<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.
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<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.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<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
<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.
<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
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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,
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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
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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.
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<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
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<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;
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<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;
(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 Stock, the International
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 Representatives, prior to the
date of the Prospectus, a letter or letters, in form and
substance satisfactory to counsel for the U.S. Underwriters,
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
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.
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
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.
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<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
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<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
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<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;
(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 International
Underwriting Agreement and the Debt Underwriting
Agreement and the consummation of the transactions
comtemplated hereby and thereby requires any
consent,
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>
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 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.
(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 whole (a "Material Adverse Effect"),
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.
(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 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.
(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 Material Adverse Effect,
otherwise than as described or contemplated in the
Prospectus.
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.
(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, copyrights, licenses,
inventions, trade secrets and other rights, and all
registrations or applications relating thereto, described in
the Prospectus as being owned by them
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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 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
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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 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
8
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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 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.
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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
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<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
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<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.;
(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.
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."
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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:
(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 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:
(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;
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;
(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 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;
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<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.
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<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:
(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;
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(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;
(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
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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
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<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
(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 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
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<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.
(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 International Managers,
impracticable or inadvisable to proceed with the public
offering or 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.
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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 International Managers.
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.
(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
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<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.
(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
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
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<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;
(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 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
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<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.
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.
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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]
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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
===========
31
<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>
2
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>
3
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
OF
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>
2
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>
3
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>
4
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>
5
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>
6
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>
7
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>
8
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>
9
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>
10
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
- ---------------------- ------------------------
N
- ---------------------- -----------------------
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
2
<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.
3
<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.
4
<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.
5
<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:
6
<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.
7
<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.
8
<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
9
<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
10
<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
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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))
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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.
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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.
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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
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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
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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
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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.
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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
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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.
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Section 7.12. Option Plan. Each of the Stockholders agrees to vote
all of the Shares of Class A Common Stock owned or held of record by such
Stockholder at any regular or special meeting of the stockholders of the
Company called for the purpose of approving the Option Plan or in any written
consent executed in lieu of such a meeting of stockholders (and the Company
agrees to use reasonable efforts to cause such meeting to occur promptly), and
agrees to take all actions otherwise necessary, to ensure the approval of the
Option Plan in accordance with the terms hereof.
21
<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
22
<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
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<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
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<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
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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;
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(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
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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
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<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;
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<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
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<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,
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<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
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<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
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(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.
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<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]
23
<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
3
<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
4
<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
5
<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
6
<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
7
<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;
8
<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
9
<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
10
<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
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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
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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.
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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
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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.
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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
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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
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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
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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.
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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.
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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
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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
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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
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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.
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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
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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.
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(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
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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.
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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
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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:
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(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);
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(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)
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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
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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,
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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.
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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:
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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;
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(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
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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.
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"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.
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"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;
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(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;
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(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,
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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.
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"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
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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
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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.
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"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);
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(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
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(xv) all of the Lockheed Martin Companies' right, title and interest
in the real property located at 1355 Bluegrass Lakes Parkway, Alpharetta,
Georgia.
"U.S. Government" means the United States Government and any agencies,
instrumentalities and departments thereof.
(b) "To the knowledge," "known by" or "known" (and any similar phrase) means
(i) with respect to Lockheed Martin, to the actual knowledge of any of the
Senior Vice Presidents or higher ranking officers of Lockheed Martin, or the
Vice President, Financial Strategies of Lockheed Martin, or the President,
Chief Financial Officer and General Counsel of the Lockheed Martin Operating
Sector to which each of the Business Units reports, and shall be deemed to
include a representation that a reasonable investigation or inquiry of the
subject matter thereof has been conducted by or on behalf of the foregoing
specified Persons, which investigation shall include inquiries of the President
and the Chief Financial Officer of each of the Business Units, and (ii) with
respect to the Individual Purchasers, to the actual knowledge of either of the
Individual Purchasers as of the date the applicable representation or warranty
is made (by Lockheed Martin, in the case of representations in Exhibit B
limited by reference to the knowledge of the Individual Purchasers, or by the
Individual Purchasers, in the case of representations in Exhibit D), it being
understood that if there is any dispute as to whether an Individual Purchaser
had actual knowledge of any fact, event or circumstance and Lockheed Martin
seeks to assert such knowledge as a defense to any claim under any of the
Transaction Documents, Lockheed Martin shall have the burden of proof in
connection with any such determination. Notwithstanding the foregoing, the
knowledge of Lockheed Martin at any particular time shall not include knowledge
of any matters actually known by either of the Individual Purchasers at such
time if such matters are not also actually known by one or more of the other
individuals specified in clause (i) above (whether by disclosure to them by the
Individual Purchasers or otherwise).
(c) Each of the following terms is defined in the Section set forth opposite
such term:
Term Section
Accrued Liability . . . . . . . . . . . . . . . . . . . . . . . . . G.05
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Allocation Tax Loss . . . . . . . . . . . . . . . . . . . . . . . . F.01
Alternative Transaction Proposals . . . . . . . . . . . . . . . . . 7.04
Assumed Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05
Basis Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . F.01
Benefit Arrangement . . . . . . . . . . . . . . . . . . . . . . . . G.01
Camden SERPs . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05
Camden Transferee . . . . . . . . . . . . . . . . . . . . . . . . . G.01
Camden Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . G.05
Cash Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.01
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.01
Controlled Group . . . . . . . . . . . . . . . . . . . . . . . . . B.21
Defending Party . . . . . . . . . . . . . . . . . . . . . . . . . 13.03
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
Employee Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . G.01
Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . A
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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
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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
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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;
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(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.
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(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.
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B.07. Sufficiency of and Title to the Transferred Assets.
(a) The Transferred Assets, together with the services to be provided
to Newco pursuant to the Interim Services Agreement and the Intellectual
Property to be licensed to Newco pursuant to the License Agreements,
constitute, and on the Closing Date will constitute, all of the assets and
services that are necessary to permit the operation of the Business in
substantially the same manner as such operations have heretofore been
conducted.
(b) Upon consummation of the Contemplated Transactions, Newco will
have acquired good and marketable title in and to, or a valid leasehold
interest in, each of the Transferred Assets that are necessary to permit the
operation of the Business in substantially the same manner as operations have
heretofore been conducted, free and clear of all Liens, except for Permitted
Liens.
(c) Section B.07 of the Disclosure Schedules includes a true and
complete list of all real property owned by the Lockheed Martin Companies (or
property which the Lockheed Martin Companies have a right to acquire in
connection with the operation of the Business) which is included in the
Transferred Assets (collectively, the "Owned Real Property"; the Owned Real
Property and the Leased Real Property, collectively the "Real Property").
Section B.07(c) of the Disclosure Schedules specifies (i) the address of each
parcel of Owned Real Property and (ii) the owner of such Owned Real Property.
(d) Section B.07 of the Disclosure Schedules includes a true and
complete list of all agreements (together with any amendments thereof
collectively, the "Real Property Leases") pursuant to which the Lockheed Martin
Companies lease, sublease or otherwise occupy (whether as landlord, tenant,
subtenant or other occupancy arrangement) any real property used in the
Business (collectively, the "Leased Real Property"). Section B.07 of the
Disclosure Schedules specifies (i) the address of each parcel of Leased Real
Property and (ii) the owner of the leasehold, subleasehold or occupancy
interest for each Leased Real Property.
B.08. No Undisclosed Liabilities. To the knowledge of Lockheed Martin,
there are no liabilities of Lockheed Martin (or any Affiliated Transferor)
relating to the Business that constitute Assumed Liabilities of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, other than:
(a) liabilities disclosed or provided for in the December Statement
and liabilities for matters taken into account in the determination of the
Final Net Tangible Asset Amount;
(b) liabilities (i) disclosed in Section B.08 of the Disclosure
Schedules, (ii) known to the Individual Purchasers, (iii) related to any
Contract disclosed in the Disclosure Schedules or (iv) related to any Employee
Plan or Benefit Arrangements identified in Exhibit G or disclosed in Section
B.08 of the Disclosure Schedules;
(c) liabilities incurred in the ordinary course of business since
December 31, 1996;
(d) liabilities not required to be accrued for or reserved against
in accordance with GAAP as of December 31, 1996; and
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(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;
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(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.
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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
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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
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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
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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
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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;
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(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).
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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
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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.
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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.
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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.
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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).
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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.
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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
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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.
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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;
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(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
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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.
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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.
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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
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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.
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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.
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(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,
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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
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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
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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
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(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
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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
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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
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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
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<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
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<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
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<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.
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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
2
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.
13
<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,
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<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;
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<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.
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<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
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<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
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<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
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<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
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<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
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<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>
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<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>
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<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>
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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
152. XRCA74296 4307549 Skylight Cover 2015 X CA
153. XRCA74474 4300227 Replicable Optical 2015 X CA 8724
Recording Medium DE
FR
GB
HK
IT
JP
MY
NL
SG
154. XRCA74603 4349887 Precise Digitally 2016 X
Programmed Frequency
Source
155. XRCA74695 4362367 Miniaturized 2016 X
Symmetrization Optics
for Junction Laser
156. XRCA74934 4265524 Optical Scanner with 2015 X
Variable Scan Line
Angle
157. XRCA75198 4325021 Optical Scanner with 2016 X
Variable Scan Line
Angle
</TABLE>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
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<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>
2
U.S. Patent No. 4,638,493, "Adaptive Interference Rejection for Improved
Frequency Hop Detection" by F. Avery Bishop and Ronald S. Leahy, U.S.S.N.
745,487
U.S. Patent No. 4,656,484, "Radar Reflection and Scanner with Electromagnetic
Programmable Drive" by Ralph A. Brown and Gerald H. Piels, U.S.S.N. 762,415
U.S. Patent No. 4,712,024 "Active Behave Star Mixer" by Charles F. McGuire,
David J. Weber and Gordon C. Steynart, U.S.S.N. 766,187
U.S. Patent No. 4,786,912 "Antenna Stabilization and Enhancement by Rotation of
Antenna Feed" by Ralph A. Brown and Lowell N. Shestag, U.S.S.N. 882,839
U.S. Patent No. 4,827,269 "Apparatus to Maximum Arbitrary Polarization
Stabilization of an Antenna" by Lowell N. Shestag, John W. Zscheile, Jr., Alan
E. Lundquist and Glen S. Kirkpatrick, U.S.S.N. 882,838
U.S. Patent No. 4,852,121 "Coherent [Illegible] Code Tracking Loop" by Samuel C.
Kingston and John W. Zscheile, Jr., U.S.S.N. 111,372
U.S. Patent No. 4,901,317 "Efficient Maximum-Likelihood Decoder for the Golay
(24,12) Code" by Craig K. Rushforth and Ayyoob D. Abbasmdeh, U.S.S.N. 231,125
U.S. Patent No. 4,926,169 "Coder-Decoder for Purged Extended Golay (22,7) Codes"
by Po Tong, Elwyn R. [Illegible], Robert J. Currie and Craig K. Rushforth,
U.S.S.N. 276,757
U.S. Patent No. 4,942,589 "Channelized Binary-Level Hop Rate Detector" by
Patrick J. Smith, Ronald S. Leahy and Scott R. Bullock, U.S.S.N. 417,175
U.S. Patent No. 4,956,644 "Channelized Binary-Level Radiometer" by Ronald S.
Leahy, Patrick J. Smith and Scott R. Bullock, U.S.S.N. 417,124
U.S. Patent No. 4,963,425 "Printed Wiring Board Substrata for Surface Mounted
Components" by Alan M. Buchanan, Jay S. Abramowitz and Roberta A. Y. Flygare,
U.S.S.N. 708,588
U.S. Patent No. 5,008,795 "Switched Capacitor Interleaved Forward Power
Converter" by David W. Parsley and Hubert C. Martin, Jr., U.S.S.N. 498,863
U.S. Patent No. 5,048,053 "Detecting and Tracking Circuit for Component FN
Codes" by Vaughn L. Mower and John W. Zscheile, Jr., U.S.S.N. 439,133
U.S. Patent No. 5,063,387 "Doppler Frequency Compensation Circuit" by Vaughn L.
Mower, U.S.S.N. 439,907
<PAGE>
3
U.S. Patent No. 5,063,572 "Channelized Daisy and Mix Chip Rate Detector" by
Ronald S. Leahy and Patrick J. Smith, U.S.S.N. 533,183
U.S. Patent No. 5,222,100 "Range Based Acquisition System" by Alan E. Lundquist,
John W. Zscheile, Jr. and Samuel C. Kingston, U.S.S.N. 625,407
U.S. Patent No. 5,257,282 "High Speed Code Sequence Generator" by Willis B.
Adlkisson, Glen D. Rattingourd, Billie M. Spencer and John W. Zscheile, Jr.,
U.S.S.N. 625,497
U.S. Patent No. 5,298,908 "Interference Nulling System Antennas" by Gerald H.
Piels, U.S.S.N. 125,832
U.S. Patent No. 5,299,229 "High Rate-Low Rate PN Code Tracking System" by John
W. Zscheile, Jr., Alan E. Lundquist and Samuel C. Kingston, U.S.S.N. 010,723
U.S. Patent No. 5,495,509 "High Processing Gain Acquisition and Demodulation
Apparatus" by Alan E. Lundquist, John W. Zscheile, Jr., and Samuel C. Kingston,
U.S.S.N. 216,746
U.S. Patent No. 5,504,787 "Coherent Sequential FN Code Extractor" by John W.
Zscheile, Jr., Alan E. Lundquist and Robert A. Wright, U.S.S.N. 216,744
U.S. Patent Applications
U.S.S.N. 06/217,378 "A Low Radar Cross Section (RCS) High Gain Lens Antenna" by
Samuel C. Kingston, Robert H. Burdoin and David Lemansdorf
U.S.S.N. 06/217,379 "Low Radar Cross Section [RCS] Narrow Beam Lens Antenna" by
Lawrence L. Rainwater
U.S.S.N. 06/389,733 "Shared Energy Signalling Apparatus" by John W. Zscheile,
Jr., Samuel C. Kingston and Billie M. Spencer
U.S.S.N. 06/626,127 "High Speed M-Sequence Generator and Decoder Circuit" by
Robert J. Currie
U.S.S.N. 07/244,188 "Fast Acquisition Random Access Network System" by John W.
Zscheile, Jr., Samuel C. Kingston, and Billie M. Spencer
U.S.S.N. 07/629,506 "Method and Apparatus for Determining Location of a Ground
Station" by LaMar K. Timothy, John W. Zscheile, Jr. and Craig S. Maddox
U.S.S.N. 08/585,616 "Frequency Discriminator and Method and Receiver
Incorporating Sams" by Samuel C. Kingston, Steven T. Barham and Sharon Wirius
<PAGE>
4
U.S.S.N. 08/606,285 "A Multi-User Acquisition Procedure for Multipoint-to-Point
Synchronous CDMA Systems" by Samuel C. Kingston, Thomas R. Giallorazi, Robert W.
Stasgall and David W. Matoiak
U.S.S.N. 08/606,378 "A Multi-User Acquisition Procedure for Point-to-Multipoint
Synchronous CDMA Systems" by Samuel C. Kingston, Thomas R. Gialloranzi, Randal
R. Sylvester, David W. Matoiak and Patrick J. Smith
U.S.S.N. 08/684,021 "Coaxial Radio Frequency Test Probe" by James E. Fray
U.S.S.N. 08/696,437 "Dielectrically Loaded Wide Band Feed" by Bryant F.
Anderson, Mark J. Yamamoto and Douglas H. Ulmer
U.S.S.N. 08/698,234 "Shrouded Horn Feed Assembly" by Bryant F. Anderson, Paul J.
Gertside, Douglas M. Harrison and Joseph M. Baird
U.S.S.N. 08/698,322 "Launcher for Plural Band Feed System" Bryant F. Anderson,
Charles A. Demaris, Kevin L. Tauscher, Paul J. Gertaide, Douglas M. Harrison
U.S.S.N. 08/698,324 "Plural Band Feed System" by Bryant F. Anderson, Joseph M.
Baird Douglas M. Harrison, Charles A. Demaris, Paul J. Gertaide, Friedrich J.
Fisher and Mark J. Yamamoto
Foreign Patent Applications
PCT International Patent Application PCT/US97/02654 (based on U.S.S.N.
08/606,285
Indian Patent Application based on U.S.S.N. 08/606,285
PCT International Patent Application PCT/US97/01154 (based on U.S.S.N.
08/606,378
Indian Patent Application based on U.S.S.N. 08/606,378
<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
to
TRANSACTION AGREEMENT
Dated as of March 28, 1997
By and Among
LOCKHEED MARTIN CORPORATION
LEHMAN BROTHERS CAPITAL PARTNERS III, L.P.
FRANK C. LANZA
ROBERT V. LAPENTA
and
L-3 COMMUNICATIONS HOLDINGS, INC.
- -------------------------------------------------------------------------------
<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 1. Capitalized terms used but not defined herein have the meanings
given to them in the Transaction Agreement dated as of March 28, 1997, by and
among Lockheed Martin, Newco and the Purchasers.
Section 2. Section 15.13(a) of the Agreement is amended by deleting the
reference to "April 14, 1997" in the second sentence of Section 15.13(a) and
inserting in its place and stead "April 17, 1997."
Section 3. Section 15.13(c) of the Agreement is amended by deleting the
references to "April 11, 1997" in each of the last two sentences of Section
15.13(c) and inserting in its place and stead "April 18, 1997."
2
<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:
3
<PAGE>
- -------------------------------------------------------------------------------
AMENDMENT NO. 2
Dated as of April 30, 1997
to
TRANSACTION AGREEMENT
Dated as of March 28, 1997
By and Among
LOCKHEED MARTIN CORPORATION
LEHMAN BROTHERS CAPITAL PARTNERS III, L.P.
FRANK C. LANZA
ROBERT V. LAPENTA
and
L-3 COMMUNICATIONS HOLDINGS, INC.
- -------------------------------------------------------------------------------
<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, upon the terms and subject to the conditions of the Agreement,
Lockheed Martin has agreed to transfer, or to cause the Affiliated Transferors
to transfer, substantially all of the assets held or owned by, or used to
conduct, the Business and to assign certain liabilities associated with the
Business to Newco, and Newco has agreed to receive such assets and assume such
liabilities; and
WHEREAS, Lockheed Martin, Newco and the Purchasers desire to amend the
Agreement in accordance with the terms of this Amendment;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties contained herein, the parties agree as follows:
Section 1. Capitalized terms used but not defined herein have the meanings
given to them in the Transaction Agreement dated as of March 28, 1997, by and
among Lockheed Martin, Newco and the Purchasers, as amended by Amendment No. 1
to Transaction Agreement dated as of April 11, 1997 (as amended, the
"Agreement").
Section 2. The list of Attachments set forth in the index to the Agreement
is revised by amending the description of Attachment XI to read as follows:
"Other Transferred Employees".
Section 3. Section 2.04(i) of the Agreement is amended by deleting the
references to "$269,118,000" in the first parenthetical of that Section and
inserting in their place and stead "$272,618,000".
Section 4. Notwithstanding the provisions of Section 15.13(c) of the
Agreement, for purposes of the Agreement, Attachment IV shall be as set forth
in Exhibit A to this Amendment.
Section 5. Notwithstanding the provisions of Section 15.13(c) of the
Agreement, for purposes of the Agreement, Attachment V shall be as set forth in
Exhibit B to this Amendment.
1
<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
2
<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:
3
<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."
4
<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:
5
<PAGE>
AMENDMENT NO. 3
Dated as of May 21, 1997
to
TRANSACTION AGREEMENT
Dated as of March 28, 1997
By and Among
LOCKHEED MARTIN CORPORATION
LEHMAN BROTHERS CAPITAL PARTNERS III, L.P.
LEHMAN BROTHERS HOLDINGS INC.
FRANK C. LANZA
ROBERT V. LAPENTA
L-3 COMMUNICATIONS HOLDINGS, INC.
and
L-3 COMMUNICATIONS CORPORATION
<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
1
<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
2
<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."
3
<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
- ------------------------------- ----------------------------
4
<PAGE>
L-3 COMMUNICATIONS CORPORATION
_______________________________ By: ____________________________
Name: Michael T. Strianese
Title: VP Finance and
Controller
5
<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>
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<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>
i
<PAGE>
<TABLE>
<CAPTION>
Page
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<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>
ii
<PAGE>
<TABLE>
<CAPTION>
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<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
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<TABLE>
<CAPTION>
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<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
v
<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;
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(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;
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(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,
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or such other assignments, deeds, share transfer forms, endorsements, notarial
deeds of transfer or other instruments or documents, duly stamped where
necessary.
1.6 License Agreement. On or prior to the Closing Date, ASTI and Purchaser
shall enter into a license agreement in the form attached hereto as Exhibit A,
with respect to the intellectual property identified in Schedule 4.6(c).
ARTICLE 2. CLOSING; PURCHASE PRICE
2.1 Closing Date and Place. On and subject to the conditions set forth
herein, the consummation of the purchase and sale contemplated hereby (the
"Closing") will take place at the offices of AlliedSignal in Morristown, NJ at
10:00 a.m., local time, on March 30, 1998, or at such other time and place as
shall be agreed upon by the parties hereto. The date upon which the Closing
occurs is referred to herein as the "Closing Date". The Closing shall be
effective as of 11:59 p.m. on the Closing Date. In addition, subsequent to the
Closing, Purchaser and Sellers shall call the notary in Europe in order to
perfect the transfer of the ELAC Shares by way of a notarial deed.
2.2 Purchase Price. (a) The purchase price to be paid by Purchaser for the
Assets including the ELAC Shares, is Sixty-Seven Million Five Hundred Thousand
Dollars ($67,500,000) (the "Purchase Price"). The Purchase Price shall be paid
by Purchaser in full at Closing in immediately available funds.
(b) The parties acknowledge the existence of a receivable relating to
a contract dated December 19, 1997 (the "Turkey Contract") pursuant to
which Ocean Systems is to supply to the Turkish Navy four (4) AQS-18A
dipping sonar systems, plus spares, ground support equipment and
performance testing (the "Turkey Receivable"). In the event that any cash
is received by AlliedSignal in respect of the Turkey Receivable, whether
before, on or after the Closing Date (each a "Turkey Cash Receipt"),
AlliedSignal shall pay to L-3 an amount in cash equal to all Turkey Cash
Receipts, on April 1, 1998, or if any Turkey Cash Receipt is received by
AlliedSignal after April 1, 1998, on the date of such receipt.
2.3 Income Taxes. As soon as reasonably practicable, the parties shall
prepare a calculation of income tax liability or tax benefit based on the income
or loss reflected on the books and records of the Business determined on a basis
consistent with prior periods (excluding any income or loss attributable to the
Turkey Contract) for the period beginning after December 31, 1997 (the
"Effective Date") and ending on the close of the Closing Date multiplied by
36.6%. The calculation of book income or loss for such period shall be computed
by means of a closing of the books and records of the Business as of the Closing
Date, and, to the extent not practical, by apportionment on the basis of elapsed
days. Buyer shall pay to Seller any such income tax liability and Seller shall
pay to Buyer any such income tax benefit within 60 days thereof.
2.4 Cash True-Up. Within fifteen business days after the Closing Date,
AlliedSignal shall prepare and deliver to Purchaser a schedule setting forth, on
a daily basis, the cash generated by the Business from 12:01 a.m. on the first
day following the Effective
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Date through and including the Closing Date. Purchaser shall have three business
days from receipt to review the schedule and AlliedSignal shall give Purchaser
reasonable access to its books and records for the purpose of confirming the
calculations of AlliedSignal pursuant to this Section 2.4. Any dispute with
respect to the schedule shall be resolved in good faith by the parties. Within
three business days after the expiration of such review period (or the
resolution of any dispute), Purchaser shall make payment to AlliedSignal if the
schedule shows a net cash usage by the Business during such period and
AlliedSignal shall make payment to Purchaser if the schedule shows net cash
generation during such period in an amount equal to such net cash usage or net
cash generation, as the case may be; provided, however, that if AlliedSignal
shall pay to Purchaser any amount pursuant to Section 2.2(b) in respect of a
Turkey Cash Receipt received on or prior to the Closing Date, and the amount of
such Turkey Cash Receipt would have been a cash generation under this Section
2.4 but for this proviso, then the amount of any such Turkey Cash Receipt shall
be excluded in calculating net cash generation or a cash usage under this
Section 2.4. Any payment to be made pursuant to this Section 2.4 shall be made
in immediately available funds by wire transfer to a bank account designated in
writing by the party entitled to receive the payment. AlliedSignal shall be
responsible for paying any checks outstanding as of the Effective Date.
2.5 Allocation of Purchase Price. The Sellers and the Purchaser agree to
allocate the Purchase Price of the Assets including the covenant not to compete,
in accordance with the rules under Section 1060 of the Internal Revenue Code of
1986, as amended (the "Code") and the Treasury Regulations promulgated
thereunder. Such allocation shall be mutually agreed between the Sellers and the
Purchaser. The Sellers and the Purchaser recognize that the Purchase Price does
not include Purchaser's acquisition expenses and that Purchaser will allocate
such expenses appropriately. Sellers and the Purchaser agree to act in
accordance with the computations and allocations as determined pursuant to this
Section 2.5 (including any modifications thereto reflecting any post-Closing
adjustments, such adjustments shall be allocated in accordance with the
character of each such adjustment, on a basis consistent with the allocation
under this Section 2.5) in any relevant Tax Returns or filings, including any
forms or reports required to be filed pursuant to Section 1060 of the Code, the
Treasury Regulations promulgated thereunder or any provisions of local, state
and foreign law ("1060 Forms"), and to cooperate in the preparation of any 1060
Forms and to file such 1060 Forms in the manner required by Applicable Law.
2.6 Payments. All payments required to be made pursuant to this Article 2
and other provisions of this Agreement shall be made in United States dollars in
immediately available funds by wire transfer to an account designated by the
party to receive payment in writing to the party making payment.
2.7 Transfer Taxes. Purchaser and Sellers shall each bear 50% of all sales,
transfer and similar taxes, duties or levies (other than taxes computed on the
basis of income) assessed or payable in connection with the transfer of the
Assets including the ELAC Shares to Purchaser, including notary fees relating to
the transfer of the ELAC Shares; provided that in no event shall Sellers be
required to pay more than $500,000 in respect thereof, including any amounts
paid by AlliedSignal pursuant to Section 2.4 of the real estate purchase
agreement, dated as of December 22, 1997 (the "Facility Sale Agreement"),
between AlliedSignal and Purchaser. Purchaser and Sellers agree to cooperate
with one another to try
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to minimize such taxes to the extent practicable without additional costs or
liabilities to Purchaser or Sellers. To the extent any exemptions from such
taxes are available, Purchaser and Sellers shall cooperate to obtain and prepare
all required resale or other exemption certificates with respect to the Assets
and the ELAC Shares.
ARTICLE 3. ASSUMPTION OF LIABiLITIES AND OBLIGATIONS
3.1 Assumed Liabilities. Except for the Excluded Liabilities, Purchaser
shall, without any further responsibility or liability of, or recourse to,
Sellers, except as set forth herein, absolutely and irrevocably assume and be
solely liable and responsible for any and all liabilities and obligations of any
kind or nature, whether foreseen or unforeseen, known or unknown, existing or
which may arise in the future, fixed or contingent, matured or unmatured, to the
extent primarily related to the Business or the Assets prior to, on, or
following the Closing Date (the "Assumed Liabilities") including, but not
limited to:
(a) obligations to fill purchase orders of customers of the Business
to the extent such orders are unfilled on the Closing Date;
(b) obligations incurred through the Closing Date to purchase or pay
for goods and services for the Business to be received on or after the
Closing Date;
(c) obligations and liabilities under the Contracts; provided that any
Contract as to which consent to assignment is required but has not been
obtained shall not be deemed an Assumed Liability until Purchaser has
obtained the benefits of such Contract;
(d) obligations and liabilities under licenses and permits of the
Business that are transferred or assigned to Purchaser (but only to the
extent so transferred or to the extent Purchaser receives the benefits
thereunder pursuant to Section 1.2); and
(e) obligations and liabilities specifically assumed or undertaken by
Purchaser hereunder.
3.2 Excluded Liabilities. Notwithstanding anything to the contrary
contained in this Agreement, the liabilities and obligations of Sellers which
are not to be assumed or retained by Purchaser hereunder (the "Excluded
Liabilities") include, but are not limited to, the following:
(a) obligations and liabilities for all Taxes relating to the Business
for all periods prior to the Effective Date;
(b) obligations and liabilities arising out of or related to past,
present or future actions, suits, claims, disputes, investigations and
other proceedings relating to the ownership or operation of the Assets or
the Business on or prior to the Effective Date, including, but not limited
to, the items referred to in Schedule 4.9;
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(c) obligations and liabilities related to employees, including former
employees, not expressly assumed by Purchaser pursuant to Article 6 hereof;
(d) all obligations and liabilities (whether or not the subject of any
claim by a third party), fixed or contingent, known or unknown, under any
Environmental Laws as have been, are or may in the future be in effect
arising out of or relating to (i) the operation of the Business on or prior
to the Effective Date or the use or ownership of any real property
(including, without limitation, the Facility) used in the Business on or
prior to the Effective Date, including without limitation, the disposal or
arrangement for the disposal of Materials of Environmental Concern prior to
the Effective Date and (ii) the presence of contamination by Materials of
Environmental Concern at or emanating from any real property (whether
leased or owned) used in the Business prior to the Effective Date
("Environmental Liabilities");
(e) all obligations and liabilities for non-trade accounts payable to
Sellers and their Affiliates (other than the Intercompany Note);
(f) all obligations, liabilities, expenses or charges to earnings or
reserves taken in connection with any restructuring program of
AlliedSignal;
(g) all debts, obligations or liabilities whatsoever to the extent not
primarily related to the Business or the Assets; and
(h) all other obligations and liabilities for which Sellers have
expressly assumed responsibility pursuant to this Agreement.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers jointly and severally represent and warrant to Purchaser as
follows:
4.1 Corporate Status. AlliedSignal is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, and has full power and
authority and all governmental licenses, authorizations, material consents and
approvals required to carry on the Business as now conducted and own all of its
properties and assets. ASTI is a corporation duly organized, validly existing
and in good standing under the laws of Arizona. AS Deutschland and ELAC are
corporations duly organized, validly existing and in good standing under the
laws of the Federal Republic of Germany. Each Seller has all requisite corporate
and other power and authority to enter into, execute and deliver this Agreement
and any other agreements contemplated hereby (the "Other Agreements") and to
perform its respective obligations and consummate the transactions contemplated
hereunder and thereunder in accordance with the terms of this Agreement. Each
Seller is duly qualified to do business in each jurisdiction in which the
failure to be so qualified would have a material adverse effect on the Sellers'
conduct of the Business.
4.2 Authorization. All corporate and other proceedings required to be taken
by or on the part of each of the Sellers to authorize Sellers to enter into and
carry out this Agreement have been, or prior to the Closing will be, duly and
properly taken. This
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Agreement has been, and on the Closing Date each of the Other Agreements will
be, duly authorized, executed and delivered by each Seller and this Agreement
constitutes, and each Other Agreement will upon execution and delivery thereof
constitute, a legal and binding obligation of Sellers, valid and enforceable
against each Seller in accordance with their respective terms, subject to laws
of general application relating to bankruptcy, insolvency and the relief of
debtors and the rules of law governing specific performance, injunctive relief
and other equitable remedies.
4.3 Compliance. Except for (i) the expiration or termination of all
applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act") and under any similar German national or
European Union law and (ii) any novations pursuant to Section 7.12 and any
consents listed on Schedule 4.15, the execution, delivery and performance of
this Agreement and Other Agreements by Sellers and the consummation of the
transactions contemplated hereby and thereby (a) will not violate (with or
without giving of notice or the lapse of time or both), or require any consent,
approval, filing or notice under any provision of any licenses, permits,
approvals, consents, certificates of public convenience, orders, franchises and
other authorizations of any federal, state, local or foreign governmental
authority (collectively, "Licenses"), law, rule or regulation, court or
administrative order, writ, judgement or decree applicable to Sellers, the
Business or any of the Assets or the Assumed Liabilities other than the
facilities clearance requirements of the Defense Investigative Services of the
United States Department of Defense ("DIS"), as set forth in the DIS Industrial
Security Regulation and the DIS Industrial Security Manual, as each may be
amended from time to time and (b) will not (with or without the giving of notice
or the lapse of time or both) (I) violate or conflict with, or result in the
breach, suspension or termination of any provision of, or constitute a default
under, or result in the acceleration of the performance of the obligations of
Sellers under, or (II) result in the creation of any lien, mortgage, pledge,
security interest, claim, charge or encumbrance or other material restriction of
any kind or nature (collectively, "Liens") upon the Business or the Assets
pursuant to, as the case may be, the articles of incorporation, by-laws or other
organization documents of any Seller or any material agreement, lease, mortgage,
note, deed of trust, lease, bond, indenture, license or other document or
undertaking, oral or written, to which any Seller is a party or by which any
Seller is bound and by which any of the Assets or the Business may be affected.
4.4 [Interntionally left blank]
4.5 Personal Property. In all material respects, the Personal Property and
the machinery and equipment, fixtures, furniture, office equipment, vehicles,
boats or ships, tools and other tangible personal property of ELAC have been
maintained in accordance with standard industry practices, are in reasonable
working condition (normal wear and tear excepted) and are sufficient for the
conduct of the Business as it is currently being conducted.
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4.6 Intellectual Property.
(a) Schedule 4.6(a) lists all Intellectual Property owned or used by
the Business that is issued or registered by or filed with any governmental
agency, and all licenses of Intellectual Property used by the Business to
or from third parties.
(b) The Sellers own or have the right to use all Intellectual Property
necessary to conduct the Business substantially as it is currently
conducted and consistent with past practice.
(c) Schedule 4.6(c) lists all Intellectual Property not included in
the Assets, the use of which is necessary for the Business as it is
currently conducted. AlliedSignal and ASTI will grant to Purchaser a
license to such Intellectual Property pursuant to the license agreement
referred to in Section 1.6 of this Agreement.
(d) Except as set forth on Schedule 4.6(d): (i) all material
Intellectual Property owned or used by the Business is unexpired, has not
been abandoned and, to the Knowledge of Sellers, does not infringe or
otherwise impair the intellectual property rights of any third party; (ii)
no material Intellectual Property owned or used by the Business is the
subject of any license, security interest, Lien or other agreement granting
rights therein to any third party other than licenses listed on Schedule
4.6(d); (iii) no judgment, decree, injunction, rule or order has been
rendered by any governmental entity, no action, suit or proceeding is
currently pending and Sellers have not received written notice, and to the
Knowledge of Sellers there are no threatened suits, actions or proceedings,
which would limit, cancel or question the validity of, or Sellers' rights
in and to any material Intellectual Property; and (iv) the Company and its
subsidiaries have taken reasonable steps to protect, maintain and safeguard
their material Intellectual Property, including any Intellectual Property
for which improper or unauthorized disclosure would impair its value or
validity, and have executed appropriate nondisclosure and confidentiality
agreements and made appropriate filings and registrations in connection
with the foregoing.
4.7 Contracts and Bindin2 Commitments. Schedule 4.7 lists the Contracts and
the contracts, agreements and/or commitments of ELAC that are material to the
operation of the Business taken as a whole (the "Agreements"). Except as set
forth on Schedule 4.7, each of the Agreements is a valid and binding agreement
of the Seller which is a party thereto or ELAC and is in full force and effect.
True and complete copies of all the Agreements have been delivered to Purchaser
or otherwise made available for inspection by Purchaser. All the Agreements are
in full force and effect. Except as set forth on Schedule 4.7, to the Knowledge
of Sellers neither AlliedSignal nor ELAC, as the case may be, is in default in
any material respect under any of the Agreements and to the Knowledge of Sellers
there has been no material default under any of the Agreements by any other
party thereto. AlliedSignal is not obligated to list in Schedule 4.7 any
agreement, contract or commitment identified elsewhere in this Agreement or any
Schedule hereto, or if such agreements, individually and together with all such
other agreements which are not listed on Schedule 4.7 pursuant to this sentence,
are not material to the Business taken as a whole and (a) such agreement,
contract or commitment, is related to the sale or furnishing of products or
services by AlliedSignal or ELAC and has a price of less than $75,000 in the
case of AlliedSignal or DM 100,000 in the
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case of ELAC; (b) such agreement, contract or commitment, if related to the
purchase of materials, supplies, equipment, merchandise or services, imposes a
payment obligation on AlliedSignal or ELAC of less than $75,000; or (c) the
disclosure of such agreement, contract or commitment is proscribed by the terms
of such document or by the provisions of a governmental security agreement or
regulation; provided that if such agreements, individually or in the aggregate,
are material to the Business, a summary of the material terms of such agreement
have been delivered to a properly authorized officer or employee of Purchaser in
accordance with Applicable Law.
4.8 Title. Except as set forth in Schedule 4.8, each Seller and ELAC holds
the entire legal, equitable and beneficial title in and will transfer to
Purchaser good (and, in the case of real property, marketable) title to, or a
valid and binding leasehold interest in, its property included in the Assets
free and clear of all Liens other than (i) Liens for taxes not yet due and
payable or being contested in good faith for which adequate reserves are being
maintained in accordance with United States generally accepted accounting
principles ("GAAP"), and (ii) encumbrances that do not, and are not reasonably
expected to, individually or in the aggregate, materially adversely affect the
value of the Assets subject thereto or the ability of AlliedSignal, ELAC or
Purchaser to conduct the Business as it is now being conducted (collectively,
"Permitted Liens").
4.9 Litigation. Except as disclosed in Schedule 4.9, there is not any
action, suit, proceeding, arbitration or litigation, pending or to the Knowledge
of Sellers threatened against Sellers or to the Knowledge of Sellers any
investigation pending or threatened, relating to the Business, the Assets, the
Assumed Liabilities or the transactions contemplated by this Agreement that
could reasonably be expected to result in any material judgment against,
material liability of, or have a material adverse effect on the Business taken
as a whole. Sellers are not in violation of any term of any judgment, writ,
decree, injunction or order entered by any court or governmental authority
(domestic or foreign) and outstanding against Sellers or with respect to the
Business or any of Sellers' assets (including the Assets) or properties, except
for such violations which could not, individually or in the aggregate, have a
material adverse effect on the Sellers or the Business. An action, suit,
proceeding, investigation, arbitration or litigation shall be considered
"threatened" for purposes of this Section 4.9 if any of the persons referred to
in Section 13.15 shall have received a written notice or communication
reasonably indicating to a business person that an action, suit, investigation,
or proceeding will be commenced.
4.10 Environmental Matters. (a) Except as set forth on Schedule 4.10 to the
Knowledge of Sellers: (i) the Business complies and has complied in all material
respects with all applicable Environmental Laws, and possesses and complies and
has possessed and complied in all material respects with all Environmental
Permits (all of which are identified accordingly on Schedule 4.10 and are
transferrable as a routine matter to Purchaser); (ii) there are and have been no
Materials of Environmental Concern, or other conditions, at any property owned,
operated, or otherwise used by the Business now or in the past, or at any other
location, that could give rise to any material liability to the Business under
any Environmental Law or result in material costs to the Business arising out of
any Environmental Law; (iii) no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under any Environmental
Law is pending or
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threatened in writing with respect to the Business, nor is the Business the
subject of any investigation or the recipient of any request for information in
connection with any such proceeding; (iv) there are no past or present
conditions, circumstances, practices, plans, or legal requirements that could be
expected to prevent the Business from, or materially increase the burden on the
Business of, complying in all material respects with applicable Environmental
Laws or obtaining, renewing, or complying in all material respects with all
Environmental Permits required under such laws.
(b) The Sellers have provided or made available to Purchaser true and
complete copies of all Environmental Reports in their possession or
control.
(c) Any costs, estimates, projections or other predictions contained
or referred to in Schedule 4.10 are not, and shall not be deemed to be,
representations or warranties of Allied Signal.
(d) For purposes of this Agreement, the following terms shall have the
following meaning:
"Environmental Laws" shall mean any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other
legally enforceable requirement (including, without limitation, common law)
of the United States or any other national government, or any state, local,
municipal or other governmental authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment or of human health, or employee health and safety as of the
Closing Date.
"Environmental Permits" shall mean any and all permits, licenses,
approvals, registrations, notifications, exemptions and any other
authorization required of the Business under any Environmental Law.
"Environmental Report" shall mean any report, study, assessment,
audit, or other similar document that addresses any issue of actual or
potential noncompliance with, or actual or potential liability under or
cost arising out of, any Environmental Law that may in any way materially
adversely affect the Business.
"Materials of Environmental Concern" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, radioactivity, and any other substances
or forces of any kind, whether or not any such substance or force is
defined as hazardous or toxic under any Environmental Law, that is
regulated pursuant to or could give rise to liability under any
Environmental Law.
4.11 Employee Benefit Plans and Policies. Schedule 4.11 lists all of the
employment, severance, change-of-control, stock purchase, stock option, fringe
benefits, incentive, bonus, pension, welfare, shop agreements or other employee
benefit plans and policies maintained or contributed to by Sellers or ELAC for
the Business or in which employees of the Business or managing directors of
ELAC, including employees or managing
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directors of ELAC on short-term disability, medical, sick or other leave of
absence (the "Employees"), are entitled to participate (collectively the
"Benefit Plans") and copies of all such written Benefit Plans have been made
available to Purchaser. Except as listed on Schedule 4.11, (a) such Benefit
Plans that cover U.S. Employees ("U.S. Benefit Plans") comply in all material
respects, to the extent applicable, with the requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and the Internal
Revenue Code of 1986, as amended (the "Code") and all other applicable laws,
rules and regulations; (b) none of the U.S. Benefit Plans subject to Part 3
Subtitle B of Title I of ERISA has incurred any "accumulated funding deficiency"
within the meaning of Section 302 of ERISA or Section 412 of the Code; (c) no
material liability, other than required premium payments, to the Pension Benefit
Guaranty Corporation has been incurred with respect to any of the U.S. Benefit
Plans subject to Title IV of ERISA; (d) AlliedSignal has not incurred any
material liability for any tax imposed under Section 4975 of the Code or Part 4
Subtitle B of Title I of ERISA with respect to any of the U.S. Benefit Plans;
(e) none of the U.S. Benefit Plans is a multiemployer plan within the meaning of
Section 3(37)(A) of ERISA. Except as otherwise is provided in this Agreement,
all contributions to the U.S. Benefit Plans that were required to be made under
such U.S. Benefit Plans as of the date hereof have been paid, accrued or
otherwise adequately reserved or disclosed in accordance with GAAP as of such
date; and (f) each Benefit Plan covering non-U.S. Employees complies in all
material respects with all Applicable Laws, rules and regulations.
4.12 Material Changes. Except as set forth on Schedule 4.12 or as
communicated to Steven Schorer or any individual who directly reports to Mr.
Schorer or Purchaser, since December 31, 1997, there has been no:
(a) Lien created on any Asset or ELAC Asset, except Permitted Liens;
(b) capital expenditures or commitment to make any such expenditures
with respect to the Assets or the ELAC Assets, except with respect to any
such expenditures or commitments incurred prior to the date hereof, to the
extent such expenditures and commitments do not exceed, when combined with
any expenditures permitted under Section 4.7(d) of the Facility Sale
Agreement, $2,100,000 in the aggregate;
(c) rights of substantial value knowingly waived with respect to the
Assets or the Business; or
(d) sale or transfer of any Assets or ELAC Assets other than
dispositions of inventory and obsolete or worn out equipment in the
ordinary course of business.
(e) (i) (x) contract, agreement, proposal or other commitment entered
into for the purchase of goods or services which is not terminable by the
parties upon 30 days' notice or less without penalty or which involves
aggregate consideration in excess of $250,000 or (y) agreement, bid,
proposal or other commitment entered into for the sale of goods or services
which is not terminable by the parties upon 30 days' notice or less without
penalty or which involves aggregate consideration in excess of $5 million
or which would result in a loss in excess of $100,000 for any individual
contract or $250,000 in the aggregate, (ii) amendment, supplement, waiver
or modification of any contract or agreement included in
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the Assets or the ELAC Assets, other than in the ordinary course of
business consistent with past practice and (iii) Affiliate that has been
permitted to do, or agree, in writing or otherwise, to do, any of the
foregoing;
(f) except as required by Applicable Law or to the extent required
under existing employee and director benefit plans, agreements or
arrangements as in effect on the date of this Agreement, (i) increase in
the compensation or fringe benefits of any of the President of Ocean
Systems and his direct reports or other employees (including any such
increase pursuant to any deferred compensation, severance, bonus, pension,
profit-sharing or other plan or commitment), except for increases, in the
ordinary course of business consistent with past practice, in salary or
wages of employees who are not senior managers of the Business, (ii) grant
of any severance or termination pay, (iii) hire, except in the ordinary
course of business, of any new employees or consultants or (iv) amendment
or termination, or any agreement to amend or terminate, any collective
bargaining, bonus, profit sharing, thrift, compensation, pension,
retirement, deferred compensation, employment, termination, severance or
other plan, agreement, trust, fund, policy or arrangement for the benefit
of the President of Ocean Systems and his past or present direct reports or
any other past or present employees of the Business (except for changes in
AlliedSignal benefit plans generally);
(g) (i) transaction with or for the benefit of any other division or
business of Seller or any Affiliate of Seller except as is set forth in
Schedule 4.26 and (ii) Affiliate has been permitted to do, or agree, in
writing or otherwise, to do, any of the foregoing;
(h) (i) waiver of any material claims or rights relating to the
Business or the Assets or (ii) Affiliate has been permitted to do, or
agree, in writing or otherwise, to do, any of the foregoing;
(i) acquisition of or agreement to acquire, by merging or
consolidating with, or by purchasing a substantial portion of the stock or
assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization or
division thereof;
(j) except for performance guarantees issued in the ordinary course of
business consistent with past practice, incurrence of any indebtedness for
borrowed money, or guarantee of any such indebtedness of another person,
issuance or sale of any debt securities or warrants or other rights to
acquire any debt securities of the Sellers, guarantee of any debt
securities of another person, entrance into any "keep well" or other
agreement to maintain any financial statement condition of another person
or entrance into any arrangement having the economic effect of any of the
foregoing, or loans, advances or capital contributions to, or investments
in, any other person; or
(k) license or agreement entered into with respect to the Intellectual
Property.
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4.13 [Interntionally left blank]
4.14 Compliance with Law. Except as set forth on Schedule 4.14, Sellers and
ELAC are not in violation of any Applicable Law which, individually or in the
aggregate, would have a material adverse effect on the operation of the
Business, and Sellers and ELAC have not received any notice in writing alleging
any such defaults or violations or potential defaults or violations.
4.15 Consents. Except as set forth in Schedule 4.15, no action, approval,
consent or authorization, including but not limited to any action, approval,
consent or authorization by any third party, financial institution, governmental
or quasi-governmental agency, commission, board, bureau or instrumentality, is
necessary to make this Agreement or any of the Other Agreements or instruments
to be executed and delivered pursuant hereto a legal, valid and binding
obligation of Sellers or ELAC or to consummate the transactions contemplated
hereunder.
4.16 Taxes. All Taxes (as hereinafter defined) with respect to the Business
that are due and payable or which relate to tax periods ending on or prior to
the Closing Date have been or will be duly and properly computed, reported,
fully paid and discharged by Sellers. There are no unpaid Taxes with respect to
any period, or a portion thereof, ending on or before the Closing Date which are
or could become a Lien on the Assets or the ELAC Assets, except for current
Taxes not yet due and payable or reserved for in the Financial Statements.
Except as set forth on Schedule 4.16, there has been filed by or on behalf of
ELAC all material returns, declarations, statements, reports, schedules, forms
and information returns and any amended tax returns relating to any Taxes (the
"Tax Returns"). All such material Tax Returns are true, complete and correct in
all material respects and all Taxes shown as due on such Tax Returns have been
or will be paid in a timely fashion by Sellers prior to Closing or have been
accrued for on ELAC's financial statements. Except as set forth on Schedule
4.16, no audit or other proceeding by any Governmental Authority, or similar
person is pending, or to the Knowledge of Sellers, is threatened with respect to
any material Taxes due from or with respect to ELAC. No material issues relating
to Taxes were raised in writing by the relevant taxing authority during any
audit or examination. Except as set forth in Schedule 4.16, ELAC is not a party
to or bound by (nor will it become a party to or bound by prior to the Closing
Date) any tax indemnity, tax sharing, or tax allocation agreement. There is no
material agreement or other document extending, or having the effect of
extending, the period of assessment or collection of any Taxes and no power of
attorney with respect to any material Taxes of ELAC has been executed or filed
with any Governmental Authority. ELAC is not, nor has it ever been, a member of
a U.S. consolidated, combined unitary tax group. As used herein, the term
"Taxes" shall include all federal, state, local and foreign taxes, assessments
or other governmental charges (including, without limitation, net income, gross
income, excise, franchise, sales and value added taxes, taxes withheld from
employees' salaries and other withholding taxes and obligations and all deposits
required to be made with respect thereto), levies, assessments, deficiencies,
import duties, licenses and registration fees and charges of any nature
whatsoever, including any interest, penalties, additions to tax or additional
amounts with respect thereto, imposed by any government or taxing authority,
provided, however, that the term "Taxes" does not include the taxes, duties and
levies referred to at Section 2.6.
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4.17 Permits and Licenses. Schedule 4.17 attached hereto lists all material
governmental or other permits, licenses, approvals, certificates of inspection,
filings, franchises and other authorizations, other than those relating to the
environment, that are issued to, or held or used by Sellers or ELAC, or for
which Sellers or ELAC have applied, in connection with the current operation of
the Business, and any limitations thereto. Except as listed in Schedule 4.17,
Sellers and ELAC have all material governmental or other permits, licenses,
approvals, certificates of inspection, filings, franchises and other
authorizations, other than those relating to the environment, that are necessary
to own and operate the Assets and the ELAC Assets and to conduct the Business as
it is currently being conducted, and Sellers and ELAC have not received notice
alleging that any other material governmental or other permits, licenses,
approvals, certificates of inspection, filings, franchises and other
authorizations, other than those relating to the environment, are required.
"Material" for purposes of this Section 4.17 shall include but not be limited to
permits, licenses and other authorizations which are required to own or operate
the Assets or ELAC Assets owned or operated by Sellers and used for the
production of products in the Business.
4.18 Ownership of ELAC Shares. The ELAC Shares constitute all of the issued
and outstanding shares of capital stock of ELAC. The ELAC Shares have been duly
authorized and validly issued and are fully paid and nonassessable. There are no
securities convertible into or exchangeable or exercisable for ELAC Shares or
any options, warrants or other rights to acquire ELAC Shares. AS Deutschland is
the sole legal and beneficial owner of the ELAC Shares and owns the ELAC Shares
free and clear of any Liens, restrictions, options or rights in others,
encumbrances or other claims, rights of first offer or first refusal, or voting
agreements, and AS Deutschland has full legal right, power and authority to
enter into this Agreement and to transfer and deliver good and valid title to
the ELAC Shares hereunder. At the Closing, Purchaser shall receive good and
valid title to the ELAC Shares free and clear of any Liens other than as created
by Purchaser. ELAC does not constitute a material part of the assets of AS
Deutschland.
4.19 Labor Relations. Except as set forth on Schedule 4.19, (i) there is no
employment agreement, collective bargaining agreement, shop agreement or written
personnel policy applicable to Employees of the Business nor are any such
agreements or policies presently negotiated; (ii) there is no current labor
strike, slowdown or work stoppage or pending lockout, dispute or other labor
controversy in effect, or to the Knowledge of Sellers threatened against or
otherwise affecting the Business, and the Business has not experienced such
labor controversy in the past five years; (iii) there is no unfair labor
practice charge or complaint pending or, to the Knowledge of Sellers, threatened
against or otherwise affecting the Business; (iv) no representation question
exists or has been raised respecting any of the Employees of the Business within
the past five years, nor to the Knowledge of Sellers are there any campaigns
being conducted to solicit cards from Employees of the Business to authorize
representation by any labor organization; (v) no action, suit, complaint,
charge, arbitration, grievance, inquiry, proceeding or investigation by or
before any court, governmental agency, administrative agency or commission
brought by or on behalf of any Employee, prospective employee, former employee,
retiree, labor organization or other representative of the Business's Employees
is pending or, to the Knowledge of Sellers, threatened against the Business;
(vi) the Sellers and ELAC are not party to, or otherwise bound by, any consent
decree with, or citation by, any Government agency relating to
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Employees or employment practices; (vii) the Sellers and ELAC are in compliance
in all material respects with all Applicable Laws, agreements, contracts, and
policies relating to employment, employment practices, wages, hours, and terms
and conditions of employment; (viii) other than to the extent accrued in the
financial statements of the Business in accordance with GAAP, the Sellers and
ELAC have paid in full to all Employees of the Business all wages, salaries,
commissions, bonuses, benefits and other compensation due to such employees or
otherwise arising under any policy, practice, agreement, plan, program, statute
or other law; (ix) the Sellers and ELAC are not liable for any severance pay or
other payments to any Employee, or former employee arising from the termination
of employment, nor will the Business have any liability under any benefit or
severance policy, practice, agreement, plan, or program which exists or arises,
or may be deemed to exist or arise, under any Applicable Law or otherwise, as a
result of or in connection with the transactions contemplated hereunder or as a
result of the termination by the Business of any persons employed by the Sellers
on or prior to the Closing Date except to the extent accrued on the Closing
Balance Sheet; (x) except as set forth in Schedule 4.19(x), the Sellers and ELAC
have not closed any Business plant or facility, effectuated any layoff of
Employees or implemented any early retirement, separation or window program
which within the past five years, nor have the Sellers or ELAC planned or
announced any such action or program for the future; (xi) the Sellers and ELAC
are in compliance with their obligations pursuant to the Worker Adjustment and
Retraining Notification Act of 1988, and Sellers and ELAC are in compliance with
all other notification and bargaining obligations arising under any collective
bargaining agreement, statute or otherwise.
4.20 Brokerage Fees. No person is entitled to any brokerage or finder's fee
or other commission from Sellers in respect of this Agreement or the
transactions contemplated hereby except Bear, Stearns & Co. Inc. (whose fee
shall be paid by Sellers).
4.21 Government Contracts. (a) With respect to each and every Government
Contract or bid to obtain a Government Contract to which Sellers or ELAC are a
party, and which relates to the Business, and except as set forth in Schedule
4.21(a): (i) Sellers and ELAC have fully complied with all material terms and
conditions of such Government Contract or bid for a Government Contract as
required as of the date hereof and as of the Closing Date; (ii) Sellers and ELAC
have fully complied with all material requirements of statute, rule or
regulation pertaining to such Government Contract or bid for a Government
Contract; (iii) all representations and certifications executed with respect to
such Government Contract were to the Knowledge of Sellers accurate in every
material respect as of their effective date and Sellers and ELAC to the
Knowledge of Sellers have fully complied with all such representations and
certifications in every material respect; and (iv) no termination for default,
cure notice or show cause notice has been issued or, to the Knowledge of Sellers
will be issued, (v) neither the U.S. Government nor any non-U.S. government nor
any prime contractor, subcontractor or other entity person has notified in
writing any of the Sellers or ELAC that any of the Sellers or ELAC has breached
or violated any Applicable Law, certification, representation, clause provision
or requirement pertaining to such Government Contract or bid; (vi) no cost
incurred by the Sellers or ELAC pertaining to such Government Contract or bid
has been questioned or challenged, is the subject of any investigation or has
been disallowed by the U.S. Government or any non-U.S. government; (vii) no
money due to the Sellers or ELAC pertaining to such Government Contract or bid
has been withheld or set
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off and the Sellers or ELAC are entitled to all progress payments with respect
thereto and (viii) each Government Contract is valid and in full force and
effect. As used herein, "Government Contract" means any open contract relating
to the Business between any of Sellers or ELAC and (x) the U.S. Government or
any non-U.S. government, (y) any prime contractor of the U.S. Government or any
non-U.S. government or (z) any subcontractor at any tier with respect to any
contract described in clauses (x) and (y) above.
(b) To the Knowledge of Sellers, except as set forth in Schedule
4.21(b), with respect to the Business; (i) none of its respective
employees, consultants or agents is (or during the last three years has
been) under administrative, civil or criminal investigation, indictment or
information by any foreign, domestic, federal, territorial, state or local
governmental authority, quasi-governmental authority, instrumentality,
court, government or self-regulatory organization, commission, tribunal or
organization or any regulatory, administrative or other agency, or any
political or other subdivision, department or branch of any of the
foregoing ("Governmental Authority"), (ii) there is not any pending audit
or investigation by Sellers or ELAC nor within the last three years has
there been any audit or investigation by Sellers or ELAC resulting in a
material adverse finding with respect to any alleged irregularity,
misstatement or omission arising under or relating to any Government
Contract or bid; and (iii) during the last three years, the Sellers and
ELAC have not made a voluntary disclosure to the U.S. Government or any
non-U.S. government, with respect to any alleged irregularity, misstatement
or omission arising under or relating to a Government Contract or bid.
Except as set forth in Schedule 4.21(b), to the Knowledge of Sellers there
are no irregularities, misstatements or omissions arising under or relating
to any Government Contract or bid that has led or is expected to lead,
either before or after the Closing Date, to any of the consequences set
forth in clause (i) or (ii) of the immediately preceding sentence or any
other material damage, penalty assessment, recoupment of payment or
disallowance of cost.
(c) Except as set forth in Schedule 4.21(c), with respect to the
Business, there exist (i) no outstanding claims against the Sellers or
ELAC, either by the U.S. Government or by any non-U.S. government or by any
prime contractor, subcontractor, vendor or other third party, arising under
or relating to any Government Contract or bid referred to in Section 4.2
1(a) and (ii) no disputes between the Sellers or ELAC and the U.S.
Government or any non-U.S. government under the Contract Disputes Act or
any other Federal statute or between the Sellers or ELAC and any prime
contractor, subcontractor or vendor arising under or relating to any such
Government Contract or bid. Except as set forth in Schedule 4.2 1(c), to
the Knowledge of Sellers there are no facts that could reasonably be
expected to result in a claim or a dispute under clause (i) or (ii) of the
immediately preceding sentence.
(d) Except as set forth in Schedule 4.2 1(d), neither the Sellers nor
ELAC nor any of their employees, consultants or agents is (or during the
last three years has been) suspended or debarred from doing business with
the U.S. Government or any non-U.S. government or is (or during such period
was) the subject of a finding of nonresponsibility or ineligibility for
U.S. Government or non-U.S. government contracting. Except as set forth in
Schedule 4.2 1(d), the Sellers, ELAC and their Affiliates have operated the
Business in
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compliance with all requirements of all material laws pertaining to all
Government Contracts and bids.
(e) Except as set forth in Schedule 4.21(e), no statement,
representation or warranty made by the Sellers or ELAC in any Government
Contract, any exhibit thereto or in any certificate, statement, list,
schedule or other document submitted or furnished to the U.S. Government or
any non-U.S. government in connection with any Government Contract or bid
(i) contained on the date so furnished or submitted any untrue statement of
a material fact, or failed to state a material fact necessary to make the
statements contained therein, in light of the circumstances in which they
were made, not misleading or (ii) contains on the date hereof any untrue
statement of a material fact, or fails to state a material fact necessary
to make the statements contained therein, in light of the circumstances in
which they are made, not misleading, except in the case of both clauses (i)
and (ii) any untrue statement or failure to state a material fact that
would not result in any material liability to the Business as a result of
such untrue statement or failure to state a material fact.
4.22 Government Furnished Equipment. Schedule 4.22 incorporates the most
recent schedule delivered to the U.S. Government or any non-U.S. Government
which identifies by description or inventory number certain equipment and
fixtures loaned, bailed or otherwise furnished to or held by the Business by or
on behalf of the United States or any foreign country. To the Knowledge of
Sellers, such schedule was accurate and complete on its date and, if dated as of
the Closing Date, would contain only those additions and omit only those
deletions of equipment and fixtures that have occurred in the ordinary course of
business, except for such inaccuracies that could not reasonably be expected to
have a material adverse effect on the Business.
4.23 Entire Business. Except for the Excluded Assets, and except as set
forth on Schedule 4.23, the Assets, together with the License Agreement,
constitute all of the assets, properties and rights necessary to conduct the
Business in all material respects as currently conducted. Other than ELAC,
Sellers have no subsidiaries primarily engaged in the Business.
4.24 Real Estate. Schedule 4.24 accurately lists all real property of the
Business owned or leased, indirectly or directly, by the Sellers or ELAC (other
than the Facility, the "Real Property"):
(a) The Sellers and ELAC have good and marketable title to all such
owned Real Property and good and valid leasehold interest in all such
leased Real Property, in each case, free and clear of all Liens except for
Permitted Liens;
(b) There are no condemnation proceedings or eminent domain
proceedings of any kind pending or, to the Knowledge of Sellers no written
notice of any threatened action has been received against any Real
Property;
(c) All of the Real Property is occupied under a valid and current
certificate of occupation or similar permit, the sale of the Assets
hereunder will not require the issuance or any new or amended certificate
of occupancy and to the Knowledge of Sellers the Real
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Property may be occupied and used by Purchaser or ELAC after the Closing
Date in the same manner as used by Sellers or ELAC on or before the Closing
Date;
(d) All improvements on the Real Property constructed by or on behalf
of Sellers or any other person were at the time installed constructed in
compliance with all applicable federal, state, local or foreign statutes,
laws, ordinances, regulations, rules, codes, orders or requirements
(including, but not limited to, any building, zoning or environmental laws
or codes) affecting the Real Property;
(e) All improvements on the Real Property and the present use and
conditions thereof do not violate any applicable deed restrictions or
applicable covenants, restrictions, agreements, existing site plan
approvals, zoning or subdivision regulations or urban redevelopment plans
as modified by any duly issued variances, and no permits, licenses or
certificates pertaining to the ownership or operation of all improvements
on the Real Property, other than those that are transferable with the Real
Property, are required by any governmental agency having jurisdiction over
the Real Property. Such improvements on the Real Property are wholly within
the lot limits of such Real Property and do not encroach on any adjoining
premises and there are no encroachments on any Real Property by any
improvements located on any adjoining premises;
(f) Sellers and ELAC enjoy peaceful and quiet possession of each
parcel of Real Property, and there is not under any lease of any of the
leased Real Property (a "Lease") any default by any of Sellers or ELAC
thereunder or any condition that with notice or the passage of time or both
would constitute such a default, and Sellers and ELAC have not received
notice asserting the existence of any such default or condition. To the
Knowledge of Sellers there are no defaults under any Lease by the landlord
thereunder. Sellers have heretofore furnished the Purchaser a true and
complete copy of each Lease and all amendments thereto pertaining to any
leased Real Property. Each Lease is valid and binding and in full force and
effect;
(g) The rental set forth in each Lease is the actual rental being
paid, and there are not separate agreements or understandings with respect
to the same; and
(h) Neither the execution of this Agreement nor the sale of the Assets
hereunder shall cause a default under any Lease or require prior written
consent of any landlord under any Lease.
4.25 Insurance. Schedule 4.25 lists insurance maintained by Sellers and
ELAC with respect to the Assets and the ELAC Assets and with respect to the
employees and representatives of the Business and the operations of the
Business. The coverage under each such policy and binder is in full force and
effect, and no notice of cancellation or nonrenewal with respect to any such
policy or binder has been received by any of the Sellers or ELAC.
4.26 Affiliate Transactions. Except as set forth in Schedule 4.26, there
are no agreements, arrangements, undertakings or other transactions between the
Business and any other division or business of Sellers or any person that
directly, or indirectly through one or
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more intermediaries, controls or is controlled by or is under common control
with any of Sellers (including, without limitation, any owner of capital stock
of Sellers) (an "Affiliate").
4.27 No Additional Representations. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS ARTICLE 4 OR ANY OTHER PROVISION OF THIS AGREEMENT,
IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO THAT ALLIEDSIGNAL IS MAKING NO
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, BEYOND THOSE
EXPRESSLY GIVEN IN THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO ANY IMPLIED
WARRANTY OR REPRESENTATION AS TO CONDITION, MERCHANTABILITY OR SUITABILITY AS TO
ANY OF THE PROPERTIES OR ASSETS OF THE SELLERS. EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED IN THIS AGREEMENT, THE ASSETS ARE BEING SOLD ON AN "AS IS, WHERE IS"
BASIS.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to AlliedSignal as follows:
5.1 Corporate Status. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
full power and all governmental licenses, authorizations, consents and approvals
required to carry on its business and to own all of its properties and assets.
Purchaser has all requisite corporate and other power and authority to enter
into, execute and deliver this Agreement and the Other Agreements and to perform
its obligations and consummate the transactions contemplated hereunder and
thereunder in accordance with the terms of this Agreement.
5.2 Authorization. All corporate and other proceedings required to be taken
by or on the part of Purchaser to authorize Purchaser to enter into and carry
out this Agreement have been, or prior to the Closing will be, duly and properly
taken. This Agreement has been, and on the Closing Date each of the Other
Agreements will be, duly executed and delivered by Purchaser and this Agreement
constitutes, and each Other Agreement will upon execution and delivery thereof
constitute, a legal and binding obligation of Purchaser, valid and enforceable
against Purchaser in accordance with their terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and the
rules of law governing specific performance, injunctive relief and other
equitable remedies.
5.3 Compliance. The execution, delivery and performance of this Agreement
and Other Agreements and the consummation of the transactions contemplated
hereby will not result in the breach of any of the terms or conditions of, or
constitute a default under, or violate, as the case may be, the articles of
incorporation, by-laws or other organization documents of Purchaser or any
material agreement, lease, mortgage, note, deed of trust, lease, bond,
indenture, license or other document or undertaking, oral or written, to which
Purchaser is a party or by which Purchaser is bound or by which any of the
Assets may be affected other than the consent required under Purchaser's
existing credit facility, which Purchaser believes will be obtained prior to
Closing.
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5.4 Due Diligence. Purchaser has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
the transactions contemplated by this Agreement and the Other Agreements.
Purchaser confirms that AlliedSignal provided to Purchaser the opportunity to
ask questions of the officers and management employees of AlliedSignal and to
acquire such additional information about the business and financial condition
of the Business as Purchaser requested and all such information has been
received.
5.5 Financing. Purchaser has funds of its own, or has binding commitments
from responsible banks or other financial institutions to provide funds, which
will be sufficient and available to pay the purchase price as set forth in
Section 2.1.
5.6 Investment Representation. Purchaser is acquiring the ELAC Shares for
investment and not with a view to the public distribution thereof.
5.7 Conveyances and Restrictions. The performance by Purchaser of its
obligations hereunder, whether through the purchase of the Assets, the obtaining
of financing to fund the acquisition, and/or the obtaining of financing for the
operations of the Business after the Closing, will not violate any provision of
the Uniform Fraudulent Conveyance Act as enacted by the United States or any
state thereof, or any regulations thereunder or any state fraudulent conveyance
or similar statute in a state in which the Business or Purchaser is doing
business.
5.8 Brokerage Fees. No person is entitled to any brokerage or finder's fee
or other commission from Purchaser in respect of this Agreement or the
transactions contemplated hereby.
ARTICLE 6. EMPLOYEES AND EMPLOYEE BENEFITS
6.1 Employment.
(a) Purchaser shall offer employment effective as of the Closing Date
to all Employees (except that Employees on Long Term Disability shall be
offered employment when such Employees are medically certified to return to
work) employed as of the Closing Date. Nothing herein expressed or implied
confers upon any Employee who accepts Purchaser's offer of employment
(collectively, "Transferred Employees") any rights or remedies of any
nature or kind, including, without limitation, any rights of employment
with Purchaser for a specified period of time.
(b) Notwithstanding Section 6.1(a) above, the employment of Employees
employed by ELAC (collectively, the "German Employees") shall continue
following the Closing Date and shall remain the liability of ELAC.
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6.2 Compensation and Benefits - U.S. Employees.
(a) Generally. Purchaser shall continue or shall provide, for a period
of at least 12 months immediately subsequent to the Closing Date, for all
Transferred Employees who are employed in the United States (collectively,
"U.S. Transferred Employees") base salary or applicable rate of pay not
less than that provided by Sellers immediately prior to the Closing Date,
employee benefits and incentive compensation comparable, in the aggregate,
to those in effect as of the Closing Date, except that, with respect to
those plans providing a benefit in AlliedSignal stock, Purchaser shall have
no obligation to provide such benefits or comparable benefits or to take
into account such benefits for purposes of this Section. Purchaser shall
assume liability for all deferred compensation, supplemental and excess
pension and savings benefits, all bonus amounts, normal and enhanced
severance benefits, and relocation benefits (whether or not all such
employee benefits are vested on the Closing Date) in respect of all U.S.
Transferred Employees incurred or earned, but not paid, on or before the
Closing Date, or as incurred in connection with the sale of the Business
and not paid as of the Closing Date, to the extent accrued on the Closing
Balance Sheet. Purchaser shall assume the retention agreements listed on
Schedule 6.2(a).
(b) Union Employees. Purchaser shall offer employment on or prior to
the Closing Date to each U.S. Employee covered by the Collective Bargaining
Agreements between AlliedSignal and the United Auto Workers ("UAW") or UAW
Local 179, including the Local Agreement between AlliedSignal and UAW Local
179, the Master Agreement between AlliedSignal and the UAW, and all
associated agreements that are part of such Master Agreement, including the
letters of understanding and agreements covering pensions, insurance and
savings plans (collectively, the "Bargaining Agreements") as described in
Schedule 4.7 (such covered Employees being referred to, collectively, as
"Union Employees"), provided that such Union Employee is actively at work
on the Closing Date. Purchaser shall provide each Union Employee with
compensation (base rate of pay and incentive compensation, if any) no less
than that required by the applicable Bargaining Agreements and any
applicable side letters and schedules immediately prior to the Closing
Date. A Union Employee who is absent on the Closing Date due to illness,
vacation, paid leave, holiday or union office leave or who is otherwise
subject to recall with seniority rights shall to the extent required by the
applicable Bargaining Agreement and any applicable side letters and
schedules be considered actively at work on the Closing Date. The Union
Employees who are actively at work on the Closing Date shall hereafter be
called "Union Transferred Employees". Sellers shall retain the obligation
to provide any Union Employee who does not become a Union Transferred
Employee on the Closing Date with benefits under Sellers' Pension Plans for
Union Employees, as defined herein, and all other benefits required to be
provided by the Bargaining Agreements.
(c) Purchaser agrees to credit each U.S. Transferred Employee service
credited with Sellers under the Benefit Plans for participation, retirement
eligibility and vesting under such employee benefit plans or policies
Purchaser maintains or will maintain for or on behalf of the U.S.
Transferred Employees. In addition, such service shall be credited for
benefit purposes under welfare plans (including severance plans), vacation
plans and qualified retirement plans in respect of which assets and
liabilities are transferred to
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Purchaser's Plans. Sellers shall not in any manner be responsible for any
liability, claim or obligation due under any such plan maintained by
Purchaser.
6.3 Severance and WARN Act. (a) Sellers shall pay and be responsible for
all liability, cost or expense for severance, termination indemnity payments,
salary continuation, special bonuses and like costs under Sellers' severance pay
plans, policies or arrangements, with respect to any of the Employees that arise
from or relate to the transactions described in or contemplated by this
Agreement, or of any U.S. Transferred Employees that arise under Sellers'
severance plans from the subsequent termination of employment by Purchaser after
the Closing Date. Purchaser agrees to pay and be responsible for all liability,
cost, expense and sanctions resulting from the Purchaser's failure to comply
after the Closing Date with the Worker Adjustment and Retraining Notification
Act of 1988 ("WARN Act"), and the regulations thereunder or for any action by
Purchaser which causes WARN to apply.
(b) The Sellers shall not, at any time within the 60-day period prior
to the Closing Date, effectuate a "plant closing" or "mass layoff', as
those terms are defined in the WARN Act or any State law, affecting in
whole or in part any Ocean Systems site of employment, facility, operating
unit or employee.
(c) The Sellers shall indemnify, defend and hold Purchaser harmless
from and against any and all claims, actions, suits, demands, proceedings,
losses, expenses, damages, obligations and liabilities (including costs of
collection, attorney's fees and other costs of defense) ("Damages") arising
out of or otherwise in respect of (i) termination by the Sellers of any
employee of the Business on or prior to the Closing Date; (ii) any claim
made by any employee of the Business for severance pay arising prior to, or
upon the Closing Date; or (iii) any suit or claim of violation brought
against the Purchaser under the WARN Act or any State law for any actions
taken by the Sellers in connection with, on or prior to the Closing Date
with regard to any site of employment, facility, operating unit or employee
affected by this Agreement which action by itself causes WARN to apply.
6.4 Health Care Continuation Liability. With respect to Sellers' plans,
Seller agrees to pay and be responsible for all liability, cost, expense, taxes
and sanctions under Section 4980B of the Internal Revenue Code (the "Code"),
interest and penalties imposed upon, incurred by, or assessed against Purchaser
or Sellers that arise by reason of or relate to any failure to comply with the
health care continuation coverage requirements of Section 4980B of the Code and
Sections 601 through 608 of ERISA, as amended, which failure occurs as a result
of the transactions described in or contemplated by this Agreement or which
failure occurs on or after the Closing Date with respect to any Employee or any
qualified beneficiary (as defined in Section 4980B(g)(l)) of such Employee.
6.5 Pension Plan.
(a) AlliedSignal shall amend the Salaried Employees Pension Program
for AlliedSignal Inc., the AlliedSignal Inc. Pension Plan for Hourly
Employees (provisions relating to UAW Local 179) and the AlliedSignal Inc.
Retirement Program (collectively, the "Pension Plans") to fully vest all
Employees employed by the Business as of the Closing Date participating in
the Pension Plan in their accrued benefit as of the Closing Date. Purchaser
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shall assume the liabilities and obligations as of the Closing Date of
Sellers for the accrued benefits of all U.S. Transferred Employees under
the Pension Plans. Purchaser shall have established as of the Closing Date,
or shall establish as soon as practicable after the Closing Date, a
tax-qualified defined benefit pension plan or plans which shall discharge
the pension obligations of Purchaser set forth in this Section
("Purchaser's Plan"). As soon as practicable after the Closing Date,
AlliedSignal shall cause a transfer of the pension liabilities and
obligations being assumed by Purchaser and of the assets, as calculated
below, to Purchaser's Plan.
(b) The assets to be transferred from the Pension Plans to Purchaser's
Plan shall be an amount equal to the "projected benefit obligation," within
the meaning of Financial Accounting Standard No. 87, as of the Closing Date
attributable to the U.S. Transferred Employees under Sellers' Pension Plans
("PBO") with adjustments described below. Sellers' actuary shall calculate
the transfer amount (the "Transfer Amount") by applying the assumptions,
methods and methodologies listed on Schedule 6.5(b) and other actuarial
assumptions and methodologies used in the ordinary course in the
preparation of the actuarial valuation not inconsistent with those listed
in Schedule 6.5(b). Notwithstanding any provision herein to the contrary,
the transfer amount shall be subject to the applicable requirements of
Sections 4 14(1) and 401(a)(12) of the Code. The amount as so determined
shall be adjusted for investment earnings at the short term investment fund
rate earned by Sellers' Pension Plans (the "Earnings") for the period
between the Closing Date and the actual dates of transfer (see below) and
reduced by the amount of any benefit payments to U.S. Transferred Employees
and a proportional share of investment and administrative expenses relative
to asset values for such period. The amount of assets caused to be
transferred pursuant to this Section shall be calculated by Sellers'
actuary, and the actuarial calculations shall be subject to review and
approval by Purchaser's actuary. In the event that Purchaser's actuary does
not agree with the calculation determined by Sellers' actuary, the
determination of the amount to be transferred pursuant to this Section
shall be made by a third, nationally recognized actuarial firm selected by
Sellers' and Purchaser's actuaries (the cost of which shall be borne
equally between Sellers and Purchaser), and the determination of such third
actuary as to the amount to be transferred shall be binding and conclusive
upon all parties hereto. The transfer of assets from Sellers' Pension Plan
to Purchaser's Plan shall be made in cash pursuant to Section 6.5(c). The
parties shall file any necessary IRS Forms 5310-A with respect to such
transfer.
(c) All transfers from the Pension Plans to the Purchaser's Plan shall
be made in accordance with the provisions of this Section 6.5(c). As soon
as is administratively practical, but in no event later than 30 days
following the Closing Date, and conditioned upon AlliedSignal having been
provided evidence reasonably satisfactory to it that Purchaser has
established a trust (or trusts) to hold the assets of the Purchaser's Plan
and that Purchaser's Plan is qualified under Section 40 1(a) of the Code
and the trusts holding assets of the Purchaser's Plan are tax exempt under
Section 501(a) of the Code ("Initial Transfer Date"), AlliedSignal shall
cause its trusts to make an initial transfer of assets in cash equal to 85%
of the amount reasonably estimated by AlliedSignal in good faith to be
equal to the Transfer Amount (the "Initial Transfer Amount"). In addition,
prior to the Initial Transfer Date AlliedSignal shall provide Purchaser
with evidence reasonably satisfactory to Purchaser that the Pension Plans
remain qualified under Section 40 1(a) of the Code. As soon as practicable
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after the final determination of the amounts to be transferred ("True-Up
Date"), AlliedSignal shall cause a second transfer to be made in cash of
the "True-Up Amount." The True-Up Amount shall be equal to the following
amount:
(Transfer Amount minus Initial Transfer Amount), minus benefit
payments made to U.S. Transferred Employees since the Closing Date
from the Pension Plans, adjusted for Earnings on the excess of the
Transfer Amount over the Initial Transfer Amount from the Initial
Transfer Date to the True-Up Date,
If the Initial Transfer Amount exceeds the Transfer Amount, as soon as
practicable following such determination Purchaser shall cause a transfer to be
made to the respective Pension Plan equal to the excess of the Initial Transfer
Amount over the Transfer Amount, adjusted to reflect earnings at the short term
investment fund rate earned by Purchaser's Plan from the Initial Transfer Date
until the date of transfer.
6.6 Savings Plan. AlliedSignal shall provide that those Employees
participating in the AlliedSignal Savings Plan and AlliedSignal Thrift Plan
("Savings Plans") immediately prior to the Closing Date shall fully vest on the
Closing Date in their respective Savings Plans accounts (the "Accounts"). As
promptly as practicable following the Closing Date, Sellers and Purchaser shall
arrange for the transfer of the Accounts and the corresponding liabilities with
respect to the U.S. Transferred Employees, from the Savings Plans to one or more
tax-qualified plans established or to be established by Purchaser which provides
benefits substantially equivalent to the benefits available under the applicable
Savings Plans. With respect to the plan or plans receiving assets from the
Savings Plans, to the extent permitted by Applicable Law, such plan or plans
shall also (a) provide for tax-deferred contributions and (b) meet all
requirements for a qualified cash or deferred arrangement under Section 401(k)
of the Code. The transfer of assets from the Savings Plans shall be made in
cash, marketable securities, promissory notes presenting participant loans, or a
combination thereof, as determined by AlliedSignal and consented to by
Purchaser. Without limiting the generality of the foregoing, if AlliedSignal
should determine to transfer assets held in Accounts which, immediately prior to
the Closing Date, provide for holding AlliedSignal common stock in such form,
Purchaser agrees to accept transfer of such Accounts in AlliedSignal's common
stock, and, to the extent permitted by law for such reasonable period of time as
Purchaser may determine, to provide U.S. Transferred Employees with an election
to retain AlliedSignal's common stock in their respective plan accounts or to
dispose of such stock and have the proceeds reinvested in other investment
alternatives offered under each such plan. Prior to the transfer date, Purchaser
shall, to the reasonable satisfaction of AlliedSignal's counsel, present
AlliedSignal with such evidence and information (which may include or be
provided by an opinion of Purchaser's counsel satisfactory to AlliedSignal) as
is reasonably necessary to establish that the tax-qualified plan or plans
established or to be established by Purchaser to which the transfer or transfers
described in this Section are to be made are in full force and effect and meet
all the requirements for qualification under Sections 401 and 411 (d)(6) of the
Code and Sellers shall, to the reasonable satisfaction of Purchaser's counsel,
present Purchaser with such evidence and information as is reasonably necessary
to establish that the Savings Plan meets the requirements of Section 401(a) of
the Code.
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6.7 Labor Agreements. Purchaser shall assume Sellers' obligations under the
Bargaining Agreements and any applicable side letters and schedules according to
their terms as in effect of and as of the Closing Date, and shall honor such
Bargaining Agreements for the remainder of the effective term thereof following
the Closing Date.
ARTICLE 7. PRE-CLOSING COVENANTS
7.1 [Intentionally left blank].
7.2 [Intentionally left blank].
7.3 [Intentionally left blank].
7.4 [Intentionally left blank].
7.5 Workers' Compensation. The Seller shall retain responsibility for all
workers' compensation events which relate to incidents occurring on or before
the Closing Date. The Purchaser shall have responsibility for all workers'
compensation events which relate to incidents occurring after the Closing Date.
7.6 Insurance-Primary Casualty Program. Sellers maintain at present a
series of insurance programs pursuant to which various insurance carriers have
provided and are providing insurance coverage in respect of the Business
relating to automobile liability, general liability, employers liability and
non-aircraft products liability (the "Primary Casualty Program") and Sellers and
Purchaser understand and agree that Sellers are not transferring to Purchaser
pursuant hereto any rights or interests in such Primary Casualty Program, nor,
except as otherwise set forth herein, shall Sellers be required to maintain any
of such coverages or limit in any manner Sellers' right to change deductible
levels or other terms or conditions thereof. As between Purchaser and Sellers,
however, it is agreed that the following shall apply to claims with a date of
occurrence prior to the Closing Date that are covered by the Primary Casualty
Program:
7.6.1 Claims Responsibility and Procedures. Purchaser shall promptly notify
in writing Sellers of any claims against the Business, Purchaser, Sellers or any
of their Affiliates arising from occurrences which took place prior to the
Closing Date relating to the Business or its prior assets, business or
operations. To the extent coverage is available under the Primary Casualty
Program, Purchaser shall handle such claims through the applicable insurance
carrier and to the limited extent required therefor is hereby appointed as
Sellers' agent in dealing with any such applicable insurance carriers, such
agency, however, being subject to revocation at any time if Purchaser fails to
comply with the provisions of this Section 7.6. Purchaser through the applicable
insurance carrier may settle any such claim on a basis which in its judgment is
reasonable provided, however, that Purchaser agrees not to settle any such
claims for an amount in excess of $50,000 without prior consultation with
AlliedSignal. Sellers and Purchasers shall cooperate with each other in the
defense of any such claims and will keep each other informed of significant
developments with respect
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thereto. Neither Purchaser nor Sellers will knowingly take any action that
prejudices the other party in the collection of any applicable insurance
proceeds.
