L 3 COMMUNICATIONS HOLDINGS INC, S-1/A, 1998-05-15

L 3 COMMUNICATIONS HOLDINGS INC
S-1/A, 1998-05-15
RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT

Previous: MCCLATCHY CO, 10-Q, 1998-05-15

Next: FEDERATED INVESTORS INC /PA/, 424B1, 1998-05-15

<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 15, 1998
REGISTRATION NO. 333-46975
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

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 HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 3812, 3663, 3679 13-3937434
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
</TABLE>

600 THIRD AVENUE
NEW YORK, NEW YORK 10016
(212) 697-1111
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

CHRISTOPHER C. CAMBRIA
L-3 COMMUNICATIONS HOLDINGS, INC.
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:

<TABLE>
<S> <C>
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
</TABLE>

------------------
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.
- --------------------------------------------------------------------------------

<PAGE>
This filing contains only the exhibits that have not been previously filed.

<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>
<CAPTION>
DESCRIPTION AMOUNT
- ---------------------------------------------------------------------- ----------
<S> <C>
Securities and Exchange Commission registration fee .................. $ 37,318
National Association of Securities Dealers, Inc. filing fee .......... 13,150
New York Stock Exchange listing application fee ...................... 140,000
Legal fees and expenses .............................................. 400,000
Accounting fees and expenses ......................................... 250,000
Printing and engraving fees and expenses ............................. 600,000
Blue Sky fees and expenses ........................................... 10,000
Miscellaneous expenses ............................................... 234,532
-------
Total ............................................................... $1,685,000
=======
</TABLE>

- ----------
* 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
<PAGE>

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.

Since April 30, 1997, Holdings has sold unregistered securities in the
amounts, at the times and for the aggregate amounts of consideration listed
below. The securities were sold directly by Holdings and did not involve any
underwriter. Holdings considers these securities to have been offered and sold
in transactions not involving any public offering and, therefore, to be
exempted from registration under Section 4(2) of the Securities Act. The
following assumes the conversion of Class B Common Stock into Common Stock
which will occur upon the consummation of the Common Stock Offering.

On April 30, 1997, Holdings issued 10,020,000 shares of Common Stock to
the Lehman Partnership and 6,980,000 shares of Common Stock to Lockheed Martin
for aggregate consideration of $109,990,000. On April 30, 1997, Holdings issued
1,500,000 shares of Common Stock to each of Messrs. Lanza and LaPenta for
aggregate consideration of $15,000,000. Of such shares, 226,000 shares have
been repurchased by Holdings.

On December 19, 1997, Holdings issued 226,000 shares of Common Stock to 21
management investors for aggregate consideration of $1,462,220.

On March 2, 1998, Holdings issued 228,571 shares of Common Stock to each
of Messrs. Lanza and LaPenta upon exercise of the first year of vesting under
their respective stock option agreements for aggregate consideration of
$2,957,700.

II-2
<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits:

The following exhibits are filed pursuant to Item 601 of Regulation S-K.

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ---------------------- --------------------------------------------------------
<S> <C>
1.1 Form of U.S. Underwriting Agreement among L-3
Communications Holdings, Inc. and the U.S. Underwriters
named therein.
1.2 Form of International Underwriting Agreement among
Holdings and the International Managers named therein.
3.1 Certificate of Incorporation of L-3 Communications
Holdings, Inc.
3.2 By-Laws of L-3 Communications Holdings, Inc.
4.1 Form of Common Stock Certificate.
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 Holdings, Inc. 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.
**11 L-3 Communications Holdings, Inc. Computation of Basic
Earnings Per Share and Diluted Earnings Per Share
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.
</TABLE>

- ----------
** Previously filed.

II-3
<PAGE>

(b) Financial Statement Schedules

Not applicable.

ITEM 17. UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreements,
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.

(b) 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.

(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
<PAGE>

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 HOLDINGS, INC.

By: /s/ Christopher C. Cambria
--------------------------------------
Vice President -- General Counsel and
Secretary

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:

<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------- --------------------------------------------------------
<S> <C>
* 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

</TABLE>

II-5
<PAGE>

EXHIBIT INDEX

- ----------
** Previously filed.

<PAGE>

EXHIBIT 1.1

4,400,000 SHARES

L-3 COMMUNICATIONS HOLDINGS, INC.

COMMON STOCK, $.01 PAR VALUE

FORM OF U.S. UNDERWRITING AGREEMENT

May __, 1998

LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
MORGAN STANLEY & CO. INCORPORATED
C.E. UNTERBERG, TOWBIN
As Representatives of the several
U.S. Underwriters named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285

Dear Sirs:

L-3 Communications Holdings, Inc., a Delaware corporation
(the "Company"), proposes to sell 4,400,000 shares (the "Firm Stock") of the
Company's Common Stock, par value $.01 per share (the "Common Stock"). In
addition, the Company proposes to grant to the U.S. Underwriters named in
Schedule 1 hereto (the "U.S. Underwriters") an option to purchase up to an
additional 825,000 shares of the Common Stock on the terms and for the purposes
set forth in Section 2 (the "Option Stock"). The Firm Stock and the Option
Stock, if purchased, are hereinafter collectively called the "Stock." As
described in the Prospectus (hereinafter defined), the Company will use the net
proceeds from the sale of the Stock 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
Stock from the Company by the U.S. Underwriters.

It is understood by all parties that the Company is
concurrently entering into an agreement dated the date hereof (the
"International Underwriting Agreement") providing for the sale by the Company
of 1,100,000 shares of 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. The U.S. Underwriters and the International
Managers simultaneously are entering into an agreement between the U.S. and
international

<PAGE>

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. Two forms of prospectus
are to be used in connection with the offering and sale of shares of Common
Stock contemplated by the foregoing, one relating to the Stock and the other
relating to the International Stock. The latter form of prospectus will be
identical to the former except for certain substitute pages as included in the
registration statement and amendments thereto referred to below. Except as used
in Sections 2, 3, 4 and 9 herein, and 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 this Agreement or the International
Underwriting Agreement, and references herein to any prospectus whether in
preliminary or final form, and whether as amended or supplemented, shall
include both the U.S. and the international versions thereof.

1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees 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 Stock have (i) been prepared by the Company 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. Copies of such registration statement and the
amendments thereto have been delivered by the Company to you
as the representatives (the "Representatives") of the U.S.
Underwriters. 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 with the consent of
the Representatives 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 has filed or is required pursuant to the terms hereof
to file a registration statement pursuant to Rule 462(b)
under the Securities Act registering additional shares of
Common Stock (a "Rule 462(b)

2
<PAGE>

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
after the effectiveness of this Agreement) conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement (including, if the Company is 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
through the Representatives by or on behalf of any U.S.
Underwriter specifically for inclusion therein.

(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 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, prospects, properties, stockholders' equity
or results of operations of the Company and its subsidiaries
taken as a whole (a "Material

3
<PAGE>

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 (other than L-3 Communications
Corporation (the "Significant Subsidiary")) is a "significant
subsidiary," as such term is defined in Rule 405 of the Rules
and Regulations.

(e) Prior to the delivery of the Stock on the First
Delivery Date, the Company will have an authorized
capitalization as set forth in the Prospectus, and 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) Prior to the delivery of the Stock on the First
Delivery Date, the shares of the Stock to be issued and sold
by the Company to the U.S. Underwriters hereunder and to the
International Managers under the International Underwriting
Agreement have been duly and validly authorized and, when
issued and delivered against payment therefor as provided
herein and in the International Underwriting Agreement, will
be duly and validly issued, fully paid and non-assessable;
and the Stock will conform to the description thereof
contained in the Prospectus.

(g) This Agreement has been duly authorized,
executed and delivered by the Company and the Significant
Subsidiary.

(h) The execution, delivery and performance of this
Agreement and the International Underwriting Agreement by the
Company and the Significant Subsidiary 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

4
<PAGE>

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 indemnificaiton and contribution
hereunder and thereunder may be limited by equitable
principles and public policy consideration; and except for
the registration of the Stock and the International Stock
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 or
foreign securities laws in connection with the purchase and
distribution of the Stock by the U.S. Underwriters and the
International Managers, 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
International Underwriting Agreement by the Company and
the Significant Subsidiary and the consummation of the
transactions contemplated hereby and thereby.

(i) 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
exercisable 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.

(j) Except as described in the Registration
Statement, the Company has not sold or issued any shares of
Common Stock 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 other
than shares issued pursuant to employee benefit plans,
qualified stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.

(k) 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

5
<PAGE>

Material Adverse Effect, otherwise than as described or
contemplated in the Prospectus.

(l) 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.

(m) 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.

(n) 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).

(o) The Company and each of its subsidiaries own or
possess adequate rights to use all material patents,
trademarks, service marks, trade names,

6
<PAGE>

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).

(p) 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

(q) 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.

(r) 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.

(s) 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.

(t) 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

7
<PAGE>

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.

(u) 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.

