributions under the Plan will be paid by the Employer and Employees and out of which benefits under the Plan will be paid as herein provided. "Trustee" means the trustee appointed under the Trust Agreement. "Vested Participant" means a Participant who terminates employment with the Employer on a Deferred Vested Termination Date. "Vested Percentage" is defined in Section 4.1. "Vesting Service" is defined in Section 3.6. L-3 Communications Corporation Pension Plan 11 ARTICLE II. ADMINISTRATION -------------------------- 2.1 Committee's Discretionary Power to Interpret and Administer the Plan - --- -------------------------------------------------------------------- (a) Appointment. The Committee shall be appointed from time to time by the Board to serve at its pleasure. Any member of the Committee may resign by delivering his written resignation to the Board. (b) Role under ERISA. The Committee is the "named fiduciary" for operation and administration of the Plan, and the "administrator" under ERISA. The Committee is designated as agent for service of legal process. (c) Committee establishes Plan procedures. The Committee and its delegates shall from time to time establish rules and procedures for the administration and interpretation of the Plan and the transaction of its business. (d) Role of Human Resource and Benefits Personnel. Employees of the Employer who are human resources personnel, or benefits representatives are the Committee's delegates and shall, under the authority of the Committee, perform the routine administration of the Plan, such as distributing and collecting forms and providing information about Plan procedures. They shall also establish Plan rules and procedures. (e) Discretionary Power to Interpret Plan (1) The Committee has complete discretionary and final authority to (i) determine all questions concerning eligibility, elections, contributions, and benefits under the Plan, (ii) construe all terms under the Plan, including any uncertain terms, and (iii) determine all questions concerning Plan administration. All administrative decisions made by the Committee, and all its interpretations of the Plan documents, shall be given full deference by any court of law. (2) Information that concerns an interpretation of the Plan or a discretionary determination, can be properly provided only by the Committee, and not by any delegate (except legal counsel). (3) Should any individual receive oral or written information concerning the Plan, which is contradicted by a subsequent L-3 Communications Corporation Pension Plan 12 determination by the Committee, then the Committee's final determination shall control. 2.2 Rules of the Committee - --- ---------------------- (a) Any act which the Plan authorizes or requires the Committee to do may be done by a majority of its members. The action of such majority, shall constitute the action of the Committee and shall have the same effect for all purposes as if made by all members of the Committee at the time in office. The Committee may act without any writing that records its decisions, and need not document its meetings or teleconferences. The Committee may also act through any authorized representative. (b) The members of the Committee may authorize one or more of their number to execute or deliver any instrument, make any payment or perform any other act which the Plan authorizes or requires the Committee to do. (c) The Committee may employ counsel and other agents and may procure such clerical, accounting, actuarial and other services as they may require in carrying out the provisions of the Plan. Legal counsel are authorized as the Committee's delegates. (d) No member of the Committee shall receive any compensation for his services as such. All expenses of administering the Plan, including, but not limited to, fees of accountants, counsel and actuaries shall be paid from the Trust Fund, except to the extent paid by an Company. (e) Each member of the Committee may delegate Committee responsibilities among the Company directors, officers, or employees, and may consult with or hire outside experts. The expenses of such experts shall be paid by the Trust Fund, to the extent that they are not paid by an Company. 2.3 Claims Procedure - --- ---------------- (a) The Committee shall determine Participants and Beneficiaries' rights to benefits under the Plan. In the event that a Participant or Beneficiary disputes an initial determination made by the Committee, then he may dispute the determination only by filing a written claim for benefits. (b) If a claim is wholly or partially denied, the Committee shall provide the L-3 Communications Corporation Pension Plan 13 claimant with a notice of denial, written in a manner calculated to be understood by the claimant and setting forth: (1) The specific reasons for such denial; (2) Specific references to the pertinent Plan provisions on which the denial is based; (3) A description of any additional material or information necessary for the claimant to perfect the claim with an explanation of why such material or information is necessary (if applicable); and (4) Appropriate information as to the steps to be taken if the claimant wishes the Committee to revise its initial denial. The notice of denial shall be given within a reasonable time period but no later than 90 days after the claim is received, unless special circumstances require an extension of time for processing the claim. If such extension is required, written notice shall be furnished to the claimant within 90 days of the date the claim was received stating that an extension of time and the date by which a decision on the claim can be expected, which shall be no more than 180 days from the date the claim was filed. (5) If no written notice of denial is provided by the Committee, then the claim shall be deemed to be denied, and the claimant may appeal the claim as though the claim had been denied. (c) The claimant and/or his representative may appeal the denied claim and may: (1) Request a review by making a written request to the Committee provided that such a request is made within 60 days of the date of the notification of the denied claim; (2) Review pertinent documents. (d) Upon receipt of a request for review, the Committee shall within a reasonable time period but not later than 60 days after receiving the request, provide written notification of its decision to the claimant stating the specific reasons and referencing specific plan provisions on which its decision is based, unless special circumstances require an extension for processing the review. If such an extension is required, the Committee shall notify the claimant of the date, no later than 120 L-3 Communications Corporation Pension Plan 14 days after the original date the request for review was received, on which the Committee will notify the claimant of its decision. (e) In the event of any dispute over benefits under this Plan, all remedies available to the disputing individual under this Article must be exhausted, within the specified deadlines, before legal recourse of any type is sought. 2.4 QDRO Claim - --- ---------- Claims relating to or affected by a domestic relations order (as defined by Code Section 414(p)) or draft order shall be determined under the Committee's procedures concerning domestic relations orders. The claims procedure described in the preceding section shall not apply to any such domestic relations order claim. 2.5 Indemnification of Committee Members - --- ------------------------------------ To the fullest extent permitted by law, the Company agrees to indemnify, to defend, and hold harmless the members of the Committee and its delegates, individually and collectively, against any liability whatsoever for any action taken or omitted by them in good faith in connection with this Plan or their duties hereunder and for any expenses or losses for which they may become liable as a result of any such actions or non-actions unless resultant from their own willful misconduct; and the Company will purchase insurance for the Committee and its delegates to cover any of their potential liabilities with regard to the Plan and Trust. 2.6 Power to Execute Plan and Other Documents - --- ----------------------------------------- Any appointed Vice President of the Company shall have the authority to execute governmental filings or other documents including the plan document relating to the Plan, or the Company may delegate this authority to another officer or employee of the Company. 2.7 Conclusiveness of Records - --- ------------------------- In administering the Plan, the Committee may conclusively rely upon the Employer's payroll and personnel records maintained in the ordinary course of business. L-3 Communications Corporation Pension Plan 15 ARTICLE III. ELIGIBILITY AND HOW TO CALCULATE SERVICE 3.1 When Participation Starts and Ends - --- ---------------------------------- (a) Participants in Prior Plan. Each Employee who was a Participant in the Prior Plan immediately before the Effective Date shall be a Participant in this Plan on the Effective Date, provided he is an Employee on the Effective Date. (b) General Rule of Participation. Each Employee, other than an Employee described in subsection (a) shall become a Participant on the first day of the month coincident with or next following the later of (1) the completion of one year of Eligibility Service or (2) his 21st birthday. (c) End of participation. A Participant ceases to be a Participant when he terminates his employment (as determined within the sole discretion of the Employer), dies, ceases to be an Employee, incurs a Severance from Service Date, or loses his eligibility to participate under the following Section. Any Participant who ceases to be a Participant becomes a Former Participant. (d) Becoming an Employee through change in status. Should any individual who was a common-law employee of the Employer or an Affiliate but not an Employee under the terms of this Plan, subsequently become an Employee, then he shall be eligible to become a Participant as set out in Subsection 3.1(b). For the purposes of the preceding sentence only, his prior period of employment shall be credited as "Service," under the rules of Articles I and III. (e) Re-entry into the Plan. Similarly, a Former Participant who again becomes an Employee of the Employer shall be eligible to become a Participant, subject to the Rule of Parity provisions of Section 3.4, as of the first day of the month coincident with or next following the date he again becomes an eligible Employee under this Article. However, a Former Participant who is fully vested in his Plan benefit who again becomes an Employee of the Employer shall again become a Participant as of his new Employment Date. (f) Plan benefit of Former Participants. (1) With respect to any individual who becomes a Former Participant because of any provision of this Article, his Monthly Accrued Benefit, under the Plan up to the date he became a L-3 Communications Corporation Pension Plan 16 Former Participant, shall be suspended. This benefit shall not be increased through any further accruals while he continues as a Former Participant. 3.2 General Restrictions on Participation - --- ------------------------------------- Notwithstanding the provisions of Section 3.1: (a) Individuals may be Participants only during those periods that they are eligible Employees, under this Article and Article I. (b) Further, an eligible Employee will be able to actively participate in this Plan only during those periods during which he is (1) in service with the Employer (rather than with any Affiliate), and (2) the Plan is in effect. (c) Leased employees, as described in Code Section 414(n), are not eligible to be Participants. 3.3 How to Calculate Eligibility Service - --- ------------------------------------ (a) General Rule. Eligibility Service shall be credited only for the purpose of determining an Employee's eligibility to participate in the Plan, unless another use is specifically expressed in this Plan (such as determining a Participant's Normal Retirement Date.) As used in this Section, "Service" shall mean "Eligibility Service," and shall also reflect the definition set out in Article I, and the Rule of Parity set out in the next Section. (b) Fractional Periods. Subject to the Rule of Parity, stated in the next Section, fractional periods of a year of Service will be credited only if they include completed months. (c) Service. Service begins on the date of hire, or the first day of reemployment with the Employer or an Affiliate. Service includes periods of lay-off, vacation, or an Employer or Affiliate-approved leave of absence, provided that such periods of vacation, lay-off or leave do not exceed 12 consecutive months. (Should such periods of vacation, lay-off or leave occur simultaneously or consecutively, they shall be aggregated in determining the maximum period of 12 months of credited Service.) If a period of vacation, lay-off, and/or leave exceeds 12 continuous months, then the portion that is more than 12 months shall not be credited as Service. L-3 Communications Corporation Pension Plan 17 (d) Severance From Service. Service will not be credited on or after any Severance from Service Date. As of a Severance from Service Date, the Participant becomes a Former Participant. A Severance from Service Date is the date of any quit, retirement, death, or termination of employment, as determined within the sole discretion of the Employer or Affiliate. A Severance from Service Date also occurs if an Employee completes a Break in Service (described in the next paragraph). If an Employee has incurred two possible Severance from Service Dates, then the earlier date shall control. However, notwithstanding the preceding provisions, if an Employee quits, retires, or terminates, and returns to active employment within 12 months of his initial Severance from Service Date (without incurring a Break in Service), then his entire Period of Severance will be credited as Eligibility and Vesting Service, although not as Accrual Service. (e) Break in Service. A Break in Service occurs when a Period of Severance continues for twelve or more consecutive months, during which the individual does not perform an hour of Service. (f) Period of Severance. A Period of Severance is any continuous period, during which the individual has had a separation from active employment with the Employer or any Affiliate, on account of lay-off, Employer or Affiliate-approved leave, vacation, retirement, quit, discharge, any other reason, or any combination of the preceding reasons. A Period of Severance dates from the first date of absence. (g) Quit, Retirement, Death or Termination. If a quit, retirement, death, or termination occurs following an absence for any other reason (such as leave or lay-off), but before a Break in Service has occurred, then a Severance from Service Date will occur as of the quit, retirement, death or termination. However, in this situation, if the former Employee returns to active employment within twelve months of his initial date of absence, so that a Break in Service has not occurred, then his entire Period of Severance shall be credited as Eligibility and Vesting Service. However, a Period of Severance following a quit, retirement or termination, shall not be treated as Accrual Service. (h) Approved Leave. A special rule applies to an Employer or Affiliate-approved leave on account of maternity or paternity, meaning on account of pregnancy, the birth of a child, the placement of a child in connection with an adoption, or the caring for such a child immediately following the birth or placement. Any period of Employer or Affiliate-approved leave on account of maternity or paternity shall be credited as L-3 Communications Corporation Pension Plan 18 Service, through the first anniversary of the first date of such an absence. Any one-year period of such an Employer-approved leave that continues past the first anniversary, that is, the second year of any such leave, shall not be credited as Service, nor shall it count as any Period of Severance. A Break in Service on account of such leave therefore shall not occur until the end of the second year of such a leave. (i) Crediting Service. Subject to the Rule of Parity, no Service that preceded a Break in Service shall be credited until the Employee has completed 12 continuous months of Service, following the Break. 