7.7 No Inconsistent Action. Subject to Sections 9.1 and 9.2, the parties
hereto shall not take any action inconsistent with their obligations under this
Agreement or which could materially hinder or delay the consummation of the
transactions contemplated by this Agreement. None of the parties hereto shall
take or omit to take any action that could result in any of their respective
representations and warranties not being true in all material respects on the
Closing Date.
7.8 [Intentionally left blank].
7.9 Non-Solicitation. Sellers agree that until December 22, 1999, they
shall not, and they shall cause each of their respective Affiliates not to,
without the prior consent of Purchaser, employ or solicit for employment any
person currently employed by the Business (other than a person solicited or
hired as a result of a general solicitation (such as an advertisement) not
specifically directed to employees of the Business).
7.10 Refunds and Remittances. In the event that Sellers or their Affiliates
receive any amount that is properly due and owing to Purchaser in accordance
with the terms of this Agreement, Sellers shall cause same to be promptly
remitted to Purchaser at the address specified in Section 13.2.
7.11 Enforcement of Confidentiality Provisions. Sellers agree to use
reasonable best efforts to enforce, at the written request of Purchaser, (i) the
confidentiality provisions of any agreements related to the sale of the Business
(excluding any employee solicitation provisions) and (ii) all confidentiality
agreements, if any, entered into between Sellers or any of their Affiliates and
any of their employees, in each case to the extent such provisions pertain to
the Business as of the Closing Date.
7.12 Novation of Government Contracts. As soon as reasonably practicable
following the Closing, AlliedSignal shall, in accordance with Federal
Acquisition Regulations Part 42, Section 42.12, submit in writing to each
responsible Contracting Officer (as such term is defined in Federal Acquisition
Regulations Part 42, Section 42.102(a)), a request for the U.S. Government to
(i) recognize Purchaser in accordance with this Agreement and (ii) enter into a
novation agreement (the "Novation Agreement") substantially in the form
contemplated by such regulations. AlliedSignal shall thereby reasonably assist
Purchaser in obtaining all consents, approvals and waivers required for the
purpose of processing, entering into and completing the Novation Agreement with
regard to any of the Government Contracts, including responding to any
reasonable requests for information by the U.S. Government with regard to such
Novation Agreement.
7.13 Further Actions. Subject to the terms and conditions hereof, Sellers
and Purchaser agree to use their reasonable best efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement, including without limitation, taking all necessary or advisable
action (i) in respect of the works council of ELAC and (ii)
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to terminate the profit/loss pooling arrangement (the "Pooling Arrangement")
between AS Deutschland and ELAC not later than December 31, 1998.
7.14 Letters of Credit. Schedule 7.14 identifies letters of credit and
other similar obligations in respect of which AlliedSignal will remain as
account party ("Retained L/Cs") and other letters of credit and similar
obligations ("Assumed L/Cs") in respect of which Purchaser shall, not later than
May 31, 1998, either (a) become account party or (b) issue replacement letters
of credit, with Purchaser as account party, and obtain the cancellation of the
Assumed L/Cs and release Sellers from any obligations under any related credit
agreements. In the event that, after using its reasonable best efforts,
Purchaser cannot perform its obligations under Section 7.14(a) or (b) with
respect to the Assumed L/Cs, Purchaser shall provide back-up letters of credit
with respect to such Assumed L/Cs. Any Assumed L/C in respect of which Purchaser
has not issued a replacement or back-up letter of credit as aforesaid by May 31,
1998 may be cancelled by AlliedSignal and Purchaser shall reimburse AlliedSignal
forthwith for all amounts drawn by the beneficiary under any such cancelled
letter of credit; provided, however, that prior to May 31, 1998, AlliedSignal
shall not waive any requirements of or agree to amend any such Retained L/C
without the prior written consent of Purchaser. The parties acknowledge that the
identity of the account party under any Retained L/C and any Assumed L/C and
other similar obligations does not alter the terms of this Agreement, meaning,
specifically and without limitation, that the provisions of Section 3.1 (Assumed
Liabilities), 3.2 (Excluded Liabilities) and Article 12 (Indemnification) are
unaffected by the identity of the account party, and if a demand for payment is
made under a Retained L/C or an Assumed L/C, the financial responsibility for
the circumstances underlying such demand shall be determined by this Agreement
and not by the identity of the account party under the letter of credit in
question.
7.15 1985 Capitalization of ELAC. AlliedSignal shall ensure that the 1985
capitalization of ELAC is confirmed by German counsel to have been lawful and
proper. The parties shall cooperate in any steps that may be necessary to
correct the capitalization, at AlliedSignal's expense.
7.16 MCDV Subcontract. Following the Closing, AlliedSignal and Purchaser
shall use their reasonable best efforts to prepare a subcontract (the "MCDV
Subcontract") to be entered into between AlliedSignal Canada Inc. ("ASC") and
Purchaser relating to the contract between ASC and MacDonald, Dettwiler and
Associates Ltd. for the maritime coastal defense vessel, as amended (the "MCDV
Contract"). The MCDV Subcontract shall be reasonably acceptable to AlliedSignal
and Purchaser and shall transfer to Purchaser in U.S. dollars the full economic
benefit of the MCDV Contract (based on the exchange rate for U.S. and Canadian
dollars as reported in the Wall Street Journal on the date of any payment).
Purchaser shall, and AlliedSignal shall cause ASC to, enter into the MCDV
Subcontract promptly following the finalization thereof to the reasonable
satisfaction of AlliedSignal and Purchaser. In the event that (i) ASC shall be
prohibited from making any payment to Purchaser under the MCDV Subcontract, (ii)
any Canadian withholding tax would be applicable to any payment to Purchaser by
ASC under the MCDV Subcontract or (iii) ASC would lose Canadian content credit
as a result of any payment to Purchaser by ASC under the MCDV Subcontract,
AlliedSignal shall, on the date any such payment is due and in lieu of such
payment from ASC under the MCDV Subcontract, make a payment to Purchaser in an
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amount equal to the amount of the payment due under the MCDV Subcontract,
without regard to any Canadian withholding tax. Purchaser shall not have any
liability under the MCDV Subcontract for any obligation or liability relating to
the ownership or operation of the Assets or the Business on or prior to the
Closing Date relating to (a) the provision of Canadian content, (b) any penalty
or excise tax for failure to meet Canadian content obligations or (c) any
obligation for liquidated damages for failure to timely deliver.
ARTICLE 8. CONDITIONS TO CLOSING
8.1 Conditions to the Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement are
subject to the fulfillment prior to or at the Closing of each of the following
conditions, any one or more of which may be waived by Purchaser in its sole
discretion:
(a) On the Closing Date, there shall be no injunction, restraining
order or decree of any nature of any court or governmental agency or body
of competent jurisdiction that is in effect that restrains or prohibits the
consummation of the transactions contemplated by this Agreement or any such
injunction, restraining order or decree or any pending lawsuit, claim or
legal action relating to the transactions contemplated by this Agreement
which would materially adversely affect such transactions or Purchaser's
ownership, use or enjoyment of the Business or any part thereof.
(b)(i) All of the representations and warranties of Sellers, including
those set forth in Section 8.1 (b)(ii) and (iii) below, contained in this
Agreement or in any certificate, instrument or other document delivered to
Purchaser pursuant hereto shall be complete, true and correct in all
respects on and as of the Effective Date, with the same force and effect as
though such representations and warranties had been made on and as of the
Effective Date, except to the extent that any such representation and
warranty is made as of a specified date, in which case, such representation
and warranty shall have been true and correct as of such date;
(ii) The representations and warranties of Sellers contained in
Sections 4.1, 4.2, 4.3, 4.8, 4.10, 4.11, 4.12, 4.15, 4.16, 4.17, 4.18,
4.20, 4.21, 4.22, 4.23, 4.25, 4.26 and 4.27 of this Agreement or in
any certificate, instrument or other document delivered to Purchaser
pursuant hereto shall be complete, true and correct in all respects on
the Closing Date, with the same force and effect as though such
representations and warranties had been made on and as of the Closing
Date, except to the extent that any such representation and warranty
is made as of a specified date, in which case, such representation and
warranty shall have been true and correct as of such date; and
(iii) To the Knowledge of Sellers, the representations and
warranties contained in Section 4.9 of this Agreement or in any
certificate, instrument or other document delivered to Purchaser
pursuant hereto shall be complete, true and correct in all respects on
the Closing Date, with the same force and effect as though such
representations and warranties had been made on and as of the Closing
Date, except to the extent that any such
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representation and warranty is made as of a specified date, in which
case, such representation and warranty shall have been true and
correct as of such date.
(c) Sellers shall have performed in all material respects all
obligations and agreements and complied in all material respects with all
covenants contained in this Agreement to be performed and complied with by
them prior to or on the Closing Date.
(d) Purchaser shall have received a certificate, dated the Closing
Date, from an authorized officer of each of the Sellers to the effect that
the conditions specified in (b) and (c) above have been fulfilled.
(e) The Transition Services Agreement, attached as Exhibit B hereto,
shall have been executed and delivered by the parties thereto.
8.2 Conditions to the Obligations of Sellers. The obligations of Sellers
under this Agreement are subject to the fulfillment, prior to or at the Closing,
of each of the following conditions, any one or more of which may be waived by
Sellers in their sole discretion:
(a) On the Closing Date, there shall be no injunction, restraining
order or decree of any nature of any court or governmental agency or body
of competent jurisdiction that is in effect that restrains or prohibits the
consummation of the transactions contemplated by this Agreement.
(b) The representations and warranties of Purchaser contained in this
Agreement or in any certificates, instruments or other documents delivered
to AlliedSignal pursuant hereto shall be complete, true and correct on the
Closing Date, with the same force and effect as though such representations
and warranties, as updated, had been made on and as of the Closing Date,
except to the extent that any such representation and warranty is made as
of a specified date, in which case, such representation and warranty shall
have been true and correct as of such date.
(c) Purchaser shall have performed in all material respects all
obligations and agreements and complied in all material respects with all
covenants contained in this Agreement to be performed and complied with by
the Closing Date.
(d) AlliedSignal shall have received a certificate, dated the Closing
Date, from an authorized officer of the Purchaser to the effect that the
conditions specified in (b) and (c) above have been fulfilled.
ARTICLE 9. TERMINATION AND SURVIVAL
9.1 Termination. Notwithstanding anything to the contrary set forth herein,
this Agreement may be terminated and the transactions contemplated hereby
abandoned at any time prior to the Closing:
(a) by mutual written consent of Purchaser and Sellers; or
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(b) by Purchaser, on the one hand, or Sellers, on the other hand, upon
written notice to the other, if such other party or its Affiliate has
breached any representation, warranty or covenant contained in this
Agreement in any respect, if the non-breaching party has notified the
breaching party of the breach in writing and the breach has continued
without cure for a period of thirty (30) days after notice of the breach;
or
(c) by the Purchaser, on the one hand, or Sellers, on the other hand,
if there shall be in effect any law or regulation that prohibits the
consummation of the Closing or if the consummation of the Closing would
violate any non-appealable final order, decree or judgment of any court or
governmental body having jurisdiction over the transactions contemplated
hereby; or
(d) by either party if the Closing shall not have occurred by April 1,
1998; provided that the terminating party is not in material breach of its
obligations under this Agreement.
9.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 9.1, this Agreement shall become void and of no further force and
effect, and none of the parties hereto (nor their respective Affiliates,
directors, shareholders, officers, employees, agents, consultants,
attorneys-in-fact or other representatives) shall have any liability in respect
of such termination except that the obligations contained in Sections 9.2, 13.1,
13.3 and 13.9 shall survive; provided, however, that if such termination is
effected pursuant to Section 9.1(b) or (d) and the failure to consummate the
transactions contemplated hereby was the result of any of the conditions to
Closing having not been fulfilled by reason of the breach by either Purchaser,
on the one hand, or Sellers, on the other hand, of their respective covenants,
representations and/or warranties set forth in this Agreement or in any
agreement, document or instrument ancillary hereto, the party having so breached
shall remain liable to the other party for such breach.
ARTICLE 10. CLOSING DOCUMENTS
10.1 Documents to be Delivered by Sellers. At the Closing, Sellers shall
deliver to Purchaser the following documents:
(i) Copies of resolutions of each of the Sellers certified by a
Secretary, Assistant Secretary or other appropriate officer of such entity,
authorizing the execution, delivery and performance of this Agreement and
the transactions contemplated hereby;
(ii) Executed deeds, bills of sale or other appropriate instruments of
transfer with respect to all of the Real Property, Personal Property,
Inventory, Accounts Receivable and any other Assets not transferred or
assigned by any other documents or instruments described in this Section;
(iii) Executed and acknowledged Assignments by ASTI sufficient to
transfer title to the Intellectual Property;
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(iv) Executed assignment and assumption agreements with respect to the
Contracts;
(v) Executed documents of assignment or transfer with respect to each
of the permits, licenses and authorizations listed in Schedule 4.17;
(vi) One executed assumption of liability agreement by which Purchaser
will assume the Assumed Liabilities pursuant to Section 3.1 (the
"Assumption of Liability Agreement");
(vii) One executed copy of the License Agreement;
(viii) A certificate of an appropriate officer of AlliedSignal
relating to the representations, warranties and covenants of AlliedSignal
made herein as provided in Section 8.1(b) and (c);
(ix) A share transfer agreement in customary form and a certificate in
the name of Purchaser representing the ELAC Shares;
(x) Any other document reasonably necessary to effectuate the
transactions contemplated hereby;
(xi) Sellers shall have delivered to Purchaser certificate(s) in form
and substance reasonably satisfactory to Purchaser, duly executed and
acknowledged, certifying any facts that would exempt the transactions
contemplated hereby from withholding pursuant to the provisions of the
Foreign Investment Real Property Tax Act (e.g., a certificate of
non-foreign status as provided in Treasury Regulation section 1.
1445-2(b)(2)(iii)(B)); and
(xii) One executed Transition Services Agreement.
10.2 Documents to be Delivered by Purchaser. At the Closing, Purchaser
shall pay the Purchase Price to AlliedSignal and shall execute where applicable
and deliver to AlliedSignal the following documents:
(i) Copies of resolutions of the Purchaser, certified by the Secretary
or Assistant Secretary of Purchaser, authorizing the execution, delivery
and performance of this Agreement and the transactions contemplated hereby;
(ii) Executed assignment and assumption agreement with respect to the
Contracts;
(iii) One executed Assumption of Liability Agreement;
(iv) A certificate of an appropriate officer of Purchaser relating to
the representations, warranties and covenants made herein by Purchaser, as
provided in Sections 8.2(b) and (c);
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(v) One executed copy of the License Agreement;
(vi) Any other document reasonably necessary to effectuate the
transactions contemplated hereby;
(vii) One resale certificate regarding inventory; and
(viii) One executed copy of the Transition Services Agreement.
ARTICLE 11. POST CLOSING OBLIGATIONS
11.1 Further Assurances. From time to time after the Closing, without
further consideration, the parties shall cooperate with each other and shall
execute and deliver instruments of transfer or assignment, or such other
documents to the other party as such other party reasonably may request to
evidence or perfect Purchaser's right, title and interest to the Assets, and
otherwise carry out the transactions contemplated by this Agreement, including
providing that Purchaser will be able to utilize the AlliedSignal sales office
in Canada previously used by the Business. Any cash received by the Sellers
after the Closing in respect of any Asset shall be immediately remitted by
Sellers to Purchaser.
11.2 Access to Books and Records. After the Closing, Purchaser shall permit
AlliedSignal to have reasonable access to and the right to make copies of such
of Sellers' books, records and files as constitute part of the Assets or the
ELAC Assets for any reasonable purpose at any time during regular business
hours, such as for use in litigation or financial reporting, tax return
preparation, or tax compliance matters.
11.3 Cooperation in Litigation. The parties shall reasonably cooperate with
each other at the requesting party's expense in the prosecution or defense of
any dispute or litigation or other proceeding arising from their respective
operation of the Business, including but not limited to affording reasonable
access to and providing information regarding amounts in dispute, information
regarding former employees of the Business and documentation created in the
running of the Business relating to such dispute or litigation. Purchaser and
Sellers shall cooperate fully, as and to the extent reasonably requested by the
other party, and at their own cost and expense, in connection with the filing of
Tax Returns, the retention of records and the forwarding of any relevant notices
or other information received from any Taxing authority and any audit,
litigation or other proceeding with respect to Taxes, and shall fully and
accurately submit any tax data packages reasonably requested by Sellers within
the time periods established by the Sellers Tax department consistent with past
practices.
11.4 Proprietary Information. Prior to the Closing Date, the Business was
routinely supplied copies of proprietary and confidential information relating
to strategic, technical, and/or marketing plans of AlliedSignal and its
Affiliates and their various operations unrelated to the Business. Although
AlliedSignal has attempted to recover such information from the Business, some
may still be present within the Business. Purchaser therefore agrees that it
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will not use such information for any purpose whatsoever, and shall destroy any
remaining copies.
11.5 Covenant Not to Compete. AlliedSignal and each of its Affiliates
agrees that for a period of five years after the Closing Date, neither it nor
any of its Affiliates will, directly or indirectly, own, manage, operate, join,
control or participate in the ownership, management, operation or control of,
any business whether in corporate, proprietorship or partnership form or
otherwise competitive with the Business as currently conducted, except for (i)
any business, service or product line acquired by AlliedSignal, directly or
indirectly, after the Closing Date to the extent the revenues attributable to
the competing business do not account for in excess of 20% of the revenues of
the business acquired or (ii) any investment by the Savings Plans or the Pension
Plans of AlliedSignal.
11.6 Change of Name. To the extent AS Deutschland has not done so prior to
Closing, Purchaser covenants that promptly after Closing it will change the
legal name of ELAC and its wholly owned pension fund subsidiary in accordance
with German law to eliminate the reference therein to "AlliedSignal."
11.7 Tax Election. The Purchaser may at its option make a section 338
election with respect to the ELAC Shares or in the alternative, the Purchaser
may purchase the ELAC Shares through a German acquisition vehicle; provided
that, in either case, the Seller consents to the making of such election or
purchase which such consent shall not be unreasonably withheld.
11.8 Research and Experimental Expenses. Sellers will furnish to the
Purchaser as soon as reasonably practicable, but in no event more than 180 days
after Closing, at Seller's cost and expense, all information reasonably
requested relating to the base period research expenses and any other
information to allow Purchaser to claim research and experimental credits in
accordance with the relevant sections of the Code and Treasury Regulations
promulgated thereunder.
11.9 Pooling Arrangement. As described in Section 7.13, the Pooling
Arrangement is to be terminated not later than December 31, 1998.
Notwithstanding the existence of the Pooling Arrangement, any net earnings of
ELAC during the period from the Effective Date until the date the Pooling
Arrangement is terminated (the "Pooling Period") shall be treated as an Asset,
and all losses and the consequences thereof shall be treated as an Assumed
Liability, for purposes of this Agreement.
ARTICLE 12. 1NDEMMFICATION
12.1 Indemnification by Sellers. Sellers shall defend, indemnify and hold
harmless Purchaser and Purchaser's directors, shareholders, officers, employees,
agents, Affiliates, successors and each of the heirs, executors and successors
and assigns of any of the foregoing (collectively, the "Purchaser Indemnified
Parties") from and against any and all claims, liabilities, obligations, losses,
costs, expenses (including, without limitation, reasonable legal,
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accounting and similar fees and expenses), fines, damages (individually a "Loss"
and collectively "Losses"), arising out of:
(a) any breach or violation of any of the covenants or agreements made
by Sellers in this Agreement or the Other Agreements;
(b) any breach of, or any inaccuracy or misrepresentation in, any of
the representation or warranties made by Sellers in this Agreement or in
any Schedule, agreement, instrument, certificate or similar document
required to be delivered pursuant to the terms hereof; or
(c) any of the Excluded Liabilities or Excluded Assets.
12.2 Tax Indemnification. The Sellers shall, jointly and severally, be
responsible for, shall pay or cause to be paid, and shall indemnify and hold
harmless the Purchaser Indemnified Parties from and against any and all Taxes
for or in respect of each of the following:
(a) any and all Taxes with respect to any taxable period or a portion
thereof, of ELAC (or any predecessor) ending on or before the Closing Date;
(b) with respect to any and all Taxes of any member of a consolidated,
combined or unitary group of which ELAC (or any predecessor) is or was a
member on or prior to the Closing Date by reason of the liability of ELAC
pursuant to Treasury Regulation Section 1.1502-6(a) (or any analogous or
similar state, local or foreign law or regulation), as a transferee or
successor, by contract, or otherwise;
(c) any Taxes arising out of a breach of the representations and
warranties contained in Section 4.16; and
(d) any payments required to be made after the Closing Date under any
Tax sharing, Tax indemnity, Tax allocation or similar contracts (whether or
not written), including but not limited to the profit/loss pooling
arrangement with AS Deutschland set forth on Schedule 4.16, to which ELAC
was obligated, or was a party, on or prior to the Closing Date.
12.3 Indemnification by Purchaser. Purchaser shall indemnify and hold
harmless AlliedSignal and AlliedSignal's directors, shareholders, officers,
employees, agents, consultants, representatives, Affiliates, successors and
assigns (the "AlliedSignal Indemnified Parties") from and against any and all
Losses arising out of:
(a) any breach or violation by Purchaser of any of the covenants or
agreements made by Purchaser in this Agreement or the Other Agreements;
(b) any breach of, or any inaccuracy in any of the representations or
warranties made by Purchaser in this Agreement, or in any Schedule,
agreement, certificate, instrument or similar documents required to be
delivered pursuant to the terms hereof; or
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(c) any Assumed Liability.
12.4 Indemnification Procedure. (a) Any party seeking indemnification
hereunder (the "Indemnitee") shall notify the party liable for such
indemnification (the "Indemnitor") in writing of any event, omission or
occurrence which the Indemnitee believes has given or could give rise to Losses
which are indemnifiable hereunder (such written notice being hereinafter
referred to as a "Notice of Claim"). Any Notice of Claim shall be given promptly
after the Indemnitee becomes aware of such event, omission or occurrence;
provided, that the failure of any Indemnitee to give notice as provided in this
Section 12.4 shall not relieve the Indemnitor of its obligations under this
Section 12.4, except to the extent that the Indemnitor is actually prejudiced by
such failure to give notice. A Notice of Claim shall specify in reasonable
detail the nature and the particulars of the event, omission or occurrence
giving rise to a right of indemnification to the extent known by or available to
Indemnitee. The Indemnitor shall satisfy its obligations hereunder within thirty
(30) days of its receipt of a Notice of Claim.
(b) All costs and expenses incurred by the Indemnitor in defending any
claim or demand shall be a liability of, and shall be paid by, the
Indemnitor. Except as hereinafter provided, in the event that the
Indemnitor notifies the Indemnitee within the 30 day period that it desires
to defend the Indemnitee against such claim or demand, the Indemnitor shall
be deemed to waive its right to contest such Indemnitee's right to
indemnification hereunder and shall have the right to defend the Indemnitee
by appropriate proceedings and shall have the sole power to direct and
control such defense. If any Indemnitee desires to participate in any such
defense, it may do so at its sole cost and expense; provided, that such
Indemnitee shall have the right to employ separate counsel to represent
such Indemnitee in such defense, at the Indemnitor's expense, if (i) in
such Indemnitee's reasonable judgement and on the advice of counsel, a
conflict of interest between such Indemnitor and such Indemnitee exists
with respect to such claim or demand or (ii) the Indemnitor agrees to the
retention of such counsel. So long as the Indemnitor is reasonably
contesting any such claim or demand in good faith, the Indemnitee shall not
pay or settle a claim or demand without the consent of the Indemnitor
(unless the Indemnitee waives in writing any right to indemnity therefor).
The Indemnitor may settle any claim or demand without the consent of the
Indemnitee provided that such settlement includes a full, unconditional and
complete release of the Indemnitee, and provided also that no such
settlement will, without the prior written consent of the Indemnitee,
impose any obligation or restriction on the Indemnitee or any of its assets
or businesses. So long as the Indemnitor is defending in good faith any
such third party claim, demand, suit, action or proceeding, the Indemnitee
shall at all times cooperate in all reasonable ways with, make its relevant
files and records available for inspection and copying by, and make its
employees available or otherwise render reasonable assistance to, the
Indemnitor and shall be reimbursed for its reasonable out-of-pocket
expenses related thereto. In the event that the Indemnitor fails to timely
defend, contest or otherwise protect against any such third party claim,
demand, suit, action or proceeding, the Indemnitee at the Indemnitor's
expense shall have the right, but not the obligation, to defend, contest,
assert crossclaims or counterclaims, or otherwise protect against, the same
and may make any compromise or settlement thereof and be entitled to all
amounts paid as a result of such third party claim, demand, suit or action
or any compromise or settlement thereof.
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(c) The Indemnitor, following receipt of any notice from any
Indemnitee requesting reimbursement for a Loss (which notice documents in
reasonable detail the Loss or portion thereof by the Indemnitee) shall
promptly and in any case within thirty days of receipt provide such
reimbursement, unless and only to the extent that the Indemnitor disputes
in good faith its indemnity obligation with respect to such Loss.
(d) Each Indemnitee shall reasonably cooperate in complying with any
applicable foreign, federal, state or local laws, rules or regulations or
any discovery or testimony necessary to effectively carry out the
Indemnitor's obligations hereunder. Such Indemnitee shall be reimbursed for
any reasonable out-of-pocket expenses incurred in connection with such
compliance.
12.5 Survival and Limitations. Except as otherwise provided herein, the
warranties and representations of the parties contained in this Agreement or in
any instrument delivered pursuant hereto, as deemed to have been given as of the
Effective Date or the Closing Date, as the case may be, pursuant to Section
8.1(b), will survive the Closing Date and will remain in full force and effect
thereafter for a period of two years from the Closing Date; provided that the
representations and warranties contained in (i) Sections 4.8 and 4.18 shall
survive the Closing Date indefinitely and (ii) Sections 4.3, 4.10, 4.11, 4.16
and 4.21 which shall survive the Closing Date until 90 days following the
expiration of any statute of limitations (or extensions thereof) applicable to
the matters described therein; and provided further that in the event notice of
any claim for indemnification is given within the applicable survival period,
the representations and warranties that are the subject of such indemnification
claim shall survive until such time as such claim is finally resolved. Anything
to the contrary contained herein notwithstanding, (a) neither party shall assert
any claim against the other for indemnification (not including indemnification
for Taxes) hereunder with respect to any inaccuracy or breach of such warranties
or representations unless and until the amount of such claim or claims,
including any claims deemed made pursuant to Section 12.8, shall exceed $750,000
calculated on a cumulative basis and not a per item basis, and then only in
respect to the excess over said $750,000; and (b) neither party shall be
entitled to recover from the other more than 50% of the sum of (I) the Purchase
Price hereunder and (II) the Purchase Price under the Facility Sale Agreement
with respect to all claims for indemnity with respect to any inaccuracy or
breach of such warranties or representations.
12.6 Adjustment for Insurance and Taxes. The amount (an "Indemnity
Payment") which an Indemnitor is required to pay on behalf of any Indemnitee
pursuant to this Article 12 shall be reduced by the amount of any insurance
proceeds theretofore or thereafter actually received by or on behalf of the
Indemnitee in reduction of the related indemnifiable loss. An Indemnitee which
shall have received or on behalf of which there shall be paid an Indemnity
Payment and which shall subsequently receive, directly or indirectly, insurance
proceeds in respect of the related indemnifiable loss, shall pay to the
Indemnitor the amount of such insurance proceeds or, if lesser, the amount of
the Indemnity Payment. Where any tax benefit is available to the Indemnitee with
respect to an indemnifiable event, the indemnity payment shall be reduced dollar
for dollar by the amount of such tax benefit and where any net Tax cost is
incurred by the Indemnitee arising from the receipt of indemnity payments
hereunder, the indemnity payment shall be increased dollar for dollar by the
amount of such Tax cost (grossed up for such increase), provided that such Tax
benefit or Tax cost shall be computed
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at the highest federal, state, local and foreign corporate income tax rate of
the jurisdiction in which such Tax benefit or Tax cost so relates.
12.7 Environmental Liabilities. (a) To the fullest extent permitted under
(i) the Stock Purchase Agreement pursuant to which AlliedSignal acquired ELAC
from Honeywell and (ii) Applicable Law, AlliedSignal agrees to assign its
indemnification rights if any in respect of the ELAC facility to Purchaser and
to the extent not assignable to enforce such provisions for the benefit of
Purchaser and to provide any amounts it receives in connection therewith to
Purchaser.
(b) Notwithstanding Section 3.2(d), (i) Purchaser shall indemnify
the AlliedSignal Indemnified Parties from and against the first $3
million of Losses, in aggregate, in respect of the combined
Environmental Liabilities hereunder and under the Facility Sale
Agreement and 50% of the next $2 million of such Losses and (ii)
AlliedSignal shall indemnify the Purchaser Indemnified Parties from
and against any other Losses relating to Environmental Liabilities.
12.8 Facility Sale Agreement. Purchaser agrees to indemnify the Allied
Signal Indemnified Parties from and against amounts up to $750,000, calculated
on a cumulative basis and not a per item basis, paid by Sellers under Article 11
of the Facility Sale Agreement for claims under the Facility Sale Agreement for
indemnification (not including indemnification for Taxes) thereunder with
respect to any inaccuracy or breach of the warranties or representations
thereunder. If AlliedSignal shall be liable to any party pursuant to the
Facility Sale Agreement (a "Facility Sale Liability"), Purchaser shall indemnify
AlliedSignal to the extent the amount of such Facility Sale Liability exceeds
the amount for which Sellers would have been liable under this Agreement had the
Real Estate Assets (as defined in the Facility Sale Agreement) been included in
the Assets. Any payments made pursuant to this Section 12.8 shall be deemed
"claims" for purposes of the $750,000 threshold set forth in Section 12.5.
Sellers shall not be required to pay more than once in respect of any Loss.
ARTICLE 13. MISCELLANEOUS
13.1 Expenses. Except as specifically set forth elsewhere herein and except
that a party not in breach of this Agreement shall be entitled to recover from a
breaching party all expenses and costs incurred by the non-breaching party by
reason of such breach (including, without limitation all legal expenses and
costs), each of the parties hereto shall pay its own expenses and costs incurred
or to be incurred by it in negotiating, closing and carrying out this Agreement,
and, in no event, shall any such fees and expenses of the Sellers constitute
"Assumed Liabilities" under this Agreement.
13.2 Notices. Any notice or communication given pursuant to this Agreement
by a party hereto to the other party shall be in writing and hand delivered, or
mailed by registered or certified mail, postage prepaid, return receipt
requested (notices so mailed shall be deemed given when mailed), or sent via
facsimile, with an original mailed as follows:
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If to AlliedSignal or Sellers:
AlliedSignal Inc.
101 Columbia Road
Morristown, New Jersey 07962
Attention: Vice President and Chief Financial Officer
Telecopier: 973-455-6039
If to Purchaser:
L-3 Communications Corporation
600 Third Avenue
New York, New York 10016
Attention: Christopher C. Cambria, Esq.
Telecopier: 212-805-5494
with a required copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: David B. Chapnick, Esq.
Telecopier: 212-455-2502
13.3 Confidentiality. AlliedSignal and Purchaser have entered into a
Confidentiality Agreement dated September 23, 1997 which notwithstanding any
provision herein to the contrary shall survive the execution and delivery of
this Agreement and the Closing hereunder.
13.4 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.5 Entire Agreement/Termination of December Agreement. Except for the
Confidentiality Agreement referred to in Section 13.3, this Agreement and the
Other Agreements are the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior communications,
representations, agreements and understandings between the parties hereto,
whether oral or written, including any prior version of this Agreement executed
and delivered by the parties hereto. On December 22, 1997, the parties hereto
entered into that certain Purchase Agreement (the "December Agreement")
regarding the purchase and sale of the Assets. Since the date of the December
Agreement, Purchaser has conducted an audit and other examinations of the
Business and has asserted certain claims with respect to the December Agreement,
relating, inter alia, to the financial position and business prospects of the
Business. The parties have resolved all such claims and, for good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, have
restated their agreement with respect to the purchase and sale of the Business,
as set forth in this Agreement. The December Agreement is hereby terminated, is
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of no further force or effect, and no party shall have any right or obligation,
whether as a matter of the law of contract or otherwise, under, arising out of
or relating to, the December Agreement or any matter appearing in the December
Agreement that does not appear in this Agreement (including, without limitation,
the representations and warranties of Sellers that do not appear in this
Agreement). The agreement between the parties as to the purchase and sale of the
Business is expressed in its entirety in this Agreement.
13.6 Construction. When the context so requires, references herein to the
singular number include the plural and vice versa and pronouns in the masculine
or neuter gender include the feminine. The headings contained in this Agreement
and the tables of contents, exhibits and schedules are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement.
13.7 Assignment. This Agreement may not be assigned, in whole or in part,
by any party hereto without the prior written consent of the other parties
hereto, which consent shall not unreasonably be withheld; provided that
Purchaser may, without the consent of Sellers, assign its rights and
obligations, in whole or in part, to any wholly-owned subsidiary of Purchaser so
long as Purchaser remains bound by all the terms of this Agreement.
13.8 Amendment. This Agreement may be amended, supplemented or otherwise
modified only by written agreement duly executed by the parties hereto.
13.9 Applicable Law. This Agreement shall be construed in accordance with
the laws of the State of New York, disregarding its conflicts of laws principles
which may require the application of the laws of another jurisdiction.
13.10 No Third Party Rights. This Agreement is not intended and shall not
be construed to create any rights in any parties other than Sellers and
Purchaser and no other person shall assert any rights as a third party
beneficiary hereunder.
13. 11 Exhibits and Schedules. The Exhibits and Schedules attached hereto
are incorporated into this Agreement and shall be deemed a part hereof as if set
forth herein in full. References herein to "this Agreement" and the words
"herein," "hereof' and words of similar import refer to this Agreement
(including Exhibits and Schedules) as an entirety. In the event of any conflict
between the provisions of this Agreement and any such Exhibit or Schedule, the
provisions of this Agreement shall control.
13.12 Waivers. Any waiver of rights hereunder must be set forth in writing.
Except as provided in the preceding sentence, no action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, covenants or
agreements contained herein, or in any documents delivered or to be delivered
pursuant to this Agreement or in connection with the Closing hereunder. A waiver
of any breach or failure to enforce any of the terms or conditions of this
Agreement shall not
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in any way affect, limit or waive any party's rights at any time to enforce
strict compliance thereafter with every term or condition of this Agreement.
13.13 Severability. If and to the extent that any court of competent
jurisdiction holds any provisions (or any part thereof) of this Agreement to be
illegal, invalid or unenforceable, such holding shall in no way affect the
validity of the remainder of this Agreement.
13.14 Bulk Sales Law. The parties hereto agree to waive compliance with the
provisions of the bulk sales law of any jurisdiction. The Sellers agree to
indemnify and hold harmless Purchaser from and against any and all liabilities
which may be asserted by third parties against Purchaser as a result of such
noncompliance.
13.15 Knowledge of Sellers. For purposes of this Agreement, Knowledge of
Sellers or any similar expression shall mean the knowledge, after due inquiry,
of (i) the executive officers of Sellers; (ii) Robert Johnson; or (iii) Steven
Schorer and all individuals who directly report to Mr. Schorer.
13.16 Personal Liability. The directors, officers, stockholders, employees,
agents, consultants, representatives and affiliates of each of the parties
hereto acting in such capacity shall not in such capacity have any personal
liability or obligation arising under this Agreement (including any claims that
the other parties may assert).
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IN WITNESS WHEREOF, Sellers and Purchaser have duly executed and delivered
this Agreement as of the day and year first above written.
AlliedSignal Inc.
By: /s/ R. Carlson
-----------------------------
AlliedSignal Technologies, Inc.
By: /s/ R. Carlson
-----------------------------
AlliedSignal Deutschland GmbH
By: /s/ R. Carlson
-----------------------------
L-3 Communications Corporation
By: /s/ [ILLEGIBLE]
-----------------------------
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EXHIBIT A TO
ASSET PURCHASE
AGREEMENT
LICENSE AGREEMENT
[Attached following the schedules]
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EXHIBIT B TO
ASSET PURCHASE
AGREEMENT
TRANSITION SERVICES AGREEMENT
[Attached following the schedules]
<PAGE>
Schedule 1 - Products
Ocean Systems Product List
Airborne
AQS-18
AQS- 1 8A
AQS-1 8VIA
AQS- 1 8V(3)
AQS-13B (Spares, and R&O only)
AQS- 13F
AQS-24B Test
Bench AWS-18M (Japan)
HELRAS
SHELRAS Test Adapter Test Set (TATS)
Reeling Machine Test Set (RMTS)
ASW System Trainer (AST) Related
Spares, service, R&O, provisioning, engineering and technical support,
documentation and publications.
Sea Systems
Non-Standard Towed Array (NSTA)
TB-23 Towed Array Modules, Tow Cables
TB-23 Towed Array Receiver Coupler (TARC)
TB- 16 Towed Array
AN/SQR-19 Towed Array
ADC MK3 Countermeasure
TB- 16 Array Module Test Set
TB-23 Array Module Test Set
Integrated Side Looking Sonar (ISLS)
Expendable Mine Destructor (EMD)
Low Frequency Active Towed Sonar (LFATS) WLY-1,
SSTD Sensors/Telemetry
Related spares, service, R&O, provisioning, engineering and technical
support, documentation and publications.
Engineering
Hybrids
Various Transducers
Fiber Optic Rotating Joint
<PAGE>
ELAC Product List
Navigation Systems
Navigation Sounders
Echosounders type LAZ 5000, 4400 for depth measurement and recording.
Echosounder VE 59
Naval Depth Sounder acc. to military standards for surface ships and
submarines. Operating frequencies between 12 kHz and 1 MHZ. For
submarines additional Sound Velocity Measurement Bases with or without
Temperature Sensor and CTD-Sensors (conductivity, temperature, depth)
to compute density, salinity and sound velocity.
Fog Horns
Foghoms designed for stationary application at the coast or on
off-shore platforms, available in directional and non-directional
version.
Hvdrogravhic Sounding Systems
Dual-Frequency Echosounders LAZ 4400/20
LAZ 4400 is a dual-frequency echograph with integrated LCD-display
including digital depth information for multi-purpose application, i.e.
navigation, fishery and survey. Its successor, the LAZ 4420, offers two
echosounders in one housing, each operating completely independently
via its own transmitter and transducer.
Hydrogranhic Survey Sounder LAZ 4700
LAZ 4700 is ELAC's state-of-the-art graphic echosounder for all types
of hydrographic survey. It provides a choice of frequencies,
transducers, transmitters, precision digitizers and other peripheral
equipment. While suited for stand-alone use it has been designed to
form the basis of an integrated computer-based survey system.
Hydrogranhic Survey System LAZ 4721
LAZ 4721 is an integrated dual-frequency system (at customer choice,
from 12 kHz up to 200 kHz) comprising Echosounder LAZ 4700 and
Digitizer STG 721, including two digital displays.
<PAGE>
Multibeam Mapping System BOTTOMCHART and HDP 4061
The BOTTOMCHART multibeam mapping system is used for commercial and
scientific applications and offers real-time wide area bathymetry
together with facilities for onboard post-processing. Collected data
are used to create a digital terrain model. Graphic output is provided
with the Hydrographic Data Processing Software System HDP 4061 on a
high resolution color monitor and on color printers/plotter which
offer real-time output in the form of a bicolor, ship centered contour
chart. Processing of measured data is performed on a high performance
computer which allows production of depths charts having already
undergone corrections for position, speed, heave, roll and pitch.
Additionally the HDP 4061 provides extensive data analysis and graphic
presentation, for example presentation of Variance, Density, Heave,
Roll, Pitch and Runtime.
Navigation System ONCOURSE
ONCOURSE is designed as central operating software for an integrated
survey system. Main features are: cruise planning, track steering
(autopilot interface), calculation of optimum position, acquisition
and storage of navigation data from different sources,
heave/roll/pitch and depth, acquisition of sound velocity depth, and
graphical presentation of track charts, depth profiles, wrecks and
other symbols.
SEACLASS
SEACLASS is a data acquisition and postprocessing software package for
sediment analysis according to the Echostrength Measuring Technique.
The most famous result of ELAC's efforts was the echostrength
measuring unit EMG II which SEACLASS now replaces. The system also
provides postprocessing capabilities for calculating different
geophysical parameters of the sediment and allows graphical output,
e.g. sections, coverage and track plot.
Sonar Systems and ComDonents
Underwater Communication System UT 2000
A microprocessor-controlled communication system with integrated
EL-display for surface ships and submarines. Wide frequency range (from
1 - 60 kHz) and output power (from 0,03 to 300 W), sector and/or
omnidirectional operation, includes communication with divers.
Operating modes e.g. telephony, telegraphy, pinger, transponder,
distance measurement, noise monitoring, emergency mode.
Transducers, Hvdronhones and other Wet-Ends
A wide range of transducers, hydrophones, baffles, special staves,
submarine cables, outboard connectors and pressure hull penetrators is
available for installation on submarines in Active-, Passive-,
HF-Intercept-, Passive Ranging-, Flank-Array Sonar Systems.
<PAGE>
Sonar Systems
Passive-, HF-Intercept-, Passive Ranging- and Flank Array Sonars are available
as standalone systems or as components of integrated systems such as SUBICS
(Submarine Integrated Combat System) and ISAACS (Integrated Sensor and Arms
Control System).
Integrated Systems
Following integrated systems can be provided with teaming partners:
ISAACS: (Integrated Sensor and Armaments Control System)
Terma Elektronik AS
SUBICS: (Submarine Integrated Combat System)
Lockheed Martin Librascope, US
These integrated systems integrate data collection, monitoring and processing as
well as combat systems monitoring and control.
Low Frequency Active Sonar (LFAS)
A towed low frequency sonar for surface ships with high output level for long
range transmission. Remote controlled towed body and automatic launching and
handling system. LFAS is a part of the German ATAS, Activated Towed Array
System.
Navigation and Detection Sonar NDS 3070
A supplementary dual-frequency sonar for navigation, detection and obstacle
avoidance for use on board of submarines and surface ships. NDS 3070 is a small,
microprocessor-controlled high resolution sonar with color display and optional
audio channel.
Diver Sonar
An active/passive sonar for divers with EL-display, search and display sector 64
degrees, max. scale range 200 m, audio channel 1-50 kHz, endurance max. 90
minutes, rechargeable NiCd-batteries.
Sonar Beacon Equipment SBE
An independent submarine emergency device system with its own power supply that
provides acoustic signals which enable rescue sonar systems to detect and locate
a submarine in distress situations. SBE is available as mono or dual frequency
system with different operating frequencies, pulse repetition rates and pulse
lengths.
<PAGE>
UZG (SUBTAS for export)-Mobile Acoustic Underwater Target System
The Mobile Target UZG is a self-propelled underwater vehicle for fleet
ASW training. It is operated in open sea without instrumental range.
The system is capable of simulating a submarine's dynamic behavior
relative to its acoustic characteristics. ELAC has been awarded a
development contract by the BWB (Federal Office for Technology and
Procurement) to develop the UZG System. The two prototype systems have
undergone trials by the German Navy in a one year Operational
Evaluation (OPEVAL). The production contract for the German Armed
Forces has been given to ELAC in 1997.
TOSO
The torpedo sonar components have been designed for the new German
heavy-weight torpedo DM2A3 to enhance acquisition capabilities.
TAU - Torpedo Countermeasure System
TAU is a soft-kill torpedo countermeasure system for submarines. TAU
was initiated by a feasibility study funded by the German Federal
Office for Technology and Procurement
(BWB).
LCAW
LCAW is a low cost weapon for anti-submarine-warfare. ELAC as a member
of a team with STN (Vulkan Group) and Rheinmetall has successfully
completed the concept phase for a NATO programme. The development phase
will start in 1998. Serial production to be expected for 2001.
Mine Countermeasure Systems (MCM')
Multibeam BOTTOMCHART Mapping System
The BOTF~OMCHART system can also be used as a MCM system.
Sediment Classifier System SEACLASS
SEACLASS, a fast Bottom Classifier System provides differentiated
information about structure and nature of upper soft and non-solidified
sediments as well as clear, high-contrast detection of buried objects
with different reflectivity from surrounding matter.
Buried objects detection system SEFAS
SEFAS, a fan beam system, enables a fast and extensive sweep of
threatened areas to detect and display objects buried in the seabed.
<PAGE>
Services
Spare parts, service, R&O, provisioning, engineering and technical support,
and documentation and publications services are provided in connection with the
above referenced products.
<PAGE>
Schedule 1.1(a) - Personal Property
The following documents, which hzzve been delivered to Purchaser, are
incorporated by reference herein:
1. Schedule of Ocean Systems' Fixed Assets, dated September 30, 1997
2. Schedule of ELAC Fixed Assets dated September 30, 1997
<PAGE>
Schedule 1.3(i) - Excluded Assets
Excluded Technology
Technical and Intellectual Property developed in connection with and
related to using sensors to detect occupant's position for passenger side air
bags is excluded from the sale.
Excluded Services
The following services are provided to Ocean Systems and ELAC by
AlliedSignal, and are not included in the sale:
Contracts and Business Development
Offset Administration
International Sales Representative Administration
Legal Support Services
Export Control Administration
Government Relations through Allied Signal's Washington, DC
Government Relations
Office
Real estate Purchase and Sales Services
Public Relations Services
Letter of Credit Management
Operations/Purchasing
Metrology
Commodity Team Support Services (Limited)
Negotiation of Long Term Agreements (Limited)
Circuit Card Assemblies
Financial
Payroll Processing Including Check Writing, Payroll Tax
Submission and W-2 Processing
Income and Property Tax Return Services
Consolidating Financial Reporting System
Travel and Expense Processing Including American Express
Administration
Risk Management Services
Fixed Property Accounting System and Related Support
Walker General Ledger and Support Services
Walker Accounts Receivable System and Related Cash Application
Function
Credit and Collections Support
Treasury Services
Forward Pricing Rate Proposal Submissions to ACO
Government Compliance Support
<PAGE>
Information Systems
Mainframe Computer Processing and Related Support
Essbase Server Resident in Tempe, AZ
MSMail Gateway
Enterprise-Wide Network
Electronic Data Interchange
Internet
Human Resources
PeopleSoft Human Resource Management System
Pension, Savings Plan and Benefits Management
Expatriate Employment Management
<PAGE>
Schedule 4.6(a) -Intellectual Property
See also Schedule 4.6(c).
Patents and Patent Applications
Ocean Systems Patents
<TABLE>
<CAPTION>
DEPLOYABLE SONAR ARRAY WITH INTERCONNECTED TRANSDUCERS OPERATED IN THE BENDING MODE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4208738 17JEI980 GRANTED EXPIRES 01MY1998
<CAPTION>
TERMINATION AND METHOD OF TERMINATING ROPES OR CABLES OF ARAMID FIBER OR THE LIKE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4184784 22JA1980 GRANTED EXPIRES 03JL1998
<CAPTION>
HYDRODYNAMIC CONFIGURATION FOR TOWED SUBMERSIBLE BODY
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
France 7836235 01AP1985 GRANTED EXPIRES 22DE1998
Great Britain 2010764 17MR1982 GRANTED EXPIRES 14DE1998
West Gennany P2855443.0 16JL1987 GRANTED EXPIRES 21DE1998
Japan 1401012 21FE1987 GRANTED EXPIRES 26DE1998
United States 4173195 06N01979 GRANTED EXPIRES 27DE1997
<CAPTION>
COLLET TYPE CYLINDER SEPARATION DEVICE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4120519 170C1978 GRANTED EXPIRES 030C1997
<CAPTION>
SPHERICAL VEHICLE FOR OPERATION IN A FLUID MEDIUM
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4377982 29MR1983 GRANTED EXPIRES 29MR2000
<CAPTION>
PRESSURE-COMPENSATED ACCELERATION INSENSITIVE HYDROPHONE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 860012 12DE1977 SECRECY ORDER
<CAPTION>
HYDRODYNAMIC CONFIGURATION FOR UNDERWATER VEHICLE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 226314 19JA1983 SECRECY ORDER
<CAPTION>
DELAY LINE TIME COMPRESSION CORRELATION CIRCUIT
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4270180 26MY1981 GRANTED EXPIRES 09N01999
<CAPTION>
FISH COUNTER WITH SCANNING TRANSDUCER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Canada 1129981 17AU1982 GRANTED EXPIRES 17AU1999
United States 4225951 30SE1980 GRANTED EXPIRES 05FE1999
<CAPTION>
WHEEL SPEED SIGNAL- PRODUCING SYSTEM FOR SKID CONTROL
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4267575 12MY1981 GRANTED EXPIRES 09JL1999
<CAPTION>
CABLE CONSTRUCTION
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Great Britain 2056157 13AP1983 GRANTED EXPIRES 21JL2000
West Germany P3028113.1 180C1990 GRANTED EXPIRES 24JL2000
Japan 1486221 14MR1989 GRANTED EXPIRES 08AU2000
United States 4250351 10FE1981 GRANTED EXPIRES 08AU1999
<CAPTION>
PROPULSION SYSTEM FOR AN UNDERWATER VEHICLE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
United States 4424042 03JA1984 GRANTED EXPIRES 23JL2001
<CAPTION>
CONNECTOR FOR SMALL DIAMETER ELONGATED SONAR ARRAYS
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4304456 08PE1981 GRANTED EXPIRES 10DE1999
<CAPTION>
CONNECTOR FOR ELONGATED UNDERWATER TOWED ARRAY
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4346954 31AU1982 GRANTED EXPIRES 31AU1999
<CAPTION>
FUNNEL CONSTRUCTION FOR A DIPPING SONAR
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 43887091 4JE1983 GRANTED EXPIRES 19JA2001
<CAPTION>
SONAR TRANSCEIVER SYSTEM AND METHOD
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4442513 10AP1984 GRANTED EXPIRES 05FE2002
<CAPTION>
SALMON COUNTER WITH SEPARATE KING SALMON TABULATOR
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Canada 1194976 080C1985 GRANTED EXPIRES 080C2002
<CAPTION>
TUNED CIRCUIT & METHOD FOR SONAR BEAM PAlTERN OPTIMIZATION
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 5309410 03MY1994 GRANTED EXPIRES 03MY2011
<CAPTION>
CONSTRUCTION AND METHOD FOR ELONGATED TOWED UNDERWATER SONAR ARRAY
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
France EPO113623 07SE1988 GRANTED EXPIRES 15DE2003
Great Britain EPO113623 07SE1988 GRANTED EXPIRES 15DE2003
West Germany P3377954.6 07SE1988 GRANTED EXPIRES 15DE2003
Japan 1727441 19JA1993 GRANTED EXPIRES 27DE2003
United States 4538250 27AUI985 GRANTED EXPIRES 27DE2002
<CAPTION>
DIGITAL DRIVE SYSTEM FOR PULSE WIDTH MODULATED POWER CONTROL
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Great Britain EP0187282 17MR1993 GRANTED EXPIRES 09DE2005
West Germany P3587191.1 17MR1993 GRANTED EXPIRES 09DE2005
Italy EP0187282 17MR1993 GRANTED EXPIRES 09DE2005
United States 4613933 23SE1986 GRANTED EXPIRES 07JA2005
<CAPTION>
EXPANDABLE SONAR ARRAY STRUCTURE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
France EP0580808 08JA1997 GRANTED EXPIRES 15AP2012
Great Britain EPO580808 08JA1997 GRANTED EXPIRES 15AP2012
Germany EP0580808 08JA1997 GRANTED EXPIRES 15AP2012
Italy EP0580808 08JA1997 GRANTED EXPIRES 15AP2012
Japan 510286/92 15AP1992 FILED
United States 5091892 25FE1992 GRANTED EXPIRES 25FE2009
<CAPTION>
SYSTEM FOR DEPLOYING AN ARRAY OF SONAR PROJECTORS
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
France EP0205740 29JA1992 GRANTED EXPIRES 17FE2006
Great Britain EP0580808 29JA1992 GRANTED EXPIRES 17FE2006
West Germany P3683692.3 29JA1992 GRANTED EXPIRES 17FE2006
Italy EP0205740 29JA1992 GRANTED EXPIRES 17FE2006
Japan 2017615 19FE1996 GRANTED EXPIRES 28MR2006
United States 4725988 16FE1988 GRANTED EXPIRES 28MR2005
<CAPTION>
HELRAS MECHANICAL CONFIGURATION AND HYDRAULIC DRIVE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 758909 25JL1985 SECRECY ORDER
ELONGATED RETAINING AND ELECTROMAGNETIC SHIELDING MEMBER FOR A TOWED UNDERWATER ACOUSTIC
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARRAY
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4636998 13JA1987 GRANTED EXPIRES 27AU2002
<CAPTION>
POLYURETHANE HEAT FORM AND BONDING OF CABLE JACKETS
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4533418 06AU1985 GRANTED EXPIRES 21SE2004
<CAPTION>
VIBRATION ISOLATION MODULE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4628851 16DE1986 GRANTED EXPIRES 24DE2004
<CAPTION>
SELF THREADING CAPSTAN DRIVE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4634102 06JA1987 GRANTED EXPIRES 23DE2005
<CAPTION>
ELECTRICAL TILT SWITCH
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4628160 09DE1986 GRANTED EXPIRES 280C2005
<CAPTION>
UNDERWATER TRANSDUCER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Australia 590050 22FE1990 GRANTED EXPIRES 23FE2007
France EPO243591 14AP1993 GRANTED EXPIRES 09FE2007
Great Britain EPO243591 14AP1993 GRANTED EXPIRES 09FE2007
West Germany P3785384.8 14AP1993 GRANTED EXPIRES 09FE2007
Italy EP0243591 14AP1993 GRANTED EXPIRES 09FE2007
Japan 2033626 19MR1996 GRANTED EXPIRES 30AP2007
Netherlands EPO243591 14AP1993 GRANTED EXPIRES 09FE2007
United States 4764907 16AU1988 GRANTED EXPIRES 30AP2006
<CAPTION>
FLEXURAL DISK TRANSDUCER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
France EPO265679 22JL1992 GRANTED EXPIRES 28SE2007
Great Britain EPO265679 22JL1992 GRANTED EXPIRES 28SE2007
West Germany P37805592 22JL1992 GRANTED EXPIRES 28SE2007
Italy EPO265679 22JL1992 GRANTED EXPIRES 28SE2007
Japan 2579173 07N01996 GRANTED EXPIRES 280C2007
United States 4709361 24N01987 GRANTED EXPIRES 300C2006
<CAPTION>
CABLE WIPER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4845683 04JL1989 GRANTED EXPIRES 160C2006
<CAPTION>
UNDERWATER SONAR ARRAY
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4901287 13FE1990 GRANTED EXPIRES 28MR2008
<CAPTION>
FIBER OPTIC SENSOR
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Eur. Patent Conv. 94112474.5 10AU1994 FILED
United States 5359445 250C1994 GRANTED EXPIRES 250C2011
<CAPTION>
LEVEL WIND SYSTEM
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4795108 03JA1989 GRANTED EXPIRES 17SE2007
<CAPTION>
MARINE ACOUSTIC AEROBUOY AND METHOD OF OPERATION
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 5060206 220C1991 GRANTED EXPIRES 25SE2010
<CAPTION>
PISTON & DRUM DRIVE SYSTEM
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Canada 2069494-7 07N01990 FILED
France EP0505437 16MR1994 GRANTED EXPIRES 07N02010
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Great Britain EP0505437 16MR1994 GRANTED EXPIRES 07N02010
Germany P69007492.1 16MR1994 GRANTED EXPIRES 07N02010
Italy EP0505437 16MR1994 GRANTED EXPIRES 07N02010
Japan 501453/91 07N01990 FILED
United States 4973893 27N01990 GRANTED EXPIRES 12DE2009
<CAPTION>
SHOCK RESISTANT FLEXTENSIONAL TRANSDUCER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Canada 2007096 O4JA1990 FILED
France 9001617 12FE1990 FILED
Great Britain 2303760 O3JE1997 GRANTED EXPIRES 04JA2010
United States 5497357 05MR1996 GRANTED EXPIRES 05MR2013
<CAPTION>
HYDRODYNAMIC CONFIGURATION FOR UNDERWATER VEHICLE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4919066 24AP1990 GRANTED EXPIRES 19JA2009
<CAPTION>
FIBER OPTIC ROTARY JOINT
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Canada 2107878 25MR1992 FILED
France EPO582639 08JA1997 GRANTED EXPIRES 25MR2012
Great Britain EPO582639 08JA1997 GRANTED EXPIRES 25MR2012
Germany P69216603.3 08JA1997 GRANTED EXPIRES 25MR2012
United States 5078466 O7JA1992 GRANTED EXPIRES 19AP2011
<CAPTION>
LOW FREQUENCY SONAR PROJECTOR AND METHOD
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Australia 664961 07JE1996 GRANTED EXPIRES 04MY2013
France EP0640020 13MR1996 GRANTED EXPIRES 04MY2013
Great Britain EP0640020 13MR1996 GRANTED EXPIRES 04MY2013
Germany P69301819.4 13MR1996 GRANTED EXPIRES 04MY2013
Italy EPO640020 13MR1996 GRANTED EXPIRES 04MY2013
Japan 503624/94 04MY1993 FILED
<CAPTION>
FIBER OPTIC ROTARY JOINT
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 5450509 12SE1995 GRANTED EXPIRES 26JL2014
<CAPTION>
IMPROVED SENSORS BASED ON STRETCH-DENSIFIED MATERIALS
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 000000 29MY1997 FILED
<CAPTION>
DIGITAL HOMODYNE PROCESSING SYSTEM
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4280202 21JL1981 GRANTED EXPIRES 310C1999
<CAPTION>
CAGE-ENHANCED SENSORS
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 08/617529 15MR1996 FILED
<CAPTION>
ELAC Patents
ELECTRO ACOUSTIC TARGET SEARCHING SYSTEM FOR TORPEDOES
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Great Britain 2265218 22SE1993 GRANTED EXPIRES 05N02001
United States 5341347 23AU1994 GRANTED EXPIRES 23AU2011
<CAPTION>
ECHO-SOUNDING APPARATUS
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Canada 1210129 19AU1986 GRANTED EXPIRES 19AU2003
<CAPTION>
SOFT PROTECT LAYER FOR SOUND TRANSDUCER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
West Germany P3422206.5 10SE1987 GRANTED EXPIRES 15JE2004
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TUBE-LIKE ELECTROACOUSTIC TRANSDUCER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
France 8708243 24DE1993 GRANTED EXPIRES 12JE2007
West Germany P3620085.9 10MR1994 GRANTED EXPIRES 14JE2006
United States 4823327 18AP1989 GRANTED EXPIRES 01JE2007
<CAPTION>
ACOUSTIC SIMULATION OF UNDERWATER TARGET
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
West Germany P3809900.4 11JA1989 GRANTED EXPIRES 24MR2008
PAT#P3809900.4 UNDER SECRECY ORDER
<CAPTION>
BROAD BAND OMNIDIRECTIONAL ELECTROACOUSTIC TRANSDUCER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Canada 1310739 24N01992 GRANTED EXPIRES 24N02009
West Germany P3812244.8 09N01989 GRANTED EXPIRES 13AP2008
Italy 1231754 21DE1991 GRANTED EXPIRES 13AP2009
Norway 171700 11JA1993 GRANTED EXPIRES 12AP2009
United States 4916675 10AP1990 GRANTED EXPIRES 01MY2009
<CAPTION>
DIVER SONAR MONITOR
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Canada 1330587 05JL1994 GRANTED EXPIRES O5JL2O11
France EPO345718 15DE1993 GRANTED EXPIRES 06JE2009
Great Britain EPO345718 15DE1993 GRANTED EXPIRES 06JE2009
Italy EPO345718 15DE1993 GRANTED EXPIRES 06JE2009
Norway 174826 13JL1994 GRANTED EXPIRES 08JE2009
<CAPTION>
UNDERWATER DIRECTION FINDING
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
France EPO355669 06AP1994 GRANTED EXPIRES 16AU2009
Great Britain EPO355669 06AP1994 GRANTED EXPIRES 16AU2009
Italy EPO355669 06AP1994 GRANTED EXPIRES 16AU2009
Norway 173528 22DE1993 GRANTED EXPIRES 18AU2009
Spain EPO355669 06AP1994 GRANTED EXPIRES 16AU2009
<CAPTION>
DEFENSE AGAINST TORPEDO ATTACK
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
West Germany P3914248.5 29AP1989 SECRECY ORDER
<CAPTION>
DIGITAL BEAM FORMER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
West Germany P3920705.6 23MY1991 GRANTED EXPIRES 24JE2009
<CAPTION>
PROTECTION CIRCUIT FOR TRANSDUCER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
West Germany P3939398.4 24JA1991 GRANTED EXPIRES 29N02009
<CAPTION>
DEFENSE AGAINST TORPEDO ATTACK FROM BACKSIDE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
West Germany P4010475.3 11MR1993 GRANTED EXPIRES 31MR2010
<CAPTION>
DETERMINATION OF PULSE LENGTH OF ACOUSTIC SIGNALS
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
West Germany P4013684.1 07AP1994 GRANTED EXPIRES 28AP2010
Japan 96665/91 26AP1991 FILED
Norway 91.1671 26AP1991 FILED
United States 5132691 21JL1992 GRANTED EXPIRES 24AP2011
<CAPTION>
NOISE SUPPRESSION FOR THE INPUT SIGNAL OF SONAR SYSTEMS
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
West Germany P4017849.8 12MR1992 GRANTED EXPIRES 02JE2010
<CAPTION>
ELECTROACOUSTIC TRANSDUCER WITH REDUCED BUNDLING
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Denmark 1539/91 02SE1991 FILED
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
West Germany P4027949.9 20AU1992 GRANTED EXPIRES 04SE2010
<CAPTION>
SONAR BUOY WITH DRAG CHAIN
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Germany P4039031.4 24MR1994 GRANTED EXPIRES 07DE2010
<CAPTION>
PASSIVE ACOUSTICAL CAMOUFLAGE MEANS FOR UNDERWATER BODIES
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Germany P4131991.5 18AU1992 GRANTED EXPIRES 26SE2011
PAT# P4131991.5 UNDER SECRECY ORDER
<CAPTION>
SONAR TRANSDUCER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Denmark EP0524371 11AU1994 GRANTED EXPIRES 20MR2012
France EP0524371 I1AU1994 GRANTED EXPIRES 20MR2012
Great Britain EP0524371 11AU1994 GRANTED EXPIRES 20MR2012
Germany P69200439.4 11AU1994 GRANTED EXPIRES 20MR2012
Italy EP0524371 11AU1994 GRANTED EXPIRES 20MR2012
Netherlands EP0524371 11AU1994 GRANTED EXPIRES 20MR2012
Sweden EP0524371 11AU1994 GRANTED EXPIRES 20MR2012
OWNED BY THE KILDARE CORPORATION ACCORDING TO A LICENSE AGREEMENT BETWEEN THE KILDARE
CORPORATION, 95 TRUMBULL STREET, SUITE D NEW LONDON, CT 06320-5595 & ALLIEDSIGNAL ELAC NAUTIK
GmbH.
<CAPTION>
SONAR SYSTEM TEST APPARATUS
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Germany P4213121.9 21APP1992 FILED
<CAPTION>
METHOD AND CIRCUITRY FOR DETERMINING THE BEGINNING OF ECHO PULSES
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
France 9400492 18OC1996 GRANTED EXPIRES 18JA2014
Great Britain 2274560 11SE1996 GRANTED EXPIRES 29DE2013
Germany P4301341.4 21OC1993 GRANTED EXPIRES 20JA2013
United States 5436580 25JL1995 GRANTED EXPIRES 30DE2013
<CAPTION>
INTERCONNECTION OF UNDERWATER TRANSDUCER ARRAY
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Germany P4307843.5 19MY1994 GRANTED EXPIRES 12MR2013
<CAPTION>
PATENT TITLE: UNKNOWN
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Germany P4323212.4 12MR1993 FILED
<CAPTION>
ANTI-SEA MINE EFFECTOR
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Germany P4323904.8 16JL1993 FILED
JOINTLY OWNED BY ALUEDSIGNAL ELAC NAUTIK GmbH AND DIEHL GznbH.
<CAPTION>
UNDERWATER TARGET LOCALIZER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Eur. Patent Conv. 94112749.0 16AU1994 FILED
Germany P4327841.8 09MR1995 GRANTED EXPIRES 19AU2013
<CAPTION>
METHOD FOR LOCALIZING AND SWEEPING OF SEA MINES
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Eur. Patent Conv. 95925762.7 26JE1995 FILED
Germany P4423235.7 02JL1994 FILED
Pat. Coop. Treaty PCT/EP95/02476 26JE1995 FILED
United States 000000 26JE1995 FILED
<CAPTION>
ECHO SIGNAL STACK CIRCUIT
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Canada 1095162 03FE1981 GRANTED EXPIRES 03FE1998
ECHO-SOUNDING RECORDER WITH DIFFERENT DEPTH MEASURING RANGES
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4104643 01AU1978 GRANTED EXPIRES 20JL1997
<CAPTION>
ABRASION PROTECTION SHIELD FOR ECHO SOUNDER
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Norway 145594 21AP1982 GRANTED EXPIRES 07JL1998
<CAPTION>
RECEIVER CIRCUIT FOR AN ECHO-SOUNDING SYSTEM
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
United States 4245332 13JA1981 GRANTED EXPIRES 12AP1999
<CAPTION>
DIVER SONAR MONITOR
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
West Germany P58906406.1 15DE1993 GRANTED EXPIRES 06JE2009
<CAPTION>
UNDERWATER DIRECTION FINDING
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
West Germany P58907386.9 06AP1994 GRANTED EXPIRES 16AU2009
<CAPTION>
APPARATUS FOR ULTRA-SOUND TREATMENT OF FLOWING LIQUID
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Great 96221170.0 240C1996 FILED
Germany 19541417.9 11N01995 FILED
<CAPTION>
PROGRAMMABLE PLL OSCILLATOR
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Germany P19625970.3 28JE1996 FILED
<CAPTION>
ELECTRONIC FUNCTION GENERATOR USING A STATUS ENGINE
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Germany P19632553.6 13AU1996 FILED
<CAPTION>
BEAM FORMING METHOD FOR DIRECTION FINDING SYSTEMS
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Germany P19648327.1 22N01996 FILED
<CAPTION>
SHOCK ABSORBING BEARING FOR GEAR WHEELS
Country Number Date Status Substatus Date
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Germany P19652143.2 14DE1996 FILED
</TABLE>
Trademark, Copyrights and Trade Names
Trademarks - Ocean Systems
AlliedSignal holds no registered trademarks for Ocean Systems, but the
following product names and acronyms may be subject to certain usage
rights and protections afforded under common law:
Common Law
Product Name Trademark
------------ ---------
Helicopter Long Range Sonar HELRAS
Low Frequency Active Dipping Sonar LFADS
Shipboard HELRAS SHELRAS
Expendable Mine Detector EMD
Light Minehunting Sonar LMHS
Integrated Side Looking Sonar ISLS
Low Frequency Active Towed Sonar LFATS
ASW Systems Trainer AST
<PAGE>
Trademarks - ELAC
ELAC holds the following registered trademarks:
Country Registration No. Trademark
- ------- ---------------- ---------
Germany 1051300 Hydrostar
International(1) 480581 Hydrostar
Germany 989375 ELAC (black letters on white background)
International(2) 458578 ELAC (black letters on white background)
Germany 1006999 ELAC (black letters on white background)
Internationa1(2) 458579 ELAC (black letters on white background)
- ----------
(1) for Belgium, Luxembourg, Netherlands, France and Italy
(2) for Egypt, Algeria, Belgium, Luxembourg, Netherlands, Spain, France, Italy,
Morocco, Slowenia, Croatia, Yugoslavia, Macedonia, Romania, Russia,
Kazakstan, Belorus, Ukrainia, Ouzbekistan, Vietnam
Intellectual Property Agreements
License and Technical Assistance Agreements. between AlliedSignal and:
ELAC, dated July 18, 1995
Compagnia Generale Di Elettricita, dated December 1, 1970
Aero International, Inc., dated April 26,1996,
and amendment dated June 10, 1997
Mitsubishi Heavy Industries, Ltd., dated February 2, 1989
Manufacturing License Agreement, between AlliedSignal and:
Aeronautica Industrial, S.A., dated July 16, 1990
Technical Assistance and Manufacturing License Agreement, between ELAC and:
The Kildare Corporation, dated March 15, 1993
Software Licenses - Ocean Systems
<TABLE>
<CAPTION>
Support Provided by:
Local
------------------------------------------
System/Application Version Vendor Platform Infrastructure App. Support
- -----------------------------------------------------------------------------------------------
VAX - General/Utilities
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Micro Tech
CIQBA 2.8 INC. VAX/VMS X
- -----------------------------------------------------------------------------------------------
ACCESS
2020 3.02.13 TECH VAX/VMS X
- -----------------------------------------------------------------------------------------------
ADA 2.3 DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Support Provided by:
Local
------------------------------------------
System/Application Version Vendor Platform Infrastructure App. Support
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BASE-VMS 5.5-2 DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
BASIC 3.5 DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
C 3.1 DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
CDD 5 DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
CDD - PLUS DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
CMS 3.5-05 DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
COBOL DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
DBMS 4.3 DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
DSNLINK l.2B DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
DTM 3.3 DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
DTR 6 DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
DECnet (end node) 5.5-2 DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
DECnet (routing node) 5.5-2 DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
DECWindows MOTIF 1.2-4 DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
FMS DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
FORTRAN DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
GKS DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
LSE DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
MMS DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
RDB DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
RDB -RUNTIME DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
SNA-3270-DSPI DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
SNA-3270-TE DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
SNA-PRE DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
SNA-RJE DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
SNA-VMS DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
SSU DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
STRIPING DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
UCX DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
VAXCLUSTER DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
VMS-USER DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Support Provided by:
Local
------------------------------------------
System/Application Version Vendor Platform Infrastructure App. Support
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
VOLSHAD DIGITAL VAX/VMS X
- -----------------------------------------------------------------------------------------------
VAX - CONTROL Manufacturing and Associated Software
- -----------------------------------------------------------------------------------------------
Accounting 7.2.2 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Accounts Payable 7.2.2 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Accounts Receivable 7.2.2 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Bill Of Material 7.2.2 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Cost Accounting 7.3 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Engineering Config. 7.2.2 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Order Management System 7.2.2 Cincorn VAX/VMS X
- -----------------------------------------------------------------------------------------------
Inventory Control 7.2.2 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Master Production
Scheduling 7.22 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
MRP 7.2.2 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Order Entry Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Project Accounting 7.2.2 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Purchasing 7.2.2 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Shop Floor Control 7.22 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Purchase Part and Quote 7.22 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Soft Pegging Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Interfaces Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Control Link 7.2.2 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
DCLS Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
MANTIS User BRP/BRP 722 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
Spectra Custom 7.2.2 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
QRW 7 Cincom VAX/VMS X
- -----------------------------------------------------------------------------------------------
PC NT Series
- -----------------------------------------------------------------------------------------------
MlvfrA Microsoft NT X
- -----------------------------------------------------------------------------------------------
MSMAIL Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
DNS Microsoft NT X
- -----------------------------------------------------------------------------------------------
WINS Microsoft NT X
- -----------------------------------------------------------------------------------------------
DHCP Microsoft NT X
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Support Provided by:
Local
------------------------------------------
System/Application Version Vendor Platform Infrastructure App. Support
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Internet Information Server Microsoft NT X
- -----------------------------------------------------------------------------------------------
McAfee Anti Virus McAfee NT/W95 X
- -----------------------------------------------------------------------------------------------
ArcServer Cheyenne NT X
- -----------------------------------------------------------------------------------------------
Remote Access (RAS) Microsoft NT X
- -----------------------------------------------------------------------------------------------
Remote Mail Microsoft NT X
- -----------------------------------------------------------------------------------------------
System Management Server Microsoft NT X
- -----------------------------------------------------------------------------------------------
NetBoy Suite NDG SW NT X
- -----------------------------------------------------------------------------------------------
VAX - Database / SW Development
- -----------------------------------------------------------------------------------------------
SQL*Forms 3 Oracle VAX/VMS X
- -----------------------------------------------------------------------------------------------
Developer/2000 Forms 4.5 Oracle VAX/VMS X
- -----------------------------------------------------------------------------------------------
Developer/2000 Reports 2.5 Oracle VAX/VMS X
- -----------------------------------------------------------------------------------------------
Oracle Enterprise Manager 1.2.2 Oracle Windows95 X
- -----------------------------------------------------------------------------------------------
Oracle SQL*Net 2.3.2.1.3 Oracle VMS/W95 X
- -----------------------------------------------------------------------------------------------
Oracle Server Manager 2.03.1 Oracle VAX/VMS X
- -----------------------------------------------------------------------------------------------
Oracle SQL*Plus 3.1 Oracle Windows95 X
- -----------------------------------------------------------------------------------------------
Oracle SQL*PLus 3.1.3.5.1 Oracle VAX/VMS X
- -----------------------------------------------------------------------------------------------
Airborne Sonar R&O Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Applicant Flow Log Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Auto Stock Withdrawal Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Automatic Carousel Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Substitute Part List Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Customer Inquiry Tracking Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
DCMC Inspection System Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Discrepancy Reporting Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Drawing Info System Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Estimating System Custom ln-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Failure and R&O Reporting Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Gov't Property Inventory Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Job Scheduler Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
KITPRINT Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Labor/Timekeeping Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Support Provided by:
Local
------------------------------------------
System/Application Version Vendor Platform Infrastructure App. Support
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Lost Time Tracking Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Maint. Work Request Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Payroll Timecard Entry Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Personnel Info System Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
P&D Request System Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Procedure Master Index Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Workstream Product Load Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Production Scheduling Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Proms/Pals Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Rec Inspection Requests Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Repair & Overhaul System Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Risk Anaiysis/Control Plan Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
SSR System Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Tooling System Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
TQM Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
Wire list System Custom In-house VAX/VMS X
- -----------------------------------------------------------------------------------------------
PC Desktop
- -----------------------------------------------------------------------------------------------
Windows 95 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
PVCS 5.01 PVCS NT/W95 X
- -----------------------------------------------------------------------------------------------
MSExcel 7 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
MSWord 7 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
MsPowerpnt 7 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
MSSchedule Plus 7 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
MSWinProject 4 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
MSAccess 2 Microsoft WIYW95 X
- -----------------------------------------------------------------------------------------------
MSAccess 7 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
MSExchange Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
MSProject 4 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
Designer 4.1 Micrografix NT/W95 X
- -----------------------------------------------------------------------------------------------
MathCAD 6 MathCAD NT/W95 X
- -----------------------------------------------------------------------------------------------
Visio 4 Visio NT/W95 X
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Support Provided by:
Local
------------------------------------------
System/Application Version Vendor Platform Infrastructure App. Support
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Photo Magic 1 Micrografix NT/W95 X
- -----------------------------------------------------------------------------------------------
Corel 4 Corel NT/W95 X
- -----------------------------------------------------------------------------------------------
ABCFlowcharter Micrografix NT/W95 X
- -----------------------------------------------------------------------------------------------
Acrobat 3 Adobe NT/W95 X
- -----------------------------------------------------------------------------------------------
Netscape 3.01 Netscape NT/W95 X
- -----------------------------------------------------------------------------------------------
COMINS 3.1 Custom NT/W95 X
- -----------------------------------------------------------------------------------------------
Peoplesoft 5.1 Peoplesoft NT/W95 X
- -----------------------------------------------------------------------------------------------
NT 4 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
Interleaf 6.1 Interleaf NT/W95 X
- -----------------------------------------------------------------------------------------------
Visio Technical 4.5 Visio NT/W95 X
- -----------------------------------------------------------------------------------------------
ASPPP97 3 Corporate NT/W95 X
- -----------------------------------------------------------------------------------------------
DOS 6.22 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
AutoCAD 13 AutoDesk NT/W95 X
- -----------------------------------------------------------------------------------------------
AutoCAD 12 AutoDesk NT/W95 X
- -----------------------------------------------------------------------------------------------
CADStar 222.4 AutoDesk NTIW95 X
- -----------------------------------------------------------------------------------------------
DatalO (Futurenet) Futurenet NT/W95 X
- -----------------------------------------------------------------------------------------------
Windows 3.1 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
Windows 3.11 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
MSWord 6 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
MSExcel 5 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
MSPowerpnt 4 Microsoft NT/W95 X
- -----------------------------------------------------------------------------------------------
HP Unix Desktop
- -----------------------------------------------------------------------------------------------
oce3-2/ANSYS 5.3 ANSYS HP 9000 X
- -----------------------------------------------------------------------------------------------
oce3OS/UGII 9.1 UGII HP 9000 X
- -----------------------------------------------------------------------------------------------
oce3O6/Pro E 18 PTC HP 9000 X
- -----------------------------------------------------------------------------------------------
oce3O7/Mentor Graphics B.4 Mentor HP 9000 X
- -----------------------------------------------------------------------------------------------
oce3lS/Intercap 7.83 Intercap HP 9000 X
- -----------------------------------------------------------------------------------------------
oce3l9/Interleaf 6 Interleaf HP 9000 X
- -----------------------------------------------------------------------------------------------
oce322/IDEAS 5 SDRC HP 9000 X
- -----------------------------------------------------------------------------------------------
IBM (Ocean Systems Specific)
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Support Provided by:
Local
<TABLE>
<CAPTION>
System/Application Version Vendor Platform Infrastructure App. Support
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Payroll Distr. (HP & SP) Custom Corporate IBM X
- -----------------------------------------------------------------------------------------
Sun Unix Desktop
- -----------------------------------------------------------------------------------------
SW Development VX-Works VX-Works X
- -----------------------------------------------------------------------------------------
Signal Processing AP - Labs AP - Labs X
- -----------------------------------------------------------------------------------------
</TABLE>
GlobalLink Software Licenses
----------------------------
GlobalLink is an AlliedSignal corporate initiative that focused on
upgrading the desktop and server infrastructure and software at all divisions to
a common level of performance. These upgrades would allow AlliedSignal to roll
out corporate based software applications and economize on desktop support given
the common software / infrastructure.
Ocean Systems did not receive any hardware improvements from this
initiative. The division did receive, and is being charged, for software
products covered under GlobalLink umbrella. These software products include all
of the following (note that some of these products are not actually in use at
this division but are being assessed none the less):
o 32-bit Desktop Operating System o LANdesk (Electronic Inventory
(NT or W95 Tool - NOT USED)
o Netscape o Microsoft Exchange (Email
o McAfee VirusScan Client Licenses - NOT USED)
o Netware 4.1 (Network Operating System o Attachmate (IBM Connectivity
- NOT USED) Tools)
o Managewise (Remote Desktop o Office97
Management Tool - NOT USED) o Server Tools
This software was purchased at $278 / seat in 1996 and is being amortized over
three-years ($74,319 per year).
If licenses were not part of the sale, the impact to Ocean Systems is as
follows:
o Little or no impact related to current desktop operating system as most are
already owned
o Requires procurement of replacement WEB tool (Netscape) and virus
protection (McAfee)
o Impact related to IBM connectivity would depend on new owner IBM access
requirements
o Future impact related to desktop upgrades (NT, Office97, Microsoft
Exchange)
<PAGE>
Software Licenses - ELAC
Software at ELAC, current through November 6, 1997
- --------------------------------------------------------------------------------
Program Provider Version License
- --------------------------------------------------------------------------------
Transcend 3Com 6.0 250
Powerchut Plus APC 4.2.4 2
ACAD AutoDesk 13 1
ACAD AutoDesk 12 1
C++ Borland 3.1 5
Paradox Borland 1
Pascal Borland 7.0 5
Quatropro win Borland 1
Arcserve Cheyenne 6.2 1
Corel Draw Corel Corporation 5.0 10
Corel Flow Corel Corporation 2.0 10
Paisy GSI 3
VPPS Infor 4.5 75
Landesk VirusProtectOOl Intel 3.01 1
Landesk VirusProtect002 Intel 3.01 1
Landesk VirusProtect003 Intel 3.01 1
Landesk VirusProtect004 Intel 3.01 1
Varial isb 2.7 10
Side Meeter McAfee 50
Cobol Microfocus 3.2 5
Informix Microfocus 7.1 5
Foxpro Dos Microsoft 2.0 5
Foxpro Win Microsoft 2.5 5
MS Access Microsoft 2.0 50
MS-Mail Microsoft 3.2 150
MS-Office Microsoft 4.2 50
MS-Projekt Microsoft 4.0 15
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Program Provider Version License
- --------------------------------------------------------------------------------
Windows 3.11 Microsoft 3.11 100
Windows 95 Microsoft 4.00950 60
Disc View Microtest 4.lOa 1
LanWorkplac Novell 16 5
ManageWise Novell 2.1 250
ManageWise Novell 2.1 5
ManageWise Novell 2.1 5
ManageWise Novell 2.1 5
Netware001 Novell 4.1 75
NetwareO02 Novell 4.1 50
Netware003 Novell 4.1 50
Netware004 Novell 4.1 250
Netwarel00 Novell 3.12 2
Netwarel0l Novell 4.1 2
Orcad Orcad 4.0 6
Easy-Archiv Recognita 2000 1
Unixl02 SCO 5
PCNFS SunSelect 5.1 5
Rumba SunSelect 4.0 2
PCAnywhere Symantec 1
PS-Gef Weka Verlag 2.1 1
- --------------------------------------------------------------------------------
Confidentiality Agreements - Ocean Systems
<TABLE>
<CAPTION>
Agreement Effective Term/ OS
Company Subject Number Date Expiry Contact
<S> <C> <C> <C> <C> <C>
ADI Limited RAN ASSTASS SEA 11000 96-033 11/6/96 10 years A.J. Garber
ADI Limited Underwater Warfare Business 95-007 4/10/95 3
Aero International International Spares 95-010 3 years P.A. Boskovich
Agusta/Italy Quality Assurance Survey 4/28/97 1 year L. Daniels
Albion Group Intl. Inc. Hellenic Navy Offset 95-013 7/12/95 3 years J. Hall/L.