(v) 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.

(w) 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.

(x) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or
treatment of toxic wastes, medical wastes, 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

8
<PAGE>

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.

(y) 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.

(z) All of the representations and warranties of the
parties to the International Underwriting Agreement and the
debt underwriting agreement (the "Debt Underwriting
Agreement"), dated as of the date hereof, providing for the
sale by the Company of $150,000,000 in aggregate principal
amount of the Significant Subsidiary's ___% Senior
Subordinated Notes due 2008 (the "Notes") to Lehman Brothers
Inc. and BancAmerica Robertson Stephens, are true and
correct.

2. Purchase of the Stock by the U.S. 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 Firm
Stock to the several U.S. Underwriters and each of the U.S. Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that U.S. Underwriter's name in Schedule 1 hereto. The
respective purchase obligations of the U.S. Underwriters with respect to the
Firm Stock shall be rounded among the U.S. Underwriters to avoid fractional
shares, as the Representatives may determine.

In addition, the Company grants to the U.S. Underwriters an
option to purchase, in whole or in part, the Option Stock. Such option is
granted for the purpose of covering over-allotments in the sale of Firm Stock
and is exercisable as provided in Section 4 hereof. Shares of Option Stock
shall be purchased severally for the account of the U.S. Underwriters in
proportion to the number of shares of Firm Stock set opposite the name of such
U.S. Underwriters in Schedule 1 hereto. The respective purchase obligations of
each U.S. Underwriter with respect to the Option Stock shall be adjusted by the
Representatives so that no U.S. Underwriter shall be obligated to purchase
Option Stock other than in 100 share amounts. The price of both the Firm Stock
and any Option Stock shall be $_____ per share.

9
<PAGE>

The Company shall not be obligated to deliver any of the
Stock to be delivered on any Delivery Date (as hereinafter defined), as the
case may be, except upon payment for all the Stock to be purchased on such
Delivery Date as provided herein and in the International Underwriting
Agreement.

3. Offering of Stock by the U.S. Underwriters.

Upon authorization by the Representatives of the release of
the Firm Stock, the several U.S. Underwriters propose to offer the Firm Stock
for sale upon the terms and conditions set forth in the Prospectus.

It is understood that 500,000 shares of the Firm Stock will
initially be reserved by the several U.S. Underwriters for offer and sale upon
the terms and conditions set forth in the Prospectus and in accordance with the
rules and regulations of the National Association of Securities Dealers, Inc.
to directors, officers, employees, business associates and related parties of
the Company and its subsidiaries who have heretofore delivered to the
Representatives offers to purchase shares of Firm Stock in form satisfactory to
the Representatives, and that any allocation of such Firm Stock among such
persons will be made in accordance with timely directions received by the
Representatives from the Company; provided, that under no circumstances will
the Representatives or any U.S. Underwriter be liable to the Company or to any
such person for any action taken or omitted in good faith in connection with
such offering to directors, officers, employees, business associates and
related parties of the Company and its subsidiaries. It is further understood
that any shares of such Firm Stock which are not purchased by such persons will
be offered by the U.S. Underwriters to the public upon the terms and conditions
set forth in the Prospectus.

Each U.S. Underwriter agrees that, except to the extent
permitted by the Agreement Between U.S. Underwriters and International
Managers, it will not offer or sell any of the Stock outside of the United
States.

4. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock 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 Representatives
and the Company. This date and time are sometimes referred to as the "First
Delivery Date." On the First Delivery Date, the Company shall deliver or cause
to be delivered certificates representing the Firm Stock to the Representatives
for the account of each U.S. 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 U.S. Underwriter hereunder. Upon delivery, the Firm Stock shall be
registered in such names and in such denominations as the Representatives shall
request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Stock, the Company shall make the

10
<PAGE>

certificates representing the Firm Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.

The option granted in Section 2 will expire 30 days after the
date of this Agreement and may be exercised in whole or in part from time to
time by written notice being given to the Company by the Representatives. Such
notice shall set forth the aggregate number of shares of Option Stock as to
which the option is being exercised, the names in which the shares of Option
Stock are to be registered, the denominations in which the shares of Option
Stock are to be issued and the date and time, as determined by the
Representatives, when the shares of Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the
option shall have been exercised nor later than the fifth business day after
the date on which the option shall have been exercised. The date and time the
shares of Option Stock are delivered are sometimes referred to as a "Second
Delivery Date" and the First Delivery Date and any Second Delivery Date are
sometimes each referred to as a "Delivery Date."

Delivery of and payment for the Option Stock shall be made at
the place specified in the first sentence of the first paragraph of this
Section 4 (or at such other place as shall be determined by agreement between
the Representatives and the Company) at 10:00 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company shall deliver
or cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each U.S. 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 U.S. Underwriter hereunder. Upon delivery, the Option
Stock shall be registered in such names and in such denominations as the
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Stock, the Company shall make the certificates representing the Option Stock
available for inspection by the Representatives in New York, New York, not
later than 2:00 P.M., New York City time, on the business day prior to such
Second Delivery Date.

5. Further Agreements of the Company. The Company agrees:

(a) To prepare the Prospectus in a form approved by
the Representatives 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
Representatives, promptly (i) after it receives notice
thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective

11
<PAGE>

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 Representatives with copies thereof; to
advise the Representatives, 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 Stock 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;

(b) To furnish promptly to each of the
Representatives and to counsel for the U.S. 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 Representatives such
number of the following documents as the Representatives
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 Stock 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 Representatives and, upon their
request, to file such document and to prepare and furnish
(without charge for the 9 month period following the First
Delivery Date) to each U.S. Underwriter and to any dealer in
securities as many copies as the Representatives 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 Representatives, be required by the
Securities Act or requested by the Commission;

12
<PAGE>

(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
Representatives and counsel for the U.S. Underwriters and not
to file any such document to which the Representatives 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 Representatives 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 Representatives may reasonably request to qualify the
Stock for offering and sale under the securities laws of such
jurisdictions as the Representatives 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;

13
<PAGE>

transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or
securities convertible into or exchangeable or exercisable
for Common Stock or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole
or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in
cash or otherwise, in each case for a period of 180 days from
the date of the Prospectus except for transactions by any
person other than the Company and its subsidiaries relating
to shares of Common Stock or other securities convertible
into or exchangeable or exercisable for Common Stock acquired
in open market transactions after the completion of the
Common Stock Offering, without the prior written consent of
Lehman Brothers Inc.;

(i) Prior to the Effective Date, to apply for the
listing of the Stock on the New York Stock Exchange and to
use its best efforts to complete that listing, subject only
to official notice of issuance, prior to the First Delivery
Date;

(j) To apply the net proceeds from the sale of the
Stock being sold by the Company as set forth in the
Prospectus;

(k) 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

(l) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the
Shares, to file a Rule 462(b) Registration Statement with the
Commission registering the Shares 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.

14
<PAGE>

or other fees; (f) the fees and expenses of qualifying the Stock 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 U.S. Underwriters); (g) all reasonable
costs and expenses of the U.S. Underwriters, including the related reasonable
fees and disbursements of counsel for the U.S. Underwriters, incident to the
offer and sale of shares of the Stock by the U.S. Underwriters to employees of
the Company and its subsidiaries, as described in Section 3; and (h) all other
costs and expenses incident to the performance of the obligations of the
Company; provided, that (x) the Company and the U.S. Underwriters will bear
their own "road show" expenses and (y) the Company on the one hand, and the
U.S. Underwriters on the other hand, will each bear one half of the cost of the
charter aircraft used in connection with the "road show".

7. Conditions of U.S. Underwriters' Obligations. The
respective obligations of the U.S. Underwriters hereunder are subject to the
accuracy, when made and on each 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 U.S. Underwriter or International Manager
shall have discovered and disclosed to the Company on or
prior to such 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 U.S. 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 International Underwriting Agreement, the
Stock, 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 U.S.
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.

15
<PAGE>

(d) Simpson Thacher & Bartlett shall have furnished
to the Representatives its written opinion, as counsel to the
Company, addressed to the U.S. Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory
to the Representatives, 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) All of the outstanding shares of
Common Stock of the Company (including the shares of
Stock and International Stock being delivered on
such Delivery Date) have been duly authorized and
all outstanding shares of Common Stock have been
and, upon payment and delivery in accordance with
this Agreement, the Stock will be validly issued,
fully paid and non-assessable; 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
soley on an examination of each such subsidiary's
stock ledger and minute books, all such shares are
held of record Company and/or a subsidiary of the
Company;

(iii) The Registration Statement has become
effective under the Securities 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 statements contained in the
Prospectus under the captions "Risk Factors-Shares
Eligible for Future Sale," "Risk Factors-Potential
Effect of Certain Anti-takeover Provisions,"
"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," "Description of Capital
Stock" and "Shares Eligible for Future Sale,"
insofar as they describe charter documents,
contracts, statutes, rules and regulations and other
legal matters, constitute an accurate summary
thereof in all material respects;

(v) 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

16
<PAGE>

regulations or legal conclusions with respect
thereto, constitute accurate summaries of the
matters described therein in all material respects.