3.4 Rule of Parity - Disregarding Prior Service - --- ------------------------------------------- (a) Definition of Service. As used in this Section, "Service" shall mean Eligibility, Vesting and Accrual Service, and shall also reflect the definition set out in Article I. (b) General Rule. Should an Employee who is not fully vested in all his accrued Plan benefits incur a Break in Service, then the following rules will apply, once he resumes active service and again becomes an Employee. The Service earned before the Break in Service shall be disregarded, only if the number of his consecutive one-year Breaks in Service either equals or exceeds (1) five years or (2) his pre-Break Service, whichever is greater. (c) Lost Service. If a Former Participant or Employee has lost Service under the preceding paragraph, then such an individual will be treated as a newly hired Employee, fully subject to the requirements of this Article. 3.5 How to Calculate Accrual Service - --- -------------------------------- (a) Purpose of Accrual Service. Accrual Service shall be accounted only for the following purposes: (1) determining the amount of a Participant's Monthly Accrued Benefit under Section 5.3 (2) determining whether a Participant who is eligible for a Deferred Vested Termination Benefit may receive such a benefit before his Normal Retirement Date under Article VI. L-3 Communications Corporation Pension Plan 19 (b) Definition of Accrual Service. (1) Accrual Service includes only the portion of an individual's Eligibility Service performed while he was a Participant in this Plan or the Prior Plan. (2) Accrual Service shall not include any period during which the individual waived participation in the Prior Plan, prior to January 1, 1982. (3) Accrual Service shall also reflect the definition of "Service" in Article I. 3.6 How to Calculate Vesting Service - --- -------------------------------- (a) Purpose of Vesting Service. Vesting Service shall be accounted only for the purpose of determining whether a Participant is vested in his Plan benefit, under Article IV. (b) General Definition of Vesting Service. Except as set out in the next subsection, Vesting Service shall include all Eligibility Service accounted under this Plan. Vesting Service shall also reflect the definition of "Service" in Article I. (c) Exceptions. Notwithstanding the general rule of the preceding paragraph, Vesting Service shall be calculated as follows: (1) In the case of a Participant who was an Employee of Loral & Communication Ltd, his Vesting Service shall be measured from the later of his Employment Date or January 1, 1963. (2) In the case of a Participant who was an Employee of Lermer Packaging Corporation, his Vesting Service shall be measured from the later of his Employment Date or April 1, 1970. (3) In the case of a Participant who is not described in paragraphs (1) or (2), above, his Vesting Service shall be measured from the later of his Employment Date or the date the Plan or Prior Plan was adopted, or such earlier date as shall be determined by the Board on a uniform and non-discriminatory basis. L-3 Communications Corporation Pension Plan 20 ARTICLE IV. VESTING AND FORFEITURES 4.1 Vesting - --- ------- (a) Full vesting at Normal Retirement Date. Upon attainment of his Normal Retirement Date, (while in active Service) a Participant's rights in his Basic Benefit shall be non-forfeitable. (b) Full Vesting in Contributory Benefit. (1) A Contributing Participant's rights in his Contributory Benefit shall be non-forfeitable at all times, provided his employee contributions to the Prior Plan were not withdrawn under Section 7.1. (2) However, if the Contributing Participant's accrued benefit attributable to his employee contributions (as determined in Code Section 411(c)(2)) is less than his Contributory Benefit, then, his Contributory Benefit shall be reduced but not eliminated by any withdrawal under Section 7.1, under Plan procedures. (c) General Vesting Schedule (1) A Participant's nonforfeitable interest in his Basic Benefit is his Vested Percentage. A Participant's Vested Percentage is based on his completed years of Vesting Service, as of his Separation from Service Date. The general vesting schedule is: Completed Years of Vesting Service Vested Percentage ------------------- ----------------------- Less than 5 0% 5 or more 100% (2) For Employees who terminated employment prior to January 1, 1989, the gradual vesting schedule in effect under the Prior Plan at the date of their termination shall control. 4.2 Changes in Vesting Schedule - --- --------------------------- If the Individual Plan's vesting schedule is amended or if the Plan is L-3 Communications Corporation Pension Plan 21 determined to be top-heavy, then any Participant with (a) at least one hour of Service during the Plan Year for which the change is made and (b) three years of Service with the Employer may within 60 days after receiving written notice of such amendment (or such later date prescribed by regulations under Code Section 411), make a Proper Application to have his Vested Percentage computed under the Plan's prior vesting provisions. 4.3 Forfeitures - --- ----------- Forfeitures shall arise if any Participant whose Vested Percentage is not 100% incurs a Severance from Service Date. Such unvested accrued Plan benefits shall then be forfeited, and these Forfeitures shall be applied to reduce future Employer contributions and to pay Plan expenses. Forfeitures shall not be used to increase Plan benefits. 4.4 Restoring Forfeitures - --- --------------------- If a Participant's nonvested interest in his accrued Plan benefit is forfeited, and the-Participant subsequently resumes employment with the Employer or an Affiliate, then the forfeited amount shall be restored to him to the extent that his pre-Break Service is recognized, under Sections 3.3 and 3.4. L-3 Communications Corporation Pension Plan 22 ARTICLE V. AMOUNT OF RETIREMENT BENEFIT 5.1 General Rules for Calculating Amount of Plan Benefits - --- ----------------------------------------------------- (a) Only Service with Employer will be accounted for accrued benefit. Notwithstanding any other contrary provision of this Article or the Plan, only Accrual Service performed (1) with the Employer (rather than with any Affiliate), (2) while the Employee is actively participating in the Plan or the Prior Plan, and (3) while the Plan or the Prior Plan is in effect, will be credited for the purpose of determining a Participant's accrued benefit under the Plan. (b) Must be vested. A Participant shall be paid only those accrued Plan benefits in which he is vested. (c) This Article limited by Article X. The provisions of this Article shall be subject to the limitations of Article X. (d) All terms of this Article apply. Any Plan benefit calculation shall be subject to all the terms of this Article, and the Plan. 5.2 The Different Plan Benefits - --- --------------------------- A Participant's Monthly Accrued Benefit shall be paid as one of the following: (a) Normal Retirement Benefit. A Participant will be eligible to receive his Normal Retirement Benefit ff he retires under the Plan as of his Normal Retirement Date. (b) Late Retirement Benefit. A Participant will be eligible to receive his Late Retirement Benefit if he retires under the Plan as of his Late Retirement Date (and continues to accrue Accrual Service after his Normal Retirement Date). (c) Early Retirement Benefit. A Participant will be eligible to receive his Early Retirement Benefit if he retires under the Plan as of his Early Retirement Date. (d) Deferred Vested Termination Benefit. A Participant will be eligible to receive his Deferred Vested Termination Benefit if he terminates employment under the Plan as of his Deferred Vested Termination Date. L-3 Communications Corporation Pension Plan 23 5.3 Monthly Accrued Benefit - --- ----------------------- (a) Formula for Monthly Accrued Benefit. Subject to the provisions of this Article, the amount of a Participant's "Monthly Accrued Benefit" shall equal his Basic Benefit and, if he is a Contributing Participant, his Contributory Benefit. (b) Formula for Basic Benefit. The amount of a Participant's "Basic Benefit" under the Plan shall equal 1/12th of the sum of Subsections (c) and (d). (c) Basic Benefit with respect to Accrual Service after 1988. For each Plan Year (and completed months) of Accrual Service on and after January 1, 1989, the sum of (1) and (2). (1) If such year is prior to the year in which he completes 15 years of Eligibility Service, 1.20% of his Earnings not in excess of the Social Security Wage Base for such year, plus 1.45% of his Earnings for such year in excess of the Social Security Wage Base for such year. (2) If such year is the year in which he completes 15 years of Eligibility Service or any subsequent year, 1.50% of his Earnings for such year not in excess of the Social Security Wage Base for such year, plus 1.75% of his Earnings for such year in excess of the Social Security Wage Base for such year. (d) Basic Benefit with respect to Accrual Service before 1989. For Accrual Service prior to January 1, 1989, the greater of (1) the sum of (A) and (B), multiplied by (C), or (2). (1) (A) 0.8% of (C) or (D), whichever is applicable, not in excess of $16,800. (B) 1.2% of (C) or (D), whichever is applicable, in excess of $16,800. (C) His years (and completed months) of Accrual Service prior to January 1, 1989. (D) For a Participant who has completed at least five years of Accrual Service as of January 1, 1989, his average Earnings for the five Plan Years 1984 through 1988. L-3 Communications Corporation Pension Plan 24 (E) For a Participant who has not completed five years of Accrual Service as of January 1, 1989, his average Earnings for his entire period (years and completed months) of such Accrual Service. (2) The Basic Benefit under the Prior Plan as in effect immediately prior to January 1, 1989 calculated through December 31, 1988. (e) Formula for Contributory Benefit (1) A Contributing Participant's "Contributory Benefit" under the Plan shall equal the amount set forth in Exhibit B hereto, provided his contributions to the Prior Plan were not withdrawn. A Participant's Contributory Benefit is based on the Accumulated Contributions he had made under the Prior Plan. (2) However, if a Participant has withdrawn his Contributory Benefit under Section 7.1 and the amount of a Participant's accrued benefit attributable to his employee contributions (as determined by Code Section 411(c)(2)) is less than his Contributory Benefit, then his Contributory Benefit shall be reduced but not eliminated by the withdrawal, under Plan procedures. (f) Formula for Participants covered by Prior Plan. Notwithstanding the preceding provisions of this Section, for a Participant who was participating in the Prior Plan immediately prior to January 1, 1989, his Basic Benefit shall not be less than (1) his Basic Benefit under the Prior Plan as in effect immediately prior to January 1, 1989, calculated as of December 31, 1988 for any Participant who is a Highly-Compensated Employee, or (2) his Basic Benefit under the Prior Plan as in effect immediately prior to January, 1 1989 calculated as of December 31, 1989 or the date of his separation from service with the Prior Employer, if earlier, for any Participant who is not highly compensated. 5.4 Special Section 401(a)(17) Provision Regarding Plan Benefits - --- ------------------------------------------------------------ (a) Application. This Section shall apply only to those Participants whose current accrued Plan benefit as of or after January 1, 1994 is based on Earnings (1) incurred during at any time prior to January 1, 1994, (2) in excess of $150,000. L-3 Communications Corporation Pension Plan 25 (b) Calculation of accrued Plan benefit. Unless otherwise provided under the Plan, each such Participant's accrued Plan benefit shall be the greater of (1) or (2): (1) the Participant's accrued Plan benefit determined under the Plan, as amended effective on or after January 1, 1994, as applied with respect to his total Accrual Service performed as of such a date, or (2) The sum of: (A) the Participants's accrued Plan benefit as of December 31, 1993, frozen as provided in Code Regulation Section 1.401(a)(4)-13, and (B) the Participant's accrued Plan benefit determined under the Plan, as amended effective on or after January 1, 1994, as applied with respect to his Accrual Service performed on or after January 1, 1994. 5.5 Minimum Basic Benefit for Certain Participants - --- ---------------------------------------------- (a) 1978 Rule Participants. Paragraph (b) of this Section shall apply only to an Employee (i) who was a Participant on and immediately prior to January 1, 1978, and (ii) who (x) had reached his Normal Retirement Date prior to January 1, 1978 or (y) remained in the employment of the Employer until his Normal Retirement Date which occurs on or after January 1, 1978 ("1978 Rule Participant"). (b) Formula for 1978 Minimum Benefit. Notwithstanding the provisions of Section 5.2(b) or the applicable provisions of the Prior Plan as in effect immediately prior to January 1, 1978, a 1978 Rule Participant's Minimum Basic Benefit (or for a 1978 Rule Participant who had reached his Normal Retirement Date prior to January 1, 1978, his minimum Plan benefit attributable to Employer contributions) shall equal 1/12th of .75% of his Earnings for the Plan Year preceding his Late Retirement Date (or, if he was compensated for less than ten full months during such year, his Earnings for the last full prior calendar year during which he was compensated, if greater), multiplied by his years (and completed months) of Eligibility Service (not in excess of 20). (c) 1984 Rule Participants. Paragraph (d) of this Section shall apply only to an Employee (i) who is a Participant on and immediately prior to January 1, 1984, and (ii) who has not reached his Normal Retirement L-3 Communications Corporation Pension Plan 26 Date on January 1, 1984 and remains in the employment of the Employer until his Normal Retirement Date ("1984 Rule Participant.") (d) Formula for 1984 Minimum Benefit. Notwithstanding the provisions of Section 5.2(b) or the applicable provisions of the Prior Plan as in effect immediately prior to January 1, 1984, a 1984 Rule Participant's Minimum Basic Benefit shall equal 1/12th of 0.75% of his Earnings for the Plan Year 1983 (or, if he was compensated for less than ten full months during such year, his Earnings for the last full prior calendar year during which he was compensated, if greater), multiplied by his years (and completed months) of Eligibility Service on and after the first day of the month coincident with or next following the later of (i) his 25th birthday or (ii) the first anniversary of his Employment Date, and prior to January 1, 1984. (e) Formula for those who are subject to both 1978 and 1984 Rules. For an Employee who is both a 1978 Rule Participant and a 1984 Rule Participant, his Minimum Basic Benefit shall be the amount determined under paragraph (b) or paragraph (d) of this Section, whichever is greater. 