Daniels
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliant Techsys. Seismic data 96-027 10/16/97 3 years A.J. Garber
Atlantic Aero Elect Corp. Various 95-001 1/17/95 3 years A.J. Garber
Australian Defense Industries Undersea Warfare Business 95-007 5/10/95 3 years K.D. Adams
Atlantic Aero Elect. Corp. Foreign Integrated Sonar Suites 95-017 8/21/95 3 years A.J. Garber
AT&T Various Information 8/7/95 2 years D. Samsury
Babcock Intl. Sonar 2087 Feasibility Study 3/7/95 5 years J. Caughey
BBN US Navy 6152 97-015 5/30/97 1 year A. J. Garber
Cambridge Bank Ltd. Sonar Equip. Brazil/Peru 96-017 5/28/96 5 years V. Riehl
Celsius Tech Sys. Mine Counter Measurers 94-021 8/19/94 3 years L. Daniels
Celsius Tech Sys. Proprietary Info. 11/14/97 5 years J.Devine
Chesapeake Sciences TARS 95-018 8/28/95 3 years A. J. Garber
Chesapeake Sciences TB 16/BQ 10/18/94 4 years R. Tomlinson
Chevron Petroleum Bore Hole Seismic Multi Level 94-037 3/3/94 3 years A. J. Garber
Receiver
Computing Devices Maritime Helicopter 95-014 7/14/95 3 years J. Anderson
C-Tech YS2000 96-029 10/2/96 2 years J. Roscigno
DAF Special Products NH-90 96-006 2/15/96 3 years D. Webb
DRA Hunt Class Mid Life 11/22/96 1 year A. J. Garber
Defense Evaluation Research
Agency Defense Hunt Class Mid Life 11/27/96 1 year A.J. Garber
Devonport Management Ltd.
Sonar 2087/Type 23 Frigates 96-007 2/13/96 3 years A.J. Garber
Durodyne, Inc. Epichlorohydrin rubber compound 88- 5/1/88 10 years J. Andersen
014/DA
Dynacon, Inc. LFATS Handling System 94-023 6/2/94 3 years A. J. Garber
E-Systems Montek Siesmic Receiving 95-012 6/28/95 3 years A. J. Garber
Electramotive TB16 Towed Array 11/12/93 3 years J. Proko
FIAR NH-90 96-005 1/18/96 3 years D. Webb
Fokker Aviation EMD 97-008 2/4/97 1 year S. McDonald
Greenblatt MCDV 95-004 3/27/95 3 years L. Daniels
Goldstar ATE 11/24/82 5 years B. Polaski
Geo Test Inc. AQS-18 Test Equipm 95-032 12/14/95 3 years L. Daniels
Hughes Naval Marine Airborne Sonar Sys. 96-026/1 5/13/97 2 years R. Husar
Hughes Naval Marine Surface Ship Programs 96-026 8/9/96 2 years R. Husar
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Hewlett Packard Weapons Replaceable Assy. Test Set 96-002 1/8/96 3 years L. Daniels
Hollandse Signaalapparten Alkmaar class mine counter 97-007 1/23/97 2 years S. McDonald
Kaman Aerospace AQS-18 Dipping Sonar SH-2G 94-019 7/19/95 5 years L. Daniels
Loral Canada Maritime Helicopter Program 7/29/95 10 years J. McDermott
Lockheed Martin Canadian Remote Minehunting Sonar 95-024 12/19/95 3 years A. J. Garber
Loral ASIC B2TC 5/28/95 10 years A. J. Garber
Litton Sys. Acoustic Sensor Array Systems 5/24/96 5 years L. DiRienzo
Northop Grumman Hybrids 95-020 9/15/95 3 years J. P. Andersen
NUWC Wide-Band Omni Telemetry Sys. 10/31/96 A. J. Garber
Optiphase Fiber Optic Technologies 96-003 1/10/96 3 years A. J. Garber
Paulsson Geo Svc. Inc. Boreholde Seismic Systems 11/22/96 1 year
Penn State LELFAS 96-034 12/17/96 3 years V. Riehl
Raytheon Electronics LFATS,Taiwan/Australian/Spanish 10/25/96 2 years V. RiehI
Raytheon Electronics YS2000fItalian Navy ASW Frig 7/2/96 5 years
STN Atlas Undersea Warfare Business 95-006 4/25/95 3 years K. Adams
STN Atlas Australia ASSTASS LFAPS 2/11/97 l year D. MacCulloch
Signal Processing Sys. Norwegian Towed Array 97-014 5/23/97 3 years W. Tally
Sikorsky Aircraft Job Shoppers 11/22/96 7 years D. Bennett
Transfield Defense Sys. SEA 1000 Australian Surface Ship 8/6/96 10 years J. Winters
Towed
3M Specialty Optical Fibers Fiber Optic Technologies 95-029 11/30/95 3 years A. J. Garber
Taiwan Int Standard S-70C Offset 96-010 5/11/96 5 years J. Corso/
Electronics Ltd. J. Winter
Witten Technologies Mine Warfare 94-030 7/11/94 3 years AJ. Garber
Whitehead Alenia Sistemi Undersea Warfare Business 95-003 4/27/95 3 years S. Schorer
Subacquei
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Confidentiality Agreements - ELAC
---------------------------------
95-01-01 Marimatek
95-01-02 SeaBeam
95-01-03 Qubit
95-01-04
95-01-05 Ultra Electronics
95-01-06 BASYS Marine Ltd.
<PAGE>
95-01-07 BAeSEMA
95-01-08 Westinghouse
96-01-01 Evia
96-01-02 Mjellum & Carlson
96-01-03 Reson
96-01-04 Raytheon Anschutz
96-01-05 HDW
96-01-06 Elektro-Optik GmbH
97-01-01 SEPA
97-01-02
97-01-06 Sonatech
97-01-07 Nautronix
97-01-08 EdgeTech
97-01-09 Kongsberg
97-01-10 Camber Corp.
<PAGE>
Schedule 4.6(c) - Licensed Intellectual Property
See also Intellectual Property expiration information contained in Schedule
4.6(a).
Intellectual Property to be Licensed to Purchaser
- -------------------------------------------------
o Armour Cable for Airborne Dipping Sonar
o Impact Resistant, Lightweight, Composite Sonar Panels
o Improved Clutter Rejection Algorithms
o Lead Magnesium Niobate (PMN) Activer Sonar Source Material US Patent No.
5,239,518
o Piezoelectric Ceramic Copolymer US Patent Application No. 08/618690
o Autonomous Underwater Mine Hunting Algorithms
o Enhanced Thickness Piezoelectric Polymer/Ceramic Composite Active
Transducer
<PAGE>
Schedule 4.6(d) - Intellectual Property
The following Intellectual Property agreements may involve certain third
party rights.
License and Technical Assistance Agreements, between AlliedSignal and:
ELAC, dated July 18, 1995
Compagnia Generale Di Elettricita, dated December 1, 1970
Aero International, Inc., dated April 26, 1996, and amendment dated
June 10, 1997
Mitsubishi Heavy Industries, Ltd., dated February 2, 1989
Manufacturing License Agreement. between AlliedSignal and:
Aeronautica Industrial, S.A., dated July 16, 1990
Technical Assistance and Manufacturing License Agreement. between ELAC and:
The Kildare Corporation, dated March 15, 1993
Confidentiality Agreements - Ocean Systems
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Agreement Effective Term/OS
Company Subject Number Date Expiry Contact
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADI Limited RAN ASSTASS SEA 11000 96-033 11/6/96 10 years A.J. Garber
ADI Limited Underwater Warfare Business 95-007 4/10/95 3
Aero International International Spares 95-010 3 years P.A. Boskovich
Agusta/Italy Quality Assurance Survey 4/28/97 1 year L. Daniels
Albion Group Intl. Inc. Hellenic Navy Offset 95-013 7/12/95 3 years I. Hall/L.
Daniels
Alliant Techsys. Seismic data 96-027 10/16/97 3 years A.J. Garber
Atlantic Aero Elect Corp. Various 95-001 1/17/95 3 years A.J. Garber
Australian Defense Industries Undersea Warfare Business 95-007 5/10/95 3 years K.D. Adams
Atlantic Aero Elect. Corp. Foreign Integrated Sonar Suites 95-017 8/21/95 3 years A.J. Garber
AT&T Various Information 8/7/95 2 years D. Samsury
Babcock Intl. Sonar 2087 Feasibility Study 3/7/95 5 years J. Caughey
BBN US Navy 6152 97-015 5/30/97 1 year A.J. Garber
Cambridge Bank Ltd. Sonar Equip. Brazil/Peru 96-017 5/28/96 5 years V. Riehl
Celsius Tech Sys. Mine Counter Measurers 94-021 8/19/94 3 years L. Daniels
Celsius Tech Sys. Proprietary Info. 11/14/97 5 years J. Devine
Chesapeake Sciences TARS 95-018 8/28/95 3 years A.J. Garber
Chesapeake Sciences TB16/BQ 10/18/94 4 years R. Tomlinson
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Chevron Petroleum Bore Hole Seismic Multi Level 94-037 3/3/94 3 years A.J. Garber
Receiver
Computing Devices Maritime Helicopter 95-014 7/14/95 3 years J. Anderson
C-Tech YS2000 96-029 10/2/96 2 years J. Roscigno
DAF Special Products NH-90 96-006 2/15/96 3 years D. Webb
DRA Hunt Class Mid Life 11/22/96 1 year A.J. Garber
Defense Evaluation Research
Agency Defense Hunt Class Mid Life 11/27/96 1 year A.J. Garber
Devonport Management Ltd. Sonar 2087/Type 23 Frigates 96-007 2/13/96 3 years A.J. Garber
Durodyne, Inc. Epichlorohydrin rubber compound 88- 5/1/88 10 years J. Andersen
014/DA
Dynacon, Inc. LFATS Handling System 94-023 6/2/94 3 years A.J. Garber
E-Systems Montek Siesmic Receiving 95-012 6/28/95 3 years A.J. Garber
Electramotive TB16 Towed Array 11/12/93 3 years J. Proko
FIAR NH-90 96-005 1/18/96 3 years D. Webb
Fokker Aviation EMD 97-008 2/4/97 1 year S. McDonald
Greenblatt MCDV 95-004 3/27/95 3 years L. Daniels
Goldstar ATE 11/24/82 5 years B. Polaski
Geo Test Inc. AQS-18 Test Equipm 95-032 12/14/95 3 years L. Daniels
Hughes Naval Marine Airborne Sonar Sys. 96-026/1 5/13/97 2 years R. Husar
Hughes Naval Marine Surface Ship Programs 96-026 8/9/96 2 years R. Husar
Hewlett Packard Weapons Replaceable Assy. Test Set 96-002 1/8/96 3 years L. Daniels
Hollandse Signaalapparten Alkmaar class mine counter 97-007 1/23/97 2 years S. McDonald
Kaman Aerospace AQS-l8 Dipping Sonar SH-2G 94-019 7/19/95 5 years L. Daniels
Loral Canada Maritime Helicopter Program 7/29/95 10 years J. McDermott
Lockheed Martin Canadian Remote Minehunting Sonar 95-024 12/19/95 3 years A.J. Garber
Loral ASIC B2TC 5/28/95 10 years A.J. Garber
Litton Sys. Acoustic Sensor Array Systems 5/24/96 5 years L. DiRienzo
Northop Grumman Hybrids 95-020 9/15/95 3 years J.P. Andersen
NUWC Wide-Band Omni Telemetry Sys. 10/31/96 A.J. Garber
Optiphase Fiber Optic Technologies 96-003 1/10/96 3 years A.J. Garber
Paulsson Geo Svc. Inc. Boreholde Seismic Systems 11/22/96 1 year
Penn State LELFAS 96-034 12/17/96 3 years V. Riehl
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Raytheon Electronics LFATS/Taiwan/Australian/Spanish 10/25/96 2 years V. Riehl
Raytheon Electronics YS2000/Italian Navy ASW Frig 7/2/96 5 years
STN Atlas Undersea Warfare Business 95-006 4/25/95 3 years K. Adams
STN Atlas Australia ASSTASS LFAPS 2/11/97 1 year D. MacCulloch
Signal Processing Sys. Norwegian Towed Array 97-014 5/23/97 3 years W. Tally
Sikorsky Aircraft Job Shoppers 11/22/96 7 years D.Bennett
Transfield Defense Sys. SEA 1000 Australian Surface Ship 8/6/96 10 years J. Winters
Towed
3M Specialty Optical Fibers Fiber Optic Technologies 95-029 11/30/95 3 years A.J. Garber
Taiwan Int Standard S-70C Offset 96-010 5/11/96 5 years J. Corso/
Electronics Ltd. J. Winter
Witten Technologies Mine Warfare 94-030 7/11/94 3 years A.J. Garber
Whitehead Alenia Sistemi Undersea Warfare Business 95-003 4/27/95 3 years S. Schorer
Subacquei
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Confidentiality Agreements - ELAC
---------------------------------
95-01-01 Marimatek
95-01-02 SeaBeam
95-01-03 Qubit
95-01-04
95-01-05 Ultra Electronics
95-01-06 BASYS Marine Ltd.
95-01-07 BAeSEMA
95-01-08 Westinghouse
96-01-01 Evia
96-01-02 Mjellum & Carlson
96-01-03 Reson
96-01-04 Raytheon Anschtutz
96-01-05 HDW
96-01-06 Elektro-Optilc GmbH
97-01-01 SEPA
97-01-02
97-01-06 Sonatech
97-01-07 Nautronix
97-01-08 EdgeTech
97-01-09 Kongsberg
97-01-10 Camber Corp.
<PAGE>
Schedule 4.7 - Contracts
See also Schedule 4.12.
Ocean Systems - Open Contracts over $75,000
-------------------------------------------
Contract Contract Value Country Status
- -------- -------------- ------- ------
N00019-90-G-0200YC94 471117.95 USA OP
N00019-90-G-0200YC95 1645386.00 USA OP
N00019-93-G-013lUU2K 245635.00 USA OP
N00019-97-G-00080001 8299107.00 USA OP
N00019-97-G-0008UU01 348023.00 USA OP
N00024-89-C-6066 20440163.00 USA OP
N00024-91-C-6501 11539100.00 USA OP
N00024-92-C-6225 5963263.00 USA OP
N00024-92-C-6502 83243508.87 USA OP
N00024-92-C-6503 27614976.00 USA OP
N00024-94-C-6152 9464260.00 USA OP
N00024-96-C-6214 34217858.00 USA OP
N00024-97-C-6375 149911.00 USA OP
N00104-96-P-G022 81408.00 USA OP
N00140-95-D-N083 208958.00 USA OP
N00140-97-D-El56 131418.00 USA OP
N00383-88-G-K3010108 820326.88 USA OP
N00383-88-G-K3010131 9460000.10 USA OP
N00383-94-G-700N0020 307778.00 USA OP
N00383-94-G-700N0030 2742742.00 USA OP
N00383-94-G-700N5045 3218001.12 USA OP
N00383-94-G-700N5209 266598.00 USA OP
N00383-94-G-700N5212 448500.00 USA OP
N00383-94-O-700N5213 77000.00 USA OP
N00383-95-G-209N0002 157836.00 USA OP
N00383-95-G-209NUUIR 79367.00 USA OP
N00383-95-G-2O9NUUIT 75108.00 USA OP
N00383~95-G-2O9NUU5l 117108.00 USA OP
N00383-95-G-209NUU55 165960.00 USA OP
N00383-95-G-2O9NUU57 100500.00 USA OP
N00383-95-G-209NUU65 178536.00 USA OP
N00383-95-G-209NUU66 153500.00 USA OP
N00383~95-G-209NUU68 83060.00 USA OP
N0O383~95-G-209NUU69 87888.00 USA OP
N00383-95-G~209NUU76 170072.00 USA OP
N00383-95-G-209NUU77 164572.00 USA OP
N00383-95-G-209NUU91 100500.00 USA OP
<PAGE>
N00383-95-G-209NUU92 100500.00 USA OP
N00383-95-G-209NUU93 134000.00 USA OP
N5588983 149111.99 USA OP
N66001-96-C-6008 819118.00 USA OP
N66604-92-C-1078 288121.00 USA OP
N66604-93-C-0788 148716.00 USA OP
N66604-97-M-5934 100814.00 USA OP
N68335-94-G-OOOIUUO8 153189.00 USA OP
N68335-96-G-00471JU02 152100.00 USA OP
P015101 106873.00 USA OP
P7805158 4862872.00 USA OP
P7822564 154500.00 USA OP
R9525401 357259.00 USA OP
5P0960-97-M-0936 95880.00 USA OP
A1E02546 - Aero International 4697043.00 VAR-NON US OP
W8472-5-BGV 1 3309635.27 CAN OP
P7900173 25843178.00 CHN OP
0774888 20566000.00 EGY OP
GWG864609 378168.00 GBR OP
SSDW1/434 429712.00 GBR OP
7/1994 5017476.00 GRC OP
P7870275 3879870.00 GRC OP
1248USA 25818944.00 ITA OP
31-1/96 237671.00 ITA OP
L40870 1649997.00 ITA OP
1E295 86880.00 JPN OP
1E312 963086.00 JPN OP
1F449 425999.00 JPN OP
1F450 1295177.00 JPN OP
1F458 103293.00 JPN OP
1F480 334691.00 JPN OP
1F481 979628.00 JPN OP
1F483 257503.00 JPN OP
1F485 127123.00 JPN OP
1F496 76584.00 JPN OP
1F509 691160.00 JPN OP
1F511 129420.00 JPN OP
1F514 95524.00 JPN OP
56S265 75754.00 JPN OP
5S0226 1680670.00 JPN OP
5S0227 919541.00 JPN OP
5S250 1751240.00 JPN OP
5S251 3502480.00 JPN OP
5S252 3502480.00 JPN OP
5S253 1751240.00 JPN OP
5S257 75921.00 JPN OP
<PAGE>
5S258 252534.00 JPN OP
5S259 398143.00 JPN OP
5S260 163056.00 JPN OP
5S262 919541.00 JPN OP
5S265 75754.00 JPN OP
5S266 619421.00 JPN OP
5S267 78446.00 JPN OP
5S268 158862.00 JPN OP
5S270 86446.00 JPN OP
5S271 92524.00 JPN OP
5S276 99749.00 JPN OP
5S277 267555.00 JPN OP
960050 389850.00 KOR OP
970050 224977.00 KOR OP
KFX-DPA-72DA57025 29700000.00 KOR OP
MGP-DGM/DAR-95-074 122720.00 PER OP
DNO1/96 151793.00 PRT OP
TURKEY 1 15548572.00 TWN OP
PA2314-C059 272645.00 TWN OP
PB4961-C067-P00 281000.00 TWN OP
ROCN 25843178.00 TWN OP
N00019-90-G-0200YCIF 83400.00 USA OP
NOOO19-90-G-0200YC93 715362.76 USA OP
Ocean Systems - Open POs Over $75,000
- -------------------------------------
<TABLE>
<CAPTION>
P0 No. P0 Value Status Open Amt Pd Amt Vendor ID Vendor Name
- ------ -------- ------ ---- --- ------ --------- -----------
<S> <C> <C> <C> <C> <C> <C>
A00458 $ 81,547 Open $ 63,245 $ 18,302 80863 SPECTRUM ENGINEERiNG CORP.
A00493 $1,059,969 Open $ 345,849 $714,120 70212 PRECISION INTERCONNECT
A00499 $ 731,090 Open $ 255,965 $475,125 00169 AT&T
A00573 $ 115,000 Open $ 65,000 $ 50,000 65109 OCEAN PROJECTS ASSOCIATES
A01277 $ 185,600 Open $ 185,600 29152 DYNACON, INC.
A01597 $ 115,961 Open $ 106,734 $ 9,227 65109 OCEAN PROJECTS ASSOCIATES
A46821 $ 178,423 Open $ 1 $178,423 81041 SPIRATEX COMPANY
A48903 $5,000,000 Open $5,000,000 16113 CDI CORPORATION WEST
A48904 $ 500,000 Open $ 500,000 81750 STANDARD REGISTER
B00541 $ 375,000 Open $ 375,000 72749 RAM TEK BUSINESS CO
BOl149 $ 333,750 Open $ 333,750 47287 INTERTEK TECHN. SERVICES
B01263 $ 200,000 Open $ 200,000 29744 EGGHEAD SOFTWARE
BO1742 $ 106,000 Open $ 100,800 $ 5,200 63168 NAVAL UNDERWATER SYSTEMS
B03266 $ 155,760 Open $ 155,760 04216 ALLIEDSIGNAL AEROSPACE CO.
B04402 $ 436,000 Open $ 436,000 56881 FORSYTHE MCARTHUR
B04984 $ 136,751 Open $ - $136,751 64014 NORMALAIR GARRETT LIMITED
BOS158 $ 111,000 Open $ 111,000 52284 LAIDLAW ENVIRONMENTAL
B05579 $ 152,500 Open $ 152,500 72935 RAWLINGS MECHANICAL CORP.
B05829 $ 150,000 Open $ 150,000 27698 DIGITAL SYSTEM RESOURCES
B05859 $ 160,000 Open $ 160,000 22781 COMPUDRAFT
B06572 $ 98,950 Open $ 98,950 18762 CARRIER BUILDING SERVICES
B07260 $ 152,770 Open $ 139,735 $ 13,035 41300 HAMILTON/AVNET ELECTRONIC
B07471 $ 240,750 Open $ 35,310 $205,440 72805 RANTEC COMPANY
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
B07815 $ 432,000 Open $ 432,000 89966 VP AND ASSOCIATES
B07816 $ 140,000 Open $ 140,000 83135 STREAMLINE SYSTEM INTEGRA
B07875 $ 123,410 Open $ 81,866 $ 41,544 42916 HERMETIC SEAL CORP.
COO114 $ 145,000 Open $ 145,000 32469 ENTEX INFORMATION SERVICES
C00954 $ 112,975 Open $ 5,575 $107,400 65109 OCEAN PROJECTS ASSOCIATES
C01624 $ 139,600 Open $ 139,600 75689 ROMIC ENVIRONMENTAL TECH.
C02490 $ 200,000 Open $ 200,000 47873 JAMAR PACKAGING CO., INC.
C03546 $ 98,000 Open $ 98,000 19035 CAPTAIN C.J. CAUGHEY RN (RET)
C03692 $ 153,400 Open $ 153,400 92011 WACKENHUT CORP.
C03842 $ 547,580 Open $ 80,135 $467,447 69973 POWERTECH INC.
C04282 $ 160,000 Open $ 160,000 72935 RAWLINGS MECHANICAL CORP.
C06070 $ 231,951 Open $ 231,951 52935 R E LEE DESIGN
C06215 $ 75,270 Open $ 73,101 $ 2,169 62372 NATEL ENGINEERING CO., IN
D00281 $ 200,000 Open $ 200,000 27310 JOHN DEVINE
D00401 $ 96,900 Open $ 96,900 19010 CATALINA COMPUTER SOLUTIONS
D00522 $ 85,000 Open $ 85,000 89966 VP AND ASSOCIATES
D00528 $ 84,450 Open $ 84,450 26748 DELTA CONSULTING SERVICES
D00553 $ 85,000 Open $ 85,000 32469 ENTEX INFORMATION SERVICES
D00768 $ 77,175 Open $ 77,175 03086 AIRFLYTE ELECTRONICS CO.
D00815 $ 190,400 Open $ 27,200 $163,200 23230 CONSOLIDATED PRODUCTS CORP.
D00821 $ 99,900 Open $ 99,900 26382 DIS RESEARCH
DO1326 $ 189,909 Open $ 20,000 $169,909 72935 RAWLINGS MECHANICAL CORP.
D01546 $ 78,000 Open $ 78,000 03955 ALL PHASE ELECTRIC SUPPLY
D01619 $ 100,000 Open $ 100,000 28352 DOUBLE "J" PACKAGING CO., INC.
D01646 $ 227,916 Open $ 227,916 52935 R E LEE DESIGN
D01714 $ 480,585 Open $ 325,962 $154,623 76365 SMTEK, INC.
D02115 $ 75,226 Open $ 51,718 $ 23,508 20582 CICON ENGINEERING, INC.
D03621 $ 120,000 Open $ 120,000 72935 RAWLINGS MECHANICAL CORP.
D04093 $ 96,600 Open $ 96,600 23230 CONSOLIDATED PRODUCTS CORP.
D04316 $ 151,265 Open $ 151,265 70212 PRECISION INTERCONNECT
D04599 $ 79,468 Open $ 79,468 62372 NATEL ENGINEERING CO., INC.
Y23066 $ 143,500 Open $ 143,500 12628 BIG 3 INDUSTRIES, INC.
Y27874 $ 422,114 Open $ 81,122 $340,992 56881 FORSYTHE MCARTHUR
Z38189 $ 110,000 Open $ 110,000 25171 DVR ENTERPRISE
Z40850 $ 250,000 Open $ 250,000 29742 EGGHEAD DISCOUNT SOFTWARE
Z40937 $1,012,000 Open $1,012,000 92011 WACKENHUT
Z40952 $ 647,220 Open $ 634,685 $ 12,535 56881 FORSYTHE MCARTHUR
</TABLE>
Ocean Systems - Marketing Consulting Agreements*
------------------------------------------------
Sigma International, dated June 1, 1995 Guy Reynolds
Reynolds Beckwith Kerry Stephen
LeeCor, Inc. (Ronald Beckwith) Omicron Corp.
John Caughy SMAT, Est.
John Devine Kuo-Chun, Henry Feng
John McDermott
Ocean Systems - International Service Representative Agreements*
----------------------------------------------------------------
C.I.E.R., dated June 30, 1996
Sigma International, dated June 1, 1995
Atkem, A.S., dated July 7, 1997
<PAGE>
Ocean Systems - Sales Representative Agreements*
------------------------------------------------
Taewoos LLC, dated January 7, 1995
Hollinda N.V., dated August 1, 1995
Itochu Aviation, Inc., dated October 1, 1994
Siam Aviation Company, Ltd., dated November 1, 1995
Benavia AB, dated October 1, 1995
Panamerica Organization Properties, Inc., dated November 1, 1995
Hovet & Co., dated October 1, 1995
Compania Aeronautica Espanola, S.A., dated October 1, 1995
Aktem A.S., dated March 1, 1997
Top Entity, dated January 1, 1997
Sistemas Electronicos S.A., dated June 1, 1997
J.C. Rangel, Representacoes Ltd., dated June 1, 1997
Alberto Maria Bravo & Filhos, dated July 1, 1997
Southwest Trading Company, dated April 1, 1997
Technica De Electronica Y Metalurgia (TADEM), dated July 1, 1997
Aero Precision Industries, Inc., dated June 1, 1997
BD Miltech Ltd., July 1, 1997
Mereit Lab Corporation, dated August 1, 1997
Ocean Systems - Computer Equipment Leases*
-------------------------------------------
<TABLE>
<CAPTION>
Vendor Name Expires Equipment Description
----------- ------- ---------------------
<S> <C> <C>
Forsythe McArthur Assoc. August 7, 1998 VAX7620
VAX4100
MTICIQBU adaptor
high capacity tape drive
Forsythe McArthur Assoc. August 31, 1998 VAX661O
Forsythe MeArthur Assoc. August 31, 1998 MicroTechnology Raid Disk Farm
and associated devices
Forsythe McArthur Assoc. January 14, 1999 SUN Spark 20
</TABLE>
Ocean Systems - Informatian Technology Service Agreements*
----------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Vendor Name Service Agreement Description Type of Expires
Coverage
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Xerox Corporation HW maintenance (2080/7080 printers) Maintenance 9/26/97
Hewlett - Packard Workstation Operating System Maintenance Maintenance 9/30/97
Cabletron Systems Inc. Network Infrastructure maint (software) Maintenance 9/30/97
Omega Logistics Int Logistics software (DILSA) Maintenance 10/15/97
Sterling Design Engineering Systems Vmetric - EDCAS - System Design Utility Maintenance 10/15/97
Tornado Software Development toolkit Maintenance 10/31/97
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Parametric Technology Corp. Designer software (Pro-E) Maintenance 11/11/97
Cincom MRP utilities USER FEE (QRW) Maintenance 11/20/97
Micro-Frame Technologies PC based estimating (Microfrarne) Maintenance 12/1/97
Executive Software Disk de-fragmentation (Diskeeper) Maintenance 12/14/97
Intersolv Inc Software config mgmt (PVCS) Maintenance 12/30/97
Struct. Dyn. Res. Corp. CAD (IDeas) Maintenance 12/30/97
Digital Equipment Corp. HW & SW maintenance (VAXcluster) Maintenance 12/31/97
Silverado Software & Consultants Analysis SW maintenance (ANSYS) Maintenance 1/2/98
Intercap Graphics System Technical Illustration (Intercap) Maintenance 1/8/98
Barr Systems Remote Printer (XEROX) RJE-RS232 Maintenance 1/9/98
West Coast Terminals, Inc. Xerox FAX machine maintenance Maintenance 1/23/98
Talaris Systems INC. Printer HW maintenance (3290s) Maintenance 1/30/98
Zuken-Redac CAD (CADstar) Maintenance 2/20/98
Datalok Off-site tape storage Maintenance 2/27/98
Select Sfotware Tools, Inc. Select Yordon - FOR SSTO Maintenance 4/15/98
Amtek HW maintewnance (HP 9000) Maintenance 4/30/98
Lasersource/DCI HW maintenance (Talaris 1590s) Maintenance 4/30/98
QMS HW maintenance (QM5860 laser printer) Maintenance 4/30/98
Computer Upgrade Corporation AMASS SW maintenance Maintenance 4/30/98
Mathworks SW maintenance (MATLAB, float license) Maintenance 5/1/98
Cincom MRP software USER FEE (Control) Maintenance 6/24/98
Cabletron Systems Inc. Network Infrastructure maint (hardware) Maintenance 6/30/98
Muzak Music on Hold Maintenance 6/30/98
Interleaf Desktop publishing (Interleaf) Maintenance 8/28/98
Micro-Technologies (SI) HW maintenance (CIQBA Controler) Maintenance 8/31/98
Exide HW maintenance on UPS system Maintenance 9/25/98
Oracle Database software (Oracle) Corporate/ 2Q/each
Maintenance year
Lasersource/DCI Blanket maintenance for HP printers Blanket 12/30/97
Software Spectrum Supplies (software blanket) Blanket 12/31/97
DIS Research Capital/Supplies (blanket) - replace HW Blanket 12/31/97
Graymar Business Systems Supplies toner) Blanket 3/2/98
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AP Labs Signal processing software (SUNs) Blanket 3/6/98
Walker Richer and Quinn Reflection Blanket 3/10/98
Xerox Corporation HW maintenance (4050,4075,3700) Blanket 3/31/98
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Ocean Systems - Confidentiality Agreements*
-------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Agreement Effective Term/ OS
Company Subject Number Date Expiry Contact
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADI Limited RAN ASSTASS SEA 11000 96-033 11/6/96 10 years A.J. Garber
ADI Limited Underwater Warfare Business 95-007 4/10/95 3
Aero International International Spares 95-010 3 years P.A. Boskovich
Agusta/Italy Quality Assurance Survey 4/28/97 1 year L. Daniels
Albion Group Intl. Inc. Hellenic Navy Offset 95-013 7/12/95 3 years J. Hall/L.
Daniels
Alliant Techsys. Seismic data 96-027 10/16/97 3 years A.J. Garber
Atlantic Aero Elect Various 95-001 1/17/95 3 years A.J. Garber
Corp.
Australian Defense Undersea Warfare Business 95-007 5/10/95 3 years K.D. Adams
Industries
Atlantic Aero Elect. Foreign Integrated Sonar Suites 95-017 8/21/95 3 years A.J. Garber
Corp.
AT&T Various Information 8/7/95 2 years D. Samsury
Babcock Intl. Sonar 2087 Feasibility Study 3/7/95 5 years J. Caughey
BBN US Navy 6152 97-015 5/30/97 1 year A.J. Garber
Cambridge Bank Ltd. Sonar Equip. Brazil/Peru 96-017 5/28/96 5 years V. Riehl
Celsius Tech Sys. Mine Counter Measurers 94-021 8/19/94 3 years L. Daniels
Celsius Tech Sys. Proprietary Info. 11/14/97 5 years J. Devine
Chesapeake Sciences TARS 95-018 8/28/95 3 years A.J. Garber
Chesapeake Sciences TB16BQ 10/18/94 4 years R. Tomlinson
Chevron Petroleum Bore Hole Seismic Multi Level 94-037 3/3/94 3 years A.J. Garber
Receiver
Computing Devices Maritime Helicopter 95-014 7/14/95 3 years J. Anderson
C-Tech YS2000 96-029 10/2/96 2 years J. Roscigno
DAF Special Products NH-90 96-006 2/15/96 3 years D. Webb
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DRA Hunt Class Mid Life 11/22/96 1 year A.J. Garber
Defense Evaluation
Research Defense Hunt Class Mid Life 11/27/96 1 year A.J. Garber
Agency
Devonport
Management Ltd. Sonar 2087/Type 23 Frigates 96-007 2/13/96 3 years A.J. Garber
Durodyne, Inc. Epichlorohydrin rubber compound 88- 5/1/88 10 years J. Andersen
014/DA
Dynacon, Inc. LFATS Handling System 94-023 6/2/94 3 years A.J. Garber
E-Systerns Montek Siesmic Receiving 95-012 6/28/95 3 years A.J. Garber
Electramotive TB16 Towed Array 11/12/93 3 years J. Proko
FIAR NH-90 96-005 1/18/96 3 years D. Webb
Fokker Aviation EMD 97-008 2/4/97 1 year S. McDonald
Greenblatt MCDV 95-004 3/27/95 3 years L. Daniels
Goldstar ATE 11/24/82 5 years B. Polaski
Geo Test Inc. AQS-18 Test Equipm 95-032 12/14/95 3 years L. Daniels
Hughes Naval Marine Airborne Sonar Sys. 96-026/1 5/13/97 2 years R. Husar
Hughes Naval Marine Surface Ship Programs 96-026 8/9/96 2 years R. Husar
Hewlett Packard Weapons Replaceable Assy. Test Set 96-002 1/8/96 3 years L. Daniels
Hollandse Alkmaar class mine counter 97-007 1/23/97 2 years S. McDonald
Signaalapparten
Kaman Aerospace AQS-18 Dipping Sonar SH-2G 94-019 7/19/95 5 years L. Daniels
Loral Canada Maritime Helicopter Program 7/29/95 10 years J. McDermott
Lockheed Martin Canadian Remote Minehunting Sonar 95-024 12/19/95 3 years A.J. Garber
Loral ASIC B2TC 5/28/95 10 years A.J. Garber
Litton Sys. Acoustic Sensor Array Systems 5/24/96 5 years L. DiRienzo
Northop Grumman Hybrids 95-020 9/15/95 3 years J.P. Andersen
NUWC Wide-Band Omni Telemetry Sys. 10/31/96 A.J. Garber
Optiphase Fiber Optic Technologies 96-003 1/10/96 3 years A.J. Garber
Paulsson Geo Svc. Inc. Boreholde Seismic Systems 11/22/96 1 year
Penn State LELFAS 96-034 12/17/96 3 years V. Riehl
Raytheon Electronics LFATS/Taiwan/Australian./Spanish 10/25/96 2 years V. Riehl
Raytheon Electronics YS2000fItalian Navy ASW Frig 7/2/96 5 years
STN Atlas Undersea Warfare Business 95-006 4/25/95 3 years K. Adams
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STN Atlas Australia ASSTASS LFAPS 2/11/97 1 year D. MacCulloch
Signal Processing Sys. Norwegian Towed Array 97-014 5/23/97 3 years W. Tally
Sikorsky Aircraft Job Shoppers 11/22/96 7 years D. Bennett
Transfield Defense Sys. SEA 1000 Australian Surface Ship 8/6/96 10 years J. Winters
Towed
3M Specialty Optical Fiber Optic Technologies 95-029 11/30/95 3 years A.J. Garber
Fibers
Taiwan Int Standard S-70C Offset 96-010 5/11/96 5 years J. Corso/
Electronics Ltd. J. Winter
Witten Technologies Mine Warfare 94-030 7/11/94 3 years A.J. Garber
Whitehead Alenia Undersea Warfare Business 95-003 4/27/95 3 years S. Schorer
Sistemi Subacquei
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Ocean Systems - Retention Agreements*
-------------------------------------
oRetention Areements with key management (V. Davisson, V. Riehi, A.
Logan, D. Dunlop, J. Roscigno, L. DiRienzo, M. Charley, B. Smith, S.
Erdman), aggregate contingent payment of $199,400 for all eight
managers (Purchaser responsibility).
oRetention Agreement with Steve Schorer (AlliedSignal responsibility).
ELAC - Retention Agreements*
----------------------------
oRetention Agreements with key management (L. Hogrefe, W. Tietz, G.
Jordt), aggregate contingent payment of $108,200 for all three
managers (Purchaser responsibility).
ELAC - Contracts Greater Than TDM100.00
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
3.2 Contracts, Value> TDM 100.0 Status: Cut-off 09/97
- ------------------------------------------------------------------------------------------------------------------------
Customer Enduser Contents Date of Value of Remaining Last
Contract Contract Backlog Shipment/Service
TDM TDM
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BAZAN, Spanish Navy 4 Echosounders for 9/4/95 442.0 331.5 August 1999
Spain Minehunter
- ------------------------------------------------------------------------------------------------------------------------
Blohm und Voss, Turkish Navy 2 Echosounders for 8/15/96 251.0 131.1 May 1998
Germany MEKO
- ------------------------------------------------------------------------------------------------------------------------
Blohm und Voss, German Navy 1 Echosounder and UT 7/14/97 281.1 281.1 October 2005
Germany Equipment for F124
- ------------------------------------------------------------------------------------------------------------------------
BWB Koblenz, German Navy Target Simulator 2/29/96 11,217.4 4,581.8 December 2005
Germany (SUBTAS)
- ------------------------------------------------------------------------------------------------------------------------
BWB Koblenz, German Navy Advanced Data 9/23/97 398.5 398.5 December 1997
Germany Evaluation
System (SUBTAS)
- ------------------------------------------------------------------------------------------------------------------------
BWB Koblenz, German Navy Spares (Transducer) 8/20/97 340.6 340.6 December 1997
Germany
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
3.2 Contracts, Value> TDM 100.0 Status: Cut-off 09/97
- ------------------------------------------------------------------------------------------------------------------------
Customer Enduser Contents Date of Value of Remaining Last
Contract Contract Backlog Shipment/Service
TDM TDM
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BWB Koblenz, German Navy 1000 Transducers 8/28/97 2,047.0 1,647.8 December 1997
Germany LSE 800
- ------------------------------------------------------------------------------------------------------------------------
BWB Koblenz, German Navy LFTASS Development 8/7/95 712.5 0.0 December 1998
Germany and Delivery of 4 ea.
Reflexducerelements
- ------------------------------------------------------------------------------------------------------------------------
DLA, Korean Navy 2 UT Equipments 12/5/96 404.4 404.4 December 1997
Korea (Training)
- ------------------------------------------------------------------------------------------------------------------------
DLA, Korean Navy 2 Echosounders for 2/26/97 329.1 202.4 December 1998
Korea KDX Destroyers
- ------------------------------------------------------------------------------------------------------------------------
HDW, Korean Navy 3 Echosounders, 3/1/95 2,541.8 1,673.3 December 1998
Germany UT Equipments, Sonar
Beacon, Tape Recorder
for Subs U209
- ------------------------------------------------------------------------------------------------------------------------
HDW, Brazilian Navy Echosounder, UT's, 1/12/96 791.2 791.2 March 1999
Germany Sonar Beacon for Sub
Tupi mod
- ------------------------------------------------------------------------------------------------------------------------
HDW, German Navy 2 Echosounders and UT 8/14/97 1,757.5 1,757.5 December 2005
Germany Equipments md. ILS for
Subs U212
- ------------------------------------------------------------------------------------------------------------------------
HDW, German Navy I Echosounder and UT 8/14/97 281.1 281.1 October 2002
Germany Equipment for F124
- ------------------------------------------------------------------------------------------------------------------------
HDW, Turkish Navy 2 Echosounders 7/1/95 861.9 14.4 February 1998
Germany 2 Sonar Beacons for
Submarines
- ------------------------------------------------------------------------------------------------------------------------
HDW/TNSW, Israel Navy 3 Sonar Beacons 12/17/93 842.0 20.5 June 1999
Germany for Submarine
"Dolphin-Class"
- ------------------------------------------------------------------------------------------------------------------------
HSA, Taiwan Navy Sonar Spares 4/1/97 111.9 111.9 November 1997
Netherlands
- ------------------------------------------------------------------------------------------------------------------------
Intermarine, Thai Navy 21 Echosounders for 6/17/97 225.0 225.0 July 1998
Italy Minehunter
- ------------------------------------------------------------------------------------------------------------------------
Lurssen, Turkish Navy 3 Sonar Beacons 10/10/95 321.8 9.3 October 1997
Germany for Patrolers
"Dogan-Class"
- ------------------------------------------------------------------------------------------------------------------------
NAMRIA, NAMRIA, BCC-SW MK II 8/14/97 791.0 791.0 November 1997
Phillipines Phillippines
- ------------------------------------------------------------------------------------------------------------------------
Naval Indian Navy Test Equipment 7/23/97 193.1 193.1 December 1997
Headquarters~
India
- ------------------------------------------------------------------------------------------------------------------------
ORCA, French Navy 7 Diver Sonars 6/18/97 966.8 41.5 December 1997
France
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
3.2 Contracts, Value> TDM 100.0 Status: Cut-off 09/97
- ------------------------------------------------------------------------------------------------------------------------
Customer Enduser Contents Date of Value of Remaining Last
Contract Contract Backlog Shipment/Service
TDM TDM
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Racal Survey, Racal Survey, UK BCC-MW 3/6/97 693.1 90.0 December 1997
UK 3 Upgrades MK I - M II
- ------------------------------------------------------------------------------------------------------------------------
SeaBeam, INHO, India 4 SeaBeam 1180 4/17/97 1,784.9 888.7 April 1998
USA ($1=1,75
DM)
- ------------------------------------------------------------------------------------------------------------------------
SeaBeam, NAMRIA, 2 SeaBeam 1180 7/31/97 792.2 792.2 November 1997
USA Phillippines MK II
- ------------------------------------------------------------------------------------------------------------------------
STN ATLAS, German Navy 2 Echosounders 10/16/95 642.0 46.1 July 1998
Germany 2 UT Equipment for
Minehunter MJ332
- ------------------------------------------------------------------------------------------------------------------------
STN ATLAS, Israel Navy 4 UT Equipments for 11/24/93 1,070.3 10.2 June 1999
Germany Submarines
"Dolphin-Class"
- ------------------------------------------------------------------------------------------------------------------------
STN ATLAS, various 30 Echosounders 9/19/97 139.5 139.5 November 1997
Germany LAZ 5000
- ------------------------------------------------------------------------------------------------------------------------
STN ATLAS, various 30 Echosounders 9/24/97 139.5 139.5 February 1998
Germany LAZ 5000
- ------------------------------------------------------------------------------------------------------------------------
STN ATLAS, German Navy MTW - Mini Torpedo 12/6/95 430.0 30.0 December 1997
Germany Development and
Testvehicle
- ------------------------------------------------------------------------------------------------------------------------
TNSW, German Navy 2 Echosounders and UT 8/11/97 1,792.5 1,792.5 December 2005
Germany Equipments md. ILS for
2
Subs U212
- ------------------------------------------------------------------------------------------------------------------------
TNSW, German Navy I Echosounder and UT 9/29/97 296.0 296.0 October 2004
Germany Equipment for F124
- ------------------------------------------------------------------------------------------------------------------------
Technical Technical Development of 3/10/97 140.7 140.7 December 1997
University, University High Frequency
Berlin, Germany Berlin, Germany Transducers
- ------------------------------------------------------------------------------------------------------------------------
Wilton-Fijenoord, Taiwan Navy Sonar Spares 1/22/97 815.6 815.6 December 1997
Netherlands
- ------------------------------------------------------------------------------------------------------------------------
WDA WSA Bremerhaven, BCC-SW MK II 9/10/97 428.4 428.4 November 1997
Bremerhaven, Germany
Germany
- ------------------------------------------------------------------------------------------------------------------------
WTV, Siegburg, Wahnbachtalsperre PIA 2000 Plancton 5/31/96 3,067.1 2,480.5 June 1999
Germany n Inactivation System
Verband Germany
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
ELAC - Guarantees and Bank Bonds*
- ---------------------------------
<PAGE>
<TABLE>
<CAPTION>
Bank Bonds
Deutsche Bank 02.10.97
item type of guarantee customer no. amount DEM due date
<S> <C> <C> <C> <C> <C> <C>
1 A advance payment bond Atlas 431 221.490,00 28.02.1998
2 V performance bond Atlas 363 237.188,00 until further
3 V performance bond Atlas 396 63.945,67 01.03.1999
4 G warranty bond Atlas 463 33.690,00 until further
5 V performance bond Atlas 328 9.589.450,00
-1.436.000,00
-877.800,00
-501.600,00
-836.000,00
-627.000,00
-627.000,00
-1.379.400,00
-543.400,00
-1.170.400,00
-------------
1.590.850,00 31.12.1999
============
6 A advance payment bond Blohm + VoB 460 18.300,00 31.08.1998
7 A advance payment bond Blohm + VoB 461 17.625,00 31.08.1997
8 V performance bond Blohm + VoB 395 26.470,00 until further
9 G warranty bond Blohm + VoB 459 6.110,00 31.08.2000
10 G warranty bond Blohm + VoB 462 7.248,00 31.08.2001
11 G warranty bond Blohm + VoB 485 16.164,00
until further
12 V performance bond Daewoo 353 1.079,00 31.10.1997
13 V performance bond Daewoo 354 1.122,00 31.10.1998
14 A advance payment bond Def. Proc. Agency 391 191.500,00 31.10.1996
15 A advance payment bond Def. Proc. Agency 478 221.600,000 30.09.1998
16 A advance payment bond Def. Proc. Agency 480 82.515,00 31.01.1999
17 V performance bond Def. Proc. Agency 390 38.300,00 30.09.1999
18 V performance bond Def. Proc. Agency 397 3.313,52 09.07.1996
19 G warranty bond Def. Proc. Agency 479 22.160,00 30.11.1999
20 G warranty bond Def. Proc. Agency 481 17.825,00 31.01.2003
21 A advance payment bond Empresa Nacional 423 19.050,00 01.08.1999
22 A advance payment bond Empresa Nacional 425 19.050,00 01.05.1998
23 A advance payment bond Empresa Nacional 426 19.050,00 01.12.1998
24 G warranty bond Empresa Nacional 474 6.370,00 until further
25 A advance payment bond HDW, Kiel 464 41.988,80 until further
26 A advance payment bond HDW, Kiel 465 85.852,10 until further
27 A advance payment bond HDW, Kiel 466 32.223,00 until further
28 A advance payment bond HDW, Kiel 473 72.450,00 30.09.1998
29 A advance payment bond HDW, Kiel 475 88.255,60 until further
30 A advance payment bond HDW, Kiel 476 33.126,90 until further
31 A advance payment bond HDW, Kiel 477 43.164,10 until further
32 A advance payment bond HDW, Kiel 482 41.988,80 until further
33 A advance payment bond HDW, Kiel 483 32.223,00 until further
34 A advance payment bond HDW, Kiel 399 72.450,00 15.10.1998
35 A advance payment bond HDW, Kiel 446 41.988,80 31.01.1998
36 A advance payment bond HDW, Kiel 447 32.223,00 31.01.1998
37 A advance payment bond HDW, Kiel 448 85.852,10 31.01.1998
38 V+G performance bond HDW, Kiel 261 19.654,70 31.08.1998
39 V performance bond HDW, Kiel 388 238.050,00 15.10.1998
40 V+G performance bond HDW, Kiel 401 42.926,00 30.11.2001
41 V+G performance bond HDW, Kiel 402 41.757,00 30.11.2000
42 V+G performance bond HDW, Kiel 403 44.128,00 30.11.2002
43 V+G performance bond HDW, Kiel 404 15.673,00 30.11.2000
44 V+G performance bond HDW, Kiel 405 16.563,00 30.11.2002
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
45 V+G performance bond HDW, Kiel 406 16.112,00 30.11.2001
46 V+G performance bond HDW, Kiel 407 20.424,00 30.11.2000
47 V+G performance bond HDW, Kiel 408 20.990,00 30.11.2001
48 V+G performance bond HDW, Kiel 409 21.582,00 30.11.2002
49 V+G performance bond HDW, Kiel 410 25.726,00 30.11.2000
50 V+G performance bond HDW, Kiel 411 26.447,00 30.11.2001
51 V+G performance bond HDW, Kiel 412 27.187,00 30.11.2002
52 G warranty bond HDW, Kiel 369 36.397,50 31.01.2000
53 G warranty bond HDW, Kiel 442 36.337,00 31.01.1999
54 G warranty bond HDW, Kiel 443 15.111,00 31.01.1999
55 G warranty bond HDW, Kiel 444 36.967,00 31.12.1999
56 G warranty bond HDW, Kiel 445 15.364,00 31.12.1999
57 A advance payment bond Intermarine 484 35.550,00 until further
58 V performance bond Kockums 265 45.512,90 01.10. 199&
59 V performance bond Kockums 275 13.500,00 01.10.1998
60 G warranty bond Lurssen Werft 456 18.750,00 30.06.1997
61 G warranty bond Lurssen Werft 468 13.214,00 01.05.1999
62 G warranty bond Lurssen Werft 469 13.214,00 01.12.1999
63 G warranty bond P.T. PAL Indonesia 457 38.500,00 31.12.1996
64 G warranty bond President of India 435 4.721,75 until further
65 V performance bond Saudi Arabien 366 17.793,50 10.01.1998
66 G warranty bond Societe d'Armement 379 8.487,50 12.09.1997
67 G warranty bond Societe d'Armement 486 73.433,85 11.07.1998
68 V performance bond Thyssen 385 238.050,00 15.09.1999
69 G warranty bond Thyssen 368 27.772,50 30.06.1999
70 A advance payment bond Wilton 472 400.000,00 until further
total 5251.697,59
</TABLE>
<TABLE>
<CAPTION>
Foreign currency
item type of guarantee customer no. amount Ablauf
<S> <C> <C> <C> <C> <C> <C>
1 V performance bond Taneer, Karacki 48.044,00 Pak.R until further
2 V performance bond Def.Proc.Agency, Korea 441 1.870,39 USD 31.05.1997
3 V performance bond SeaBeam 482 49.371,00 USD 31.07.1999
</TABLE>
ELAC - Confidentiality Agreements*
- ----------------------------------
Date Party
---- -----
95-01-01 Marimatek
95-01-02 SeaBeam
95-01-03 Qubit
95-01-04
95-01-05 Ultra Electronics
95-01-06 BASYS Marine Ltd.
95-01-07 BAeSEMA
95-01-08 Westinghouse
96-01-01 Evia
96-01-02 Mjellum & Carison
96-01-03 Reson
96-01-04 Raytheon Anschtutz
96-01-05 HDW
96-01-06 Elektro-Optik GmbH
97-01-01 SEPA
97-01-02
<PAGE>
97-01-06 Sonatech
97-01-07 Nautronix
97-01-08 EdgeTech
97-01-09 Kongsberg
97-01-10 Camber Corp.
ELAC - Other Contracts*
- -----------------------
o ELAC Lease, between Honeywell Regelsysteme GMBH and Honeywell
ELAC-Nautik, dated April 1, 1994
o Intercompany note between Ocean Systems and ELAC with respect to the
cash in the AlliedSignal German cash pool, and related agreements
Stock Purchase Agreement by and among AlliedSignal Deutchland GmbH,
AlliedSignal, Inc., Honeywell AG and Honeywell, Inc., dated March 30,
1994
o Lease agreement by and between ELAC and Christian-Albrecht
Universitat, Kiel, dated April 1995
o Long term agreement for cable repair with AS Aerospace GmbH
Ocean Systems - Other Contracts
- -------------------------------
o The following pages contain information regarding certain contracts
signed between August 1, 1997 and December 19, 1997.
o Effective December 19, 1997, Ocean Systems is under contract with the
Turkish Navy to provide 4 AQS-18A dipping sonar systems plus spares,
ground support equipment and performance testing.
o Ocean Systems has an opportunity to propose a significant contract
with Egypt. In the event that OS moves forward to compete on that
contract, it is likely that OS will retain an in-country
representative and will sign a letter of intent with that
representative to retain post-contact award services which would
likely exceed $250,000.
- ----------
* Included without regard to dollar amount. May or may not exceed $75,000 or
DM100,000.
<PAGE>
CONTRACTS RECEIVED
8/97 through 12/97
(Over $250K)
<TABLE>
<CAPTION>
CUSTOMER SALES ORDER CONTRACT # DESCRIPTION VALUE
- -------- ----------- ---------- ----------- -----
<S> <C> <C> <C> <C>
NAVSEA SS3442 N00024-92-C-6502 TB-23 Spares $279.3K
NUWC SU3498 N66604-7225-4BF7 AMTS Upgrade $100.8K
ITOCHU SY3591 5S277 Q18M Spares $268K
ITOCHU SY3714 5S272 Q18M Spares $3700K
ITOCHU SY3717 5SS275 Q18M Spares $1800K
ITOCHU SY3726 1F529 Q18M Spares $366K
HELLENIC NAVY 1Q18V System $2200K
NAVSEA ECP320/325 TB16 Upgrade $660K
NAVSEA TB23 Repairs $300K
</TABLE>
<PAGE>
<TABLE>
ASOS-SB-RO10 PAGE NO: 187
ALLIEDSIGNAL OCEAN SYSTEMS RUN DATE: 12/19/97
PURCHASING STATISTIC AWARD REPORT
ALL PURCHASE ORDERS
FROM 08/01/97 THRU 12/18/97
<CAPTION>
BUYER VENDOR VENDOR VENDOR AWARD TECH PO LINE DEPT/ACCT/JOB COMM TOTAL
ID NAME NUMBER CLASS CODE CODE NUMBER ITEM CODE DOLLARS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12 CONSOLIDATED PRODUCTS CORP. 23230 SB 1A 1A D05064 007 3000-031-01-0-0000-0-0-0 5002 47,600.00
12 CONSOLIDATED PRODUCTS CORP. 23230 SB 1A 1A D05064 008 3000-031-01-0-0000-0-0-0 5002 88,000.00
12 CONSOLIDATED PRODUCTS CORP. 23230 SB 1A 1A D05064 009 3000-031-01-0-0000-0-0-0 5002 54,400.00
TOTAL DOLLARS FOR THIS PO 462,400.00
$500,000 AND UP
TOTAL DOLLARS FOR THIS BUCKET 489,909.30
TOTAL NUMBER OF PO's FOR THIS BUCKET 4
</TABLE>
<PAGE>
Schedule 4.8 - Titles and Leases
No items to schedule.
<PAGE>
Schedule 4.9 - Litigation
See also Schedules 4.21(a) and 4.21(b).
Ocean Systems
Sellers are presently aware of two pending suits:
Brown v. AlliedSignal, case no. 15826, filed in the Superior Court of the
State of California, County of Los Angeles, North Valley Judicial District
on May 28, 1996.
Tomlinson v. AlliedSignal, case no. BC 163670, filed in the Superior Court
of the State of California, County of Los Angeles, North Valley Judicial
District on May 23, 1997.
Sellers are presently aware of an international sales matter, which
Purchaser acknowledges having had the opportunity to discuss with Sellers'
counsel (voluntary disclosure #329, relating to sales to the government of
Greece and the United States).
ELAC
There is one contractual dispute related to a German Government contract.
ELAC intends to solve the dispute prior to January 21, 1998.
Contract Data:
Customer: BWB, Koblenz, Germany
Content: Development and delivery of 4 ea. Reflexducers
Date of Contract: 8/7/1995
Value: DM 712.5 k
Last Shipment: Dec. 1998
Current Status:
An agreement with the customer was settled on 5th November, 1997, to close
the contract end of December 1997 without shipment of transducers. ELAC agreed
to pay back 438 k DM of the total payment of 712.5 k DM that was received end of
1996. BWB accepts the development results.
Payback has to be transferred 30 days after written approval of BWB. ELAC
confirmed agreement in writing 7th of November, BWB approval expected in the
last week of December, 1997, payment to be released January 1998.
<PAGE>
Schedule 4.10 - Environmental Disclosure
The following documents, which have been delivered to Purchaser, are
incorporated herein by reference:
1. Environmental, Health and Safety Disclosure Document
AlliedSignal Ocean Systems, Sylmar, CA
Prepared for AlliedSignal Electronic Systems
June 30 to July 2, 1997
2. Phase I Environmental Site Assessment
15825 Roxford Street, Sylmar, CA
July 1997
3. Health, Safety and Environmental Disclosure AlliedSignal
Electronic Systems - ELAC Nautik GmbH
September 29, 1997
4. ELAC Environmental Disclosure Statement
Ocean Systems Permits
City of Los Angeles, Department of Building and Safety, Certificates of
Occupancy
Permit No.'s: LA76447/60 VN00435/73 VN50140/76
LA76448/60 LA64337/73 VN39348/76
VN92138/66 LA77430/73 VN89736/79
VN98941/66 VN16035/74 VN93597/79
LA72477/68 LAl6583/75 VN40476/82
LA72479/68 LAl6584/75 LA20231/85
VN87685/72 VN44208/76 VN98937/86
VN83102/72 VN41832176 VN15222/62
VN81765/72 VN43697/76 VN13124-62
VN968742/73 VN39986176
City of Los Angeles, Department of Building and Safety Water Conservation
Program Certificate of Compliance No. 310437
City of Los Angeles Fire Permit
Permit No.'s 777456-33/F/828
777456-331F/701
City of Los Angeles Office of the City Clerk, Tax and Permit Division
<PAGE>
Hazardous Material Certificate Renewal No. 587720-23/F/803
City of Los Angeles Certificates of Disclosure of Hazardous Substances
Account No. 587720-23/F/206
City of Los Angeles, Department of Building and Safety and Division of
Occupational Safety and Health of the State of California, Certificates of
Inspection and Permit to Operate Steam Boiler or Pressure Vessel
Permit No.'s AC09411
AC09412
AC4018
AC4019
AC4020
City of Los Angeles, Department of Public Works and Bureau of Sanitation,
Industrial Wastewater Permit
User No. IU000068
Permit No. W482195
City of Los Angeles, Department of Public Works and Bureau of Sanitation,
Industrial Waste Permit No. 482195
County of Los Angeles, Hazardous Waste License No. 103 453285
County of Los Angeles, Public Health License, SIC# 3699 13
South Coast Air Quality Management
District
Permit No.'s M35231 Spray Booth
M09716 Spray Booth
P19724 Bake Oven
D29049 Surface Prep. Tank
Application No.'s 327865 Spray Booth/UV Cure
327866 Degreaser
ELAC
ELAC approval to release waste water dated June 25, 1997
ELAC business and local licenses are listed in Schedule 4.17
See also Schedule 4.15.
<PAGE>
Schedule 4.11 - Benefit Plans and Policies
See also Schedule 6.6.
U.S. Pension, Savings and Stock Option Plans
Salaried Employees Pension Plan of AlliedSignal, Inc.
AlliedSignal, Inc. Pension Plan for Hourly Employees
AlliedSignal, Inc. Retirement Program
AlliedSignal, Inc. Supplemental Retirement Plan
AlliedSignal, Inc. Savings Plan
AlliedSignal, Inc. Thrift Plan
AlliedSignal, Inc. Supplemental Savings Plan
1993 Stock Plan for Employees of AlliedSignal, Inc. and its Affiliates
(option plan for certain managers)
U.S. Health and Welfare Plans
Medical-Managed Care-HCC-Salaried
Blue Cross/Blue Shield - Hourly
Dental Plan
Vision Plan-VSP-Salaried
Sick Days
Life Insurance
Group Universal Life Insurance
Long Term Disability (Salaried provided through pension plan)
Short Term Disability
Severance Plan
Drug Testing
Supplemental Unemployment Benefit per UAW Labor Agreement (hourly)
Personal Accident Insurance (voluntary)
Employment Laws in Germany and Agreements at ELAC
German Government Laws
Every employee must have insurance for:
Health
Unemployment
Pension (retirement)
o Daily working time is limited to 10 hours.
o Each employee is entitled to a minimum of 4 weeks vacation
annually.
o Significant restrictions apply to employee lay-offs, including,
without limitation, a 4 week minimum notice requirement prior to
lay-off and restrictions on layoffs for pregnant women and
employees over 56 years old.
<PAGE>
Wage and Salary Agreements
Agreements between the Metal and Electro Employer Association and the
German Metal Union cover the following:
Standard wages and salaries.
Amount of extra payment for Christmas (50% of monthly salary)
Amount of extra payment for holidays (30% of monthly salary)
Payment during illness (6 weeks)
Annual vacation time (6 weeks)
These agreements have the status of laws.
Company Agreements
There are additional agreements between Sellers and the ELAC work
council covering the following:
Daily and weekly working time
Working rules
Pension plan
Redundancy payment plan (severance)
Employers contribution plans (savings plan)
Other German Benefit Programs
ELAC Pension Plan
Worldwide AlliedSignal Stock Purchase Plan
Statutory German Health and Welfare Plans
Company Automobiles
U.S. Other Programs
Education Assistance
Holidays
Vacation
Student Loan Program
Matching Gifts
Savings Bonds
Credit Union
Employee Mortgage Program
Ride Sharing Incentives
Reward and Recognition
Financial Planning Seminars
Service Awards
Bereavement Pay
Family Leave
Military Pay
<PAGE>
Jury Duty
Adoption Assistance
Employee Assistance
Company Automobiles
Ocean Systems - Retention Agreements
o Retention Agreements with Key Management (V. Davisson, V. Riehl,
A. Logan, D. Dunlop, J. Roscigno, L. DiRienzo, M. Charley, B.
Smith, S. Erdman), aggregate contingent payment of $199,400
(Purchaser responsibility).
o Retention Agreement with Steve Schorer (AlliedSignal
responsibility)
ELAC - Employment Agreements
All ELAC employees have employment agreements including temporary employees
and Apprentices. Most employees have "standard" agreements
("Anstellungsvereinbarung"). As of November 1, 1997, there were 170 employees,
as follows:
Category Employment Agreement Form Number
-------- ------------------------- ------
Employees Standard 136
Temporary Temporary 3
Apprentices Apprentice 4
Managers AT- Individual 26
Senior Manager GT- Individual 1
The following individuals have "AT-Individual" agreements: Bjornsen, Bohn,
Bomhorst, Brundel, Bumbe, Diehl, Eigenbrod, Gumpel, Gnutzmann, Gorl, Heir, Holm,
Jordt, Knoop, Kuhn, Maschmann, Olden Gueg, Raether, Schaefer, Schultz, Seibkin,
Tietz, Timm, Westerbeck, Wieczorek, Ziegenbein. Dr. Luder Hogrefe has the
"GT-Individual" agreement.
The following individuals are parties to retention agreements with an
aggregate contingent payment of $108,200: Dr L Hogrefe, W. Tietz, G. Jordt
(Purchaser responsibility).
<PAGE>
Schedule 4.12 - Material Changes
Pre - Closing Committments
ELAC
ELAC and STN-ATLAS will sign a Teaming Agreement for the joint
development and marketing of a Mine Avoidance Sonar for Submarines
Ocean Systems
o Effective December 19, 1997, Ocean Systems is under contract with the
Turkish Navy to provide 4 AQS-l 8A dipping sonar systems plus spares,
ground support equipment and performance testing.
o Ocean Systems has an opportunity to propose a significant contract
with Egypt. In the event that OS moves forward to compete on that
contract, it is likely that OS will retain an in-country
representative and will sign a letter of intent with that
representative to retain post-contact award services which would
likely exceed $250,000.
o Additionally, Greece System 6 contract ($2.2M Sales value )
effectivity expected by December 31, 1997, and a $6 million booking is
expected on the TB-23 Refurbishment program.
o See also Schedule 4.7, containing recent contract information.
Pre-Closing Changes in Employment, Compensation and Benefits
ELAC
ELAC is covered by the "Tarifvertrag" of IG Metall Schleswig-Holstein.
This law covers all major employee issues such as salary, vacation,
illness, etc. The "Tarifvertrag" is valid for a certain time period and is
a topic of collective bargaining events between the Union and industrial
representatives. The basic salary is always an important topic for upcoming
negotiations. ELAC expects a salary increase of 2.5%, becoming effective on
the 1st of April 1998. This increase is covered within the 1998 ADP.
Recent Hirings - ELAC
ELAC expects to hire a replacement sales manager in December 1997
One additional marketing consultant was contracted in November 1997
Positions Currently Open at Ocean Systems
Sr. Transducer Engineer
Systems Engineer
Advanced Manufacturing Engineer (2)
Sr. Staff Electrical Desigzi Engineer (2)
<PAGE>
Sr. Mechanical Engineer
Program Manager
Planner, Sr.
Sr. Engineer - Tech
Process Lead - Towed Array
Manager, Contracts
Sr. Cost Control Analyst
Sr. Financial Analyst
Human Resource Generalist
<PAGE>
Schedule 4.14 - Compliance with Law
See Schedules 4.9, 4.10, 4.21(a) and 4.21(b).
<PAGE>
Schedule 4.15 - Consents
The following may not be assigned without the written consent of the
contracting party:
* Service Agreement #SEROOOO6, dated June 1, 1995, between AlliedSignal
and C.I.E.R.
Service Agreement #SEROOOO7, dated June 1, 1995, between AlliedSignal and
Sigma International
Memorandum of Agreement dated October 31, 1996, between AlliedSignal and
Celsius Tech Systems AB
Teaming Agreement dated February 11, 1997, between AlliedSignal and STN
Atlas PTY, Limited
The following may be terminated by either party upon the sale of the other
party:
Cooperation Agreement dated February 19, 1996, between AlliedSignal
and FIAR
The following may be assigned upon a sale of assets, but Lockheed Martin
Librascope Corp. must be notified of the assignment and sale of assets:
Teaming Agreement, dated May 31, 1996, by and between AlliedSignal and
Lockheed Martin Librascope Corporation.
*The lease between Honeywell and ELAC, dated March 31, 1994, may not be
assigned without the consent of Honeywell, which may not be unreasonably
withheld.
Any and all government contracts, U.S. or foreign, may not be assignable
without the consent of the government party.
Certain of the confidentiality agreements, software licenses, equipment
leases, and equipment service agreements listed on Schedule 4.6(a) may not
be assignable without the consent of the contracting party.
The export licences set forth on schedule 4.17 may not be assignable
without consent.
The permits, licenses, certificates and registrations referenced in
Schedules 4.10 and 4.17 may require action by the Buyer in the form of
notification, reapplication or otherwise, upon a change in ownership.
- ----------
* Material consent.
<PAGE>
Schedule 4.16 - ELAC Taxes
o Tax audit executed by the Tax Authorities of Kiel for the years 1989
through 1993. During the last tax audit, covering the period ending
December 31, 1993, the tax authorities made minor routine findings which
are not expected to have a significant impact in subsequent years. Years
after 1993 are still open but no specific tax exposure is known.
o ELAC is a party to the profit pooling agreement with AlliedSignal
Deutschland GmbH for the period 1995 to 1997.
o Annual audit of the General Ledger executed by Price Waterhouse for the
year 1996.
<PAGE>
Schedule 4.17 - Permits and Licenses
Ocean Systems - Permits
City of Los Angeles, Department of Building and Safety, Certificates of
Occupancy
Permit No.s: LA76447/60 VN00435/73 VNSOl4O/76
LA76448/60 LA64337/73 VN39348/76
VN92138/66 LA77430/73 VN89736/79
VN98941/66 VN16035/74 VN93597/79
LA72477/68 LA16583/75 VN40476/82
LA72479/68 LA16584/75 LA20231/85
VN87685/72 VN44208/76 VN98937/86
VN83102/72 VN41832/76 VN15222/62
VN81765/72 VN43697/76 VN13124-62
VN968742/73 VN39986/76
City of Los Angeles, Department of Building and Safety Water Conservation
Program Certificate of Compliance No. 310437
City of Los Angeles Fire Permit
Permit No.s 777456-33/F/701
777456-33/F/828
City of Los Angeles Office of the City Clerk, Tax and Permit Division
Hazardous Material Certificate Renewal No. 587720-23/F/803
City of Los Angeles Business Tax Registration Certificates
Cert. No.s 435532-82/L/190 Profs/Occupations
435532-82/L/167 Retail Sales
435532-82/L/166 Wholesale Sales
City of Los Angeles Certificates of Disclosure of Hazardous Substances
Account No. 587720-23/F/206
City of Los Angeles, Department of Building and Safety and Division of
Occupational Safety and Health of the State of California, Certificates of
Inspection and Permit to Operate Steam Boiler or Pressure Vessel
Permit No.s AC09411
AC09412
AC4018
AC4019
AC4020
<PAGE>
City of Los Angeles, Department of Public Works and Bureau of Sanitation,
Industrial Wastewater Permit
User No. IU000068
Permit No. W482195
City of Los Angeles, Department of Public Works and Bureau of Sanitation,
Industrial Waste Permit No. 482195
County of Los Angeles, Hazardous Waste License No. 103 453285
County of Los Angeles, Public Health License, SIC# 3699 13
South Coast Air Quality Management District
Permit No.s M35231 Spray Booth
M09716 Spray Booth
P19724 Bake Oven
D29049 Surface Prep. Tank
Application No.s 327865 Spray Booth/UV Cure
327866 Degreaser
Ocean Systems - Vessel Registrations
U.S. Department of Transportation and U.S. Coast Guard Certificates of
Documentation
Vessel Official Number
------ ---------------
3 Acres 600022
Sonar Queen 511517
Ocean Systems - Vehicle Registrations (License Plate Numbers)
1PXL24l 5A19782 2SDR083
2MRJ696 1FN4696 2S15252
25DR082 3BGKl8O 1J0E389
ELAC - Permit
Approval to release waste water, dated June 25, 1997
<PAGE>
Ocean Systems - Export Licenses
-------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Country Region License# Date Type Subtype Status Product System ELAC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Abu Dhabi Middle East T071358 8/16/93 Temporary Hardware Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Algeria N. Africa 454071 6/28/90 Technical Data Unclassified Expired AS AQS-18(V)l No
- ------------------------------------------------------------------------------------------------------------------------------------
Argentina S. America 707475 7/24/97 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Argentina S. America 612612 8/1/94 Technical Data Unclassified 4 years AS AQS-18(V)IA No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific 696980 4/4/97 Technical Data Unclassified Pending SSLF LFAPS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific 696980 4/4/97 Technical Data Unclassified 4 years SSLF LFAPS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific 684669 1/17/97 Technical Data Unclassified 4 years SSLF LFAPS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific C17445 10/25/95 Technical Data Classified 4 years TA TB-23 No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific 641004 9/20/95 Technical Data Unclassified 4 years SSLF LFATS No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific 622537 12/23/94 Technical Data Unclassified 4 years TA TB-23 No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific 579069 11/16/93 Technical Data Unclassified 4 years WPN LCAW No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific T069558 4/12/93 Temporary Hardware Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific T068072 12/23/92 Temporary Hardware Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific T067456 12/7/92 Temporary Hardware Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific 405452 5/2/89 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific 350699 10/23/87 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific 350699 10/23/87 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific 041582 10/5/77 Technical Data Unclassified Expired AS AQS-13E No
- ------------------------------------------------------------------------------------------------------------------------------------
Australia Asia/Pacific C04056 10/5/77 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Bahrain Middle East 659935 3/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Bahrain Middle East 568039 6/28/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Bahrain Middle East 568039 6/28/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Belgium Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Belgium Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Belgium Europe 618756 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Belgium Europe 568038 6/28/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Belgium Europe 568038 6/28/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Country Region License# Date Type Subtype Status Product System ELAC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Belgium Europe 450681 5/9/90 Technical Data Unclassified Expired WPN LCAW No
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil S. America 706261 7/24/97 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil S. America -- 7/14/97 Technical Data Unclassified Pending AS AQS-18(V)l Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil S. America AG 1322-96 2/6/97 TAA DSAM 10 years AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil S. America 647890 9/21/95 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil S. America 543038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)IA No
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil S. America 450834 5/24/90 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil S. America 450834 5/24/90 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil S. America 405450 5/2/89 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil S. America 344027 9/24/87 Technical Data Unclassified Expired AS AQS-18(V)l No
- ------------------------------------------------------------------------------------------------------------------------------------
Brunei Asia/Pacific 568037 7/12/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Brunei Asia/Pacific 568037 7/12/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Canada N. America C04640 Unknown Technical Data Classified Expired AS AQS-13E No
- ------------------------------------------------------------------------------------------------------------------------------------
Canada N. America C17445 10/25/95 Technical Data Classified 4 years TA TB-23 No
- ------------------------------------------------------------------------------------------------------------------------------------
Canada N. America 622537 12/23/94 Technical Data Unclassified 4 years TA TB-23 No
- ------------------------------------------------------------------------------------------------------------------------------------
Canada N. America 553757 2/22/93 Technical Data Unclassified Expired SURV ARCSSS No
- ------------------------------------------------------------------------------------------------------------------------------------
Canada N. America C012075 6/21/88 Technical Data Classified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Canada N. America C05342 4/23/79 Technical Data Classified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Chile S. America -- 7/21/97 Technical Data Unclassified Pending SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Chile S. America 679402 10/11/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Chile S. America 569850 7/22/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Chile S. America 569850 7/22/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Chile S. America 499932 8/28/91 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
China PRC Asia/Pacific 342257 8/27/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Colombia S. America 707475 7/24/97 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Colombia S. America 556072 4/1/93 Technical Data Unclassified Expired AS AQS-l8(V)IA No
- ------------------------------------------------------------------------------------------------------------------------------------
Denmark Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Denmark Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Denmark Europe 618752 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Denmark Europe 568038 6/28/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Denmark Europe 568038 6/28/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Country Region License# Date Type Subtype Status Product System ELAC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ecuador S. America 663624 3/13/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Ecuador S. America 651988 11/28/95 Technical Data Unclassified 4 years AS AQS-18(V)IA No
- ------------------------------------------------------------------------------------------------------------------------------------
Ecuador S. America 344027 9/24/87 Technical Data Unclassified Expired AS AQS-18(V)1 No
- ------------------------------------------------------------------------------------------------------------------------------------
Egypt Middle East T081685 8/27/96 Temporary Hardware 4 years ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Egypt Middle East 666411 3/14/96 Technical Data Unclassified 4 years SSLF SADS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Egypt Middle East 663626 3/13/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Egypt Middle East 543038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)IA No
- ------------------------------------------------------------------------------------------------------------------------------------
Egypt Middle East 480606 1/23/91 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Egypt Middle East 480606 1/23/91 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Egypt Middle East 344235 8/14/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Finland Europe 337560 8/14/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
France Europe 641139 7/12/95 Technical Data Unclassified 4 years AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
France Europe 641139 7/12/95 Technical Data Unclassified 4 years AS AQS-18(V)IA No
- ------------------------------------------------------------------------------------------------------------------------------------
France Europe 618752 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes
- ------------------------------------------------------------------------------------------------------------------------------------
France Europe 559494 4/30/93 Technical Data Unclassified Expired CMSR ADO EX-l1 No
- ------------------------------------------------------------------------------------------------------------------------------------
France Europe C012678 5/2/89 Technical Data Classified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
France Europe 356157 1/19/88 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
France Europe T043212 6/1/87 Temporary Hardware Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 703020 5/5/97 Technical Data Unclassified 4 years ASLF HELRAS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 693546 2/19/97 Technical Data Unclassified 4 years MWF EMD Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 693546 2/19/97 Technical Data Unclassified 4 years MWF LMHS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe T082205 9/25/96 Temporary Hardware 4 years AS XDUCER Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe T07895C 10/17/95 Temporary Hardware 4 years AS XDUCER Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe AG 124-95C 6/6/95 MLA ELAC 10 years AS AQS-18 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe AG 124-95C 6/6/95 MLA ELAC 10 years AS AQS-18(V) Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe AG 124-95C 6/6/95 MLA ELAC 10 years AS AQS-18A Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe AG 124-95C 6/6/95 MLA ELAC 10 years ASLF HELRAS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe AG 124-95C 6/6/95 MLA ELAC 10 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe AG 124-95C 6/6/95 MLA ELAC 10 years SSLF SADS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 620446 2/14/95 Technical Data Unclassified 4 years SSLF Sonar 90 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Country Region License# Date Type Subtype Status Product System ELAC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Germany Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 618756 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe T072207 11/3/93 Temporary Hardware Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 551381 1/6/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 551381 1/6/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 551381 1/6/93 Technical Data Unclassified Expired MWF SLS No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 533052 7/16/92 Technical Data Unclassified Expired WPN LCAW No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 522678 3/3/92 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 522678 3/3/92 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 450681 5/9/90 Technical Data Unclassified Expired WPN LCAW No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 408204 4/26/89 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 356157 1/19/88 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 318506 1/12/87 Technical Data Unclassified Expired ASLF XDUCER No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 318505 10/31/86 Technical Data Unclassified Expired ASLF XDUCER No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe CO11096 10/20/86 Technical Data Classified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe C010909 8/27/86 Technical Data Classified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 306318 8/26/86 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 300089 5/5/86 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 200603 6/14/83 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe C07892 3/31/82 Technical Data Classified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe C07473 10/19/81 Technical Data Classified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe 136259 4/21/81 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Germany Europe C04056 10/5/77 Technical Data Classified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Greece Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Greece Europe 622832 1124/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Greece Europe 618752 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Greece Europe 568038 6/28/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Greece Europe 568038 6/28/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Greece Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Greece Europe 405451 4/19/89 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Country Region License# Date Type Subtype Status Product System ELAC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Greece Europe 397934 1/10/89 Technical Data Unclassified Expired AS AQS-18(V)6 No
- ------------------------------------------------------------------------------------------------------------------------------------
Greece Europe 356156 1/19/88 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Greece Europe 344235 8/14/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
India Asia/Pacific 344238 8/7/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
India Asia/Pacific 191510 2/24/83 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
India Asia/Pacific T023031 3/22/82 Temporary Hardware Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Indonesia Asia/Pacific 543038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Indonesia Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Indonesia Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Indonesia Asia/Pacific 405450 5/2/89 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
Indonesia Asia/Pacific 296001 5/9/86 Technical Data Unclassified Expired AS AQS-18(V)3 No
- ------------------------------------------------------------------------------------------------------------------------------------
Israel Middle East 713415 9/12/97 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Israel Middle East 344235 8/14/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Israel Middle East 165784 4/15/82 Technical Data Unclassified Expired AS AQS-13E No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe 707479 7/24/97 Technical Data Unclassified 4 years AS AQS-18A Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe AG 496-96 7/26/96 MLA FIAR 10 years AS AQS-18 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe AG 496-96 7/26/96 MLA FIAR 10 years AS AQS-l8(V) Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe AG 496-96 7/26/96 MLA FIAR 10 years AS AQS-18A Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe AG 496-96 7/26/96 MLA FIAR 10 years ASLF HELRAS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe 674284 7/12/96 Technical Data Unclassified 4 years ASLF HELRAS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe 641314 9/20/95 Technical Data Unclassified 4 years SSLF LFATS No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe T078240 7/19/95 Temporary Hardware 4 years ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe T077737 6/9/95 Temporary Hardware 4 years ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe 618756 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)lA No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe T067349 10/1/92 Temporary Hardware Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe 450834 5/24/90 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe 450834 5/24/90 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe C013453 11/17/89 Technical Data Classified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe 405451 4/19/89 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Country Region License# Date Type Subtype Status Product System ELAC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Italy Europe 341967 8/12/87 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe T032482 12/10/84 Temporary Hardware Expired AS AQS-13F No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe 162852 5/27/82 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe Unknown 3/10/82 Technical Data Classified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Italy Europe C04856 10/2/78 Technical Data Classified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Japan Asia/Pacific 703026 7/11/97 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Japan Asia/Pacific 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Japan Asia/Pacific 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)lA No
- ------------------------------------------------------------------------------------------------------------------------------------
Japan Asia/Pacific 405452 5/2/89 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
Japan Asia/Pacific 399819 1/24/89 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Japan Asia/Pacific 396862 10/29/88 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Japan Asia/Pacific 396862 10/29/88 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Japan Asia/Pacific 383356 9/19/88 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Japan Asia/Pacific 123720 1/26/80 Technical Data Unclassified Expired AS AQS-13E No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific 703026 7/11/97 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific 694217 2/6/97 Technical Data Unclassified 4 years AS AQS-18A Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific 584759 12/20/93 Technical Data Unclassified 4 years TA SQR-19 No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific T071257 8/3/93 Temporary Hardware Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific T069585 5/3/93 Temporary Hardware Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific T068073 3/24/93 Temporary Hardware Expired AST AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific 551512 1/25/93 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific 547067 12/2/92 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific 543038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific 405452 5/2/89 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific 347285 9/30/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific 335191 6/15/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Korea Asia/Pacific 196264 6/9/83 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Kuwait Middle East 707480 5/15/97 Technical Data Unclassified Pending AS AQS-18A Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Kuwait Middle East 700687 4/8/97 Technical Data Unclassified 4 years ASLF HELRAS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Country Region License# Date Type Subtype Status Product System ELAC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Kuwait Middle East 659935 3/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Kuwait Middle East 641140 7/12/95 Technical Data Unclassified 4 years AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Kuwait Middle East 641140 7/12/95 Technical Data Unclassified 4 years AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Kuwait Middle East 568039 6/28/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Kuwait Middle East 568039 6/28/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Malaysia Asia/Pacific 682259 10/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Malaysia Asia/Pacific 579069 11/16/93 Technical Data Unclassified 4 years WPN LCAW No
- ------------------------------------------------------------------------------------------------------------------------------------
Malaysia Asia/Pacific 543038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Malaysia Asia/Pacific 422198 8/31/89 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Malaysia Asia/Pacific 422198 8/31/89 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Malaysia Asia/Pacific 344233 9/24/87 Technical Data Unclassified Expired As AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Morocco N. Africa 707478 7/24/97 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Morocco N. Africa 543038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Morocco N. Africa 467183 9/27/90 Technical Data Unclassified Expired AS AQS-l8(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Nato HQ NATO 318505 1/12/87 Technical Data Unclassified Expired ASLF XDUCER No
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands Europe 662765 3/21/96 Technical Data Unclassified 4 years ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands Europe 618756 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands Europe 568038 6/28/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands Europe 568038 6/28/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands Europe 357187 11/24/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands Europe 165784 4/15/82 Technical Data Unclassified Expired AS AQS-13E No
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands Europe C04056 10/5/77 Technical Data Classified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
New Zealand Asia/Pacific 568040 7/12/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
New Zealand Asia/Pacific 568040 7/12/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
New Zealand Asia/Pacific 559491 5/10/93 Technical Data Unclassified Expired AS AQS-18(V)lA No
- ------------------------------------------------------------------------------------------------------------------------------------
Nigeria N. Africa 139824 6/3/81 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Norway Europe 707474 8/18/97 Technical Data Unclassified 4 years TA TBE Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Norway Europe 641314 9/20/95 Technical Data Unclassified 4 years SSLF LFATS No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Country Region License# Date Type Subtype Status Product System ELAC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Norway Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Norway Europe 618752 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Norway Europe T074459 6/13/94 Temporary Hardware 4 years SSLF SADS No
- ------------------------------------------------------------------------------------------------------------------------------------
Norway Europe 533052 7/16/92 Technical Data Unclassified Expired WPN LCAW No
- ------------------------------------------------------------------------------------------------------------------------------------
Norway Europe 389416 8/26/88 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Norway Europe 389416 8/26/88 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Norway Europe 356157 1/19/88 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Norway Europe C04856 10/2/78 Technical Data Classified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Oman Middle East 622177 10/4/95 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Oman Middle East 597362 5/27/94 Technical Data Unclassified 4 years SSLF SADS No
- ------------------------------------------------------------------------------------------------------------------------------------
Oman Middle East 537957 9/1/92 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Oman Middle East 537957 9/1/92 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Oman Middle East 537957 9/1/92 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Pakistan Asia/Pacific 418823 5/9/89 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Pakistan Asia/Pacific 418823 5/9/89 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Pakistan Asia/Pacific 405450 5/2/89 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
Pakistan Asia/Pacific 380693 9/9/88 Technical Data Unclassified Expired AS AQS-18(V)3 No
- ------------------------------------------------------------------------------------------------------------------------------------
Pakistan Asia/Pacific 344028 6/19/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Pakistan Asia/Pacific 227320 9/24/84 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Peru S. America 707481 8/21/97 Technical Data Unclassified 4 years AS AQS-18A Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Peru S. America 658908 3/21/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Peru S. America 662443 3/13/96 Technical Data Unclassified 4 years AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Peru S. America 405450 5/2/89 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
Peru S. America 344027 9/24/87 Technical Data Unclassified Expired AS AQS-18(V)l No
- ------------------------------------------------------------------------------------------------------------------------------------
Philippines Asia/Pacific 568037 7/12/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Philippines Asia/Pacific 568037 7/12/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal Europe 618756 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal Europe T072026 10/22/93 Temporary Hardware Expired AST AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal Europe 568038 6/28/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Country Region License# Date Type Subtype Status Product System ELAC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Portugal Europe 568038 6/28/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal Europe 530482 4/14/92 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal Europe 530482 4/14/92 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal Europe 405451 4/19/89 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal Europe 367625 2/8/88 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal Europe 143053 7/15/81 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Qatar Middle East 659935 3/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Saudi Arabia Middle East 707480 5/15/97 Technical Data Unclassified Pending AS AQS-18A Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Saudi Arabia Middle East 673977 8/27/96 Technical Data Unclassified 4 years ASLF HELRAS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Saudi Arabia Middle East 659935 3/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Saudi Arabia Middle East 572591 7/1/93 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Saudi Arabia Middle East 568039 6/29/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Saudi Arabia Middle East 568039 6/29/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Singapore Asia/Pacific 682259 10/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Singapore Asia/Pacific T077151 2/16/95 Temporary Hardware 4 years ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Singapore Asia/Pacific 616626 9/13/94 Technical Data Unclassified 4 years ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Singapore Asia/Pacific 579069 11/16/93 Technical Data Unclassified 4 years WPN LCAW No
- ------------------------------------------------------------------------------------------------------------------------------------
Singapore Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Singapore Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Singapore Asia/Pacific T045433 11/9/87 Temporary Hardware Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Singapore Asia/Pacific 344233 9/24/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Singapore Asia/Pacific 227322 9/24/84 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Spain Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Spain Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Spain Europe 618756 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Spain Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)lA No
- ------------------------------------------------------------------------------------------------------------------------------------
Spain Europe 450834 5/24/90 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Spain Europe 450834 5/24//90 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Spain Europe 436195 2/16/90 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
Spain Europe 423778 9/18/89 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Country Region License# Date Type Subtype Status Product System ELAC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Spain Europe 394948 10/13/88 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Spain Europe 371131 3/11/88 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Spain Europe 357187 11/24/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Spain Europe 165784 4/15/82 Technical Data Unclassified Expired AS AQS-13E No
- ------------------------------------------------------------------------------------------------------------------------------------
Sweden Europe T081685 8/27/96 Temporary Hardware 4 years ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Sweden Europe 654582 8/15/96 Technical Data Unclassified 4 years TA YS2000 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Sweden Europe 641313 9/20/95 Technical Data Unclassified 4 years SSLF LFATS No
- ------------------------------------------------------------------------------------------------------------------------------------
Sweden Europe 394942 10/31/88 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Sweden Europe 394942 10/31/88 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Sweden Europe 356158 1/19/88 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Taiwan Asia/Pacific -- 7/30/97 Technical Data Unclassified Pending SSTD SLQ-25B Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Taiwan Asia/Pacific 679403 2/5/97 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Taiwan Asia/Pacific 640109 8/4/95 Technical Data Unclassified 4 years AS AQS-18(V)3 No
- ------------------------------------------------------------------------------------------------------------------------------------
Taiwan Asia/Pacific T068073 3/24/93 Temporary Hardware Expired AST AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Taiwan Asia/Pacific 5443038 10/30/92 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Taiwan Asia/Pacific 413670 3/31/89 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Taiwan Asia/Pacific 413670 3/31/89 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Taiwan Asia/Pacific 398329 11/14/88 Technical Data Unclassified Expired AS AQS-18(V)3 No
- ------------------------------------------------------------------------------------------------------------------------------------
Taiwan Asia/Pacific 288454 3/11/86 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Taiwan Asia/Pacific 215206 3/8/84 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Taiwan Asia/Pacific 196265 6/21/83 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Taiwan Asia/Pacific 161678 7/14/82 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Thailand Asia/Pacific 694217 2/6/97 Technical Data Unclassified 4 years AS AQS-18A Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Thailand Asia/Pacific 682259 10/4/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Thailand Asia/Pacific 637851 5/26/95 Technical Data Unclassified 4 years SSLF SADS No
- ------------------------------------------------------------------------------------------------------------------------------------
Thailand Asia/Pacific 543038 10/30/92 Technical Data Unclassified Expired AS QS-l8(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Thailand Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
Thailand Asia/Pacific 413671 6/15/89 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Thailand Asia/Pacific 344233 9/24/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
Thailand Asia/Pacific 227321 9/24/84 Technical Data Unclassified Expired AS AQS-18 No
- ------------------------------------------------------------------------------------------------------------------------------------
Turkey Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Country Region License# Date Type Subtype Status Product System ELAC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Turkey Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Turkey Europe 618752 12/16/94 Technical Data Unclassified 4 years TA B-T-P Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Turkey Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
Turkey Europe 456852 6/29/90 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Turkey Europe 456852 6/29/90 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Turkey Europe 405451 4/19/89 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
Turkey Europe 344235 8/14/87 Technical Data Unclassified Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
UAE Middle East 647889 10/13/95 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
UAE Middle East 637849 8/4/95 Technical Data Unclassified 4 years SSLF SADS No
- ------------------------------------------------------------------------------------------------------------------------------------
UAE Middle East 568039 6/28/93 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
UAE Middle East 568039 6/28/93 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
UAE Middle East 550980 1/21/93 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 658925 1/23/96 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe C17445 10/25/95 Technical Data Classified 4 years TA TB-23 No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 617076 2/14/95 Technical Data Unclassified 4 years SSLF Sonar 2087 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 622832 1/24/95 Technical Data Unclassified 4 years TA SQR-19 Yes
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 622537 12/23/94 Technical Data Unclassified 4 years TA TB-23 No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 607252 7/7/94 Technical Data Unclassified 4 years SSLF Sonar 2087 No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe T071358 8/16/93 Temporary Hardware Expired AS AQS-18(V) No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 559130 5/18/93 Technical Data Unclassified Expired TA B-T-P No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 543037 10/22/92 Technical Data Unclassified Expired AS AQS-18(V)1A No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 533052 7/16/92 Technical Data Unclassified Expired WPN LCAW No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 468501 10/16/90 Technical Data Unclassified Expired FO FO Array No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 455675 6/1/90 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 450681 5/9/90 Technical Data Unclassified Expired WPN LCAW No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe T053927 8/16/89 Temporary Hardware Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe C012679 8/8/88 Technical Data Classified Expired SSTD SSTD No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe C012021 3/3/88 Technical Data Classified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 356157 1/19/88 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 350682 11/23/87 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 350696 10/27/87 Technical Data Unclassified Expired MWF AQS-17 No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Country Region License# Date Type Subtype Status Product System ELAC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
UK Europe 350696 10/27/87 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe Various 7/9/86 Temporary Hardware Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 207510 12/8/83 Technical Data Unclassified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe 165784 4/15/82 Technical Data Unclassified Expired AS AQS-13E No
- ------------------------------------------------------------------------------------------------------------------------------------
UK Europe C04056 10/5/77 Technical Data Classified Expired ASLF HELRAS No
- ------------------------------------------------------------------------------------------------------------------------------------
Venezuela S. America 707475 7/24/97 Technical Data Unclassified 4 years SSLF LFATS Yes
- ------------------------------------------------------------------------------------------------------------------------------------
Venezuela S. America 450834 5/24/90 Technical Data Unclassified Expired MWF EMD No
- ------------------------------------------------------------------------------------------------------------------------------------
Venezuela S. America 450834 5/24/90 Technical Data Unclassified Expired MWF LMHS No
- ------------------------------------------------------------------------------------------------------------------------------------
Venezuela S. America 405450 5/2/89 Technical Data Unclassified Expired AS AST No
- ------------------------------------------------------------------------------------------------------------------------------------
Venezuela S. America 344027 9/24/87 Technical Data Unclassified Expired AS AQS-18(V)1 No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
ELAC - Export Licenses
----------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
4.1.2 EXPORT LICENSES Status: Sep. 30. 1997
- ---------------------------------------------------------------------------------------------------------
No. Validity Consignee Goods Value DM
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DE/253 7046 27.12.97 Wilton-Fijenoord Sonar Spares 1.075.000,00
Schiedam/Netherlands
for export Taiwan
- ---------------------------------------------------------------------------------------------------------
DE/264 8651 21.01.98 Defence Procurement Agency Underwater Telephone 443.200,00
Seoul, Rep. of Sudkorea UT 2000
- ---------------------------------------------------------------------------------------------------------
DE/264 8654 11.02.98 Hollandse Signaalapparaten BV Sonar Cables 231.015,00
Hengelo/Netherlands
for export Taiwan
- ---------------------------------------------------------------------------------------------------------
DE/253 7049 14.02.98 Merkaz Aspaka Spares for Echosounder 8.596,00
Tel Aviv/Israel VE 59
- ---------------------------------------------------------------------------------------------------------
DE/264 8660 12.03.98 Chilean Navy Spares for Echosounder 144.679,81
Taleahauno/Chile VE 59
- ---------------------------------------------------------------------------------------------------------
DE/264 8659 17.03.98 Naval Headquarters Spares for Echosounder 68.239,30
India VE 59
- ---------------------------------------------------------------------------------------------------------
DE/253 7044 24.04.99 Marinha Repair of Dipping Sonar up to
Almada/Portugal 1.500.000,00
- ---------------------------------------------------------------------------------------------------------
DE/253 7021 29.10.98 Ministeria de Defensa Armada Repair of Dipping Sonar up to
Spain 200.000,00
- ---------------------------------------------------------------------------------------------------------
DE/253 7036 14.03 .99 AlliedSignal Aerospace Spares for Echosounder up to
Canada VE 59 1.500.000,00
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DE/203 7050 07.07.99 Hellenic Navy Spares for Echosounder 107.344,00
Piraeus / Greece VE 59
- ------------------------------------------------------------------------------------
DE/264 8662 10.09.99 ORCA Instrumentation Diver Sonar DSE 1 909.829,40
Brest / France
- ------------------------------------------------------------------------------------
<CAPTION>
ELAC - Vehicle Registrations
- ----------------------------
----------------------------------------------------------------------
Kfz-Kennzeichen Fabrer KSt. Nr. des Kfz-Briefes
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 K1-DC409 EX 710
- ------------------------------------------------------------------------------------
2 K1-AS554 EX 710
- ------------------------------------------------------------------------------------
3 K1-AS908 EX 710 BB810307
- ------------------------------------------------------------------------------------
4 K1-AS885 EX 710 BB805514
- ------------------------------------------------------------------------------------
5 K1-DA605 Dr.L.Hogrefe 210
- ------------------------------------------------------------------------------------
6 K1-AS 760 G.Jordt 210 BB849466
- ------------------------------------------------------------------------------------
7 K1 - AS 403 W. Tietz 300 BB847854
- ------------------------------------------------------------------------------------
8 K1-A5105 H.-J.Maschmann 400 BB911508
- ------------------------------------------------------------------------------------
9 K1-AS121 EX 710
- ------------------------------------------------------------------------------------
Erprobungsschiff MS "Skjoldnaes"
- ------------------------------------------------------------------------------------
</TABLE>
ELAC - Business and Local Licenses
- ----------------------------------
ELAC business and local licenses are listed on the following pages.