(vi) To such counsel's knowledge, there are
no contracts or documents of a character required by
the Securities Act or 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 required by the
Securities Act or the rules and regulations
thereunder;

(vii) This Agreement and the International
Underwriting Agreement have each been duly
authorized, executed and delivered by the Company
and the Significant Subsidiary, as applicable;

(viii) The issue and sale of the shares of
Stock being delivered on such Delivery Date by the
Company and the compliance by the Company and the
Significant Subsidiary, as applicable, with all of
the provisions of this Agreement, the International
Underwriting Agreement and the Debt 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 or any of its 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 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 or any of
its 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 Company and the issuance and sale of the
Notes by the Significant Subsidiary (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 under state securities or

17
<PAGE>

Blue Sky laws in connection with the purchase and
distribution of the Stock, International Stock,
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 (i) 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 Representatives a written
statement, addressed to the U.S. Underwriters and
dated such 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 (iv) 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 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

18
<PAGE>

have furnished to the Representatives his written opinion, as
General Counsel to the Company, addressed to the U.S.
Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to
the effect that:

(i) Other than as set forth in the
Prospectus, there are no preemptive or other rights
to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any shares of the
Stock pursuant to the Company's charter or by-laws
or any agreement or other instrument known to such
counsel;

(ii) 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);

(iii) 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;

(iv) 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;

19
<PAGE>

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 (provided, thiat the opinion in this
paragraph (v) may be delivered by other counsel
reasonably satisfactory to the Representatives).

(f) The Representatives shall have received from
Latham & Watkins, counsel for the U.S. Underwriters, such
opinion or opinions, dated such Delivery Date, with respect
to the issuance and sale of the Stock, the Registration
Statement, the Prospectus and other related matters as the
Representatives 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
Representatives shall have received from Coopers & Lybrand
L.L.P. a letter, in form and substance satisfactory to the
Representatives, addressed to the U.S. 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
Representatives shall have received from Ernst & Young LLP a
letter, in form and substance satisfactory to the
Representatives, addressed to the U.S. 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.

(i) At the time of execution of this Agreement, the
Representatives shall have received from KPMG Peat Marwick
LLP a letter, in form and

20
<PAGE>

substance satisfactory to the Representatives, addressed to
the U.S. 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
Representatives concurrently with the execution of this
Agreement (the "initial letters"), the Company shall have
furnished to the Representatives letters (the "bring-down
letters") of such accountants, in form and substance
satisfactory to the Representatives, addressed to the U.S.
Underwriters and dated such 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 shall have furnished to the
Representatives a certificate, dated such Delivery Date, of
its Chairman of the Board, its President or a Vice President
and its chief financial officer stating that:

(i) The representations and warranties of
the Company in Section 1 are true and correct as of
such Delivery Date; the Company has complied with
all its 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, and (B) since the Effective
Date no event has occurred

21
<PAGE>

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
Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public
offering or the delivery of the Stock being delivered on such
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 U.S. Underwriters,

22
<PAGE>

impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in
the Prospectus.

(o) The New York Stock Exchange shall have approved
the Stock for listing, subject only to official notice of
issuance and evidence of satisfactory distribution.

(p) The closing under the International Underwriting
Agreement shall have occurred concurrently with the closing
hereunder on the First 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 U.S. Underwriters.

8. Indemnification and Contribution.

(a) The Company and the Significant Subsidiary,
jointly and severally, shall indemnify and hold harmless each
U.S. Underwriter (including any U.S. Underwriter in its role
as qualified independent underwriter pursuant to the rules of
the National Association of Securities Dealers, Inc.), its
officers and employees and each person, if any, who controls
any U.S. 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
Stock), to which that U.S. 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
U.S. Underwriter in connection with, or relating in any
manner to, the Stock 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 Significant Subsidiary 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 U.S.
Underwriter through its gross negligence or willful
misconduct), and shall reimburse each U.S.

23
<PAGE>

Underwriter and each such officer, employee or controlling
person promptly upon demand for any legal or other expenses
reasonably incurred by that U.S. 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 Significant Subsidiary 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 U.S. Underwriter
furnished to the Company through the Representatives by or on
behalf of any U.S. Underwriter specifically for inclusion
therein; provided further, that the indemnification contained
in this paragraph (a) with respect to the Preliminary
Prospectus shall not inure to the benefit of any U.S.
Underwriter (or to the benefit of any officers or employees
of any U.S. Underwriter or of any person controlling such
U.S. Underwriter) on account of any such loss, claim, damage,
liability or action arising from the sale of Stock by such
U.S. 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 U.S. Underwriter sold
Stock 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
U.S. 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 or the
Significant Subsidiary may otherwise have to any U.S.
Underwriter or to any officer, employee or controlling person
of that U.S. Underwriter.

(b) Each U.S. Underwriter, 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, 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 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

24
<PAGE>

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 U.S. Underwriter furnished to the Company
through the Representatives by or on behalf of that U.S.
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 U.S. Underwriter 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
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

25
<PAGE>

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
U.S. 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, the
Significant Subsidiary on the one hand and the U.S.
Underwriters on the other from the offering of the Stock 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, the Significant Subsidiary, on the one hand
and the U.S. 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, the Significant Subsidiary,
on the one hand and the U.S.

26
<PAGE>

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, the Significant Subsidiary, on the one hand, and the
total underwriting discounts and commissions received by the
U.S. Underwriters with respect to the shares of the Stock
purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the shares of
the Stock 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, the Significant
Subsidiary, or the U.S. Underwriters, the intent of the
parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or
omission. For purposes of the preceding two sentences, the
net proceeds deemed to be received by the Company shall be
deemed to be also for the benefit of the Significant
Subsidiary and information supplied by the Company shall also
be deemed to have been supplied by the Significant
Subsidiary. The Company, the Significant Subsidiary and the
U.S. 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 U.S.
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 U.S. 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 U.S. 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 U.S. 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 U.S. Underwriters severally confirm and the
Company and the Significant Subsidiary acknowledge that the
statements with respect to the public offering of the Stock
by the U.S. Underwriters and the last sentence of the third
paragraph on the cover page of, the legend concerning
stabilization on page (i) of,

27
<PAGE>

and the fourth, eighth, tenth, sixteenth, twenty-second,
twenty-third and twenty-fourth paragraphs and the
stabilization language in paragraphs eleven through fourteen
under the caption "Underwriting" in, the Prospectus are
correct and constitute the only information concerning such
U.S. Underwriters furnished in writing to the Company by or
on behalf of the U.S. Underwriters specifically for inclusion
in the Registration Statement and the Prospectus.

9. Defaulting U.S. Underwriters.

If, on either Delivery Date, any U.S. Underwriter defaults in
the performance of its obligations under this Agreement, the remaining
non-defaulting U.S. Underwriters shall be obligated to purchase the Stock which
the defaulting U.S. Underwriter agreed but failed to purchase on such Delivery
Date in the respective proportions which the number of shares of the Firm Stock
set opposite the name of each remaining non-defaulting U.S. Underwriter in
Schedule 1 hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining non-defaulting U.S. Underwriters in
Schedule 1 hereto; provided, however, that the remaining non-defaulting U.S.
Underwriters shall not be obligated to purchase any of the Stock on such
Delivery Date if the total number of shares of the Stock which the defaulting
U.S. Underwriter or U.S. Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of the Stock to be purchased
on such Delivery Date, and any remaining non-defaulting U.S. Underwriter shall
not be obligated to purchase more than 110% of the number of shares of the
Stock which it agreed to purchase on such Delivery Date pursuant to the terms
of Section 2. If the foregoing maximums are exceeded, the remaining
non-defaulting U.S. Underwriters, or those other underwriters satisfactory to
the Representatives who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them,
all the Stock to be purchased on such Delivery Date. If the remaining U.S.
Underwriters or other underwriters satisfactory to the Representatives do not
elect to purchase the shares which the defaulting U.S. Underwriter or U.S.
Underwriters agreed but failed to purchase on such Delivery Date, this
Agreement (or, with respect to the Second Delivery Date, the obligation of the
U.S. Underwriters to purchase, and of the Company to sell, the Option Stock)
shall terminate without liability on the part of any non-defaulting U.S.
Underwriter or the Company, except that the Company and the Significant
Subsidiary will continue to be liable for the payment of expenses to the extent
set forth in Sections 6 and 11. As used in this Agreement, the term "U.S.
Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 9, purchases Firm Stock which a defaulting U.S. Underwriter agreed
but failed to purchase.

Nothing contained herein shall relieve a defaulting U.S.
Underwriter of any liability it may have to the Company for damages caused by
its default. If other underwriters are obligated or agree to purchase the Stock
of a defaulting or withdrawing U.S. Underwriter, either the Representatives or
the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company
or

28
<PAGE>

counsel for the U.S. Underwriters may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.