5.6 Normal Retirement Benefit. - --- -------------------------- The amount of a Participant's Normal Retirement Benefit under the Plan shall equal his vested Monthly Accrued Benefit, payable at his Normal Retirement Date. 5.7 Late Retirement Benefit. - --- ------------------------ (a) General rule. A Participant's Late Retirement Benefit under the Plan shall generally equal his Monthly Accrued Benefit payable at his Late Retirement Date. (b) Special rule for those who reached age 65 before 1988. (1) This Subsection applies only to those Participants who reached age 65 before calendar year 1988. (2) The Late Retirement Benefit of such a Participant shall equal the greater of (i) his Monthly Accrued Benefit at his Late Retirement Date, or (ii) his Monthly Accrued Benefit at his Normal Retirement Date multiplied by his Late Commencement Factor as determined in accordance with the following Subsection (c). L-3 Communications Corporation Pension Plan 27 (3) Further, if the Minimum Basic Benefit rules of Section 5.4 are applicable to such a Participant, then clause (ii) of the preceding paragraph shall not apply to his Minimum Basic Benefit (or his minimum Plan benefit). (c) Late Commencement Factors defined (1) For the purpose of this Section, a Participant's "Late Commencement Factor" means for age 70 and under a factor determined in accordance with the schedule below based on his age at his Annuity Starting Date (with interpolations for actual age). Age Late Commencement Factor --- ------------------------ 66 1.10 67 1.20 68 1.30 69 1.40 70 1.50 (2) Over age 70, "Late Commencement Factor" means a factor equal to the Actuarial Equivalent. 5.8 Early Retirement Benefit - --- ------------------------ (a) Timing affects amount of benefit. (1) A Participant's Early Retirement Benefit will be affected by the exact date of his Annuity Starting Date. (2) Generally, the earlier that his Annuity Starting Date precedes his Normal Retirement Date, the lower a Participant's monthly Early Retirement Benefit payment will be. (b) Formula for Early Retirement Benefit. (1) A Participant's Early Retirement Benefit shall equal his Normal Retirement Benefit at his Early Retirement Date multiplied by his Early Commencement Factor, as defined in this Section. (2) The "Early Commencement Factor" is a factor equal to (A) minus (B). (A) and (B) shall mean: L-3 Communications Corporation Pension Plan 28 (A) 1. (B) 1/180 for each of the first 60 months plus 1/360 for each of the next 60 months by which his Annuity Starting Date precedes his Normal Retirement Date. (3) For the purposes of calculating the "Early Commencement Factor," partial months shall be considered to be whole months. 5.9 Deferred Vested Termination Benefit. - --- ------------------------------------ (a) If a Participant has any vested accrued benefit, and his Annuity Starting Date is on or after his Normal Retirement Date, the amount of his Deferred Vested Termination Benefit under the Plan shall equal his Monthly Accrued Benefit at his Deferred Vested Termination Date. (b) If a Participant's Vested Percentage is 0%, and his Annuity Starting Date is on or after his Normal Retirement Date, the amount of his Deferred Vested Termination Benefit under the Plan shall equal 100% of his Contributory Benefit at his Deferred Vested Termination Date, if any, or, if greater, his accrued benefit attributable to employee contributions (as determined in Code Section 411(c)(2)). (c) If a Participant's Annuity Starting Date is prior to his Normal Retirement Date, the amount of his Deferred Vested Termination Benefit shall equal the amount determined in paragraph (a) or (b) of this Section, whichever is applicable, multiplied by his Early Commencement Factor as determined in the preceding Section. (d) If any benefit under any welfare plan maintained by the Employer or Affiliate is dependent on "retirement" under this Plan, then the receipt of a Deferred Vested Termination Benefit shall not constitute "retirement." 5.10 Co-ordination with Prior Plan. - ---- ------------------------------ (a) The monthly amount of any Plan benefit being paid to a Former Participant or any joint annuitant or Beneficiary immediately prior to the Effective Date under the Prior Plan shall continue to be paid to such payee on and after the Effective Date in accordance with the applicable provisions of the Prior Plan. L-3 Communications Corporation Pension Plan 29 (b) The monthly amount of any Plan benefit which had not commenced as of the Effective Date for any terminated, Vested Former Participant whose employment with the Employer had terminated prior to the Effective Date, shall be determined under the Prior Plan as in effect on the date of his termination of employment. However, the provisions of Article VI of this Plan shall apply to the payment of such Plan benefits. Further, if the Annuity Starting Date is prior to his Normal Retirement Date, the amount of the payment shall be calculated using the Early Commencement Factor as determined in accordance with this Article of this Plan. 5.11 Effect of Deferred Payment - ---- -------------------------- If a Participant or Former Participant who was eligible to retire under this Plan has failed to make a Proper Application for his Plan Benefit, so that his benefit commencement date falls after the date he terminates employment, he shall receive, in a lump sum, an amount equal to all payments that would have been made (but were not made), due to the delay. Similarly, a retroactive, lump sum payment will be made if the amount of the Plan benefit cannot be immediately ascertained by the Committee or its delegates, or if the payee cannot be immediately located. However, there shall be no actuarial adjustment made, under this Section. 5.12 Effect of Reemployment After Receipt of Plan Benefits - ---- ----------------------------------------------------- (a) Reemployment. If a Former Participant who is receiving a Plan benefit becomes re-employed as an Employee of the Employer or an Affiliate, the payment of his Plan benefits shall immediately cease. (b) Suspension of Benefits. Generally, suspension of benefits under this Section shall occur only if the re-employed Employee shall be working a full-time schedule, as determined by the Employer under ERISA. (c) Offset for Error. Should such a suspension permitted under this Section not take place, through administrative error or any other reason, then the amounts which were paid but which were also suspendable may be offset from future Plan benefits. Offsets may also be taken against any survivor benefits, with respect to the Participant. (d) Proper Notice. No suspension of benefits under this Section may take place unless proper notice is sent to the individual during the calendar month of the suspension, under ERISA. (e) Recommendation of Benefits. Plan payments to the individual shall L-3 Communications Corporation Pension Plan 30 recommence, generally within four months after his period of reemployment has ended, provided he has made Proper Application (with 90 days advance notice) for their recommencement. (f) Amount of Benefit. Such an individual's ultimate Plan benefit shall be reduced by the Actuarial Equivalent of Plan benefits he has already received, but in no event shall his monthly benefit be reduced below the amount that he was receiving, before his reemployment and suspension of benefits. L-3 Communications Corporation Pension Plan 31 ARTICLE VI. PAYMENT OF RETIREMENT AND DEATH BENEFITS 6.1 How to Retire - --- ------------- (a) General rules. Except as provided in the next Section, no Plan benefit shall be paid unless Proper Application is made to the Committee. (b) Eligibility for Benefits. Each Participant or Beneficiary will be eligible to receive a Plan benefit only when: (1) the Participant is vested in an accrued Plan benefit, under Article IV, (2) the Participant has terminated his employment with the Employer and all Affiliates, under that employer's procedures, and (3) the payee has met all the requirements of this Article, particularly those described in the next paragraph. (c) Making "Proper Application" - required forms. (1) Retirement and death benefits will be paid only after "Proper Application" has been made. For all purposes under this Plan, the term "Proper Application" shall mean making any election, granting any consent, giving any notice or information, and making any communication whatsoever to the Committee or its delegates, in compliance with all Plan procedures, on forms provided by the Committee, and providing all information required by the Committee. A Proper Application will be deemed to have been made only if it is properly completed, as determined by the Committee. (d) Advance notice to Committee necessary. Generally, at least four months advance notice must be made to the Committee, in order to make a Proper Application to elect any particular Annuity Starting Date. 6.2 Timing of Participant's Benefits - --- -------------------------------- (a) General rules. Generally, a Participant's Plan benefit will be paid, under this Article, as soon as is feasible (but no less than 30 days) after the Retirement Date or Annuity Starting Date that he has elected, by making a Proper Application. L-3 Communications Corporation Pension Plan 32 (b) Consent to distribution. With respect to this Article, making a Proper Application for a Plan distribution shall be considered as giving written consent to such a distribution. (c) Payments made only on the first of the month. All benefits paid under the Plan will be paid only as of the first day of any relevant month. Any Retirement Date or Annuity Starting Date must therefore fall on the first day of a month. (d) Deferred Vested Termination Benefit rules. (1) Normally, the Annuity Starting Date for any Participant receiving a Deferred Vested Termination Benefit will be his Normal Retirement Date. (2) However, if a Participant who is eligible to receive a Deferred Vested Termination Benefit has also completed ten years of Accrual Service, then the Participant may make Proper Application (with 60 days advance notice) to elect an Annuity Starting Date with respect to his Deferred Vested Termination Benefit that is: (A) before his Normal Retirement Date, and (B) after his 55th birthday. (e) Final monthly payment. The final monthly payment of any Plan annuity payment shall be made with respect to the month within which the death of the Participant or his Beneficiary (whichever is applicable) occurs. (f) Deferred payments. Any failure to make Proper Application (as determined within the sole discretion of the Committee), shall be deemed to be a Proper Application to defer payment, provided that deferred payment is permitted under this Section. (g) Required payment date of small amounts. If the lump sum Actuarial Equivalent of a Participant's vested Plan benefit equals or is less than $5,000 (or any other figure set by the Code), then a lump sum payment of such an amount shall be made as soon as is feasible on or after his death or termination of employment with the Employer and all Affiliates, subject to this Article. Such a payment shall not be deferred; L-3 Communications Corporation Pension Plan 33 and payment shall be made even if the Participant or Beneficiary fails to make any Proper Application for payment. (h) General rules for required payment dates. Unless the Participant elects to defer his benefit payment, Plan benefits will be paid under this Article no later than the 60th day after the close of the plan year in which the latest of the following events occurs: (1) the Participant's Normal Retirement Date (2) the 10th anniversary of the year in which the Participant commenced participation in the plan (3) the Participant terminates service with the Employer. (i) Payments following age 70 1/2. Notwithstanding any contrary provision of this Plan, payments to each Participant must begin no later than the April 1st of the calendar year following the calendar year in which he attains age 70 1/2 or separates from service, unless otherwise required by law. With respect to any required minimum distribution prescribed by Code Section 401(a)(9), there shall be no annual recalculation of life expectancies. (j) Payments on Account of Participant's Death (1) Distribution begun before death. If the distribution of a Participant's benefit has commenced under this Article prior to his death, then the payment of any remaining portion that is payable under this Article shall be paid to the Beneficiary as soon as is practicable. The schedule of such payments shall be at least as rapid as the schedule used at the Participant's death. In this event, there shall be no permitted deferral of payment. (2) Distribution paid after death to non-spouse Beneficiary. If the Participant dies before distribution under this Article has begun, then the payment under this Article to any non-spouse Beneficiary shall be made: (A) As soon as is feasible, but no later than five calendar years following the date of death, if the Beneficiary is not the surviving, legally married spouse of the Participant, and the benefit is to be paid in any form except payments over the life or life expectancy of the Beneficiary. L-3 Communications Corporation Pension Plan 34 (B) As soon as is feasible, if the benefit is to be paid over the life or life expectancy of a non-spouse Beneficiary, but no later than by December 31 of the calendar year immediately following the calendar year in which the Participant died. (3) Distribution paid to Eligible Spouse (A) Distributions to an Eligible Spouse under a QJSA shall be paid as soon as is feasible. (B) Distributions paid to an Eligible Spouse under a QPSA shall be paid as provided in Section 6.8. 