<PAGE>
ELAC - Vessel Registrations
- ---------------------------
ELAC vessel registrations are provided on the following pages.
<PAGE>
L.O.A. .......................... 11.600
F.G.O. .......................... .285
A.G.O. .......................... .450
L.B.G. .......................... 10,865
F.F. ............................ 1.450
F.A. ............................ 1.000
G.S.D.f. ........................ 0.310
G.S.D.a ......................... 0.115
F.S.F.D. ........................ 0.060
A.S.F.D. ........................ 0.02/2
G.D. ............................
y ...............................
F.O.C. .......................... 0.249
A.O.C. .......................... 0
L ............................... 10.616
B ............................... 4.000
Q.B.D. .......................... 1.380
F.D. ............................ 1.600
t ............................... 0.045
F.M.D. .......................... 0.740
F.F.D. .......................... 0.980
D. .............................. 2.053
Draft
excl. Centre board ___________________
Draft
Centre boatd down ____________________
Mast height
To height point
of measurement 16.050
Rating Formula for Measured Rating
L(square root)S
M.R. - 0.15 --------------- + 0.2(L + (square root) S)
(square root) of BD
SAIL AREA
FORETRIANGLE Sq.M.
Height I 12.10 Base J. 6.10
Penalty Penalty 0.550 Meas'd 34.515
Allowance 0.945 Area
I. cor. J cor. 5.705
MAINSAIL (MIZZEN of W'BONE KETCH)
b. 7.400 p 14.650 Meas'd 54.205
h ..... d ...... g ........ Area
TOPSAIL I ....... p-h ...... Meas'd ......
Area
MIZZEN b miz .... p miz .... bs ... Meas'd ......
h miz.... d miz .... g miz .... ps ... Area
WISHBONE KETCH ) BETWEEN MASTS
SCHOONER )
Meas'd
ps .............. bs ....... ps ...... Area ......
Meas'd ......
Other Areas .......................... Area
Measured Sail Area (M.S.A.) .......Sum 88.720
A.R.A. 10.093 Rated Sail Area (S.) 70.893
(square root) S...................... 8.420
Mast height Penalty..................
Sum
MEASURED RATING ...................... 8.485
Length of Bowsprit ................... 2.500
Penalities are carried on ..........................
....................................................
SCANTLINGS
All Dimensions are mm
Main Frames of Oak Scantlings or )
) 110.0
Thickness (if metal) sizes of angles )
Intermediate Frames of Oak Scantlings or )
) 50.0
Reversed Frames, thickn. sizes of angles )
Reinforcement or addt. Scantlings or )
Frames or Stringers of ) .......
sizes of angles )
Dock Beams of Oak
Scantlings or )
Thickness (if metal) ) 50.0
sizes of angles )
Topslides of Teak Thickness 0.045 M
Deck of Teak Thickness 0.045 M
W 6.156 R.D.B. 0.5. BK 0.225
STABILITY ALLOWANCE
Scantling Component.............. 16.057
Shallow Draft Component..........
Iron Ballast Component...........
Wt. Of Engine Component.......... 2.060
Sum 18.119
Light Alloy Mast Component.......
S.T.A. 18.119 Difference
If Positive, STA corrected....... 9.506%
<PAGE>
Schedule 4.19 - Labor Relations
See also Schedules 4.11, 4.19(x).
Ocean Systems
- -------------
Collective Bargaining Agreements
--------------------------------
Local Agreement between AlliedSignal Government Electronic Systems,
Sylmar, Ca., and UAW Local No. 179, dated May 3, 1995
Master Agreement between Divisions of AlliedSignal, Inc. and UAW,
dated May 3, 1995
Supplemental Agreement between AlliedSignal Government Electronic
Systems, Sylmar, Ca. and UAW Local No. 179, dated March 4, 1995
Letters of Understanding No.s 1-35, covering Supplemental Agreement
dated May 4, 1995
Written Personnel Policies
--------------------------
Employee Handbook for Employees Covered Under the Master Bargaining
Agreement
Salaried Employee Handbook
Retention Agreements
--------------------
Retention Agreements with key management, V. Davisson, V .Riehl, A.
Logan, D. Dunlop, J. Roscigno, L. DiRienzo, M. Charley, B. Smith, S.
Erdinan), aggregate contingent payment of $199,400 for all eight
managers.
ELAC
ELAC is covered by the "Tarifvertrag" of IG Metafl Schleswig-Holstein. This
law covers all major employee issues such as salary, vacation, illness, etc. The
"Tarifvertrag" is valid for a certain time period and is a topic of collective
bargaining events between the Union and industrial representatives.
Collective Bargaining Agreements
--------------------------------
Gu1tige Betriebsvereinbarungen
------------------------------
<TABLE>
<CAPTION>
Nr. Betreff Tag des
Inkrafttretens
<S> <C> <C>
6/79 Interne Richtlinien fur innerbetriebliche
Stellanausschreibungen 01.01.80
1/83 Storzeiten-Erfassungsgeiite an den CNC-Maschinen 01.03.83
1/89 Bildschirm-Arbeitsplatze 12.10.89
1/90 Vorholzeiten 01.04.90
3/90 Schichtzulagen 25.06.90
</TABLE>
<PAGE>
2/95 Zeiterfassungssystem "Zepem" 01.03.95
3/95 Arbeitszeitabsenkung 01.09.95
4/95 Neuregelung der Arbeitszeit ab 01.10.95 25.09.95
5/95 Einrichtung eines Arbeitszeitkontos fir die Verteilung der
regelmaiBigen wochentlichen Arbeitszeit 01.10.95
7/95 Gleitende Arbeitszeit 01.11.95
8/95 Arbeitszeit der Auszubildenden 01.11.95
1/96 IUK-Nutzung BDE 15.07.96
2/96 Vorholzeiten und arbeitsfreie Tage 1997 07.11.96
3/96 Einrichtung einer flexiblen Arbeitszeitregelung 01.12.96
01/97 Betriebliches Vorschlagswesen 01.09.97
Written Personnel Policies
--------------------------
Handbuch fur Mitarbeiter, dated May 26, 1997
Retention Agreements
--------------------
Retention Agreements with key management (L. Hogrefe, W. Tietz, G.
Jordt), aggregate contingent payment of $108,200 for all three
managers (Purchaser responsibility).
Labor Strikes, Slowdowns or Work Stoppages - ELAC
-------------------------------------------------
No significant strikes have taken place in the past five years. Only
two hours work stoppage in 1993-1995.
Liabilities for Severance Pay - ELAC
------------------------------------
Lay off payment in 1997 DM 271.285,--
liability for 1998 DM 251,660,--
Layoffs - ELAC
--------------
1993 7
1994 15
1995 27
1996 14
1997 12
All layoffs beginning in 1994 were in accordance with the Honeywell ELAC
Social Plan provided in the data room.
Ocean Systems
-------------
1997 Incentive Compensation has not been paid in full. Prior years~
incentive compensation was deferred at employee's request.
Payments for vested, non-exercised stock options remain outstanding.
<PAGE>
Schedule 4.19(x) - Labor Relations
See also Schedule 4.19.
Layoffs - ELAC
--------------
1993 7
1994 15
1995 27
1996 14
1997 12
All layoffs beginning in 1994 were in accordance with the Honeywell ELAC
Social Plan provided in the data room.
Ocean Systems
-------------
A production facility in Vista, California was closed effective June, 1997.
Involuntary RIF's occurred on the following dates:
June 23, 1993 November 5, 1993 March 4, 1993 March 1, 1993
July 1995 August 1995 January 1, 1996 February 1996
July 1996 October 1996
Voluntary RIF's occurred on the following dates:
September 1996 November 1996 June 1997 August 1997
See also Local Agreement and Master Agreement between AlliedSignal and the
UAW, Article III, Paragraph 21 & 22, Representation of the UAW Master Agreement,
provided in data room.
<PAGE>
Schedule 4.21(a) - Government Contracts
Sellers are presently aware of an international sales matter, which
Purchaser acknowledges having had the opportunity to discuss with Sellers'
counsel (voluntary disclosure #329, relating to sales to the government of
Greece and the United States).
A dispute relating to the Maritime Coastal Defense Vessel involving the
Canadian Navy has recently been settled.
There is one contractual dispute related to a German Government contract.
ELAC intends to solve the dispute prior to January 21, 1998.
Contract Data:
Customer: BWB, Koblenz, Germany
Content: Development and delivery of 4 ea. Reflexducers
Date of Contract: 8/7/1995
Value: DM 712.5 k
Last Shipment: Dec. 1998
Current Status:
An agreement with the customer was settled on 5th November, 1997, to close
the contract end of December 1997 without shipment of transducers. ELAC agreed
to pay back 438 k DM of the total payment of 712.5 k DM that was received end of
1996. BWB accepts the development results.
Payback has to be transferred 30 days after written approval of BWB. ELAC
confirmed agreement in writing 7th of November, BWB approval expected in the
last week of December, 1997, payment to be released January 1998.
See also Schedules 4.9 and 4.21(b).
<PAGE>
Schedule 4.21(b) - Government Contracts
See also Schedule 4.21(a).
Investigations or Audits - Ocean Systems
- ----------------------------------------
AlliedSignal Government Compliance Assurance report dated October 27, 1997.
Al1iedSignal Internal Audit Sell-Side Due Diligence Review of Ocean Systems in
connection with the proposed sale of the Business (Summer 1997) (no written
report prepared, except as reflected in Schcdule 4.4.).
An Estimating System Audit was performed by DCAA in November 1997 and a draft
report has been delivered to Ocean Systems.
The Sylmar site is subject to DCAA audits and fact finding in connetion
with all forward pricing rate proposals, contract proposals and contract awards
with the US Government.
The only unusual costs which have not yet been approved for forward pricing
rate purposes for the Sylmar site include the Vista, California facility closure
severance payments; the 1996 Sylmar Involuntary RIF severance payments and the
1994 earthquake expenses.
ELAC
Cost estimate audit of hourly pay rates and estimation rates executed by the
Federal Authorities for Defense and Procurement (German Government) in Koblenz
for the year 1997
Actual cost audit and audit of various cost plus contracts executed by the State
Authorities for economy, Technology and Traffic of the State of
Schleswig-Holstein for the years prior to 1995.
<PAGE>
Schedule 4.21(c) - Government Contracts
See Schedules 4.21(a) and 4.21(b).
<PAGE>
Schedule 4.21(d) - Government Contracts
See Schedules 4.21(a) and (b).
<PAGE>
Schedule 4.21(e) - Government Contracts
See Schedules 4.21(a) and (b).
<PAGE>
Schedule 4.22 - Government Furnished Euuinment
See following pages.
<PAGE>
<TABLE>
<CAPTION>
PROPERTY ADMINISTRATOR WORKSHEET
DCRL SUP 1 TO DLAM 8135.1 DCRL FORM 098
PRIME CONTRACTS
- ------------------------------------------------------------------------------------------------------------------------------------
Contractor CAGE: 60225 Allied Signal Ocean Systems As of Date: 03/03/97 Page :1
- ------------------------------------------------------------------------------------------------------------------------------------
Estimated Total Value Special Other Agency Indust Material
Control Number Completion Government Special Test Plant Peculiar Plant
Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
N00019-97-C-008 821 LI 550 250 21 SDC, AWM-24B
----------------------------------------------------------------------------------------------------
FP $967,601 $ 148373 684284 134944
- ------------------------------------------------------------------------------------------------------------------------------------
N00024-84-C-6074 352 LI 305 47 TB-23
----------------------------------------------------------------------------------------------------
FP $216,167 $ 65269 150898
- ------------------------------------------------------------------------------------------------------------------------------------
N00024-85-C-6236 207 LI 21 186 TB-23,BQ ASA
----------------------------------------------------------------------------------------------------
FP $920,305 $ 39323 880982
- ------------------------------------------------------------------------------------------------------------------------------------
N00024-89-G-6098 2 LI 2 TARC
----------------------------------------------------------------------------------------------------
FP $3,775 $ 3775
- ------------------------------------------------------------------------------------------------------------------------------------
N00024-89-C-6066 48 LI 46 2 ADC MK3
----------------------------------------------------------------------------------------------------
FP $43,551 $ 41431 2120
- ------------------------------------------------------------------------------------------------------------------------------------
N00383-88-G-K301 446 LI 307 139 Q13B
----------------------------------------------------------------------------------------------------
FP $ 84488 275242
- ------------------------------------------------------------------------------------------------------------------------------------
N00024-94-C-6152 LI ADC MK3
----------------------------------------------------------------------------------------------------
FP $
- ------------------------------------------------------------------------------------------------------------------------------------
Total LI 1229 626 21 0 0 0 0
----------------------------------------------------------------------------------------------------
Total $ $378,884 1,997,301 134,944 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
GRAND TOTAL LINE ITEMS 1876 GRAND TOTAL $$ 2,511,129
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PROPERTY ADMINISTRATOR WORKSHEET
DCRL SUP 1 TO DLAM 8135.1 DCRL FORM 098
PRIME CONTRACTS
- ------------------------------------------------------------------------------------------------------------------------------------
Contractor CAGE: 60225 Allied Signal Ocean Systems As of Date: 03/03/97 Page :2
- ------------------------------------------------------------------------------------------------------------------------------------
Estimated Total Value Special Other Agency Indust Material
Control Number Completion Government Special Test Plant Peculiar Plant
Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
N00019-92-G-0195 30 LI 30 Q13-F
----------------------------------------------------------------------------------------------------
FP $24,672 $ 24672
- ------------------------------------------------------------------------------------------------------------------------------------
N00024-C-6501 34 LI 34 Q13-F R/M
----------------------------------------------------------------------------------------------------
FP $13,227 $ 13227
- ------------------------------------------------------------------------------------------------------------------------------------
LI
----------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
----------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
----------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
----------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
----------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
Total LI 64 0 0 0 0 0 0
----------------------------------------------------------------------------------------------------
Total $ 37,899 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
GRAND TOTAL LINE ITEMS 64 GRAND TOTAL $$ 37,899
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PROPERTY ADMINISTRATOR WORKSHEET
DCRL SUP 1 TO DLAM 8135.1 DCRL FORM 098
PRIME CONTRACTS
- ------------------------------------------------------------------------------------------------------------------------------------
Contractor CAGE: 60225 Allied Signal Ocean Systems As of Date: 03/03/97 Page :3
- ------------------------------------------------------------------------------------------------------------------------------------
Estimated Total Value Special Other Agency Indust Material
Control Number Completion Government Special Test Plant Peculiar Plant
Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LI
----------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
----------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
----------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
----------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
----------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
----------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
----------------------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
Total LI 0 0 0 0 0 0 0
----------------------------------------------------------------------------------------------------
Total $ 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
GRAND TOTAL LINE ITEMS 0 GRAND TOTAL $$ 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PROPERTY ADMINISTRATOR WORKSHEET
DCRL SUP 1 TO DLAM 8135.1 DCRL FORM 098
PRIME CONTRACTS
- ------------------------------------------------------------------------------------------------------------------------------------
Contractor CAGE: 60225 Allied Signal Ocean Systems As of Date: 03/03/97 Page :4
- ------------------------------------------------------------------------------------------------------------------------------------
Estimated Total Value Special Other Agency Indust Material
Control Number Completion Government Special Test Plant Peculiar Plant
Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
Total LI 1293 626 21 0 0 0 0
----------------------------------------------------------------------------------------------------
Total $ 416783 1997301 134944 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
GRAND TOTAL LINE ITEMS 1940 GRAND TOTAL $$ 2,549,028
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PROPERTY ADMINISTRATOR WORKSHEET
DCRL SUP 1 TO DLAM 8135.1 DCRL FORM 098
PRIME CONTRACTS
- ------------------------------------------------------------------------------------------------------------------------------------
Contractor CAGE: 60225 Allied Signal Ocean Systems As of Date: 03/03/97 Page :4
- ------------------------------------------------------------------------------------------------------------------------------------
Estimated Total Value Special Other Agency Indust Material
Control Number Completion Government Special Test Plant Peculiar Plant
Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
Total LI 1357 626 21 0 0 0 0
----------------------------------------------------------------------------------------------------
Total $ 454682 1997301 134944 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
GRAND TOTAL LINE ITEMS 2004 GRAND TOTAL $$ 2,586,927
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PROPERTY ADMINISTRATOR WORKSHEET
DCRL SUP 1 TO DLAM 8135.1 DCRL FORM 098
PRIME CONTRACTS
- ------------------------------------------------------------------------------------------------------------------------------------
Contractor CAGE: 60225 Allied Signal Ocean Systems As of Date: 03/03/97 Page :4
- ------------------------------------------------------------------------------------------------------------------------------------
Estimated Total Value Special Other Agency Indust Material
Control Number Completion Government Special Test Plant Peculiar Plant
Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
LI
---------------------------------------------------------------------------------------
$
- ------------------------------------------------------------------------------------------------------------------------------------
Total LI 2650 1252 42 0 0 0 0
----------------------------------------------------------------------------------------------------
Total $ 871465 3994602 269888 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
GRAND TOTAL LINE ITEMS 3944 GRAND TOTAL $$ 5,135,955
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S><C>
4-JUN-97
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE
Tool Number Location/Vendor Loc Date PM Date Cal
- --------------- -------------------- ----------- ----------- -----
T218510 F2A 03/07/97 07/12/96 N
T218511 F2A 03/10/97 07/12/96 N
T218512 F3F 02/17/92 07/15/96 N
T218515 F3A 03/10/97 07/15/96 N
T218516 F2A 03/10/97 07/12/96 N
T218518 F2A 03/10/97 07/12/96 N
T218520 F2F 03/10/970 07/15/96 N
T2186527-1 C6C REPR 06/29/93 07/09/96 N
T218527-2 C6C 05/31/96 05/31/96 N
T218527-3 C6C 05/31/96 05/31/96 N
T218527-4 C6C REPR 06/29/93 07/09/96 N
T218527-5 CICON ENG 03/25/97 06/11/96 N
T218527-6 C6C 12/18/95 07/09/96 N
T218527-7 C6C REPR 07/09/96 07/09/96 N
T2186741 C5B 03/09/92 07/01/96 N
T2186742 C5B 03/09/92 07/01/96 N
T218675A/B C7E5 02/24/92 07/10/96 N
T218676 C7E4 02/24/92 07/10/96 N
T218677 C7E9 02/26/92 07/10/96 N
Page: TOOL MASTER
Customer: USN
Tool Description Part Number Qty Unit Cost Rework Tot. Cost
------------------------------ ----------------- ----- ------------ ----------- --------------
CABLE BOARD P7 3326505-402 2 411 822
CABLE BOARD P8 3326505-403 2 418 826
CABLE BOARD J1 3326501-401 1 729 729
3326505-401
CABLE BOARD J5 3326501-404 2 118 236
CABLE BOARD J5 3326501-405 2 155 310
CABLE BOARD J7 3326501-407 2 422 844
CABLE BOARD, A37 PWR ASSY 3326501-409 2 244 488
FIXTURE, ENCLOSURE ASSY 3013475-1-801 1 987 987
3326501-801
FIXTURE, ENCOLSURE ASSY 3326501-801 1 987 987
8013475-1-801
FIXTURE, ENCOLSURE ASSY 8013475-1-801 1 987 987
3326501-801
FIXTURE, ENCOLSURE ASSY 801375-1-801 1 987 987
3326501-801
FIXTURE, ENCOLSURE ASSY 8013475-1-001 1 987 987
3326501-801
FIXTURE, ENCOLSURE ASSY 8013475-1-801 1 987 987
3326501-801
FIXTURE, ENCOLSURE ASSY 3326501-801 1 987 987
8013475-1-801
TEMPLATE 3322114-1 1 52 52
TEMPLATE 3322114-2 1 52 52
TEMPLATE 3320165-1 1 379 379
ROUTER PLATE 3320165-1 1 240 240
TEMPLATE 3320165-2 1 135 135
<PAGE>
T218678 C7E7 02/26/92 07/10/96 N ROUTER PLATE 3320165-2 1 20 20
T218679 C6E22 02/24/92 07/09/96 N PANTO MASTER 3320162 1 117 117
T218680 C6E22 02/24/92 07/09/96 N PANTO MASTER 3320162 1 435 435
T218681 C6E22 02/24/92 07/09/96 N PANTO MASTER 3320162 1 328 328
T218682 C5B 03/09/92 07/01/96 N TEMPLATE 3320184-5 1 69 69
3320184-6
T218683 C6E7 02/21/92 07/09/96 N TEMPLATE 3320184-1 1 547 647
T218684 C5B 03/09/92 07/01/96 N DRILL TEMPLATE 3320142 1 326 326
T218685 C6E7 02/21/92 07/09/96 N DRILL TEMPLATE 3310793 1 1084 1064
T218686 C5B 03/09/92 07/01/96 N DRILL TEMPLATE 3310794 1 739 739
T218687-A F3F 02/10/92 07/15/96 N CABLE BOARD 3320250 1 707 707
T218687-B F3F 02/10/92 07/15/96 N CABLE BOARD 3320250 1 707 707
T218687-C F2B 02/10/92 07/12/96 N CABLE BOARD, XFMR REV C 3320250-403 1 707 707
T218688 C5B 03/09/92 07/01/96 N DRILL PATTERN 3322018 1 1025 1025
T218689 C8E14 02/24/92 07/09/96 N DRILL PATTERN 3320164-1 1 532 532
T218690 C8E15 02/24/92 07/09/96 N ROUTER BLOCK 3320164-1 1 278 276
T218691 C8E13 02/24/92 07/09/96 N ROUTER BLOCK 3320184-1 1 258 258
T218692 C8E8 02/21/92 07/09/96 N ROUTER BLOCK 3320184-2 1 191 191
T218693 C8E8 02/21/92 07/09/96 N ROUTER BLOCK 3320184-3 1 103 103
T218694 C8E18 02/24/92 07/09/96 N ROUTER BLOCK 3320184-5 1 285 255
3320184-6
T218695 C8E10 02/24/92 07/09/96 N ROUTER BLOCK (2 PC SET) 3322015 1 136 136
T218696 C7E9 02/24/92 07/10/96 N DRILL TEMP 3320248 1 295 295
<PAGE>
4-JUN-97
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number
- ----------- ---------------- ---------- ----------- ----- ----------------- -----------------
218697 C7E9 02/24/92 07/10/96 N DRILL TEMP 3320249
218698 C5B 03/09/92 07/01/96 N SAWADRILL TEMP 3320259
218699 C5B 03/09/92 07/01/96 N DRILL TEMP 3320259
218700 C5B 03/10/92 07/01/96 N DRILL TEMP 3320257
218701 C5B 03/10/92 07/01/96 N DRILL TEMP 3320255
218702 C7E3 02/10/92 07/10/96 N DRILL TEMP 3322033
218703 C6E12 02/24/92 07/09/96 N WALES TEMP 3320254-2
218704 C6E10 02/24/92 07/09/96 N WALES TEMP 3320254-4
218705 C6E16 02/24/92 07/09/96 N ROUTER PLATE 3320254-3
218706 C6E16 02/24/92 07/09/96 N HOLE TEMP 3320254-2
218707 C7F 07/10/96 07/10/96 N DRILL TEMP 3322039-1
218708 C4A 02/10/92 06/27/96 N NCL TAPE 3320254-1
218709 C8E16 02/24/92 07/09/96 N TEMPLATE 3320164-1
218710 C5B 03/10/92 07/01/96 N TEMPLATE 3320164-2
218711 C4A 02/18/92 06/27/96 N NCL TAPE 3322039-1
218712 C5B 03/10/92 07/01/96 N TEMPLATE 3322015
218713 C6E23 02/24/92 07/09/96 N ENGRAVE PLATE 3320254-1
218714 C5B 03/10/92 07/01/96 N TEMPLATE 3320164-3
218747 C5B 03/10/92 07/01/96 N WALES TEMP 3310763
218751 C6E5 05/17/93 07/09/96 N TEMPLATE 3320197-1
3320197-2
02/24/92 ROUTER PLATE 3320197-2
3320197-1
218753 C5B 03/10/92 07/01/96 N PMF TEMPLATE 3322093
218757 C7E10 02/26/92 07/10/96 N TEMPLATE 3320166-1
218758 C5B 03/10/92 07/01/96 N TEMPLATE 3320166-2
218759 C5B 03/10/92 07/01/96 N TEMPLATE 3320168
Page: TOOL MASTER
Customer: USN
Qty Unit Cost Rework Tot. Cost
----- ------------- ----------- ---------------
1 244 244
1 87 87
1 122 122
1 70 70
1 267 267
1 848 848
1 331 331
1 405 405
1 355 355
1 1190 1190
1 591 591
1 1590 1590
1 1029 1029
1 103 105
1 709 709
1 80 66
1 103 103
1 103 103
1 202 202
1 256 258
1 167 167
1 ?? ??
1 540 540
1 85 85
1 53 53
1 128 128
<PAGE>
218760 C5B 03/10/92 07/01/96 N TEMPLATE 3320171 1 49 49
218772A/B C6E17 02/24/92 07/09/96 N TEMPLATE 3320165-4 1 192 192
3320165-3
218773 C5B 03/10/92 07/01/96 N TEMPLATE 3320165-5 1 179 179
218774 C5B 03/10/92 07/01/96 N TEMPLATE 3320165-6 1 63 63
218775 C5B 03/10/92 07/01/96 N TEMPLATE 3320164-2 1 60 60
218776 C5B 03/10/92 07/01/96 N TEMPLATE 3320164-4 1 149 149
218777 C5B 03/10/92 07/01/96 N TEMPLATE 33204014 1 66 66
218778 C5B 03/10/92 07/01/96 N TEMPLATE 3320193 1 50 50
218779 C5B 03/10/92 07/01/96 N TEMPLATE 3322037 1 119 119
218780 C5B 03/10/92 07/01/96 N TEMPLATE 3310766 1 75 75
218781 MECH-TRONICS 02/11/81 04/27/93 N CHASSIS TOOLING 3320502 1 6000 6000
218783 C6E7 02/21/92 07/09/96 N DRILL TEMP 3320242 1 75 75
218784 C6E7 02/21/92 07/09/6 N ROUTE PLATE 3320242 1 155 155
218791 C7E10 02/26/92 07/10/96 N TEMPLATE 3320167 1 99 99
218796 C5B 07/22/94 07/01/96 N ROUTER BLOCK 3310776 1 99 99
218797 C5B 03/10/92 07/01/96 N TEMPLATE 3320188 1 86 86
218799 C5B 03/10/92 07/01/96 N TEMPLATE 3320172-1 1 135 135
218800 C5B 03/11/92 07/01/96 N TEMPLATE 3320173 1 102 102
218801 F3C 02/11/92 07/15/96 N CABLE BOARD 3322050 1 511 511
218809 F2B 02/10/92 07/12/96 N CABLE BOARD, W10 3822061 1 1173 1173
218810 F2B 02/10/92 07/12/96 N CABLE BOARD, W13 3322062 1 109 109
218814 C5B 03/11/92 07/01/96 N TEMPLATE 3322039-2 1 75 75
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description
- -------------- ------------------ ----------- ----------- ----- ---------------------------
T218815 C6E15 02/24/92 07/09/96 N TEMPLATE
T218818 C5B 03/11/92 07/01/96 N TEMPLATE
T218819 C5B 03/11/92 07/01/96 N TEMPLATE
T218820 C5B 01/03/94 07/01/96 N DRILL TEMPLATE
T218821 C6E14 02/24/92 07/09/96 N ROUTER PLATE
T218822 C5B 03/11/92 07/01/96 N DRILL TEMPLATE
T218823 C5B 03/11/92 07/01/96 N DRILL & ROUTER FIXTURE
T218824 C5B 03/11/92 07/01/96 N DRILL TEMPLATE
T218825 C5B 03/11/92 07/01/96 N DRILL TEMPLATE
T218826 C5B 05/25/94 07/01/96 N DRILL & ROUTER FIXTURE
T218827 C5B 03/11/92 07/01/96 N DRILL & ROUTER FIXTURE
T218828 C5B 03/01/93 07/01/96 N DRILL TEMPLATE
T218829 C5B 10/29/93 07/01/96 N PUNCH/DIE FIXTURE
T218831 C5B 03/11/92 07/01/96 N TEMPLATE
T218833 C5B 03/11/92 07/01/96 N DRILL TEMPLATE
T218839 C6E6 05/25/94 07/09/96 N TEMPLATE
T218840 C5B 08/30/92 07/01/96 N TEMPLATE
T218841 C5B 10/08/92 07/01/96 N TEMPLATE
T218842 C4A 10/25/92 06/27/96 N STRIPPIT TAPE, W115-1, -2
T218843 C5B 03/11/92 07/01/96 N TEMPLATE
T218844 ?? 04/14/93 07/01/96 N TEMPLATE
T218845 C5B 01/28/93 07/01/96 N TEMPLATE
T218847 C5B 03/11/92 07/01/96 N DRILL TEMPLATE
T218848 C5B 03/01/93 07/01/96 N FORM DIE
T2188531 TOWSON 04/26/94 09/13/96 N SOLDER FIXTURE
T218854 F2B 02/10/92 07/12/96 N HARNESS BOARD, W52
Part Number Qty Unit Cost Rework Tot. Cost
-------------- ----- ------------- ----------- ---------------
332239-3 1 75 75
3320254-3 1 75 75
3320254-9 1 75 75
3316024-2 1 171 171
3316024-1
3316023 1 195 195
3316023 1 142 142
3316022 1 182 182
3315902 1 145 145
3315959 1 222 222
3315913 1 245 245
3315929 1 486 436
3316036 1 92 92
3315896 1 519 519
3320184-3 1 0 0
3316022 1 169 169
3326468 1 192 192
3326506-3 1 112 112
3326506-2 1 69 69
3326506-1 1 1356 1356
3325184-4 1 0 0
3326471 1 23 23
3318136 1 129 129
3318133 1 155 155
3318132 1 641 641
20 155 3100
3322052 1 112 112
<PAGE>
T218856 F3F 02/17/92 07/15/96 N HARNESS BRD 3320170-405 1 2741 18 2759
T218857 F3C 02/11/92 07/15/96 N HARNESS BRD 3320160-401 1 1295 1295
T218858 F2B 02/10/92 07/12/96 N HARNESS BRD 3320160-402 1 714 714
T218859 F3F 02/18/92 07/15/96 N HARNESS BRD, J18 3320160-404 1 445 446
T218860 F3C 02/11/92 07/15/96 N HARNESS BRD, P16A, 6B, 7A, 7B 3320160-405 1 522 522
T218861 F3C 02/11/92 07/15/96 N HARNESS BROAD 3320170-402 1 4315 4315
T218862 F2B 02/10/92 07/12/96 N HARNESS BRD 3320160-405 1 657 657
T218863 F2B 02/10/92 07/12/96 N HARNESS BRD, K1 (1/8) 3320160-407 1 848 483
T218865 9855A 09/04/85 08/08/95 N HARNESS BRD, K1 (7/12) 3326468 1 1031 1031
T218870 F3F 02/17/92 07/18/95 N LOUVER DIE 3322056 1 1737 1737
T218871 F2C 02/11/92 07/12/96 N HARNESS BOARD 3322557 1 224 224
T218872 F2C 02/11/92 07/12/96 N HARNESS BOARD 3322559 1 221 221
T218873 F3C 02/11/92 07/15/96 N HARNESS BOARD 3322083-407 1 1455 1455
T218874 F3C 02/11/92 07/15/95 N HARNESS BOARD 3322053 1 545 545
T218875 F2C 02/11/92 07/12/96 N HARNESS BOARD 3322054 1 450 450
T218876 F2C 02/11/92 07/12/96 N HARNESS BOARD 3322055 1 109 109
T218877 C4B 03/11/92 06/28/96 N HOLDING FIXT 3320169 1 842 842
T218878 C7E12 02/26/92 07/10/96 N TEMPLATE 3322089-6 1 150 150
T218880 C6E11 08/03/94 07/09/96 N TEMPLATE B/P REV A 3326488-1 1 238 238
T218881 C6E15 08/03/94 07/09/96 N ROUTING FIXTURE B/P REY A 3326488-1 1 248 248
T218882 C6E11 08/21/94 07/09/96 N TEMPLATE B/P REV A 3326484-1 1 152 152
T218883 C6E19 08/07/94 07/09/96 N TEMPLATE B/P REV A 3326484-2 1 73 73
T218884 C6E11 08/19/94 07/09/96 N ROUTING FIXUTURE B/P REV A 3326488-2 1 337 337
<PAGE>
4-JUN-97 TOOL MASTER Page:
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
218885 C6E11 08/03/94 07/09/96 N TEMPLATE B/P REV A 33256488-2 1 178 178
218887 C6E9 10/17/94 07/09/96 N SCREEN, METAL MARKING 3326500 1 170 170
3326505
218890-1 C4A OOS 06/07/94 06/27/96 Y GAGE, HEIGHT, MFG REV A 3320400 1 22 22
218890-2 TOWSON 05/05/94 05/05/94 Y GAGE, HEIGHT, MFG REV A 3326400 1 22 22
218891-1 TOWSON 05/05/94 05/05/94 Y GAGE, HEIGHT, INSP REV A 3326400 1 22 22
218891-2 C4A OOS 05/20/94 06/27/96 Y GAGE, HEIGHT , INSP REV A 3326400 1 22 22
218892-1 C4A OOS 06/26/94 06/27/96 Y HEIGHT GAGE 3326455 1 169 169
218892-2 C4A OOS 03/17/95 06/27/96 Y HEIGHT GAGE 3326455 1 169 169
218893-1 C4A OOS 06/06/94 06/27/96 Y HEIGHT GAGE 3326455 1 104 104
218893-2 C4A OOS 08/06/94 06/27/96 Y HEIGHT GAGE 3326455 1 104 104
218894-1 C4A OOS 06/06/94 06/27/96 Y HEIGHT GAGE 3326475 1 153 153
218894-2 C4A OOS 08/06/94 06/27/96 Y HEIGHT GAGE 3326475 1 153 153
218895-1 C4A OOS 06/06/94 06/27/96 Y INSP HEIGHT GAGE REV A 3326475 1 228 228
218895-2 C4A OOS 06/06/94 06/27/96 Y INSP HEIGHT GAGE REV A 3326475 1 228 228
218896-1 C4A OOS 11/15/94 06/27/96 Y HEIGHT GAGE 3326465 1 169 169
218896-2 C4A OOS 12/05/94 06/27/96 Y HEIGHT GAGE 3326465 1 169 169
218897-1 C4A OOS 06/06/94 06/27/96 Y HEIGHT GAGE 1 316 316
218897-2 C4A OOS 06/06/94 06/27/96 Y HEIGHT GAGE 3326465 1 316 316
218898 C5B 10/19/93 07/01/96 N TEMPLATE 3326483-1 1 116 116
218899 C5B 06/07/94 07/01/96 N TEMPLATE 3326483-2 1 166 165
218990-1 D6F POS ?? 08/23/96 Y GAGE, LEAD, PROTUSION ?? 1 76 76
218992-2 D6F POS ?? 08/23/96 Y GAGE, LEAD, PROTUSION 3326500 1 76 76
218904 C5B 03/11/92 07/01/96 N LEAD CUT PLATE 3326500 1 654 654
218905 C5B 03/11/92 07/01/96 N LEAD CUT PLATE 1 646 646
218909-1 D6F POS 02/14/97 07/15/96 N PLUGGING FIXT, P7 & P8 3326505-302 1 117 117
218909-2 D6F POS 02/14/97 07/15/96 N PLUGGING, FIXT, P7 & P8 3326505-302 1 117 117
218910 F2C 02/11/92 07/12/96 N HARNESS BOARD 3320170-401 1 30 36
218919 F2C 02/11/92 07/12/96 N CABLE BOARD 3322063-405 1 1007 1007
218920 C5B 10/06/92 07/01/96 N WEALES TEMPLATE 3326498-1 1 128 128
218921 D6F 08/23/95 07/15/96 N COMP PREP BRD, R29 & R30 3310776-601 1 109 109
3310775-1 1
218929 TOWSON 04/26/94 09/13/96 N COMP PREP FIXTURE REV A 1 255 255
219028 C6A 03/03/92 07/08/96 N DRILL FIXT 3325371-3 1 215 215
219029 C6A 03/03/92 07/08/96 N ROUTE FIXT 3325371-3 1 215 215
219030 C6A 03/03/92 07/08/96 N DRILL FIXT 3325372-4 1 215 215
219031 C6A 03/03/92 07/08/96 N ROUTE FIXT 3325372-4 1 215 215
219032 C6A 03/03/92 07/08/96 N ROUTE FIXT 3325370-2 1 215 215
219033 C6A 03/03/92 07/08/96 N DRILL FIXT 3325370-2 1 215 215
219036-1 9852B 06/17/96 06/17/96 N ESP HARNESS FIXTURE 3325501-001 1 1076 1076
219038-2 C4D 12/18/95 06/28/96 N ESP HARNESS FIXTURE 3325501-001 1 1076 1076
219051 D6F POS 02/14/97 07/10/96 N SOLDER FIXT 2 245 18 4320
219052 9852B 02/24/95 09/20/96 N NUT DRIVER 3315005 1 4 4
219117-1 C4A OOS 12/04/92 06/27/96 Y QA HEIGHT GAGE 3326515 1 171 171
219117-2 C4A OOS 12/04/92 06/27/96 Y QA HEIGHT GAGE 3326515 1 171 171
219135-3 9852B 03/17/96 06/17/96 N ALIGN TOOL, A33 INTERCONN 3326501 1 148 148
219135-4 9852B 06/17/96 06/17/96 N ALIGN TOOL, A33 INTERCONN 3326501 1 148 148
219135-5 9852B 06/17/96 06/17/96 N ALIGN TOOL, A33 INTERCONN 3326501 1 148 148
219135-6 9852B 06/17/96 06/17/96 N ALIGN TOOL, A33 INTERCONN 3326501 1 148 148
219136-3 9852B 06/18/96 06/18/96 N ALIGN TOOL, A31, 32 3326501 1 144 144
INTERCONN
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T219136-4 9852B 06/18/96 06/18/96 N ALIGN TOOL, A31, 32 INTERCN 3326501 1 144 144
T219136-5 9852B 06/18/96 06/18/96 N ALIGN TOOL, A31, 32 INTERCN 3326501 1 144 144
T219136-6 9852B 06/18/96 06/18/96 N ALIGN TOOL, A31, 32 INTERCN 3326501 1 144 144
T219153-1 9852B 06/12/96 06/12/96 N ESP WIRING FIXT FRT PNL 1 179 179
T219153-2 9852B 06/12/96 06/12/96 N ESP WIRING FIXT FRT PNL 1 179 179
T219153-3 9852B 07/15/96 06/14/96 N ESP WIRING FIXT FRT PNL 1 179 179
T219189 F3F 02/18/96 07/15/96 N PREP BOARD, REV B 3326501-804 1 167 167
T219471 C6A 03/03/96 07/08/96 N WALES TEMP 3312344-1 1 127 127
T219472 C6A 03/03/92 07/08/96 N WALES TEMP 3312339-1 1 127 127
T219473 C7E13 03/02/92 07/10/96 N WALES TEMP 3312346-1 1 475 475
T219474 C6A 03/04/92 07/08/96 N DRILL TEMP 3312346-2 1 212 212
T219475 C7E13 03/02/92 07/10/96 N WALES TEMP 3312346-1 1 410 96 556
T219476 C6E24 02/24/92 07/09/96 N WALES TEMP 3312346-2 1 171 171
T219477 C6A 03/03/92 07/08/96 N WALES TEMP 3312346-3 1 65 85
T219478 C6A 03/03/92 07/08/96 N WALES TEMP BRKT 3312346-4 1 86 86
T219479 C6A 03/03/92 07/08/96 N DRILL FIXT 3312346-5 1 277 277
T219480 C6E24 02/24/92 07/09/96 N WALES TEMP 3312344-1 1 487 487
T219481 C6A 03/04/92 07/08/96 N WALES TEMP 3312344-2 1 127 127
T219482 C6A 03/03/92 07/08/96 N WALES TEMP 3312344-3 1 88 88
T219483 C6A 03/03/92 07/08/96 N WALES TEMP 3312344-4 1 106 106
T219484 C6A 03/04/92 07/08/96 N DRILL FIXT 3312344-1 1 44 44
T220182A ?? 08/13/92 07/01/96 N DRILL TEMP R/S ITEM 1 8014431 1 265 265
T220182B ?? 08/13/92 07/01/96 N DRILL TEMP R/S ITEM 1 8014431 1 274 246 414
T220182C C4E 08/13/96 07/01/96 N DRILL TEMP ITME 3 8014431 1 239 239
T220182D C4E 08/13/96 07/01/96 N TEMP BKSD CTCUT ITEM 1 8014431 1 265 265
T220182E C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 5 8014431 1 304 304
T220182F C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 6 8014431 1 183 183
T220182G C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 2 8014431 1 161 41 202
T220182H C4E 08/13/96 07/01/96 N TEMP CUTOUT ITEM 2 8014431 1 187 187
T220182J C4E 08/13/96 07/01/96 N DRILL TEMP ITEMS 9 & 10 8014431 1 204 189 393
T220182K C4E 08/13/96 07/01/96 N DRILL TEMP ITEMS 2 8014431 1 135 54 199
T220182L C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 3 & 7 8014431 1 174 174
T220182M C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 3 & 8 8014431 1 174 174
T220182N C4E 08/13/96 07/01/96 N DRILL TEMP R /S ITEM 1 8014431 1 134 134
T220182P C4E 08/13/96 07/01/96 N DRILL TEMPLATE 8014431 1 136 136
T220182R C4E 08/13/96 07/01/96 N DRILL TEMPLATE 8014431 1 262 262
T220182S C4E 08/13/96 07/01/96 N DRILL TEMPLATE 8014431 1 262 262
T220182T C4E 08/13/96 07/01/96 N WALES TEMP 8014431-13 1 234 234
T220182U C4E 08/13/96 07/01/96 N DRILL TEMPLATE 8014431 1 234 234
T220183A C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 1 8016664 1 483 483
T220183B C4E 08/13/96 07/01/96 N DRILL TEMP, ITEM 1 8016664 1 186 136
T220183C C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 1 8016664 1 70 70
T220183E C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 3 8016664 1 392 392
T220183F C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 2 8016664 1 225 184 330
T220183G C4E 08/13/96 07/01/96 N DRILL TEMPLATE 8016664-6 1 320 320
T220183H C4E 08/13/96 07/01/96 N DRILL TEMPLATE 8016664-A6 1 207 207
T220184A C4E 08/13/96 07/01/96 N DRILL TEMP ITEM 4 8016683 1 395 395
T220184B C4E 08/13/96 07/01/96 N DRILL TEMP L/S ITEM 1 8016683 1 157 157
T220184C C4E 08/13/96 07/01/96 N DRILL TEMP L/S ITEM 1 8016683 1 448 448
T220184D C4E 08/13/96 07/01/96 N DRILL TEMP L/S ITEM 1 8016683 1 152 152
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
220191 F3B 03/10/97 05/31/96 N HARNESS BRD, PANEL MATRIX 8014470-400 1 1026 1026
220192 F3B 03/10/97 05/31/96 N HARNESS BOARD, J1 CONN 8014470-401 1 572 572
220193 F3B 03/10/97 07/10/96 N HARN ESS BRD, J2 CONN REV B 8014470-402 1 788 223 1011
220194 F2B 03/10/97 05/31/96 N HARNESS BRD, J3 CONN REV B 8014470-403 1 808 218 1026
221095 F3C 03/10/97 05/31/96 N HARNESS BOARD, J4 CONN 8014470-404 1 2223 2223
220196 F2B 03/10/97 05/31/96 N HARNESS BOARD, J5 CONN 8014470-405 1 56 56
220198 CICON ENG 04/30/96 04/30/96 N HARNESS BRD, FACE PLATE 8016659-401 1 207 267
220199 F3C 03/10/97 05/31/96 N HARNESS BRD, P1 REV C 8016720-401 1 1190 437 1627
220200 F3C 03/10/97 05/31/96 N HARN BRD, XA1 & TB1 REV A 8016720-402 1 1805 158 1463
220201 F2B 03/10/97 07/15/96 N HARNESS BOARD, T2, REV B 8016720-403 1 567 320 887
220203 CICON ENG 04/30/96 04/30/96 N HARNESS BRD, J3 8015660-403 1 683 683
220205 F3C 03/10/97 05/31/96 N HARNESS BRD, PANEL 8016665-401 1 657 657
220206 F2B 03/10/97 07/15/96 N HARNESS BRD, 31 8016665-402 1 634 634
220207 C6A 03/04/92 07/08/96 N WALES TEMPLATE 3310737 1 704 704
220209 C6A 03/04/92 07/08/96 N PUNCH TEMPLATE 8016697 1 252 252
220214 C6A 03/04/92 07/08/96 N DRILL/ROUTING TEMPLATE 3103843 1 509 509
220221 F3C 03/10/97 07/15/96 N HARN BRD, PATCH PNL 8016600-402 1 1694 1594
220222 F3C 03/10/97 05/31/96 N HARN BRD, P16 & P17 8016600-404 1 1551 1551
220223 F3C 03/10/97 05/31/96 N HARN BRD, P14 & P15 REV B 8016600-405 1 1930 68 1998
220224 F2B 03/10/97 07/15/96 N HARN, TEST POINT PANEL 8014440-402 1 2091 282 2373
220225 F2B 03/10/97 05/31/96 N ?? 8015660-401 1 1090 14 1204
220226 ?? ?? 05/31/96 N ?? ?? 1 ?? ?? 1225
220227 F3F 05/21/96 05/31/96 N HARN, BRD, FRNT PNL REV B ?? 1 1739 135 1074
220233 F2B 03/10/97 07/15/96 N HARN BRD, TB2 THRU TB33 8014440-401 1 1567 1567
220234 F3E 05/31/96 05/11/96 N HARN BRD, FRONT PANEL 8014440-403 1 639 639
220235 TOWSON 04/21/94 09/13/96 N CONN LEAD TRIM FIXT REV A 3324070 1 2613 2613
3328485
220235A-1 TOWSON 04/21/97 09/13/96 N CONN LEAD TRIM PLT REV A 1 0 0
220235A-2 TOWSON 04/21/94 09/13/96 N CONN LEAD TRIM PLT REV A 1 0 0
220235B-1 TOWSON 04/21/94 09/13/96 N CON N LEAD TRIM PLT REV A 1 0 0
220235B-2 TOWSON 04/21/94 09/13/96 N CONN LEAD TRIM PLAT REV A 1 0 0
220237 F3C 03/10/97 05/31/96 N HARN BRD/P14A, P14B, P15 8014770-403 1 1993 1993
220238 F3C 03/10/97 05/31/96 N HARN BRD, P16A & P16B 8014771-412 1 1635 1635
220239 C7E22 09/09/96 06/25/96 N DRILL TEMPLATE, FRAME 8016750 1 591 591
220240 C7E28 09/09/96 06/25/96 N DRILL TEMPLATE, FRAME 8016750 1 632 632
220241 C7E18 09/09/96 06/25/96 N DRILL TEMP, RIGHT SIDE 8016750 1 413 413
220243 CICON ENG 07/10/96 05/31/96 N HARND BRD, J1 & J2 REV A 8016705-401 1 531 531
220244 CICON ENG 08/22/96 05/31/96 N HARN BRD, J3 REV B 8016705-403 1 212 155 367
220245 CICON ENG 08/22/96 05/31/96 N HARN BRD, J4 REV NC 8016705-404 1 266 266
220246 F2C 03/10/97 07/15/96 N HARN BRD, P1 8016705-402 1 207 207
220247 CICON ENG 08/22/96 05/31/96 N HARN BRD, LAY-INREV NC 8016705-406 1 531 531
220248 C7E24 01/16/97 05/24/96 N WIRING FIXT, XDCR TEST 8016705 1 1351 486 1837
220249 F2C 03/10/97 05/31/96 N HARN BRD, CHASSIS LAYIN 8014470-415 1 322 322
220253 F2C 03/10/97 05/31/96 N HARN BRD, TB WIRES/TOP 8014445-404 1 613 513
220256 CICON ENG 04/30/96 04/30/96 N HARN BRD, CAB 2 LAY IN 8016660-401 1 419 419
220257 CICON ENG 09/06/96 05/31/96 N HARN BRD, #1 FRONT PNL 8014530-401 1 548 36 684
220258 CICON ENG 08/22/96 05/31/96 N HARN BRD, #2 FRONT PNL 8014535-405 1 513 513
220308-1 9852E 08/24/95 06/21/96 N ALIGHMENT TOOL 8016600 1 284 284
220308-2 9852E 08/24/95 06/21/96 N ALIGNMENT TOOL 8016600 1 284 284
220309-1 9852E 09/14/95 06/21/96 N ALIGHMENT TOOL 8016600 1 423 423
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
220209-2 9852E 09/14/95 06/21/96 N ALIGNNMENT TOOL 0016600 1 428 428
220359 CICON ENG 03/10/93 07/10/96 N MOLD, CABLE ASSY 0017072 (A) 1 440 441
E252953 9852B 06/18/96 06/10/96 TEST FIXT BD ASSY A7 3320140 1 3000 3000
3320190
E252954 9852E 09/19/95 05/21/96 N TEST FIXT, TONE DECODER AS 3320140 1 2000 2000
3320205
E252955 D6B 02/25/92 07/11/96 N TEST FIXT, TONE DECDR LDG 3320201 1 2500 2500
3320140
E252956 9852B 06/18/95 06/18/96 TEST FIXT 3320140 1 3000 3000
3320210
E252957 9852B 06/18/96 06/18/96 N TEST FIXT FREQ SEL BD A2 3320140 1 2000 2000
3320175
E252959 9852B 06/18/96 06/18/96 TEST FIXT 3320140 1 1800 1800
3322030
E252960 9852B 06/18/96 06/18/96 N TEST FIXT 3320140 1 1800 1800
3320225
E252964 9852B 06/18/96 06/18/96 TEST FIXT 3320180 1 2000 2000
E252965 9852B 06/18/96 06/18/96 TEST FIXT 3320187 1 2000 2000
E252966 9852E 09/19/96 06/21/96 TEST FIXT 3320215 1 2000 2000
E252969 9852B 09/08/92 06/14/96 N TEST FIXT 3320230 1 2000 2000
E252975 9852B ?? 06/18/96 TEST FIXT A6A1 3328222 1 2000 2000
E252976 D6B 07/13/92 06/11/96 N TEST FIXT A4A4 3322088 1 2000 2000
E252977-1 D5B 07/18/95 06/13/96 N TEST FIXT W-56 1 250 250
E252977-2 D5B 07/18/95 06/10/96 N TEST FIXT W-56 1 250 250
E252977-3 D5B 05/24/95 06/24/96 N TEST FIXT W-56 1 250 250
E252977-4 D5B 07/24/95 06/13/96 N TEST FIXT W-56 1 250 250
E252977-5 D5B 07/18/95 06/13/96 N TEST FIXT W-56 1 250 250
E252977-6 D5B 07/18/95 06/13/96 N TEST FIXT W-56 1 250 250
E252978 OAF POS 02/06/97 07/10/96 N ESP FIXTURE 1 3500 3500
E252978 D5B 06/30/93 07/10/96 N TEST FIXT A3 3320173 1 1500 1500
E2529031 D5B 05/01/81 07/10/96 N CABLE ISOLATOR 3320127-2 1 100 100
E2529032 9852B 05/01/81 06/09/96 N CABLE ISOLATOR 3320127-3 1 75 75
E2529033 9852B 05/01/81 06/09/96 N CABLE ISOLATOR 3320127-4 1 90 90
E252984 D4B 07/18/96 06/09/96 N TEST FIXT A3A14-18 1 2000 2000
E253001 9852B 06/18/96 06/13/96 Y TEST STATION 1 3000 3000
E2530011 9852B 05/19/96 06/18/96 Y OSCILLOSCOPE 1 4365 4365
E25300110 9852B 05/19/95 06/19/96 Y FREQUENCY GENERATOR 1 3545 3545
E25300111 9852EL 05/01/84 08/03/96 CRT TERMINAL 1 1450 1450
E25300112 9852 EL 05/01/83 08/12/96 POWER PANEL 1 750 750
E25300114 9852EL 07/23/96 07/23/95 POWER SUPPY 1 1532 1532
E25300115 9852B 06/19/96 06/19/95 BLOWER 1 150 150
E25300116 9852B 06/19/96 06/19/96 BLOWER 1 150 150
E25300117 9852B 06/19/96 06/19/96 TAC/NAV PANEL 1 2000 2000
E25300119 9852B 06/19/96 06/19/96 A/B CARD CAGE 1 10000 10000
E25300120 9852B 06/19/96 06/19/96 Q13B SIMULATOR PANEL 1 2000 2000
E25300121 9852EL 06/05/83 06/09/96 RANGE BEARING PANEL 1 600 600
E25300122 9852EL 07/23/96 07/23/96 SWITCH CONTROL 1 3695 3695
E25300124 9852B 06/19/96 06/19/96 400HZ POWER CONTROL 1 800 800
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
E25300125 9852B 06/19/96 06/19/96 POWER SUPPLY 1 1300 1300
E25300215 9852B 06/19/96 06/19/96 POWER CONTROL 1 900 900
E25300129 9852EL 05/05/93 08/02/96 T BAR RELAY PANEL 1 16000 16000
E2530018 9852B 06/16/96 06/19/96 SIMULATOR CARD CAGE 1 15000 15000
E25300139 9852EL 05/05/93 08/12/96 CABLE INTERFACE 1 2000 2000
E25300132 9852EL 05/05/92 08/02/96 COMMON BUSS 1 800 800
E25300133 9852EL 05/05/83 08/12/96 POWER INTERFACE PANEL 1 650 650
E2530014 9852B 05/19/96 06/18/96 BUOY SIMULATOR PANEL 1 6000 6000
E2530015 9852B 05/19/96 06/19/96 MULTIMETER 1 3570 3570
E2530016 9852EL 05/05/83 08/02/96 CRT DISPLAY 1 2875 2875
E2530017 9852B 05/10/96 06/19/96 BITE CONTROL PANEL 1 6000 6000
E2530018 9852B 06/19/96 06/19/96 COMPUTOR 1 10395 10395
E2530019 TOR REP 05/27/97 08/12/96 Y COUNTER TIMER 1 3289 3289
E253002 9852B 05/19/96 06/19/96 Y TEST STATION 1 4000 4000
E2530021 9852B 06/19/96 06/19/96 N BLOWER 1 150 150
E25300210 9852B 06/19/96 06/19/96 Y POWER SUPPLY PANEL 1 1395 1395
E25300211 9852B 06/19/96 06/19/96 Y POWER SUPPLY PANEL 1 1395 1395
E25300212 D7E 06/30/92 07/11/96 N COMPUTER 1 10500 10500
E25300214 D7E 06/30/93 07/12/96 N TERMINAL DISPLAY 1 1241 1241
E25300215 9852B 06/19/93 08/19/96 SWITCH CONTROLLER 1 2695 2695
E25300216 9852B 04/09/96 08/12/96 MODULAR SWITCH 1 7000 7000
E25300217 9852B 06/19/94 08/13/96 SIGNAL GENERATOR 1 3546 3546
E25300218 9852B 06/17/96 06/19/96 Y SIGNAL GENERATOR 1 3545 3545
E25300219 D7F POS 02/05/97 08/12/96 Y COUNTER TIMER 1 3289 3289
E25300022 9852B 06/19/96 06/19/96 N BLOWER 1 150 150
E25300220 9852B 06/19/96 06/19/96 PHASE METER 1 3415 3415
E25300221 9852B 06/19/96 06/19/96 Y DIGITAL MULTIMER 1 3570 3570
E25300222 C/L IFR 06/12/96 03/12/96 Y WAVEFORM ANALYZER 1 18750 18750
E25300224 9852B 06/19/96 06/19/96 DECADE RESISTOR BOX 1 2050 2050
E2530025 9852B 06/19/96 06/19/96 DECADE RESISTOR BOX 1 2050 2050
E2530023 9852B 06/19/96 06/19/96 N BLOWER 1 150 150
E2530024 9852B 06/19/96 06/19/96 N BLOWER 1 150 150
E2530025 9852B 06/19/96 06/19/96 N POWER PANEL 1 1000 1000
E2530026 9852B 06/19/96 06/19/96 Y POWER SUPPLY ASSY 1 1512 1512
E2530027 9852B 06/19/96 06/19/96 Y POWER SUPPLY PANEL 1 4265 4265
E2530028 9852B 08/19/96 06/19/96 Y POWER SUPPLY PANEL 1 1395 1395
E2530029 9852B 08/19/96 06/19/96 Y POWER SUPPLY PANEL 1 1395 1395
E253002 9852B 08/19/96 06/19/96 RUN-IN TEST SET 3326500 1 25000 25000
E253003-12 9852B 06/19/96 06/19/96 PANEL MANUAL OVERRIDE 1 900 900
E253003-13 9852B 06/19/96 06/19/96 PANEL MANUAL OVERRIDE 1 600 600
E2530031 9852B 06/19/96 06/19/96 CRT DISPLAY 1 2875 2875
E25300310 9852B 06/19/96 06/19/96 BLOWER 1 150 150
E25300311 9852EL 07/23/96 07/23/96 POWER SUPPLY 1 1572 1572
E25300314 9852EL 07/23/96 07/23/96 A/B CARD CAGE 1 9000 9000
E25300315 9852B 06/19/96 06/19/96 Y 400HZ POWER 1 800 800
E25300316 VENDORRP 02/10/97 08/13/96 COUNTER TIMER 1 3289 3289
E25300317 9852B 06/19/96 06/17/96 AUDIO OUTPUT PANEL 1 1000 1000
E2530032 9852B 06/19/96 08/19/96 BITE CONTROL 1 1000 1000
E2530033 9852B 06/20/96 06/20/96 POWER SUPPLY 1 1532 1532
E2530034 9852B 06/20/96 06/20/96 POWER PANEL 1 750 750
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
E2530035 9852EL 08/28/80 08/28/80 BLOWER 1 150 150
E2530036 9852B 06/26/96 06/26/96 COMPUTER 1 18395 18395
E2530037 9852B 06/26/96 06/26/96 OSCILLOSCOPE 1 4365 4365
E2530038 9852EL 07/07/87 07/07/87 N CRT TERMINAL 1 1450 1450
E253004 9852EL 06/12/81 06/12/81 AGREE TEST SET 3326500 1 60000 60000
E25300410 9852EL 07/21/81 07/21/81 POWER SUPPLY 3326430 1 1532 1532
E25300411 9852EL 07/21/81 07/21/81 BLOWER 3326435 1 150 150
E25300413 VENDORRP 02/10/97 02/10/97 Y COUNTER TIMER 3326445 1 3289 3289
E25300414 9852ELOS 08/18/96 08/18/96 Y FREQUENCY GENERATOR 3326450 1 3545 3545
E25300416 9852EL 07/21/81 07/21/81 BLOWER 3326460 1 150 150
E25300417 9852EL 07/21/81 07/21/81 TAC/NAV PANEL 3326465 1 2000 2000
E25300418 9852EL 06/26/81 06/26/81 MODULAR SWITCH 3326470 1 7000 7000
E25300419 9852EL 10/10/81 10/10/81 CARD CAGE 1 10000 10000
E25300420 9852EL 06/04/81 06/04/81 Q13 SIMULATOR PANEL 1 2000 2000
E25300421 9852EL 07/21/85 07/21/85 RANGE BEARING CURSER 1 600 600
E25300422 9852EL 06/20/93 06/20/93 SWITCH CONTROL 1 3695 3695
E25300423 9852EL 07/21/80 07/21/80 POWER SUPPLY 1 1572 1572
E25300424 9852EL 07/23/83 07/23/83 400 HZ POWER 1 800 800
E25300425 9852EL 09/20/80 09/20/80 POWER SUPPLY 1 1300 1300
E25300426 9852EL 05/30/93 05/30/93 MANUAL OVER RIDE PANEL 1 900 900
E25300427 9852EL 07/23/87 07/23/87 C/B PANEL 1 1000 1000
E25300428 9852EL 07/21/81 07/21/81 PANIC & 18Y PANEL 1 500 500
E25300429 9852EL 06/04/81 06/04/81 RELAY & RES PANEL 1 900 900
E2530043 9852EL 06/03/81 06/03/81 SIMULATOR CARD CAGE 1 15000 15000
E25300430 9852EL 06/04/81 06/04/81 400HZ DIXER PANEL 1 1000 1000
E25300431 9852EL 06/04/81 06/04/81 INTERFACE PANEL 1 6000 6000
E25300432 9852EL 06/04/81 06/04/81 POWER INTERFACE PANEL 1 650 650
E25300433 9852EL 06/04/81 06/04/81 AGREE CHAMBER INT 1 2000 2000
E25300434 9852EL 06/04/81 06/04/81 COMMON BUSS 1 800 800
E25300435 9852EL 06/04/81 06/04/81 T-BAR RELAY PANEL 1 25000 25000
E2530044 9852EL 06/03/81 06/03/81 BUDY SIMULATOR PANEL 1 6000 6000
E2530046 9852EL 06/03/81 06/03/81 60 HZ POWER PANEL 1 500 500
E2530047 9852EL 04/09/94 04/09/94 Y DIGITAL MULTIMETER 1 3570 3570
E2530048 9852EL 06/06/93 06/06/93 CRT DISPLAY 1 2875 2875
E2530049 9852EL 07/18/81 07/18/81 BITTE CONTROL PANEL 1 8000 8000
E253005 9852B 05/05/88 05/05/88 N VERTICLE FRAME ADOPTER 1 1000 1000
E25300510 9852B 06/20/90 06/20/90 INTERFACE MODULE 1 1403 1403
E25300511 9852B 06/20/93 06/20/93 INTERFACE MODULE 1 1300 1300
E25300512 9852B 06/20/96 06/20/96 INTERFACE MODULE 1 93.0 93.0
E25300513 9852B 06/20/96 06/20/96 INTERFACE MODULE 1 1250 1250
E25300514 9852B 06/20/96 06/20/96 INTERFACE MODULE 1 1200 1200
E25300515 9852B 06/20/96 06/20/96 INTERFACE MODULE 1 940 940
E25300516 9852B 06/20/96 06/20/96 INTERFACE MODULE 1 800 800
E25300517 9852B 06/20/96 06/20/96 INTERFACE MODULE 1 800 800
E25300518 9852B 07/22/96 07/22/96 INTERFACE MODULE 1 900 900
E2530053 9852B 06/20/96 06/20/96 INTERFACE MODULE 3326400 1 15000 15000
E2530054 D4C 08/14/90 08/14/90 INTREFACE MOD 10 A 30 1 13000 13000
E2530055 9852B 06/20/96 06/20/96 INTERFACE MODULE 3326405 1 12000 12000
E2530056 9852B 06/20/96 06/20/96 INTERFACE MODULE 3326410 1 14000 14000
E2530057 9852B 06/20/96 06/20/96 INTERFACE MODULE 3326415 1 800 800
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
E2530058 9852B 06/20/96 06/20/96 INTERFACE MODULE 3326420 1 940 940
E2530059 9852B 06/20/96 06/20/96 INTERFACE MODULE 3326425 1 1000 1000
E253006 9852B 06/20/96 06/13/96 VERTICLE FRAME ADAPTER 1 10000 10000
E2530061 9852B 06/20/96 06/20/96 N IPM CARD CAGE 1 12000 12000
E25300610 9852B 06/20/96 06/20/96 STATIC PERSON, MODULE 3326495 1 1450 1450
E25300612 D4A 09/25/96 09/20/96 DYNAMIC PERSON, MODULE 3326480 1 2000 2000
E25300613 D4A 09/25/96 09/20/96 DYNAMIC PERSON, MODULE 3326485 1 2000 2000
E25300614 D4A 09/25/96 09/20/96 DYNAMIC PERSON, MODULE 3326490 1 2000 2000
E25300617 9852B 06/20/96 06/20/96 N W6 CABLE 1 300 300
E25300618 9852 06/20/96 06/20/96 N W7 CABLE 1 400 400
E2530062 D4A 09/26/96 09/26/96 DPM/SELF TEST 1 1400 1400
E2530063 9852B 07/22/96 07/22/96 N W1 CABLE 1 300 300
E2530064 9852B 06/05/88 08/13/96 N W2 CABLE 1 320 320
E2530065 9852B 04/04/81 08/12/96 N W3 CABLE 1 340 340
E2530067 9852B 03/25/81 08/13/96 N INTERFACE MODULE 3326480 1 1500 1500
E2530068 9852B 06/20/96 06/20/96 STACTIC PERSON, MODULE 3326485 1 1400 1400
E2530069 9852B 07/22/98 07/22/96 STACTIC PERSON, MODULE 3326499 1 1400 1400
E253025 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A9 3326435 1 2300 2300
E253026 D3F POS 02/03/97 07/11/96 N TEST FIXTURE A10 3326448 1 2300 2300
E253027 D3F POS 02/03/97 07/11/96 N TEST FIXTURE A6 3326438 1 2300 2300
E253028 D3F POS 02/08/97 07/11/96 N TEST FIXTURE A30 3326415 1 2400 2400
E253029 D3F POS 02/06/97 07/11/96 N TEST FIXTURE ESP 3326405 1 2400 2400
E253030 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A33 3326410 1 2800 2800
3326510
E253031 D3F POS 02/05/97 07/11/96 N TEST FIXTURE A12 3326450 1 2400 2400
E253032 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A14, A17 3326480 1 2500 2500
E253033 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A26, A29 3326475 1 2900 2900
E253034 D3F POS 02/05/97 07/11/96 N TEST FIXTURE A32 3325360 1 2500 2500
E253035 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A5 3326415 1 2500 2500
E253036 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A16 A19 3326470 1 2500 2500
E253037 D3F POS 02/06/97 07/11/96 N TEST IXTURE A32 3325365 1 2700 2700
E253038 D3F POS 02/06/97 07/11/96 N TEST FIXTURE A30 3326495 1 2600 2600
E253060 D3F POS 02/06/97 07/11/96 N ESP TEST FIXT A13 3326455 1 2500 2500
E253061 D3F POS 02/06/97 07/11/96 N ESP TEST FIXT A15 3326465 1 2100 2100
E253062 D3F POS 02/06/97 06/11/96 N ESP TEST FIXT A27 3326488 1 2200 2200
E253063 D3F POS 02/06/97 06/13/96 ESP TEST FIXT BUS DAR 3315924 1 500 500
E253064 D3F POS 02/06/97 07/11/96 N ESP TEST FIXT A28 3326485 1 2800 2800
E253075 D6C 02/25/92 07/11/96 N MANUAL CONTROLLER 1 1500 1500
E253083 9852B 05/24/95 07/22/96 E PROM ERASER 1 2200 2200
E254077 D7C OOS 03/24/92 07/11/96 Y LOAD FIXT PWR SUPPLY 3326403-4 1 3000 3000
3326403-2
E254077-1 D4A 02/18/92 07/10/96 N RES LOAD BOX -2 P/S 3326403-2 1 150 150
E254077-2 D4A 02/18/92 07/10/96 N RES LOAD BOX -4 P/S 3326403-4 1 160 160
E254000-1 D7B 03/24/92 07/11/96 N BURN-IN TEST SET 3326403-2 1 4000 4000
E254080-2 D7D 03/24/92 07/11/96 N BURN-IN FIXTURE 3326403-2 1 1000 1000
E254081-1 D7B 03/24/92 07/11/96 N BURN-IN TEST SET 3326403-4 1 4000 4000
E254081-2 D6D 03/24/92 07/11/96 N BURN-IN FIXTURE 3325403-4 1 1000 1000
E254085 C/L IFR 03/13/96 08/13/96 Y BRD BURN-IN STATION 1 15000 15000
E254085-1 9852EL 04/04/84 06/24/96 Y POWER SUPPLY 1 565 565
E254095-10 D6A 02/19/92 07/11/96 N BURN-IN FIXT #4 1 1000 1000
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
TE254085-11 D6A 02/19/92 07/11/96 N BURN- IN FIXT #5 1 1000 1000
TE254085-12 D4C 02/19/92 07/10/96 N BURN- IN FIXT #6 1 1500 1500
TE254085-13 D4C 02/19/92 07/10/96 N BURN- IN FIXT #7 1 1500 1500
TE254085-14 D4C 02/19/92 07/01/96 N BURN- IN FIXT #8 1 1500 1500
TE254085-15 D4C 02/19/92 07/10/96 N BURN- IN FIXT #9 1 1500 1500
TE254085-16 9852EL 08/08/84 06/24/96 N INTERFACE CABLE 8X8 3 150 450
TE254085-17 9852EL 08/08/84 06/24/96 N INTERFACE CABLE SM BD 9 155 1395
TE254085-2 9852EL 04/04/84 06/24/96 POWER SUPPLY 1 565 565
TE254085-3 9852EL 04/04/84 06/25/96 POWER SUPPLY 1 690 690
TE254085-4 9852EL 04/04/84 06/25/96 POWER SUPPLY 1 1175 1175
TE254085-5 9852EL 04/04/84 06/25/96 CONTROL PANEL 1 2000 2000
TE254085-6 9852EL 04/04/84 06/25/96 POWER PANEL 1 500 500
TE254085-7 D6A 02/19/92 07/11/96 N BURN- IN FIXT #1 1 1000 1000
TE254085-8 D4C 02/19/92 07/10/96 N BURN- IN FIXT #2 1 1000 2000
TE254085-9 D6A 02/19/92 07/11/96 N BURN- IN FIXT #3 3331630 1 1000 1000
TE254088 D3F POS 02/05/97 07/10/96 N ESP FIXTURE 1 2700 2700
TE254090 9852EL 04/04/84 06/25/96 INTERFACE MOO A28 BD 1 2500 2500
TE254099 9852B 06/20/96 06/20/96 SELECT LEVER METER 1 9400 9400
TE254262 9852B 06/14/96 06/14/96 N ESP CABLE 20E 1 200 200
TE254263 9852B 06/14/96 06/14/96 N ESP CABLE 21E 1 200 200
TE254264 9852B 06/14/96 06/14/96 N ESP CABLE 22E 1 200 200
TE254266 9852B 06/14/96 06/14/96 N ESP CABLE 25E 1 20 20
TE254267 9852B 06/14/96 06/14/96 N ESP CABLE 31E 1 160 160
TE254268 9852E 10/24/95 09/25/96 N SONAR SIMULATOR T/F 8014470 1 3000 3000
TE254269 9852B 06/14/96 06/14/96 N ESP CABLE 29E 1 125 125
TE254270 9852B 06/14/96 06/14/96 N ESP CABLE 30E 1 130 130
TE254272 9852E 10/27/95 06/21/96 N TEST FIXTURE CAB #2 1 400 400
TE254272-1 9852E 10/30/95 06/21/96 N POWER RESISTOR 8014530-401 1 120 120
TE254273 9852B 06/14/96 06/14/96 N ESP CABLE 33E 1 100 100
TE254274 9852B 12/15/88 06/20/96 N ESP CABLE 34E 1 200 200
TE254275 9852 05/22/95 06/20/96 N TEST FIXTURE, AS BRD 1 1900 1900
TE254276 9852E 10/31/95 06/21/96 N POWER SUPPLY TEST FIXT 8016720 1 1600 1600
TE254277 9852 03/31/92 06/20/96 N TEST FIXT, A2 BRD ASSY 80166720 1 2200 2200
TE254278 9852B 06/14/96 06/14/96 N ESP CABLE 35E 1 75 75
TE254281 9852E 11/03/95 06/21/96 N TEST FIXT SONOBT SIMU 8016600 1 3500 3500
TE254291 9852 05/15/95 06/20/96 N TEST FIXT, TONE DCOR A9 8016610 1 2500 2500
TE254337 9854B 04/12/94 06/20/96 N T/F DEPTH RT SIMU A1A10 3326030 1 1800 1800
TE254338 9852B 05/18/94 06/20/96 N T/F UTILITY LP DVR A1A11 8029230 1 1900 1900
TE254339 9852E 07/13/95 06/21/96 N T/F CABLE CONTROL A1A12 3326040 1 2300 2300
TE254340 9852E 04/27/94 06/21/96 N T/F CABLE TENSION A1A13 8029195 1 2200 2200
TE254341 9852E 04/26/95 06/21/96 N T/F RELAY CO ASSY A1A14 3326050 1 1700 1700
TE254342 9852B 06/14/96 06/14/96 N T/F CBL PAYOUT DVR A1A15 8029225 1 1900 1900
TE254350 9852B 06/14/96 06/14/96 N ESP CABLE, 55 E 1 350 350
TE254351 9852B 06/14/96 06/14/96 N ESP CABLE , 56E 1 280 280
TE254352 9852B 06/04/91 06/14/96 N ESP CABLE , 57E 1 420 420
TE254353 9852B 06/14/96 06/14/96 N ESP CABLE , 58E 1 250 250
TE254354 9852B 06/14/96 06/14/96 N ESP CABLE , 59E 1 260 260
TE254355 9852B 06/14/96 06/14/96 N ESP CABLE , 60E 1 300 300
TE254356 9852B 06/14/96 06/14/96 N ESP CABLE , 61E 1 280 280
TE254357 9852B 06/14/96 06/14/96 N ESP CABLE , 62E 1 210 210
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
-----
E254266 9852E 08/02/95 06/21/98 N T/F RNTS ICAS SWITCH BOX 8029170 1 800 800
E254417 D5D 02/28/97 06/04/96 N TEST FIXTURE (CASTS) 8015029 1 2000 2000