10. Termination. The obligations of the U.S. Underwriters
hereunder may be terminated by the Representatives by notice given to and
received by the Company prior to delivery of and payment for the Firm Stock 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 U.S. Underwriters shall decline to purchase the
Stock for any reason permitted under this Agreement.

11. Reimbursement of U.S. Underwriters' Expenses. If (a) the
Company shall fail to tender the Stock for delivery to the U.S. Underwriters by
reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed, or because any other
condition of the U.S. Underwriters' obligations hereunder required to be
fulfilled by the Company is not fulfilled, the Company and the Significant
Subsidiary will reimburse the U.S. Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred
by the U.S. Underwriters in connection with this Agreement and the proposed
purchase of the Stock, and upon demand the Company and the Significant
Subsidiary shall pay the full amount thereof to the Representative(s). If this
Agreement is terminated pursuant to Section 9 by reason of the default of one
or more U.S. Underwriters, the Company and the Significant Subsidiary shall not
be obligated to reimburse any defaulting U.S. 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 U.S. 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 or to the Significant
Subsidiary, 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 U.S. Underwriter pursuant to Section
8(c) shall be delivered or sent by mail, telex or facsimile transmission to
such U.S. Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by
the Representatives 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 U.S. Underwriters by Lehman Brothers Inc. on
behalf of the Representatives.

29
<PAGE>

13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the U.S. Underwriters, the
Company, the Significant Subsidiary, 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 contained in this Agreement shall also be deemed to
be for the benefit of the person or persons, if any, who control any U.S.
Underwriter within the meaning of Section 15 of the Securities Act and for the
benefit of each International Manager (and controlling persons thereof) who
offers or sells any shares of Common Stock in accordance with the terms of the
Agreement Between U.S. Underwriters and International Managers and (B) the
indemnity agreement of the U.S. Underwriters contained in Section 8(c) of this
Agreement shall be deemed to be for the benefit of directors of the Company,
officers of the Company who have signed the Registration Statement and any
person controlling the Company 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.

14. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Significant Subsidiary and the
U.S. 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 Stock 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]

30
<PAGE>

If the foregoing correctly sets forth the agreement among the
Company, the Significant Subsidiary and the U.S. Underwriters, please indicate
your acceptance in the space provided for that purpose below.

Very truly yours,

L-3 COMMUNICATIONS HOLDINGS, INC.

By
----------------------------------
Name:
Title:

L-3 COMMUNICATIONS CORPORATION,
the Significant Subsidiary

By
----------------------------------
Name:
Title:
Accepted:

LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
MORGAN STANLEY & CO. INCORPORATED
C.E. UNTERBERG, TOWBIN

For themselves and as Representatives
of the several U.S. Underwriters named
in Schedule 1 hereto

By LEHMAN BROTHERS INC.

By
---------------------------
Authorized Representative

<PAGE>

SCHEDULE 1

Number of
U.S. Underwriters Shares
----------------- ------

Lehman Brothers Inc.....................................
Bear, Stearns & Co. Inc.................................
Credit Suisse First Boston Corporation .................
Morgan Stanley & Co. Incorporated ......................
C.E. Unterberg, Towbin..................................

----------
Total
==========

<PAGE>

LOCK-UP LETTER AGREEMENT

LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
MORGAN STANLEY & CO. INCORPORATED
C.E. UNTERBERG, TOWBIN
As Representatives of the
several U.S. underwriters

LEHMAN BROTHERS INTERNATIONAL (EUROPE)
BEAR, STEARNS INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
C.E. UNTERBERG, TOWBIN
As Representatives of the
several international managers

c/o LEHMAN BROTHERS INC.
Three World Financial Center
New York, NY 10285

Dear Sirs:

The undersigned understands that you and certain other firms propose
to enter into underwriting agreements (the "Underwriting Agreements") providing
for the purchase by you and such other firms (collectively, the "Underwriters")
of shares (the "Shares") of Common Stock, par value $.01 per share (the "Common
Stock"), of L-3 Communications Holdings, Inc. (the "Company") and that the
Underwriters propose to reoffer the Shares to the public (the "Offering").

In consideration of the execution of the Underwriting Agreements by
the Underwriters, and for other good and valuable consideration, the
undersigned hereby irrevocably agrees that, without the prior written consent
of Lehman Brothers Inc., the undersigned will not, directly or indirectly, (1)
offer for sale, sell, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock
(including, without limitation, shares of Common Stock that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common
Stock that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable or exercisable for Common Stock (other than
the Shares) owned by the undersigned on the date of execution of this Lock-Up
Letter Agreement or on the date of the completion of the Offering, or (2) enter
into any swap or other derivatives transaction that

<PAGE>

transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, for a period of 180 days after
the date of the final Prospectus relating to the Offering except in each case
for transactions by any person other than the Company relating to shares of
Common Stock or other securities convertible into or exchangeable or
exercisable for Common Stock acquired in open market transactions after the
completion of the Offering.

In furtherance of the foregoing, the Company and its Transfer Agent
are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.

It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, we will be released from our
obligations under this Lock-Up Letter Agreement.

The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.

The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Lock-Up Letter Agreement and
that, upon request, the undersigned will execute any additional documents
necessary in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.

Very truly yours,

By:
---------------------------
Name:
Title:

Dated:
---------------

<PAGE>

EXHIBIT 1.2

1,100,000 SHARES

L-3 COMMUNICATIONS HOLDINGS, INC.

COMMON STOCK, $.01 PAR VALUE

FORM OF INTERNATIONAL UNDERWRITING AGREEMENT

May __, 1998

LEHMAN BROTHERS INTERNATIONAL (EUROPE)
BEAR, STEARNS INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
C.E. UNTERBERG, TOWBIN
As Lead Managers of the several
International Managers named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285

Dear Sirs:

L-3 Communications Holdings, Inc., a Delaware corporation
(the "Company"), proposes to sell 1,100,000 shares (the "International Stock")
of the Company's Common Stock, par value $.01 per share (the "Common Stock").
As described in the Prospectus (hereinafter defined), the Company will use the
net proceeds from the sale of the International Stock 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 International Stock from the Company by the International
Managers.

It is understood by all parties that the Company is
concurrently entering into an agreement dated the date hereof (the "U.S.
Underwriting Agreement") providing for the sale by the Company of 4,400,000
shares of Common Stock (the "Firm 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. In addition, the Company 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

<PAGE>

the U.S. Underwriting Agreement. The International Managers and the U.S.
Underwriters 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. Two forms of
prospectus are to be used in connection with the offering and sale of shares of
Common Stock contemplated by the foregoing, one relating to the U.S. Stock and
the other relating to the International Stock. The latter form of prospectus
will be identical to the former except for certain substitute pages as included
in the registration statement and amendments thereto referred to below. Except
as used in Sections 2, 3, 4 and 9 herein, and 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 this Agreement or the U.S.
Underwriting Agreement, and references herein to any prospectus whether in
preliminary or final form, and whether as amended or supplemented, shall
include both the international and the U.S. versions thereof.

1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees 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 Stock have (i) been prepared by the Company 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. Copies of such registration statement and the
amendments thereto have been delivered by the Company to you
as the Lead Managers (the "Lead Managers") of the
International Managers. 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 with the
consent of the Lead Managers 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 has filed or is required pursuant
to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Securities Act registering
additional shares of Common Stock (a "Rule 462(b)

2
<PAGE>

(b) The Registration Statement (other than any Rule
462(b) Registration Statement to be filed by the Company
after the effectiveness of this Agreement) conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement (including, if the Company is 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
through the Lead Managers by or on behalf of any
International Manager specifically for inclusion therein.

(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.

3
<PAGE>

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 (other than L-3 Communications Corporation (the
"Significant Subsidiary")) is a "significant subsidiary," as
such term is defined in Rule 405 of the Rules and
Regulations.

(f) Prior to the delivery of the Stock on the First
Delivery Date, the shares of the Stock to be issued and sold
by the Company to the International Managers hereunder and to
the U.S. Underwriters under the U.S. Underwriting Agreement
will have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein and
in the U.S. Underwriting Agreement, will be duly and validly
issued, fully paid and non-assessable; and the Stock will
conform to the description thereof contained in the
Prospectus.

(g) This Agreement has been duly authorized,
executed and delivered by the Company and the Significant
Subsidiary.

(h) The execution, delivery and performance of this
Agreement and the U.S. Underwriting Agreement by the Company
and the Significant Subsidiary 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

4
<PAGE>

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 International Stock and
the U.S. Stock 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 or foreign securities laws in connection with the
purchase and distribution of the Stock by the International
Managers and the U.S. 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 U.S. Underwriting Agreement by the Company and the
Significant Subsidiary and the consummation of the
transactions contemplated hereby and thereby.

5
<PAGE>

(l) 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
predecessor) 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) 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

6
<PAGE>

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).