6.3 Normal Form of Benefits - --- ----------------------- (a) Normal form for married Participant. The normal form of retirement benefit for any married Participant who has an Eligible Spouse on his Annuity Starting Date shall be a Qualified Joint and Survivor Annuity, or a "QJSA." (b) Normal form for unmarried Participant. The normal form of benefit for any Participant who does not have an Eligible Spouse as of his Annuity Starting Date shall be a single life annuity paid for his life. 6.4 Notice and Election Period - --- -------------------------- (a) Notice concerning benefits. The Committee shall distribute to each Participant at least 90 days before his Annuity Starting Date a written explanation of: (1) the QJSA; (2) how the Participant may waive the QJSA; (3) the effect of the Participant's waiver of the QJSA; (4) the need for the Participant's Eligible Spouse to consent to such a waiver, before the waiver can be effective, and (5) the Participant's and the spouse's right to revoke their waiver or consent (respectively), during the Election Period (which is described in the next paragraph). L-3 Communications Corporation Pension Plan 35 (b) Election Period. For the purposes of this Article, the Election Period shall be the 90 calendar day period preceding any Participant's Annuity Starting Date. The last business day preceding the Annuity Starting Date is the last day of the Election Period. 6.5 Waiver and Spousal Consent Necessary for Optional Forms of Benefit - --- ------------------------------------------------------------------ (a) General rules. A married Participant may elect an optional form of benefit, in lieu of the normal form of benefit, only if he and his spouse meet all the requirements of this Section. (b) Waiver. (1) After receiving the notice explaining the normal form of benefit, described in the preceding Section, the married Participant must waive his right to the normal form of benefit, by making a Proper Application concerning his waiver. (2) The waiver shall specify the optional benefit, and, if applicable, the designated nonspouse Beneficiary (or any single or class of contingent Beneficiaries). (c) Spousal consent. (1) After the Participant's receipt of notice explaining the normal form of benefit, described in the preceding Section, the Participant's Eligible Spouse must give written consent to the Participant's waiver of the normal form of benefit, in order for the waiver to be effective. (The Committee's delivery of the explanatory notice to the Participant shall be deemed to also be delivery to the Eligible Spouse.) The Eligible Spouse's written consent shall be made by Proper Application and shall: (A) express the effect of waiving the normal form of benefit; (B) be notarized; (C) consent to the optional form of benefit being selected; (D) consent to a designated Beneficiary other than herself, if applicable, and L-3 Communications Corporation Pension Plan 36 (E) state whether or not the consent is revocable. However, if the consent form is silent as to this issue, then it shall be considered to be revocable, under the terms of this Section. (2) If the Participant has designated a Beneficiary other than his spouse, then such a designation shall not be effective unless the spouse gives written consent to the Beneficiary designation, by making Proper Application. This consent must state that the Beneficiary cannot be changed further without further spousal consent, unless the written consent form explicitly states that no such further consent with respect to another change in designated Beneficiary is necessary. (3) Any waiver of a QJSA or any spousal consent described in this Section shall be binding only upon the individual spouse who gives the consent. It shall not be binding upon any subsequent spouse of the Participant. (d) Deadline for waiver and spousal consent. To be effective, the Participant's waiver of his normal form of benefit and his Eligible Spouse's written consent must be made by Proper Application during the 90 day Election Period. (e) Revocation of waiver and spousal consent. Both the Participant's waiver of the QJSA and his Eligible Spouse's consent to the waiver may be revoked within the Election Period, by making Proper Application. Any such revocation will cause the normal form of benefit to be paid to the Participant, unless another waiver and consent is made by Proper Application, within the Election Period. Notwithstanding the previous provisions of this paragraph, a revocation of the Eligible Spousal consent shall not be permitted if the forms on which the consent were made explicitly disallow such a spousal revocation. 6.6 Optional Forms of Benefit - --- ------------------------- (a) Procedural rules. A Participant may elect an optional form of benefit, rather than the normal form described in Section 6.3, if he meets the requirements of the preceding Section, and makes a Proper Application. (b) Value of optional forms. Each optional form of benefit described in this Section shall equal the Actuarial Equivalent of the normal form of benefit that would be paid with respect to the Participant as of his L-3 Communications Corporation Pension Plan 37 Normal Retirement Date. (c) Optional forms available. The optional forms of benefit offered under the Plan are: (1) Single life annuity. (2) Joint and survivor annuity, with any person designated by the Participant as his joint annuitant (and Beneficiary) and with the survivor annuity equal to a percentage, not less than 50% and not in excess of 100%, designated by the Participant, of the annuity payable for the life of Participant. (3) Single life annuity with a period certain guarantee of 10, 15, or 20 years or, if less, the joint life and last survivor life expectancy of the Participant and his Beneficiary at his Annuity Starting Date. Upon the death of the Participant prior to the expiration of the period certain, monthly payments shall continue to the Beneficiary if the Beneficiary survives the Participant or, if the Beneficiary has predeceased the Participant or if no proper contingent Beneficiary designation is in effect at the Participant's death, the Actuarial Equivalent of the remaining payments shall be paid to the Participant's next Beneficiary in a lump sum. Upon the death of the Participant after expiration of the period certain, no further payments shall be made under this option. Upon the death of the properly designated Beneficiary who survived the Participant prior to expiration of the period certain, the Actuarial Equivalent of the remaining payments shall be paid to the Beneficiary's Beneficiary in a lump sum. (4) For a Participant whose Annuity Starting Date is prior to the earliest date Social Security old-age benefits are payable, a level-income single life annuity taking into account the estimated amount of Social Security old-age benefits payable commencing at such date. (d) Restrictions as to optional forms. (1) Notwithstanding the foregoing, no optional form of payment shall provide only for a survivor benefit to the Participant's Beneficiary after his death. (2) Under any optional form of payment, the present value of the L-3 Communications Corporation Pension Plan 38 payments to be made to the Participant while living must exceed 50% of the present value of the total payments to be made to the Participant and any joint annuitant, Beneficiary or other survivor (other than his Eligible Spouse). (3) Any optional form of payment shall provide for payment (i) over the life of the Participant, (ii) over the lives of the Participant and his Beneficiary, (iii) over a period not exceeding the life expectancy of the Participant, or (iv) over a period not exceeding the life expectancies of the Participant and his Beneficiary. 6.7 Suspending Plan Payments Upon Reemployment. - ----------------------------------------------- Plan payment under this Article will be suspended, if the Former Participant becomes re-employed; as set out in Section 5.11. 6.8 Qualified Pre-Retirement Survivor Annuity - --- ----------------------------------------- (a) Eligibility for QPSA. A Qualified Pre-Retirement Survivor Annuity, or "QPSA," will be paid only in the event that a Participant dies: (1) with a surviving Eligible Spouse, as of his date of death, and (2) one of the following: (A) while in active employment with the Employer, or (B) after his termination of employment with the Employer, but before his Annuity Starting Date. (b) QPSA is paid to Eligible Spouse. The QPSA shall be paid, under this Section, to the Eligible Spouse of a Participant who meets the requirements of the preceding Subsection. (c) Amount of QPSA. (1) A QPSA shall be paid only with respect to the Participant's vested, accrued Plan benefits. The precise amount of QPSA is determined by referring to the 50% survivor benefit that would have been payable, with respect to the Participant's death, had he elected a 50% QJSA and had he died at the dates described in this Subsection. Different dates apply, according to the Participant's age and service history at the time of his death. L-3 Communications Corporation Pension Plan 39 (2) If an eligible Participant dies after his Normal Retirement Date, then the QPSA shall equal the 50% QJSA survivor benefit that would have been payable had he retired with a 50% QJSA on the day before his actual date of death, so that his QJSA Annuity Starting Date would have been the date before his actual date of death (or the first day of the next month). (3) If a Participant dies (i) with 10 years of Accrual Service, and (ii) before his Normal Retirement Date, but (iii) after his 55th birthday, then the QPSA shall, as in the preceding paragraph, equal the 50% QJSA survivor benefit that would have been payable had he retired with a 50% QJSA on the date before his actual date of death, so that his QJSA Annuity Starting Date would have been the date before his actual date of death (or the first day of the next month). (4) If a Participant dies (i) before his Normal Retirement Date, and (ii) before completing 10 years of Accrual Service, then the amount of the QPSA shall equal the 50% QJSA survivor benefit that would have been payable had he (a) survived, (b) terminated employment as of either his actual termination date, or his actual date of death (whichever came first), (c) elected his Normal Retirement Date as his Annuity Starting Date, and (d) died the next day. (5) If a Participant dies (i) before his 55th birthday, and (ii) after completing 10 years of Accrual Service, then the amount of the QPSA shall equal the 50% QJSA survivor benefit that would have been payable had he (a) survived, (b) terminated employment as of either his actual termination date, or his actual date of death (whichever came first), (c) elected the first day of the month coincident with or next following his 55th birthday as his Annuity Starting Date, and (d) died the next day. (6) With respect to the four preceding paragraphs, in the event that the Participant dies after his active employment has ended, the four preceding paragraphs shall not be construed to credit the Participant with any Accrual Service or accruals that he had not earned, as of his termination of employment. (d) Special rule for amount of QPSA if optional benefit has been elected. If a QPSA is payable with respect to a Participant who had made a Proper Application for an optional form of benefit which would have provided annuity payments to the Participant and his Eligible Spouse, then, L-3 Communications Corporation Pension Plan 40 notwithstanding any other provisions of this Section, the amount of the QPSA shall equal the Actuarial Equivalent of the survivor benefit under the elected optional form of benefit. (e) Form of the QPSA. The QPSA shall be paid in monthly installments, over the life of the surviving Eligible Spouse. (f) QPSA is subsidized. Participants are not charged, under this Plan, for their right to a QPSA. (g) Commencement of QPSA payments. QPSA payments shall generally be made as soon as is feasible following the Eligible Spouse's Proper Application. Eligible Spouses may not defer payment later than the first day of the month coincident with or following: (1) the Participant's 55th birthday - with respect to a Participant who had earned 10 years of Accrual Service and died before age 55 (2) the date of death - with respect to Participant's who had earned 10 years of Accrual Service and died after age 55 (3) The Participant's Normal Retirement Date - with respect to Participant's who died with less than 10 years of Accrual Service. 6.9 Form of Benefit Fixed as of Annuity Starting Date - --- ------------------------------------------------- (a) General Rule. The form of any Plan benefit is fixed as of the Annuity Starting Date, and is not subject to change, except with respect to the provision of any survivor benefit under a QJSA or optional form of benefit. (b) QDRO Exception. Should a QDRO become effective after a Participant's Annuity Starting Date, the Plan payments may be divided, as provided for under the QDRO, but the total monthly payment that had been made monthly under Plan (before the QDRO) shall not be changed. L-3 Communications Corporation Pension Plan 41 ARTICLE VII. IN-SERVICE WITHDRAWAL AND RETURN OF CONTRIBUTIONS 7.1 In-Service Withdrawal of Pre-1970 Employee Contributions - --- -------------------------------------------------------- (a) Withdrawal of Accumulated Contributions Benefit. A Contributing Participant may at any time prior to his Annuity Starting Date, by making Proper Application at least 30 days in advance, withdraw all of his Accumulated Contributions Benefit. (b) No Partial Withdrawal. Such a withdrawal must be made of all of the Participant's Contributory Benefit; no partial withdrawal shall be permitted. (c) Spouse' Consent Required. However, if the amount of a Participant's Contributory Benefit exceeds $5,000, then a married Participant may make such a withdrawal only if his spouse gives her written, notarized consent, under Committee procedures. L-3 Communications Corporation Pension Plan 42 ARTICLE VIII. THE TRUST, FUNDING AND CONTRIBUTIONS 8.1 Contributions to the Trust Fund - --- ------------------------------- (a) General Rule. The Employer shall make contributions under this Plan to the Trust Fund at least once each quarter during each Plan Year. Notwithstanding the preceding sentence, the Committee may direct that Contributions be made on a different schedule, as permitted by the Code, without formal Plan amendment. (b) Amount of Contributions. The amount of such contributions shall be the amount recommended by the Plan's enrolled actuary, in compliance with the Code and ERISA, to fund Plan benefits. (c) No Contributions By Employees. Contributions by Employees shall not be permitted. (d) Determination of Necessary Contributions. An enrolled actuary hired by the Committee shall make an annual actuarial valuation to estimate the Employer contributions necessary under this Article. 