Tooling 550 148373
Test Equip. 250 684284
Total 600 332857
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00019-97G-0000 Description: ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
TE253080 9852EL 08/22/80 05/24/96 VIBRATION CONTROL SYS 1 1000 1000
TE253080-10 9852EL 01/22/81 05/24/96 N COMPUDESK 1 508 500
TE253080-11 9852EL 01/22/81 05/24/96 N CHAIR 1 123 123
TE253080-2 9852EL 08/22/80 05/24/96 BLANK PANEL 1 100 100
TE253080-3 9852EL 08/22/80 05/24/96 X-Y DISPLAY 1 2500 2500
TE253080-4 9852EL 08/22/80 05/24/96 SYSTEM CONTROL 1 6000 6000
TE253080-5 9852EL 08/22/80 05/24/96 PROCESSION 1 22879 22879
TE253080-6 9852EL 08/22/80 05/24/96 SYSTEM INTERFACE 1 0300 0300
TE253080-7 9852EL 08/22/80 05/24/96 FLEX DISK DRIVE 1 3171 3171
TE253080-8 9852EL 08/22/80 05/24/96 GRAPHICS TERMINAL 1 6000 6000
TE253080-9 9852EL 08/22/80 05/24/96 KEYBOARD FOR 2548A 1 1000 1000
TE253081 9852EL 02/28/81 05/24/96 VIBRATION TEST SYSTEM 1 48510 48510
TE253081-1 9852EL 02/28/81 05/24/96 CONTROL RACK 1 23000 23000
TE253081-10 9852EL 04/10/87 08/12/96 BLOWER ASSEMBLY 1 490 490
TE253081-2 9852EL 05/09/81 06/24/96 CHARGE AMP/D22PMJ(0) 1 2820 2820
TE253081-3 9852EL 05/09/81 06/24/96 CHARGE AMP/D22PMJ(0) 1 2820 2820
TE253081-4 9852EL 05/09/81 06/24/96 VIB NON/LIMIT AM-123 1 5125 5125
TE253081-5 9852EL 08/08/84 06/24/96 Y ACCELEROMETER S/N1405 1 150 150
TE253081-6 CAL LAB 11/04/96 09/27/96 Y ACCELEROMETER S/N2484 1 150 150
TE253081-8 CAL LAB 11/04/96 09/27/96 Y ACCELEROMETER S/N1408 1 150 150
TE253081-3 9852EL 09/26/96 06/24/96 ACCELEROMETER S/N1704 1 150 150
Tooling 0 0
Test Equip. 21 134944
Total 21 134944
<PAGE>
4-JUN-97 Page: 1 TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T219879 F2C 03/01/67 07/12/96 N HARNESS BRD, J1 REV B 0007248-4012 1 131 113 244
T219800 F2B 03/10/97 07/12/96 N HARNESS BRD, J2 REV B 0007248-402 1 124 198 322
T219881 F2B 03/10/97 07/12/96 N HARNESS BRD, J3 REV B 0007248-403 1 667 455 1142
T219882 F3B 03/10/97 05/31/96 N HARNESS BRD, P1 REV B 0007255-401 1 1154 257 1411
T219883 F3B 03/10/97 05/31/96 N HARNESS BRD, P2 REV C 0007255-402 1 4627 244 5071
T219884 F2B 03/10/97 05/31/96 N HARNESS BRD, P3 REV C 0007255-403 1 946 153 1099
T219885 F3B 03/10/97 05/31/96 N HARNESS BRD, TB1 REV C 0007255-404 1 2003 163 2166
T219886 F3B 03/10/97 05/31/96 N HARNESS BRD, J1-J5 REV E 0007255-405 1 3279 321 3600
T220014 C5D 02/03/96 07/02/96 Y MOLD, PI W1 CBL ASSY 0007263 1 272 272
T220015-1 9852C 08/23/96 08/14/96 Y MOLD, P1 P2 WC CBL ASSY 0007264 1 257 257
T220015-2 9852C 08/23/95 08/14/96 Y MOLD, P1 P2 WC CBL ASSY 0007264 1 257 257
T220016-1 9282C 02/06/95 06/14/96 Y MOLD, P2 W3 W4 CBL ASSY 0007265 1 261 261
0007266
T220016-2 9232C 02/06/95 06/14/96 Y MOLD, P2 W3 W4 CBL ASSY 0007265 1 261 261
0007266
T220040-1 9852E 03/18/97 05/21/95 N ALIGN TOOL, CARD CAGE 0007248 1 195 195
T220040-2 9852E 03/18/97 06/21/95 N ALIGN TOOL, CARD CAGE 0007248 1 195 195
T220052-1 9852E 05/25/96 05/25/96 N HOLD FIXT, AMTS PNL ASSY 0007255 1 136 136
T220052-2 ?? 01/06/95 01/10/96 N HOLD FIXT, AMTS PNL ASSY 0007255 1 136 136
T220052-3 ?? 05/10/96 06/21/96 N HOLD FIXT, AMTS PNL ASSY 0007256 1 136 136
T220052-4 9852E 09/26/96 07/10/96 N HOLD FIXT, AMTS PNL ASSY 0007255 1 136 136
T220053-1 9862E 04/23/96 05/16/96 N WIRING FIXTURE 1 857 857
T220053-2 9862E 04/23/96 05/16/96 N WIRING FIXTURE 1 702 702
T220070 F3B 03/10/97 07/15/96 N HARN BRD, COUP ASSY A12 1 831 488 1319
T220075-1 C6A 01/20/92 07/08/96 N POTTING FIXT, P1 CLK MOD 007394 1 184 184
T220075-2 C6A 01/20/92 07/08/96 N POTTING FIXT, P1 CLK MOD 007394 1 184 184
T220075-3 C6A 01/20/92 07/08/96 N POTTING FIXT, P1 CLK MOD 007394 1 184 184
T220078-1 9232C 05/14/96 08/14/96 N POTTING FIXT, P1 007394 1 141 141
T220078-2 9232C 05/14/96 06/14/96 N POTTING FIXT, P1 007394 1 141 141
T220078-3 9232C 06/14/96 06/14/96 N POTTING FIXT, P1 CLK MOD 007394 1 141 141
T220306A/B-1 9852E 06/14/96 06/13/96 N SUPPORT BRKT, AMTS ASSY 0007300 1 270 270
T220306A/B-2 9852E 06/13/96 06/14/96 N SUPPORT BRKT, AMTS ASSY 0007300 1 270 270
T402534 SPIRATEX CO. 01/09/81 04/10/96 N REDUCING SLEEVE 3328746 1 1435 1435
T402540 C7D 03/13/92 07/10/96 N TEST FIXT WD BND HYDRO 1 1320 1320
T402542-A D5F POS 02/12/97 09/27/96 N PLUG, BOOTING ASSYTION 3328760 1 433 433
T402542-D D5F POS 02/12/97 09/27/96 N FITTING, HOSE JUNCTION 3328780 1 172 172
7402549 SN1 9234 04/14/93 06/14/96 N SHOCK TEST SLEEVE, XMTR 3328880 1 242 242
T7402549 SN2 C6B 04/14/93 07/03/96 N SHOCK TEST SLEEVE, XMTR 3328880 1 242 242
T402549 SN2 C6B 04/14/93 07/03/96 N SHOCK TEST SLEEVE, XMTR 3328880 1 242 242
T402554-1 9855N 06/14/96 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257
T402554-10 9855N 06/14/96 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257
T402554-2 9855N 06/14/96 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257
T402554-3 CL/ARA 10/15/95 06/09/93 N ASSEMBLY FIXTURE 3333263 1 257 257
T402554-4 C6B 01/28/95 07/08/96 N ASSEMBLY FIXTURE 3333263 1 257 257
T402554-5 9855N 06/14/95 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257
T402554-6 9232C 06/14/95 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257
T402554-7 9232C 06/14/96 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257
T402554-8 9232C 06/14/96 16/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257
T40554-9 9232C 06/14/96 06/14/96 N ASSEMBLY FIXTURE 3333263 1 257 257
T402567-1 C6D 03/13/92 07/09/96 N TEST HOLD FIXT, HYBRID 1 358 358
<PAGE>
4-JUN-97 Page: 2 TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T402567-2 9234 04/14/93 06/14/96 N TEST HOLD FIXT, HYBRID 1 358 358
T402567-3 C6D 03/13/92 07/09/96 N TEST HOLD FIXT, HYBRID 1 358 358
T402567-4 C6D 03/13/92 07/09/95 N TEST HOLD FIXT/HYBRID 1 358 358
T402567-5 C6D 07/08/92 07/09/96 N TEST HOLD FIXT/HYBRID 1 358 358
T402567-6 C6D 03/13/92 07/08/96 N TEST HOLD FIXT/HYBRID 1 358 358
T402576 C6B 03/06/92 07/08/96 N HOLD FIXT/HX-POT 3328865 1 207 207
T402629 C7D 10/25/95 07/10/96 N HOLD FIXT/XMTR 1160 16 2400
T402644 C6B 03/09/92 07/08/95 MOLD MSTR/4 STRAND 3332993 1 219 219
T402645 C6B 10/01/96 10/01/96 N MOLD MSTR/8 STRAND 3332992 1 244 244
T402663-1 C6B 03/02/92 07/09/96 Y MOLD MSTR/RESONATOR, REV A 3332990-1 1 26 26
T402664 FREQUENCY SELECT
NET 12/10/84 04/03/96 N MOLD/RESONATOR 1 29 29
T402703-1 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58
T402703-10 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58
T402703-11 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58
T402703-12 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58
T402703-13 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58
T402703-14 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58
T402703-2 C6D 09/27/96 09/27/96 N SPLICE MOLD STAND 3333165 1 58 58
T402703-3 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58
T402703-4 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333155 1 58 58
T402703-5 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333156 1 58 58
T402703-6 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58
T402703-7 C6D 09/19/96 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58
T402703-8 C6D 09/19/95 07/09/96 N SPLICE MOLD STAND 3333165 1 58 58
T402703-9 C6D 09/19/95 07/09/96 Y SPLICE MOLD STAND 3333165 1 58 58
T4027041 NPO 11/12/90 09/10/96 Y THERMAL WIRE STRIPPER 1 73 73
T4027042 NPO 11/12/90 10/15/96 Y THERMAL WIRE STRIPPER 1 73 73
T4024043 NPO 11/12/95 09/18/96 Y THERMAL WIRE STRIPPER 1 73 73
T402705-1 9852E 05/16/95 06/21/95 N SPANNER WRENCH 1 174 174
T402714-1 9855E 07/01/93 08/26/95 Y STRAIGHT SCALE/300 LB 1 109 109
T402714-2 9855E 08/29/94 06/26/96 Y STRAIGHT SCALE/300 LB 1 109 109
T402714-3 9855E 07/10/95 05/25/98 Y STRAIGHT SCALE/300 LB 1 109 109
T402714-4 9855W 07/23/90 06/26/96 Y STAIGHT SCALE/300 LB 1 109 109
T402714-6 9855W 07/01/93 06/26/96 Y STRAIGHT SCALE/300 LB 1 109 109
T402749-1&A DISP ARA 10/15/95 07/01/93 Y PRESSURE POT 1 1568 1568
T402754-1 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746
T402754-10 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746
T402754-11 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746
T402754-12 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746
T402754-2 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746
T402754-3 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746
T402754-4 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746
T402754-5 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746
T402754-6 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746
T402754-7 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746
T402754-8 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746
T402754-9 9855E 01/06/97 07/12/96 N HYDRO BONDING FIXTURE 8004380 1 628 118 746
T402761-1 9855W 07/16/90 05/26/95 N HOSE WRAPPING STATION 8004380 1 1008 1008
T402761-2 9855W 07/16/90 06/26/96 N HOSE WRAPPING STATION 8004380 1 757 757
T402761-3 9855E 07/21/93 06/26/96 N HOSE WRAPPING STATION 8004380 1 757 757
<PAGE>
4-JUN-97 Page: 3 TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T402761-4 9665E 07/21/93 06/26/96 N HOSE WRAPPING STATION 1 757 757
T402765-1 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49
T402765-2 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49
T402765-3 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49
T402765-4 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49
T402765-5 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49
T402765-6 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49
T402765-7 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49
T402765-8 C6B 04/18/97 07/12/96 N END CAP & ELEM ASSY TOOL 8001220 1 49 49
T402769 CAL LAB 06/02/97 07/09/96 Y DIGITAL THERMOMETER 1 0 0
T402773-1 9855E 07/21/93 06/26/96 N SUPPORT BRACKET 1 131 131
T402773-2 9855W 07/18/90 06/26/96 N SUPPORT BRACKET 1 131 131
T402773-3 9855W 07/18/90 06/26/96 N SUPPORT BRACKET 1 131 131
T402773-4 9855E 07/21/93 06/26/96 N SUPPORT BRACKET 1 131 131
T402774-1 8002 03/13/97 07/12/96 N ACOUSTIC CHAMBER HORIZ 1 2500 2500
T402774-2 8900TL 07/18/90 08/30/96 N ACOUSTIC CHAMBER HORIZ 1 2500 2500
T402777-1 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589
T402777-10 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589
T402777-2 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589
T402777-3 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589
T402777-4 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589
T402777-5 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589
T402777-6 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589
T402777-7 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589
T402777-8 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589
T402777-9 C3B 03/21/97 07/12/96 N BOND FIXT/ELEM ASSY 8001225 1 589 589
T402798-1 TOOLCRIB 03/14/97 07/12/96 N PREP FIXT/C1 & C3 CAP 1 53 53
T402798-2 TOOLCRIB 03/17/97 07/12/96 N PREP FIXT/C1 & C3 CAP 1 53 53
T402799-1 TOOLCRIB 03/17/97 07/12/96 N PREP FIXT/C2 & C4 CAP 1 53 53
T402799-2 TOOLCRIB 03/17/97 07/12/96 N PREP FIXT/C2 & C4 CAP 1 53 53
T402803-1 C4A 03/10/97 08/30/93 N HOT STRIPPER/SPEC GRND 1 154 154
T402803-2 C6B 04/18/97 09/30/98 N HOT STRIPPER/SPEC GRND 1 154 154
T402803-3 CL/ARA 10/15/96 06/30/98 N HOT STRIPPER/SPEC GRND 1 154 154
T402803-4 C6B 04/18/97 09/30/98 N HOT STRIPPER/SPEC GRND 1 154 154
T402803-5 C6B 04/18/97 09/30/98 N HOT STRIPPER/SPEC GRND 1 154 154
T402803-6 CL/ARA 10/15/96 06/30/93 N HOT STRIPPER/SPEC GRND 1 154 154
T402805-1 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402805-10 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402805-11 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402805-12 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402805-13 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402805-14 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402805-15 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REVNC 8001220 1 48 48
T402805-16 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REVNC 8001220 1 48 48
T402805-2 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402805-3 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402805-4 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402805-5 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402805-6 C3C 03/19/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402805-7 C3C&C4C 03/21/97 05/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
<PAGE>
4-JUN-97 Page: 4 TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T402605-8 C3C&C4C 03/21/97 03/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402805-9 C3C&C4C 03/21/97 03/28/96 N HAND FIXT, COIL ELEM REV A 8001220 1 48 48
T402823 C6B 03/09/92 07/08/96 N WELD FIXT/PTV 7 CLOCK 1 42 42
T402825 D5F POS 02/12/97 07/08/96 N SHOCK TEST FIXTURE 2 60 120
T402828ABCD C4B 07/07/92 06/28/96 PRESSURE TEST FITTING 1 977 977
T402629 9055W 10/10/96 06/26/96 N HOSE GRINDER 1 1099 1099
T402839 C6B 08/19/92 07/08/96 N HOLDING FIXTURE 1 952 952
T402876A-1 C6B 09/17/96 06/26/96 Y MOLD, DROQUE TERM REV E 3333220 1 431 431
T402876B-4 C6B 07/23/96 07/23/96 Y MOLD, DROQUE TERM REV E 1 359 359
TE252990 D5C 02/20/92 07/10/96 N TEST FIXT/XMTR LGC1/2 1 2000 2000
TE252991 D5C 02/20/92 07/10/96 N TEST FIXT/TELE/TLM LOC 1 3000 3000
TE254007 D5B 02/20/92 07/10/96 N PREAP TEST FIXT 1 250 250
TE254018 D5F POS 02/12/97 07/11/96 N HI-POT TEST FIXT 2 1 250 250
TE254019 D6B 02/25/92 07/11/96 N CLOCK TEST FIXT 1 1800 1800
TE254026-1 9855N 06/20/96 06/20/96 Y TEST FIXT, CLOCK TERM 1 200 200
TE254026-2 9855N 10/15/98 06/20/96 Y TEST FIXT, CLOCK TERM 1 200 200
TE254029-1 D5B 02/19/92 07/10/96 N TEST FIXT/FRONT END 3327455 1 1800 1800
TE254029-2 D5B 02/19/92 07/10/96 N TEST FIXT/FRONT END 3327455 1 1800 1800
TE2540311 D6B 02/26/92 07/11/93 N LOGIC TEST PAN/SUBSTRT 3327455 1 3600 3600
TE2540312 D6B 02/26/92 07/11/96 N LOGIC TEST PAN/SUBSTRT 3327455 1 3600 3600
TE254036 D5C 02/2092 07/10/96 N COAX DELAY LINE 1 1625 1625
TE254039 9234 04/14/93 08/17/96 Y ACTIVE TRIM TEST SET 1 27000 27000
TE254040 D5B 02/19/92 07/10/96 N PWR SPLITTER TEST SET 1 400 400
TE254041 D5B 02/19/92 07/10/96 Y LINEARTY PAD 1 25 25
TE254042 9234 04/14/93 06/17/96 N XMTR ADDRESS BOX 1 200 200
TE254044 D5B 02/19/92 07/10/96 N CROWBAR TEST FIXT 1 500 500
TE254045 D5A 08/09/84 07/10/96 N BURN-IN BO/CURRENT REG 1 300 300
TE254046 9234 04/14/93 06/17/96 Y CURRENT MONITOR/CLOCK 1 200 200
TE254050 CNL/ARA 10/15/96 06/22/93 Y LOW PASS FLTR TEST SET 1 500 500
TE254052 D5B 02/19/92 07/10/96 N HYDROPHONE TEST SET 1 1000 1000
TE254052 D4B 02/18/92 07/10/96 TEST FIXT/ACTV TRIM PS 1 250 250
TE254064-1 NPO 07/30/96 07/11/96 N HYDROPHONE EXCITER 1 200 200
TE254064-2 D5A 04/17/97 07/11/96 N HYDROPHONE EXCITER 1 200 200
TE254072 9234 04/14/93 08/17/96 N TEST PAN/DIODE CLAMP 1 250 250
TE254073 9234 04/14/93 08/17/96 TEST PAN/CURRENT REG 1 400 400
TE254074 9234 05/19/93 06/17/96 Y PWR SUPPLY/PTV CUR REG 1 600 600
TE254079 D5A 07/06/93 07/10/96 N ACOUSTIC XMTR/CAL STD 1 5000 5000
TE254086 D7F POS 02/12/97 08/13/96 Y COUNTER/HP5328A/030 1 1550 1550
TE254089-1 FREQUENCY SELECT NET 02/24/94 04/03/96 N TEST COIL RESONATOR 3332990 1 1648 1648
TE254092-1 NPO 08/05/96 07/12/96 N HI-POT TESTER 1 1100 1100
TE254092-2 D5A 04/17/97 09/30/96 HI-POT TESTER 1 1100 1100
TE254092-3 D5A 04/17/97 07/12/96 N HI-POT TESTER 1 1100 1100
TE254100 D6C PM 09/29/95 07/11/96 N REPEATER CLOCK T/S 1 50000 50000
TE254101-1 D4D 10-25-95 07-10-96 N TEST CABLE SWTICH BOX 1 10000 10000
TE254101-2 9234 06/17/96 06/17/96 N TEST CBL SWITCH BOX 1 10000 10000
TE254101-3 9234 06/17/96 06/17/96 N TEST CBL SWITCH BOX 1 10000 10000
TE254160 9852E 06/13/96 06/13/96 Y AMTS PWR SUP TEST FIXT 2 400 800
TE254175 SN 1 9852E 11/14/94 07/11/96 N TEST FIXT, AMTS BRD 8007210 1 1900 1900
8007245
TE254175 SN 2 D6B 09/14/93 07/11/96 N TEST FIXT, AMTS BRD 8007245 1 1900 1900
<PAGE>
4-JUN-97 Page: 5 TOOL MASTER
Contract Number: N00024-84-C-6074 Description: TB-23/BQ ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
TE254296-1 9852D HS 08/25/96 06/26/96 N ADAPTOR CABLE 0007210 1 500 500
TE254296-2 9852D HS 09/27/96 06/27/96 N ADAPTOR CABLE 0018100 1 500 500
TE254296-3 9852D HS 06/26/96 06/26/96 N ADAPTOR CABLE 0018100 1 500 500
TE285295-4 9852D HS 06/27/96 06/26/96 N ADAPTOR CABLE 0018100 1 500 500
TE254297 9852E 08/25/96 06/26/96 N FWD ADAPTOR 0018100 1 325 325
TE254298 9852E 08/25/96 06/26/96 N AFT ADAPTOR 0018100 1 325 325
Tooling 285 65269
Test Equip. 47 150398
Total 352 216167
<PAGE>
4-JUN-97 Page: 1 TOOL MASTER
Contract Number: N00024-85-C-6236 Description:TB-23/ BQ ASA TOOL/T/E Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T219868 F3B 03/07/97 07/15/95 N HARNESS BRD F1 0009030-401 1 435 436
T219873 F3F 02/10/92 07/15/95 N HARNESS BRD, RCVR PNL 8007625-401 1 1652 1652
T219875 F3D 02/11/92 07/15/95 N HARNESS BRD/PWR SUPPLY 8007620-701 1 2542 177 2819
T219878 F2C POS 02/05/97 07/12/95 N HARNESS BRD, RECEIVER PNL 8007625-402 1 120 120
T219947 F2B 03/10/97 07/15/95 N HARNESS BRD F5 8007625-403 1 516 516
T219953 F3B 03/10/97 07/15/95 N HARNESS BRD F2 8009030-402 1 840 840
T219958 F3B 03/10/97 07/15/95 N HARNESS BRD/TEST POINT 8009035 1 1252 1252
T219962 F3F 02/10/92 07/15/95 N HARNESS BRD/LFRA REV A 8007840 1 2092 2092
T220019 C6B 03/06/92 07/08/96 N SPLIT MOLD 8011516 1 21311 21311
T220020 C6B 03/06/92 07/08/96 N SPLIT MOLD 8011516 1 0 0
T220021 C6B 03/06/92 07/08/96 N TENSILE TEST ADAPTOR 8011516 1 0 0
T220022 C6B 03/06/92 07/08/96 N SPLIT MOLD 8011516 1 0 0
T220023 C6B 03/08/92 07/08/96 N PRESSURE TEST LEAD 8011516 1 0 0
T220024 C6B 03/08/92 07/08/96 N TENSILE TEST LEAD 8011516 1 0 0
T220025 C6B 03/08/92 07/08/96 N PLUG 8011516 1 0 0
T220026 C6B 03/08/92 07/08/96 N SPACER PLATE 8011516 1 0 0
T220027 C6B 03/08/92 07/08/96 N DUMMY RETAINER 8011516 1 0 0
T220028 C6B 03/08/92 07/08/96 N SEAL BACK-UP BAR 8011516 1 0 0
T220029 C6B 03/08/92 07/08/96 N RETAINER POSITION TEMP 8011516 1 0 0
T220053 C6D 04/09/92 07/09/96 N ?? ?? 1 516 506
T402944&-1 TELFRWHS 08/20/93 08/02/96 N VIB TEST FIXTURE 8007600 1 7767 7767
0007800
0008940
TE254114 D7B 03/24/92 07/11/96 N EMULATOR/T.I. CHIP 1 5000 5000
TE254116 9852B 06/20/96 08/20/96 N TEST CD/ESP RCVR/EFMR 0009040 40 400 10000
TE254116 SN 1 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 10 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 11 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 12 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 13 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 14 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 15 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 16 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 17 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 18 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 19 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 2 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 20 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 21 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 22 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 23 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 24 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 25 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 26 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 27 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 28 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 29 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 3 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 30 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 31 9852B 06/27/96 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
<PAGE>
4-JUN-97 Page: 2 TOOL MASTER
Contract Number:N00024-85-6-6336 Description:TB-23/8Q ASA TOOL/T/F Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
TE254116 SN 32 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 33 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 34 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 35 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 36 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 37 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 38 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 39 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 4 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 40 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 5 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 6 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 7 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 8 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254116 SN 9 9852B 06/27/90 06/20/96 N TEST CARD, ESP BMFRMR RECV 0009040 1 400 400
TE254117 9852B 06/18/96 06/13/96 N ESP CBL RCVR 79 D 8007635 1 300 300
TE254118 SN 1 9852B 05/05/96 06/20/96 N ESP CABLE, RECEIVER 8007635 1 150 150
TE254118 SN 2 9852B 05/05/86 06/20/96 N ESP CABLE, RECEIVER 0007635 1 150 150
TE254118 SN 3 9852B 05/05/86 06/20/96 N ESP CABLE, RECEIVER 0007635 1 150 150
TE254119 9852B 07/22/96 07/22/96 N BRD TEST FIXT FRA 0007635 1 300 300
TE254120 9852B 08/13/96 06/13/96 N ESP CBL RCVR 16D 1 300 300
TE254121 SN 1 9852B 08/13/96 06/13/96 N ADAPTER CABLE 900/94D 1 250 250
TE254121 SN 2 9852B 08/13/96 06/13/96 N ADAPTER CABLE 900/94D 1 250 250
TE254121 SN 3 9852B 08/13/96 06/13/96 N ADAPTER CABLE 900/94D 1 250 250
TE254121 SN 4 9852B 06/18/96 06/13/96 N ADAPTER CABLE 900/94D 1 250 250
TE254121 SN 5 9852B 06/18/96 06/13/96 N ADAPTER CABLE 900/94D 1 250 250
TE254135 D7E 12/07/95 07/12/96 N CLAMP, RANDOM VIB 13 85 1040
TE254137 D6C 05/05/94 07/11/95 N CKT BRD PWR TEST FIXT 1 1500 1500
TE254139 9852B 06/14/96 06/14/96 N ESP CBL DL3-30R 100D 1 150 150
TE254140 9852B 06/14/96 06/14/96 N ESP CBL 14 BNC'S 89D 1 125 125
TE254141 9852B 06/14/96 06/14/96 N ESP CBL DLI-155R 99D 1 250 250
TE254142 D4B 07/18/96 06/14/96 N ESP FIXT RCVR CONT PNL. 1 450 450
TE254143 D4B 07/18/96 07/11/96 ES FIXT CONT PNL BMFR 1 250 350
TE254144-1 9852B 06/14/96 06/14/96 N ESP CABLE 1E HD 78S 1 175 175
TE254144-2 9852B 06/14/96 06/14/96 N ESP CABLE 2E HD 78S 1 175 175
TE254144-3 9852B 06/14/96 06/14/96 N ESP CABLE 3E HD 78S 1 175 175
TE254144-4 9852B 06/14/96 06/14/96 N ESP CABLE 4E HD 78S 1 175 175
TE254145 9852B 06/14/96 06/14/96 N ESP CABLE 5E HD 78P 1 160 160
TE254145 9852B 06/14/96 06/14/96 N ESP CBL 84D 1 250 250
TE254148 9852B 06/14/96 06/14/96 N ESP CBL 8E MOLEX PLUGS 1 150 160
TE254149 D7A 03/17/94 07/11/96 N LFRA BD TESTER 1 2500 2500
TE254150 D5A 03/17/94 07/10/96 N ADAPTER TEST BOX 1 1500 1500
TE254150-1 D5A 03/17/94 07/10/96 N BITE LOGIC CARD 1 2000 2000
TE254150-2 D5A 03/17/94 07/10/96 N CABLE 1 200 200
TE254151 D6A 05/06/94 07/11/96 N LFRA CHANNEL BOX 1 800 800
TE254152 D4B 07/18/96 05/14/96 N ESP CBL LFRA PAOL BRD 1 950 950
TE254153 D5C 02/18/92 07/10/96 N PADDLE-BD CARD GAGE 1 1250 1250
TE254153-1 D5C 02/18/92 07/10/96 N D.C. PWR CABLE 1 50 50
TE254161 9852B 08/14/96 06/14/96 N ESP CABLE 83D 1 100 100
TE254162 9852B 06/14/96 06/14/96 N ESP CABLE 86D 1 100 100
<PAGE>
4-JUN-97 Page: 3 TOOL MASTER
Contract Number:N00024-85-C-6236 Description:TB-23/BQ ASA TOOL/T/E Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
TE254163 98528 06/14/96 06/14/96 N ESP CABLE 6E 1 100 100
TE254164 98528 06/14/96 06/14/96 N ESP CABLE 10E 50 PIN 1 300 300
TE254165 98528 06/14/96 06/14/96 N ESP CABLE 11E 60 PIN 1 310 310
TE254168 D5F POS 06/15/96 07/11/96 N ESP CABLE 12E 1 250 250
TE254169 9852B 06/14/96 06/14/95 N ESP CABLE 13E 1 250 250
TE254170-1 SN1 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250
TE254170-1 SN2 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250
TE254170-1 SN3 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250
TE254170-1 SN4 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250
TE254170-1 SN5 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250
TE254170-1 SN6 9852B 10/29/86 06/20/96 N ESP CARD LFRA 1 250 250
TE254170-2 SN1 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250
TE254170-2 SN2 9852B 10/29/86 06/20/96 N ESP CARDS, LFRA 1 250 250
TE254176 D6C 02/26/92 07/11/96 N BRKOUT BOX - ASA 1 750 750
TE254176-1 D6A 02/25/92 07/11/96 N J2 INTERFACE CABLE 1 100 100
TE254176-2 D6A 02/25/92 07/11/96 N J3 INTERFACE CABLE 1 120 120
TE254176-3 D6A 02/25/92 07/11/96 N J4 INTERFACE CABLE 1 100 100
TE254176-4 D6A 02/25/92 07/11/96 N J3 INTERFACE CABLE 1 175 175
TE254176-6 D6A 02/25/92 07/11/96 N INTERFACE CABLE 1 150 150
TE254176-7 D7E 02/25/92 07/11/96 N TARGET ARRAY SIMULATOR(??) ?? ?? ?? 00000
TE254195 SN 1 D7A 10/27/95 07/11/96 N CABLE 8DXW7 0008000 1 ?? 50
TE254195 SN 2 D7A 02/28/92 07/11/96 N CABLE 8DXW7 0009000 1 50 50
TE254195 SN 3 D7A 02/28/92 07/11/96 N CABLE 8DXW7 0009000 1 50 50
TE254196 SN 1 D7A 08/29/92 07/11/96 N CABLE 8DXW8 0009000 1 50 50
TE254196 SN 2 D7A 08/29/92 07/11/96 N CABLE 8DXW8 0009000 1 50 50
TE254196 SN 3 D7A 08/29/92 07/11/96 N CABLE 8DXW8 0009000 1 50 50
TE254197 D7A 02/19/92 07/11/96 N PADDLE BOARD 0009000 1 200 300
TE254198 D7A 02/19/92 07/11/96 N ADAPTOR 0009000 1 50 50
TE254199 D7A 11/27/93 07/11/96 LFRA PTR ADAPTOR 0009000 1 50 50
TE254201-1 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30
TE254201-10 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30
TE254201-2 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30
TE254201-3 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30
TE254201-4 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30
TE254201-5 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30
TE254201-6 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 30 30
TE254201-7 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 80 30
TE254201-8 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 80 30
TE254201-9 D7A 03/26/92 07/11/96 N GROUND CABLES 0009000 1 80 30
TE254300 D4B 07/18/96 06/14/96 N T/F ESP LFRA 0007785 1 200 200
TE254301 TOWSON 04/19/94 09/30/96 N T/F SUMMER MEM, PNB 0008960 1 7795 7796
0008980
TE254302 TOWSON 04/19/94 09/30/96 N T/F BMFMR SUMMER SEQ PWB 0008965 1 8135 8135
TE254303 TOWSON 04/19/94 09/30/96 N T/F ARTHMTC BRD ASSY 0007710 1 5293 5293
TE254304 TOWSON 04/19/94 09/30/96 N T/F BFA CONTROL PNB 0007705 1 5342 5342
TE254305 TOWSON 04/19/94 09/30/96 N T/F INTERPOLATOR PNB 000895-4 1 7349 7349
000995-3
0008985
0008995-2
<PAGE>
4-JUN-97 Page: 4 TOOL MASTER
Contract Number:N00024-86-C-6236 Description: TB-23/BQ ASA TOOL/T/E Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
80008995-1
TE254306 TOWSON 04/19/94 09/30/96 N T/F LFRA DAC PNB ASSY 8668995-1 1 6867 6867
Toling 21 39323
Test Equip. 186 886982
Total 267 926305
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00024-89-C-6066 Description: ADC/MK-3-ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T220333 MODERN PATTERN &FOU 08/02/93 10/14/96 N CASTING MOLD, PROPELLER 6667375 1 350 350
T220464 9826 08/05/97 08/17/96 Y TORQUING FIXTURE, VISE 1 1600 1500
T220465-1 9826 06/05/97 09/17/96 Y TORQ WRENCH 75"LB BC50577 1 100 100
T220465-2 C5C 06/05/97 07/18/96 Y TORQ WRENCH 75"LB BC50576 1 100 100
T220466-2 C5C 06/05/97 06/02/97 Y TORQ WRENCH 75" LB BC50576 1 100 100
T220466-3 9820 06/05/97 06/02/97 Y TORQ WRENCH BC51507 1 100 100
T220467ABC-1 9820 06/05/97 09/17/96 N VAC ENCAP CHAMBER UPR STK 1 3000 3000
T220468ABC-1 9820 06/05/97 09/17/96 N VAC ENCAP CHAMBER TOP/LWR 1 3000 3000
T220469A 9820 06/05/97 09/17/96 N VACUUM SYSTEM PUMP 1 2500 2500
T2204698 9820 06/05/97 09/17/96 N VACUUM SYSTEM MANIFOLD 1 350 350
T220470-1 CAL LAB 05/29/97 09/17/96 Y TORQ WRENCH 48"LB BC50581 1 100 100
T220470-2 CAL LAB 05/29/97 09/17/96 Y TORQ WRENCH 48"LB BC50580 1 100 100
T220471 9820 06/05/97 09/17/96 N FEED THRU ASSY BOND FIXT 1 180 180
T220472 C5C 06/04/97 09/17/96 N ULTRASONIC CLEANER 1 1200 1200
T220473 9820 06/05/97 09/17/96 N RING PAD CNTRING/BOND FIX 1 350 350
T220474-1 9820 06/05/97 09/17/96 N BONDING FIXTURE 1 1250 1250
T220474-2 9820 06/05/97 09/17/96 N BONDING FIXTURE 1 1250 1250
T220475-1 9820 06/05/97 09/17/96 N LOWER STACK ASSY FIXTURE 1 250 250
T220475-1 9820 06/05/97 09/17/96 N LOWER STACK ASSY FIXTURE 1 250 250
T220476-? CAL LAB 05/09/97 09/17/96 Y CRIMP TOOL 1 130 130
T220476-2 CAL LAB 05/29/97 09/17/96 Y CRIMP TOOL BC50020 1 130 130
T220477-1 NPO M/A 03/10/94 09/17/96 N MOLD, LWR CLAM SHELL 1 3100 3100
T220477-2 9820 06/05/97 09/17/96 N MOLD, LWR SHELL REY C 8028900 1 1002 1002
8028925-2
T220478-1 C5C 05/30/97 09/17/96 N MOLD, UPPER CLAM SHELL 1 2750 2750
T220478-2 C5C 05/30/97 09/17/96 N MOLD, UPPER CLAM SHELL REV C 8028900 1 965 965
T220479 9820 06/05/97 09/17/96 N LATHE 1 5500 5500
T220480-1 9820 06/05/97 09/17/96 N STACK WIRING ASSY 1 750 750
T220480-2 9820 06/05/97 09/17/96 N STACK WIRING ASSY 1 750 750
T220481 NPO M/A 03/10/94 09/17/96 N UPPER STACK WIRING FIXT 1 150 150
T220482-1 NPO M/A 03/10/94 09/17/96 Y TORQUE WRENCH, 25 LBS 1 125 125
T220482-2 9820 06/05/97 06/02/97 Y TORQ WRENCH 25"LB BC60631 1 125 125
T220483-1 9820 06/05/97 09/17/96 N BUS WIRE FORMING FIXTURE 1 400 400
T220483-2 9820 06/05/97 09/17/96 N BUS WIRE FORMING FIXTURE 1 400 400
T220506 9820 06/05/97 09/17/96 N 30 GAL POLYETHYLENE TANK 1 300 300
T220533 9820 06/05/97 N MOLD, MID COUPLING 1 250 250
T220534-1 9820 06/05/97 N MOLD, COIL BOARD 1 500 500
T220523 9820 06/05/97 09/17/96 N MOLD 8132888-2 1 3000 3000
T220524 9820 06/05/97 09/17/96 N MOLD 8132887-2 1 3000 3000
T404001-1 C5D 01/14/92 07/02/96 N HIOLD FIX, HOVER CONT 4709300 1 125 125
T404001-2 C5D 06/23/93 07/02/96 N HOLD, FIXT HOVER CONT 4709300 1 125 125
T404002 C5D 01/23/92 07/02/96 N PANEL, HOVER CONTROL 4709300 1 275 275
T404003 C5D DOS 01/14/92 07/02/96 Y PANEL ASSY, HOVER ASSY 4709300 1 275 275
T404004-1 C5D 01/14/92 07/02/96 N END CAP, RDT POOL TEST 4709300 1 175 175
T404004-2 C5D 01/14/92 07/02/96 N END CAP, RDT POOL TEST0 4709300 1 175 175
T404006-1 C5D 10/21/96 10/16/96 N ADAPT HOLD FIXT, RDT 4709300 1 421 421
T404006-2 C5D 01/14/92 07/02/96 N ADAPT HOLD FIXT, RDT 4709300 1 421 421
TE254416 9820 06/05/97 09/17/96 N COIL ASSY TEST FIXTURE 1 1170 1170
TE256000-3 C5D DOS 01/23/92 07/02/96 Y GAGE, HELICOID PRESSUR0 4709300 1 950 950
Tooling 46 41431
Test Equip. 2 2120
Total 48 43551
<PAGE>
4-JUN-97 Page:1 TOOL MASTER
Contract Number: N00383-88-G-K301 Description: Q13B SPEC TOOL/TEST EQUIP Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T207231 C6E 06/17/93 07/02/96 N DRILL JIQ 10872184567 1 321 321
T207232 C6E 06/17/93 07/02/96 N DRILL JIQ 1087218 1 478 478
T207233 C6E 06/17/93 07/02/96 N DRILL JIQ 1087218-2 1 198 198
1087218-1
T207234 C6E 06/17/93 07/02/96 N ALIGNMENT FIXTURE 1087218-3 1 78 78
T207385-ABCD C6D 09/30/93 07/02/96 N PRESSURE TEST FIXTURE 1060394 1 322 322
T207395&A C4D 08/05/96 08/05/96 N PRESSURE TEST FIXTURE 1048920 1 494 494
T207397 C5D 09/30/98 07/02/98 N TEST PLATE 1067248 1 170 170
T207611 C3F 02/28/92 08/27/96 N DRILL JIQ 1043165 1 212 212
T207631 C3F 03/03/92 06/27/96 N MOLD 1057269 1 590 590
T207650 SONFARRELL, INC. 12/04/72 07/12/96 N MOLD 1067222 1 2219 2219
T207664-1 C2B 06/02/98 06/27/96 N BOND & LOCATE FIXTURE 1049927 1 57 57
T207664-2 C2B 06/02/98 08/27/96 N BOND & LOCATE FIXTURE 1049927 1 57 57
T207664-3 C2B 06/02/92 08/27/96 N BOND & LOCATE FIXTURE 1049927 1 57 57
T207664-4 C2B 08/23/94 06/27/96 N LOCATING FIXTURE 1049927 1 57 57
T207727-1 C7A 05/14/96 08/02/96 N BAFFLE HOLDING FIXTURE 3187780 1 63 63
1049928
T207727-2 TELFWHSE 08/01/93 08/02/96 N BAFFLE HOLDING FIXTURE 1049928 1 63 63
3187780
T207727-3 TELFWHSE 08/01/93 08/02/96 N BAFFLE HOLDING FIXTURE 3187780 1 38 38
1049926
T207727-4 TELFWHSE 08/01/93 08/02/96 N BAFFLE HOLDING FIXTURE 3187780 1 63 63
1049928
T207727-5 TELFWHSE 08/01/93 08/02/95 N BAFFLE HOLDING FIXTURE 3187780 1 63 63
1049928
T207727-6 TELFWHSE 08/01/93 08/02/96 N BAFFLE HOLDING FIXTURE 3187780 1 63 63
1049920
T207727-7 TELFWHSE 08/01/93 08/02/96 N BAFFLE HOLDING FIXTURE 3167780 1 63 63
1049928
T207776 9852B 01/10/78 08/09/96 N TANK TEST FIXTURE 1049980 1 159 159
T207965 LINMOLD CO. 03/08/73 07/12/95 N MOLD 1067240-998 1 724 724
T208013 TELFWHSE 08/01/93 08/02/96 N ALUMINUM DIE, FWD END 1050364 1 2970 2970
T208014 TELFWHSE 08/01/93 08/02/96 N ALUMINUM DIE 1050364 1 2359 2309
T208015 TELFWHSE 08/01/93 08/02/96 N PUSHOFF RING 1060364 1 31 31
T208018 TELFWHSE 08/01/93 08/02/96 N STEEL MANDREL 1060384 1 1082 1082
T208118 RUBBERCRAFT 11/11/85 07/17/96 N MOLD, COYER FLANGE 1070522 1 417 417
T208355 C7B 01/30/97 07/10/96 N SHAKE TEST FIXTURE (1 SET) 1049201 1 25 25
T208556 BLOOMERS METAL STAMP 09/21/77 07/10/96 N FORM DIE 1048304 1 862 662
T208557 BLOOMERS METAL STAMP 09/21/77 07/10/96 N FORM DIE 1048364 1 285 285
T208682A/B G & D INDUSTRIES 02/26/87 07/23/96 N DRILL JIG & GAGE 1047160 1 834 834
T209075 J4D 02/20/96 02/20/96 N TANK TEST FIXT 1049928 1 0 0
T209151 C4B 03/11/92 06/28/96 N HYDRO STD ADAPTER 1049928 1 167 167
T211537 C4F 02/27/92 07/01/96 N DRILL JIG 3134269 1 93 93
T211538 C5F 11/02/94 07/02/96 N PERM MOLD 3153771 1 246 246
T211600 C5A 03/05/92 07/01/96 N TEMPLATE 3134276 1 28 28
T211601 C5A 03/05/92 07/01/96 N TEMPLATE 3134272-1 1 16 16
T211602 C5A 03/05/92 07/01/96 N TEMPLATE 3134272-2 1 16 16
T211603 C5A 03/05/92 07/01/96 N TEMPLATE 1 33 33
T211619 C5A 03/05/92 07/01/96 N TEMPLATE 3134263-1 1 97 97
T211620 C6E1 02/28/92 01/09/96 N ROUTER FIXTURE 3134263-1 1 81 81
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00019-97-G-0008 Description: ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T211623 TURNER CASTING CORP. 07/25/91 07/12/96 N WOOD PATTERN 3153759 1 331 331
T211624 C6F 02/27/92 07/09/96 N WOOD PATTERN 3153766 1 329 329
T211648 C5A 03/05/92 07/01/96 N TEMPLATE 3152716-1 1 45 45
T211664 C5A 03/05/92 07/01/96 N TEMPLATE 3134317 1 41 41
T211665 C5A 03/05/92 07/01/96 N TEMPLATE 3154333-1 1 45 45
T211666 C5A 03/05/92 07/01/96 N TEMPLATE 3154333-2 1 37 37
T211667 C5A 03/05/92 07/01/96 N TEMPLATE 3154271 1 33 33
T211670 ACE RUBBER CO. 04/19/72 07/01/96 N CAVITY MOLD 1060397 1 971 971
T211672 C3F 02/20/92 06/27/96 N CAVITY MOLD 3153078 1 229 229
T211779 C5A 03/05/92 07/01/96 N TEMPLATE 3154340-1 1 113 113
T211780 C5A 03/05/92 07/01/96 N MOLD FIXTURE 3154940-1 1 64 64
T211781 C5A 03/05/92 07/01/96 N TEMPLATE 315340-2 1 33 33
T211782 C5A 11/03/94 07/01/96 N TEMPLATE 3154342 1 28 28
T211812 C5E 06/24/93 07/02/96 N PERMANENT MOLD 3153755 1 487 487
T211813ABCD TEMPCO 09/11/90 07/10/96 N CASTING MOLD 3144273 1 608 608
T211847A/B G & D INDUSTRIES 02/26/87 07/23/96 N FABRIC MODELS 1 639 1270
T211849 G & D INDUSTRIES 02/26/87 07/23/96 N HI-TEMP DIE 3166690 1 749 749
T211860A/B G & D INDUSTRIES 02/26/87 07/23/96 N DRILL/TRIM FIXTURE 3165990 1 555 555
T211851 G & D INDUSTRIES 02/26/87 07/23/96 N FABRIC MODELS 3165990 1 333 333
T211852 G & D INDUSTRIES 02/27/87 07/23/96 N HI TEMP DIE 3165070 1 360 360
T211911 TEL FWHSE 08/01/93 08/02/96 N COMPRESSION MOLD 3149664 1 3692 3692
T212172 F2A 07/31/95 07/12/96 N CABLE HARNESS BRD REV A 3134270 1 43 43
T213144 C3F 02/03/92 06/27/96 N SINGLE CAVITY MOLD 3152816-1 1 322 322
T213322 TELFWHSE 08/01/92 08/02/96 N CHECK FIXTURE 1000365 1 643 643
T213537-1 C5C 09/30/93 07/01/96 N LOCATING TOOL 3167509 1 50 50
T213537-2 C5C 03/09/80 08/09/96 N LOCATING TOOL 3167509 1 50 50
T213537-3 C5C 09/30/93 07/01/96 N LOCATING TOOL 3167689 1 50 50
T213537-4 C5C 08/09/96 08/09/96 N LOCATING TOOL 3167589 1 50 50
T213537-5 C5C 09/30/93 07/01/96 N LOCATING TOOL 3167589 1 50 50
T2136772A C5E 06/17/93 07/02/96 N DRILL FIXTURE 3153200 1 498 498
T215466 C5A 03/05/92 07/01/96 N TEMPLATE 3166495 1 385 385
T216629-1 C5A 03/05/92 07/01/96 N SPANNER WRENCH 3161360 1 54 54
T216629-2 C5A 03/05/92 07/01/96 N SPANNER WRENCH 3103186 1 54 54
T216238 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 147 147
T216239 C5A 08/21/96 07/01/96 N WALES TEMPLATE 1 49 49
T216240 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 134 134
T216241 C6E4 02/20/92 07/09/96 N ROUTER PLATE 1 206 206
T216242 C5A 03/05/92 07/01/96 N ROUTER PLATE 1 79 79
T216243 C5A 03/05/92 07/01/96 N ROUTER PLATE 1 60 60
T216351 C5A 03/05/92 07/01/96 N P. C. TEMPLATE 1 30 30
T216352 C6E4 02/20/92 07/09/96 N ROUTER PLATE 1 243 243
T216354 C5A 03/05/92 07/01/96 N ROUTER PLATE 1 57 57
T216355 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 79 79
T216357 C6E3 02/20/92 07/09/96 N P. C. TEMPLATE 1 42 42
T216358 C5A 10/19/93 07/01/96 N WALES TEMPLATE 1 49 49
T216359 C5A 03/01/93 07/01/96 N WALES TEMPLATE 1 42 42
T216360 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 42 42
T216361 C5A 09/09/96 07/01/96 N WALES TEMPLATE 1 91 91
T216362 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 42 42
T216378 C5A 03/05/92 07/01/96 N DRILL FIXTURE 1 246 246
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00383-88-G-K301 Desription: ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T216453 C5A 10/29/93 07/01/96 N WALES TEMPLATE 1 85 85
T216455 C5A 03/05/92 07/01/96 N PANTO MASTER 1 198 198
T216415 C5A 05/03/93 07/01/96 N WALES TEMPLATE 1 122 122
T216416 C5A 03/05/92 07/01/96 N DRILL FIXTURE 1 295 295
T216417 C6E3 04/13/94 07/09/96 N WALES TEMPLATE 1 129 129
T216418 C5A 03/09/93 07/01/96 N WALES TEMPLATE 1 122 122
T216419 C6E3 03/09/93 07/09/96 N WALES TEM[LATE 1 262 262
T216420 C6E1 03/09/93 07/09/96 N WALES TEMPLATE 1 246 246
T216421 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 77 77
T216422 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 80 80
T216423 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 160 160
T216439 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 48 48
T216440 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 91 91
T216441 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 142 142
T216443 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 99 99
T216445 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 114 114
T216447 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 83 83
T216448 C6E2 0205/92 0709/96 N WALES TEMPLATE 1 122 122
T216449 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 152 152
T216451 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 236 236
T216452 C6E2 02/20/92 07/09/96 N ROUTER PLATE 1 137 137
T216453 C5A 03/05/92 07/01/96 N WALES TEMPLATE 1 293 293
T216454 C6E1 02/20/92 07/09/96 N WALES TEMPLATE 1 129 129
T216455 C6E2 02/28/92 07/09/96 N ROUTER PLATE 1 214 214
T216456 C6E1 02/20/92 07/09/96 N P. C. TEMPLATE 1 297 297
T216457 C6E1 02/20/92 07/09/96 N P. C. TEMPLATE 1 103 103
T216458 C6E1 02/20/92 07/09/96 N P. C. TEMPLATE 1 103 103
T216459 C6E3 09/30/92 07/09/96 N P. C. TEMPLATE 1 73 73
T216460 C6E3 12/05/93 07/09/96 N P. C. TEMPLATE P/N REV C 1 80 80
T216461 C6E3 12/08/93 07/09/96 N P. C. TEMPLATE 1 72 72
T216462?A C6E1 05/07/95 07/09/96 N P. C. TEMPLATE 1 90 90
T216465 C5A 05/10/92 07/01/96 N SPOT WELD FIXTURE 1 77 77
T2164652-A C6E4 04/13/94 07/09/96 N SHEAR & ROUTER TEMP REV A 3184045-2 1 171 171
T216478 C5A 03/05/92 07/01/96 N PREP FIXTURE 1 19 19
T216485 C5A 03/01/93 07/01/96 N WALES TEMPLATE 1 42 42
T216488 TOWSON 04/26/94 09/30/96 N PREP FIXTURE 1 31 31
T216491 C5A 03/0/92 07/01/96 N WALES TEMPLATE 1 49 49
T216500-1 C5A 09/27/96 07/01/96 N PREP BLOCK 1 10 10
T216500-2 C5A 07/01/96 09/27/96 N PREP BLOCK 1 10 10
T216505 C5A 03/21/94 07/01/96 N WALES TEMPLATE 1 54 10
T216522?-A C5A 03/05/92 07/01/96 N PREP FIXTURE 1 245 245
T216567-1 9852B 06/17/96 08/17/96 N ALIGNMENT FIXTURE 3183305-601 1 74 74
T216567-2 9852B 06/17/96 08/17/96 N ALIGNMENT FIXTURE 3183305-601 1 74 74
T217147 C5A 03/06/92 07/01/96 N TEMPLATE 3188469-4 1 127 127
T217828 C5A 03/06/92 07/01/96 N MOLD FIXTURE 1049920 1 201 201
T217829 C4C 03/12/92 08/28/96 N STRAIGHTENING TOOL 1049920 1 440 440
T217835 C5A 03/05/92 07/01/96 N DRILL FIXTURE 1 405 405
T217838-1 C4B 03/11/92 08/28/96 N HOLD FIXT. PRE AMP 3135110 1 137 137
T217838-2 C4B 03/11/92 08/28/96 N HOLD FIXT. PRE AMP 3135110 1 137 137
T217846 C5A 08/24/94 07/01/96 Y STATION HEADER FIXTURE 1 500 500
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00383-88-G-K301 Description: ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T217913 C5A 03/05/92 07/01/96 N WALES TEMPLATE 3183111 1 30 30
3183111-1&2
T217966 C5A 03/06/92 07/01/95 N DRILL TEMPLATE 3183204-001 1 65 65
T217967 C5A 03/06/92 07/01/96 N DRILL TEMPLATE 3182504-001 1 65 65
T217968 C5A 03/06/92 07/01/96 N DRILL TEMPLATE 31835??-001 1 65 65
T217969 C5A 03/06/92 07/01/96 N DRILL TEMPLATE 3183804-001 1 65 65
T218121 C5B 03/09/92 07/01/96 N TEMPLATE 3198341-2 1 45 45
3198341-1
T218427 C5B 03/09/92 07/01/96 N SHEAR TEMPLATE 3310718-5 1 41 41
3310718-6
T218248-1 CAL LAB 05/04/97 06/14/96 Y CRIMPER 3310700 1 0 0
T218248-2 C4A 03/15/97 07/10/96 Y CRIMP TOOL 3310700 1 70 70
T218248-3 9852E 03/05/96 06/21/96 Y HAND CRIMP TOOL 3310700 1 70 70
T218249-1 9852E 03/16/97 07/01/96 Y HAND CRIMP TOOL 3310700 1 140 140
T218249-2 CAL LAB 06/04/97 05/10/95 Y CRIMP TOOL 3310700 1 70 70
T218249-3 9852E 03/05/96 07/10/96 Y HAND CRIMP TOOL 3310700 1 70 70
T218257 F3A 03/07/97 07/15/96 N CABLE BOARD 3310574-101 1 216 216
T218258 F2A 02/16/92 07/12/96 N CABLE BOARD 331074? 1 104 104
T218259 F3A 03/07/97 07/15/96 N CABLE BOARD 331074? 1 520 520
T2182?? F3A 03/07/97 08/09/96 N CABLE BOARD 3310666-102 1 5350 5350
T218287 C7E6 02/28/92 07/10/96 N TEMPLATE 3310669-1 1 74 74
T218288 C6E17 02/20/92 07/09/96 N TEMPLATE 3310669-2 1 91 91
T218296 C6E21 02/21/92 07/09/96 N PANTO MASTER 3310662-1 1 158 158
T218297 C5B 01/03/94 07/01/96 N TEMPLATE 3183406 1 99 99
T218298 C6E18 02/20/92 07/09/95 N TEMPLATE 3310662-2 1 87 87
T218299 C6E18 02/21/92 07/09/96 N TEMPLATE 3310662-3 1 87 87
T218300 C5B 03/09/92 07/01/96 N DRILL FIXTURE 3195284 1 125 125
T218302 C5B 02/20/92 07/01/96 N SPOT WELDIMG FIXTURE 3192493 1 136 136
T218303 C5B 03/09/92 07/01/96 N TEMPLATE 3192493-3 1 52 52
T218304 C5B 03/09/92 07/01/96 N TEMPLATE 3192493-2 1 52 52
T218305 C5B 03/09/92 07/01/96 N TEMPLATE 3192493-1 1 52 52
T218306 C5B 03/09/92 07/01/96 N TEMPLATE 3195407-? 1 26 26
T218307 C6E14 02/28/92 07/09/96 N TEMPLATE 3194984 1 86 86
T218308 C5B 03/09/92 07/01/96 N TEMPLATE 3194984-2 1 139 139
T218309 C6E6 02/20/92 07/09/96 N WALES TEMPLATE 3310694-1 1 136 136
T218310 C5B 03/09/92 07/01/96 N FORM TEMPLATE 3183778-4 1 61 61
T218311 C5B 03/09/92 07/01/96 N TEMPLATE 3183778-7 1 87 87
T218312 C5B 03/09/92 07/01/96 N TEMPLATE, BRCKT CLMP REV B 3195926 1 71 71
T218313 C6E6 02/20/92 07/09/96 N TEMPLATE 3310693-1 1 184 184
T218314 C5B 03/09/92 07/01/96 N TEMPLATE 3310693-2 1 187 187
T218315 C6E7 02/20/92 07/09/96 N TEMPLATE, REV C 3310772-1 1 124 124
T218316 C5B 03/09/92 07/01/96 N TEMPLATE 3310772-2 1 112 112
T218317 C5B 03/09/92 07/01/96 N TEMPLATE 3310772-3 1 112 112
T218318 C6E19 02/21/92 07/09/96 N TEMPLATE 3310655-1 1 74 74
T218320 C6E6 02/20/92 07/09/96 N TEMPLATE 3310679 1 61 61
T218321 C6E6 02/21/92 07/09/96 N PANTO MASTER 3310679 1 100 100
T218326 C6E9 02/20/92 07/09/96 N TEMPLATE 3310661 1 126 126
T218327 C5B 03/09/92 07/01/96 N TEMPLATE 3310826 1 48 48
T218328 C5B 03/09/92 07/01/96 N TEMPLATE 3310827 1 48 48
T218329 C6E15 02/20/92 07/09/96 N TEMPLATE 3310548-1 1 113 113
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00383-88-G-K301 Description:Q13B SPEC TOOL/TEST EQUIP Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T218330 C6E12 02/20/92 07/09/96 N TEMPLATE 3310648-2 1 113 113
T218331 C5B 03/09/92 07/01/96 N TEMPLATE 3310648-3 1 26 26
T218332 C6E6 02/21/92 07/09/96 N TEMPLATE, REV D 3310659 1 74 74
T218333 C6E5 02/20/92 07/09/96 N TEMPLATE 3310699 1 74 74
T218334 C5B 03/09/92 07/01/96 N TEMPLATE 3310698 1 61 61
T218335 C5B 03/09/92 07/01/96 N TEMPLATE 3310733 1 61 61
T218336 C5E18 02/21/92 07/09/96 N TEMPLATE 3310708 1 87 87
T218338 C5B 03/09/92 07/01/96 N TEMPLATE, P/N REV D 3310656 1 149 149
T218339 C6E9 02/20/92 07/09/96 N ROUTER PLATE 3310856 1 174 174
T218340 C6E12 02/20/92 07/09/96 N TEMPLATE 3310649-1 1 118 118
T218341 C5E19 02/21/92 07/09/96 N TEMPLATE 3310549-2 1 48 48
T218343 C5B 05/05/93 07/01/96 N TEMPLATE 3310883-2 1 13 13
T218344 C6E5 02/20/92 07/09/96 N TEMPLATE 3310846-7 1 139 139
T218345 C6E12 02/20/92 07/09/96 N TEMPLATE 3310846-10 1 168 168
T218346 C6E5 02/20/92 07/09/96 N TEMPLATE 3310845-11 1 128 128
T218347 C6B 03/09/92 07/01/96 N TEMPLATE 3310852 1 74 74
T218348 C6E7 02/20/92 07/09/96 N TEMPLATE 3310848-1 1 100 100
T218349 C6E6 02/20/92 07/09/96 N TEMPLATE 3310848-9 1 139 139
T218350 C637 02/21/92 07/09/96 N TEMPLATE 3310846-20 1 74 74
T218351&A C7E10 03/02/92 07/10/96 N DRILL TEMPLATE 3310850 1 180 180
3319245
3310546
3319246
T218352A C7E8 03/02/92 07/10/96 N DRILL FIXTURE 3310646 1 180 180
3310246
T218356 C6E9 02/24/92 07/09/96 N TEMPLATE 3310688-1 1 400 400
T218357 C6B 03/09/92 07/01/96 N TEMPLATE, P/N REV F 3310688-1 1 126 126
T218358 C5B 03/09/92 07/01/96 N TEMPLATE 3310688-2 1 21 21
T218359 C5B 03/09/92 07/01/96 N TEMPLATE 3310688-3 1 48 48
T218360 C5B 03/09/92 07/01/96 N TEMPLATE 3310698-4 1 26 26
T218361 C5B 03/09/92 07/01/96 N TEMPLATE 3310714-1 1 100 100
T218362 C6E21 02/24/92 07/09/96 N TEMPLATE 3310714-1 1 129 129
T218363 C5B 03/09/92 07/01/96 N TEMPLATE 3310731 1 48 48
T218364 C6B 12/21/93 07/01/96 N TEMPLATE 3310315 1 74 74
T218365 C5B 03/09/92 07/01/96 N TEMPLATE 3310314 1 65 65
T218366 C6B 03/09/92 07/01/96 N TEMPLATE 3310713 1 48 48
T218367 C5E5 02/21/92 07/09/96 N TEMPLATE 3310817 1 113 113
T218368 C5B 03/09/92 07/01/96 N TEMPLATE, P/N REV C 3310833 1 48 48
T218369 C5B 05/05/93 07/01/96 N TEMPLATE, P.N REV B 3310739 1 49 49
T218370 C838 02/21/92 07/09/96 N ROUTER PLATE, P/N REV B 3310729 1 100 100
T218371 C7E4 02/24/92 07/10/96 N TEMPLATE 3310654-1 1 300 300
T218372 C6E18 02/24/92 07/09/96 N TEMPLATE, 3310654-2 1 74 74
T218373 C58 03/09/92 07/01/96 N TEMPLATE, P/N REV F 3310654-3 1 65 65
T218374 C8E9 02/24/92 07/09/96 N TEMPLATE 3310654-4 1 200 200
T218375 C6E19 02/24/92 07/09/96 N TEMPLATE 3310654-5 1 78 78
T218376 C6E18 02/24/92 07/09/96 N TEMPLATE 3310654-6 1 25 25
T218377 C5B 03/09/92 07/01/96 N TEMPLATE 3310654-8 1 252 252
T218378 C5B 03/09/92 07/01/96 N TEMPLATE 3310654-9 1 103 103
T218379 C6E6 02/21/92 07/09/96 N TEMPLATE 3310654-10 1 74 74
T218380 C6E19 02/24/92 07/09/96 N TEMPLATE 3310737 1 39 39
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00383-88-G-K301 Description:Q13BSPEC TOLL/TEST EQUIP Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T218381 C6E19 02/24/92 07/09/96 N TEMPLATE 3314162-1 1 87 87
T218382 C5B 03/09/92 07/01/96 N TEMPLATE 3310019 1 95 95
T218383 C7E6 02/24/92 07/10/96 N TEMPLATE 3310736 1 274 274
T218384 C7F 07/10/96 07/10/96 N ROUTER FIXTURE 3310736 1 329 329
T218385 C7E9 03/02/92 07/10/96 N TEMPLATE 3310686 1 213 213
T218386 C5B 05/11/93 07/01/96 N TEMPLATE 3310712-1 1 74 74
T218387 C7E6 03/02/92 07/10/96 N ROUTER FIXTURE 3310689-1 1 352 352
T218388 C7E6 03/02/92 07/10/96 N TEMPLATE ,P/N REV C 3310689-1 1 352 352
T218389 C6E12 02/24/92 07/09/96 N PANTO MASTER 3310689-1 1 74 74
T218390 C5B 03/09/92 07/01/96 N TEMPLATE 3310732 1 61 61
T218399 F2A 02/10/92 07/12/96 N CABLE BOARD 3310760 1 110 110
T218401 F3B 02/10/92 07/15/96 N CABLE BOARD 3310744 1 223 223
T218404 C5B 03/09/92 07/01/96 N LAYOUT TEMPLATE 3310689 1 87 87
T218417 C6E21 02/24/92 07/09/96 N PANTO MASTER 3310689 1 320 320
T218422ABC C7E11 02/26/92 07/16/96 N PANTO MASTER 1 213 213
T218423 C7E6 02/24/92 07/10/96 N TEMPLATE 3310647-1 1 275 275
T218426 C6E9 02/24/92 07/09/96 N TEMPLATE 3310662-1 1 232 232
T218429 C6E21 02/24/92 07/09/96 N PANTO MASTER 3310662-1 1 91 91
T218432 C5B 03/09/92 07/01/96 N TEMPLATE 3314157-1 1 126 126
T218443 C5B 03/09/92 07/01/96 N SHEAR & BRAKE FIXTURE ? 1 39 39
T218444 C5B 03/09/92 07/01/96 N SHEAR & BRAKE FIXTURE ? 1 48 48
T218445 C5B 03/09/92 07/01/96 N TEMP/SH/BR/FIXTURE 3310246-4 1 39 39
T218447 C6E14 02/24/92 07/09/96 N SHEAR & FORM TEMPLATE 3310646-5 1 61 61
T218458 F2A 05/08/94 07/11/96 N HARNESS BOARD 3310770-401 1 215 215
T218459 C5B 03/09/92 07/01/96 N TEMPLAE 8190038-3 1 48 48
T218478 F3A 03/10/97 07/15/96 N HARNESS BOARD, AZAI P1 3310685-401 1 65 65
T218480 F2A 02/10/92 07/12/96 N HARNESS BOARD 3316665-403 1 65 65
T218498 F3A 03/10/97 07/15/96 N HARNESS BOARD J2 3316600-402 1 101 101
T218621 C5B 03/09/92 07/01/96 N DRILL FIXTURE 3310834-1 1 50 50
T218622 C5B 02/12/92 07/16/96 N HOLD FIXTURE 3190099 1 75 75
T218625 C5B 03/09/92 07/01/96 N DRILL FIXTURE 3316686-5 1 60 60
T218632 9234 07/06/87 08/08/96 N MAKS ALIGN FIXT 1 708 708
T218748 C5B 03/10/92 07/01/96 N FORM TEMP 3190082-2 1 75 75
T218754 C5B 03/10/92 07/01/96 N TEMPLATE 3310765 1 135 135
T400300 TELPWHSE 08/01/93 08/02/96 N LAY-IP HOLD 1006364 1 28 28
T400301 TELPWHSE 08/01/93 08/02/96 N FOAM MOLD 1060364-1 1 419 419
T400302 TELPWHSE 08/01/93 08/02/96 N FOAM MOLD 1000364-2 1 335 335
T400303 TELPWHSE 08/01/93 08/02/96 N LAYUP MOLD 1060364-4 1 54 54
T400304 TELPWHSE 08/01/93 08/02/96 N MADREL 1056364-3 1 431 431
T400306ABC TELPWHSE 08/01/93 08/02/96 N DRILL JIG 1000364 1 620 620
T400312 KLUNE 11/22/72 07/12/96 N BLANK DIE 1049920-6 1 110 110
T400411 TELPWHSE 08/01/93 08/02/96 N DRILL JIG 2669401 1 324 324
T400447 ACE TUBE CO. 07/28/71 07/10/96 N CAVITY MOLD 1660301 1 260 260
T401132 C3F 02/28/92 06/27/96 N SINGLE CAVITY MOLD 3051072 1 165 165
T401133 C3F 02/28/92 06/27/96 N SINGLE CAVITY MOLD 3051073 1 180 180
T401143AB C6F 02/28/92 07/09/96 N PATTERN & CORE BOX 3151156 1 1305 1305
0T401144ABC C2F 02/28/92 06/26/96 N PATTEN & 2 CORE BOXES 3151157 1 985 985
T401145ABCD C6F 02/28/92 07/08/96 N PLASTIC PATTERN 3151158 1 795 795
T401421 INDUSTRIAL TUBE 07/02/71 07/17/96 N FORMING TOOL 31655871 1 740 740
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00383-98-G-K301 Description: ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T401599 G & D INDUSTRIES 02/26/87 07/23/96 N PLASTER MOCKUP 3185355 1 2670 2670
T401600 G & D INDUSTRIES 02/26/87 07/23/96 N MOLD 3185355 1 2636 2636
T401601 G & D INDUSTRIES 02/26/87 07/23/96 N FORNING TOOL A 3185355 1 1115 1115
T401602 G & D INDUSTRIES 02/26/87 07/23/96 N FORNING TOOL B 3185355 0 0 0
T401603 G & D INDUSTRIES 02/26/87 07/23/96 N TRIM DRILL FIXTURE 3185355 1 676 676
T401605 G & D INDUSTRIES 02/26/87 07/23/96 N EPOXY MOLD 3185350 1 1960 1960
T401606 G & D INDUSTRIES 02/26/87 07/23/96 N EPOXY MOLD A 3185350 1 860 860
T401607 G & D INDUSTRIES 02/26/87 07/23/96 N FORNING TOOL B 3185350 0 0 0
T401608 G & D INDUSTRIES 02/26/87 07/23/96 N TRIM DRILL FIXTURE 3185350 1 510 510
T401609 G & D INDUSTRIES 02/26/87 07/23/96 N APPLY ROUTING FIXTURE 3185350 1 150 150
T401611 G & D INDUSTRIES 02/26/87 07/23/96 N EPOXY MOLD 3185350 1 795 795
T402404 D5F POS 02/11/97 06/26/96 N PROTRACTOR, REEL MACHINE 3323471 1 250 250
T402421 G & D INDUSTRIES 02/25/87 07/23/96 N MOLD LOW FUNNEL 3318695 1 3500 3500
T402463 G & D INDUSTRIES 02/26/87 07/23/96 N LAYUP MOLD 3165890 1 2500 2500
T603660-1 CICON 01/26/97 07/10/96 N HARNESS HOLDING FIXTURE 1 258 258
T603660-2 CICON 01/26/97 09/27/96 N HARNESS HOLDING FIXTURE 1 258 258
T603766 C6B 03/11/92 07/08/96 N ROUTER PLATE 3310646 1 120 120
3319246 45 45
T603767 C6B 03/11/92 07/06/96 N SAW TEMPLATE 3319246 1 45 45
T603768 C6B 03/11/92 07/06/96 N SAW TEMPLATE 3310646 1 45 45
T603769 C6B 03/11/92 07/09/96 N SAW TEMPLATE 3319246 1 45 45
3310646
T603770 C6B 03/11/92 07/09/96 N SAW TEMPLATE 3319246 1 45 45
3310646
T603771 C6B 03/11/92 07/09/96 N SAW TEMPLATE 3310646 1 45 45
3319246
T603777 C6B 03/11/92 07/09/96 N DRILL JIG 3310834-2 1 100 100
T603780 C6B 03/11/92 07/09/96 N ROUTER PLATE 3310846 1 120 120
3319246
TE251006 D5A 09/27/96 09/27/96 N POLAR & RES. HYDRO T/F 1 110 110
TE251008 9852D 06/25/96 06/25/96 REEL MACH PANEL 1 344 344
TE251008-4 D4B 06/25/96 06/25/96 N TEST CONNECTOR P5657 1 100 100
TE251008-5 D4B 06/25/92 06/25/96 N TESTCONNECTOR P5019 1 100 100
TE251008-6 D4B 06/25/96 06/25/96 CONTINUITY TEST FIXTURE 1 100 100
TE251010 9852AR/O 05/10/89 06/09/96 N JIFF-LIFT T/F 1 175 175
TE251696 9234 04/12/93 06/17/96 T/F NAFI-4 & HYBRID 4F 3185210 1 875 875
TE251698 9234 04/14/93 06/17/96 T/F NAFI-3 & HYBRID 3F 3185205 1 767 767
TE251705 D6C 02/26/92 07/11/96 N TEST FIXT, HYBRID 1021 3185240 1 324 324
TE251710 9762 06/20/90 09/27/96 T/F CURSOR POSITION CONT 3184674 1 511 511
TE251712 D6A 06/25/97 07/11/96 N TEST FIXTURE 318370 1 347 347
TE251714 DSF POS 02/10/97 07/12/96 N TEST FIXTURE 1 316 316
TE251748 9234 04/13/93 06/17/96 TEST FIXTURE 3185220 1 300 300
TE251754 D7E 07/02/92 07/11/96 N SONAR CABLE, SUPER TESTER 1 439 439
TE251757 9234 04/14/93 06/17/96 TEST FIXTURE 3185075 1 363 363
TE251760 9852BOOS 06/18/96 06/18/96 SYST ATP TEST STATION 1 8450 8450
TE251760-1 9852BOOS 06/16/96 06/18/96 PANEL, METER 1 1000 1000
TE251760-10 D7F POS 02/10/97 07/18/96 Y OSCXLLOSCOPE 1 3600 3600
TE251760-12 9852BOOS 06/10/96 06/18/96 PANEL, POWER CONTROL 1 800 800
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00383-88-G-K301 Description: Q13B SPEC TOOL/TEST EQUIP Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
TE251760-13 9852B 06/18/96 05/18/96 PANEL, 50HS POWER 1 700 700
TE251760-14 9852B 06/18/95 05/18/96 PANEL, 400HS POWER 1 1500 1500
TE251760-2 9852B 06/18/96 05/18/96 TIMER, COUNTER 1 2500 2500
TE251760-3 9852BOOS 06/18/96 06/18/96 BURST GEN DRANETZ 206A 1 5000 5000
TE251760-4 D7F POS 02/10/97 05/18/96 WAVEFORM SYNTHESIZER 1 3000 3000
TE251760-5 9852B 06/18/96 06/18/96 CONTROL PANEL, MARTIX 1 80000 80000
TE251760-6 9852B 06/18/96 05/18/96 CONTROL PANEL 1 28761 28761
TE251760-7 9852B 06/18/96 06/18/96 BLOWER 1 150 150
TE251760-8 9852BOOS 06/18/96 05/18/96 PANEL, METER 1 1500 1500
TE252142 9762 05/24/82 07/22/96 N T/F K.C. TESTER D/A CONV 3184649 1 355 355
TE252143 D5F POS 02/10/97 07/11/96 N SUPER TEST CABLE SA 1 200 200
TE252144 9852B 12/12/80 06/13/96 N TEST CABLE SB 1 200 200
TE252146 D5F POS 02/10/97 09/27/96 N TEST CABLE 1 200 200
TE252147 D5F POS 02/10/97 06/13/96 N SUPER TEST CABLE TO 1 200 200
TE252162 9852B 07/22/96 07/22/96 N TEST CABLE 1 200 200
TE252167 DSF POS 02/10/97 07/11/96 N SUPER TEST CABLE TF 1 200 200
TE252168 DSF POS 02/10/97 07/11/96 N SUPER TEST CABLE TG 1 200 200
TE252170 9852B 06/13/96 06/13/96 N TEST CABLE 1 200 200
TE252171 9852B 05/13/96 06/13/96 N TEST CABLE 1 200 200
TE252181 9234 04/19/93 06/17/96 TEST FIXTURE 3185110 1 511 511
TE252182 9234 04/14/93 06/17/96 TEST FIXTURE 3185190 1 402 402
TE252184 9234 04/14/93 06/17/96 TEST FIXTURE 3185100 1 411 411
TE252185 9234 04/14/93 06/17/96 TEST FIXTURE 3185085 1 411 411
TE252186 9234 04/14/96 06/17/96 POWER DISTRIBUTOR BOX 3185230 1 411 411
TE252187 9234 04/14/93 06/17/96 POWER DISTRIBUTOR BOX 3185196 1 411 411
TE252188 9234 04/14/93 06/17/96 POWER DISTRIBUTOR BOX 31652.35 1 411 411
TE252189 9234 04/14/93 06/17/96 POWER DISTRIBUTOR BOX 3165000 1 377 377
TE252230 9234 04/14/93 06/17/96 I. F. HYBRID TEST FIXT 3185100 1 753 753
TE252230-1 DTC POS 02/10/97 09/27/96 Y POWER SUPPLY 1 550 550
TE252237 D5C 02/20/92 07/10/96 N TEST FIXTURE, 1026 1 700 700
TE252242 D3F POS 02/10/97 07/10/96 N TEST HEAD 3183370 1 225 225
TE252250 D3F POS 02/10/97 07/10/96 N TEST HEAD 3183450 1 225 225
TE252251 D3F POS 02/10/97 07/10/96 N TEST HEAD 3183355 1 250 250
TE252253 D3F POS 02/10/97 07/10/96 N TEST HEAD 3183225 1 183 183
TE252300 D4B 02/16/92 07/10/96 TEST FIXTURE 1 653 653
TE252301 D5B 02/19/92 07/10/96 N TEST FIXTURE 3185110 1 214 214
TE252304 9234 07/21/88 06/17/96 HYBRID TRIM FIXTURE 1 214 214
TE252406 D3F POS 02/10/97 07/10/96 N ADAPT MULTILAYER BOARD 3194811 1 1500 1500
TE252475 8900XDCR 10/30/79 08/09/96 NULLMETER 1 3566 3566
TE252483 9852B 05/14/82 08/09/96 TEST FIXTURE 3188225 1 540 540
TE252484-1 D6B 02/25/92 07/11/96 N T/F MAD GATING 2A11 3188483 1 1147 1147
TE252493 9852B 06/18/96 06/18/96 SONAR BITE CNTL A11 3196615 1 1500 1500
TE252494 9852B 06/18/96 06/18/96 DOME CONTROL T/F A2 1 750 750
TE252652 9852B 06/18/96 06/18/96 TEST FIXTURE 3190366 1 500 500
TE252656-1 D4A 02/18/92 07/10/96 N TEST FIXTURE A2A12 3188486 1 2703 2703
TE252657 9852B 06/18/96 06/18/96 TEST FIXTURE 3183426 1 3000 3000
TE252659 9852B 06/18/96 06/18/96 TEST FIXTURE 3198205 1 3205 3205
TE252672 9852B 06/18/96 06/18/96 TEST FIXTURE 3182630 1 1721 1721
TE252674 9852B 06/18/96 06/18/96 TEST FIXTURE 3316405 1 2256 2256
TE252675 9852B 06/18/96 06/18/96 TEST FIXTURE 3198740 1 2805 2805
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00383-88-G-K301 Description: ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
TE252677 9852B 06/18/96 06/18/96 TEST FIXTURE 3163454 1 1721 1721
TE252678 9852B 06/18/95 06/18/95 TEST FIXTURE 3165460 1 1721 1721
TE252679 9852B 06/18/95 06/18/95 TEST FIXTURE 3165445 1 2233 2233
TE252938 D4B 07/18/95 06/18/96 TEST FIXTURE 3163630 1 1900 1900
TE252739 D4A 02/18/92 07/10/96 N TEST FIXTURE 3167820 1 1921 1921
TE252740 D5B 02/19/92 07/10/95 N TEST FIXTURE 3315780 1 2256 2256