7
<PAGE>

and nothing has occurred, whether by action or by failure to
act, which would reasonably be expected to cause the loss of
such qualification.

8
<PAGE>

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.

(z) All of the representations and warranties of
the parties to the U.S. Underwriting Agreement and the debt
underwriting agreement (the "Debt Underwriting Agreement"),
dated as of the date hereof, providing for the sale by the
Company of $150,000,000 in aggregate principal amount of the
Significant Subsidiary's ___% Senior Subordinated Notes due
2008 (the "Notes") to Lehman Brothers Inc. and BancAmerica
Robertson Stephens, are true and correct.

2. Purchase of the Stock by the International Managers. 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
International Stock to the several International Managers and each of the
International Managers, severally and not jointly, agrees to purchase the
number of shares of the International Stock set opposite that International
Manager's name in Schedule 1 hereto. The respective purchase obligations of the
International Managers with respect to the International Stock shall be rounded
among the International Managers to avoid fractional shares, as the Lead
Managers may determine.

The Company shall not be obligated to deliver any of the
Stock to be delivered on the First Delivery Date (as hereinafter defined),
except upon payment for all the Stock to be purchased on the First Delivery
Date as provided herein and in the U.S. Underwriting Agreement.

3. Offering of Stock by the International Managers.

Upon authorization by the Lead Managers of the release of the
International Stock, the several International Managers propose to offer the
International Stock for sale upon the terms and conditions set forth in the
Prospectus.

9
<PAGE>

Each International Manager agrees that, except to the extent
permitted by the Agreement Between U.S. Underwriters and International
Managers, it will not offer or sell any of the Stock outside of the United
States.

4. Delivery of and Payment for the Stock. Delivery of and
payment for the International Stock 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 Lead
Managers and the Company. This date and time are sometimes referred to as the
"First Delivery Date." On the First Delivery Date, the Company shall deliver or
cause to be delivered certificates representing the International Stock to the
Lead Managers for the account of each International Manager 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 International Manager hereunder. Upon delivery, the
International Stock shall be registered in such names and in such denominations
as the Lead Managers shall request in writing not less than two full business
days prior to the First Delivery Date. For the purpose of expediting the
checking and packaging of the certificates for the International Stock, the
Company shall make the certificates representing the International Stock
available for inspection by the Lead Managers in New York, New York, not later
than 2:00 P.M., New York City time, on the business day prior to the First
Delivery Date.

5. Further Agreements of the Company. The Company agrees:

(a) To prepare the Prospectus in a form approved by
the Lead Managers 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
Lead Managers, 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 Lead
Managers with copies thereof; to advise the Lead Managers,
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
Stock 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

10
<PAGE>

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;

(b) To furnish promptly to each of the Lead Managers
and to counsel for the International Managers 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 Lead Managers such
number of the following documents as the Lead Managers 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 Stock 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 Lead Managers and, upon their
request, to file such document and to prepare and furnish
(without charge for the 9 month period following the First
Delivery Date) to each International Manager and to any
dealer in securities as many copies as the Lead Managers 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 Lead Managers, 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 Lead
Managers and counsel for the International Managers and not
to file any such document to which the Lead Managers 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

11
<PAGE>

current fiscal quarter) to make generally available to the
Company's security holders and to deliver to the Lead
Managers 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 Lead Managers may reasonably request to qualify the
Stock for offering and sale under the securities laws of such
jurisdictions as the Lead Managers 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) For a period of 180 days from the date of the
Prospectus, not to, directly or indirectly, (1) offer for
sale, sell, or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or
securities convertible into or exchangeable or exercisable
for Common Stock (other than the International Stock, the
U.S. Stock and shares issued pursuant to currently
outstanding options, warrants, rights or convertible
securities), or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of
Lehman Brothers Inc.; and to cause each person who
beneficially owns more than 5% of the outstanding shares of
Common Stock as of the date of the Prospectus and each
officer and director of the Company to furnish to the Lead
Managers, prior to the date of the Prospectus, a letter or
letters, in form and substance satisfactory to counsel for
the Lead Managers, pursuant to which each such person shall
agree not to, directly or indirectly, (1) offer for sale,
sell, or otherwise dispose of (or enter into any transaction
or device which is designed to, or could be expected to,
result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common
Stock or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 180 days from the
date of the Prospectus except for transactions by any person
other than the Company and its subsidiaries relating to
shares of Common Stock or

12
<PAGE>

other securities convertible into or exchangeable or
exercisable for Common Stock acquired in open market
transactions after the completion of the Common Stock
Offering, without the prior written consent of Lehman
Brothers Inc.;

(j) To apply the net proceeds from the sale of the
Stock being sold by the Company as set forth in the
Prospectus;

6. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock 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 Stock; (e) any applicable listing or other fees; (f) the
fees and expenses of qualifying the Stock 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 International Managers); and (g) all other costs and expenses
incident to the performance of the obligations of the Company; provided, that
(x) the Company and the International Managers will bear their own "road show"
expenses and (y) the Company on the one hand, and the International Managers on
the other hand, will each bear one half of the cost of the charter aircraft
used in connection with the "road show."

13
<PAGE>

7. Conditions of International Managers' Obligations. The
respective obligations of the International Managers hereunder are subject to
the accuracy, when made and on the First 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:

(b) No International Manager or U.S. Underwriter
shall have discovered and disclosed to the Company on or
prior to the First 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 International
Managers, 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 U.S. Underwriting Agreement, the Stock,
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 International Managers,
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 Lead Managers its written opinion, as counsel to the
Company, addressed to the International Managers and dated
the First Delivery Date, in form and substance reasonably
satisfactory to the Lead Managers, to the effect that:

14
<PAGE>

(ii) All of the outstanding shares of Common
Stock of the Company (including the shares of
International Stock and U.S. Stock being delivered
on the First Delivery Date (as defined in the U.S.
Underwriting Agreement)) have been duly authorized
and all outstanding shares of Common Stock have been
and upon payment and delivery in accordance with
this Agreement, the Stock will be validly issued,
fully paid and non-assessable; 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 an examination of each such subsidiary's
stock ledger and minute books, all such shares are
held of record by the Company and/or a subsidiary of
the Company;

(v) 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.

(vi) 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;

15
<PAGE>

(vii) This Agreement and the U.S.
Underwriting Agreement have each been duly
authorized, executed and delivered by the Company
and the Significant Subsidiary, as applicable;

(viii) The issue and sale of the shares of
Stock being delivered on the First Delivery Date by
the Company and the compliance by the Company and
the Significant Subsidiary, as applicable, with all
of the provisions of this Agreement, the U.S.
Underwriting Agreement and the Debt 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 or any of its 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 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 or any of
its 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 Company and the issuance and sale of the
Notes by the Significant Subsidiary (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 under state securities or Blue Sky
laws in connection with the purchase and
distribution of the Stock, International Stock,
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 (i)
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.

16
<PAGE>

Such counsel shall also have furnished to the Lead
Managers a written statement, addressed to the
International Managers and dated such 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
(iv) 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 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 Lead Managers his
written opinion, as General Counsel to the Company, addressed
to the International Managers and dated such Delivery Date,
in form and substance reasonably satisfactory to the Lead
Managers, to the effect that:

17
<PAGE>

(v) None of the issue and sale of the
shares of Stock being delivered on such Delivery
Date by the Company and the compliance by the
Company, the Significant Subsidiary and the
Guarantors, as applicable, with all of the
provisions of this Agreement, the U.S. Underwriting
Agreement and the Debt 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 court, regulatory body,
administrative agency or other governmental body,
agency or official having authority over government
procurement matters (provided, that the opinion in
this paragraph (v) may be delivered by other counsel
reasonably satisfactory to the Lead Managers).

(f) The Lead Managers shall have received from
Latham & Watkins, counsel for the International Managers,
such opinion or opinions, dated the First Delivery Date, with
respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related
matters as the Lead Managers may reasonably require, and the
Company shall have furnished to such counsel such

18
<PAGE>

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
Lead Managers shall have received from Coopers & Lybrand
L.L.P. a letter, in form and substance satisfactory to the
Lead Managers, addressed to the International Managers 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
Lead Managers shall have received from Ernst & Young LLP a
letter, in form and substance satisfactory to the Lead
Managers, addressed to the International Managers 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.

(i) At the time of execution of this Agreement, the
Lead Managers shall have received from KPMG Peat Marwick LLP
a letter, in form and substance satisfactory to the Lead
Managers, addressed to the International Managers 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

19
<PAGE>

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 Lead Managers
concurrently with the execution of this Agreement (the
"initial letters"), the Company shall have furnished to the
Lead Managers letters (the "bring-down letters") of such
accountants, in form and substance satisfactory to the Lead
Managers, addressed to the International Managers and dated
the First 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 shall have furnished to the Lead
Managers a certificate, dated the First Delivery Date, of its
Chairman of the Board, its President or a Vice President and
its chief financial officer stating that:

(i) The representations and warranties of
the Company in Section 1 are true and correct as of
the First Delivery Date; the Company has complied
with all its agreements contained herein; and the
conditions set forth in Sections 7(a) and 7(l) have
been fulfilled; and

20
<PAGE>

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
Lead Managers, so material and adverse as to make it
impracticable or inadvisable to proceed with the public
offering or the delivery of the Stock being delivered on the
First Delivery Date on the terms and in the manner
contemplated in the Prospectus.