8.2 The Trust - --- --------- (a) Trust Agreement. Amounts contributed to the Trust shall be managed and invested, according to the Trust Agreement. (b) Funding Policy. The Company shall, to the extent allowed under the Trust, establish a funding policy and method, consistent with the objectives of the Plan the applicable requirements of ERISA and the Code. L-3 Communications Corporation Pension Plan 43 ARTICLE IX. AMENDMENT AND TERMINATION 9.1 Power to Amend Plan - --- ------------------- (a) General Rule. The Company, by action of the Board, may, subject to this Section, at any time modify or amend, in whole or in part, any or all of the provisions of the Plan. Any such amendment shall be by an instrument in writing executed by the Board, under its by-laws. Upon the execution of any such instrument, the Plan shall be deemed to have been amended in the manner therein set forth. (b) Parties Bound. The Employer, the Trustee and each Employee, Participant, Former Participant, Eligible Spouse, Beneficiary or any person claiming under or through any of the foregoing shall be bound by any such amendment. However, no such amendment shall make it possible for any of the assets of the Trust Fund to be used for or diverted to purposes other than for the exclusive benefit of Participants and their beneficiaries, increase the duties or responsibilities of the Trustee without its consent thereto, or adversely affect any benefits accrued by any Participant prior to such amendment, except as provided in Article XI. 9.2 Power to Terminate Plan - --- ----------------------- Although the Company intends to maintain the Plan indefinitely, the Company, by action of the Board, may terminate the Plan. 9.3 Allocation of Assets Upon Termination - ----------------------------------------- (a) General rule. In the event of termination of the Plan, the Plan Administrator shall, subject to the approval of the Committee, allocate the assets of the Trust Fund that are available among the applicable Participants, Former Participants, and appropriate Beneficiaries in the manner set forth in Section 4044 of ERISA. (b) Full vesting upon termination or partial termination. Upon termination or partial termination of the Plan as to any Participants hereunder, all rights of such Participants to their accrued Plan benefits theretofore accrued shall become non-forfeitable to the extent then funded. L-3 Communications Corporation Pension Plan 44 9.4 Reversion of Assets Upon Termination - --- ------------------------------------ Any Trust Fund assets which remain by reason of actuarial error after all liabilities of the Plan to applicable Participants, Former Participants, and other persons have been satisfied and all expenses of terminating the Plan as to any such persons and liquidating the Trust Fund assets have been paid, shall upon direction of the Committee be paid to the Company, provided such payment does not contravene any applicable provisions of law. L-3 Communications Corporation Pension Plan 45 ARTICLE X. LIMITATION OF BENEFITS 10.1 Construction - ---- ------------ The purpose of this Article is to comply with the provisions of section 415 of the Code, and all terms and provisions of this Article shall be interpreted and construed consistently with said provisions. The provisions of this Article shall apply notwithstanding any contrary provision of the Plan. 10.2 Definitions - ---- ----------- Solely for the purposes of this Article: Annual Addition. "Annual Addition" means the sum for any Limitation Year of (a) employer contributions to a plan (or portion thereof) subject to section 415(c) of the Code maintained by the Employer or an Affiliate, (b) forfeitures under all such plans (or portions thereof), if any, credited to employee accounts, (c) employee contributions under all such plans (or portions thereof), and (d) amounts described in section 419A(d)(2) of the Code (relating to post-retirement medical benefits of Key Employees (as defined in the Article entitled "Top Heavy Provisions.")) or allocated to a pension plan individual medical account described in section 415(l) of the Code to the extent includable for purposes of section 415(c)(2) of the Code. The employee contributions described in clause (c) shall be determined without regard to (i) any rollover contributions, (ii) any repayments of loans, or (iii) any prior distributions repaid to a plan upon the exercise of buyback rights. Employer and employee contributions taken into account as Annual Additions shall include "excess contributions" as defined in section 401(k)(8)(B) of the Code, "excess aggregate contributions" as defined in section 401(m)(6)(B) of the Code and "excess deferrals" as described in section 402(g) of the Code (to the extent such deferrals are not distributed to the Participant before the April 15th following the end of the taxable year of the Participant in which such deferrals were made), regardless of whether such amounts are distributed or forfeited. The Annual Additions for any year beginning before January 1, 1987 shall be determined under the law as in effect for such year and shall not be recomputed to treat all employee contributions as Annual Additions. Compensation Limit. "Compensation Limit" means 100% of the Participant's average annual Earnings for the three consecutive years in which his Earnings were highest. Dollar Limit. "Dollar Limit" means, subject to the Section of this Article entitled "Protection of Current Accrued Benefit," $90,000 as adjusted from time to time (beginning in 1988) to reflect increases in the cost of living pursuant to applicable L-3 Communications Corporation Pension Plan 46 regulations. The adjustment required pursuant to the preceding sentence for any year shall be the cost of living adjustment which is effective as of the January 1 which occurs in such year. No such adjustment shall be taken into account before the year for which such adjustment first takes effect. Earnings. "Earnings" for any year shall have the meaning set forth in Treas. Reg. ss. 1.415-2(d)(11)(i). 10.3 Limitation on Annual Benefits - ---- ----------------------------- (a) Unadjusted Limit. If a Participant's Plan benefit is payable as a single life annuity or a QJSA, the annual amount of benefit payable to the Participant shall not exceed the lesser of the Dollar Limit or the Compensation Limit. (b) Optional Payment Forms. If a Participant's Plan benefit is payable in any form other than a single life annuity or a QJSA, the annual amount of benefit payable to the Participant shall not exceed the Actuarial Equivalent of a single life annuity which does not exceed the lesser of the Dollar Limit or the Compensation Limit. In making such actuarial adjustment, (a) the actuarial assumptions used shall be those set forth in the Plan, as appropriate according to the form and date of payment, provided that the interest assumption used shall generally not be less than 5%, and (b) no adjustment shall be made for any ancillary benefit provided under the Plan (if applicable) which is not directly related to retirement benefits, including, without limitation, disability benefits, medical benefits, and pre-retirement death benefits, and any death benefit coverage described in the Plan. (c) Multi-employer Plans. Any benefits provided under any multi-employer plan to which the Employer or any Affiliate is a party shall be taken into account under this Article only to the extent that the benefits provided under such plan exceed the benefits that would have been provided under such plan if the Participant had no service with the Employer or any Affiliate. 10.4 Adjustments for Early or Late Payment - ---- ------------------------------------- (a) Payments Starting Before Social Security Retirement Age But After Age 62. If a Participant's Plan benefit begins before his Social Security Retirement Age but on or after the date he attains age 62, the Dollar Limit shall be reduced: (1) if the Participant's Social Security Retirement Age is 65, by 5/9th of 1% for each month by which the L-3 Communications Corporation Pension Plan 47 commencement of payment of his Plan benefit precedes the month in which he attains age 65; or (2) if the Participant's Social Security Retirement Age is 66 or 67, by 5/9th of 1% for each of the first 36 months and 5/12th of 1% for each additional month by which the commencement of payment of his Plan benefit precedes the month in which he attains his Social Security Retirement Age. (b) Payments Starting Before Age 62. If a Participant's Plan benefit begins before age 62, the Dollar Limit shall be reduced in accordance with applicable regulations (using the actuarial assumptions set forth in the Actuarial Equivalent, this Plan, provided that the interest assumption used shall be not less than 5%), so that it is equivalent to the Dollar Limit as applied to a pension beginning at age 62. (c) Payments Starting After Social Security Retirement Age. If a Participant's Plan benefit begins after his Social Security Retirement Age, the Dollar Limit shall be increased in accordance with applicable regulations (using the actuarial assumptions set forth in the Actuarial Equivalent, provided that the interest assumption shall not exceed 5%) so that it is actuarially equivalent to the Dollar Limit as applied to a pension beginning at his Social Security Retirement Age. 10.5 Conditional Exemption for Pensions Under $10,000 - ---- ------------------------------------------------ The Compensation Limit shall not be applicable to any Plan benefit with respect to a Participant for any year if (a) the annual amount of employer-provided retirement benefits payable with respect to such Participant under this Plan and all other defined benefit plans of the Employer and all Affiliates does not exceed $10,000 for such year or any prior year, and (b) such Participant never participated in any defined contribution plan maintained by the Employer or an Affiliate. 10.6 Participants with Fewer Than Ten Years of Service - ---- ------------------------------------------------- If a Participant has fewer than 10 years of Service in the aggregate with the Employer and all Affiliates at the time his Plan benefit starts, the Compensation Limit and the $10,000 limit described in the Section of this Article entitled "Conditional Exemption for Pensions under $10,000" shall be adjusted by multiplying such amounts by a fraction (a) the numerator of which is the Participant's number of years of Service (and fraction thereof) and (b) the denominator of which is 10. In no event shall such fraction be less than 1/10th. 10.7 Participants with Fewer Than Ten Years of Participation - ---- ------------------------------------------------------- L-3 Communications Corporation Pension Plan 48 If a Participant has been credited with fewer than 10 "Years of Participation," the Dollar Limit shall be adjusted by multiplying such amount by a fraction (a) the numerator of which is the Participant's number of Years of Participation in the Plan (and fraction thereof) and (b) the denominator of which is 10. In no event shall such fraction be less than 1/10th. "Years of Participation" means years of Service for which the Participant is credited with future Service benefits excluding any such year of Service credited (a) for a Plan Year prior to the Plan Year in which the individual first became a Participant, (b) for any period of disability during which the Participant was not permanently and totally disabled (within the meaning of section 22(e)(3) of the Code), and (c) for any period prior to the Effective Date. 10.8 Benefits Payable under More Than One Defined Benefit Plan - ---- --------------------------------------------------------- If benefits that are subject to the limitations of section 415 of the Code are payable under any other defined benefit plan maintained by the Employer or an Affiliate, the benefits payable under this Plan, as limited by this Article, shall be subject to further limitation in order that the amount of employer-provided benefits payable under all defined benefit plans maintained by the Employer and all Affiliates shall not, in the aggregate, exceed the benefit limitations described in this Article. If a reduction in the benefits under such defined benefit plans in the aggregate is thus required, such reduction shall be applied in the reverse order in which benefits under,such plans would otherwise accrue except as any such other plan may otherwise expressly provide, provided that benefits under any multi-employer plan shall be reduced last. 10.9 Participation in Defined Contribution Plan - ---- ------------------------------------------ (a) Combined Limitation. Subject to the later paragraph of this Subsection, entitled "Adjustment of Defined Contribution Plan Fraction," if a Participant participates (or participated) in one or more defined contribution plans maintained by the Employer or an Affiliate (including any plan so considered as a result of any employee contributions to a defined benefit plan) the sum of his Defined Contribution Plan Fraction and Defined Benefit Plan Fraction as of the close of any year shall in no event exceed 1.0. In order to prevent such sum from exceeding 1.0, benefits under this Plan shall be reduced to the extent necessary for that purpose. Such reduction shall be made prior to any reduction of allocations of Annual Additions under such defined contribution plans which would otherwise be made in order to prevent such sum from exceeding 1.0. (b) Defined Contribution Plan Fraction Determination. For purposes of this Section, a Participant's "Defined Contribution Plan Fraction" shall L-3 Communications Corporation Pension Plan 49 be determined as follows: (1) Numerator. For any year, the numerator shall be the sum of the Annual Additions to the Participant's accounts under all such defined contribution plans maintained by the Employer or an Affiliate in such year and in all prior years. (2) Denominator. For any year, the denominator shall be the sum of the lesser of the following amounts, determined for such year and for each prior year of service with the Employer and all Affiliates as if the Participant were covered by a defined contribution plan maintained by the Employer or Affiliates for all such years, but were not covered by any defined benefit plan for any such year: (A) 125% of the maximum dollar limitation applicable to defined contribution plan allocations for such year (as provided in section 415(c)(1)(A) of the Code determined without regard to section 415(c)(6)), or (B) 35% of the Participant's Earnings for such year. (c) Notwithstanding the foregoing, in computing the denominator of the Defined Contribution Plan Fraction for any year ending after 1982, the Committee may elect to determine the portion of such denominator which relates to 1982 and prior years under the method described in section 415(e)(6) of the Code, in lieu of the method described above. Such election may be made at such time and in such manner as may be provided in applicable Treasury regulations. (d) Defined Benefit Plan Fraction Determination. For purposes of this Section, a Participant's "Defined Benefit Plan Fraction" shall be determined as follows for any year: (1) Numerator. The numerator shall be the total projected annual benefit (as defined in section 415(b)(2) of the Code) of the Participant under all defined benefit plans maintained by the Employer or any Affiliate as of the close of such year, as determined for each such plan for purposes of section 415(e)(2)(A) of the Code, disregarding