TE252747 9852B 06/18/96 06/18/95 TEST FIXTURE 3185435 1 2776 2776
TE252748 9852B 06/18/95 06/1896 N TEST FIXTURE, AMP DRIVER 3188209 1 1577 1577
TE252749 D5C 00S 02/20/92 07/10/96 Y TEST FIXTURE 3315775 1 2050 2050
TE252765 9852B 06/18/96 06/18/96 TEST FIXTURE 31986610 1 2000 2000
TE252778 9852B 06/18/96 06/18/96 TEST FIXTURE 3196270 1 595 595
TE252803 9852B 05/15/96 06/18/96 TEST FIXTURE 3193465 1 1705 1705
TE252815 9852B 05/16/96 06/18/96 TEST FIXTURE 3195510 1 1700 1700
TE252818 9852B 05/18/96 06/18/96 TEST FIXTURE 3195565 1 2138 2138
TE252835 9852B 06/18/96 06/18/96 TEST FIXTURE 3199831 1 743 743
TE252836 9852B 06/18/96 06/18/96 TEST FIXTURE 3196575 1 2132 2132
TE252837 9852B 06/18/96 06/18/96 TEST FIXTURE 3310500 1 1542 1542
TE252846 9852B 06/18/96 06/18/96 TEST FIXTURE 3185430 1 2200 2200
TE252847 9852B 06/18/96 06/18/96 TEST FIXTURE 3183485 1 2200 2200
TE252848 9852B 06/18/96 06/18/96 TEST FIXTURE 3315750 1 2200 2200
TE252??? 9852B 06/18/96 06/18/96 TEST FIXTURE 3315730 1 1700 1700
TE252850 9852B 06/18/96 06/18/96 TEST FIXTURE 3185290 1 2200 2200
TE252851 9852B 06/18/96 06/18/96 TEST FIXTURE 3183?95 1 1700 1700
TE252883 9852B 06/18/96 06/18/96 TEST FIXTURE 3195605 1 2336 2336
TE252855 9852B 06/18/96 06/18/96 TEST FIXTURE 3183270 1 1710 1710
TE252857 9852B 06/18/96 06/18/96 TEST FIXTURE 3183390 1 1100 1100
TE252864 9852B 06/18/96 06/18/96 TEST FIXTURE 3315760 1 2330 2330
TE252866 D3A 11/18/94 07/10/96 N TEST FIXT, SERVO MECHANISM 1 2118 2118
TE252873 9852B 06/18/96 06/18/96 TEST FIXTURE 3183230 1 1502 1502
TE252876 9852B 06/18/96 06/18/96 TEST FIXTURE 3198365 1 2688 2688
TE252881 9852B 06/18/96 06/18/96 TEST FIXTURE 3198255 1 2115 2115
TE252882 9852B 06/18/96 06/18/96 TEST FIXTURE 3183610 1 1542 1542
TE252888-1 TELFWHSE 06/18/93 08/02/96 END BELL TEST FIXTURE 3149654 1 2400 2400
TE252888-2 TELFWHSE 06/18/93 08/02/96 END BELL TEST FIXTURE 3149654 1 2400 2400
TE252896 9852B 06/18/96 06/18/96 TEST FIXTURE A2A? 3310695 1 2000 2000
TE252897 9852B 06/18/96 06/18/96 TEST FIXTSPEECH AMP A4 3190065 1 1800 1800
TE252898 9852B 06/18/96 06/18/96 TEST FIXT FUNCT GEN A4A1 3310715 1 2200 2200
TE252899 9852B 06/18/96 06/18/96 TEST FIXTLOG FILTR A4A2 3310720 1 2200 2200
TE252900 9852B 06/18/96 06/18/96 TEST FIXT MONITOR A5 3190280 1 2000 2000
TE252901 9852B 06/18/96 06/18/96 TEST FIXT MOD CAR GEN A6 3190015 1 2000 2000
TE252903 9852B 06/18/96 06/18/96 TEST FIXT METER SEAL A? 3190085 1 2200 2200
TE25904 9852B 06/18/96 06/18/96 TEST FIXT PHASE DET A9 3190270 1 2000 2000
TE252905 9852B 06/18/96 06/18/96 TEST FIXT/SICCOND A 16 3190095 1 1800 1800
TE252916 9852B 06/18/96 06/18/96 TEST FIXT PHASE SHFTR A11 3190095 1 1800 1800
3190275
TE252917 9852B 06/18/96 06/18/96 T/F PREAMP ATTEN A12 A13 3190023 1 2000 2000
TE252918 9852B 06/18/96 06/18/96 TEST FIXT ECHO PROC A 14 3190045 1 2000 2000
TE252919 9852B 06/18/96 06/18/96 TEST FIXT RANGE DELAY A15 3190025 1 2000 2000
TE252920 9852B 06/18/96 06/18/96 T/F PULSE WIDTH/MSTR TIMR 3190075 1 2200 2200
TE252921 9852B 06/18/96 06/18/96 T/F HI VOLT REG A2A7 3310705 1 2000 2000
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00383-88-G-K301 Description: 013B SPEC TOOL/TEST EQUIP Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
TE252923 9852B 05/18/96 06/18/96 T/F MAD & SAD OSC A1A1A2 3310675 1 1800 1800
TE252924 9852E 09/19/95 08/21/96 T/F INTERFC BUFFER A1A1A1 3310725 1 2500 2500
TE252930 D6B 04/30/92 07/11/96 N TEST FIXTURE OP 3190055 1 240 240
TE252931 D5B 02/19/92 07/10/96 N TEST FIXT 3162393 1 2350 2350
TE252932 9852B 06/18/96 06/18/96 CAL FIXT A2A8 LOW VOL. REG 3310595 1 1800 1800
TE252938 9852B 06/18/96 06/18/96 N T/F COS SHAPER 4A14 3316150 1 2000 2000
TE252939 9852B 06/18/96 06/18/96 T/F MULTIPLEXER 4A14 3316155 1 2000 2000
TE254182 9234 04/14/93 06/17/95 N TEST FIXT, ALC & LEVEL 3325690 1 1500 1500
TE254183 9234 04/14/93 06/17/95 N TEST FIXT, D/A CONVERTER 3318663 1 1200 1200
TE254185 9234 04/14/93 06/17/96 N TEST FIXT, AUDIO FILTER 3190431 1 800 800
3189110
TE254186 9234 04/14/93 06/17/96 N TEST FIXT, BANDPASS FILTER 1 1200 1200
TE254187 9234 04/14/93 06/17/96 N TEST FIXT, #1 CONTINUITY 1 1500 1500
TE254189 9234 04/14/93 06/17/96 N TEXT FIXT, #2 CONTINUITY 3322393 1 1500 1500
8013841
3326598
8013840
8013845
3326590
TE254245 9234 04/14/93 06/17/96 N TEST FIXTURE 3327394 1 2000 2000
TE254247 9234 04/06/?? 08/17/96 N TEST FIXT ?? PRO #2 3310440 1 4300 4300
TE265146 TELFWHSE 08/01/93 08/02/96 N HYDROPHONE 1 10151 10151
TE265151 D7C 06/24/93 07/11/96 N SONAR CABLE 1 1174 1174
TE265155 D7D 03/24/92 07/11/96 Y RECORD TEST SET 1 5000 5000
TE270001 98520POS 10/28/95 06/25/96 Y TENSIONING MACHINE 3162368 1 5416 5416
TE4251192-1 9284 07/09/87 07/16/96 BURN IN RACK S/N 1 1 851 851
TE45105 C/L IFR 08/12/96 08/12/96 VAR O SHIFT GENERATOR 1046912 1 2722 2722
Tooling 307 84488
Test Equip. 139 275242
Total 446 359730
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00019-92-G-0195 Description:Q-13F SPEC TOOL/REEL MACH Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
403012-1 NAS FLA 02/02/95 10/15/96 N DRILL JIG DOME CONT 2 RYA 8030640 1 1342 1342
403012-2 9855A 05/03/95 05/25/96 N DRILL JIG DOME CONT 2 RYA 8030640 1 1342 1342
403012-3 NAS CA 02/02/95 09/18/96 N DRILL JIG DOME CONT 2 RYA 8030640 1 1342 1342
403013-1 NAS FLA 02/02/95 10/15/96 N DRILL JIG DOME CONT 2 RYA 8030640 1 1342 1342
403013-2 9855A 05/03/95 06/25/96 N DRILL JIG DOME CONT 2 RYA 8030640 1 1342 1342
403013-3 NAS CA 02/02/95 09/16/96 N DRILL JIG DOME CONT 2 RYA 8030640 1 1342 1342
403016-1 NAS FLA 02/02/95 10/15/96 N HOLE TEMP CBL RETNR REV A 8030640 1 898 898
403016-2 C5B 12/17/95 06/25/96 N HOLE TEMP CBL RETNR REV A 8030640 1 898 898
403016-3 NAS CA 02/02/95 09/16/96 N HOLE TEMP CBL RETNR REV A 8030640 1 898 898
403017-1 NAS CA 02/02/95 09/16/96 N TOOL, DRIP PAN BRICKT REV A 8030640 1 500 500
403017-2 C5B 08/25/95 06/25/96 N TOOL, DRIP PAN BRICKT REV A 8030640 1 500 500
403017-3 NAS FLA 02/02/95 10/15/96 N TOOL, DRIP PAN BRICKT REV A 8030640 1 500 500
403018-1 NAS CA 02/02/95 09/15/96 N CUTOUT GUIDE UPR PAN RY A 8030640 1 500 500
403018-2 C5B 06/25/95 06/25/96 N CUTOUT GUIDE UPR PAN RY A 8030640 1 500 500
403018-3 NAS FLA 02/02/95 10/15/96 N CUTOUT GUIDE UPR PAN RY A 8030640 1 500 500
403019-1 NAS CA 02/02/95 09/16/96 N TOOL, UPPER DRIP PAN REV A 8030640 1 371 371
403019-2 C5B 06/25/95 06/25/96 N TOOL, UPPER DRIP PAN REV A 8030640 1 371 371
403019-3 NAS FLA 02/02/95 10/15/96 N TOOL, UPPER DRIP PAN REV A 8030640 1 371 371
403020-1 NAS CA 02/02/95 09/16/96 N TOOL, MID DRIP PAN REV A 8030640 1 335 335
403020-2 C5B 05/25/96 06/25/96 N TOOL, MID DRIP PAN REV A 8030640 1 335 335
403020-3 NAS FLA 12/02/95 ?? N TOOL, MID DRIP PAN REV A 8030640 1 335 335
403021-1 NAS CA 12/02/95 09/16/96 N TEMPLATE CBL GUIDE REV A 8030640 1 273 273
403021-2 C5B 12/17/95 06/25/96 N TEMPLATE CBL GUIDE REV A 8030640 1 273 273
403021-3 NAS FLA 02/02/95 10/15/96 N TEMPLATE CBL GUIDE REV A 8030640 1 273 273
403022-1 C5B 05/03/95 07/08/96 N TEMPLATE CBL GUIDE REV A 8030640 1 644 644
403022-2 NAS CA 02/02/95 09/16/96 N TEMPLATE CBL GUIDE REV A 8030640 1 644 644
403022-3 NAS FLA 02/02/95 10/15/96 N TEMPLATE CBL GUIDE REV A 8030640 1 644 644
403023-1 NAS CA 02/02/95 09/16/96 N ALIGN TOOL CBL RETNR REV A 8030640 1 2019 2019
402023-2 9852D 05/03/95 08/25/96 N ALIGN TOOL CBL RETNR REV A 8030640 1 2019 2019
402023-3 NAS FLA 02/02/95 10/15/96 N ALIGN TOOL CBL RETNR REV A 8030640 1 2019 2019
Tooling 34 24672
Test Equip. 0 0
Total 34 24672
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00024-92-C-6501 Description:TB-23X Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T403048 C7B 10/17/96 10/17/96 N TERMINATION TOOL REV B 1 1364 1364
T403050-1 C7B 06/05/96 06/05/96 N MARKING BRACKET 1 174 131 305
T403050-2 C7B 06/26/96 06/26/96 N MARKING BRACKET 1 174 131 305
T403050-3 C7B 06/26/96 06/26/96 N MARKING BRACKET 1 174 131 305
T403050-4 C7B 06/26/96 06/26/96 N MARKING BRACKET 1 174 131 305
T403054-1 C7B ABC 06/18/96 06/18/96 N MOLD, MASTER 1 192 192
T403054-2 C7B ABC 10/17/96 10/17/96 N MOLD, MASTER 1 192 192
T403055-1 C7B 10/17/96 07/09/96 N CENTERING PIN 1 44 44
T403055-2 C7B 10/17/96 07/09/96 N CENTERING PIN 1 44 44
T403055-3 C7B 10/17/96 07/09/96 N CENTERING PIN 1 44 44
T403055-4 C7B 10/17/96 07/09/96 N CENTERING PIN 1 44 44
T403055-5 C7B 10/17/96 07/09/96 N CENTERING PIN 1 44 44
T403055-6 C7B 10/17/96 07/09/96 N CENTERING PIN 1 44 44
T403056-1 C7B 10/17/96 07/15/96 N TENSION ADAPTER 1 220 226
T403056-2 C7B 10/17/96 07/15/96 N TENSION ADAPTER 1 220 225
T403058/B C7B 10/17/96 07/09/96 N MARKING BRACKET 1 435 435
T4053068 C7B 03/13/96 06/14/96 N LMANDREL, HOSE GRINDER 1 287 237
T403061 C7B 10/17/96 10/17/96 N SLEEVE, COLLET, HOSE TERM 1 208 208
T403062 C7B 10/17/96 10/17/96 N COLLET, HOSE TERM 1 385 385
T403063 C7B 07/10/96 07/10/96 N MOLD, LRH HOSE TERM 1 534 534
T403064 C7B 07/10/96 07/10/96 Y MOLD, HOSE TERM BOND STA 1 534 534
T403068 ?? 12/17/95 04/04/96 N SAGE ASSEMBLY 1 801 301
T403070 ?? 09/25/95 09/14/96 N COUPLER, HOSE 1 237 237
T403071 8600 ENG 09/25/95 09/15/95 N ADAPTER 1 359 359
T403072 8600 ENG 09/25/95 09/14/95 N ADAPTER 1 292 292
T403073 C7B 06/13/96 06/14/96 N ADAPTER 1 267 267
T403074A-1 8600 09/27/95 09/27/95 N FITTING 1 148 148
T403074A-2 8600 09/27/95 09/27/95 N FITTING 1 148 148
T403075 C7B 10/17/96 10/17/95 N PULL PIG 1 208 208
T403078-1 C7B 07/10/96 07/10/96 N TENSION TEST TOOL REY A 1 878 878
T403078-2 C7B 07/10/96 07/10/96 N TENSION TEST TOOL REY A 1 878 878
T403078-3 C7B 07/10/96 07/10/96 N TENSION TEST TOOL REY A 1 876 878
T403078-4 C7B 07/10/96 07/10/96 N TENSION TEST TOOL REY A 1 878 878
T403082 C7B 02/26/97 06/04/86 Y GAGE ASSY REV A 1 1250 1260
Tooling 24 13227
Test Equip. 0 0
Total 34 13227
<PAGE>
PROPERTY ADMINISTRATOR WORKSHEET
DCRL FORM 098 DCRL SUP 1 TO DLAM 8135.1
- -----------------------------------------------------------------------------------------------------------------------------------
Contractor CAGE: Allied Signal Ocean Systems As of Date: 03/03/97 Page: 1
- -----------------------------------------------------------------------------------------------------------------------------------
Estimated Total Value Special Other Agency Indust Material
Control Number Completion Government Special Test Plant Peculiar Plant
Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks
- -----------------------------------------------------------------------------------------------------------------------------------
N00019-85-C-0148 54 LI 3 51 Sikorsky
$127,527 $ 7239 120288 AQS-13F
N00024-90-C-6013 364 LI 62 302 Northrop
-Grumman
$2,932,360 $ 394768 2537592 SQR-19
N00024-90-C-6031 2 LI 1 1
$837 $ 437 400 TARC
$12,040 $ 425 11615 TARC
N00024-92-C-6225 5 LI 1 4 Northrop
-Grumman
FP
$12,040 $ 425 11615 NSIS
0 LI
$0 $
0 LI
$0 $
Total LI 68 362 0 0 0 0 0
Total $ 403,294 2,681,510 0 0 0 0 0
GRAND TOTAL LINE ITEMS 430 GRAND TOTAL $$ 3,084,804
<PAGE>
PROPERTY ADMINISTRATOR WORKSHEET
DCRL FORM 098 DCRL SUP 1 TO DLAM 8135.1
- -----------------------------------------------------------------------------------------------------------------------------------
Contractor CAGE: Allied Signal Ocean Systems As of Date: 03/03/97 Page: 2
- -----------------------------------------------------------------------------------------------------------------------------------
Estimated Total Value Special Other Agency Indust Material
Control Number Completion Government Special Test Plant Peculiar Plant
Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks
- -----------------------------------------------------------------------------------------------------------------------------------
0 LI
$0 $
0 LI
$0 $
0 LI
$0 $
0 LI
$0 $
0 LI
$0 $
0 LI
$0 $
0 LI
$0 $
Total LI 0 0 0 0 0 0 0
Total $ 0 0 0 0 0 0 0
GRAND TOTAL LINE ITEMS 0 GRAND TOTAL $$ 0
<PAGE>
PROPERTY ADMINISTRATOR WORKSHEET
DCRL FORM 098 DCRL SUP 1 TO DLAM 8135.1
- -----------------------------------------------------------------------------------------------------------------------------------
Contractor CAGE: Allied Signal Ocean Systems As of Date: 03/03/97 Page: 3
- -----------------------------------------------------------------------------------------------------------------------------------
Estimated Total Value Special Other Agency Indust Material
Control Number Completion Government Special Test Plant Peculiar Plant
Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks
- -----------------------------------------------------------------------------------------------------------------------------------
0 LI
$0 $
0 LI
$0 $
0 LI
$0 $
0 LI
$0 $
0 LI
$0 $
0 LI
$0 $
0 LI
$0 $
Total LI 0 0 0 0 0 0 0
Total $ 0 0 0 0 0 0 0
GRAND TOTAL LINE ITEMS 0 GRAND TOTAL $$ 0
<PAGE>
PROPERTY ADMINISTRATOR WORKSHEET
DCRL FORM 098 DCRL SUP 1 TO DLAM 8135.1
- -----------------------------------------------------------------------------------------------------------------------------------
Contractor CAGE: Allied Signal Ocean Systems As of Date: 03/03/97 Page: 4
- -----------------------------------------------------------------------------------------------------------------------------------
Estimated Total Value Special Other Agency Indust Material
Control Number Completion Government Special Test Plant Peculiar Plant
Type Contract Date Property Tooling Equipment Equipment Property Equipment CAP GFM Remarks
- -----------------------------------------------------------------------------------------------------------------------------------
LI
$
LI
$
LI
$
LI
$
LI
$
LI
$
LI
$
Total LI 68 362 0 0 0 0 0
Total $ 403294 2681510 0 0 0 0 0
GRAND TOTAL LINE ITEMS 430 GRAND TOTAL $$ 3,084,804
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00019-85-C-0148 Description: AQS-13F ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
402843 STILLMAN SEAL 08/07/92 07/17/96 N MOLD, SOL CAV, ELEMENT 3328838 1 3639 3639
3328838
402898A/B C4B 03/09/92 06/28/96 N U-JOINT TENSILE FIXT 1 300 300
402963 STILLMAN SEAL 02/16/93 07/17/96 N MOLD, BOOT BLADDER 8002763 1 3300 3300
8002763
E254178 9234 04/14/93 06/17/96 N BURN-IN BOARD 8013841 1 1500 1500
E254179 9234 04/14/93 06/17/96 N BURN-IN BOARD 8013845 1 1500 1500
E254203 D4F POS 02/08/97 07/10/96 N ESP TEST FIXT A3 BRD 8011756 1 1613 1613
E254204 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A4 BRD 8011766 1 2419 2419
E254205 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A8 BRD 8009381 1 1723 1723
E254206 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A9 BRD 8011796 1 2266 2266
E254207 D4F POS 02/08/97 07/10/96 N ESP TEST FIXT A12 BRD 8011808 1 2472 2472
E254208 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A13 BRD 8011816 1 1648 1648
E254209 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A7 BRD 8013556 1 2418 2418
E254210 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A14 BRD 8014086 1 1723 1723
E254211 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A27 BRD 8011826 1 5152 5152
E254212 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A28 BRD 8011831 1 4048 4048
E254213 9852B 06/20/98 06/20/96 N AUTO BRD T/S FIXT 4A29 8009235 1 1600 1600
E254214 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A40 BRD 8011841 1 1880 1880
E254215 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A38 BRD 8011836 1 2773 2773
E254216 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A6 BRD 8013955 1 1526 1526
E254217 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A?? BRD ?? 1 1890 1890
E254218 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A1 BRD 8013966 1 1890 1890
E254219 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A4 BRD 8013946 1 1890 1890
E254220 D4F POS 02/08/97 07/11/96 N ESP FIXT DOPPLER PROC 8013878 1 1000 1000
E254222 9852B 06/20/96 06/20/96 N AUTO BRD T/S FIXT 10A3 8011758 1 2500 2500
E254223 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A5 BRD 8013961 1 1820 1820
E254224 D4F POS 02/08/97 07/11/96 N ESP TEST FIXT A7 BRD 8011788 1 2220 2220
E254225 D4F POS 02/08/97 07/11/96 N ESP T/F A1 CKT CD 8011381 1 1190 1190
E254226 D4F POS 02/08/97 07/11/96 N ESP T/F I/0-A2 CKT CD 80111388 1 1240 1240
E254227 D4F POS 02/08/97 07/11/96 N ESP T/F LED-A3 CKT CD 80111391 1 1080 1080
E254230 9852B 07/01/88 06/20/96 N IEEE-488 BUS S/N 753 1 5899 5899
E254231 9852EL 07/18/88 07/15/96 N IEEE-488 BUS S/N 759 8013965 1 5899 5899
E254232 9852EL 12/03/92 07/15/96 N IEEE-488 BUS S/N 787 1 5899 5899
E254233 9852EL 10/02/88 08/02/96 N IEEE-488 BUS S/N 789 1 5899 5899
E254234 D4E 07/18/96 08/14/96 N TEST FIXT/ESP DOME CON 8014005 1 2610 2610
E254235 D4F POS 02/06/97 07/11/96 N ESP TEST FIXT A3 BRD 8013951 1 1990 1990
E254239 9852 06/30/88 08/20/96 N INTERFACE MOD PN (A28) 8011830 1 8000 8000
E254242 9852 06/18/88 08/20/96 N AUTO BRD T/F 10A9 BRD 8011795 1 1500 1500
E254243 9852 06/24/88 08/20/96 N AUTO BRD T/F PM 10A12 8011805 1 2000 2000
E254244 9852 06/28/88 08/20/96 N AUTO BRD T/F A40 FRT 8011640 1 1800 1800
E254245 9852 07/05/88 08/20/96 N AUTO BRD T/F DOME A10 8013970 1 2000 2000
E254248 D4F POS 02/05/97 07/11/96 N ESP TEST FIXT A24 BRD 8014026 1 2074 2074
E254250 9852 07/19/88 08/20/96 N AUTO BRD T/F DOME A1 8013955 1 1800 1800
E254251 9852 07/20/88 08/20/96 N AUTO BRD T/F MUX A18 8000190 1 1500 1500
8011890
E254252 9852B 08/14/96 08/14/96 N ESP CABLE 23E 1 250 250
E254253 9852B 08/14/96 08/14/96 N ESP CABLE 24E 1 250 250
E254254 9852B 08/14/96 08/14/96 N ESP CABLE 25E 1 250 250
E254256 9852B 08/14/96 08/14/96 N ESP CABLE 27E 1 100 100
<PAGE>
4-JUN-97 Page: TOOL MASTER
Contract Number: N00019-85-C-0148 Description: AQS-13F ST/STE Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
E254257 9852 09/12/88 08/20/96 N TEST FIXT/PC BRD 3A24 8014530-401 1 600 600
8014025
E254258 9852 08/26/88 08/20/96 N TEST FIXT A27 BRD 8011825 1 1500 1500
8013990
E254258-1 9852 08/26/88 08/20/96 N TEST CABLE A27 BRD 8011825 1 300 300
8013990
E254259 D4F POS 02/06/97 07/11/96 N ESP CARD HOLD, IND BRD 1 365 365
E254279 9852 01/17/89 08/20/96 N INTERFACE MOD FM (A37) 1 1800 1800
E254280 9852 04/05/89 08/20/96 N AUTO T/F A38 BRD ASSY 8011835 1 2500 2500
E254365 TOWSON 04/19/94 09/13/96 N T/F HP 3085 MUX A10, A17 8014075 1 10522 10522
8014070
Tooling 3 7239
Test Equip. 51 120288
Total 54 127527
<PAGE>
ORIGINAL DATE: MARCH 1, 1996 LOCATION: NPO
CONTRACT N00024-90-C-6013 SQQ SPECIAL TEST EQUIPMENT
Phy. Inv. REQUEST TO KEEP FOR:
Found Trans. BarCode CATEGORY DESCRIPTION
3/24/97 CAN VIM PWA TB-16 Number TE NUMBER
- -------------------------------------------------------------------------------------------------------------
0030983.00 1 FITS SUBASSY STE
X 0030983.01 TE254358-1 AFT DATA #1 TEST FIXTURE
X 0030983.02 TE254358-2 VOLTAGE MONITOR 1213D3903
X 0030983.03 TE254358-3 ?? 1213D3891
X 0030983.04 TE254358-4 AFT DATA #2 1213D3899
X 0030983.05 TE254358-5 CONTROL BOARD ITA PART 1
X 0030983.06 TE254358-6 CONTROL BOARD ITA PART 2
X 0030983.07 TE254358-7 LINE DRIVER #1 1215A3814
X 0030983.08 TE254358-8 LINE DRIVER #2
X 0030983.09 TE254358-9 CABLES
0030984.00 2 T/A PWA FIXTURES
X X 0030984.01 TE254359-1 ZEHNTEL IN CIRCUIT TEST FIX.
X X 0030984.02 TE254359-2 ZEHNTEL IN CIRCUIT TEST FIX.
X X 0030984.03 TE254359-3 ZEHNTEL IN CIRCUIT TEST FIX.
X X 0030984.04 TE254359-4 ZEHNTEL IN CIRCUIT TEST FIX.
X X 0030984.05 TE254359-5 ZEHNTEL IN CIRCUIT TEST FIX.
X X 0030984.06 TE254359-6 ZEHNTEL IN CIRCUIT TEST FIX.
X X 0030984.07 TE254359-7 ZEHNTEL IN CIRCUIT TEST FIX.
X X 0030984.08 TE254359-8 ZEHNTEL IN CIRCUIT TEST FIX.
X X 003098409 TE254359-9 ZEHNTEL IN CIRCUIT TEST FIX.
X X 0030984.10 TE254359-10 ZEHNTEL IN CIRCUIT TEST FIX.
X X 0030984.11 TE254359-11 ZEHNTEL IN CIRCUIT TEST FIX.
X X 0030984.12 TE254359-12 ZEHNTEL IN CIRCUIT TEST FIX.
0031037.00 3 T/A CAN FIXTURES
X X 0031037.01 TE254360-1 SN1 VIBRATION TEST FIXTURE
X X 0031037.02 TE254360-1 SN2 SOLID DELRIN VIBRATION FIXTURE QTY 1
X X 0031037.03 TE254360-1 SN3 SOLID DELRIN VIBRATION FIXTURE QTY 1
X X 0031037.04 TE254360-2 SN 1 (2PCS) SOLID DELRIN VIBRATION FIXTURE QTY 1
X X 0031037.05 TE254360-2 SN 2 (2PCS) SOLID DELRIN VIBRATION FIXTURE QTY 1
X X 0031037.06 TE254361-1 TDM A11 CAL/CGA COMM RECV
X X 0031037.07 TE254361-2 TDM A4 OVERVOLTAGE PROTECTOR
X X 0031037.08 TE254361-3 TDM A3 SHUNT REGULATOR
X X 0031037.09 TE254361-4 TDM A27 CALIBRATOR
X X 0031037.10 TE254361-5 HDTM A7 AFT VOLTAGE MONITOR
X X 0031037.11 TE254361-6 TDM A13 AMT D/D
X X 0031037.12 TE254361-7 TDM A7 NAD/VLF VOLTAGE REG
X X 0031037.13 TE254361-8 TDM A9 FORWARD POWER SUPPLY
X X 0031037.14 TE254361-9 TDM A21,A22,A23 GCA/SAMPLE HOLD
X X 0031037.15 TE254361-10 TDM A18 AD CONVERTER
X X 0031037.16 TE254361-11 HDTM A13 HEADING SENSOR
X X 0031037.17 TE254361-12 TDM A24 INVERSE GCA/?? FILTER
X X 0031037.18 TE254361-13 VLFM A5 3.1 ACOUSTIC MUX
X X 0031037.19 TE254361-14 CABLE LINE DRIVER
X X 0031037.20 TE254361-15 TDM A5 A6 + 39V ACOUSTIC REG
MAKE MODEL SERIAL # VALUE
- ------------------------------------------------------------
$ 38,507.00
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX SN 1-7 NSP
MGB 1418Z 962 $ 6,095.00
MGB 1418Z 939 $ 6,095.00
MGB 1418Z 965 $ 6,095.00
MGB 1418Z 984 $ 6,095.00
MGB 1418Z 987 $ 6,095.00
MGB 1418Z 951 $ 6,095.00
MGB 1418Z 988 $ 6,095.00
MGB 1418Z 955 $ 6,095.00
MGB 1418Z ?? $ 6,095.00
MGB 1418Z 963 $ 6,095.00
MGB 1418Z 980 $ 6,095.00
MGB 1418Z 956 $ 6,095.00
$ 216,892.00
S/N 1 NSP
S/N 2 NSP
S/N 3 NSP
NSP
NSP
BENDIX 1213D0359 NSP
BENDIX 1213D3546 NSP
BENDIX 1213D03?? NSP
BENDIX 1213D3683 NSP
BENDIX 1213D3380 NSP
BENDIX 1213D3779 NSP
BENDIX 1213D3851 NSP
BENDIX 1213D3657 NSP
BENDIX 1213D0357 NSP
BENDIX 1213D0359 NSP
BENDIX 1213D0369 NSP
BENDIX 1213D0920 NSP
BENDIX 1213D3482 NSP
BENDIX 1213D0382 NSP
BENDIX 1213D0689 NSP
<PAGE>
ORIGINAL DATE: MARCH 1, 1996 LOCATION: NPO
CONTRACT N00024-90-C-6013 SQQ SPECIAL TEST EQUIPMENT
Phy Inv. REQUEST TO KEEP FOR:
Found Trans. BarCode CATEGORY DESCRIPTION
3/24/97 CAN VIM PWA TB-16 Number TE NUMBER
- -------------------------------------------------------------------------------------------------
X X 0031037.21 TE254361-16 HDTM A2 AFT/A/D CONVERTER
X X 0031037.22 TE254361-17 HDTM A8 AFT P/S
X X 0031037.23 TE254361-18 LFAM ACOUSTIC MUX LINE DRIVE A2
X X 0031037.24 TE254361-19 LFAM A6 ACOUSTIC LINE DRIVER
X X 0031037.25 TE254361-20 HDTM A4 AFT ??
X X 0031037.26 TE254361-21 HDTM A1 8:1 MUX/GCA
X 0031037.28 TE254361-23 WORK STATION
X 0031037.29 TE254361-24 COMPUTER SYSTEM CONSISTING OF:
X 0031037.30 PART OF-24 SEAGATE ST-01 DRIVE CONTROLLER QTY 2
X 0031037.31 PART OF-24 4 OMB REMOVABLE HARD DRIVE DISK
X 0031037.32 PART OF-24 IEEE INTERFACE CARD 778092-??
X 0031037.33 PART OF-24 FLOPPY CONTROL
X 0031037.34 TE254361-25 COLOR MONITOR
X 0031037.35 TE254361-26 KEYBOARD
X 0031037.36 TE254361-27 MOUSE
X 0031037.37 TE254361-28 PRINTER
X 0031037.38 TE254361-29 FREQUENCY RESPONSE ANALYZER
X X 0031037.39 TE254361-30 SWITCH CONTROL UNIT AND BELOW
X X 0031037.40 PART OF-30 RELAY MULTIPLEXER
X X 0031037.41 PART OF-30 ??
X X 0031037.42 PART OF-30 ??
X X 0031037.43 PART OF-30 RACK FLANGE KIT
X X 0031037.44 PART OF-30 RACK FLANGE KIT
X X 0031037.45 TE254361-31 POWER SUPPLY
X X 0031037.46 TE254361-32 40 DB AMPL
X X 0031037.47 TE254361-33 PROG DIG MULTIMETER
X 0031037.48 TE254361-34A DIGITAL THERMOMETER
X X 0031037.?? TE254361-34B DIGITAL THERMOMETER
X X 0031037.49 TE254361-35 RAPID COOL REFRIG. RCULATOR
X X 0031037.50 TE254361-36 PROM A14 TDM
X X 0031037.51 TE254361-37 DATA DECODE STATUS A12 TDM
X X 0031037.52 TE254361-38 DIGITAL MULTIPLEXER TDM A15
X X 0031037.53 TE254361-39 PM/FL CAL TONE GEN A26 TDM
X X 0031037.54 TE254361-40 12:1 ACOUSTIC MUX A10
X 0031037.55 TE254361-41 AC COUPLER - HTS
X X 0031037.56 TE254361-42 ACOUSTIC CAN INTERFACE FIXTURES
X 0031037.57 TE254361-43 SPECIAL PNEUMATICS FITTINGS
X 0031037.58 PRESSURE CALIBRATOR 5000 BAAB
X 0031037.59 TE254361-45 OSCILATOR TEST BOX
X 0031037.60 TE254361-46 HDTM TEST FIXTURE
X 0031037.61 TE254361-47 CABLE
X 0031037.62 TE254361-48 MODULE/CAN INTERFACE BOX
X X 0031037.63 TE254361-49 DYNAMIC SIGNAL ANALYZER
X X 0031037.64 PART OF-49 RACK MOUNT KIT
X 0031037.65 TE254361-50 MODULE/CAN INTERFACE BOX
X X 0031037.66 TE254361-51 LFAM A7 6:1 ACOUSTIC MUX
MAKE MODEL SERIAL # VALUE
- ---------------------------------------------------------
BENDIX 1213D4608 NSP
BENDIX 1213D3641 NSP
BENDIX 1213C0138 NSP
BENDIX 1213D1451 NSP
BENDIX 1213D3592 NSP
BENDIX 1213D3551 NSP
NSP
NSP
NSP
NSP
NSP
050210 NSP
SAMTRON ?? NSP
FUJITSU F6033849 NSP
?? NSP
PANASONIC 1624 P1624-001 NSP
SCHLUMBERGER 302803 NSP
HP HP3488A NSP
HP HP44470A NSP
HP ?? NSP
HP ?? NSP
HP 50623972 NSP
HP 50623974 NSP
HP HP6833A S/N 3004A-02831 NSP
HP (INSIDE) HP455A S/N 530-01148 NSP
HP HP3478A S/N 2911A63677 NSP
FLUKE 2180A S/N 5130002 NSP
FLUKE NSP
S/N 910411 MDL 9500 NSP
BENDIX 1213D3612 NSP
BENDIX 1213D3673 NSP
BENDIX 1213D3664 NSP
BENDIX 1213D3584 NSP
BENDIX 1213D1449/1450 NSP
BENDIX NSP
BENDIX NSP
BENDIX S/N 1-5 NSP
EATON A1239 NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
HP HP3561A NSP
NSP
BENDIX NSP
BENDIX 1213D1448 NSP
<PAGE>
ORIGINAL DATE: MARCH 1, 1996 LOCATION: NPO
CONTRACT N00024-90-C-6013 SQQ SPECIAL TEST EQUIPMENT
Phy. Inv. REQUEST TO KEEP FOR:
Found Trans. BarCode CATEGORY DESCRIPTION
- -----------------------------------------------------------------------------------------------------------------
3/24/97 CAN VIM PWA TB-16 Number TE NUMBER
0030986.00 4 HARNESS TESTER
X 0030986.01 TE254362-1 MONITOR CTX 14"
X 0030986.02 TE254362-2 PRINTER
X 0030986.03 TE254362-3 COMPUTER
X 0030986.04 TE254362-4 TESTER
X 0030986.05 TE254362-5 RACK
X 0030986.06 TE254362-6 INTERFACE FIXTURE
X 0030986.07 TE254362-7 INTERFACE CABLE
X 0030986.07 TE254362-7 INTERFACE CABLE
X 0030986.07 TE254362-7 INTERFACE CABLE
X 0030986.07 TE254362-7 INTERFACE CABLE
X 0030986.07 TE254362-7 INTERFACE CABLE
X 0030986.07 TE254362-7 INTERFACE CABLE
X 0030986.07 TE254362-7 INTERFACE CABLE
X 0030986.07 TE254362-7 INTERFACE CABLE
X 0030986.08 TE254362-8 INTERFACE CABLE
Loss Report Filed 4/22/97 0030986.09 TE254362-9 ECL ADAPTER
0030987.00 ?? CABLES ??
X 0030987.01 ?? ??
X 0030987.02 TE254399-1 BLIND FLANGE PENETRATION CABLE AFT
X 0030987.03 TE254399-2 BLIND FLANGE PENETRATION CABLE FWD
X 0030987.04 TE254399-2 BLIND FLANGE PENETRATION CABLE FWD
X 0030987.05 TE254399-3 PRESSURE BALANCE OIL FILL PENANT CABLE AFT
X 0030987.06 TE254399-3 PRESSURE BALANCE OIL FILL PENANT CABLE AFT
X 0030987.07 TE254399-4 PRESSURE BALANCE OIL FILL PENANT CABLE FW
X 0030987.08 TE254399-4 PRESSURE BALANCE OIL FILL PENANT CABLE FW
X X 0030987.09 TE254399-5 BLIND FLANGE PENETRATION CABLE
X X 0030987.10 TE254399-5 BLIND FLANGE PENETRATION CABLE
X X 0030987.11 TE254399-6 PBOF PENDANT CABLE FWD
X X 0030987.12 TE254399-7 PBOF PENDANT CABLE FFT
0030988.00 6 MISC TEST FIXTURE
X 0030988.01 TE254401 SN1 MODULE DRUM REEL
X 0030988.02 TE254401 SN2 MODULE DRUM REEL
X 0030988.03 TE254401-2 MODULE CART
X 0030988.04 TE254348 EXTENSION CABLE 50 FT CONTINUITY TEST SET-UP
X 0030988.05 TE254349 COMPASS (IN GREEN BAG)
X 0030988.06 TE254383 TEST FIXTURE HEADING BENCH (WOODEN)
X 0030988.07 TE254367 YOW CABLE IF CABLE PO
X 0030988.08 TE254408 LINE DRIVER INTERFACE BOX
X X 0030988.09 TE254368 SAMPLE AND HOLD TEST BOX
X 0030988.10 TE254381 NPN XSTR FULSE T/F
X 0030988.11 TE254385 CABLE FITS BOX
X 0030988.12 TE254400 PENDANT CABLE FORWARD
MAKE MODEL SERIAL # VALUE
- -----------------------------------------------------------------------
$ 74,859.00
CVG5439 DBLCVG5431 NSP
PANASONIC KX-P1180 PCJ328KX-P1180 NSP
POWER FLEX AIR 0264821 NSP
ECYLPSE 501 5011010 NSP
NSP
BENDIX NSP
BENDIX SN1 NSP
BENDIX SN2 NSP
BENDIX SN3 NSP
BENDIX SN4 NSP
BENDIX SN5 NSP
BENDIX SN6 NSP
BENDIX SN7 NSP
BENDIX SN8 NSP
BENDIX SN1 & 2 NSP
BENDIX NSP
??
BENDIX ?? NSP
BENDIX SN2 NSP
BENDIX SN1 NSP
BENDIX SN2 NSP
BENDIX SN1 NSP
BENDIX SN2 NSP
BENDIX SN1 NSP
BENDIX SN2 NSP
SN1 NSP
SN2 NSP
NSP
NSP
$ 71,912.00
NSP
NSP
NSP
NSP
STOCKER/YALE DAAK01-89-C-0125 NSP
NSP
BENDIX (ON CART) NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
<PAGE>
ORIGINAL DATE: MARCH 1, 1996 LOCATION: NPO
CONTRACT N00024-90-C-6013 SQQ SPECIAL TEST EQUIPMENT
Phy. Inv. REQUEST TO KEEP FOR:
Found Trans. BarCode CATEGORY
03/24/97 CAN VIM PWA TB-16 Number TE NUMBER DESCRIPTION
- ------------------------------------------------------------------------------------------------------------
X X 0030988.13 TE254405-2 CABLE LINE DRIVER
Loss Report filed 1/29/97 0030988.14 TE254344 FUNCTIONAL GAIN TEST BOX
0030989.00 7 MISC TEST ADAPTERS
0030989.01 T220396 HDLG FIX. CAROUSEL MODULE TRASPORT REEL
X X 0030989.02 T220397 CART ATTACHED TO T220398
X X 0030989.03 T220398 FWD TENSION ADAPTER
X X 0030989.04 T220399 AFT TENSION ADAPTER
X X 0030989.05 TE254325 SN 1 BREAKOUT BOX AFT
X 0030989.06 TE254325 SN 2 BREAKOUT BOX AFT
X 0030989.07 TE254326 SN 1 BREAKOUT BOX FWD
X 0030989.08 TE254326 SN 2 BREAKOUT BOX FWD
X 0030989.09 TE254331 HANGING SCALE HS-284
X 0033415.00 TE254408 CALT BOX
X 0 TE254409 REFERENCE PREAMP/POSTAMP
X 0 TE254410 TDM D/A FILTER
X 0 TE254345 ADAPTER PENDANT, AFT
X 0030989.12 TE254413 MSC CHAMBER
X 0030989.13 TE254412 INTERFACE CABLE
X ?? ?? INTERFACE CABLE
X ?? ?? INTERFACE CABLE
X 0030989.15 TE254414 INTERFACE CABLE
X 0030989.16 TE254413 INTERFACE CABLE
X 0 TE254415 INTERFACE CABLE
X 0 TE254415 INTERFACE CABLE
X 0 TE254416 INTERFACE CABLE
X 0031016.01 TE254332 ADAPTER CABLE FWD
X 0031016.02 TE254332 ADAPTER CABLE FWD
X 0031016.03 TE254332 ADAPTER CABLE FWD
X 0031016.04 TE254332 ADAPTER CABLE FWD
X 0031016.05 TE254333 ADAPTER CABLE AFT
X 0031016.06 TE254333 ADAPTER CABLE AFT
Loss Report filed 4/29/97 0031016.07 TE254333 ADAPTER CABLE AFT
X 0031016.08 TE254333 ADAPTER CABLE AFT
X 0031016.09 TE254389 SN 3 CABLE
X 0031016.10 TE254388 SN 3 CABLE
0030990.00 ACOUSTIC TEST SET #1
X 0030990.01 TE254321 ACOUSTIC MODULE TEST SET #1
X 0030990.02 TE254321-1 CONTROL PANEL (AMTS)
X 0030990.03 TE254321-2 AC POWER PANEL
X 0030990.04 TE254310 DIGITAL STORAGE OSCOPE
X 0030990.05 TE254311 DIGITAL MULTIMETER
X 0030990.06 TE254318 FREQ RESPONSE ANALYZER
X 0030990.07 TE254388 CABLE INTERFACE FWD (S/N 1)
X 0030990.08 TE254389 CABLE INTERFACE AFT (S/N 1)
MAKE MODEL SERIAL # VALUE
- ----------------------------------------------------------
BENDIX NSP
BENDIX NSP
$12,378.00
NSP
NSP
BENDIX NSP
BENDIX TENSIONING SYSTEM NSP
BENDIX TENSIONING SYSTEM NSP
BENDIX SN 1 NSP
BENDIX SN 2 NSP
BENDIX SN 1 NSP
BENDIX SN 2 NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX SN 1 NSP
BENDIX ?? NSP
BENDIX ?? NSP
BENDIX SN 1 TO 15 NSP
BENDIX SN 1 NSP
BENDIX SN 2 NSP
BENDIX SN 3 NSP
BENDIX SN 4 NSP
BENDIX S/N 1 NSP
BENDIX S/N 2 NSP
BENDIX S/N 3 NSP
BENDIX S/N 4 NSP
BENDIX S/N 1 NSP
BENDIX S/N 2 NSP
BENDIX S/N 3 NSP
BENDIX S/N 4 NSP
BENDIX S/N 3 NSP
BENDIX S/N 3 NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
PHILIPS PM3367A 0002003 NSP
FLUKES 8842A 6088303 NSP
SCHLUMBERGER SI 1250 303083 NSP
BENDIX NSP
BENDIX NSP
<PAGE>
ORIGINAL DATE: MARCH 1, 1996 LOCATION: NPO
CONTRACT N00024-90-C-6013 SQQ SPECIAL TEST EQUIPMENT
Phy. Inv. REQUEST TO KEEP FOR:
Found Trans. BarCode CATEGORY
03/24/97 CAN VIM PWA TB-16 Number TE NUMBER DESCRIPTION
- --------------------------------------------------------------------------------------------------------
0030991.00 9 ACOUSTIC TEST SET #2
X 0030991.01 TE254322 ACOUSTIC MODULE TEST SET #2
X 0030991.02 TE254322-1 CONTROL PANEL (AMTS)
X 0030991.03 TE254322-2 AC POWER PANEL
X 0030991.04 TE254314 DIGITAL STORAGE OSCILLOSCOPE
X 0030991.05 TE254316 DIGITAL MULTIMETER
X 0030991.06 TE254378 FREQ RESPONSE ANALYZER
X 0030991.07 TE254388 CABLE INTERFACE FWD (S/N 2)
X 0030991.08 TE254389 CABLE INTERFACE AFT (S/N 2)
0031006.00 10 HTDM TEST SET
X 0031006.01 TE254324 HDTM TEST SET
X 0031006.02 TE254324-1 CONTROL PANEL HDTM
X 0031006.03 TE254324-2 AC POWER PANEL
X 0031006.04 TE254324-3 POWER SUPPLY PANEL HDTM
X 0031006.05 TE254324-4 CABLE FRONT PANEL./ADAPTER CBL
X 0031006.06 TE254372 DIGITAL MULTIMETER
X 0031006.07 TE254377 DIGITAL STORAGE OSCILLOSCOPE
?? ?? ??
?? ?? ??
0031007.00 BURN-IN TEST EST
X 0031007.01 TE254375 BURN-IN TEST SET
X 0031007.02 TE254375-1 POWER SUPPLY
X 0031007.03 TE254375-2 UNIVERSAL MODULE POWER
X 0031007.04 TE254375-3 TDM POWER AND LOAD
X 0031007.05 TE254375-4 AC POWER PANEL
X 0031007.06 TE254375-5 RESISTIVE LOAD BOX
X 0031007.07 TE254375-7 W4 CABLE ASSY
X 0031007.08 TE254375-8 W5 CABLE ASSY
X 0031007.09 TE254309 SIGNAL ANALYZER
X X 0031007.10 TE254404 MONITOR/CAL TEST BOX
X X 0031007.11 TE254405 LINE DRIVER TEST BOX
X X 0031007.12 TE254405-1 INTERFACE CABLE LINE DRIVER
0031008.00 12 COMPUTER SET-UP
X 0031008.01 TE254390 COMPUTER
X 0031008.02 TE254390-1 MONITOR
X 0031008.03 TE254390-2 KEYBOARD
X 0031008.04 TE254390-3 SURGE PROTECTOR
X 0031008.05 TE254390-4 MOUSE
X 0031008.06 TE254391 LASER JET PRINTER
X 0031008.07 TE254392 COMPUTER WORKSTAND
X 0031009.00 COMPUTER SET-UP
X X 0031009.01 TE254393 COMPUTER
MAKE MODEL SERIAL # VALUE
- ---------------------------------------------------------
BENDIX NSP
BENDIX NSP
BENDIX NSP
PHILIPS PM3367A DO002007 NSP
FLUXE 8842A 5071303 NSP
SCHLUMBERGER SI1250 303216 NSP
BENDIX NSP
BENDIX NSP
$335,087.00
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
FLUKE 8842A 5311282 NSP
PHILIPS 3367A DM331001 NSP
?? ??
?? ??
BENDIX NSP
EM TCR15054-1-0D 91J-7372 NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
HP 33880A
BENDIX
BENDIX
BENDIX
$24,806.00
EVEREX 388/25 EBS10920088 NSP
NEC MULTISYNC 3D 11C03788 NSP
EVEREX 11692D-001 13046080 NSP
RENSINGTON NSP
LOGITECH NSP
HP 33481A 3103JG0800 NSP
NSP
$24,806.00
EVEREX 388/25 E8S10920075 NSP
<PAGE>
ORIGINAL DATE: MARCH 1, 1996 LOCATION: NPO
CONTRACT N00024-90-C-6013 SQQ SPECIAL TEST EQUIPMENT
Phy. Inv. REQUEST TO KEEP FOR:
Found Trans. BarCode CATEGORY
03/24/97 CAN VIM PWA TB-16 Number TE NUMBER DESCRIPTION
- ---------------------------------------------------------------------------------------------------------------------
X X 0031009.02 TE254393-1 MONITOR
X X 0031009.03 TE254393-2 KEYBOARD
X X 0031009.04 TE254393-3 SURGE PROTECTOR
X X 0031009.05 TE254393-4 MOUSE
X X 0031009.06 TE254394 PRINTER
X X 0031009.07 TE254395 COMPUTER TABLE
0031010.00 COMPUTER SET-UP
X 0031010.01 TE254398 COMPUTER
X 0031010.02 TE254398-1 MONITOR
X 0031010.03 TE254398-2 KEYBOARD
X 0031010.04 TE254398-3 SURGE PROTECTOR
X 0031010.05 TE254398-4 MOUSE
X 0031010.06 TE254397 PRINTER
X 0031010.07 TE254398 COMPUTER STAND
13 MODULE WIRING TESTERS
X 0031011.00 TE254327 TEST FIXT VLF MODULE CONTINUITY/SHORT
X 0031012.00 TE254328 LF CONTINUITY TEST FIXTURE
X
X
0031015.00 14 ACOUSTIC SOUND SOURCE
X 0031015.01 TE254335 MOBILE ELEXT SOUND SOURCE
X 0031015.02 TE254335-1 CABLEMESS
X 0031015.03 TE254335-2 SPEAKER ENCLOSURE
0031018.00 15 TDM TEST SET
X 0031018.01 TE254323 TOM TEST SET
X 0031018.02 TE254315 MULTIMETER
X 0031018.03 TE254370 PHILLIPS PM 8662
X 0031018.04 TE254319 DIGITAL STORAGE OSCOPE
X 0031018.05 TE254323-1 TOMI PANEL
X 0031018.06 TE254312 POWER SUPPLY
X 0031018.07 TE254323-3 TEST SET PWR PNC
X 0031018.08 TE254323-2 RACK PWR SUPPLY
X 0031018.09 TE254323-4 CABLE
X 0031018.10 TE254323-5 BLOWER
X 0031018.11 TE254376 ADAPTER CABLE
0031019.00 16 ACOUSTIC MODULE TEST SET
X 0031019.01 TE254374 ACOUSTIC MODULE TEST SET
X 0031019.02 TE254313 DIGITAL STORAGE OSCOPE
X 0031019.03 TE254320 DIGITAL MULTIMETER
X 0031019.04 TE254374-1 CONTROL PANEL
X 0031019.05 TE254374-2 P/S AC CONTROL
MAKE MODEL SERIAL # VALUE
- --------------------------------------------------------------
NEC MULTISYNC 3D 11C03605 NSP
NSP
KENSINGTON NSP
NSP
HP LASER JET 3P 3103JGIHCC NSP
NSP
$24,808.00
EVEREX 388 EBS10920084 NSP
NEC MULTISYNC 04M14708 NSP
EVEREX 03758230 NSP
KENSINGTON 80120088 NSP
LOGITECH LT009122473 NSP
HP LASER JET 3P 3103JGIHHI NSP
NSP
$28,383.00
BENDIX $28,883.00
?? ?? ??
?? ?? ??
$38,803.00
BENDIX NSP
BENDIX NSP
BENDIX NSP
$490,709.00
NSP
FLUKE 6842A 5071309 NSP
PHILLIPS PM6882 528790 NSP
PHILLIPS 3387A DQ002008 NSP
NSP
KEPCOATE ATE 150-7M NSP
NSP
NSP
NSP
NSP
NSP
$212,493.00
BENDIX NSP
PHILLIPS PM3367A DQ002008 NSP
FLUKE 8842A NSP
BENDIX NSP
BENDIX NSP
<PAGE>
ORIGINAL DATE: MARCH 1,1998 LOCATION: NPO
CONTRACT N00024-90-C-6013 SQQ SPECIAL TREATMENT EQUIPMENT
Phy. Inv. REQUEST TO KEEP FOR:
Found Trans. BarCode CATEGORY
03/24/97 CAN VIM PWA TB-16 Number TE NUMBER DESCRIPTION
- ----------------------------------------------------------------------------------------------
X X 003101106 TE254317 FREQUENCY RESPONSE ANALYZER
X 0031020.01 17 TE254388 CROSSOVER MODULE#1
X 0031021.03 TE254387 CROSSOVER MODULE#2
X 0331022.00 18 TE254407 ESS TEST STATION
X 0331022.01 TE254407-1 EMI POWER SUPPLY
X 0031022.02 TE254407-2 CONTROL PANEL
X 0031022.03 TE254407-3 PATCH PANEL
X 0031022.04 TE254407-4 POWER SUPPLY PANEL
X 0031022.05 TE254407-5 AC CONTROL PANEL
X 0031022.06 TE254407-6 UNIVERSAL MODULE CABLE SN 1-4
X 0031022.07 TE254407-7 TOM CABLE
X 0031022.08 TE254407-8 VLF TEST ADAPTER AN 1 & 2 & 3
X 0031022.09 TE254407-9 LF TEST ADAPTER SN 1 & 2
X 0031022.10 TE254407-10 MF TEST ADAPTER SN 1 & 2
X 0031022.11 TE254407-11 HF TEST ADAPTER SN 1 & 2
X 0031022.12 TE254407-12 ROTM TEST ADAPTER SN 1 & 2
X 0031022.13 TE254407-13 CABLE
?
X
X 0031017.01 TE254334-1 ADAPTER CABLE MSC TEST
X 0031017.02 TE254334-2 CABLE
X 0031017.03 TE254334-3 CABLE
X 0031017.04 TE254334-4 CABLE
X 0 TE254334-5 BATTERY CHARGE CABLE
Total Count 263
MAKE MODEL SERIAL# VALUE
- -----------------------------------------------
SCHLUMBERGER S11250 303059 NSP
BENDIX $ 34,703.60
BENDIX $ 34,703.60
BENDIX $ 30,000.00
BENDIX
BENDIX
BENDIX
BENDIX
BENDIX
BENDIX
BENDIX
BENDIX
BENDIX
BENDIX
BENDIX
BENDIX
BENDIX
BENDIX $ 32,107.00
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
BENDIX NSP
Total Value: $ 2,045,145.00
<PAGE>
ORIGINAL DATE: MARCH 1, 1998 LOCATION: NPO
CONTRACT N0002490-C-8013 SQQ SPECIAL TOOLING
Phy. Inv. REQUEST TO KEEP FOR:
Found Trans. BarCode
03/24/97 CAN VIM PWA TB-16 Number CATEGORY TOOL NUMBER DESCRIPTION
- --------------------------------------------------------------------------------------------------------------------------
X 1 SWAGE BUTTON SWAGER 1220368A SWAGER
X 1220368B PUMP
X 1220368C L?ETER
X 1220368D REGULATOR
X 2 TENSIONING SYSTEM TENSIONING SYSTEM
X 3 TENSION FIXTURE 122037D-1 TENSIONING FIXTURE
X 122037D-2 TENSIONING FIXTURE
X 4 HOSE TEMPERING SYSTEM 1220371-A TROUGH
Loss Report File 5/28/97 1220371B BOILER
X ?? 1220371C-1 AIR PURGER
X ?? 1220371C-2 AIR PURGER ARMSTRONG
X 5 HOSE DRYING RECK 1220072 HOSE DRYING RACK (ON WALL)
X 6 HOSE GRINDING SYSTEM 1220073-1 HOSE GRINDING SYSTEM (2)
X 1220073-2
X 7 SKOVIL SWAGER 1220074 SKOVIL SWAGER
X HEIGHT GAUGE HEIGHT GAUGE
? X FIXTURE
X X
X X 1220376-1C FIXTURE
X X 1220376-1D FIXTURE
X X 1220376-1E FIXTURE
X X 1220376-1F FIXTURE
X X 1220376-1G FIXTURE
X 9 MODULE BOOTING SYSTEM 122379 AIR REGULATOR
X 1220403-B1 TUBES
X 10 ISOPAR FILLING SYSTEM 1220380 ISOPAR FILLING SYSTEM
X 11 ISOPAR FILLING FIXTURE 1220381 ISOPAR FILLING SYSTEM
X 1220381-1 VACUUM CHAMBER FILL FIXTURE
X 1220381-1 VACUUM CHAMBER FILL FIXTURE
X 12 REELING HANDLER REELING HANDLER
X X 13 RF LOAD COIL 1220386A RF LOAD COIL
X X 1220386B RF LOAD COIL
X X 14 CAN HLDG/HEATSINK FIX 1220387 CAN HOLDING/HEATSINK FIXTURE
X X 15 HEADER HOLDING/HEATSINK 1220388 HEADER HOLDING/HEATSINK FIXTURE
MAKE MODEL SERIAL # VALUE
- ----------------------------------------------
$13,713.00
NSP
NSP
NSP
$68,545.00
$833.00
$833.00
$53,735.00
NSP
NSP
NSP
$ 6,153.00
$ 12,872.00
$8,327.00
NSP
NSP
NSP
NSP
NSP
NSP
$ 8,052.00
NSP
NSP
NSP
NSP
$ 5,998.00
$ 5,998.00
NSP
NSP
$47,413.00
$ 700.00
$ 700.00
<PAGE>
ORIGINAL DATE: MARCH 1, 1995 LOCATION: NPO
CONTRACT N00024-90-C-8013 SQQ SPECIAL TOOLING
Phy. Inv. REQUEST TO KEEP FOR:
Found Trans. BarCode
03/24/97 CAN VIM PWA T8-16 Number CATEGORY TOOL NUMBER DESCRIPTION
- -------------------------------------------------------------------------------------------------------------
X X 16 HELIUM LEAK TESTER T220389 HELIUM LEAK TESTER
Less Report Filed: 4/28/97 17 TOW ASSY FIXTURES T220390 TORSION TEST
ADAPTER
X X 18 DESSICATOR SYSTEM T220375 DESSICATOR SYSTEM
X X 19 CAN ASSY VACUUM CHAMBER T220377
X X T220377A VACUUM OVEN
X X T220377B DIRECT DRIVE
VACUUM PUMP
X 20 EXTRACT INSERTION TOOLS T220376
X T220378A HYDRAULIC CRIMPER
X T220378B HYDRAULIC CRIMPER
X T220378C AUTOMATIC CRIMPER
X T220378D AUTOMATIC CRIMPER
X 21 BOOTING SYSTEM WINCH T220085 BOOTING SYSTEM
WINCH
X X 22 TAKE-UP REEL T220453 TAKE-UP REEL
9-97
X 23 BUOYANCY TEST SYSTEM T220454 BUOYANCY TEST
SYSTEM
X T220454A CARDINAL SCALE
X T220454B LOAD CELLS
X T22O454C LOAD CELLS
X T220454D LOAD CELLS
X T220454E LOAD CELLS
X T220454F SWIMMING BOX
X 24 STRINGING ASSY TENSION T220455 STRINGING ASSY
TENSION SYSTEM
X SYSTEM T220455A MOTOR
X 25 DROP TEST PLATFORM T220456 DROP TEST
PLATFORM
X X 26 VACUUM PUMP T220522 VACUUM PUMP
9-97 BARBEE VALVE
MAKE MODEL SERIAL # VALUE
- -----------------------------------------------------------
$ 23,877.00
$2,869.00
$3,641.00
$4,145.00
COLE PALMERS INS N05053-10 NSP
COLE PALMER INS 5A55KFL-6517 NSP
$20,478.00
NSP
NSP
NSP
NSP
$ 45,444.00
$8,205.00
738 NSP
NSP
NSP
NSP
NSP
NSP
$ 6,779.00
NSP
$5,558.00
$21,000.00
<PAGE>
CONTRACT N00024-90-C-6013 LOCATION: NPO
SQQ AGENCY PECULIAR
Items on this listing are required for further CAN work. Requesting keep.
- ------------------------------------------------------------------------------------------------------------------------------------
PART
NUMBER
OR TE Serial USED
Found BARCODE No. NUMBER Number DESCRIPTION ON VALUE PHYSICAL LOCATION
- ------------------------------------------------------------------------------------------------------------------------------------
X 0021843.00 1213D0338 133 CAN ASSEMBLY, CAN $2,470.00 TDM Test
X 0021844.00 1213D0357 720 CAN ASSEMBLY, GCA SAMPLE AND HOLD CAN $3,700.00 TDM Test
X 0021657.00 1213D0358 136 CAN ASSEMBLY, CAL/GCA COMMAND RECEIVER CAN $3,090.00 TDM Test
X 0021666.00 1213D0359 085 CAN ASSEMBLY, A/D CONVERTER CAN $4,940.00 GFE LOCK UP
X 0021845.00 1213D0359 218 CAN ASSEMBLY, A/D CONVERTER CAN $4,940.00 TDM Test
X 0021846.00 1213D0369 043 CAN ASSEMBLY, HEADING SENSOR ELECTRONICS CAN GFE LOCK UP
X 0021653.00 1213D0689 549 CAN ASSEMBLY, +39V ACST, VOLTAGE REGULATOR CAN $2,470.00 TDM Test
X 0021847.00 1213D0920 137 CAN ASSEMBLY, INVERSE GCA/OUT-OF-BAND FILTER CAN $2,470.00 TDM Test
X 0021848.00 1213D1057 273 CAN ASSEMBLY, DEPTH SENSOR ELECTRONICS CAN $3,700.00 GFE LOCK UP
X CAN $1,240.00 GFE LOCK UP
X 0021849.00 1213D1449 186 CAN ASSEMBLY, ACOUSTIC MULTIPLEXER (12 TO 1) MF CAN $1,240.00 GFE LOCK UP
X 0021862.00 1213D1450 385 CAN ASSEMBLY, ACOUSTIC MULTIPLEXER (12 TO 1) HF CAN $1,240.00 GFE LOCK UP
X 0021850.00 1213D1451 2552 CAN ASSEMBLY, ACOUSTIC MULTIPLEXER LINE DRIVER CAN $1,240.00 GFE LOCK UP
X 0021851.00 1213D3482 742 CAN ASSEMBLY, ACOUSTIC MULTIPLEXER (3 TO 1) VLF CAN $2,470.00 GFE LOCK UP
X 0021852.00 1213D3528 2047 CAN ASSEMBLY, PRE-AMPLIFIER (LF) CAN $2,470.00 GFE LOCK UP
X 0021853.00 1213D3529 2735 CAN ASSEMBLY, PRE-AMPLIFIER (MF) CAN $2,470.00 GFE LOCK UP
X 0021854.00 1213D3530 5361 CAN ASSEMBLY, PRE-AMPLIFER (HF) CAN $2,470.00 GFE LOCK UP
X 0021855.00 1213D3531 189 CAN ASSEMBLY, PRE-AMPLIFER (HF) CAN $2,470.00 GFE LOCK UP
X 0021652.00 1213D3546 258 CAN ASSEMBLY, OVER VOLTAGE PROTECTION CAN $2,470.00 TDM Test
X 0022236.00 1213D3559 0034 CAN ASSEMBLY, CAN $28,930.00 STRING ASSY DAMAGED
X 0021656.00 1213D3584 071 CAN ASSEMBLY, PM/FL & CAL SQUARE WAVEGENERA CAN $3,210.00 TDM Test
X 0021856.00 1213D3602 033 CAN ASSEMBLY, OSCILLATOR CAN $324.00 GFE LOCK UP LOCK UP
X 0021660.00 1213D3612 266 CAN ASSEMBLY, PROM CAN $3,090.00 GFE LOCK UP
X 0021661.00 1213D3612 270 CAN ASSEMBLY, PROM CAN $2,470.00 GFE LOCK UP
X 0021654.00 1213D3651 264 CAN ASSEMBLY, NAD/VLF VOLTAGE REGULATOR CAN $2,470.00 TDM Test
X 0021655.00 1213D3657 071 CAN ASSEMBLY, FORWARD POWER SUPPLY CAN $2,470.00 TDM Test
X 0021662.00 1213D3664 048 CAN ASSEMBLY, DIGITAL MULTIPLEXOR CAN $2,470.00 TDM Test
X 0021663.00 1213D3664 125 CAN ASSEMBLY, DIGITAL MULTIPLEXOR CAN $2,470.00 GFE LOCK UP
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
CONTRACT N00024-90-C-6013 LOCATION: NPO
SQQ AGENCY PECULIAR
Items on this listing are required for further CAN work. Requesting keep.
- ------------------------------------------------------------------------------------------------------------------------------------
PART
NUMBER
OR TE Serial USED
Found BARCODE No. NUMBER Number DESCRIPTION ON VALUE PHYSICAL LOCATION
- ------------------------------------------------------------------------------------------------------------------------------------
X 0021659.00 1213D3673 253 CAN ASSEMBLY, DATE/DECODER/STATUS CAN $4,270.00 TDM Test
X 0021664.00 1213D3683 266 CAN ASSEMBLY, CALIBRATION CAN $2,470.00 TDM Test
X 0021857.00 1213D3714 669 CAN ASSEMBLY, PRE-AMPLIFER(LF) CAN $2,470.00 GFE LOCK UP
X 0021858.00 1213D3715 557 PRE-AMPLIFER(MF) CAN $2,470.00 GFE LOCK UP
X 0022237.00 1213D3759 167 TDM(W/O HOSE ASSEMBLY, STRINGING ASSEMBLY MOD $76,340.00 TDM Test
X 0021859.00 1213D3766 2,255 CAN ASSEMBLY, PRE-AMPLIFER(VLF) CAN $1,240.00 GFE LOCK UP
X 0021860.00 1213D3826 558 CAN ASSEMBLY, PRE-AMPLIFER(HF) CAN $1,240.00 GFE LOCK UP
Total Count: 35 Total Value: $186,584.00
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
CONTRACT N00024-90-C-6013 LOCATION: NPO
SQQ AGENCY PECULIAR
Items on this list are to be returned to USN.
- -----------------------------------------------------------------------------------------------------------------------------------
PART
NUMBER
OR TE Serial USED
Found BARCODE No. NUMBER Number DESCRIPTION ON VALUE PHYSICAL LOCATION
- -----------------------------------------------------------------------------------------------------------------------------------
X 0022239.00 0411C0042 3282-021 SHIPPING CONTAINER MOD $1,500.00 SHIPPED
X 0022240.00 0411C0042 3282-023 SHIPPING CONTAINER MOD $1,500.00 SHIPPED
X 0022241.00 0411C0042 3282-024 SHIPPING CONTAINER MOD $1,500.00 SHIPPED
X 0022242.00 0411C0042 3282-022 SHIPPING CONTAINER MOD $1,500.00 SHIPPED
0028385.00 0411C0042 None SHIPPING CONTAINER MOD $1,850.00 SHIPPED
0022236.00 1213D3533 0003 ACOUSTIC MODULE, VLF CAN $49,840.00 SHIPPED
0022234.00 1213D2161 0117 VIBRATIONISOLATION MODULE, FORWARD $10,530.00 SHIPPED
X 0021665.00 1213D3779 043(0022) CAN ASSEMBLY, TRANSMIT/DRIVE/DECODE CAN $3,700.00 SOLDER TRAINING LAB
0022236.00 1213D4065 0021 ACOUSTIC MODULE, MF $65,240.00 SHIPPED
X 002????.00 1214C4044 005 TOW CABLE ASSEMBLY $8,000.00 SHIPPED
Total Count: 10 Total Value: $145,160.00
- -----------------------------------------------------------------------------------------------------------------------------------
<PAGE>
4-JUN-97 TOOL MASTER LIST Page: 1
Contract Number: N00024-90-C-6031 Description: ST/STE P.O. 644594 Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
220181 9752RINS 07/17/96 07/09/96 Y HOLE PSOITION GAGE REV B 8006985 1 437 437
E254158-5 D7A 01/18/92 07/11/96 N CABLE, H5-2 SIGNAL 1 400 400
Tooling 1 437
Test Equip. 1 400
Total 2 837
<PAGE>
4-JUN-97 TOOL MASTER LIST Page: 1
Contract Number: N00024-90-C-6031 Description: ST/STE P.O. 644594 Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T219954-1 C4A OOS 03/12/96 06/27/96 Y COMP HGT GAGE .636 8006925 1 69 69
T219954-2 C4A OOS 05/26/94 06/27/96 Y COMP HGT GAGE .030 8006925 1 69 69
T219955-1 C4A 05/25/96 05/28/96 Y COMP HGT GAGE .025 8006925 1 58 58
T219955-2 C4A OOS 10/01/96 06/27/96 Y COMP HGT GAGE .025 8006925 1 58 58
T219955-3 D6F POS 02/14/97 06/27/96 Y COMP HGT GAGE .025 8006925 1 58 58
T219955-4 D6F-POS 02/14/97 06/27/96 Y COMP HGT GAGE .025 8006925 1 59 59
T219956ABC C7C 01/13/97 08/19/96 N BONDING FIXTURE REV B 8006925 1 1320 1320
T219901 TOWSON 04/27/94 09/30/96 N COMP PREP FIXTURE 8006880 1 809 809
8006940
8006960
8006950
8008955
8006925
8006935
8006930
8006945
T219978A/B1 C8A 10/23/95 07/08/96 N BONDING FIXTURE 8006850 1 398 398
T219978A/B2 C8A 10/23/95 07/08/96 N BONDING FIXTURE 8006850 1 398 398
?? C4A 09/27/96 06/27/96 ?? ?? 8006925 ?? 98 98
??
8006930
T219980-2 C4A OOS 02/17/97 08/26/96 Y HGT GAGE .275 X 1.9 8006925 1 96 96
8006930
8008960
T219980-3 D6F POS 02/14/97 06/28/98 Y HGT GAGE .275 X 1.9 8006930 1 96 96
8006925
8006980
T219980-4 D6F POS 02/14/97 06/27/96 Y HGT GAGE .275 X 1.9 8006925 1 96 96
8006930
8006960
T219981-1 C4A OOS 05/26/94 06/28/96 Y HGT GAGE .275 X 2.1 8006925 1 54 54
8006960
8006930
T219981-2 C4A 09/27/96 06/27/96 Y HGT GAGE .275 X 2.1 8008960 1 54 54
8006925
8006930
T219981-3 D6F POS 02/14/97 06/28/96 Y HGT GAGE .275 X 2.1 8006925 1 54 54
8006950
8006930
T219981-4 D6F POS 02/14/97 06/28/96 Y HGT GAGE .275 X 2.1 8006925 1 54 54
8006960
8006930
T219982-1 C4A OOS 05/31/94 06/27/96 Y HGT GAGE .345 X 1.92 8006935 1 17 17
8006955
T219982-2 C4A OOS 05/27/94 08/27/96 Y HGT GAGE .345 X 1.92 8006935 1 17 17
8006955
T219982-3 D6F POS 02/14/97 08/28/96 Y HGT GAGE .345 X 1.92 8006955 1 17 17
8006935
T219982-4 D6F POS 02/14/97 08/28/96 Y HGT GAGE .345 X 1.92 8006935 1 17 17
8006955
<PAGE>
4-JUN-97 TOOL MASTER LIST Page: 2
Contract Number: N00024--91-C-6001Description: ST/STE P. O. 844594 Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T219983-1 C4A 03/12/96 06/26/96 Y HGT GAGE .345 X 2.17 8006955 1 102 102
8006935
T219983-2 C4A OOS 10/19/95 06/27/96 Y HGT GAGE .345 X 2.17 8006955 1 102 102
8006935
T219983-3 D6F POS 02/14/97 06/27/96 Y HGT GAGE .345 X 2.17 8006955 1 102 102
8006935
T219983-4 D6F POS 02/14/97 06/26/96 Y HGT GAGE .345 X 2.17 8006935 1 102 102
8006955
T219984-1 C4A OOS 05/27/94 06/27/96 Y HGT GAGE .300 X 2.17 8006945 1 9 9
8006950
8006940
T219984-2 C4A OOS 05/27/94 05/27/96 Y HGT GAGE .380 X 2.17 8006950 1 9 9
8006945
8008940
T219984-3 D6F POS 02/14/97 06/20/96 Y HGT GAGE .380 X 2.17 8008940 1 9 9
8006945
8006950
T219984-4 D6F POS 02/14/97 06/28/96 Y HGT GAGE .380 X 2.17 8006940 1 9 9
8006950
8006945
T219985-1 C4A OOS 05/31/94 06/28/96 Y HGT GAGE .380 X 1.92 8006950 1 87 87
8006940
8006945
T219985-2 C4A 04/10/95 05/21/96 Y HGT GAGE .380 X 1.92 8006945 1 87 87
8006950
8006940
T219985-3 D6F POS 02/14/97 06/28/96 Y HGT GAGE .380 X 1.92 8006940 1 87 87
8006950
8006945
T219985-4 D6F POS 02/14/97 06/28/96 Y HGT GAGE .386 X 1.92 8006945 1 87 87
8006950
8006940
T219986-1 C4A OOS 03/03/95 06/28/96 Y HGT GAGE .493 X 1.950 8006880 1 22 22
T219986-2 C4A OOS 03/03/95 06/28/96 Y HGT GAGE .493 X 1.950 8006880 1 22 22
T219986-2 D6F POS 02/14/97 06/28/96 Y HGT GAGE .493 X 1.950 8006880 1 22 22
T219986-4 D6F POS 02/14/97 06/28/96 Y HGT GAGE .493 X 1.950 8006880 1 22 22
T219997-1 C4A 09/24/96 06/28/96 Y HGT GAGE .045 8006930 1 49 49
8006925
8006880
8006950
8006980
8006945
8006940
T219997-2 C4A 12/17/96 06/28/96 Y HGT GAGE .045 8006940 1 49 49
8006880
8006925
8006950
8006986
8006945
8006930
<PAGE>
4-JUN-97 TOOL MASTER LIST Page: 1
Contract Number: N00024-90-C-6031 Description: ST/STE P.O. 644594 Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T219998-1 C4A 09/27/96 06/21/96 Y HGT GAGE .040 8006880 1 49 49
8006950
8006925
8006930
8006940
8006945
8006950
T219998-2 C4A OOS 04/10/96 06/21/96 Y HGT GAGE .040 8006860 1 49 49
8006980
8006980
8006945
8006940
8006950
8006925
T219998-3 D6F POS 02/14/97 06/28/96 Y HGT GAGE .040 8006880 1 49 49
8006925
8006950
8006980
8006940
8006930
8006945
T219998-4 D6F POS 02/14/97 06/2896 Y HGT GAGE .040 8006960 1 49 49
8006950
8006880
8006940
8006925
8006930
8006945
T219999-1 C4A OOS 05/31/94 06/28/96 Y HGT GAGE .325 X 2.17 8006925 1 71 71
T219999-2 C4A OOS 05/31/94 06/28/96 Y HGT GAGE .325 X 2.17 8006925 1 71 71
T219999-3 D6F POS 02/14/97 06/28/98 Y HGT GAGE .325 X 2.17 8006925 1 71 71
T219999-4 D6F POS 02/14/97 06/28/98 Y HEIGHT GAGE 8006925 1 71 71
T220000-1 C4A OOS 06/05/94 06/28/96 Y HGT GAGE .325 X .1.92 8006925 1 65 65
T220000-2 C4A OOS 06/29/92 06/28/96 Y HGT GAGE .325 X .1.92 8006925 1 65 65
T220000-3 D6F POS 02/14/97 06/28/96 Y HGT GAGE .325 X .1.92 8006925 1 65 65
T220000-4 D6F POS 02/14/97 06/28/96 Y HGT GAGE .325 X .1.92 8006925 1 65 65
T220008 C6A 02/26/92 07/08/96 N ROUTER DRILL FIXT REV D 8006900 1 648 648
8006896
T220033-1 9232C 06/14/96 08/14/96 Y MOLD MASTER PATTERN 8006900 1 422 422
T220033-2 9232C 06/14/96 08/14/96 Y MOLD MASTER PATTERN 8006900 1 422 422
T220043 C6A 10/25/96 10/25/96 N CABLE BRD, W4 EXTERNAL 8006965 1 365 365
T402918-1 C6B 03/09/92 07/08/96 N SPANNER WRENCH 1 75 75
T402918-2 C6B 03/09/92 07/08/96 N SPANNER WRENCH 1 73 73
T402918-3 C6B 03/09/92 07/08/96 N SPANNER WRENCH 1 73 73
T402922 9852E 04/30/97 06/26/96 Y CRIMP TOOL 8006917-301 1 158 158
T402931 C4A OOS 11/28/94 06/26/96 Y CRIMP TOOL 1 158 158
TE254115 D3F POS 02/11/97 07/10/96 N T/F MOTHER BOARD 8006910 1 650 650
TE254122 9852B 06/20/96 06/20/96 N TEST FIXT A1&A2 BOARD 8006955 1 1000 1000
TE254123 9852B 06/20/98 06/20/98 N TEST FIXT A3 BOARD 8006935 1 950 950
TE254124 9852B 05/20/96 06/20/96 N TEST FIXT A4 BOARD 8006940 1 950 950
<PAGE>
4-JUN-97 TOOL MASTER LIST Page:4
Contract Number: N00024-91-C-6001 Description: ST/STE P.O. 644594 Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
TE254125 9852B 08/20/96 08/20/96 N TEST FIXT A5 BOARD 8006930 1 975 975
TE254126 9852B 08/20/96 08/20/96 N TEXT FIXT A6 BOARD 8008945 1 950 950
TE254127 9852B 06/20/96 06/20/96 N A7/A8 BRD, TEST FIXT 8006980 1 5000 5000
TE254126 9852B 05/20/96 06/20/96 N TEST FIXT A8 BOARD 8006980 1 1000 1000
TE254129 9852E 05/18/90 06/21/96 N T/F A9 BD/XFMR HV COUP 8006980 1 900 1200 2100
TE254130 9852D 08/20/95 06/20/96 PMFL WORD GEN A1/A2BD 1 1500 1500
TE254131 9852E 06/13/96 06/13/96 Y SYSTEM T/S STIMULATOR 1 20000 22000 42000
TE254131-2 9852EHK 06/13/96 06/13/96 Y POWER SUPPLY 1 500 500
TE254131-3 9852B 06/14/96 06/14/96 N CABLE, W4 TARC PWR 1 400 400
TE254131-4 9852E 06/13/96 06/13/96 N CABLE, W5 TARC SIG 1 400 400
TE254131-5 9852E 06/13/96 06/13/96 N CABLE, W8 STIM JUMPER 1 400 400
TE254131-6 9852E 06/18/96 06/13/96 N CABLE, W7 HY/LV P/S 1 400 400
TE254131-7 D7A 03/24/92 07/11/96 N CABLE, W3 HVPS/STIM 1 400 400
TE254131-8 9852E 06/18/96 06/18/96 N CABLE, W10 HYPS/HY FLT 1 400 400
TE254132 9852B 06/13/96 06/13/96 N ESP CABLE 95D 1 150 150
TE254133 9852B 06/14/96 06/14/96 N ESP CABLE 96D 1 170 170
TE254134 9852B 06/14/96 06/14/96 N ESP CABLE 97D 1 175 175
TE254138-1 9852B 06/14/96 06/14/96 N ESP CABLE J1, 1 CONN 8006910 1 160 160
TE254138-2 9852B 06/14/96 06/14/96 N ESP CABLE J2, ?? CONN 8006910 1 150 150
1 160 160
1 150 150
TE254138-5 9852B 06/14/96 06/14/96 N ESP CABLE J5, 17 CONN 8006910 1 150 150
TE254138-6 9852B 06/14/96 06/14/96 N ESP CABLE J6, 22 CONN 8006910 1 150 150
TE254138-7 9852B 06/14/96 06/14/96 N ESP CABLE J7, 27 CONN 8006910 1 150 150
TE254138-8 9852B 06/14/96 06/14/96 N ESP CABLE J8, 32 CONN 8006910 1 150 150
TE254155 D5B 02/26/92 07/11/96 N TEST FIXTURE-A4, A5 UNIT#5 8006930 1 5000 5000
8006940
TE254156 9852B 06/20/96 06/20/96 TEST FIXTURE A6 8006945 1 6000 6000
TE254157 D6B 02/25/92 07/11/96 N TEST FIXTURE A9 8006980 1 4000 4000
TE254158 D7A 03/24/92 07/11/96 SYSTEM TEST SET STIM 1 1 140000 140000
TE254158-1 D6D 02/04/94 07/11/96 N BREAKOUT BOX 1 400 400
TE254158-3 D7A 03/18/92 07/11/96 N CABLE, W4 LOW VOLT P/S 1 300 300
TE254158-4 D7A 03/18/92 07/11/96 N CABLE, WS-1 SIGNAL 1 300 300
TE254158-6 D7A 03/18/92 07/11/96 N CABLE, W7 HV/LV P/S 1 400 400
TE254158-7 9852E 08/13/96 06/13/96 N CABLE, WS-3 SIGNAL 1 200 200
TE264158-8 D7A 08/18/92 07/11/96 N CABLE, INTERFACE W3 1 75 75
TE254159 9852E 04/05/95 05/21/96 Y SYSTEM TEST SET STIM 2 1 37500 37500
TE264159-1 9852E 04/05/95 08/21/96 Z LOAD 1 500 500
TE264171 9852BESP 06/14/98 08/14/96 N ESP CABLE 9E 1 200 200
TE254228-1 TELFWHSE 08/01/93 08/02/96 Y CABLE SIMULATOR (ENG) 1 8500 8500
TE254228-2 9852E 08/13/96 08/13/96 Y CABLE SIMULATOR (PROD) 1 8000 375 8375
TE254241 9855 E/L 10/04/95 07/23/96 N POWER SUPPLY LOW VOLT 1 800 800
TE254255 D5B 08/12/96 08/12/96 N CABLE, STIMULATOR TEST 1 100 100
TE254265 D6D 02/04/94 07/11/96 N BURN-IN T/F A4 BRD 1 1900 1900
TE254271 9852E 05/13/96 08/13/96 N FILTER, HIGH VOLTAGE P/S 8016543 1 250 250
Tooling 61 7875
Test Equip. 48 276350
Total 109 284225
<PAGE>
4-JUN-97 TOOL MASTER LIST Page:1
Contract Number: N00024-92-C-6225 Description: NSIS (NORDEN) Customer: USN
Tool Number Location/Vendor Loc Date PM Date Cal Tool Description Part Number Qty Unit Cost Rework Tot. Cost
- ----------- --------------- -------- ------- --- ---------------- ----------- --- --------- ------ ---- ----
T220590 D5F POS 02/11/97 07/12/96 N HOLDING FIXTURE 1 425 425
TE254411-1 8002 06/29/93 03/06/96 P. C. S/N 9207054 1 4525 4525
TE254411-2 8002 06/29/93 08/06/96 COLOR MONITOR, ARCUS 1 0 0
TE254411-3 D5D 08/15/96 08/15/96 N DIGITALTAPE RECORDER 1 3695 3695
TE254411-4 8002 08/29/93 08/05/96 DATA TRANSLATION BOARD 1 3395 3395
Tooling 1 425
Test Equip. 4 11615
Total 5 12040
<PAGE>
SCHEDULE 4.23 - ENTIRE BUSINESS
No items to schedule.