(o) The New York Stock Exchange shall have approved
the Stock for listing, subject only to official notice of
issuance and evidence of satisfactory distribution.

(p) The closing under the U.S. Underwriting
Agreement shall have occurred concurrently with the closing
hereunder on the First Delivery Date.

21
<PAGE>

8. Indemnification and Contribution.

(a) The Company and the Significant Subsidiary, jointly and
severally, shall indemnify and hold harmless each International Manager
(including any International Manager in its role as qualified independent
underwriter pursuant to the rules of the National Association of Securities
Dealers, Inc.), its officers and employees and each person, if any, who
controls any International Manager 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 Stock), to which
that International Manager, 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 International Manager in connection with, or relating in
any manner to, the Stock 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 Significant Subsidiary 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 International Manager through its gross negligence
or willful misconduct), and shall reimburse each International Manager and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that International Manager, 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
Significant Subsidiary 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 International Manager
furnished to the Company through the Lead Managers by or on behalf of any
International Manager specifically for inclusion therein; provided further,
that the indemnification contained in this paragraph (a) with respect to the
Preliminary Prospectus shall not inure to the benefit of any International
Manager (or to the benefit of any officers or employees of any International
Manager or of any person controlling such

22
<PAGE>

International Manager) on account of any such loss, claim, damage, liability or
action arising from the sale of Stock by such International Manager 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 International Manager sold Stock 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 International
Manager 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 or the
Significant Subsidiary may otherwise have to any International Manager or to
any officer, employee or controlling person of that International Manager.

(b) Each International Manager, 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, 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 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 International Manager furnished to the Company
through the Lead Managers by or on behalf of that International Manager
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 International Manager may otherwise have to the Company or any such
director, officer, employee or controlling person.

23
<PAGE>

claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party
in writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party and
in the reasonable judgment of such counsel, it is advisable for such
indemnified party to employ separate counsel or (iii) the indemnifying party
has failed to assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party, in which case, if such indemnified party
notifies the indemnifying party in writing that it elects to employ separate
counsel at the expense of the indemnifying party 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 International Managers 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.

24
<PAGE>

liability, or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Company, the
Significant Subsidiary on the one hand and the International Managers on the
other from the offering of the Stock 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, the Significant Subsidiary,
on the one hand and the International Managers 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, the
Significant Subsidiary, on the one hand and the International Managers 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, the
Significant Subsidiary, on the one hand, and the total underwriting discounts
and commissions received by the International Managers with respect to the
shares of the Stock purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the shares of the Stock 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, the Significant Subsidiary, or the International Managers, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. For purposes of
the preceding two sentences, the net proceeds deemed to be received by the
Company shall be deemed to be also for the benefit of the Significant
Subsidiary and information supplied by the Company shall also be deemed to have
been supplied by the Significant Subsidiary. The Company, the Significant
Subsidiary and the International Managers 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 International Managers 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 International Manager 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 International Manager 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 International Managers'
obligations to contribute as provided in this Section 8(d) are several in
proportion to their respective underwriting obligations and not joint.

(e) The International Managers severally confirm and the
Company and the Significant Subsidiary acknowledge that the statements with
respect to the public offering of Stock

25
<PAGE>

by the International Managers and the last sentence of the third paragraph on
the cover page of, the legend concerning stabilization on page (i) of, and the
fourth, eighth, tenth, sixteenth, twenty-second, twenty-third and twenty-fourth
paragraphs and the stabilization language in paragraphs eleven through fourteen
under the caption "Underwriting" in, the Prospectus are correct and constitute
the only information concerning such International Managers furnished in
writing to the Company by or on behalf of the International Managers
specifically for inclusion in the Registration Statement and the Prospectus.

9. Defaulting International Managers.

If, on the First Delivery Date, any International Manager
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting International Managers shall be obligated to purchase
the Stock which the defaulting International Manager agreed but failed to
purchase on the First Delivery Date in the respective proportions which the
number of shares of the Stock set opposite the name of each remaining
non-defaulting International Manager in Schedule 1 hereto bears to the total
number of shares of the Stock set opposite the names of all the remaining
non-defaulting International Managers in Schedule 1 hereto; provided, however,
that the remaining non-defaulting International Managers shall not be obligated
to purchase any of the Stock on the First Delivery Date if the total number of
shares of the Stock which the defaulting International Manager or International
Managers agreed but failed to purchase on such date exceeds 9.09% of the total
number of shares of the Stock to be purchased on the First Delivery Date, and
any remaining non-defaulting International Manager shall not be obligated to
purchase more than 110% of the number of shares of the Stock which it agreed to
purchase on the First Delivery Date pursuant to the terms of Section 2. If the
foregoing maximums are exceeded, the remaining non-defaulting International
Managers, or those other underwriters satisfactory to the Lead Managers who so
agree, shall have the right, but shall not be obligated, to purchase, in such
proportion as may be agreed upon among them, all the Stock to be purchased on
the First Delivery Date. If the remaining International Managers or other
underwriters satisfactory to the Lead Managers do not elect to purchase the
shares which the defaulting International Manager or International Managers
agreed but failed to purchase on the First Delivery Date, this Agreement shall
terminate without liability on the part of any non-defaulting International
Manager or the Company, except that the Company and the Significant Subsidiary
will continue to be liable for the payment of expenses to the extent set forth
in Sections 6 and 11. As used in this Agreement, the term "International
Manager" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 9, purchases Stock which a defaulting International Manager agreed
but failed to purchase.

Nothing contained herein shall relieve a defaulting
International Manager of any liability it may have to the Company for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing International Manager, either the Lead
Managers or the Company may postpone the Delivery Date for up to seven full
business days in order to effect any changes that in the opinion of counsel for
the Company or

26
<PAGE>

counsel for the International Managers may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.

10. Termination. The obligations of the International
Managers hereunder may be terminated by the Lead Managers by notice given to
and received by the Company prior to delivery of and payment for the
International Stock 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 International
Managers shall decline to purchase the Stock for any reason permitted under
this Agreement.

11. Reimbursement of International Managers' Expenses. If (a)
the Company shall fail to tender the Stock for delivery to the International
Managers by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed, or because any
other condition of the International Managers' obligations hereunder required
to be fulfilled by the Company is not fulfilled, the Company and the
Significant Subsidiary will reimburse the International Managers for all
reasonable out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the International Managers in connection with this Agreement and
the proposed purchase of the International Stock, and upon demand the Company
and the Significant Subsidiary shall pay the full amount thereof to the Lead
Manager(s). If this Agreement is terminated pursuant to Section 9 by reason of
the default of one or more International Managers, the Company and the
Significant Subsidiary shall not be obligated to reimburse any defaulting
International Manager on account of those expenses.

12. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:

(a) if to the International Managers, 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;

provided, however, that any notice to an International Manager pursuant to
Section 8(c) shall be delivered or sent by mail, telex or facsimile
transmission to such International Manager at its address set forth in its
acceptance telex to the Lead Managers, which address will be supplied to any
other party hereto by the Lead Managers upon request. Any such statements,
requests, notices

27
<PAGE>

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 International Managers by Lehman
Brothers Inc. on behalf of the Lead Managers.

13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the International Managers,
the Company, the Significant Subsidiary, 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 contained in this Agreement shall also be deemed to
be for the benefit of the person or persons, if any, who control any
International Manager within the meaning of Section 15 of the Securities Act
and for the benefit of each International Manager (and controlling persons
thereof) who offers or sells any shares of Common Stock in accordance with the
terms of the Agreement Between International Managers and International
Managers and (B) the indemnity agreement of the International Managers
contained in Section 8(c) of this Agreement shall be deemed to be for the
benefit of directors of the Company, officers of the Company who have signed
the Registration Statement and any person controlling the Company 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.

14. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Significant Subsidiary and the
International Managers 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 Stock 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.

16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.

28
<PAGE>

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]

29
<PAGE>

If the foregoing correctly sets forth the agreement among the
Company, the Significant Subsidiary and the International Managers, please
indicate your acceptance in the space provided for that purpose below.

Very truly yours,

L-3 COMMUNICATIONS HOLDINGS, INC.