benefits derived from employee contributions. (2) Denominator. The denominator shall be the lesser of the following amounts: L-3 Communications Corporation Pension Plan 50 (i) 125% of the Dollar Limit, deter mined after giving effect to the Section of this Article entitled "Protection of Current Accrued Benefit", or (ii) 140% of the Compensation Limit. For purposes of computing the denominator of the Defined Benefit Plan Fraction, (A) the Dollar Limit and the Compensation Limit shall be determined as if years of Service for purposes of the Section of this Article entitled "Participants with Fewer than Ten Years of Service" included future years before the Participant will attain age 65, provided that the year in which the Participant will attain age 65 shall not count as a future year unless it can be reasonably anticipated that the Participant will receive a year of Service for such year and (b) the Dollar Limit shall be determined as if all years of Service (determined after application of clause (A) above) were Years of Participation (and fractions thereof) solely for purposes of the Section of this Article entitled "Participants with Fewer than Ten Years of Participation." (e) Adjustment of Defined Contribution Plan Fraction. If the sum of a Participant's Defined Benefit Plan Fraction and Defined Contribution Plan Fraction determined as of December 31, 1986 would have exceeded 1.0 had the provisions of this Article as in effect after December 31, 1986 been used to compute such sum, an amount shall be subtracted from the numerator of the Defined Contribution Plan Fraction (not exceeding such numerator) so that the sum of the Defined Contribution Plan Fraction and Defined Benefit Plan Fraction as of the first day of the Limitation Year beginning in 1987 does not exceed 1.0. Such amount shall be equal to the product of: (1) the sum of the Defined Contribution Plan Fraction plus the Defined Benefit Plan Fraction as of the determination date minus one, times (2) the denominator of the Defined Contribution Plan Fraction as of the determination date. 10.10 Limitation Year - ----- --------------- All determinations under this Article shall be made by reference to the Limitation Year, which shall be the Plan Year. L-3 Communications Corporation Pension Plan 51 10.11 Protection of Current Accrued Benefit - ----- ------------------------------------- If a Participant's Plan benefit, determined as if the Participant had terminated employment as of the close of 1986 and expressed in the form of a Qualified Joint and Surviving Spouse Annuity or a single life annuity, as of January 1, 1987 exceeds the limitations of this Article, then the Dollar Limit with respect to such Participant shall be equal to his Plan benefit determined as described in this Section. The Dollar Limit as so determined shall include optional benefit forms and early retirement benefits or retirement subsidies that are protected under section 411(d)(6) of the Code, whether or not the Participant has met all the requirements to qualify for such forms or benefits or subsidies, if and to the extent that they remain so protected as of the date on which the limitations of this Article are applied. 10.12 Rules Regarding 25 Top-Paid Employees - ----- ------------------------------------- (a) For purposes of this Section, the following terms shall have the indicated meaning: Benefits. The term "Benefits" means the sum of the Participant's accrued benefit and all other benefits to which he is entitled under the Plan. Restricted Participant. The term "Restricted Participant" means, with respect to a Plan Year, a Highly Compensated Employee who is a Participant and who, if there are more than 25 Highly Compensated Employees, is one of the 25 Highly Compensated Employees with the highest Total Annual Pay. An individual who is a Restricted Participant in a Plan Year shall be a Restricted Participant in a subsequent Plan Year only if he satisfies the conditions of the previous sentence in that subsequent Plan Year. If more than one individual has the same Total Annual Pay, the younger individual shall be deemed to have the higher Total Annual Pay. Total Annual Pay. The term "Total Annual Pay" means, with respect to any Plan Year, (a) in the case of a Highly Compensated Employee who is not currently employed by the Employer or an Affiliate, the greater of his Earnings (as defined in this Article) for the Plan Year he ceased to be employed by the Employer or an Affiliate or his Earnings for the Plan Year immediately preceding such Plan Year and (b) in the case of a Highly Compensated Employee who is currently employed by the Employer or an Affiliate, the greater of his Earnings for the Plan Year in question or for the prior Plan Year. L-3 Communications Corporation Pension Plan 52 (b) Limitation on Distributions. Subject to the further provisions of this Section, a Restricted Participant may not receive his benefits under this Plan in the form of a single sum payment, or other benefit form under which payments during a single year would exceed the annual payments that would be made on behalf of the Participant under a single life annuity that is the Actuarial Equivalent of his Benefits (other than benefits described in paragraph (c)(1) of this Section. (c) Application of Limitation. The limitation of this Section shall not apply to: (1) payment of benefits attributable to transferred balances from defined contribution plans or to employee contributions, (2) any payment, if the value of Plan assets after such payment equals or exceeds 110 percent of the value of the Plan's "current liabilities" (within the meaning of section 412(l)(7) of the Code), or (3) any payment, if the value of the Restricted Participant's benefits is less than one percent of the value of such "current liabilities." (d) Changes in Law. In the event that Congress should provide by statute, or the Internal Revenue Service should provide by regulation or ruling, that the limitations set forth in this section are no longer necessary for the Plan to meet the requirements of section 401(a) of the Code or other applicable provisions of the Code then in effect, such limitations shall become void and shall no longer apply without the necessity of further amendment to the Plan. L-3 Communications Corporation Pension Plan 53 ARTICLE XI. GENERAL PROVISIONS 11.1 No Contract of Employment - ---- ------------------------- Nothing contained in the Plan shall be construed as a contract of employment between the Company, the Employer and any Employee, and the Plan shall not afford an Employee a right of continued employment with the Company or the Employer. 11.2 Employer Not Liable for Plan Benefits - ---- ------------------------------------- All benefits payable under the Plan shall be paid or provided for solely from the Trust Fund, and neither the Company nor the Employer assumes any liability or responsibility therefor. 11.3 Exclusive Benefit and Return of Employer Contributions - ---- ------------------------------------------------------ (a) General Rule. Except as provided in this Section, the assets of the Trust Fund shall be used for the exclusive purposes of providing Plan benefits to Participants and their Beneficiaries and defraying reasonable expenses of administering the Plan. (b) Tax Deductibility. Contributions are always conditioned upon their deductibility under Code Section 404. (c) Return of Contributions. Contributions may be returned to the Company only: (1) if a contribution is made to the Trust Fund by the Company (or the Employer) by a mistake of fact, then such contribution may be returned to the Company within one year after the payment of the contribution; (2) if any part or all of a contribution is disallowed as a deduction under Section 404 of the Code, then to the extent a contribution is disallowed as a deduction it may be returned to the Company within one year after the disallowance; (3) if the Internal Revenue Service initially determines that the Plan does not meet the requirements of Section 401(a) of the Code, the Plan shall be null and void from the Effective Date and any contributions shall be returned to the Company less expenses paid unless the Company elects to make the changes to the Plan L-3 Communications Corporation Pension Plan 54 necessary to receive a determination from the Internal Revenue Service that the requirements of Section 401(a) are met; (4) if the Plan has been terminated, and the rules set out in Section 9.4 are met, then the excess Plan assets shall revert to the Company. 11.4 Tax Withholding - ---- --------------- The Committee hereby specifically delegates to the Trustee the responsibility to be liable for income tax withholding, and to withhold the appropriate amount from any payment made from the Trust to any payee under the provisions of applicable law and regulation. 11.5 Incompetency or Minority of Payee - ---- --------------------------------- (a) General Rule. In the event the Committee determines in its discretion that any Participant or Beneficiary, receiving or entitled to receive benefits under the Plan is incompetent to care for his affairs, and in the absence of the appointment of a legal guardian of the property of the incompetent, benefit payments due under the Plan (unless prior claim thereto has been made by a duly qualified guardian, committee or other legal representative) may be made to the spouse, parent, brother or sister or other person, including a hospital or other institution, deemed by the Committee to have incurred or to be liable for expenses on behalf of such incompetent (b) Payment to Adult. In the absence of the appointment of a legal guardian of the property of a minor, any minor's share of benefits payable under the Plan may be paid to such adult or adults as in the discretionary opinion of the Committee have assumed the custody and principal support of such minor. (c) Legal Guardian May Be Required. The Committee, however, in its sole discretion, may require that a legal guardian for the property of any such incompetent or minor be appointed, before authorizing the payment of benefits in such situations. (d) Court Determination. If the Committee is in doubt as to the right of any person to receive a Plan benefit, the Committee may direct the Trustee to retain such amount, without liability for any interest thereon, until the rights thereto are determined, or the Committee may direct the Trustee to pay such amount into any court of appropriate L-3 Communications Corporation Pension Plan 55 jurisdiction. (e) No Verification or Insurance Required. The Trustee shall not be required to verify or insure that any distributions made to any third parties under this Section are applied for the benefit of such minor or incompetent or incapacitated Beneficiary. 11.6 Missing Payees - ---- -------------- If all or portion of a Participant's vested Plan benefit becomes payable under the Plan and the Committee after a reasonable search cannot locate the Participant (or his Beneficiary if such Beneficiary is entitled to payment), then, five years after the Participant's benefit first became payable under the Plan, a notice shall be mailed to the last known address of the Participant. If the Participant does not respond within three months, the Committee may elect, upon advice of counsel, to remove all records of the Participant's accrued benefit from the Plan's current records and that benefit shall be used to offset future Employer contributions. If the Participant or his Beneficiary subsequently presents a valid claim for benefits to the Committee, the Committee shall restore and pay the appropriate Plan benefit. 11.7 Alienation and QDROs - ---- -------------------- (a) General Rule. Except as provided in this Section, no accrued Plan benefit whether vested or not, shall be subject to alienation, assignment, pledging, encumbrance, attachment, garnishment; including but not limited to execution, sequestration, or other legal or equitable process, or transferability by operation of law in the event of bankruptcy, insolvency or otherwise. (b) QDRO Exception. The provisions of the preceding paragraph shall not prevent the creation, assignment or recognition of any individual's right to a benefit payable with respect to a Participant pursuant to a Qualified Domestic Relations Order (QDRO). (c) QDRO Definition. "Qualified Domestic Relations Order" or "QDRO" shall mean any judgment, decree or order which (1) meets the basic requirements of Code Section 414(p) and further (2) meets the QDRO requirements set out in the Plan procedures, concerning domestic relations orders, as determined by the final, discretionary authority of the Committee. (d) QDRO Procedures. The Committee shall establish reasonable procedures to determine whether a domestic relations order is a QDRO L-3 Communications Corporation Pension Plan 56 and to administer distributions under a QDRO. If any domestic relations order is received by the Plan, the Committee shall (1) promptly notify the Participant and any Alternate Payee that the order has been received and of the Plan's procedures for determining whether the order is a QDRO and (2) notify the Participant and each Alternate Payee (or their representatives) of the Committee's determination. (e) Definition of Alternate Payee. "Alternate Payee" shall mean any spouse, former spouse, child or other dependent of a Participant recognized by a proper domestic relations order as having a right to receive all, or a portion of, a Participant's benefits under the Plan, as prescribed under Code Section 414(p). (f) Court Order After Death. Should any court order be issued after a Participant's or Alternate Payee's death, it will be considered a QDRO only if it (1) relates to and reflects an earlier order issued before death, and (2) meets the QDRO requirements. (g) Committee Authority. The Committee shall have final, discretionary authority to administer and interpret any QDRO, including any uncertain terms. 11.8 Notice to Committee, Elections - ---- ------------------------------ Any election made or notice given by a Participant pursuant to the Plan shall be in writing to the Committee or to such representative as may be designated by it for such purpose and shall be deemed to have been made or given on the date received by the Committee or its representative. 11.9 Merger or Transfer With Other Plans - ---- ----------------------------------- The Board shall have the power to fully or partially merge or consolidate this Plan with any other plan. In the event of any merger or consolidation of the Plan (by action of the Board) with, or a transfer of the assets and liabilities of the Plan to, any other plan, each Participant must (if such other plan were terminated immediately after such merger, consolidation or transfer) receive a benefit under such other plan which is equal to or greater than the benefit he would have been entitled to receive under the Plan (if the Plan had been terminated immediately prior to such merger, consolidation or transfer). 