<PAGE>
SCHEDULE 4.25 - INSURANCE
See following pages.
See also Schedule 4.11.
<PAGE>
TITLE: RISK
[LOGO] ALLIEDSIGNAL AUTOMOBILE LIABILITY MANAGEMENT
DOMESTIC MANUAL
SUPERSEDES: DATE: PAGE: 1
5/96 5/97
AUTOMOBILE LIABILITY INSURANCE - U.S.
Insurance Company
The Travelers Indemnity Company
Policy No.
TC2EE-CAP-173T4473-TCT-97 Texas
Bond 470J1965 Massachusetts
TC2J-CAP-201T485-A-TIL-97 Virginia
TC2J-CAP-173T445-5-TIL-97 All Others (excluding Texas,
Virginia, Massachusetts)
TJEAP-225T169-8-97 Massachusetts Excess
Coverage
This policy covers the legal liability of AlliedSignal Inc. which may result
from the ownership, maintenance, or use of any automobile (hired, non-owned,
long-term leased, or owned). Coverage includes bodily injury liability,
property damage liability, medical payments coverage, no fault coverage and
uninsured/underinsured motorists protection. There is no coverage under this
policy for physical damage to AlliedSignal Inc. units. This policy will pay
first dollar coverage for damages to third parties for which we are legally
liable, notwithstanding a $2,000,000 deductible each occurrence, bodily injury
and property damage combined, including expense. Travelers is reimbursed via a
daily cash transfer system for claims within the deductible area.
Policy Period
4/1/97 - 4/1/98
Limits of Liability
COVERAGE LIMITS OF LIABILITY
Bodily Injury and $2,000,000 per occurrence
Property Damage Liability Combined Single Limit
Medical Payments $5,000 Each Person
Uninsured/Underinsured Motorists Statutory Limits
Statutory No-Fault coverage in states where applicable
Basis of Premium Charge
1 of 2
<PAGE>
Prior to renewal each year, the Risk Management Department sends each operation
a form to be completed. The form indicates the number of vehicles by category.
Premium is then charged on the number of vehicles in each of five classes
(automobiles, vans, trucks, tractors and buses) as well as three experience
rate levels relating to the operation's past losses.
Short-Term Leased Vehicles
(Less than one year)
For automobiles rented/leased with the Corporate American Express Card within
the United States, no matter which leasing company is used to lease a
short-term vehicle, the insurance waiver for the collision deductible should be
accepted. If not rented/leased with the Corporate American Express Card, it
will be up to the individual operating unit's management to decide whether or
not the employee waives or accepts the waiver for collision deductible. This
decision should be based on the costs/benefits of the operating unit's rental
experience.
Use of Personal Automobile on Company Business
The AlliedSignal Inc. Corporate Risk Management Program does not provide
coverage for physical damage to an employee's vehicle or for the employee's
liability to third parties. An employee using their own automobile on company
business must look to their own personal insurance carrier for coverage.
At the discretion of Corporate Management, the Corporate Automobile Liability
Policy will provide liability insurance in excess of the employee's personal
automobile liability limits while an employee is using his personal car on
company business.
Notice and Handling of Claims
A. Litigation
If you receive a copy of a Summons, Complaint Petition or
other legal paper indicating that AlliedSignal Inc., one of
its subsidiaries, divisions or employees is involved in a
lawsuit, immediately contact your Regional Counsel. Forward
legal papers to your counsel with copies to the Corporate
Risk Management Department.
B. Other Claims
The following Motor Vehicle Accident Reporting Form is to be
completed in full and returned to the Corporate Risk
Management Department. The information is necessary to
attempt recovery from the adverse driver and also enable
proper credit of any recovery.
2 of 2
<PAGE>
TITLE: RISK
[LOGO] ALLIEDSIGNAL BLANKET CRIME MANAGEMENT
MANUAL
SUPERSEDES: DATE: PAGE: 1
2/96 2/97
BLANKET CRIME INSURANCE
Insurance Company
National Union Fire Insurance Co. Federal Insurance Company
Coverage
This policy will reimburse AlliedSignal for loss of Money, securities and other
property resulting from perils insured, i.e., employee dishonesty, safe
burglary, robbery, hold up, and forgery, subject to the limits of liability
stated below.
Policy Period
12/31/95 - 12/31/98
Limits of Liability
TYPE OF LOSS LIMIT DEDUCTIBLE
- ------------ ----- ----------
Employee Dishonesty
Loss Inside Premises
Loss Outside Premises
Depositors Forgery Coverage $50,000,000 $1,000,000
Loss of Precious Metals
Money Orders, Counterfeit
Paper & Credit Card Forgery*
* $1,000,000. Limitation on credit card forgery
Basis of Premium Charge
Premium is based on census and precious metals exposure.
Notice an Handling of Claims
Report losses to the Risk Management Department, Corporate Controller, the
Director of Corporate Services and the Director of Corporate Auditing in
accordance with Vol. I Section I.6 of the AlliedSignal Controller's Manual.
1 of 1
<PAGE>
TITLE: RISK
[LOGO] ALLIEDSIGNAL DIRECTOR & OFFICERS MANAGEMENT
LIABILITY MANUAL
SUPERSEDES: DATE: PAGE: 1
2/96 2/97
DIRECTORS & OFFICERS LIABILITY
For information on this coverage contact Lois Fuchs at (973) 455-5916.
1 of 1
<PAGE>
TITLE: RISK
[LOGO] ALLIEDSIGNAL FIDUCIARY LIABILITY MANAGEMENT
MANUAL
SUPERSEDES: DATE: PAGE: 1
2/96 2/97
FIDUCIARY LIABILITY
Insurance Company
a. National Union
b. CNA Insurance
c. Reliance Insurance
d. ACE Insurance
Coverage
This coverage will pay on behalf of any individual construed to be a fiduciary
under ERISA and AlliedSignal Inc. and its subsidiaries, claims made during the
policy period for breach of fiduciary duty in the administration of Employee
Benefit Plans as governed under ERISA or similar Canadian, U.K. or other
foreign laws.
Policy Period
12/31/95 - 12/31/98
Limits of Liability
Contact the Risk Management Department for specific limit information.
Deductible
The Corporate deductible is $250,000 per loss (incl. defense). First dollar
coverage is provided to individual fiduciaries.
1 of 1
<PAGE>
TITLE: RISK
[LOGO] ALLIEDSIGNAL GENERAL & AUTO LIABILITY MANAGEMENT
FOREIGN MANUAL
SUPERSEDES: DATE: PAGE: 1
5/96 6/97
COMPREHENSIVE GENERAL & AUTOMOBILE LIABILITY - FOREIGN
Insurance Company
Zurich-American Insurance Company
Policy No. CGL 68-63-617-04
Coverage - General Liability
This policy pays on behalf of or indemnifies AlliedSignal Inc. for all sums
which they shall become obligated to pay by reason of third party liability
imposed by law for damages because of bodily injury, sickness or disease,
and/or injury to or destruction of property, including the low of use thereof,
caused by an occurrence.
Coverage under this policy also includes (but is not limited to) the following
types of liability claims: products (excluding aircraft products), completed
operations and contractual liability.
Policy Period
4/1/97 to 4/1/98
Limits of Liability (In US dollars)
General Liability
$2,000,000 combined single limit, per occurrence $20,000,000 in the aggregate
$2,000,000 Products Liability and Completed Operations per
occurrence/$4,000,000 in the aggregate
Automobile Liability
Bodily Injury/Property Damage $2,000,000 combined single limit
Hired car and non-ownership coverage included.
Deductibles
General-Liability
None
Automobile Liability
1 of 3
<PAGE>
For owned automobiles, this coverage is excess and difference in
conditions over local statutory limits or $25,000 SIR, whichever is
greater.
Local Automobile Insurance Guidelines
Automobile insurance is broken down into 2 main categories:
1. Automobile Liability for bodily injury and property damage to
others 2. Physical damage to the vehicle to include collision, theft,
etc.
The purchase of physical damage insurance is prohibited by Corporate policy.
As respects automobile liability, this subject can be broken down into two more
categories:
A. Liability arising out of the use of owned or leased vehicles
B. Liability arising out of the use of vehicles not owned, hired
or leased by AlliedSignal. This category includes vehicles
that are owned by AlliedSignal employees and used on company
business with the permission of the company.
In item "A" above, the owned or leased vehicles must carry local automobile
liability insurance. In most countries, the local vehicle registration laws
require that the operating unit maintain automobile liability insurance for
those vehicles.
Non-owned vehicle coverage is provided as an adjunct to our general liability
program. Such coverage will also normally be provided on an admitted basis as
part of the locally issued general or automobile liability policies. It is
important to note, however, that this coverage does not extend to personal use
of employees' vehicles. It is intended to protect AlliedSignal and may,
depending on the discretion of the Risk Management Department, be extended as
excess coverage to its employees as respects liability arising from employees
using personal cars on company business. Therefore, it is imperative that all
employees continue to maintain their own personal automobile insurance.
With respect to the Zurich-American USA policy, it extends on a broader and
excess basis to all categories of automobile liability indicated above, over a
minimum primary limit of $25,000 or the local statutory limit, whichever is
greater.
On the subject of rented automobiles, the major rental firms with whom we deal
provide liability insurance as part of the rental agreement. Our international
program provides insurance protection for both AlliedSignal and the employee,
while an company business, for coverage in excess of that offered by the
automobile contract.
The Zurich-American program does not mandate that the local admitted automobile
insurance be placed with the Zurich-American network facility in the various
countries. However, with all other factors being equal, we strongly encourage
the use of the Zurich-American for the admitted automobile liability program.
Whether or not the Zurich-American is used, the J&H local facility is to be the
broker for the automobile insurances.
Basis of Premium Charge - General & Automobile Liability
2 of 3
<PAGE>
Premium is based on non-aircraft sales and number of vehicles.
Notice and Handling of Claims
The original of each report and of supporting papers are to be submitted to the
local Zurich representative servicing the area where the accident occurred,
with copies sent to the, Risk Management Department at
101 Columbia Road
Morristown, New jersey 07962
3 of 3
<PAGE>
TITLE: RISK
[LOGO] ALLIEDSIGNAL GENERAL LIABILITY-DOMESTIC MANAGEMENT
MANUAL
SUPERSEDES: DATE: PAGE: 1
5/96 5/97
GENERAL LIABILITY INSURANCE
Insurance Company
The Travelers Indemnity Company
U.S. Policy No. TC2J-GLSA-199T573-A-TIL-97
Coverage
This policy will pay on behalf of AlliedSignal Inc. & subsidiaries all sums the
insured is legally liable to pay, for damages arising from bodily injury and
property damage liability, resulting from a product or activity of the insured
and caused by an occurrence.
Coverage under this policy includes (but is not limited to) the following types
of liability claims: products (excluding aircraft products), completed
operations, contractual liability. This policy will pay first dollar coverage
for damages to third parties for which we are legally liable, notwithstanding
our current deductible of $3,000,000 each occurrence, bodily injury and
property damage combined, including expenses. Travelers is reimbursed via a
daily cash transfer system, for claims within the deductible area.
Policy Period
4/1/97-4/1/98
Limits of Liability(1)
A. General Liability (excl. products) -$3,000,000 each occurrence
combined limit for bodily injury, sickness, disease or death or
physical injury to or destruction of tangible, property.
B. Product Liability (excl. aircraft products) and Completed
Operations Liability - $3,000,,000 each occurrence, combined
limit for bodily injury and property damage subject to an
aggregate(2) of $10,000,000.
(1) Defense costs are paid in addition to the limits of
liability.
(2) Aggregate is eroded by indemnity payment within both the
deductible & pure insurance areas.
Basis of Premium
8% is based on wages - this covers premises type exposure 60% is based on
historical loss experience.
32% is based an non-aircraft sales.
1 of 2
<PAGE>
NOTICE AND HANDLING OF CLAIMS
A. Litigation
If you receive a copy of a Summons, Complaint, Petition or other legal
paper indicating that AlliedSignal Inc., one of its subsidiaries,
divisions, operating units or employees is involved in a lawsuit,
immediately contact the Law Department Forward legal papers to your
assigned company Counsel with copies to the Risk Management
Department.
B. Other Claims and Incidents
Report all other claim and incidents under this coverage by submitting
a comprehensive narrative report to the Risk Management Department and
the Travelers Insurance Company. For serious claims telephone the Risk
Management Department and provide all available information.
Your written report should include all relevant aspects of the claim,
especially the following items:
1. Date of accident or loss
2. Persons involved and extent of their injuries 3. Extent of
Property Damage 4. Short narrative of what took place 5.
Copies of available accident reports and witness statements
The Risk Management Department and the local Travelers office will
work with you in every aspect of a claim under this coverage, so that
fine disposition is made in the most beneficial and expeditious
manner.
C. Environmental Claims
See Excess Liability Section.
GENERAL LIABILITY INSURANCE-CANADA
Insurance Company
The Guardian Insurance Company
Policy No. 1412000
Policy Period
4/1/97-4/1/98
Coverage
Coverage is the same as provided in the United States.
2 of 2
<PAGE>
TITLE: RISK
[LOGO] ALLIEDSIGNAL EMPLOYEE TRIP TRANSIT MANAGEMENT
MANUAL
SUPERSEDES: DATE: PAGE: 1
5/96 5/97
EMPLOYEE TRIP TRANSIT
Insurance Company
Fireman's Fund Insurance Company
Policy No. OP-18530
Coverage
Provides worldwide coverage on household goods and personal effects of
AlliedSignal's officers and employees while in transit by any mode of
conveyance, including risks while on docks, platforms, wharves, sidings,
awaiting transshipments or being transshipped, and held covered while in
warehouses. Insured against "All Risks" of physical loss and/or damage from any
external cause exclusions considered uninsurable, such as nuclear, wear and
tear, insects, inherent vice and gradual deterioration. Coverage does not apply
to loss of accounts, bills, currency, deed, evidences of debt, money, notes or
securities. Jewelry and watches require prior Risk Management Department
approval at rates to be agreed upon. Coverage attaches from the time goods are
being packed for shipment and covering continuously until same are safely
delivered and unpacked at the final destination, but only at and between the
places as reported on AlliedSignal's monthly report required to be made under
the policy.
For questions on Monthly Reporting, please contact Fran Watkins in Morristown.
Policy Period
5/1/97-4/30/98
Limit of Liability
$400,000 any one shipment at any one time.
Deductible
None
Notice of Handling of Claims
Report to the AlliedSignal Risk Management Department, who shall report prompt
notice to the Fireman's Fund Insurance Company.
All potential claims in excess of $500 shall be reported to:
Mr. Tom Lynch
Fireman's Fund Insurance Company
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Ocean Marine Claims
One Liberty Plaza
New York, NY 10006
2 of 2
<PAGE>
TITLE: RISK
[LOGO] ALLIEDSIGNAL MARINE CARGO MANAGEMENT
MANUAL
SUPERSEDES: DATE: PAGE: 1
5/96 5/97
OCEAN CARGO INSURANCE INCLUDING WAR RISK
Insurance Company
Fireman's Fund Insurance Company
Policy No. OP-18529 - Ocean Cargo
Policy No. OP-18530 - Household and Personal Effects
Coverage
This policy covers 100% interest in shipments worldwide (excluding shipments
within the US & Canada), by vessel and air freight for account of AlliedSignal
Inc. and its overseas customers on merchandise incidental to the business of
the insured.
Valuation of goods normally includes prepaid or advanced or guaranteed freight
or other charges incurred prior to shipment, plus 10%. Policy provides for
certain alternative valuation clauses.
Limits of Liability
1. $15,000,000 per any one vessel or conveyance including aircraft.
$400,000 per any one household effects shipment
$50,000 per package shipped by mail or parcel post and $50,000 in
any one package and/or baggage while in the custody of a
messenger whether an employee of AlliedSignal Inc. or otherwise.
2. Shipments originating within the United States and Canada are
excluded if the destination is also within the US or Canada.
3. War Risk applies only while goods are carried on overseas vessels
or aircraft. It does not apply prior to being on-board or after
arrival at intended port of discharge.
4. War Risk does not cover loss or damage caused by or resulting
from commandeering, preemption, requisition, nationalization or
seizure or destruction under quarantine or customs regulations.
5. Geographical Limits - coverage is on the basis known as "World to
World", i.e., from ports and places in the world to ports and
places in the world.
6. All merchandise with exception of Dry Bulk Cargo and Liquid Bulk
Cargo is insured for "All Risks" conditions. Intracompany
shipments are subject to a $5,000 deductible. Note, in view of
the sensitive nature of our products, under deck stowage should
always be requested from the Steamship Companies.
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Dry Bulk Cargo is insured for "All Risks". However, claims for
leakage and/or shortage and/or loss in weight are subject to a
one-half (.5%) deductible applied to the insured value of the
entire shipment.
Bulk Liquid Products are insured:
"All Risks" excluding shortage, leakage, and/or contamination
unless caused by or arising out of the vessel being stranded,
sunk, burnt, or in collision. Contamination resulting from stress
of weather is covered.
Claims are payable subject to deductible for normal shortage.
Options are given to cover Bulk Liquid Cargo for:
a. "All Risks" excluding unexplained shortage
and/or loss in weight. Claims for
differences between shipped and outturn
weights are subject to a .5% deductible
applied to contents of each tank.
b. "All Risks" including coverage for all
shortage and/or loss in weight subject to
deductible of .5% applied to contents of
each tank.
Warranties are in effect with respect to
tank cleanliness, loading and survey
requirements.
7. Temporary detention coverage is provided for goods during
interruption of transit and in temporary storage for repacking,
consolidation, inspection, storage or allocation for up to 60
days.
8. Duty coverage on imports included where required.
9. Sixty (60) days notice of cancellation.
10. Foreign storage coverage is provided for goods in storage up to
$500,000 each unnamed location. The risks of Earthquake and Flood
are excluded at unnamed locations; but these risks may be
restored if location is named within thirty (30) days of receipt
of merchandise. A specific endorsement must be secured to name
the location and respective limit. Prompt notice must be given
when goods are placed in storage indicating location, amount and
goods at risk.
11. Contingency - For Exports Only
Depending on the Contracts of Sale, the buyer will arrange their
own Marine insurance, thus AlliedSignal will not insure the
shipment an behalf of the buyer under the Corporation's Ocean
Marine Insurance Policy. For one reason or another, title in the
goods may revert to the seller, i.e., by exercise of rights of
stoppage in transit or rejection of the goods by the buyer. Or
the buyer might refuse to pay for the merchandise because of loss
and/or damage.
In order to protect AlliedSignal's interest in the preceding,
AlliedSignal has the option provided such option is exercised
prior to any known or reported loss to insure all goods and/or
merchandise sold to others whereby AlliedSignal is not obligated
to provide Ocean Cargo insurance for the Contingency Interest of
AlliedSignal Inc.
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This coverage will indemnify AlliedSignal for loss incurred due
to perils insured against under the Corporation's Ocean Marine
Insurance Policy.
12. Exhibitions
All goods and/or merchandise property of AlliedSignal Inc. while
on tour and/or display in exhibitions, showrooms and/or trade
shows or otherwise including all incidental transit are covered
under the Marine Insurance Program. Excluding exhibitions,
showrooms and/or trade shows, etc, in the United States.
The limit of this coverage is $100,000. Excess coverage provided
under foreign property program.
13. Increased. Value/Difference in Conditions - For Imports Only
Depending on the Contracts of Sale, AlliedSignal will purchase
various merchandise from vendors located outside the United
States in which the Seller will arrange the Ocean Marine
Insurance. Thus in the event of loss or damage, AlliedSignal will
have to rely on the Sellers Insurance to be reimbursed for the
loss.
In order to fully protect AlliedSignal's interest, AlliedSignal
has the option, provided such option is exercised prior to any
known or reported loss, to insure all goods and/or merchandise
purchased by AlliedSignal on Cost, Insurance, Freight (C.I.F.) or
other terms of purchase whereby the Marine insurance is provided
by the seller or others for Difference in Conditions and
Increased Value as stated in the Corporation's Ocean Marine
Insurance Policy.
Policy Period
5/1/94 until cancelled.
Notice and Handling of Claims
In the event of loss:
- Make every reasonable effort to minimize the loss. Act as a prudent
uninsured cargo owner would. Reasonable expenses incurred in
minimizing a loss are recoverable.
- Take proper delivery exceptions and file claim against the
transportation carrier. Do the necessary to preserve insurer's
recovery rights against the carrier.
- Promptly report the loss to AlliedSignal's Risk Management
Department (domestic shipment and imports) or insurer's settling agent
(exports).
INTERNATIONAL SHIPMENTS
Import Shipments (From Foreign, to U.S.)
Inspect Cargo
Before accepting your shipment from the carrier, carefully inspect the
cargo. If damages or shortages are observed, make the appropriate
notation on the delivery receipt. If damage is
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suspected but not readily apparent, note on the delivery receipt "Subject to
Inspection." At this time, take any practical steps to minimize the loss.
File Claim on Carrier
Promptly file written claim against the transportation
carrier. (See sample claim letter).
Prompt notice is very important as claims can be disallowed
within a short period. For example, a claim for damage to an
air shipment must be filed within seven days. FAILURE TO FILE
PROMPTLY AGAINST THE CARRIER MAY PREJUDICE YOUR INSURANCE
CLAIM.
File Insurance Claim
Promptly report the loss to AlliedSignal's Risk Management Department who will
in turn notify insurer.
If the loss exceeds $5,000 or involves unusual circumstances, the initial
report should be made by telephone, so that insurer might arrange to have a
surveyor inspect the damages promptly. The surveyor issues his report to
insurer relating the nature, cause and extent of loss.
Regardless of the amount of the loss, do not dispose of any damaged cargo until
settlement is agreed or advised to do so by the surveyor.
Claims Documentation
Cargo claims are essentially adjusted on the basis of documentation. It is your
obligation to demonstrate your claim by providing the Risk Management
Department with documentation which shows the loss was incurred during transit
and which substantiates the values being claimed.
The following documents are required for claims on imports:
- - File an itemized statement as to the amount claimed
- - Bills of Lading (Ocean, Air and Inland). If claim is for non-delivery of an
entire shipment, all original ocean bills of lading are required.
- - Commercial Invoice
- - Packing List
- - Consumption Entry Report (if duty is insured).
- - Copy of claim against the carrier and reply, if any.
- - Delivery Receipt showing exceptions.
- - Trailer Interchange Receipt (for containerized shipments).
- - Carrier's confirmation of non-delivery (when claiming non-delivery of an
entire shipping package).
- - Repair/reconditioning invoices or estimates.
This list includes the documents commonly needed to demonstrate a cargo claim.
Be me to submit any other documentation which would substantiate your claim.
General Average
In case a General Average is reported, the Average Adjusters require either a
cash deposit or a General Average Guarantee from an Underwriter authorized to
do business in the country where security is
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taken.
The cargo generally will not be released until the Average Adjusters receive
the Average Bond or Average Agreement and the General Average Guarantee.
Be prepared to furnish identification of the Average, Adjuster, details of the
casualty, description and value of cargo, the Bill of Lading number and date,
and identification of the insurance declaration. Alexander & Alexander will
then arrange for the Underwriter to issue a General Average Guarantee or to
post a cash deposit.
The documentation required is as follows:
a. Invoice
b. Bill of Lading
c. Copy of the signed Average Bond or Average Agreement
d. Insurance Certificate or Insurance Declaration
After the cargo is released for delivery and the documentary requirements
fulfilled all subsequent claim negotiations will be between the Average
Adjuster and Underwriter.
Export (U.S. to Foreign) and Foreign (Foreign to Foreign) Shipments
On shipments terminating in foreign countries, the consignee basically follows
the same claim procedure as you do for imports. Instead of reporting the loss
to AlliedSignal's Risk Management Department, however, the consignee contacts
the insurer's survey agent as listed on the Special Marine Policy which he
receives with the shipping documentation.
The consignee pays the survey fee and submits his claim (including the survey
fee) to the nearest insurer settling agent shown on the Special Marine Policy.
He submits the Special Marine Policy and the survey report in addition to those
documents listed above for import shipments.
This claim procedure is clearly outlined on the reverse of the Special Marine
Policy.
HOUSEHOLD AND PERSONAL EFFECTS SHIPMENTS
Employees household goods and personal effects moves are insured against all
risks of physical loss or damage from an external cause up to the value
declared on AlliedSignal's relocation forms.
Domestic and Foreign to U.S. Moves
Inspect Cargo
Before accepting delivery, inspect your goods and note any apparent
damages on the delivery receipt. If you do not have an opportunity to
make a thorough inspection, sign the receipt with the notation
"Subject to further inspection."
File Claim Against the Moving Company
In the event of damage or shortage, promptly notify the moving company
by telephone and then follow-up with a written notice of claim. Under
a special arrangement with the insurer, the moving
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company will inspect the damages and settle the claim directly with you.
Claims Documentation
The following documents should usually be submitted to the moving
company:
- Bill of Lading
- Valued Inventory
- Packing List/Inventory
- Delivery Receipt
- Repair Bill or Estimates
- Completed Claim Form (supplied by the moving company)
Foreign Moves
In the event of loss or damage to your goods when delivered to a foreign
destination, secure the above claim documentation (Household and Personal
Effects Shipments) and forward to the Risk Management Department.
GENERAL REMARKS
These procedures will serve as a guideline for everyday cargo claims handling.
If you encounter any difficulties in handling a particular claim, contact the
Risk Management Department for assistance.
You should also be sure to promptly notify the Risk Management Department of
any serious cargo loss.
SAMPLE LETTER FORM FOR
NOTICE OF LOSS TO CARRIER
TO BE WRITTEN ON YOUR LETTERHEAD
Vessel or Carrier's Name
Bill of Lading No. - Date
Description of Shipment
Estimate of Loss
Your own Reference No.
Gentlemen:
The captioned shipment was received short and/or damaged. We hold you fully
responsible for an estimated amount of $________.
Please forward a copy of your delivery records covering this shipment so we may
file claim under our insurance.
A formal claim with supporting documents will be submitted when the exact
amount of loss has been determined.
Very truly yours,
[Signature]
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<PAGE>
TITLE: RISK
[LOGO] ALLIEDSIGNAL EXCESS LIABILITY MANAGEMENT
MANUAL
SUPERSEDES: DATE: PAGE: 1
5/96 5/97
WORLDWIDE MARINE LIABILITIES
Insurance Company
European, US, Swiss & Bermudian Companies
Coverage
This insurance will pay on behalf of the Assured all sums for bodily injury and
property damage which the Assured shall become legally liable to pay or be
liable to pay by reason of contract or agreement including but not limited to
Protection and Indemnity Risks, including War Protection and Indemnity Risks
for AlliedSignal's barge fleet, collision, towers, removal of wreck,
charterers, charterers' demurrage, terminal or wharf owners or operators'
liability. Includes seepage and pollution coverage in accordance with Federal
Water Quality Improvement Act requirements.
Policy Period
4/1/97 - 4/1/98
Limits of Liability*
$200,000,000 any one occurrence and in the aggregate**, excess of $3,000,000
(insured and/or self-insured) any one occurrence.
* Payment of Loss for joint ventures is determined as follows: Total loss of
joint venture times AlliedSignal's percentage of interest, unless otherwise
requested and endorsed on the policy.
** Additional limits respond on a "claims-made" excess basis.
BROAD FORM UMBRELLA LIABILITIES-WORLDWIDE
Insurance Company
Alchem Insurance Ltd., Bermudian, European, Swiss & American Companies
Coverage
Excess Liability Insurance is designed to add an additional amount of coverage
over and above some specific limit. Our excess liability policies provide
coverage over various primary underlying limits.
Underwriters shall indemnify the Assured for all sums which the Assured shall
be obligated to pay by
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reason of the liability:
e. imposed upon the Assured by law, or
f. assumed under contract or agreement by the Named
Assured and/or any officer, director, stockholder,
partner or employee of the Named Assured, while
acting in his capacity as such, for damages on
account of:
i. Personal Injuries
ii. Property Damage
iii. Advertising Liability
iv. Marine Liability
caused by or arising out of each occurrence happening anywhere in the world.
Policy Period
4/1/97 - 4/1/98
Limits of Liability*
$200,000,000 combined single limit attaching excess of the following:
US$3,000,000 any one occurrence Ultimate Net Loss whether
insured or self-insured as respects general and non-aircraft
products liability.
US$2,000,000 any one occurrence Ultimate Net Loss whether
insured or self-insured as respects Automobile Liability
US$2,000,000 any one occurrence Ultimate Net Loss whether
insured or self-insured as respects Foreign Liability
US$1,000,000 Ultimate Net Loss per person as respects
Employer's Liability Occupational Disease (domestic). Excess
of non-U.S. and Canada programs declared to Risk Management
Department.
Basis of Premium Allocation
50% is based on non-aircraft sales.
50% is based on historical loss experience.
*Payment of Loss for joint ventures is determined as follows: Total loss of
joint venture times
AlliedSignal's percentage interest, unless otherwise requested and endorsed on
the policy.
NOTE: Additional limits respond on a "claims-made" excess basis.
SEEPAGE AND POLLUTION LIABILITY
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Insurance Company
European, US, & Bermudian Companies
Coverage
To cover the Assured for all liabilities, costs and expenses for which they may
be held liable arising from seepage, pollution, contamination, containment,
confinement and cleanup expenses, (unless deliberate or resulting directly from
willful or conscious violation or non-compliance with rules, regulations or
law). Coverage is limited to accidental, unintended and unexpected occurrences.
All policies require that the occurrence can be identified as commencing at a
specific time and date during the term of the policies, that we learn of the
occurrence within a specified time soon after commencement and report same to
underwriters within a specified time*. Excludes coverage for claims involving
waste sites.
Policy Period
4/1/97 - 4/1/98
Limits of Liability**
Contact the Risk Management Department for specific limit information.
NOTICE AND HANDLING OF CLAIMS
Notice of Loss
First Notice of Loss should immediately be phoned to the Risk Management
Department. All losses must be reported to the Risk Management Department in
time for them to report the loss to the insurers within 20 days of commencement
of the loss.
*Time element wording varies by policy as shown on next page.
**Limits of liability for joint ventures we determined as follows: policy
limits times AlliedSignal's percentage of interest in the joint venture unless
otherwise arranged.
Pollution - Time Element Reporting Provisions
Discovery Within Reporting Within
7 days 40 days
Litigation
If you receive a copy of a Summons, Complaint. Petition or other legal paper
indicating that AlliedSignal Inc., one of its subsidiaries, divisions,
operating units or employees is involved in a lawsuit, immediately contact the
Law Department. Forward legal papers to your assigned company Counsel with
copies to the Risk Management Department.
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Other Claims and Incidents Involving Pollution
Report to the Risk Management Department all claims, lawsuits, and incidents
relating to waste disposal or plant manufacturing operations and which involve
alleged contamination of the environment. All claims are to be reported
irrespective of the date upon which the disposal or spillage occurred. Claims
and lawsuits that must be reported include the following:
o demands from any private party or governmental entity that
action be taken to remedy the alleged contamination
o information requests from any governmental agency or private
party
o demands for reimbursement of costs expended and/or damages
incurred by any governmental agency or private party
o circumstances that involve negotiations with a governmental
agency where a written demand has not been made but where a
consent order is expected.
Reports of these claims to Risk Management should include a copy of the claim
or lawsuit, a synopsis of the events, if known, associated with the claim along
with an outside counsel recommendation or selection if the Law Department
determines that outside counsel is necessary.
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TITLE: RISK
[LOGO] ALLIEDSIGNAL GLOBAL PROPERTY DAMAGE & MANAGEMENT
BUSINESS INTERRUPTION MANUAL
SUPERSEDES: DATE: PAGE 1
10/95 10/96
GLOBAL PROPERTY DAMAGE, AND BUSINESS INTERRUPTION
Insurance Company
The insurance company is American International Underwriters for Allied's
International locations. In North America the Primary insurers are Reliance,
Houston Casualty, National Union and Protection Mutual. These same insurers,
plus other U.S. & European insurers participate both in the primary layer, as
well as the excess layers.
Coverage
This is a blanket policy* covering the Corporation against loss or damage, on a
replacement cost basis **, to real and personal property, or the property of
others for which the Corporation is responsible at locations worldwide
(including while in transit). The policy insures against all risk of direct
physical loss or damage from any external cause, including boiler and machinery
breakdown and is subject to normal exclusions such as wear and tear, gradual
deterioration, extremes of temperature war, nuclear and other exclusions
commonly considered uninsurable or the subject of other insurance such as
employee dishonesty.
The Policy covers Boiler and Machinery up to the full limit per occurrence.
This policy also provides business interruption insurance and contingent
business interruption insurance which is designed to pay for loss of profits
and continuing costs which result from damage to insured property and/or to
those of a supplier or receiver by art insured peril.
The policy has been extended to cover damage to electronic data processing
equipment and for costs of reproducing media from duplicates or originals only.
Some limited amount of full reproduction expenses is provided. Included therein
is business interruption and/or extra expense coverage which provide for
reimbursement for loss of income and/or the assurance of funds to meet the
additional expenses incurred in returning to normal operations following an
Insured incident.
The policy automatically (subject to reporting to underwriters in a certain
time frame) covers new and acquired property and the interest of any company or
corporation which during the period of the policy is merged with, becomes a
subsidiary of, or becomes controlled by Allied or any subsidiary of Allied.
*This policy covers all Allied Signal's locations on a blanket basis (except
certain EMS locations, which are covered for $1.2 Billion each occurrence)
which means the entire amount of insurance can be applied to a single location.
**In the event of loss or damage to real and/or personal property which is not
repaired rebuilt or replaced, such property will be valued at Actual Cash
Value.
Policy Period
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10/1/96 - 10/1/97 RENEWED 10/1/97 - 10/1/98
Limits of Liability
Blanket limit combined on Real and Personal Property Insurance and Business
Interruption.
$350,000,000 for earthquake per occurrence and in the aggregate except Critical
Zone earthquake where it is $200 million per occurrence and in the aggregate
for ISO Critical Zone 1 (areas of the states include portions of California,
Nevada, Alaska and the Country of Canada) and $150 million per occurrence and
in the aggregate for one other Zone 1 equivalent International locations. In
Japan Zones 4, 5 or 6 there is a 60% indemnity provision. For Flood the per
occurrence and annual aggregate is $350,000,000, except in The Netherlands
where the occurrence/aggregate limit is $25,000,000.
$150,000,000 per occurrence for the following:
a. Extra Expense
b. Contingent Extra Expense
c. Rental Insurance
d. Transit
e. Contingent Business Interruption
f. Fine Arts
g. Valuable Papers and Records (including reproduction cost of media)
h. Leasehold Interest
i. Off Premises Power - Property Damage and Time Element - excluding losses
resulting from flood and earthquake.
j. Accounts Receivable
k. Debris Removal (except windblown debris)
l. Vessel impact damage to piers, wharves and docks
m. Expediting Expense
n. Installment Sales
o. Miscellaneous Unnamed Locations
p. Newly acquired property subject to reporting within 180 day of acquisition
q. Precious metals r. Fire Department/Brigade Charges s. Electronic Data
Processing Equipment t. Property in the course of construction (including
testing)
Deductible
All claims for damage, loss of income, profit or expense arising out of any one
occurrence shall be adjusted as one loss and from the amount of such adjusted
loss, there shall be deducted the sum of $100,000 combined any one occurrence
at all locations, anywhere in the world except $250,000 combined any one
occurrence at all locations in the U.S, its territories and possessions, Puerto
Rico and Canada.
Earthquake Deductibles*
$10,000,000 for each loss Insured against the peril of earthquake involving all
locations situated within designated critical ISO Zone No. 1 (areas of the
states include portions of California, Nevada, Alaska and the Country of
Canada).
Deductibles:
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1. $5,000,000 for each loss at the following locations:
Frankford
Hopewell
Orange
2. $2,500,000 for each loss at the following locations:
Chesterfield
Columbia
Moncure
3. $2.500,000 for each loss at the following locations:
Detroit (Tar Plant)
Ironton (Tar Plant)
Pottsville, PA
Longlaville, FR
Riedel-de-Haen German
Rudolstadt, Germany
4. $100,000 for each loss involving property in transit.
*One carrier (Protection Mutual) has an earthquake deductible of 5% of the
maximum of $500,000 any one occurrence in Japan or Mexico and a deductible of
5% to a maximum of $1,500,000 any one occurrence in Taiwan.
5. a. 2% for each Property Damage loss insured against by the peril of
windstorm in the U.S.A. at each location within designated areas
(as defined in Windstorm Endorsement Designated Areas), the
amount to be deducted shall be stated percentage of the one
hundred percent reported property damage values for each and
every location (see Attachment A).
b. 5 days for each Time Element loss insured against by the peril of
windstorm in the U.S.A. at each location within the designated
areas (as defined in Windstorm Endorsement Designated Areas), the
amount to be deducted shall be the dollar equivalent of the
stated number of days times the daily plant value - computed by
dividing the reported annual time element values by the actual
number of working days.
Notwithstanding 5 a and b above, the minimum amount to be deducted from the
total loss arising out of one windstorm occurrence shall in no event be less
than $250,000, while the maximum amount to be deducted shall in no event be
greater than $5,000,000.
Territory
Worldwide except Afghanistan, Albania Angola, Bosnia-Herzegovina, Croatia,
Cuba, El Salvador, Iran, Iraq, Kampuchea (Cambodia), Laos, Lebanon, Libya,
Macedonia, North Korea, Outer Mongolia, Serbia, Syria, Tibet and Montenegro.
Those with a $10,000,000 per occurrence limit include Armenia, Azerbaijan,
Bulgaria, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldava, Romania,
Tajikistan, Tibet, Turkmenistan, Uzbekistan and Russia.
Basis of Premium Charge
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Values for property damage and business interruption are completed and
submitted to the Risk Management Department annually. Premium is determined on
the basis of trended building, machinery and equipment replacement values,
together with inventory and estimated business interruption values as of
December 31 each year. In addition, loss experience is considered in expensing
the cost of the Insurance based upon each business area's proportion of total
values.
Notice of Loss
The proper reporting of claims is important as it effects:
o The speed of loss settlement
o The prejudicing of your rights against the insurance company
caused by reporting delays, thereby violating the insurance
policy conditions
o The proper adjusting of the claim amount.
For all losses that may result in an insurable claim you should notify the
Corporate Risk Management Department and if the loss occurs outside North
America, you should immediately notify your local insurance broker when:
o The claims could exceed $10,000
o There is a possibility that the claim will be denied by the
local insurance company
o There is a dispute as to the settlement amount of the claim
All losses should be reported to the local broker and the Corporate Risk
Manager. Those claims insured by the Corporate Ocean Maine Cargo program should
be reported in accordance with the procedures set forth by the Corporate Risk
Management Department and reported to the Corporate ocean marine cargo broker
in New York.
The claims specialists are:
AlliedSignal Inc. Mr. Tim Cummings
Morristown, NJ Office Manager, Risk Management Services
Telephone: (973) 455-4527
AONNYO Mr. John Rhodes
Property/Business Interruption Claims Vice President
Telephone: (212) 441-2298
AONNYO Mr. Dante Petrizzo
Marine Claims Vice President
Telephone: (212) 441-1340
WINDSTORM ENDORSEMENT DESIGNATED AREAS
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ALABAMA: Counties of Baldwin and Mobile
FLORIDA: Seacoast Zone 1
Seacoast Zone 2
Seacoast Zone 3
All Other Counties (Inland)
AlliedSignal: Fort Lauderdale, Lynn Haven
GEORGIA: Counties in Brantley, Bryan, Camden, Charlton, Chatham
Effingham, Glynn, Liberty, Long, McIntosh, Pierce and Wayne.
HAWAII: Entire State
LOUISIANA: Parishes of Acadia, Ascension, Assumption, Calcasieu,
Cameron, East Baton Rouge, East Feliciana, Iberia,
Iberville, Jefferson Davis, Lafayette, Lafourche,
Livingston, Orleans, Plaquemines, Pointe Coupee, St.
Bernard, St. Charles, St. Helena, St. James, St. John the
Baptist, St. Martin, St. Mary, St. Tammany, Tangipanoa,
Terrebonne, Vermillion, Washington, West Baton Rouge and
West Feliciana.
AlliedSignal: Geismar, Darrow - Ascension
Baton Rouge - W and E Baton Rouge
MISSISSIPPI: Counties of George, Hancock, Harrison, Jackson, Pearl River
and Stone.
N. CAROLINA: Counties of Besufort, Bertie. Bladen Brunswick, Camden,
Carteret, Chowan, Columbus, Craven, Currituck, Dare, Duplin,
Gates, Greene, Hartford, Hude, Jones, Lenior, Martin, New
Hanover, Onslow, Pamlico, Pasquotank, Pender, Perquimans,
Pitt, Tyrell, and Washington.
PUERTO RICO: Entire Island including all Caribbean Islands.
S. CAROLINA: Counties of Beaufort, Berkeley, Charleston, Colleton,
Dorchester, Georgetown, Hampton, Horry, Jasper and
Williamsburg.
AlliedSignal: Conway, Charleston
TEXAS: Counties of Aransas, Bea, Brazoria, Brooks, Calhoun,
Cameron, Chambers, Fort Bend, Galveston, Goliad, Hardin,
Harris, Hidalgo, Jackson, Jefferson, Jim Wells, Kenedy,
Kleberg, Liberty, Live Oak, Matagorda, Nueces, Orange,
Refugio, San Patricio, Victoria, Wharton and Willacy.
AlliedSignal: Orange, Brownsville
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VIRGINIA: Counties of Accomao, Charles City, Chesapeake, Gloucester,
Isle of Wright, James City, Lancaster, Mathews, Middlesex,
Nansemond, New Kent, Norfolk, Northampton, Northumberland,
Prince George, Princess Ann, Southampton, Surry, Sussex,
Virginia Beach, Warwich and York.
AlliedSignal: Hopewell - Chesterfield
County
Not in designated areas
Petersburg - Grant County
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<PAGE>
TITLE: RISK
[LOGO] ALLIEDSIGNAL WORKERS' COMPENSATION- MANAGEMENT
DOMESTIC MANUAL
SUPERSEDES: DATE PAGE: 1
7/96 5/97
WORKERS' COMPENSATION - DOMESTIC
Insurance Company
The Travelers Insurance Company
Policy No. Applicable State
TC2EEUB-196T365-1-97 Texas
TC2JUB-204T578-2-97 Minnesota
TDRJ-UB-196T362-6-97 Hawaii, Massachusetts, Oregon, Wisconsin
TC2JUB-202T831-8-97 All Others States
Self-Insured Excess Policies
Policy #: 4155588 Arizona, California, Louisiana, New
Jersey, Ohio, Rhode Island, South
Carolina, Washington
Insurer: National Union Insurance Co.
Limits of Liability: Statutory
181000532 Maine - Insured by Maine Employers
Insurance Co.
Coverage
The Travelers Insurance Company will provide coverage for statutory benefits in
all states in the United States, except Maine and monopolistic State Fund
jurisdictions (Nevada, North Dakota, Ohio, Washington, West Virginia and
Wyoming) and self-insured states. Allied is legally self-insured for workers'
compensation in Ohio, Arizona, Louisiana, Rhode Island, New Jersey, Floria,
California, South Carolina and Washington. Travelers Insurance Company (CSSC)
is our claims administrator in Ohio, Louisiana, Rhode Island, California, South
Carolina and Washington. Kemper Insurance (NATLSCO) is our claims administrator
in New Jersey, Florida and Arizona for claims with a date of occurrence after
April 1, 1996. Travelers was the claims administrator for these three states
prior to April 1, 1996. Kemper will provide Employer's Liability coverage, as
well as coverage for Longshoremen's and Harbor Workers Act Benefits for New
Jersey, Florida and Arizona. Travelers will provide these coverages for all
other states.
Limits of Liability
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1. Workers' Compensation - Statutory limits in all insured states of the
United States
2. Employer's Liability - $1,000,000 by accident, $1,000,000 by disease
3. Longshoremens'& Harbor Workers' Act including masters and members of
crew for all operations worldwide. The Jones Act, Defense Base Act and
Outer Continental Shelf Act are also covered subject to terms and
conditions of these acts.1.2.
Location Retained Limits Per Occurrence
Except for Nevada, North Dakota, West Virginia and Wyoming, AlliedSignal is
financially self-insured in all states. We retain the first $1 million of each
occurrence. Each location is responsible for the first $250,000 per occurrence.
Losses from $250,000 to $1 million are retained at Corporate.
Policy Period
4/1/97 - 4/1/98
Basis of Premium Charge
Workers' compensation premium is allocated in two segments. Payroll and
estimated claims costs are the base used in determining administrative cost
which is allocated annually. Included in the administrative cost are Travelers'
engineering services (inspections, schools, etc.), state taxes, special fund
assessments, cost of excess insurance and expense and profit of Travelers.
Secondly, there is a quarterly charge that includes claim losses based upon
total incurred liability, up to a maximum of $250,000 per occurrence and a
claims administration fee. Claim losses include all new claims filed during the
current period plus increase and/or decrease in the incurred liability for
prior periods. Claims and the incurred liability appear on the quarterly loss
run. The claims administration fee is 11% for accidents occurring prior to
April 1, 1986, and 8% after April 1, 1986.
Locations in State Funds (Wyoming, West Virginia, Nevada, North Dakota) pay
premium directly to a division of the respective State Governments. The State
Agency is responsible for payment of statutory benefits and administration of
the claims.
The cost of this premium is allocated based upon payroll and estimated claims
costs.
For accidents that occur on or after April 1, 1996, Kemper Insurance Company is
the workers' compensation claims administrator for locations in Arizona,
Florida and New Jersey. Travelers Insurance retains responsibility for claims
that occurred in these states before April 1, 1996. Travelers also retains
responsibility for claims in all other states.
The following Claims Service Requirements (CSR) will be followed by both the
Travelers Insurance Company and Kemper Insurance Company in administering our
claim files. Travelers refers to these instructions as Special Account
Communication (SAC). Kemper uses the title National Account Claim Bulletin.
ALLIEDSIGNAL CLAIM SERVICE REQUIREMENTS (CSR)
Acknowledgment - Workers' Compensation
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The Workers' Compensation system has been programmed to produce a claim
acknowledgment printout. All claim acknowledgments will be mailed to: The
location submitting the loss.
Adjuster Notes - Workers' Compensation
Instant access to your claim information is available through our adjuster
notes facility. The customer will see the development of the specific claim
especially in the two key areas of reserve rationale and action plan for
resolution. Sharing of information is the key.
Quarterly Contact - Workers' Compensation
We have agreed with both AlliedSignal officials and the producer that Workers'
Compensation supervisory personnel will maintain a program of open
communications between Travelers, Kemper and AlliedSignal personnel in
conjunction with our handling of Workers' Compensation cases. Each AlliedSignal
location will have a Workers' Compensation coordinator, designated by the plant
manager, who will be our contact. The Claim Supervisor/file handler handling
Workers' Compensation claims should maintain at least quarterly contact with
the Workers' Compensation coordinator designated at each locations so that
cases of interest may be reviewed, or any other topics can be discussed.
File Review Meetings - Workers' Compensation
AlliedSignal Inc. has agreed to hold file review meetings as needed. If
requested by AlliedSignal, these file review meetings will be held to discuss
open claim files designated by the customer or recommended by Travelers/Kemper
as cases significant in nature. After each file is discussed, a joint action
plan should be agreed to and made part of the file. These meetings should take
place in our office or the AlliedSignal location.
Requests for Special Reports or Services
Occasionally, the AlliedSignal Workers' Compensation Coordinator will ask for
special reports or implementation of a program/service that is beyond the
services outlined in these instructions. While close local communications are
encouraged, any such arrangement (to be performed an a routine basis) should be
submitted to the Claim Account Executive for discussion with AlliedSignal Risk
Management.
This will assure continuity in the services provided AlliedSignal Inc.
Annual Visitations
On an annual basis, a personal visit will be made to the AlliedSignal location
to review the CSR instructions, application of best practices, communications
and any problem areas. During these meetings a detailed review of the CSR
instructions should be completed to insure we are in compliance. This
visitation should be completed during the first quarter and may be part of a,
regular quarterly meeting. The AlliedSignal Inc. annual visitation form must be
completed and sent to the Claim Account Executive.
"Red Flag" Claims - Workers' Compensation
There will be occasions when the field office will receive notification from
the customer expressing special interest in a claim. This will be termed a "Red
Flag" claim by AlliedSignal. This special interest may be expressed at the time
of first notice, or at any other time while the claim remains open. When a
claim is submitted by the AlliedSignal location and a form letter is attached
to the first report identifying
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the claim as a "RED FLAG" case, we have agreed to the following special
handling guidelines:
o Acknowledge receipt of the case to the AlliedSignal
representative who submitted it.
o The claim handler will initiate a telephone call to AlliedSignal
representative to establish a game plan for investigation and
management of the case. The claim handler will outline in a
letter to AlliedSignal location the proposed investigation and
action to be completed.
o As the case develops, we will maintain communications with the
AlliedSignal location.
o After completion of the investigation, we will discuss the case
by telephone with the AlliedSignal location and explain our
decision on compensability. If there is a difference of opinion
on compensability and agreement cannot be reached, the
AlliedSignal location will contact Tim Cummings and Travelers
offices should contact the Claim Account Executive.
If any problems or disagreements arise, notify the Claim Account Executive.
Employer's Liability Claims - Workers' Compensation
Any time an employer's liability claim is established, acknowledgment of the
claim should be sent to: (I-1).
Independent Medical Exams and Medical Consultation Referrals After 60 Days of
Disability - Workers' Compensation
When an employee has been disabled or is anticipated to be disabled for 60 days
or more an independent medical examination or medical consultation referral
should be considered. The supervisor managing the claims should discuss the
feasibility of an independent exam or consultation with the location submitting
the claim. If the location submitting the claim AGREES NOT to schedule IME or
refer the employee for a medical consultation the claim file should be
documented accordingly.
Medical Services Department
AlliedSignal Inc. has an in house Medical Services Department which is
available for consultation on any claim. This medical staff is a valuable
resource and we should take advantage of their service. Members of this
department may contact you directly an selected cases. If you or our medical
vendor require the assistance of AlliedSignal's medical staff, contact (I-1).
Some of the locations, especially the larger ones with a medical representative
are interested in receiving copies of the medical reports. We should attempt to
accommodate the customers needs for this medical information.
Alternative and Modified Work - Workers' Compensation
AlliedSignal Inc. has put in place an aggressive alternative and modified work
program in all their locations. Before making any lost time benefit payments
you should discuss with the AlliedSignal location whether the injured worker
has returned or will return to alternative or modified work. Continuous contact
with the AlliedSignal Workers' Compensation coordinator should be maintained on
any employee who is receiving lost time benefits to return these employees to
work.
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The process for returning employees to Alternative Work at AlliedSignal is to
determine the capabilities of the employee. The AlliedSignal location will
determine what restrictions they can accommodate. It is most important the
AlliedSignal location know the current capabilities of every disabled employee.
The AlliedSignal location representative is to be kept current on the medical
status of disabled employees. Every effort should be made to set target dates
for return to regular or alternative work.
o The purpose of this process is to aggressively track for return
to work, employees on temporary total disability. If the nature
of the claim allows for a more rapid assessment and finalization
of the claim, we would certainly encourage you to identify your
recommendations to AlliedSignal. If an employee is paid Temporary
Total benefits, we will provide the following:
After 90 and 180 days on temporary total disability, identify in a report to
the location Workers' Compensation Coordinator, copy T. Cummings the following
information. Send a copy of the 90 day report to the Plant Manager.
90 Days of Temporary Total
- Basis for disability - Why is the employee out of work?
- What efforts have been made to find alternative work?
- When will the employee be returning to work?
- Identify the chances of the employee ever returning to alternative
work, regular
job or permanent modified job at AlliedSignal. What can the locations
do to provide temporary or permanent job modified job at AlliedSignal.
What can the locations do to provide temporary or permanent job
modification?
- Should we consider Rehabilitation/Retraining?
- Provide an action plan to return the employee to work or to resolve
the claim.
- If the location has determined that they cannot take this employee
back to work,
we need to identify to the locations the possible cost of
this claim. What are the alternatives for resolving this claim and the cost
structure of each?
180 of Temporary Total
- Same information as in 90 day report.
- At this time, the report must identify the specific action with a
time table and the financial consequence that will be taken to
resolve this claim.
- Subsequent reports as determined by the claim and the time table
for resolution.
Vocational Rehabilitation - Workers' Compensation
Before assigning a case for vocational rehabilitation we will discuss the
reason(s) for the vocational rehabilitation with the location submitting the
loss. The AlliedSignal location may have other pertinent information concerning
the injured party that will assist in the vocational rehabilitation process.
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Claim Checks - Temporary Total, Permanent Partial & Temporary Partial Workers'
Compensation
All checks issued in payment of Temporary Total, Permanent Partial and
Temporary Partial disability benefits are to be made payable to the injured
employee and mailed to the customer at the customer's location reporting the
loss. If that practice is not permitted in the state involved, mail the check
to the employee and furnish the insured's location the Workers' Compensation
payment summary.
Serious/Catastrophic Injuries - Workers' Compensation
When we learn that a claim involves a serious or catastrophic injury, the
AlliedSignal Risk Management Department should be notified immediately. The
following injuries are examples, but are not intended to be all encompassing.
Fatalities.
Amputation.Of One Or More Extremities.
Severe Brain Or Brain Stem Injury.
Second Or Third Degree Burns.
Heart Cases'.
Disability Of 60 Days.
Occupational Disease.
Notify (I-1) by telephone and direct a detailed letter to the insured outlining
the diagnosis, facts of the accident and plans for future handling. The letter
should be sent to: Reporting Location, Copies to (I-1) and (B).
Actuarial Reserve - Workers' Compensation
When you are recommending a file for actuarial reserve, send a copy of your
recommendation to: Reporting Location, Copies to (I-1) and (B).
Reserve/Estimate Advisory Report - Workers' Compensation
In all cases wherein claim reserve/estimate of $20,000 or more is established,
or at the time of any claim reserve/estimate change of $20,000 or more,
immediately direct a letter outlining the factors affecting the reserve amount,
including facts of the accident, nature and extent of injuries as well as
pertinent investigation details to: The location submitting the loss, copies to
(I-1) and (B).
Selection of Counsel - Workers' Compensation
The insured has agreed to utilize our regular panel and staff attorneys in
defense of law suits. However, on certain cases the customer may prefer to use
their own outside counsel for cases in litigation. We
have, agreed to accommodate these exception requests.
If you feel that working with the law firm chosen by the customer will prove,
to be a problem, contact the Claim Account Executive. If a decision is made to
change and assigned Defense Attorney, concurrence must be received from
AlliedSignal's Risk Management Department. Direct a letter outlining the facts
for the basis of the proposed change to: (I-1), copy to the Claim Account
Executive.
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<PAGE>
Legal Correspondence - Workers' Compensation
You should instruct the defense attorney to send copies of all legal
correspondence to: The location submitting the loss.
Pre-Settlement Review - Workers' Compensation
In any case which way have a settlement value of $1.00 to $24,999, we have
agreed to review the case with the customer, before settlement negotiations are
initiated. This is to be accomplished by letter, setting forth details of the
case, and explaining our intentions for handling. This letter is to be directed
to:
The location submitting the loss.
We will make every effort to consult with the customer prior to settling any
Workers' Compensation claim of $25,000 or greater. This review should be
accomplished in a letter which outlines the claim in detail, including our
rationale for settlement. This letter is to be directed to: The location
reporting the loss and (I-1).
If a mutually acceptable resolution regarding the settlement value cannot be
reached, then contact the Claim Account Executive.
Settlements - Workers' Compensation
Before entering into settlement negotiations where the claimant is represented
by an attorney to settle a Workers' Compensation claim for any former
AlliedSignal employee (no longer working at AlliedSignal) or any active
employee that is currently disabled and has indicated he or she is going to
file or has filed a separate action against AlliedSignal for wrongful
termination, ADA violations, etc., contact Patrick McGovern (973) 455-5069 or
Lisa Parlato (East Coast) (973) 455-2150 or Joseph Gore (West Coast) (310)
512-2959. If there are any questions on this procedure please contact (I-1),
Tim Cummings at (973) 455-4527.
Surveillance - Workers' Compensation
If a request is made by AlliedSignal for immediate or emergency surveillance or
if the claims handler feels there is a need our office will give the assignment
to the best surveillance company available that can handle immediate
surveillance. There should not be any delay in making the assignment. The
surveillance company should confirm the assignment with the AlliedSignal
location that made the request.
The Workers' Compensation system has been programmed to produce a closing
notice printout. All closing notices will be mailed to: The location submitting
the loss.
Closing Notices - Workers' Compensation
The Workers' Compensation system has been programmed to produce a closing
notice printout. All closing notices will be mailed to: The location submitting
the loss.
Lines of Communication
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(I-1) Mr. Tim W. Cummings
Manager, Risk Management Services
AlliedSignal Inc.
101 Columbia Road
Morristown, NJ 07962-1219
(973) 455-4527
(973) 455-3866 - FAX
(B) Mr. Richard Catarelli
J&H/Marsh & McLennan
125 Broad Street
New York, NY 10004
(212) 574-8261
(212) 574-8985 - FAX
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<PAGE>
TITLE: RISK
[LOGO] ALLIEDSIGNAL WORKERS' COMPENSATION - MANAGEMENT
FOREIGN MANUAL
SUPERSEDES: DATE: PAGE: 1
5/96 5/97
WORKERS'COMPENSATION/EMPLOYER'S LIABILITY-FOREIGN
Insurance Company
Zurich-American Insurance Company
Policy No. WC68-63-618-04 - Voluntary Foreign
Policy No. WC79-74-372-04 - Defense Base Act
Coverage
Workers' Compensation - Coverage A
1. Voluntary Foreign Workers' Compensation master US
policy coverage provides benefits according to the
state statute where the employee was hired on claims
filed for all US Nationals and those Foreign Nationals
on US dollar payroll anywhere in the world excluding
the United States of America, its territories or
possessions, Canada, Cuba, Cambodia, Laos, Albania,
North Korea, and Viet Nam.
2. Defense Base Act, US Code (1946) Title 42, Sections
1651-54, (Public Law 208, 77th Congress, as amended)
and the provisions applicable thereto of the
Longshoremens' and Harbor Workers' Compensation Acts.
Please contact the Risk Management Department and your
Regional Counsel prior to entering into any contract
requiring Defense Base Act coverage.
Employer's Liability - Coverage B
All covered employees, United States and Foreign National, anywhere in
the World except excluded countries as mentioned above to a limit of
$2,000,000 (US dollars) under the master policy in the US. Excess
limits covered under Foreign General Liability and Broad Form Umbrella
Liabilities.
Policy Period
4/1/97 - 4/1/98
Basis of Premium
Payroll is the base used in determining the premium.
Loss Limit
The losses used in computing the retrospective premium shall be limited to a
maximum of $150,000 per occurrence.
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Notice and Handling of claims
Claims filed under this Policy should be mailed to:
Risk Management Department
Attn: Tim Cummings
101 Columbia Road
Morristown, NJ 07962
973-455-4527
973-455-3866 (FAX)
Supporting data, i.e., physician's statement, medical bills. etc. should
accompany first notice. Please contact the Risk Management Department for
assistance.
Local workers' Compensation/Employer's Liability Insurance Guidelines
As Workers' Compensation/Employer's Liability Laws vary by country,
AlliedSignal operating units must arrange local Employer's Liability and/or
Workers' Compensation coverage, as required by statute, through their local
J&H/Unison representative.
2 of 2
<PAGE>
SCHEDULE 4.26 - AFFILIATE TRANSACTIONS
ELAC
o Manufacturing Licence and Technical Assistance Agreememtn with Ocean
Systems for Dipping Sonar Repair
o Tax organic unit with AS Deutchland GmbH
o Profit & Loss carry over with AS Deutchland GmbH
o Cash pool with AS Deutchland GmbH
o Long term agreement for cable repair with AS Aerospace GmbH
Ocean Systems
See Schedule 1.3(j).
OS manufactures hybrids for other AlliedSignal operations.
<PAGE>
SCHEDULE 6.2(A) - RETENTION AGREEMENTS
See Schedule 4.11.
<PAGE>
SCHEDULE 6.5(B) - ACTUARIAL METHODS AND ASSUMPTIONS
See following pages.
<PAGE>
Schedule 6.5 (b)
ACTUARIAL METHODS AND ASSUMPTIONS
- -------------------------------------------------------------------------------
Actuarial Valuation for Accounting Purposes
Actuarial Cost Method
Projected Unit Credit Cost Method*.
Market-Related Value of Assets
Market-related value equals fair market value adjusted for investment earnings
and losses. Such investment experience is reflected in market-related value as
follows:
o Actual earnings on fixed-income investments are reflected immediately;
o Expected earnings on other assets are reflected immediately;
o Actual earnings on other assets less expected earnings on other assets
are reflected ratably over three years--one-third in the year
following the gain or loss, two-thirds in the second year following,
and 100% in all subsequent years.
The Company reported that fixed income investments represented 28.3% and 29.3%
of total trust assets as of December 31, 1996 and December 31, 1995,
respectively. The Company also reported 1996 rates of return of 8.2% for the
fixed income segment and 16.6% for the total trust. Based on this information,
a 1996 rate of return of 19.9% was calculated for the other assets of the
trust.
Actuarial Assumptions
(1) Discount Rate: 1.00% compounded annually.
(2) Expected Long-Term Rate of Return on Assets: 10% per year.
(3) Compensation Increases**: Present compensation is assumed to increase
5% per year to retirement.
(4) Retirement: For Salaried plan, an average retirement age of
approximately 61, with incidence at specific ages as follows:
------------------------------------
Age Probability Age Probability
------------------------------------
55 5% 61 20%
56 6% 62 30%
57 7% 63 20%
58 8% 64 30%
59 9% 65 100%
60 10%
*Standard Unit Credit for non-pay-related plan.
**Pay-related plan only.
<PAGE>
Schedule 6.5 (b)
ACTUARIAL METHODS AND ASSUMPTIONS (continued)
- -------------------------------------------------------------------------------
For Bendix Hourly: The assumed retirement age is based upon the early
retirement provisions of the particular location according to the
following:
(a) For units providing "30-and-out" retirements, the retirement age
is the later of age 56 or the completion of 30 years of service
but not later than age 62 with ten years of service;
(b) Age 64 for units providing unreduced benefits at age 62;
(c) Otherwise, age 65.
All early retirements are assumed to be voluntary. No involuntary
retirements or plant shutdowns are assumed.
(5) Mortality:
Nondisabled Lives 1971 Group Annuity
Disabled Lives 1977 Railroad Board
(6) Withdrawal:
(a) Salaried Plan: Table B-1 (See Page 3).
(b) Hourly Plan: Table B-2 (See Page 3).
(7) Disability: Table B-3 (See Page 3).
(8) Social Security: Future wage indices are based on an increase of 4.5%
per year. Past wages are estimated on the basis of Social Security
Index Factors. Future cost of living increases are assumed to be 4%
per year.
(9) Marital Status: With regard to any preretirement surviving spouse
annuity provisions of the plan, the assumption is made that the male
of the couple is three years older than the female and that 85% of
male participants and 65% of female participants are married.
(10) IRC Section 415 Limits: Reflect the single and dual plan limits based
on estimated defined contribution account balances, and percentage of
employees electing joint and survivor payment forms. This limit is
projected at an assumed 4% annual cost-of-living increase rate.
(11) IRC Section 401(a)(17) Pay Limit: $160,000 for 1997. This limit is
projected at an assumed 4% annual cost-of-living increase rate.
<PAGE>
Schedule 6.5(b)
ACTUARIAL METHODS AND ASSUMPTIONS (continued)
- -------------------------------------------------------------------------------
TABLE B-1
Probability of Withdrawal
- ------------------
Age Rate
- ------------------
25 12.0%
35 7.5%
45 5.0%
55 0.0%
60 0.0%
TABLE B-2
Probability of Withdrawal
- ----------------------------------
Age Male Female
- ----------------------------------
25 .099 .149
35 .048 .069
45 .016 .028
55 .000 .000
60 .000 .000
TABLE B-3
Probability of Disability
Percentage of
Participants at Indicated
Age Assumed to Become
Disabled in the Next Year
-------------------------
Age Male Female
- ----------------------------------
25 .0855% .0490%
35 .1505% .1340%
45 .3305% .2975%
55 .9410% .7615%
60 1.9600% .9300%
All participants assumed to become disabled are assumed to become eligible for
social security disability benefits and, if applicable, for long-term
disability benefits.
<PAGE>
SCHEDULE 7.15
Letters of Credit
Retained L/Cs (AlliedSignal to remain as account party):
Bank Ref. Beneficiary Bank Amount* Issue Date Expiry Date
- --------- ----------- ---- ------- ---------- -----------
PG634585/ DPA-Korea Chase $87,400 6/19/96 10/30/98
P259525
P 386605 DPA-Korea Chase $1,485,000 6/27/97 7/31/01
P 386610* DPA-Korea Chase $2,970,000* 6/27/97 12/31/00
T 388424 Min. Def. Spain CIBC $818.00 11/12/97 6/30/99
94-NED- MacDonald CIBC Cdn$7,947,595 1/25/94 7/20/99
116441 Dettwiler & Associates
94-NED- MacDonald CIBC Cdn$500,000 1/25/94 7/20/00
116442 Dettwiler & Associates
Intercompany Wahnbachtalsperrenverband DM 3,067,150
(re ELAC
Watertech.)
Any other L/C or similar obligation not listed below as an Assumed L/C shall be
a Retained L/C.
ASSUMED L/CS (PURCHASER TO BECOME ACCOUNT PARTY):
Bank Ref. Beneficiary Bank Amount* Issue Date Expiry Date
- --------- ----------- ---- ------ ---------- -----------
P 386610* DPA-Korea Chase $8,910,000* 6/27/97 12/31/00
P 348778 SSM/Turkey Chase $3,107,490.92 12/22/97 3/23/01
P 348779 SSM/Turkey Chase $932,247.28 12/22/97 3/23/04
P 348780 SSM/Turkey Chase $11,433,827.00 12/23/97 3/23/01
The ELAC Guarantees and Bank Bonds set forth in Schedule 4.7 shall be Assumed
L/Cs.
* NOTE: L/C P-386610 IS A RETAINED L/C AS TO $2,970,000
AND AN ASSUMED L/C AS TO THE REMAINDER OF ITS FACE AMOUNT.
<PAGE>
Exhibit A to Allied Signal
Asset Purchase Agreement
TECHNICAL INFORMATION AND PATENT LICENSE AGREEMENT
AGREEMENT effective this 30th day of March, 1998 ("Agreement") by and
between ALLIEDSIGNAL Inc., a corporation of Delaware, having a place of
business at 2525 West 190th Street Torrance, California 90504 and its wholly
owned subsidiary AlliedSignal Technologies Inc., having a place of business at
8440 South Hardy Dr., Tempe, Arizona 85285 (hereinafter jointly referred to as
"AlliedSignal") and L-3 COMMUNICATIONS CORPORATION, a corporation of Delaware,
having a place of business at 600 Third Avenue, New York, New York 10016
(hereinafter referred to as "Purchaser") either or both of which may also
hereinafter be referred to respectively as the "Party" or "Parties" to this
Agreement.
WHEREAS this Agreement is an attachment to an Asset Purchase Agreement
between the Parties of even date herewith;
WHEREAS Purchaser is purchasing an ongoing business from AlliedSignal
and requires a license of certain technology not exclusively used in the
business in support of Purchaser continued manufacture of the product line as
such product line exists as of the date of the Closing and as such information
exists as of the date of the Closing; and
WHEREAS AlliedSignal represents that it is the owner of certain
technology that a) is used in connection with a business that AlliedSignal is
selling to Purchaser and b) is also otherwise used by AlliedSignal (hereinafter
"Shared Use Technology");
NOW, THEREFORE, in consideration of the promises and the mutual
covenants of this Agreement, the parties hereto agree as follows:
ARTICLE I-DEFINITIONS
The term "Products" and other capitalized terms not otherwise defined
in this Agreement shall have the meaning ascribed to them in the Asset Purchase
Agreement dated as of December 22, 1997 between the Parties.
The term "Technical Information", as used herein, means all
information and assistance (including, but not limited to, data, know-how,
technical, manufacturing, marketing information, including designs, drawings,
specifications, bills of materials, and documentation of processes) as of the
date of the Closing which Purchaser obtains from AlliedSignal and pertains to
the Shared Use Technologies identified in Schedule A to this Agreement.
<PAGE>
The term "Licensed Patents", as used herein, means the patents and
applications for patents which are now or hereafter owned or controlled by
AlliedSignal and pertain to the Shared Use Technologies identified in Schedule
A to this Agreement.
ARTICLE II-LICENSES GRANTED
AlliedSignal grants and agrees to grant to Purchaser an irrevocable,
fully paid-up perpetual, non exclusive, transferable world wide license, with
right to sublicense, to make, have made, use and sell the Products under all
applicable Technical Information and Licensed Patents.
No license, either express or implied, is granted by AlliedSignal to
Purchaser hereunder with respect to any patent or information except as
specifically stated above.
No license, either express or implied, is granted hereunder to use as
a trademark or otherwise the trademarks "BENDIX", "AlliedSignal", "SIGNAL",
"GARRETT" or any other trademark or trade or product name of AlliedSignal, or
any word or mark similar thereto.
No license, either express or implied, is granted hereunder to any
improvements that-AlliedSignal may make to the Licensed Patents or Technical
Information after the date of the Closing.
Purchaser may indicate that products of the Products are made under
license from AlliedSignal by a suitable legend, if the form of such legend and
the extent of Purchaser's use thereof have received prior written approvals
from AlliedSignal. AlliedSignal may amend or revoke prior approvals to use such
legends at any time during the term of this Agreement, and all rights to use
such legends shall terminate with this Agreement.
Nothing contained in this Agreement shall constitute, or be construed
to be, a limitation or restriction on either Purchaser or AlliedSignal to use
existing technologies for future businesses.
Nothing contained in this Agreement shall constitute, or be construed
to be, to require AlliedSignal to license Purchaser to use AlliedSignal patents
or technology for other than the licensed Products.
Nothing contained in this Agreement shall constitute, or be construed
to be, a limitation or restriction upon any right otherwise possessed by
Purchaser or AlliedSignal to make, use or sell any product, or parts therefor,
in any country.
ARTICLE III-ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS
A. AlliedSignal shall at all times have the sole right to take
whatever steps it deems necessary or desirable to enforce its rights in the
licensed Technical Information,
<PAGE>
including the filing and prosecution of litigation; and AlliedSignal shall have
the right to include Purchaser as a party in such litigation where necessary
for the conduct thereof. If AlliedSignal and Purchaser desires to agree to
joint participation in any suit or other enforcement action with respect to any
of the Licensed Patents or Technical Information, the respective
responsibilities of the parties, and their contributions to the costs and
participation in any recoveries, will be agreed upon in writing prior to
undertaking such joint enforcement action.
B. AlliedSignal does not make any representation to Purchaser
regarding the scope or enforceability of the Licensed Patents or Technical
Information, and does not warrant that any Products manufactured or sold under
this Agreement will not infringe patents of others.
In the event of any actual or threatened infringement suit against
Purchaser or its customers which would affect the manufacture, use or sale of
Products, Purchaser shall promptly give written notice thereof to AlliedSignal,
and AlliedSignal will make available to Purchaser free of charge any
information in its possession which AlliedSignal believes will assist Purchaser
in defending or otherwise dealing with such suit.
ARTICLE IV-TECHNICAL INFORMATION
Purchaser shall be entitled to receive only the data, know-how and
assistance as set forth in the Asset Purchase Agreement with respect to any
designs or models of Products as it exists on the date of closing.
If approval by any government is required in order to render this
Agreement fully effective, AlliedSignal shall not be obligated to furnish any
information or assistance hereunder until such approval has been obtained and
evidence thereof has been supplied to AlliedSignal.
All Technical Information covered by this Agreement is property of
AlliedSignal and shall be maintained in confidence by Purchaser.
Purchaser agrees that it will not at any time knowingly disclose to
any third party (except to its employees who reasonably require such
information in connection with the performance of their regular duties) any
Technical Information which is communicated to Purchaser by AlliedSignal under
this Agreement. The foregoing obligation of confidentiality shall not apply to
any Technical Information that (a) is or may become generally available to the
general public through no act of the receiving party or any of its employees;
(b) Purchaser can demonstrate by means of prior documentation was in its
unrestricted possession at the time such Technical Information was first
communicated to Purchaser by AlliedSignal; or (c) Purchaser received such
information from a third party independent of AlliedSignal and such third party
having a bona fide right to disclose such information to Purchaser without any
obligation of confidentiality.
<PAGE>
ARTICLE V-MISCELLANEOUS PROVISIONS
Waiver: Failure of either party to insist upon the strict performance
of any provisions hereof or to exercise any right or remedy shall not be deemed
a waiver of any right or remedy with respect to any existing or subsequent
breach or default; the election by either party of any particular right or
remedy shall not be deemed to exclude any other; and all rights and remedies of
either party shall be cumulative.
Notice: Any notice required or permitted hereunder shall be in writing
and shall be sufficiently given when mailed postpaid first class registered or
certified mail and addressed to the party for whom it is intended at its record
address, and such notice shall be effective as of the date it is deposited in
the mail. The record address of AlliedSignal for this purpose is its address
set forth in the preamble and the record address of Purchaser is its address
set forth in the preamble of this Agreement. Either party may, at any time
substitute for its previous record address any other address by giving written
notice of the substitution.
Government Approvals: Purchaser shall, at its own expense, take
whatever steps are required to satisfy the laws and requirements of the
respective countries within respect to declaring, recording and otherwise
rendering this Agreement valid.
Severability: If any section or provision of this Agreement in any way
contravene a law of any state or country in which this Agreement is effective,
the remaining section of this Agreement shall not be affected thereby and this
Agreement shall be modified to conform with such law. Notwithstanding the
foregoing, in the event of any such contravention AlliedSignal may at its
option terminate this Agreement forthwith by giving to Purchaser written notice
of termination.
Arbitration: In the event of any dispute arising out of the terms of
this agreement the parties shall attempt to reach an amicable settlement.
Failing such settlement the dispute shall be settled by arbitration in
accordance with the Rules of the Conciliation and Arbitration of the American
Arbitration Association (the "AAA") in effect at the time of arbitration, by
one or more arbitrators designated in conformity with these rules, the awards
being formal and binding. The place of the arbitration shall be Los Angeles,
California. The arbitration shall be conducted in the English language.
Governing Law: This Agreement shall be interpreted and construed in
accordance with the laws of the State of Delaware except as governed by the
trade secret laws of the United States of America.
Force Majeure: Neither Party shall be in default under this Agreement
for any delay or failure to perform hereunder due to causes beyond its control
and without its fault or negligence, including but not limited to acts of
nature, acts of any government in
<PAGE>
its sovereign or contractual capacity, strikes, fires, floods, riots or
embargoes; provided, however, that prompt written notice is given to the other
Party describing such cause.
Export: This agreement transfers to Purchaser, possession of
AlliedSignal US origin technology that is governed by the US Export Control
laws including the Export Administration regulations, 15 CFR ss. 703-774,
promulgated by the Department of Commerce of the United States of America; the
International Traffic in Arms Regulations, 22 CFR ss. 122 et seq., promulgated
by the Department of State of the United States of America; and the Asset
Control and Transaction Regulations, 31 CFR 500 et seq., promulgated by the
Department of Treasury of the United States of America. Purchaser is required
to fully comply with all applicable export regulations and secure all required
export approvals prior to disclosure of any technology conveyed under this
license to a non US person either inside or outside the United States of
America or prior to the export or sale of a product of the technology conveyed
under this license to a non US person either inside or outside the United
States of America.
Entire Agreement: This Agreement contains all of the terms and
conditions agreed upon by AlliedSignal and Purchaser regarding the specific
subject matter hereof; and this Agreement may be modified only by an instrument
in writing executed on behalf of AlliedSignal and Purchaser by their respective
duly authorized representatives.
Purchaser and AlliedSignal have caused this Agreement to be executed,
in duplicate, by their respective duly authorized representatives the dates and
at the places indicated below.
ALLIEDSIGNAL INC. L-3 COMMUNICATIONS CORPORATION
By /s/ T.L. Carlson By /s/ Christopher C. Cambrin
-------------------------------- --------------------------------
Typed T.L. CARLSON Typed Christopher C. Cambrin
---------------------------- ----------------------------
Title DEPUTY GENERAL COUNSEL Title Vice President
---------------------------- ----------------------------
Date March 30, 1998 Date March 30, 1998
----------------------------- -----------------------------
ALLIEDSIGNAL TECHNOLOGIES INC.
By /s/ Gaylord P. Haas, Jr.
--------------------------------
Gaylord P. Haas, Jr.
Vice President
March 24, 1998
<PAGE>
SCHEDULE A TO TECHNICAL INFORMATION AND PATENT LICENSE AGREEMENT
SHARED USE TECHNOLOGY PURCHASER PRODUCT APPLICATION
- -------------------------------------------------------------------------------
Armour Cable for Airborne Dipping Sonar Airborne Sonar
Impact Resistant, Lightweight,
Composite Sonar Panels LFATS
Improved Clutter Rejection Algorithms HELRAS and LFATS
Lead Magnesium Niobate (PMN)
Active Sonar Source Material
U.S. Patent No 5,239518 Flextensional Transducers
Piezoelectric Ceramic Copolymer
U.S. Patent Application No.08/618690 Towed Array Hydrophones
Autonomous Underwater
Mine Hunting Algorithms Specific for EMD Product Line
Enhanced Thickness Piezoelectric
Polymer/Ceramic Composite
Active Transducer (Polymer/Ceramic EMD Product Line
Composite Piezoelectrics)
<PAGE>
Exhibit B to Allied Signal
Asset Purchase Agreement
TRANSITION SERVICE AGREEMENT
This Transition Services Agreement (the "Services Agreement") is made
as of the 30th day of March, 1998, by and between (i) ALLIEDSIGNAL INC., a
Delaware corporation ("AlliedSignal"), and each of the other Seller Entities,
and (ii) L-3 COMMUNICATIONS CORPORATION, a Delaware Corporation ("L-3"), and
each of the other Purchaser Entities. Pursuant to the Asset Purchase Agreement
dated as of March 30, 1998 (as it may be mended from time to time, the
"Purchase Agreement"). AlliedSignal and certain of its affiliates
(collectively, "Sellers") sold the Business as an ongoing business to L-3 and
certain of its affiliates (collectively, "Purchasers"). Prior to the Closing,
the Business received certain services from and provided certain services to
the Seller Entities. Each of the Seller Entities and Purchaser Entities desires
that these services continue to be provided after the Closing upon the terms
and conditions set forth in this Services Agreement.
In consideration of the mutual covenants and agreements contained in
this Services Agreement, the Parties hereto hereby agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 Definitions Incorporated. All capitalized terms not otherwise
defined in this Services Agreement have the meaning ascribed to them in the
Purchase Agreement.
1.2 Additional Definitions. Unless the context otherwise requires, the
following terms, and their singular or plural, used in this Services Agreement
shall have the meanings set forth below:
(a) "AlliedSignal" shall have the meaning set forth in the preamble to
this Services Agreement.
(b) "Business" means the business sold by Sellers to Purchasers
pursuant to the Purchase Agreement, as such business is conducted after the
Closing by Purchasers and their subsidiaries and affiliates anywhere in the
world.
(c) "Confidential Information" shall have the meaning set forth in
Section 8.1 of this Services Agreement.
(d) "Force Majeure" shall have the meaning set forth in Section 6.1 of
this Services Agreement.
(e) "L-3" shah have the meaning set forth in the preamble to this
Services Agreement.
<PAGE>
2
(f) "Party" means each of the entities set forth on the signature
pages to this Services Agreement.
(g) "Person" means an individual, partnership, corporation, trust,
unincorporated association, or other entity or association.
(h) "Provider" shall mean the particular Seller Entity or Purchaser
Entity, in any given location, that is providing services pursuant to this
Services Agreement.
(i) "Purchasers" shall have the meaning set forth in the preamble to
this Services Agreement.
(j) "Purchaser Entities" means, collectively, L-3 and its affiliates
that are listed as Recipients on Schedule A hereto or as Providers on
Schedule B hereto.
(k) "Purchaser Provider Services" shall have the meaning set forth in
Section 2.2 of this Services Agreement.
(l) "Recipient" shall mean the particular Seller Entity or Purchaser
Entity, in any given location, that is receiving services or leasing or
subleasing property (as tenant) pursuant to this Services Agreement.
(m) "Sellers" shall have the meaning set forth in the preamble to this
Services Agreement.
(n) "Seller Entities" means, collectively, AlliedSignal and its
affiliates that are listed as Providers on Schedule A hereto or as
Recipients on Schedule B hereto.
(o) "Seller Provided Services" shall have the meaning set forth in
Section 2.1 of this Services Agreement.
(p) "Services" means, collectively, the Seller Provided Services and
the Purchaser Provided Services.
(q) "Term" shall have the meaning set forth in Section 4.1 of this
Services Agreement.
Other terms are used as defined elsewhere herein.
ARTICLE 2.
SERVICES
2.1 Seller Provided Services. Pursuant to the terms of this Services
Agreement, the Seller Entities agree to provide, or cause to be provided, to
the Business the services described in Schedule A to this Services Agreement
(the "Seller Provided Services").