By
---------------------------------
Name:
Title:

L-3 COMMUNICATIONS CORPORATION,
the Significant Subsidiary

By
---------------------------------
Name:
Title:

Accepted:

LEHMAN BROTHERS INTERNATIONAL (EUROPE)
BEAR, STEARNS INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
C.E. UNTERBERG, TOWBIN

For themselves and as Lead Managers
of the several International Managers named
in Schedule 1 hereto

By LEHMAN BROTHERS INTERNATIONAL (EUROPE)

By
--------------------------------------
Authorized Representative

<PAGE>

SCHEDULE 1

International Managers Number of Shares
- ---------------------- ----------------

Lehman Brothers International Europe......................
Bear, Stearns International Limited.......................
Credit Suisse First Boston (Europe) Limited...............
Morgan Stanley & Co. International Limited................
C.E. Unterberg, Towbin....................................

-----------
Total
===========

<PAGE>

EXHIBIT 3.1

FORM OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
L-3 COMMUNICATIONS HOLDINGS, INC.

L-3 COMMUNICATIONS HOLDINGS, INC., a corporation organized
and existing under the laws of the State of Delaware (the "Corporation"),
hereby certifies as follows:

1. The name of the corporation is L-3 Communications Holdings,
Inc. The date of the filing of its original Certificate of Incorporation with
the Secretary of State of the State of Delaware was March 20, 1997 under the
name L-Three Communications Holdings, Inc. A Certificate of Amendment to the
Certificate of Incorporation was filed with the Secretary of State on March 26,
1997.

2. This Amended and Restated Certificate of Incorporation has
been duly adopted in accordance with Sections 103, 241 and 245 of the General
Corporation Law of the State of Delaware and restates and amends the provisions
of the existing Amended and Restated Certificate of Incorporation. A
Certificate of Amendment to the Certificate of Incorporation was filed with the
Secretary of State on May ___, 1998.

3. Upon the filing of this Amended and Restated Certificate
of Incorporation, (i) each of the issued and outstanding shares of Common
Stock, par value $0.01 per share, Class A ("Class A Common Stock") and Common
Stock, par value $0.01 per share, Class B ("Class B Common Stock" and, together
with Class A Common Stock, the "Old Shares") shall immediately, and without any
action on the part of the holder thereof, be converted into an equal number of
shares of Common Stock, par value $0.01 per share ("Common Stock"), (ii) Common
Stock, par value $0.01 per share, Class C ("Class C Common Stock") shall no
longer be authorized under this Amended and Restated Certificate of
Incorporation and (iii) the Board of Directors shall be authorized issued
Preferred Stock in accordance with Article FOURTH of this Amended and Restated
Certificate of Incorporation.

The certificates representing the Old Shares shall be
cancelled by the Corporation upon surrender of such certificates to the
Corporation by the holders thereof and the Corporation shall issue to the
holders thereof new certificates representing Common Stock into which the Old
Shares shall have been converted. Until so surrendered, the certificates
theretofore representing the Old Shares shall be deemed to represent shares of
Common Stock into which the Old Shares have been converted.

4. The text of the Certificate of Incorporation as amended
heretofore is hereby amended and restated to read in its entirety as follows:

<PAGE>

FIRST: The name of the Corporation is L-3 Communications
Holdings, Inc.

SECOND: The registered office and 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
General Corporation Law of the State of Delaware.

FOURTH: The total number of shares of all classes of stock
which the Corporation shall have the authority to issue is 125,000,000 shares,
consisting of 100,000,000 shares of Common Stock, par value $.01 per share (the
"Common Stock") and 25,000,000 shares of preferred stock (the "Preferred
Stock"). Set forth below with respect to each class of stock of the Corporation
is a statement of the voting powers and the designations, preferences, rights,
qualifications, limitations and restrictions thereof:

A. Common Stock.

1. Voting Rights. Except as may otherwise be required by law,
each holder of Common Stock shall have one vote in respect of each share of
Common Stock held on all matters voted upon by the stockholders of the
Corporation.

2. Dividends. Subject to Section B of this Article FOURTH,
the holders of Common Stock shall be entitled to receive such dividends as may
be declared from time to time by the Board of Directors of the Corporation.

3. Distributions. Subject to Section B of this Article
FOURTH, in the event of any voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, the holders of Common Stock shall be entitled
to receive all of the remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to stockholders ratably
in proportion to the number of shares of Common Stock held by them.

B. Preferred Stock. The Board of Directors of the Corporation
is authorized to fix, by resolution or resolutions, the designation of each
series of Preferred Stock and the voting rights, preferences as to dividends
and in liquidation, conversion and other rights, qualifications, limitations
and restrictions thereof and such other subjects or matters as may be fixed by
resolution or resolutions of the Board of Directors under the General
Corporation Law of the State of Delaware.

FIFTH: The Board of Directors of the Corporation, acting by
the affirmative vote of a majority of the directors

<PAGE>

then in office, may alter, amend or repeal the Bylaws of the Corporation;
provided, that the affirmative vote of two-thirds of the directors then in
office is required to alter, amend or repeal Sections 2.5, 2.6, 3.2, 3.6, 3.7,
6.2, 6.7 and 7.1 of the Bylaws of the Corporation.

SIXTH: The number of directors of the Corporation shall be
determined in the manner provided in the Bylaws of the Corporation.

SEVENTH: A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation 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 General Corporation Law, as the same exists or hereafter may be amended,
or (iv) for any transaction from which the director derived an improper
personal benefit. If the General Corporation Law hereafter is amended to
authorize the further elimination or limitation of the liability of the
directors, then the liability of a director shall be eliminated or limited to
the fullest extent permitted by the amended General Corporation Law. In
addition to the limitation on personal liability of directors provided herein,
the Corporation shall, to the fullest extent permitted by the General
Corporation Law: (x) indemnify its officers and directors and (y) advance
expenses incurred by such officers or directors in relation to any action, suit
or proceeding. Any repeal or modification of this paragraph by the stockholders
of the Corporation shall be prospective only, and shall not adversely affect
any limitation on the personal liability or right to indemnification or
advancement of expenses hereunder existing at the time of such repeal or
modification.

EIGHTH: Meetings of stockholders may be held within or
without the State of Delaware, as the Bylaws of the Corporation may provide.
The books of the Corporation may be kept outside the State of Delaware at such
place or places as may be designated by the Board of Directors or in the Bylaws
of the Corporation.

NINTH: Unless and except to the extent that the Bylaws of the
Corporation shall so require, the election of the directors of the Corporation
need not be by written ballot.

TENTH: Notwithstanding the provisions of Section 228 of the
General Corporation Law of the State of Delaware, the stockholders of the
Corporation may take action by written consent only if all of the stockholders
entitled to vote on the matter sign such consent. This Article TENTH may not be
amended without the unanimous consent of all stockholders entitled to vote on
the matter.

<PAGE>
4

IN WITNESS WHEREOF, L-3 Communications Holdings, Inc. has
caused this Amended and Restated Certificate of Incorporation to be executed
by _________, (title), this __th day of May 1998.

L-3 COMMUNICATIONS HOLDINGS, INC.

By:______________________________
Name:
Title:

<PAGE>

Exhibit 3.2

FORM OF

BYLAWS

L-3 COMMUNICATIONS HOLDINGS, INC.

(hereinafter called the "Corporation")

Incorporated under the Laws of the State of Delaware

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 which the meeting is called, shall be
prepared and delivered by the

<PAGE>

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

<PAGE>

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 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. The directors are divided into
classes, each class to consist of one- third of the number of directors then
constituting the Board of Directors. The term of office of those of the first
class shall expire at the annual meeting next following the first election
held after the adoption of this Bylaw; the term of office of those of the
second class shall expire one year thereafter; and the term of office of those
of the third class shall expire two years thereafter. At each annual meeting
following the annual meeting at which this Bylaw shall be adopted, the
directors elected shall be elected for a full term of three years to succeed
those whose terms expire. Notwithstanding the foregoing, each director shall
serve until his successor is duly elected and qualified, or until his
resignation, removal, or death.

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.

<PAGE>

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 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

<PAGE>

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 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

<PAGE>

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.

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.

<PAGE>

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.

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.

<PAGE>

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.

(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

<PAGE>

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

<PAGE>

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 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.

<PAGE>

Exhibit 4.1

NUMBER SHARES
- ---------------------- ------------------------

- ---------------------- -----------------------
COMMON STOCK CUSIP 502424 10 4
Incorporated under the laws
of the State of Delaware

L-3 COMMUNICATIONS HOLDINGS, INC.

- --------------------------------------------------------------------------------
THIS CERTIFIES THAT

IS THE OWNER OF

- --------------------------------------------------------------------------------

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF

L-3 COMMUNICATIONS HOLDINGS, INC. (hereinafter called the "Corporation")
transferable on the books of the Corporation in person or by duly
authorized attorney upon surrender of the Certificate properly endorsed. This
Certificate is not valid unless countersigned and registered by the Transfer
Agent and Registrar.

Witness the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.