11.10 Fiduciaries - ----- ----------- Any person or group of persons may serve in more than one fiduciary capacity L-3 Communications Corporation Pension Plan 57 with respect to the Plan. 11.11 Plans Shall Comply with Law; and Choice of Law - ----- ---------------------------------------------- It is intended that the Plan conform to and meet the applicable requirements of ERISA and the Code. Except to the extent preempted by ERISA, the validity of the Plan or of any of its provisions shall be determined under, and it shall be construed and administered according to, the laws of the State of New York (including its statute of limitations and all substantive and procedural law, and without regard to its conflict of laws provisions). 11.12 Deemed Distribution of Unvested Amounts - ----- --------------------------------------- Notwithstanding any contrary provision of the Plan, in the event that (a) a Participant separates from the Service with the Company, and (b) the Participant has not, as of the date he separates from service, met the Service and other requirements that would enable him to be 100% vested in all his accrued Plan benefits, then, (c) as of the date he separates from Service, he shall be deemed to have received a distribution of his unvested accrued benefits under the Plan. The amount of this deemed distribution shall be zero. Following this deemed distribution, the Participant's remaining accrued Plan benefits shall be only those benefits in which is 100% vested. 11.13 Gender and Number - ----- ----------------- Whenever any words are used herein in the masculine gender, they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and whenever any words are used herein in the singular or plural form, they shall be construed as though they were also used in the other form in all cases where they would so apply. 11.14 Headings - ----- -------- The headings of Sections and Articles are included solely for convenience of reference, and if there is any conflict between such headings and the text of the Plan, the text shall control. 11.15 Illegality of Particular Provisions - ----- ----------------------------------- The illegality of any particular provision of this Plan shall not affect the other provisions thereof, but the Plan shall be construed in all respects as if such invalid provision were omitted. L-3 Communications Corporation Pension Plan 58 11.16 Receipt and Release for Payments - ----- -------------------------------- Any payment to any Participant, his legal representative, Beneficiary, or to any guardian or committee appointed for each Participant, or Beneficiary in accordance with the provisions of this Plan shall, to the extent thereof, be in full satisfaction of all claims hereunder against the Trustee, the Company, and the Employer, any of whom may require such Participant, legal representative, Beneficiary, guardian or committee, as a condition precedent to such payment, to execute a receipt and release thereof in such form as shall be determined by the Trustee or the Company. 11.17 Action by the Company - ----- --------------------- Whenever the Company under the terms of this Plan is permitted or required to do or perform any act or matter or thing, it shall be done and performed by a person duly authorized by its legally constituted authority. 11.18 Mistaken Payments - ----- ----------------- No Participant or Beneficiary shall have any right to any payment made (a) in error, (b) in contravention to the terms of the Plan, the Code, or ERISA, or (c) because the Committee or its delegates were not informed of any death. The Committee shall have full rights under the law and ERISA to recover any such mistaken payment, and the right to recover attorney's fees and other costs incurred with respect to such recovery. Recovery shall be made from future Plan payments, or by any other available means. 11.19 Participants and Beneficiaries Bound by the Plan - ----- ------------------------------------------------ All Employees, Participants, Beneficiaries, as well as their heirs, successors, and assigns shall be bound by the terms of this Plan. 11.20 Direct Rollover Distributions to Other Plans or IRAs - ----- ---------------------------------------------------- (a) General Rule. A Distributee (as defined in this Section) may elect, under Plan procedures, to have all or any portion of his proper Plan distribution transferred in a trust-to-trust transfer from the Trust Fund to another qualified plan, certain "IRAs" and certain other vehicles, subject to the restrictions of this Section. (b) Definition of "Distributee". For the purposes of this Section only, a "Distributee" is a Participant, Former Participant, surviving spouse, or Alternate Payee, who is eligible under the Plan and Plan procedures to L-3 Communications Corporation Pension Plan 59 receive any Plan distribution. Distributees shall not include any other non-spouse Beneficiary. (c) Limits on Distributions Eligible for Direct Rollover. Generally, all or any portion of the accrued, vested Plan benefit payment attributable to the Distributee would be eligible for a trust-to-trust transfer under this Section, provided that the amount is includable in gross income. However, the following distributions are not eligible: (1) periodic payments paid out over the life or life expectancy of the Distributee (or joint lives of the Distributee and his Beneficiary); (2) equal installment payments scheduled to be made over 10 or more years; (3) the portion of any distribution that is required to be paid under Code Section 401(a)(9). (d) Limits on recipient plans and IRAs. A trust-to-trust transfer from the Trust Fund under this Section can be made only to the trustee or custodian of one of the following "eligible retirement plans" listed below, provided that the transfer is made under Plan procedures, and that the trustee or custodian accepts the trust-to-trust transfer. However, only one trust-to-trust transfer can be made with respect to any single distribution. Such "eligible retirement plans" are: (1) a qualified defined contribution plan; (2) an individual retirement account or "IRA," which holds or which will hold only amounts attributable to qualified employer plans, as described by Code Section 408(d)(3); (3) an individual retirement annuity described in Code Section 408(b); and (4) an annuity plan described in Code Section 403(a). (e) Limits on direct rollovers made by surviving spouses. Distributees who are surviving spouses, but who are not alternate payees as described by Code Section 414(p), will be able to elect a trust-to-trust transfer only to an IRA or an individual retirement annuity, subject to all of the preceding rules of this Section. L-3 Communications Corporation Pension Plan 60 11.21 Transfers Among Affiliates - ----- -------------------------- (a) Service among Affiliates credited for eligibility and vesting. Generally, Service performed for the Employer or any Affiliate will be credited among all Affiliates for the purposes of eligibility and vesting. Should a Plan Participant be transferred and become an Employee of an Affiliate, then he may be eligible to immediately become a participant in the new employer's plan, provided that (i) he has sufficient Service under the new plan's eligibility provisions and (2) he has submitted to the new plan all the proper forms by the appropriate deadline. (b) Vesting continues after transfer. Any Participant who transfers employment to an Affiliate shall not be treated as having terminated employment for vesting and distribution purposes. That is, his vesting under the Plan shall continue during his Service with the Affiliate, and he may not receive a distribution of Plan benefits until his Service with the Employer and any Affiliate ceases (or until the April 1, following the year he reaches age 70 1/2 or retires). However, no Accrual Service shall accrue under this Plan, upon his transfer to the Affiliate. (c) Transfer following a Break in Service. This Subsection (c) concerns the situation of an individual who has worked for the Employer or an Affiliate, terminates employment from that employer, but does not immediately transfer to the Employer or an Affiliate. Instead, this Subsection (c) concerns those individuals who incur a period during which they are not employed by the Employer or an Affiliate, and then, subsequently, become reemployed by the Employer or an Affiliate. (1) If such an individual (described in the introductory paragraph of this Subsection (c) does not incur a Break in Service prior to his subsequent reemployment with the Employer or an Affiliate (determined under the sole discretion of the administrator of the new employer's plan under the terms of that plan), then the period of time preceding his employment with the Employer or an Affiliate (following his termination with the Employer or Affiliate) shall be credited for the purpose of eligibility and vesting. (2) If such an individual has incurred a Break in Service (determined under the sole discretion of the administrator of the new employer's plan, under the terms of that plan) then the terms of the new employer's plan shall govern how the individual's total service among the Employer and all Affiliates shall be credited, for the purposes of the new employer's plan. L-3 Communications Corporation Pension Plan 61 (3) If an individual described in this Subsection (c) has incurred one or more Breaks in Service under the terms of his first employer's plan, and has consequently lost the recognition of pre-Break in Service under the first employer's plan, then any provisions in the first employer's plan regarding (i) repayment of distributed amounts back into the first employer's plan, within five years of "rehire" by the Employer or an Affiliate in order to have forfeited amounts restored by the first employer's plan and pre-Break Service recognized by both plans and (ii) completing one year of Service with the new employer in order to have forfeited amounts restored under the former employer's plan and pre-Break Service recognized by both plans must be acknowledged and effected by the administrator of the new employer's plan, as if these provisions in the first employer's plan were fully a part of the new employer's plan. It will therefore be necessary for the administrators of the two plans to share information concerning the individual. L-3 Communications Corporation Pension Plan 62 ARTICLE XII. TOP-HEAVY PROVISIONS 12.1 Applicable Plans Included in Determination of "Top Heavy" Status - ---- ---------------------------------------------------------------- For purposes of this Article, "Applicable Plans" shall include (a) each plan of the Employer or an Affiliate in which a Key Employee (as defined in the next Section for this Plan, and as defined in section 416(i) of the Code for each other Applicable Plan) participates and (b) each other plan of the Employer or an Affiliate which enables any plan described in clause (a) of this sentence to meet the requirements of section 401(a)(4) or 410 of the Code. Any plan not required to be included under the preceding sentence may also be included, at the option of the Committee, provided that the requirements of sections 401(a)(4) and 410 of the Code continue to be satisfied for the group of Applicable Plans after such inclusion. Applicable Plans may include terminated plans, frozen plans and, to the extent that benefits are provided with respect to Service with the Employer or an Affiliate, multi-employer plans (described in section 414(f) of the Code) and multiple employer plans (described in section 413(c) of the Code) to which the Employer or an Affiliate makes contributions. 12.2 "Key Employee" - ---- -------------- For purposes of this Article, "Key Employee" shall mean an employee (including a former employee, whether or not deceased) of the Employer or an Affiliate who, at any time during a given Plan Year or any of the four preceding Plan Years, is one or more of the following: (a) An officer of the Employer or an Affiliate having "compensation" (as defined in section 414(q)(7) of Code) ("Top-Heavy Compensation") greater than fifty percent (50%) of the maximum dollar limitation described in the Article entitled "Limitation of Benefits" for any such Plan Year; provided, that the number of employees treated as officers shall be no more than 50 or, if fewer, the greater of three employees or 10% of the employees (including leased employees as described in Code Section 414), exclusive of employees described in section 414(q)(8) of the Code. (b) One of the 1) employees (a) having Top-Heavy Compensation of more than the maximum dollar limitation for defined contribution plans in effect under section 415(c)(1)(A) of the Code and (b) owning (or considered as owning, within the meaning of section 416(i) the Code), the largest percentage interests in value of the Employer or an Affiliate, provided that such percentage interest exceeds 0.5% in value. If two employees have the same interest in the Employer or an Affiliate, the L-3 Communications Corporation Pension Plan 63 employee having the greater Top-Heavy Compensation shall be treated as having the larger interest. (c) A person owning or considered as owning, within the meaning of section 416(i) of the Code, more than 5% of the outstanding stock of the Employer or an Affiliate, or stock possessing more than 5% of the total combined voting power of all stock of the corporation (or having more than 5%) of the capital or profits interest in the Employer or an Affiliate that is not a corporation, determined under similar principles). (d) A 1% owner of the Employer or an Affiliate having Top-Heavy Compensation of more than $150,000. "One-percent owner" means any person who would be described in the preceding paragraph if "1%" were substituted for "5%" in each place where it appears therein. 12.3 "Top Heavy" Test - ---- ---------------- In any Plan Year during which the sum, for all Key Employees (as defined in this Section and as defined in section 416(i) of the Code for each other Applicable Plan) (and their beneficiaries) of the present value of the cumulative accrued benefits under all Applicable Plans which are defined benefit plans (determined based on an interest assumption of 5% and the UP-1984 mortality table) and the aggregate of the accounts under all Applicable Plans which are defined contribution plans, exceeds 60% of a similar sum determined for all participants in such plans (but excluding participants who are former Key Employees), the Plan shall be deemed "Top Heavy". Solely for purposes of determining whether this Plan or any other Applicable Plan is "Top Heavy" for a given Plan Year, the accrued benefit of a participant other than a Key Employee shall be determined under (a) the method, if any, that uniformly applies for accrual purposes under all Applicable Plans that are defined benefit plans maintained by the Employer or an Affiliate, or (b) if there is no method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional rule of section 411(b)(1)(C) of the Code. 12.4 Determination Dates - ---- ------------------- The determination as to whether this Plan is "Top Heavy" for a given Plan Year shall be made as of the last day of the preceding Plan Year (the "Determination Date"); and other Applicable Plans shall be included in determining whether this Plan is "Top Heavy" based on the determination date (as defined in section 414(g)(4)(C) of the Code) for each such plan which occurs in the same calendar year as such Determination Date for this Plan. The date on which plan benefits are valued for the purpose of determining the topheaviness of any Applicable Plan which L-3 Communications Corporation Pension Plan 64 is a defined benefit plan shall be the most recent valuation date used for determining such plan's minimum funding requirements that occurs during the 12-month period ending on the Determination Date. The date on which plan assets are valued for the purpose of determining the topheaviness of an Applicable Plan which is a defined contribution plan is the most recent valuation date used for valuing plan assets that occurs during the 12-month period ending on the Determination Date. 12.5 Add-Back of Prior Distributions - ---- ------------------------------- Subject to the next Section, distributions from the Plan or any other Applicable Plan during the five-year period ending on the applicable determination date shall be taken into account in determining whether the Plan is "Top Heavy." 