Dated:

L-3 COMMUNICATIONS HOLDINGS, INC.
[CORPORATE
SEAL
1997
DELAWARE]
*

/s/ /s/
------------------------ ---------------------------
CHAIRMAN PRESIDENT

/s/
----------------------------
SECRETARY

COUNTERSIGNED AND REGISTERED
FIRST CHICAGO TRUST COMPANY OF NEW YORK
TRANSFER AGENT AND REGISTRAR

BY /s/
----------------------------------------
AUTHORIZED OFFICER

<PAGE>

EXHIBIT 5

May 14, 1998

L-3 Communications Holdings, Inc.
600 Third Avenue
New York, New York 10016

Ladies and Gentlemen:

We have acted as special counsel for L-3 Communications Holdings, Inc., a
Delaware corporation (the "Company"), in connection with the Registration
Statement on Form S-1 (No. 333-46975) 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 shares of its Common Stock,
par value $.01 per share (the "Shares"). The Shares are to be purchased by
certain underwriters and offered for sale to the public pursuant to the terms
of a U.S. Underwriting Agreement and an International Underwriting Agreement,
among the Company and the underwriters named therein (collectively, the
"Underwriting Agreement").

We have examined the Registration Statement and the forms of Underwriting
Agreement which have been filed with the Commission as Exhibits to the
Registration Statement. In addition, we have examined, and have relied as to
matters of fact upon, the originals or copies, certified or otherwise identified
to our satisfaction, of such corporate

<PAGE>

L-3 Communications Holdings, Inc. -2- May 14, 1998

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, we are of the opinion that, when the issuance of the Shares
has been authorized by the Board of Directors of the Company or a duly
constituted committee thereof, upon payment and delivery in accordance with
the Underwriting Agreement, the Shares will be validly issued, fully paid and
nonassessable.

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.

<PAGE>

L-3 Communications Holdings, Inc. -3- May 14, 1998

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

<PAGE>

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

<PAGE>

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

<PAGE>

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.

<PAGE>

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.

<PAGE>

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.

<PAGE>

"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:

<PAGE>

(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.

<PAGE>

"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.

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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))

<PAGE>

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.

<PAGE>

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.

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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.

<PAGE>

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

<PAGE>

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.

<PAGE>

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.

<PAGE>

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

<PAGE>

EXHIBIT A TO STOCKHOLDERS AGREEMENT

Bylaws -- Please see Exhibit 3.2 to the Registration Statement.

<PAGE>

EXHIBIT B TO STOCKHOLDERS AGREEMENT

Certificate of Incorporation -- Please see Exhibit 3.1 to the
Registration Statement

<PAGE>

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.

================================================================================
<PAGE>

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.
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

(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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

(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
<PAGE>

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
<PAGE>

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
<PAGE>

(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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

(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
<PAGE>

(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
<PAGE>

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
<PAGE>

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

<PAGE>

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]

<PAGE>

EXHIBIT E TO STOCKHOLDERS AGREEMENT

1997 Option Plan for Key

Employees -- Please see

Exhibit 10.91 to the

Registration statement.

<PAGE>

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.

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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;

<PAGE>

(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

<PAGE>

(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

<PAGE>

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

<PAGE>

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

<PAGE>

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.

<PAGE>

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

<PAGE>

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.

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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.

<PAGE>

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.

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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.

<PAGE>

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

<PAGE>

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.

<PAGE>

(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

<PAGE>

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.

<PAGE>

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

<PAGE>

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:

<PAGE>

(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);

<PAGE>

(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)

<PAGE>

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

<PAGE>

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,

<PAGE>

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

<PAGE>

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

<PAGE>

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.

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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.

<PAGE>

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:

<PAGE>
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;

<PAGE>

(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

<PAGE>

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.

<PAGE>

"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.

<PAGE>

"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;

<PAGE>

(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;

<PAGE>

(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,

<PAGE>

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.

<PAGE>

"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

<PAGE>

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

<PAGE>

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.

<PAGE>

"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);

<PAGE>

(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

<PAGE>

(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).

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

<PAGE>

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

<PAGE>

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

<PAGE>

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;

<PAGE>

(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.

<PAGE>

(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.

<PAGE>

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;

(d) liabilities not required to be accrued for or reserved against
in accordance with GAAP as of December 31, 1996; and

<PAGE>

(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;

<PAGE>

(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.

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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;

<PAGE>

(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).

<PAGE>

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

<PAGE>

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.

<PAGE>

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.

<PAGE>

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.

<PAGE>

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).

<PAGE>

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.

<PAGE>

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

<PAGE>

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.

<PAGE>

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;

<PAGE>

(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

<PAGE>

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.

<PAGE>

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.

<PAGE>

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

<PAGE>

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.

<PAGE>

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.

<PAGE>

(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,

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

(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

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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

<PAGE>

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.

<PAGE>
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
<PAGE>

[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
<PAGE>

[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

Ernst & Young LLP is a member of Ernst & Young International, Ltd.
<PAGE>

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
<PAGE>

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
<PAGE>

LOCKHEED MARTIN PREDECESSOR BUSINESSES

COMBINED STATEMENTS OF CASH FLOWS
(In thousands)

<TABLE>
<CAPTION>
For the years ended December 31,
-----------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
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 -- -- --
========= ========= =========
</TABLE>

See notes to combined financial statements.

5
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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.

<PAGE>
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
<PAGE>

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

<PAGE>

[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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>
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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>
ATTACHMENT IV TO TRANSACTION AGREEMENT

See Amendment No. 2 to the Transaction Agreement
<PAGE>
ATTACHMENT V TO TRANSACTION AGREEMENT

See Amendment No. 2 to the Transaction Agreement
<PAGE>
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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

(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:

<TABLE>
<CAPTION>
December 31, 1996 Effective Date(a)
----------------- -----------------
(in millions) (in millions)

<S> <C> <C>
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)
</TABLE>

VI-5
<PAGE>
<TABLE>
<S> <C> <C>
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)
</TABLE>
(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
<PAGE>

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
<PAGE>

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
<PAGE>
ATTACHMENT VIII TO TRANSACTION AGREEMENT

See Amendment No. 2 to the Transaction Agreement
<PAGE>
ATTACHMENT IX TO TRANSACTION AGREEMENT

See Amendment No. 2 to the Transaction Agreement
<PAGE>
ATTACHMENT X TO TRANSACTION AGREEMENT

See Amendment No. 2 to the Transaction Agreement

<PAGE>

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

<PAGE>
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

<PAGE>

or conflict with the charter or bylaws of Lockheed Martin or any Affiliated
Transferor

XII-2

<PAGE>

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

<PAGE>
ATTACHMENT XIV TO TRANSACTION AGREEMENT

See Amendment No. 2 to the Transaction Agreement

<PAGE>

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

<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 1 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 2 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 3 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 4 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 5 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 6 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 7 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 8 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 9 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 10 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 11 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 12 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 13 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 14 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 15 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 16 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 17 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 18 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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.
</TABLE>

Page 19 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 20 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

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
</TABLE>

Page 21 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 22 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 23 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 24 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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

</TABLE>

Page 25 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 26 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

Communications Systems Patent Portfolio

<TABLE>
<CAPTION>
Docket Patent Term 1997
Ref. No. No. Title Date Application US For Fee Class* Remarks
---- --- --- ----- ---- ----------- -- --- --- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>

Page 27 of 32

* CLASS: 1 - Keep; 2 - Review; 3 - Drop(ped)
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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".
<PAGE>

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".
<PAGE>

RANDTRON PATENT LISTING

U.S. PATENT No. 4,658,262 "Dual Polarized Sinuous Antennas".
<PAGE>

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".
<PAGE>

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"
<PAGE>

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"

<PAGE>

- -------------------------------------------------------------------------------

AMENDMENT NO. 1

Dated as of April 11, 1997

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.

- -------------------------------------------------------------------------------

<PAGE>

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 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."

<PAGE>

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:

<PAGE>

- -------------------------------------------------------------------------------

AMENDMENT NO. 2

Dated as of April 30, 1997

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.

- -------------------------------------------------------------------------------

<PAGE>

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, 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.

<PAGE>

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

<PAGE>

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:

<PAGE>

"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."

<PAGE>

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:

<PAGE>

AMENDMENT NO. 3

Dated as of May 21, 1997

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

<PAGE>

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

<PAGE>

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

<PAGE>

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."

<PAGE>

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

- ------------------------------- ----------------------------

<PAGE>

L-3 COMMUNICATIONS CORPORATION

_______________________________ By: ____________________________
Name: Michael T. Strianese
Title: VP Finance and
Controller

<PAGE>

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

<PAGE>

ASSET PURCHASE AGREEMENT

<TABLE>
<CAPTION>
Page
----
<S> <C>
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
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C>
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
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C>
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
</TABLE>

iii
<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C>
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
</TABLE>

iv
<PAGE>

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

<PAGE>

4.26 Affiliate Transactions

6.2(a) Retention Agreements

6.5(b) Actuarial Methods and Assumptions

7.15 Letters of Credit

vi
<PAGE>

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
<PAGE>

(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;

<PAGE>

(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;

<PAGE>

(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,

<PAGE>

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