12.6 Former Employees Disregarded after Five Plan Years - ---- -------------------------------------------------- Benefits and distributions under this Plan or any other Applicable Plan shall not be taken into account with respect to any individual who has not performed any services as an employee for the Employer or an Affiliate at any time during the five-year period ending on the applicable determination date. 12.7 Compliance with Section 416 of the Code - ---- --------------------------------------- The calculation of the Top-Heavy ratio, and the extent to which distributions, amounts attributable to rollovers or similar transfers to and from this Plan or any other Applicable Plan shall be taken into account in accordance with section 416 of the Code and applicable regulations. 12.8 Beneficiaries - ---- ------------- The terms "Key Employee" and, for purposes of this Article "participant" include their beneficiaries. 12.9 Provisions Applicable in "Top Heavy" Plan Years - ---- ----------------------------------------------- For any Plan Year in which the Plan is deemed to be "Top Heavy", the following provisions shall apply: (a) Minimum Accrued Benefit. The accrued benefit derived from Employer contributions under the Plan of each Participant who is not a Key Employee, expressed as an annual benefit in single life annuity form beginning at Normal Retirement Date, shall be at least (a) 2% of the average of such Participant's Top-Heavy Compensation not in excess of the limits under section 401(a)(17) of the Code, for the five calendar L-3 Communications Corporation Pension Plan 65 years in which such average is highest (excluding any such year after the Plan ceased to be "Top Heavy" or during which the Participant had less than 1,000 Hours of Service) multiplied by (b) the number of Plan Years beginning on or after January 1, 1984 during which the Plan is "Top Heavy" and he has at least 1,000 Hours of Service, but not more than 10 years. The foregoing provisions of this paragraph shall apply before the corresponding provision of any Applicable Plan that is a defined contribution plan, and shall, to the extent necessary or appropriate, be deemed satisfied in whole or in part by benefits to the Participant provided under any other Applicable Plan, including without limitation, the actuarial equivalent of accumulated account balances derived from employer contributions under any defined contribution plan (other than employer contributions described in section 401(k) of the Code). A Participant's accrued benefit, determined as of the last day of any Plan Year in which the Plan ceases to be "Top Heavy", shall not be reduced because the Plan ceased to be "Top Heavy". (b) Adjustment of Combined Limits. Except as otherwise provided by law, "125%" in the Article entitled Limitation of Benefits shall become "100%" unless the following conditions are met: (a) the percentage described in the Top-Heavy Test in this Article does not exceed 90%, and (b) the Company amends paragraph (a) of this Section to substitute "3%" for "2%" therein. Notwithstanding any other provision of this Plan, if the sum of the combined limitation fractions described in the Article entitled Limitation of Benefits, calculated by substituting "100%" for "125%" therein, for any Participant exceeds 100% for the last Plan Year before the Plan becomes "Top Heavy", such fractions shall be adjusted, in accordance with applicable regulations, so that their sum does not exceed 100% for such Plan Year. (c) Vesting. Any Participant shall be vested in his accrued benefit derived from employer contributions on a basis at least as favorable as is provided under the following schedule: L-3 Communications Corporation Pension Plan 66 Completed Years of Vesting Service Nonforfeitable Interest - -------------------------- ------------------------- 2 20% 3 40 4 60 5 100 In any Plan Year in which the Plan is not deemed to be "Top Heavy", the minimum vested percentage shall be no less than that which was determined as of the last day of the last Plan Year in which the Plan was deemed to be "Top Heavy". IN WITNESS WHEREOF, this L-3 Communications Corporation Pension Plan is hereby adopted effective April 30, 1997. L-3 COMMUNICATIONS CORPORATION By:_______________________________ Title:____________________________ L-3 Communications Corporation Pension Plan 67 EXHIBIT A. ACTUARIAL EQUIVALENT FACTORS 1. Conversion of life annuity into 50% joint and survivor annuity -- multiply life annuity benefit by 86% minus (or plus) 0.6% for each full year the Participant is older (or younger) than age 65, minus (or plus) 0.5% for each full year the Participant is older (or younger) than the Eligible Spouse. 2. Conversion of life annuity into 100% joint and survivor annuity -- multiply life annuity benefit by 75% minus (or plus) 0.6% for each full year the Participant is older (or younger) than age 65, minus (or plus) 1.0% for each full year the Participant is older (or younger) than the Eligible Spouse. 3. Conversion of life annuity into life annuity with 10-year period certain guarantee -- multiply life annuity benefit by 91% plus 0.7% for each full year the Participant is younger than age 65, or minus 0.7% for each full year the participant is older than age 65. 4. Conversion of life annuity into life annuity with 15-year period certain guarantee -- multiply life annuity benefit by 82.5% plus 1.3% for each full year the Participant is younger than age 65, or minus 1.3% for each full year the Participant is older than age 65. 5. Conversion of life annuity into life annuity with 20-year period certain guarantee -- multiply life annuity benefit by 74% plus 1.6% for each full year the Participant is younger than age 65, or minus 1.6% for each full year the Participant is older than age 65. 6. All other conversions -- use 1971 Group Annuity Mortality Table assuming an 80% male mix and 7% annual interest (5% annual interest for purposes of Article X); provided, however, that for purposes of converting a retirement benefit or spouse's benefit into a lump sum, the lump sum will be determined on the basis of the Pension Benefit Guaranty Corporation interest rate for immediate and deferred annuities on plan terminations in effect on the January 1 of the calendar year in which such lump sum is paid. NOTE: All ages are to be determined as age at nearest birthday; and all conversion factors are not to exceed 99%. 7. In determining the present value of any vested accrued benefit under this Plan, the interest rate used shall be no greater than the rate that would be used, as of the distribution date, by the Pension Benefit Guaranty Corporation for the purposes of determining the present value of a distribution (immediate or deferred, as is applicable) on plan termination (the "Applicable Interest Rate"). The L-3 Communications Corporation Pension Plan 1 Applicable Interest Rate used shall be the rate in effect by the PBGC on the first day of the calendar year that contains the relevant Annuity Starting Date. The Applicable Interest Rate shall be used only if the present value of the vested accrued benefit is $25,000 or less, (as a result of using the Applicable Interest Rate). 8. However, if after using the Applicable Interest Rate, the present value of the vested accrued benefit exceeds $25,000, then the present value shall be recalculated, using an interest rate that is no greater than 120% of the Applicable Interest Rate. However, in this event, the distributed amount shall not be reduced to any amount below $25,000. L-3 Communications Corporation Pension Plan 2 EXHIBIT B. CONTRIBUTORY BENEFITS Monthly Amount of Contributory Name of Contributory Benefit Payable as a Life Participant Annuity Commencing at Age 55 - ---------------------- --------------------------------- BENENSON, C. 187.77 CARROLL, MELVIN 69.84 CIPRIANI, PHILIP 63.69 DAVIS, ALLEN H. 47.92 GLEIMER, LEON 35.29 HISCHE, EDWARD H. 16.11 IERVOLINO, NICK 45.24 IRIZARRY, REYNALDO 3.92 MARCIANO, JOHN 9.99 OWSICK, ALEXANDER 37.54 PENN, HAROLD 144.67 PLOTKIN, MURRAY 55.07 SACKS, MARVIN 69.97 SCHWARTZ, WALTER 30.30 SOLOMON, MURRAY 161.58 TURF, HAROLD 32.99 WONG, KENNETH L. 74.37 L-3 Communications Corporation Pension Plan 3 EX-25 17 FORM T-1 EXHIBIT 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.) 48 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.) 600 THIRD AVENUE NEW YORK, NEW YORK 10016 (Address of principal executive offices) (Zip code) --------------------- 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.) 600 THIRD AVENUE NEW YORK, NEW YORK 10016 (Address of principal executive offices) (Zip code) --------------------- 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.) 600 THIRD AVENUE NEW YORK, NEW YORK 10016 (Address of principal executive offices) (Zip code) --------------------- SOUTHERN CALIFORNIA MICROWAVE, INC. (Exact name of obligor as specified in its charter) CALIFORNIA 13-0478540 (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) --------------------- % SENIOR SUBORDINATED NOTES DUE 2008 (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 State of 2 Rector Street, New York, N.Y. 10006, New York and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 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 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 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. 33-44051.) 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. 2 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 28th day of April, 1998. THE BANK OF NEW YORK By: /s/ MARY JANE MORRISSEY --------------------------------------- Name: MARY JANE MORRISSEY Title: VICE PRESIDENT 3 EXHIBIT 7 TO FORM T-1 CONSOLIDATED REPORT OF CONDITION OF THE BANK OF NEW YORK OF 48 WALL STREET, NEW YORK, N.Y. 10286 AND FOREIGN AND DOMESTIC SUBSIDIARIES, a member of the Federal Reserve System, at the close of business December 31, 1997, 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 IN THOUSANDS --------------- ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ............................. $ 5,742,986 Interest-bearing balances ...................................................... 1,342,769 Securities: Held-to-maturity securities .................................................... 1,099,736 Available-for-sale securities .................................................. 3,882,686 Federal funds sold and Securities purchased under agreements to resell .......... 2,568,530 Loans and lease financing receivables: Loans and leases, net of unearned income ....................................... 35,019,608 LESS: Allowance for loan and lease losses ...................................... 627,350 LESS: Allocated transfer risk reserve .......................................... 0 Loans and leases, net of unearned income, allowance, and reserve ............... 34,392,258 Assets held in trading accounts ................................................. 2,521,451 Premises and fixed assets (including capitalized leases) ........................ 659,209 Other real estate owned ......................................................... 11,992 Investments in unconsolidated subsidiaries and associated companies ............. 226,263 Customers' liability to this bank on acceptances outstanding .................... 1,187,449 Intangible assets ............................................................... 781,684 Other assets .................................................................... 1,736,574 ----------- Total assets .................................................................... $56,153,587 =========== LIABILITIES Deposits: In domestic offices ............................................................ $27,031,362 Noninterest-bearing ............................................................ 11,899,507 Interest-bearing ............................................................... 15,131,855 In foreign offices, Edge and Agreement subsidiaries, and IBFs .................. 13,794,449 Noninterest-bearing ............................................................ 590,999 Interest-bearing ............................................................... 13,203,450 Federal funds purchased and Securities sold under agreements to repurchase. ..... 2,338,881 Demand notes issued to the U.S. Treasury ........................................ 173,851 Trading liabilities ............................................................. 1,695,216 Other borrowed money: With remaining maturity of one year or less .................................... 1,905,330 With remaining maturity of more than one year through three years .............. 0 With remaining maturity of more than three years ............................... 25,664 Bank's liability on acceptances executed and outstanding ........................ 1,195,923 Subordinated notes and debentures ............................................... 1,012,940 Other liabilities ............................................................... 2,018,960 ----------- Total liabilities ............................................................... 51,192,576 ----------- EQUITY CAPITAL Common stock .................................................................... 1,135,284 Surplus ......................................................................... 731,319 Undivided profits and capital reserves .......................................... 3,093,726 Net unrealized holding gains (losses) on available-for-sale securities .......... 36,866 Cumulative foreign currency translation adjustments ............................. (36,184) Total equity capital ............................................................ 4,961,011 ----------- Total liabilities and equity capital ............................................ $56,153,587 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and 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 issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Renyi Alan R. Griffith } Directors J. Carter Bacot -----END PRIVACY-ENHANCED MESSAGE-----