<PAGE>
3
2.2 Purchaser Provided Services. Pursuant to the terms of this
Services Agreement, the Purchaser Entities agree to provide, or cause the
Business to provide, the services described in Schedule B to this Services
Agreement (the "Purchaser Provided Services").
2.3 Other Services. If, after the execution of this Services
Agreement, the parties determine that a service provided by or to the Business
as conducted by Sellers prior to the Closing was inadvertently omitted from the
Schedules to this Services Agreement, then the Parties shall negotiate in good
faith to attempt to agree to the terms and conditions upon which such services
would be added to this Services Agreement, it being agreed that the charges for
such services should be determined on a basis consistent with the methodology
for determining the initial prices provided for herein (i.e., sufficient to
cover a Provider's reasonable estimate of its actual costs and, if applicable,
consistent with the prices such Provider would charge to an affiliate, in each
case without taking into account any profit margin or projected savings from
increased efficiency).
2.4 General Intent. The Parties agree that the Services are intended
to allow the Recipient the opportunity to obtain the Services from other than
the Provider. The party designated as a Recipient agrees to use its reasonable
efforts to end its need to use such Services of the Provider (unless the
Parties otherwise agree) not later than the end of the Term, including any
extension thereof.
ARTICLE 3.
COMPENSATION
3.1 Compensation for Seller Provided Services. Subject to Section 3.3,
the compensation for the Seller Provided Services for the duration of the Term
shall be as described for each individual service provided to the Business as
set forth on Schedule A plus applicable statutory sales or value-added taxes,
if any.
3.2 Compensation for Purchaser Provided Services. Subject to Section
3.3, the compensation for the Purchaser Provided Services for the duration of
the Term shall be as described for each individual service provided by the
Business as set forth on Schedule B plus applicable statutory sales or
value-added taxes, if any.
3.3 Price Adjustments. (a) It is the intent of the parties hereto that
the prices set forth on the Schedules hereto are consistent with the
methodology for determining prices as described in Section 2.3. If the parties
determine (which determination shall be made in good faith) that the initial
prices set forth on the Schedules hereto are not consistent with such
methodology, then the parties shall negotiate in good faith to adjust such
prices in a manner that is consistent with such methodology. Any such price
adjustment shall be retroactive and prospective.
(b) The Parties shall review the Providers' respective costs of
providing Services hereunder as of July 31, 1998, and quarterly thereafter. If
it is determined in
<PAGE>
4
connection with any such review that (i) a Provider's cost of providing
Services hereunder (taken individually) exceeds by at least ten percent (10%)
the charge for such Service(s) because of a significant increase in usage by
the Recipient or other circumstances beyond the reasonable control of the
Provider (including, without limitation, events of Force Majeure) or (ii) a
Provider's cost of providing Service(s) hereunder (taken individually) drops by
at least 10% below the charge for such Service(s) because of a significant
decrease in usage by the Recipient or other circumstances, then, upon request
of such Provider or its Recipient, such Provider and its Recipient shall
negotiate in good faith to determine an appropriate adjustment to the
then-current prices for such Services on a basis consistent with the
methodology for determining the initial prices provided for herein (as
described in Section 2.3).
3.4 Allocation of Certain Expenses. Notwithstanding anything to the
contrary herein or in the Schedules hereto, the Parties agree that the Seller
Entities shall pay any costs and expenses, in an amount of up to $400,000 in
the aggregate, incurred during the Initial Term (as defined in Section 4.1) in
connection with obtaining any and all consents from third party vendors set
forth in Schedule C hereto which may be necessary in connection with the
Services hereunder and which relate to services set forth in Schedule C hereto,
and L-3 shall pay any such costs and expenses in excess of $400,000 in the
aggregate which are reasonably incurred to obtain any such consents; provided,
however, that the Seller Entities shall provide L-3 with reasonable notice
before any such costs and expenses related to such consents are incurred which
would exceed $425,000 in the aggregate, which notice shall be deemed reasonable
if it permits L-3 to make reasonable alternative arrangements with regard to
such Services. Other than for those services set forth in Schedule C which are
provided by the vendors set forth therein, the Seller Entities shall pay all
costs and expenses incurred in connection with obtaining any and all consents
from third parties which may be necessary, in connection with the provision of
Seller Provided Services hereunder during the Initial Term. L-3 shall pay all
costs and expenses incurred in connection with obtaining any and all consents
from third parties which may be necessary in connection with the provision of
(i) Purchaser Provided Services hereunder during the Initial Term and (ii)
Services which are provided hereunder after the expiration of the Initial Term;
provided, however, that if the Purchaser Entities cannot transition the
Services in accordance with the terms of Section 5.3 due to material lack of
cooperation on the part of the Seller Entities, L-3 shall not be liable for the
payment of any cost and expenses incurred in connection with obtaining any such
consents. The Parties agree that they shall use reasonable best efforts and
work in good faith to minimize any cost and expenses incurred in connection
with the obtaining of the consents described in this Section 3.4.
3.5 Terms of Payment; Dispute Resolution. (a) Except as expressly
provided otherwise herein, Providers shall invoice Recipients monthly (or, if
mutually agreeable to Provider and Recipient, quarterly or semi-annually) in
arrears for the services provided by them under this Services Agreement.
Payment shall be made by Recipients within 30 days after receipt of any
invoice. No Recipient shall unreasonably withhold any payments to its Provider
under this Services Agreement and no Provider shall unreasonably withhold any
Services from its Recipient under this Services Agreement, notwithstanding any
dispute that may be pending between them, whether under this Services Agreement
or otherwise (any required adjustment being made on subsequent invoices).
<PAGE>
5
(b) All mounts due for services rendered pursuant to this Services
Agreement shall be billed and paid in the currency in which the rate for such
service is quoted, as stated herein or as shown on the Schedules hereto.
(c) If there is a dispute between any Recipient and any Provider
regarding the amounts shown as billed to such Recipient on any invoice, such
Provider shall furnish to such Recipient reasonable documentation to
substantiate the amounts billed including, but not limited to, listings of the
dates, times and amounts of the services in question where applicable and
practicable. Upon delivery of such documentation, such Recipient and such
Provider shall cooperate and use their best efforts to resolve such dispute
among themselves.
3.6 Records. The Provider will preserve all records supporting the
amounts charged to the Recipient pursuant to this Services Agreement for a
period of five years following invoicing of such amounts, and thereafter, not
destroy or dispose of such records without giving notice to the Recipient of
such pending disposal and offering the Recipient the right to obtain and retain
such records at its expense. In the event the Recipient has not obtained such
materials within 30 days following the receipt of notice from the Provider, the
Provider may proceed to destroy or dispose of such materials without any
liability. Subject to any disclosure, copying or limitation imposed by
applicable law and to any privileges (including, without limitation, the
attorney-client privilege), the Provider shall (i) at its expense afford the
Recipient and its representatives reasonable access upon reasonable prior
notice during normal business hours to all such records and (ii) at the
Recipient's expense provide copies of such records as the Recipient may
reasonably request for any proper purpose (including, without limitation, in
connection with any judicial, quasi judicial, administrative, tax, audit or
arbitration proceeding).
ARTICLE 4.
TERM
4.1 Term. Except as expressly provided otherwise in this Services
Agreement, or with respect to specific services as indicated on the Schedules
hereto, the term of this Services Agreement shall be for twelve months
commencing at 12:61 a.m. on the date immediately following the date hereof (the
"Initial Term"). Effective between the respective Provider and Recipient, such
Provider shall in good faith consider requests for the extension of the Initial
Term for an additional period of up to six (6) months at the request of a
Recipient by written notice from such Recipient to its Provider, with copies to
AlliedSignal and L-3; any such notice shall be made at least 39 days prior to
the expiration of the Initial Term (the Initial Term plus any extension thereof
may be referred to herein as the "Term"). The obligation of any Recipient to
make a payment for services previously rendered shall not be affected by the
expiration of the Term and shall continue until full payment is made.
4.2 Termination of Individual Services. Effective between the
respective Provider and Recipient, a Recipient may terminate at any time during
the Term any individual service provided under this Services Agreement on a
service-by-service basis (and/or location-by-location basis where an individual
service is provided to multiple locations of a Recipient)
<PAGE>
6
upon written notice to the Provider identifying the particular service (or
location) to be terminated and the effective date of termination, which date
shall not be less than 30 days after receipt of such notice unless the Provider
otherwise agrees. Effective upon the termination of such service, an
appropriate reduction will be made in the fees charged to such Recipient.
ARTICLE 5.
CERTAIN COVENANTS
5.1 Points of Contact. Each Provider and Recipient shall name a point
of contact which shall be added to the Schedules hereto. Such point of contact
shall be responsible for the implementation of this Services Agreement between
the respective Provider and its Recipient, including resolution of any issues
which may arise during the performance hereunder on a day-to-day basis.
5.2 Cooperation; Reasonable Care (a) The Parties will cooperate (using
reasonable commercial efforts) to effect a smooth and orderly transition of the
services provided hereunder from the Providers to the respective Recipients
including, without limitation, the separation of the Business from the
businesses retained by AlliedSignal and its affiliates; provided, however, that
this Section 5.2 shall not require any Party hereto to incur any out-of-pocket
expenses unless and except as expressly provided otherwise herein.
(b) Each Provider shall perform the services that it is required to
provide to its respective Recipient(s) under this Services Agreement with
reasonable skill and care and shall use at least that degree of skill and care
that it would exercise in similar circumstances in carrying out its own
business. Each Provider shall take necessary measures to protect the respective
Recipient's data that is processed by such Provider from destruction, deletion
or unauthorized change and allow its recovery in events of Force Majeure;
provided, however, that a Provider shall be deemed to have satisfied this
obligation if the measures taken to protect and recover Recipient's data are
equivalent to what it uses in carrying out its own business.
5.3 Migration Projects. Each Provider will provide the respective
Recipient with reasonable support necessary to transition the services, which
may include consulting and training and providing reasonable access to data and
other information and to Provider's employees; provided, however, that such
activities shall not unduly burden or interfere with Provider's business and
operations. Where required for transitioning the services, the Recipient's
employees will be granted reasonable access to the respective Provider's
facilities during normal business hours.
5.4 Systematic Costs. If the provision of a Service or a migration
project will result in the Provider's incurring incremental "systematic costs"
(such as the costs of partitioning data bases, developing conversion programs
or extraordinary management supervision and/or coordination) the Provider shall
provide the Recipient with a written explanation of such costs and the reason
they will be incurred. Thereafter, the Provider and
<PAGE>
7
Recipient shall in good faith discuss the matter. If the Recipient agrees in
writing to be responsible for such costs, then the amounts will be included
with invoices to the Recipient. If the Recipient fails to agree in writing to
be responsible for such costs within five (5) business days of the provision of
such written explanation by the Provider, the Recipient shall be deemed to have
declined to be responsible for such costs. If the Recipient declines to be
responsible for such costs, then, notwithstanding any other provision of this
Services Agreement, if such Service cannot be provided in a commercially
reasonable manner absent the incurrence of such costs, then the Provider may
curtail, limit or eliminate the Provider's provision of the related Service;
provided, however, that the extent to which such Service is limited, curtailed
or eliminated shall be the minimum action reasonably necessary to allow, if
possible, the provision of the related Service in a commercially reasonable
manner absent the incurrence of such costs.
5.5 Further Assurances. From time to time after the date hereof,
without further consideration, each Party shall execute and deliver such formal
lease or license agreements as another Party may reasonably request to evidence
any lease or license provided for herein or contemplated hereby.
5.6 Certain Disbursements/Receipts. The parties hereto contemplate
that, from time to time on or after the Closing Date, Seller-related entities
and/or Purchaser-related entities (any such party, the "Paying Party"), as a
convenience to another Purchaser-related entity or Seller-related entity, as
the case may be (the "Responsible Party"), in connection with the transactions
contemplated by this Services Agreement or the Purchase Agreement, may make
certain payments that are properly the responsibility of the Responsible Party
(whether pursuant to the Purchase Agreement, this Services Agreement or
otherwise) (any such payment made, a "Disbursement"). Similarly, from time to
time on or after the Closing Date, Seller-related entities and/or
Purchaser-related entities (any such party, the "Receiving Party") may receive
from third parties certain payments to which another Purchaser-related entity
or Seller-related entity, as the case may be, is entitled (any such Party, the
"Other Party", and any such payment received, a "Receipt"). Accordingly, with
respect to Disbursements and Receipts, the Parties hereto agree as follows:
(a) Disbursements.
(i) For Disbursements made by check, the Responsible Party will
reimburse the Paying Party within seven (7) business days after written
notice of such Disbursement has been given to the Responsible Party.
(ii) In case of a Disbursement by wire, if written notice has been
given by 2 p.m. of the Responsible Party's local time at least one business
day prior to the payment of such Disbursement, the Responsible Party shall
reimburse the Paying Party for the amount of such payment (in the local
currency equivalent paid by the Paying Party) on the date the Disbursement
is made by the Paying Party. If notice as provided above has not been given
prior to the payment of such Disbursement, the Responsible Party shall
reimburse the Paying Party for the amount of such payment (in the local
currency equivalent paid by the Paying Party) within one business day after
receipt by the Responsible Party of such notice from the Paying Party.
<PAGE>
8
(iii) A Paying Party shall provide such supporting documentation
regarding Disbursements for which it is seeking reimbursement as the
Responsible Party may reasonably request.
(b) Receipts. A Receiving Party shall remit Receipts to the Other
Party (in the same currency as such payment is received) within 24 hours of
receipt thereof in immediately available funds.
(c) Certain Exceptions. Notwithstanding anything to the contrary set
forth above, if, with respect to any particular transaction, it is impossible
or impracticable under the circumstances to comply with the procedures set
forth in subsections (a) and (b) of this Section 5.6 (including the time
periods specified therein), the parties will cooperate to find a mutually
agreeable alternative that will achieve substantially similar economic results
from the point of view of the Paying Party or the Other Party, as the case may
be; i.e., an alternative pursuant to which the Paying Party will not incur any
material interest expense or the Other Party will not be deprived of any
material interest income; provided, however, that if a Receiving Party cannot
comply with the procedures set forth in subsection (b) of this Section because
it does not become aware of a Receipt on behalf of the Other Party in time
(e.g., because of the commingling of funds in an account), such Receiving Party
shall remit such Receipt (with interest thereon is such remittance occurs more
than 48 hours after such Receipt is paid to the Receiving Party) to the Other
Party within 24 hours after it becomes aware of such Receipt.
(d) Funding of payroll, Accounts Payable and American Express.
Notwithstanding anything which may be to the contrary set forth in Sections
5.6(a), 5.6(b) or 5.6(c) above, the following processes will be funded as set
forth below.
(i) Payroll. Payroll checks disbursed by or at the direction of a
Seller Entity as part of the Services shall be funded in immediately
available funds to an account as directed by such Seller Entity on the day
the checks are issued to the Purchaser's employees, provided such Seller
Entity provides notification and supporting documentation (with a
simultaneous copy to the business unit) to the respective Buyer
Entity/Recipient by 3:00 p.m. on the business day prior to check issuance
of the funding requirement amount. Direct deposit of payroll will have the
same notice requirement and be funded on payday (alternately referred to as
the settlement date).
(ii) Supplier Payment Processing (Accounts Payable). L-3 will
establish by the Closing Date a bank account to fund supplier payment
checks. AlliedSignal will provide supporting documentation on an agreed
upon schedule.
(iii) American Express ("AmEx") Payments. All AmEx-related payments
for travel and expense and corporate purchasing card payments will continue
to be directly funded by AlliedSignal during the transition period. L-3
will wire-transfer payments to AlliedSignal on the day of payment to AmEx.
AlliedSignal will provide supporting documentation, with a simultaneous
copy to the business unit, 24 hours prior to the required wire-transfer by
L-3.
<PAGE>
9
(e) Interest Rate. The rate for any interest income or expense that is
paid or payable pursuant to Section 5.6(c) shall be LIBOR plus 0.25% per annum.
5.7 Collection of Receivables. If some trade receivables of the
Business are retained by the Seller Entities either as owner or as collection
agent, the Buyer Entities agree to collect such trade receivables on
AlliedSignal's behalf using the same degree of care and diligence as if they
were their own.
5.8 Internet Protocol Addresses. AlliedSignal and L-3 acknowledge and
agree that during the Term L-3 shall be permitted to use the AlliedSignal-owned
TCP/IP subnet addresses 131.127.72.X, 131.127.73.X and 131.127.74.X, and upon
expiration or if earlier termination of the Term L-3 shall stop using such
addresses and such addresses will be made available for use by AlliedSignal.
ARTICLE 6.
FORCE MAJEURE
6.1 Force Majeure. No Provider shall bear any responsibility or
liability for any losses arising out of any delay, inability to perform or
interruption of its performance of obligations under this Services Agreement
due to any acts or omissions of its respective Recipient or for events beyond
its reasonable control (hereinafter referred to as "Force Majeure") including,
without limitation, acts of God, act of governmental authority, act of the
public enemy or due to war, riot, flood, civil commotion, insurrection, labor
difficulty, severe or adverse weather conditions, lack of or shortage of
electrical power, malfunctions of equipment or software programs or any other
cause beyond the reasonable control of the Provider whose performance is
affected by the Force Majeure event.
ARTICLE 7.
INDEMNITY
7.1 Indemnity. (a) The Seller Entities and Purchaser Entities, in both
instances jointly and severally, will each indemnify and hold harmless the
other, their agents, employees and invitees, against all liabilities, claims,
losses, damages, death or personal injury whatever nature or kind, arising out
of their respective performance of this Services Agreement or the entry of
their respective agents, employees or invitees in the premises of the other, to
the extent occasioned by their own willful misconduct or negligent actions or
omissions or the willful misconduct or negligent actions or omissions of their
respective agents, employees or invitees.
(b) Notwithstanding the foregoing, no Party shall be entitled to any
damages with respect to lost profits or other consequential damages or punitive
damages with respect to the performance by any other Party under this Services
Agreement.
<PAGE>
10
ARTICLE 8.
CONFIDENTIALITY
8.1 With respect to any information disclosed by one Party to another
Party for the purpose of this Services Agreement or otherwise accessible to
such other Party during the performance hereunder and which has been designated
in writing as "Confidential Information", the receiving Party agrees that it
will use at least that degree of skill and care that it would exercise in
similar circumstances in carrying out its own business to prevent the
disclosure or accessibility to others of the disclosing Party's Confidential
Information and will use such Confidential Information only for the purpose of
this Services Agreement. The receiving Party shall limit dissemination of and
access to the other's Confidential Information to only such of its employees
who have a need to know.
8.2 Specifically excluded from the foregoing obligation is any and all
information that:
(a) is already known to the receiving Party at the time of disclosure
or thereafter is independently developed by the receiving Party without
breach of this Services Agreement;
(b) is already in the public domain at the time of disclosure, or
thereafter becomes publicly known other than as the result of a breach by
the receiving Party of its obligations under this Services Agreement;
(c) is rightfully received from a third party without breach of this
Services Agreement;
(d) is furnished by the disclosing Party to a third party without a
similar restriction on its rights; or
(e) upon advice of counsel, must be produced by the receiving Party as
a matter of law; provided, however, that in such case the receiving Party
shall promptly notify the disclosing Party and, insofar as is permissible
and reasonably practicable without placing the disclosing Party under
penalty of law, give it an opportunity to appear and to object to such
production before producing the requested information.
<PAGE>
11
ARTICLE 9.
MISCELLANEOUS
9.1 Notices. Any notice provided or permitted to be given to a Party
under this Services Agreement must be in writing, and may be served by
depositing same in the mail, addressed to the Person to be notified, postage
prepaid, and registered or certified, with a return receipt requested. Notice
given by registered or certified mail shall be deemed given and effective on
the date of delivery as shown on the return receipt. Notice may be served in
any other manner including telex, telecopy or telegram but shall be deemed
given and effective as of the time of actual delivery thereof to the
addressees. For purposes of the giving of notice, Recipients and Providers
shall be notified at the addresses used for billing purposes (which shall be
added to the Schedules hereto), and AlliedSignal and L-3 shall be notified at
the addresses listed below:
If to AlliedSignal:
AlliedSignal Inc.
101 Columbia Road
Morristown, New Jersey 07962
Fax: (973) 455-4217
Attention: Senior Vice President, General Counsel and Secretary
If to L-3:
L-3 Communications Corporation
600 Third Avenue
New York, New York 10016
Fax: (212) 805-5494
Attention: Vice President and General Counsel
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Fax: (212) 455-2502
Attention: David Chapnick, Esq.
Any Party may change its respective address for notice by the giving of notice
of such change in the manner provided above.
9.2 Entire Agreement. Except for those matters provided for in the
Purchase Agreement or the other agreements contemplated therein, this Services
Agreement sets forth the entire agreement of the Parties with respect to its
subject matter. This Services Agreement shall not be modified or amended except
by written instrument executed by each
<PAGE>
12
Party; provided, however, that a modification or amendment affecting only the
relationship between a certain Provider and its Recipient, or between a lessor
and its lessee, does not require signature by the other Parties. The Schedules
to this Services Agreement shall be deemed incorporated in this Services
Agreement and shall form a part of it.
9.3 Waiver. The failure of a Party to insist upon strict performance
of any provision of this Services Agreement shall not constitute a waiver of,
or estoppel against, asserting the right to require such performance in the
future, nor shall a waiver or estoppel in any one instance constitute a waiver
or estoppel with respect to a later breach of a similar nature or otherwise.
9.4 Severability. If any of the terms and conditions of this Services
Agreement are held by any court of competent jurisdiction to contravene, or to
be invalid under, the laws of any political body having jurisdiction over the
subject matter of this Services Agreement, such contravention or invalidity
shall not invalidate the entire Services Agreement. Instead, this Services
Agreement shall be construed as if it did not contain the particular provision
or provisions held to be invalid, and an equitable adjustment shall be made and
necessary provisions added so as to give effect to the intention of the Parties
as expressed in this Services Agreement at the time of the execution of this
Services Agreement and of any amendments to this Services Agreement.
9.5 Governing Law; Construction; Jurisdiction. This Services Agreement
shall be construed and enforced in accordance with and governed by the laws of
the State of New York, without reference to its conflicts of law rules or
principles. The headings in this Services Agreement are not to be considered
part of this Services Agreement and are inserted for convenience,
identification and reference only and are not intended to interpret, define, or
limit the scope, extent, or intent of this Services Agreement or any provision
of this Services Agreement. Whenever the context requires, the gender of all
words used in this Services Agreement shall include the masculine, feminine and
neuter, and the number of all words shall include the singular and the plural.
9.6 Counterpart Execution. This Services Agreement may be executed in
counterparts with the same effect as if all of the Parties had signed the same
document. Such counterparts shall be construed together and shall constitute
one and the same instrument, notwithstanding that all of the Parties are not
signatories to the original or the same instrument, or that signature pages
from different counterparts are combined. The signature of any Party to one
counterpart shall be deemed to be a signature to and may be appended to any
other counterpart.
9.7 Successors and Assigns. (a) This Services Agreement shall inure to
the benefit of and shall be binding upon the Parties, their respective legal
representatives, successors, and permitted assignees, and all Persons claiming
by, through, or under right of any of the aforesaid Persons. This Services
Agreement may not be assigned by any Party without the prior written consent of
the other Parties; provided, however, that the Seller may assign this Services
Agreement in whole or in part to an affiliate, successor or transferee thereof,
but only to the extent that a sale or other transfer of a Seller's operations
reasonably requires such transfer for performance of its services hereunder and
provided, further, that
<PAGE>
13
Purchaser may assign this Services Agreement to one of its subsidiaries. No
assignment shall relieve any Party of any of its obligations hereunder.
(b) At the request of any Provider or Recipient that is a Party
hereto, any other Provider or Recipient that is receiving benefits or has
obligations hereunder and is not a signatory hereto, shall execute and deliver
to the other Parties a counterpart hereof. The failure of any Person that is
receiving benefits or has obligations hereunder to execute a counterpart hereof
shall not affect the enforceability of this Services Agreement against such
Person or against any other Party hereto.
9.8 No Third Party Rights. The provisions of this Services Agreement
are intended to bind the Parties to each other and are not intended and do not
create rights in any other person, including any employee of the Business or
AlliedSignal, and no Person is intended to be or is a third party beneficiary
of any of the provisions of this Services Agreement.
<PAGE>
14
IN WITNESS WHEREOF, the duly authorized officers or representatives of
the parties hereto have duly executed this Services Agreement as of the date
first above written.
PURCHASER ENTITIES: SELLER ENTITIES:
L-3 COMMUNICATIONS ALLIEDSIGNAL INC.
CORPORATION
/s/ Christopher C. Cambria
- ---------------------------------- ----------------------------------
Name: Christopher C. Cambria Name:
Title: Vice President Title:
L-3 COMMUNICATIONS HOLDING ALLIEDSIGNAL EUROPE SERVICES
GMBH TECHNIQUES S.A.
/s/ Christopher C. Cambria
- ---------------------------------- ----------------------------------
Name: Christopher C. Cambria Name:
Title: Managing Director Title:
<PAGE>
14
IN WITNESS WHEREOF, the duly authorized officers or representatives of
the parties hereto have duly executed this Services Agreement as of the date
first above written.
PURCHASER ENTITIES: SELLER ENTITIES:
L-3 COMMUNICATIONS ALLIEDSIGNAL INC.
CORPORATION
/s/ T.L. Carlson
- ---------------------------------- ----------------------------------
Name: Name: T.L. Carlson
Title: Title: Deputy General Counsel
L-3 COMMUNICATIONS HOLDING ALLIEDSIGNAL EUROPE SERVICES
GMBH TECHNIQUES S.A.
/s/ T.L. Carlson
- ---------------------------------- ----------------------------------
Name: Name: T.L. Carlson
Title: Title: Authorized Signatory
<PAGE>
Schedule A
Seller Provided Services
- ------------------------------------------------------------------------------
INDEX TO SCHEDULES TO SERVICES AGREEMENT
Schedule A - Seller Provided Services
A. United States
1. Human Resources
2. Information Technology Group (ITG)
3. Finance
4. Travel Services
5. Treasury Services
Annex 1: United States Services and Charges
B. France
1. Information Technology Group
<PAGE>
Schedule A
Seller Provided Services 2
- ------------------------------------------------------------------------------
A. UNITED STATES
Sellers will provide to Purchasers at the Facilities located in the
United States human resource, information technology, finance, travel
and treasury services set forth on Annex 1. The monthly charges for
such services for the duration of the Term shall be the fixed rates
set forth on Annex 1, plus (if and as applicable) the additional
charges provided for in the notes set forth below. All charges to
Recipients located in North America will be billed and paid in U.S.
dollars.
1. HUMAN RESOURCES
A. PROVIDER: AlliedSignal Inc. - Human Resources
101 Columbia Road
Morristown, NJ 07962
Contact Person: Dave Sholtis
Telephone: 973-455-5017
RECIPIENT: L-3 Communications, Ocean Systems
15835 Roxford Street
Sylmar, CA 91342
Contact Person: Anita Logan
Telephone: 818-833-2486
<PAGE>
Schedule A
Seller Provided Services 3
- ------------------------------------------------------------------------------
SERVICES AND CHARGES: See Annex 1.
TERM: As provided in Article 4 of this Services Agreement, with the
following clarifications:
o Savings Plan Administration services will terminate
concurrent with the asset transfer to the L-3 Savings
Plans.
o As provided in Article 5.7 of this Services Agreement,
Group Insurance Plan coverage and related administration
will be provided under the Sellers' programs through June
30, 1998. Effective July 1, 1998, coverage under the
Sellers' plans will be discontinued and replaced by
similar plans of the Purchasers. Continued services will
be provided for the Purchasers' Plans under this Services
Agreement for the remainder of the Term, provided that
the Purchasers' plans are comparable to the Sellers'
plans and can be accommodated with existing systems and
processes.
o Term for payroll services shall be up to one year from
the closing date, provided that Seller shall, in good
faith, consider requests for the extension of such
service for an additional six months beyond such one-year
period.
NOTES:
1. Annex 1 costs exclude reasonable third party costs that are
billed to the Provider and will be charged back to Recipient
consistent with past practice.
2. Annex 1 costs exclude reasonable incremental expenses incurred
to support Purchaser's Benefit Plans (e.g. modifications to
benefit plan tables to support the L-3 welfare plans,
developing interfaces to L-3 savings plan providers, etc.).
3. THE ALLIEDSIGNAL EMPLOYEES AND ENTITIES ENGAGED IN THE
EXECUTION OF THE PENSION PLAN ADMINISTRATION SERVICES AND THE
BENEFIT SERVICES ARE NOT ERISA FIDUCIARIES WITH RESPECT TO ANY
BENEFIT PLAN SPONSORED BY L-3. THEY DO NOT AND WILL NOT HAVE
ANY DISCRETIONARY CONTROL OR AUTHORITY OVER THE MANAGEMENT OF
ANY L-3 PLAN OR OF ITS ASSETS, NOR DO THEY OR WILL THEY HAVE
ANY DISCRETIONARY AUTHORITY OR RESPONSIBILITY OVER THE
ADMINISTRATION OF ANY L-3 PLAN.
<PAGE>
Schedule A
Seller Provided Services 4
- -------------------------------------------------------------------------------
DESCRIPTION OF SERVICES:
Human Resources/Employee Systems and Services:
TEMPE PAYROLL SERVICES - provide standard payroll services, including check
printing and distribution, balancing and reconciliation, direct deposit
processing, stop payments requested, reissues, W-4 processing, W-2 processing,
garnishments, reporting tax withholding information to L-3*.
Continuance of Tempe Payroll services is dependent on the continuance of the
AlliedSignal PeoplePower Human Resource System.
Continuance of Tempe Payroll beyond October 1, 1998 requires a commitment by
the Recipient to participate in the planned 1998 conversion from the current
MSA system to a PeopleSoft payroll system. This commitment must be received by
May 1, 1998. It will be the Recipient's responsibility to meet the desktop and
interface standards required for this conversion.
* Note: L-3 will be responsible for the following payroll related items:
1. Payroll Funding,
2. Payroll Tax Deposits and Reporting,
3. Funding 401(k) Contributions to the L-3 Plan Recordkeeper.
HR SYSTEMS (PEOPLEPOWER) - provide continued utilization of the centralized
reporting database of Employee Data which includes central systems maintenance
& operations, on-line inquiry access to employee records, end-user reporting
tools, Customer Service Center support and Helpline Support.
Continuance of PeoplePower services is dependent on the Recipient meeting
upgraded 32 bit desktop standards and participating in data audit and software
upgrade activities.
* Note: Local L-3 employees will be responsible for the following HRIS
related items:
1. Maintaining the accuracy of Employee Records (Processing New
Hires, Transfers, Terminations, Compensation Changes, Position
Changes, Department Changes, etc.).
2. Answering benefits related questions, and providing basic
benefits counseling for salaried and hourly (union) employees.
PENSION PLAN ADMINISTRATION: RETIREE BENEFITS ADMINISTRATION - provide pension
plan administration, pension plan
benefit estimates and retirement calculations, provided Recipient establishes
exact mirror plans to the existing AlliedSignal plans for the transferred
employees.
* Note: L-3 will be responsible for the following pension related items:
1. Creating, valuation, funding and reporting for the mirror
plans that they create.
2. Performing actuarial review of pension calculations prior to
distribution to employees. (AlliedSignal can not guarantee the
accuracy of calculations).
3. 90 days written notice required for cancellation of this
service.
BENEFIT SERVICES: GROUP INSURANCE PLAN ADMINISTRATION - Continuation of
administrative support (e.g. eligibility & enrollment) for transferred
employees in the AlliedSignal health and welfare benefit programs will be
provided until June 30, 1998. Effective July 1, 1998, continued administrative
support services will be available to employees in the L-3 health & welfare
plans provided L-3 establishes plans that are comparable to the Existing
AlliedSignal plan arrangements.
* Note: Effective July 1, 1998, L-3 will be responsible for direct
payment of premiums to the carriers for the comparable plans
created under their sponsorship.
<PAGE>
Schedule A
Seller Provided Services 5
- ------------------------------------------------------------------------------
Description of Services (continued):
SAVINGS PLAN - Until such time as assets are transferred to the L-3 Savings
Plans, services with regard to existing plan accounts will include: daily
valuation recordkeeping, maintenance of participant's accounts, account
allocations, existing plan loan maintenance, quarterly statements, withdrawal
processing, Passport IVR System and Customer Service Center support. Also to be
provided are services regarding the transfer of assets to the L-3 Plans.
Note: Effective with the first full payroll after Closing, no new
contributions will be permitted to the AlliedSignal plans. The
asset transfers to L-3 plans will include loans outstanding in
the in the Allied Plans. Loan repayments will continue to Allied
Plans post-closing.
<PAGE>
Schedule A
Seller Provided Services 6
- ------------------------------------------------------------------------------
A. NORTH AMERICA
2. INFORMATION TECHNOLOGY GROUP (ITG)
PROVIDER: AlliedSignal Inc. - Computing Technology Center
1300 West Warner Road
Tempe, AZ 85285
Contact Person: Bill Busby
Telephone: 602-893-4481
RECIPIENT: L-3 Communications, Ocean Systems
15835 Roxford St.
Sylmar, CA 91342
Contact Person: Sam Erdman
Telephone: 818-833-2493
SERVICES AND CHARGES: See Annex 1.
NOTES:
1. Excludes certain third party costs that are billed to
Provider that have been approved by and will be charged back
to Recipient consistent with past practice.
2. EWN service covers the worldwide network. All EWN services
will be billed at actual cost plus network support costs
from the Information Technology Center in Tempe (in U.S.
dollars).
<PAGE>
Schedule A
Seller Provided Services 7
- ------------------------------------------------------------------------------
DESCRIPTION OF SERVICES:
MAINFRAME COMPUTING - provides large scale, IBM like mainframe computing
capacity in which Ocean's legacy applications are processed. Responsibility for
applications support (including any Year 2000 assessment and remediation) rests
with the business unit's I/S applications and production control groups. The
ITG services include Help Desk, data systems storage management, capacity
planning, disaster recovery and offsite storage, software / hardware
maintenance / upgrades, IBM and third party vendor software products, problem
resolution, technical support.
ELECTRONIC MAIL (E-MAIL) - includes central planning, standards administration,
technical support and problem resolution of AlliedSignal's global E-Mail system
(Microsoft Mail).
ENTERPRISE-WIDE NETWORK (EWN) - provides global network bandwidth connecting
over 240 worldwide sites. The EWN is a multi-protocol network allowing any
device-to-any device communications ie., mainframe to mainframe, LAN server to
LAN server. All locations on the network can communicate with each other
allowing access to Corporate - level applications, E-Mail, business unit based
applications as well as Intranet and Internet facilities.
DATA NETWORK - provides for any circuits or telecommunications equipment
dedicated to a specific site or business unit. There are none covered by ITG
services to Oceans. The only known Data Network services billed to Oceans are
for Virtual Gateway Services (VGS), a dial-up facility used to access
applications and E-Mail in a remote environment i.e., travel status).
ELECTRONIC DATA INTERCHANGE (EDI) - allows computerized business transactions
between Ocean's and its business partners (customers and suppliers) to flow
through the ITG using industry EDI standards to meet requirements for reduced
cycle time and just-in-time delivery
INTERNET - includes technical support, WEB Master support, firewall servers,
bandwidth to/from the Internet, software and the external Internet access
service provider fees. The firewall provides security to prevent unauthorized
access into the company's computer facilities and allows only authorized
internal users to exit the company network into the Internet.
<PAGE>
Schedule A
Seller Provided Services 8
- ------------------------------------------------------------------------------
A. NORTH AMERICA
3. FINANCE
PROVIDERS: AlliedSignal Inc. - Financial Shared Services
1140 West Warner Road
Mail Stop 1233-B
Tempe, AZ. 85284
Contact Person: Tim Couvreur
Telephone: 313-953-5256
RECIPIENT: L-3 Communications, Ocean Systems
15835 Roxford St.
Sylmar, CA 91342
Contact Person: Tom Benecke
Telephone: 818-833-2875
SERVICES AND CHARGES: See Annex 1.
NOTES:
1. Excludes reasonable third party costs that are billed to
Provider and will be charged back to Recipient consistent
with past practice.
<PAGE>
Schedule A
Seller Provided Services 9
- ------------------------------------------------------------------------------
DESCRIPTION OF SERVICES:
FIXED ASSETS - provide asset accounting services (tax, insurance, & reporting)
including transactional processing services to Oceans Systems domestic
operations
PROJECT TRACKING - provide project accounting services including processing and
inputting appropriation requests, processing electronic data feeds,
accumulating costs as they are committed and providing project recordkeeping
and closure to Oceans Systems domestic operations.
GENERAL LEDGER - provide technical and administrative support including support
of the closing process, report generation and distribution and system
administration to Oceans Systems domestic operations.
<PAGE>
Schedule A
Seller Provided Services 10
- -------------------------------------------------------------------------------
A. NORTH AMERICA
4. TRAVEL SERVICES
PROVIDERS: AlliedSignal Inc. - Financial Shared Services
1140 West Warner Road
Mail Stop 1233-B
Tempe, AZ. 85284
Contact Person: Merrill Sehulster
Telephone: 602-496-2464
RECIPIENT: L-3 Communications, Ocean Systems
15835 Roxford St.
Sylmar, CA 91342
Contact Person: Tom Benecke
Telephone: 818-833-2875
PROVIDERS: AlliedSignal Inc. - Financial Shared Services
1140 West Warner Road
Mail Stop 1233-B
Tempe, AZ. 85284
Contact Person: Merrill Sehulster
SERVICES AND CHARGES: See Annex 1.
NOTES:
1. Excludes reasonable third party costs that are billed to
Provider and will be charged back to Recipient consistent
with past practice.
DESCRIPTION OF SERVICES:
CORPORATE TRAVEL CARD - provided by American Express and provides the business
traveler a vehicle to charge all travel related expenses and obtain cash, if
necessary.
TRAVEL RESERVATIONS - provided by American Express at a National Reservation
Center in Phoenix, AZ. Using this service permits the business traveler to
obtain all AlliedSignal negotiated programs with the airline, car rental and
hotel industries.
EXPENSE PROCESSING AND REPORTING - provides centralized processing of expense
reports submitted either on a manual or remote basis. Reimbursements for
expense report charges can be directed either to the Corporate credit Card or
to the employee. L-3 will be responsible for the funding of all AMEX charges.
Note: Current Pricing is based on L-3 remaining on PeoplePower. In the
event, L-3 does not continue on PeoplePower, AlliedSignal reserves
the right to review the cost to process expense reports and may
revise the pricing.
<PAGE>
Schedule A
Seller Provided Services 11
- ------------------------------------------------------------------------------
A. NORTH AMERICA
5. TREASURY SERVICES
PROVIDERS: AlliedSignal Inc. - Credit & Treasury Services
1300 West Warner Road
Mail Stop 1207-3A
Tempe, AZ. 85284
Contact Person: Allen Silberman
Telephone: 602-893-5050
RECIPIENT: L-3 Communications Corp.
601 3rd Avenue
New York, NY 10016
Contact Person: Kelly Warlan
Telephone: 212-805-5251
SERVICES AND CHARGES: See Annex 1.
NOTES:
1. Excludes reasonable third party costs that are billed to
Provider and will be charged back to Recipient consistent
with past practice.
DESCRIPTION OF SERVICES:
CREDIT & TREASURY SERVICES - Provide Credit, Collection, and Cash Application
services which include credit analysis and decisions prior to product sales,
collection of open sales invoices (based on information fed into our Walker
Accounts Receivable system), and application of cash to customer accounts.
Note: - L-3 will be responsible for any recurring and / or
non-recurring costs expended by AlliedSignal to transition to
newly established lockboxes, necessary to perform transition
services under this agreement. These efforts will be billed at
the actual costs incurred by AlliedSignal
<PAGE>
Schedule A
Seller Provided Services 12
- -------------------------------------------------------------------------------
ANNEX 1 TO SCHEDULE A
UNITED STATES SERVICES AND CHARGES
Service Monthly Applicable Notes
Billing
Amount
(in US Dollars)
Mainframe processing 3,200
MS Mail 1,200
EWN 6,000 (2)
Data Network 450
EDI 100
Internet 2,400 (1)
Software 1,000 (2)
------
INFORMATION TECHNOLOGY GROUP 14,350 (3)
Property Accounting 2,300
General Ledger 5,900
------
DOMESTIC FINANCIAL SERVICES 8,200 (3)
Tempe Payroll Services 4,600 (4)
HR Systems 4,300 (5)
Benefit Services 1,400
Pension Administration 1,100
------ ------
HUMAN RESOURCE SERVICES 11,400 (3)
Travel & Expense Processing 2,500
TRAVEL SERVICES 2,500 (3)
------
TOTAL - BUSINESS SERVICES BILLINGS 36,450 (6)
CREDIT & TREASURY SERVICES 7,000 (3),(6)
TOTAL ALLIEDSIGNAL US BILLINGS 43,450
(1) AlliedSignal owned Internet Protocol addresses to be returned following
termination of the transition services agreement period.
(2) Billing for EWN, Oracle Software Silver Support from the vendor. Billed
at actual cost.
(3) Excludes reasonable third party costs that are billed to the Provider and
will be charged back to the Recipient consistent with past practice
(e.g., pension, consulting services, application software, usage based
telephone charges, etc.)
(4) Effective October 1, 1998, the ongoing monthly rate for Tempe Payroll
will increase by $1,000 to pay for the cost of PeopleSoft Payroll
conversion relating to the Recipient location. If L-3 informs
AlliedSignal of its intent to discontinue Payroll services before the
PeopleSoft Payroll conversion, and later reverses itself, L-3 will be
responsible for incremental programming costs incurred.
(5) Excludes incremental software licensing fees that may be assessed by
third parties (e.g. PeopleSoft, Oracle, etc.) in connection with
providing services under this agreement
(6) Any incremental costs, incurred to migrate Oceans Systems off of existing
AlliedSignal systems, will be charged back at
<PAGE>
Schedule A
Seller Provided Services 13
- ------------------------------------------------------------------------------
actual cost.
B. FRANCE
PROVIDER: AlliedSignal Business Services ASEST
Sofia Antipolis, France
Contact Person: Alain Gaudard
Telephone: 011-33-1-5546-2143
RECIPIENT: L-3 Communications, Ocean Systems
15835 Roxford St.
Sylmar, CA 91342L-3
Contact Person: Sam Erdman
Telephone: 818-833-2493
SERVICES AND The cost of such services will be invoiced for the
CHARGES: respective areas of assistance at the following
rates:
MONTHLY RATE
(IN FRENCH FRANCS)
E-Mail Services (125 users) 8,125
DESCRIPTION OF SERVICES:
ELECTRONIC MAIL (E-MAIL) - includes central planning, standards administration,
technical support and problem resolution of AlliedSignal's global E-Mail system
(Microsoft Mail).
<PAGE>
Schedule B
Buyer Provided Services 1
- ------------------------------------------------------------------------------
Schedule B - Buyer Provided Services
1. FACILITIES USE AND MAINTENANCE
a) Provider: L-3 Ocean Systems
15835 Roxford St.
Sylmar, CA
Contact Person: Richard Howlett (818) 833-2789
b) Recipient: AlliedSignal
15835 Roxford St.
Sylmar, CA
Contact Person: Bill Pugliese (818) 833-2590
Charges: See Annex 1
Term: Up to one year from Closing as specified in the
side letter of even date herewith relating to the
lease of space at Sylmar by Purchasers, as
landlord, to AlliedSignal Avionics, as tenant.
Description: This service includes access to and use of the
cafeteria, parking lot, surrounding company
grounds, restrooms, Avionics designated
manufacturing and repair & overall areas, Avionics
designated stockroom, Avionics designated
administrative offices, shipping and loading dock
and general passageways throughout the facility.
<PAGE>
Schedule B
Buyer Provided Services 2
- ------------------------------------------------------------------------------
2. Security
a) Provider: L-3 Ocean Systems
15835 Roxford St.
Sylmar, CA
Contact Person: Anita Logan (818) 833-2486
b) Recipient: AlliedSignal
15835 Roxford St.
Sylmar, CA
Contact Person: Bill Pugliese (818) 833-2590
Charges: See Annex 1
Term: Up to one year from Closing as specified in the
side letter of even date herewith relating to the
lease of space at Sylmar by Purchasers, as
landlord, to AlliedSignal Avionics, as tenant.
Description: Security Services include uniformed security
guards and personnel assigned to L-3 Ocean
Systems, beneficial use of installed security and
surveillance cameras, vehicle patrol in parking
lot areas and general safekeeping of Avionics
assets and facility areas.
<PAGE>
Schedule B
Buyer Provided Services 3
- ------------------------------------------------------------------------------
3. HUMAN RESOURCES/LABOR MANAGEMENT
a) Provider: L-3 Ocean Systems
15835 Roxford St.
Sylmar, CA
Contact Person: Anita Logan (818) 833-2486
b) Recipient: AlliedSignal
15835 Roxford St.
Sylmar, CA
Contact Person: Bill Pugliese (818) 833-2590
Charges: See Annex 1
Term: Up to one year from Closing as specified in the
side letter of even date herewith relating to the
lease of space at Sylmar by Purchasers, as
landlord, to AlliedSignal Avionics, as tenant.
Description: Services to be provided include:
o Approve Requisitions
o Source Internal and External Candidates
for Hire
o Pre-Employment Physical
o Benefits Counseling
o Resolving Benefit issues
o Labor Management
o Employee Relations
o Reward and Recognition Program
o Merit and Lump Sums
o Status Changes for Employees
o Medical Leaves
o Payroll Issues
o Stamps
o Educational Assistance
o Meal Tickets
o Employee Activities (Recreational
Activities)
o Occupational Health
o Worker's Compensation Issues
o Security
o Rideshare Benefits
<PAGE>
Schedule B
Buyer Provided Services 4
- ------------------------------------------------------------------------------
4. TIMEKEEPING
a) Provider: L-3 Ocean Systems
15835 Roxford St.
Sylmar, CA
Contact Person: Tom Benecke (818) 833-2875
b) Recipient: AlliedSignal
15835 Roxford St.
Sylmar, CA
Contact Person: Bill Pugliese (818) 833-2590
Charges: See Annex 1
Term: Up to one year from Closing as specified in the
side letter of even date herewith relating to the
lease of space at Sylmar by Purchasers, as
landlord, to AlliedSignal Avionics, as tenant.
Description: Timekeeping services include the labor services of
local union timekeeping personnel who will provide
hourly labor timekeeping support including clock
maintenance, labor charge corrections and
application to correct Avionics jobs. General
support to hourly labor supervisor in resolving
issues involving timekeeping anomalies.
<PAGE>
Schedule B
Buyer Provided Services 5
- ------------------------------------------------------------------------------
5. MAIL & TELEPHONE SWITCHBOARD
a) Provider: L-3 Ocean Systems
15835 Roxford St.
Sylmar, CA
Contact Person: Sam Erdman (818) 833-2493
b) Recipient: AlliedSignal
15835 Roxford St.
Sylmar, CA
Contact Person: Bill Pugliese (818) 833-2590
Charges: See Annex 1
Term: Up to one year from Closing as specified in the
side letter of even date herewith relating to the
lease of space at Sylmar by Purchasers, as
landlord, to AlliedSignal Avionics, as tenant.
Description: Mail service includes delivery of incoming mail to
Avionics personnel and pick-up of outgoing mail.
Postage expense is the responsibility of Avionics.
Telephone Switchboard services includes on-site
operator assistance for incoming and outgoing
calls involving Avionics personnel including after
hours and weekend call routing by on-duty security
guards.
<PAGE>
Schedule B
Buyer Provided Services 6
- ------------------------------------------------------------------------------
6. EDC ASSESSMENT
a) Provider: L-3 Ocean Systems
15835 Roxford St.
Sylmar, CA
Contact Person: Sam Erdman (818) 833-2493
b) Recipient: AlliedSignal
15835 Roxford St.
Sylmar, CA
Contact Person: Bill Pugliese (818) 833-2590
Charges: See Annex 1
Term: Up to one year from Closing as specified in the
side letter of even date herewith relating to the
lease of space at Sylmar by Purchasers, as
landlord, to AlliedSignal Avionics, as tenant.
Description: EDC Assessment includes general use of the L-3
Oceans Systems Business Resource Planning (BPR)
system which includes the use of the Manufacturing
Resource Planning (MRP-II) module for planning and
netting material and labor requirements for
manufacturing operations. This is strictly a
system use fee and does not include labor support
from L-3 personnel to plan and schedule contract
requirements.
<PAGE>
Schedule B
Buyer Provided Services 7
- ------------------------------------------------------------------------------
7. PROCUREMENT - RELATED SERVICES
a) Provider: L-3 Ocean Systems
15835 Roxford St.
Sylmar, CA
Contact Person: Chris Vosse (818) 833-2206
b) Recipient: AlliedSignal
15835 Roxford St.
Sylmar, CA
Contact Person: Bill Pugliese (818) 833-2590
Charges: See Annex 1
Term: Up to one year from Closing as specified in the
side letter of even date herewith relating to the
lease of space at Sylmar by Purchasers, as
landlord, to AlliedSignal Avionics, as tenant.
Description: Services related to purchasing direct and indirect
material and supplies for the Avionics group. The
expense of procuring materials is included in the
prevailing L-3 Ocean Systems procurement burden
rate, which will vary, based on site specific
negotiated billing rates with the US government.
Stockroom and Receiving Inspection labor are
included in the procurement burden and material
handling burden billing rates which will be
applied to purchases on behalf of Avionics. These
burden rates will be applied to the direct
material procured which will be invoiced at the
actual purchase cost. In all cases, the L - 3
Oceans Systems local, General and Administrative
secondary billing indirect rate will be applied to
the direct material, burden and indirect material
or supplies.
<PAGE>
Schedule B
Buyer Provided Services 8
- ------------------------------------------------------------------------------
8. UTILITIES
a) Provider: L-3 Ocean Systems
15835 Roxford St.
Sylmar, CA
Contact Person: Richard Howlett (818) 833-2789
b) Recipient: AlliedSignal
15835 Roxford St.
Sylmar, CA
Contact Person: Bill Pugliese (818) 833-2590
Charges: See Annex 1
Term: Up to one year from Closing as specified in the
side letter of even date herewith relating to the
lease of space at Sylmar by Purchasers, as
landlord, to AlliedSignal Avionics, as tenant.
Description: Utilities will be billed to Avionics based upon
the square footage occupied by the Avionics group.
This percentage allocation will be billed as
actual expense incurred by L-3 Oceans Systems with
the applicable local General and Administrative
secondary billing rates applied to direct product
cost areas in manufacturing.
<PAGE>
Schedule B
Buyer Provided Services 9
- ------------------------------------------------------------------------------
ANNEX 1 TO SCHEDULE B
Services to the Avionics Division at Sylmar
- -------------------------------------------------------------------------------
Service Monthly Billing Amount Notes
- -------------------------------------------------------------------------------
Facilities Maintenance 15,400
Security 2,000
HR/Labor Management 12,400
Timekeeping1 2,000
Mail & Telephone Switchboard 1,500
EDC Assessment 3,500
- -------------------------------------------------------------------------------
Monthly Assessment 36,800
- -------------------------------------------------------------------------------
In addition to the above Ocean Systems provides the following services to the
Avionics business:
PROCUREMENT-RELATED SERVICES
The expense of procuring materials is included in the prevailing
Oceans Systems procurement burden rate that will vary based upon the
specific negotiated billing rate with the US government. Stockroom and
Receiving Inspection labor are included in the procurement burden and
the material handling burden rates which will be applied to all
purchases made on behalf of Avionics. These burden rates will be
applied to the direct material procured and will be involved at the
actual cost of purchase. In all cases the Oceans Systems local General
and Administrative secondary billing indirect rate will be applied to
the direct material, burden and indirect material or supplies.
UTILITIES:
Allocated to Avionics monthly in proportion to the factory space
occupied. The billing will include applicable local General and
Administrative secondary billing rates applied to direct product cost
areas in manufacturing.
OTHER:
Calibration, Machine shop, repairs, maintenance and similar costs not
included above will be billed as incurred.
<PAGE>
Schedule C
- -------------------------------------------------------------------------------
Vendor Product Use
- -------------------------------------------------------------------------------
Compuware Abendaid/FX CICS Dump formatting for debugging CICS
Abendaid/MVS Dump formatting for debuggingbatch
Fileaid MVS File and data manipulation
Platinum ZEKE Production Scheduler
ZEBB Production Restart
Sterling SAMS:Disk Data management-backup & archives
Syncsort, Inc. SYNCSORT Sort utility
TSI International Keymaster Data entry
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 10.10
L-3 COMMUNICATIONS CORPORATION
PENSION PLAN
Effective April 30, 1997
July 24, 1997
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
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<S> <C>
INTRODUCTION...........................................................................................1
GENERAL DESCRIPTION ...................................................................................1
ARTICLE I. DEFINITIONS ................................................................................2
Accrual Service ..............................................................................2
Accumulated Contributions ....................................................................2
Actuarial Equivalent .........................................................................2
Affiliate ....................................................................................2
Alternate Payee ..............................................................................2
Annuity Starting Date ........................................................................3
Basic Benefit ................................................................................3
Beneficiary ..................................................................................3
Board ........................................................................................4
Break in Service .............................................................................4
Code .........................................................................................4
Committee ....................................................................................4
Company ......................................................................................4
Contributing Participant .....................................................................4
Contributory Benefit .........................................................................4
Deferred Vested Termination Benefit ..........................................................4
Deferred Vested Termination Date .............................................................4
Early Commencement Factor ....................................................................5
Early Retirement Benefit .....................................................................5
Early Retirement Date ........................................................................5
Earnings .....................................................................................5
Effective Date ...............................................................................6
Election Period ..............................................................................6
Eligibility Service ..........................................................................6
Eligible Spouse ..............................................................................7
Employee .....................................................................................7
Employer .....................................................................................7
Employment Date ..............................................................................7
ERISA ........................................................................................7
Forfeitures ..................................................................................8
Former Participant ...........................................................................8
Highly Compensated Employee ..................................................................8
Hour of Service ..............................................................................8
Late Retirement Benefit ......................................................................8
Late Retirement Date .........................................................................8
Minimum Basic Benefit ........................................................................8
Monthly Accrued Benefit ......................................................................8
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Pension Plan
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Normal Retirement Benefit ....................................................................8
Normal Retirement Date .......................................................................8
Participant ..................................................................................8
Period of Severance ..........................................................................8
Plan .........................................................................................8
Plan Year ....................................................................................9
Prior Employer ...............................................................................9
Prior Plan ...................................................................................9
Proper Application ...........................................................................9
QDRO .........................................................................................9
Qualified Joint and Survivor Annuity .........................................................9
Qualified Pre-Retirement Survivor Annuity ....................................................9
Retirement Date ..............................................................................9
Service ......................................................................................10
Severance From Service Date ..................................................................10
Social Security Wage Base ....................................................................10
Trust Agreement ..............................................................................10
Trust ........................................................................................11
Trustee ......................................................................................11
Vested Participant ...........................................................................11
Vested Percentage ............................................................................11
Vesting Service ..............................................................................11
ARTICLE II. ADMINISTRATION.......................................................................12
2.1 Committee 's Discretionary Power to Interpret and
Administer the Plan..................................................................12
2.2 Rules of the Committee ..............................................................13
2.3 Claims Procedure ....................................................................13
2.4 QDRO Claim ..........................................................................15
2.5 Indemnification of Committee Members ................................................15
2.6 Power to Execute Plan and Other Documents ...........................................15
2.7 Conclusiveness of Records ...........................................................15
ARTICLE III. ELIGIBILITY AND HOW TO CALCULATE
SERVICE ....................................................................16
3.1 When Participation Starts and Ends ..................................................16
3.2 General Restrictions on Participation ...............................................17
3.3 How to Calculate Eligibility Service ................................................17
3.4 . Rule of Parity o Disregarding Prior Service .........................................19
3.5 How to Calculate Accrual Service ....................................................19
3.6 How to Calculate Vesting Service ....................................................20
L-3 Communications Corporation
Pension Plan
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ARTICLE IV. VESTING AND FORFEITURES..............................................................21
4.1 Vesting ............................................................................21
4.2 Changes in Vesting Schedule .........................................................22
4.3 Forfeitures .........................................................................22
4.4 Restoring Forfeitures ...............................................................22
ARTICLE V. AMOUNT OF RETIREMENT BENEFIT.........................................................23
5.1 General Rules for Calculating Amount of Plan Benefits................................23
5.2 The Different Plan Benefits .........................................................23
5.3 Monthly Accrued Benefit .............................................................24
5.4 Special Section 401(a)(17) Provision Regarding Plan Benefits.........................25
5.5 Minimum Basic Benefit for Certain Participants ......................................26
5.6 Normal Retirement Benefit ...........................................................27
5.7 Late Retirement Benefit .............................................................27
5.8 Early Retirement Benefit ............................................................28
5.9 Deferred Vested Termination Benefit .................................................29
5.10 Co-ordination with Prior Plan .......................................................29
5.11 Effect of, Deferred Payment .........................................................30
5.12 Effect of Reemployment After Receipt of Plan Benefits ...............................30
ARTICLE VI. PAYMENT OF RETIREMENT AND DEATH BENEFITS.............................................32
6.1 How to Retire........................................................................32
6.2 Timing of Participant's Benefits ....................................................32
6.3 Normal Form of Benefits .............................................................35
6.4 Notice and Election Period ..........................................................35
6.5 Waiver and Spousal Consent Necessary for Optional Forms of
Benefit .............................................................................36
6.6 Optional Forms of Benefit ...........................................................38
6.7 Suspending Plan Payments Upon Reemployment ..........................................39
6.8 Qualified Pre-Retirement Survivor Annuity ...........................................39
6.9 Form of Benefit Fixed as of Annuity Starting Date ...................................41
ARTICLE VII. IN-SERVICE WITHDRAWAL AND RETURN OF
CONTRIBUTIONS ...................................................................43
7.1 In-Service Withdrawal of Pre-1970 Employee Contributions.............................43
ARTICLE VIII. THE TRUST, FUNDING AND CONTRIBUTIONS ................................................44
8.1 Contributions to the Trust Fund .....................................................44
8.2 The Trust ...........................................................................44
L-3 Communications Corporation
Pension Plan
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ARTICLE IX. AMENDMENT AND TERMINATION............................................................45
9.1 Power to Amend Plan .................................................................45
9.2 Power to Terminate Plan .............................................................45
9.3 Allocation of Assets Upon Termination ...............................................45
9.4 Reversion of Assets Upon Termination ................................................45
ARTICLE X. LIMITATION OF BENEFITS...............................................................47
10.1 Construction ........................................................................47
10.2 Definitions .........................................................................47
10.3 Limitation on Annual Benefits .......................................................48
10.4 Adjustments for Early or Late Payment ...............................................48
10.5 Conditional Exemption for Pensions Under $10,000 ....................................49
10.6 Participants with Fewer Than Ten Years of Service ...................................49
10.7 Participants with Fewer Than Ten Years of Participation .............................50
10.8 Benefits Payable under More Than One Defined Benefit Plan . . .......................50
10.9 Participation in Defined Contribution Plan ..........................................50
10.10 Limitation Year .....................................................................53
10.11 Protection of Current Accrued Benefit ...............................................53
10.12 Rules Regarding 25 Top-Paid Employees ...............................................53
ARTICLE XI. GENERAL PROVISIONS ..................................................................55
11.1 No Contract of Employment ...........................................................55
11.2 Employer Not Liable for Plan Benefits ...............................................55
11.3 Exclusive Benefit and Return of Employer Contributions ..............................55
11.4 Tax Withholding .....................................................................56
11.5 Incompetency or Minority of Payee ...................................................56
11.6 Missing Payees ......................................................................57
11.7 Alienation and QDROs ................................................................57
11.8 Notice to Committee, Elections ......................................................58
11.9 Merger or Transfer With Other Plans .................................................58
11.10 Fiduciaries .........................................................................59
11.11 Plans Shall Comply with Law; and Choice of Law ......................................59
11.12 Deemed Distribution of Unvested Amounts .............................................59
11.13 Gender and Number ...................................................................59
11.14 Headings ............................................................................59
11.15 Illegality of Particular Provisions .................................................60
11.16 Receipt and Release for Payments ....................................................60
11.17 Action by the .......................................................................60
11.18 Mistaken Payments ...................................................................60
11.19 Participants and Beneficiaries Bound by the Plan ....................................60
L-3 Communications Corporation
Pension Plan
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11.20 Direct Rollover Distributions to Other Plans or IRAs ................................60
11.21 Transfers Among Affiliates ..........................................................62
ARTICLE XII. TOP-HEAVY PROVISIONS.................................................................64
12.1 Applicable Plans Included in Determination of "Top Heavy"
Status ............................................................................64
12.2 "Key Employee" ......................................................................64
12.3 "Top Heavy" Test ....................................................................65
12.4 Determination Dates .................................................................65
12.5 Add-Back of Prior Distributions .....................................................66
12.6 Former Employees Disregarded after Five Plan Years ..................................66
12.7 Compliance with Section 416 of the Code .............................................66
12.8 Beneficiaries .......................................................................66
12.9 Provisions Applicable in "Top Heavy" Plan Years .....................................66
EXHIBIT A. ACTUARIAL EQUIVALENT FACTORS.........................................................-1-
EXHIBIT B. CONTRIBUTORY BENEFITS ...............................................................-3-
L-3 Communications Corporation
Pension Plan
</TABLE>
v
<PAGE>
L-3 COMMUNICATIONS CORPORATION PENSION PLAN
-------------------------------------------
INTRODUCTION
------------
On April 30, 1997, Lockheed Martin Corporation ("Lockheed Martin")
sold certain of its businesses (the "Business") to L-3 Communications
Holdings, Inc. ("Holdings"). In connection with the sale, certain employees in
the information display systems operations of the Lockheed Martin currently
located in Alpharetta, Georgia, and certain headquarters employees became
employees of L-3 Communications Corporation, a wholly owned subsidiary of
Holdings. Lockheed Martin agreed to transfer, and Holdings agreed to accept,
the assets under the Lockheed Martin Tactical Defense Systems Pension Plan
(Corp. & LMSD) (the "Pension Plan") attributable to the Accrued Benefits of
the employees and former employees (the "Transferred Individuals") of the
transferred operations.
The Transferred Individuals shall be entitled to their Accrued
Benefit under the Pension Plan (or a predecessor plan) as of April 30, 1997,
provided that the assets are transferred, and future benefits, if any, under
the terms of this Plan.
A Participant under this Plan, including a Transferred Individual, is
entitled to benefits under the terms of the Plan in effect, including the
terms of the Pension Plan or any other predecessor plan, when the Participant
terminates (or terminated) employment with the Employer.
The Plan is intended to be qualified under Internal Revenue Code
Section 401 and its Trust is intended to be tax-exempt under Code Section 501.
GENERAL DESCRIPTION
-------------------
Benefits attributable to Employer contributions are integrated with
Social Security, under Code Section 401(l). Such benefits are termed the
"Basic Benefit" under the Plan. The Plan also provides for a "Minimum Basic
Benefit" for certain Participants.
The plan does not charge for QPSA coverage, and does provide for a
subsidized early retirement benefit.
L-3 Communications Corporation
Pension Plan
<PAGE>
ARTICLE I. DEFINITIONS
As used in this Plan, the following terms shall have the following
meanings, unless a different meaning is required by the context:
"Accrual Service" shall have the meaning set forth in Section 3.5.
"Accumulated Contributions" means the after-tax, voluntary employee
contributions made by a Participant under the Prior Plan prior to April 1,
1970. These contributions, plus the accrued interest described in this
paragraph, constitute a Contributing Participant's Contributory Benefit. The
accrued interest shall be computed up to April 1, 1970 as provided under the
Prior Plan plus interest thereon at the rate of 4% per year for the period
from April 1, 1970 through December 31, 1973, at the rate of 5% per year for
the period from January 1, 1974 through December 31, 1987, and at the rate of
120% of the Federal mid-term rate (as in effect under Code Section 1274 for
the first month of each Plan Year) for the period beginning January 1, 1988
compounded annually from the last day of the calendar year in which such
contributions were made to the first day of the month in which occurs the
earliest of (a) withdrawal of such contributions by the Participant prior to
or termination of employment, (b) the Participant's Annuity Starting Date, (c)
the Participant's death, or (d) the date the Participant becomes a Former
Participant.
"Actuarial Equivalent" means an amount of equal value as determined in
accordance with EXHIBIT A hereto.
"Affiliate" means the Company and any corporation, trade or business during
any period when it is, along with the Company, a member of a controlled group
of corporations or a controlled group of trades or businesses, as described in
Code Section 414(b), the common control rules of Code Section 414(c), the
affiliated service group rules of Code Section 414(m), or the rules of 414(o),
subject to the rules of Code Section 415(h).
"Alternate Payee" means any spouse, former spouse, child or other dependent of
a Participant who is recognized by a "qualified" court domestic relations
order as having a right to receive all, or a portion of, the benefits payable
under the Plan with respect to such Participant, as described in Code Section
414(p). The determination of whether a court order is "qualified" shall be
made in the sole discretion of the Committee.
L-3 Communications Corporation
Pension Plan
2
<PAGE>
"Annuity Starting Date" shall mean:
(a) with respect to any lump sum or installment payment, first
day of the month coincident with or next following the date
that the Participant is both entitled to and has completed
his Proper Application for a Plan distribution,
(b) with respect to any one of a series of payments over the
life or life expectancy of one or more distributees, the
first date for which the benefit is paid, even if this date
is not the date of actual payment.
(c) The term "Annuity Starting Date" shall be determined with
respect to payments made to the Participant, rather than
with respect to any survivor benefit payments (excepting
only the QPSA).
(d) The term "Annuity Starting Date" shall, in all events, be defined
by Treasury Regulation Section 1.401(a)-20.
"Basic Benefit" for a Participant shall have the meaning set forth in Section
5.3.
"Beneficiary" means a Participant's designated beneficiary, under Plan
procedures. As required by the context of the Plan, "Beneficiaries" may also
include Alternate Payees.
(a) The Beneficiary of any married Participant shall normally be his
legally married spouse, at the time of death (whether or not she
or he is an Eligible Spouse). Married Participants may designate
someone other than a spouse as Beneficiary, only if the
designation includes the written consent of the Participant's
spouse, as set out in Plan Section 6.5. If these requirements
are not met, then the designation of a non-spouse Beneficiary is
invalid. However, the Committee may not require the spouse's
written consent if it is established to the satisfaction of a
Plan representative that such consent cannot be obtained because
(1) there is no spouse, (2) the spouse cannot be located, or (3)
such other circumstances exist as may be prescribed by
applicable regulation.
Any such written spousal consent or establishment that
consent cannot be obtained shall be effective only with
respect to that spouse.
(b) Beneficiary designations may be changed at any time before the
Annuity Starting Date. If no proper Beneficiary is designated or
survives, the Participant's Beneficiary shall be, in the
following order of
L-3 Communications Corporation
Pension Plan
3
<PAGE>
priority: (1) his spouse, if living at the
time of such payment; (2) his children (including adopted
children but excluding stepchildren) per stirpes; (3) his estate.
(c) If the Committee is in doubt as to the right of any person to
receive a Plan benefit, the Committee may direct the Trustee to
retain such amount, without liability for any interest thereon,
until the rights thereto are determined, or the Committee may
direct the Trustee to pay such amount into any court of
appropriate jurisdiction and such payment shall be a complete
discharge of the liability of the Plan and the Trust therefor.
"Board" means either the Board of Directors of the Company, or the Executive
Committee of the Board of Directors.
"Break in Service" is defined in Section 3.3.
"Code" means the Internal Revenue Code of 1986, as amended from time to time,
and all appropriate regulations and administrative guidance.
"Committee" means the committee which administers the Plan in accordance with
Article II. As context requires, the term "Committee" shall refer to the
Committee or its delegates.
"Company" means L-3 Communications Corporation, a Delaware corporation, and
any successor thereto which adopts this Plan. The Company shall act by
resolution of its Board of Directors.
"Contributing Participant" means a Participant who made voluntary after-tax
contributions to the Prior Plan prior to April 1, 1970 and has not withdrawn
such contributions.
"Contributory Benefit" is defined in Section 5.3, and shall equal the amounts
set out in Exhibit B.
"Deferred Vested Termination Benefit" is defined in Section 5.9.
"Deferred Vested Termination Date" means:
(a) the first day of the month coincident with or next following the
date that a Participant terminates active employment. A Vested
Terminated Date will always precede any date that might have been
the Participant's Retirement Date.
L-3 Communications Corporation
Pension Plan
4
<PAGE>
(b) Generally, a Deferred Vested Termination Date will arise only
with respect to a Participant whose Vested Percentage is more
than 0%. However, a Contributing Participant who retains a
Contributory Benefit may incur a Deferred Vested Termination Date
even if he has no Vested Percentage.
(c) A Deferred Vested Termination Date will be the date as of which a
Participant's Deferred Vested Termination Benefit is calculated,
under Article V.
(d) A Deferred Vested Termination Date is not a "Retirement Date" per
se. Accordingly, if any benefit under any welfare plan is
dependent upon "retirement," then such a benefit may not be
available to a Participant who terminates employment as of his
Deferred Vested Termination Date.
"Early Commencement Factor" is defined in Section 5.8.
"Early Retirement Benefit" is defined in Section 5.8.
"Early Retirement Date" means the first day of the month (a) coincident with or
next following the date a Participant retires under the terms of the Plan, (b)
on or after his 55th birthday and completion of ten years of Eligibility
Service, and (c) prior to his Normal Retirement Date. For purposes of this
definition only, Accrual Service includes any period during which the Employee
was an active participant of (1) a qualified defined benefit plan sponsored by
an Affiliate (provided that such a plan was in effect and sponsored by the
Affiliate during the relevant period) or (2) the Prior Plan.
"Earnings" for any Plan Year shall mean:
(a) the total cash remuneration actually paid by the Employer,
including regular earnings; commissions; overtime pay; bonuses;
incentive compensation; fringe benefits; elective employee
deferrals or contributions made under any qualified retirement
plan; and Code Section 125 elective, payroll deduction
contributions.
(b) Any compensation that is accrued but not paid during the relevant
Plan Year shall not be accounted. The following items shall also
be excluded: distributions from any employer qualified retirement
or welfare plan; the disposition or granting of stock options;
imputed income from life insurance; employer contributions made
to any welfare plan, or to any
L-3 Communications Corporation
Pension Plan
5
<PAGE>
qualified retirement plan; any reimbursed expenses such as
relocation expenses; all severance pay; and lump sum vacation
allowances.
(c) In addition to other applicable limits set out in this Plan, and
notwithstanding any contrary Plan provisions, Earnings accounted
under this Plan shall be capped at $150,000 (adjusted for cost of
living, as provided by Code Section 401(a)(17)).
(1) If a cost of living adjustment is declared under the Code
with respect to any calendar year, it shall affect the
Earnings accounted for the Plan Year that begins on the
January 1st of that same calendar year.
(2) Generally, if Earnings paid for any prior Plan Year are taken
into account in determining benefit accruals for the current
Plan Year, then the Earnings limit for the prior year will be
subject to the Code Section 401(a)(17) limit applicable
(adjusted for the cost of living) for that prior year.
(3) If a Participant is not actively employed for a full Plan
Year, then his credited Earnings under Code Section
401(a)(17) shall not be reduced, prorated, or limited because
of his incomplete year of service.
(4) However, if this Plan should be amended to base its benefit
allocation or accrual formula on compensation paid for a
period of less than a Plan Year, then Earnings taken into
account under this Plan shall be prorated, to correspond to
the period of time used in the Plan formula. For example, if
the Plan formula is based on compensation paid each quarter,
then the 401(a)(17) limit for that Plan Year shall be divided
by four, when applying the Plan benefit formula.
(d) To the extent that any Participant's Earnings exceeded $150,000
prior to January 1, 1994, Section 5.4 shall apply to his accrued
Plan benefit.
"Effective Date" of this Plan means April 30, 1997. Unless specified within
the Plan, all Plan provisions are effective as of the Effective Date. However,
the terms of the Prior Plan, or any earlier restatement of this Plan, shall
apply with respect to periods before the Effective Date.
L-3 Communications Corporation
Pension Plan
6
<PAGE>
"Election Period" refers to a period during which certain elections must be
made concerning the form of benefit paid under the Plan. It is described in
Section 6.4.
"Eligibility Service" is defined in Section 3.3.
"Eligible Spouse" means:
(a) A participant's legally married spouse. Further, with respect to
a spouse's eligibility to receive a QPSA benefit, an Eligible
Spouse must have been married to the Participant for at least 12
continuous months before the Participant's date of death.
(b) Whether or not an individual is an Eligible Spouse shall in all
events be determined under Treasury Regulation Section
1.401(a)-20.
"Employee" shall mean:
(a) any common-law employee in the service of the Employer,
(b) Employees shall, as prescribed by the Code, also include
employees of Affiliates, for the limited purposes of determining
eligibility to participate, and vesting.
(c) Leased employees as described by Code Section 414(n), shall be
considered Employees for the sole purpose of Code Section
414(n)(3).
Notwithstanding, the preceding provisions, the following shall not be
an Employee:
(d) any person whose terms of employment is subject to a collective
bargaining agreement, to which the Company is a party, unless the
agreement specifically provides for the person's participation in
this Plan,
(e) any common-law employee of an Employer or Affiliate who is
employed at a site, unit, or subsidiary whose employees, under
Employer or Affiliate policy, are not eligible to participate in
a qualified defined benefit.
"Employer" means the New York Corporate office of the Company and the L-3
Communications Corporation - Display Systems Division currently located in
Alpharetta, Georgia.
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<PAGE>
"Employment Date" means the first day of employment with an Employer or Prior
Employer, as determined by the Employer's procedures, and within its
discretion.
"ERISA" means the Employee Retirement Income Security Act of 1974, as enacted
or as amended from time to time, and all appropriate regulations and
administrative guidance.
"Forfeitures" are defined in Section 4.3.
"Former Participant"
(a) Means an individual who has ceased to be a Participant for any of
the reasons set out in Section 3.1, and a former participant in
the Prior Plan if the Prior Plan transferred to this Plan assets
attributable to his accrued benefit under the Prior Plan.
(b) A Former Participant is ineligible to accrue further benefits
under the Plan, because he is no longer an active Participant.
"Highly Compensated Employee" means any Employee or former Employee who is a
highly compensated employee as defined in Code Section 414(q).
"Hour of Service" means any hour for which an Employee is paid or is entitled
to payment, for the performance of duties for the Employer or Prior Employer.
"Late Retirement Benefit" is defined in Section 5.7.
"Late Retirement Date" means the first day of the month coincident with or
next following the date on which a Participant retires, under the terms of the
Plan, after his Normal Retirement Date.
"Minimum Basic Benefit" is defined in Section 5.5.
"Monthly Accrued Benefit" is defined in Section 5.3.
"Normal Retirement Benefit" is defined in Section 5.6.
"Normal Retirement Date" means the first day of the month coincident with or
next following the later of (i) a Participant's 65th birthday, or (ii) the
date a Participant completes five years of Eligibility Service.
"Participant" means any Employee who is participating in the Plan, under the
terms of the Plan, after meeting the eligibility requirements of Article III.
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"Period of Severance" is defined in Section 3.3.
"Plan" means the L-3 Communications Corporation Pension Plan, as amended from
time to time, which includes EXHIBITS A and B which are attached, as well as
the Trust Agreement.
"Plan Year" means the calendar year, except that the first Plan Year shall be
the period beginning on April 30, 1997 and ending on December 31, 1997.
"Prior Employer" means Lockheed Martin Corporation prior to April 30, 1997,
and Loral Corporation.
"Prior Plan" means the Lockheed Martin Tactical Systems Inc. Pension Plan
(Corp. & LMDS), as in effect from time to time prior to the Effective Date,
and the predecessors to that plan, which are the Loral Corporation Pension
Plan, established effective April 1, 1970, and restated effective January 1,
1976, January 1, 1984, January 1, 1989 and restated, reflecting amendments
made through December 20, 1994, effective January 1, 1989. It was preceded by
the Retirement Plan for Non-Union Employees of Loral Corporation established
effective January 1, 1963.
"Proper Application" is defined in Section 6.1.
"QDRO" is an abbreviation for "qualified domestic relations order," defined in
Section 11.7.
"QJSA" or "Qualified Joint and Survivor Annuity" means an annuity for the life
of a Participant with a survivor annuity for the life of his Eligible Spouse,
if there is an Eligible Spouse as of his Annuity Starting Date. The amount of
the survivor annuity shall be 50% of the amount payable during the lifetime of
the Participant. The QJSA shall be calculated to be the Actuarial Equivalent
of a single life annuity for the life of the Participant, as of his Normal
Retirement Date. In all events, a QJSA shall be as defined by Treasury
Regulation Section 1.401(a)-20.
"QPSA" or "Qualified Pre-Retirement Survivor Annuity" means an annuity for the
life of an Eligible Spouse who survives a Participant, under the circumstances
and in the amount described in Section 6.8. In all events a QPSA shall be
defined by Treasury Regulation Section 1.401(a)-20.
"Retirement Date" means a Participant's Normal, Early or Late Retirement Date,
whichever is applicable. A Vested Terminated Participant shall not have a
Retirement Date, per se. Accordingly, if any benefit under any welfare plan is
conditioned upon "retirement," then such a benefit may not be available to a
Vested
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Terminated Participant.
"Service"
(a) Different Meanings. Service under the Plan has different meanings
for different purposes. The Plan accounts three different types
of Service: Eligibility Service, Accrual Service, and Vesting
Service. The definition of "Service" set out in this Article I
applies to all of these different types of Service.
(b) General Rule. Service shall generally mean the period for which
the Employee is paid or is entitled to payment (including any
back pay, irrespective of mitigation of damages), subject to the
rules and restrictions of Article III, for the performance of
duties for the Employer. For the purposes of calculating
Eligibility Service and Vesting Service, "Service" shall also
include Service performed for an Affiliate or service credited
under a Prior Plan. However, with respect to crediting Service
during any period during which the Prior Plan was in effect, then
the provisions of the Prior Plan shall control. Service shall
never be double-credited.
(c) Military Service
(1) An employee or Participant shall be credited with Service for
any period of military service to the extent required by any
Federal veteran reemployment laws.
(2) Notwithstanding the foregoing, if a Participant who leaves
employment with the Employer for the sole purpose of entering
the armed forces of the United States returns to active
employment with the Employer within the period his
re-employment rights are protected by applicable law, his
Service shall include the period of such absence and solely
for the purpose of the Plan during such period he shall be
deemed to have received Earnings from the Employer equal to
his basic remuneration rate immediately prior to the
commencement of such absence (subject to escalation to the
extent required under applicable laws and regulations).
"Severance From Service Date" is defined in Section 3.3.
"Social Security Wage Base" means, for any Plan Year, the maximum amount of a
L-3 Communications Corporation
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Participant's annual remuneration which may be treated as wages under Section
3121(a) of the Federal Insurance Contributions Act for such year, indexed to
the extent required by Code Section 401(l).
"Trust Agreement" The agreement between the Company and Trustee concerning the
assets of this Plan. The Trust Agreement is fully a part of the Plan.
"Trust" or Trust Fund" means the fund held by the Trustee into which
contributions under the Plan will be paid by the Employer and Employees and
out of which benefits under the Plan will be paid as herein provided.
"Trustee" means the trustee appointed under the Trust Agreement.
"Vested Participant" means a Participant who terminates employment with the
Employer on a Deferred Vested Termination Date.
"Vested Percentage" is defined in Section 4.1.
"Vesting Service" is defined in Section 3.6.
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ARTICLE II. ADMINISTRATION
--------------------------
2.1 Committee's Discretionary Power to Interpret and Administer the Plan
- --- --------------------------------------------------------------------
(a) Appointment. The Committee shall be appointed from time to time
by the Board to serve at its pleasure. Any member of the
Committee may resign by delivering his written resignation to the
Board.
(b) Role under ERISA. The Committee is the "named fiduciary" for
operation and administration of the Plan, and the "administrator"
under ERISA. The Committee is designated as agent for service of
legal process.
(c) Committee establishes Plan procedures. The Committee and its
delegates shall from time to time establish rules and procedures
for the administration and interpretation of the Plan and the
transaction of its business.
(d) Role of Human Resource and Benefits Personnel. Employees of the
Employer who are human resources personnel, or benefits
representatives are the Committee's delegates and shall, under
the authority of the Committee, perform the routine
administration of the Plan, such as distributing and collecting
forms and providing information about Plan procedures. They shall
also establish Plan rules and procedures.
(e) Discretionary Power to Interpret Plan
(1) The Committee has complete discretionary and final authority
to (i) determine all questions concerning eligibility,
elections, contributions, and benefits under the Plan, (ii)
construe all terms under the Plan, including any uncertain
terms, and (iii) determine all questions concerning Plan
administration. All administrative decisions made by the
Committee, and all its interpretations of the Plan documents,
shall be given full deference by any court of law.
(2) Information that concerns an interpretation of the Plan or a
discretionary determination, can be properly provided only by
the Committee, and not by any delegate (except legal
counsel).
(3) Should any individual receive oral or written information
concerning the Plan, which is contradicted by a subsequent
L-3 Communications Corporation
Pension Plan
12
<PAGE>
determination by the Committee, then the Committee's final
determination shall control.
2.2 Rules of the Committee
- --- ----------------------
(a) Any act which the Plan authorizes or requires the Committee to do
may be done by a majority of its members. The action of such
majority, shall constitute the action of the Committee and shall
have the same effect for all purposes as if made by all members
of the Committee at the time in office. The Committee may act
without any writing that records its decisions, and need not
document its meetings or teleconferences. The Committee may also
act through any authorized representative.
(b) The members of the Committee may authorize one or more of
their number to execute or deliver any instrument, make any
payment or perform any other act which the Plan authorizes
or requires the Committee to do.
(c) The Committee may employ counsel and other agents and may procure
such clerical, accounting, actuarial and other services as they
may require in carrying out the provisions of the Plan. Legal
counsel are authorized as the Committee's delegates.
(d) No member of the Committee shall receive any compensation for his
services as such. All expenses of administering the Plan,
including, but not limited to, fees of accountants, counsel and
actuaries shall be paid from the Trust Fund, except to the extent
paid by an Company.
(e) Each member of the Committee may delegate Committee
responsibilities among the Company directors, officers, or
employees, and may consult with or hire outside experts. The
expenses of such experts shall be paid by the Trust Fund, to the
extent that they are not paid by an Company.
2.3 Claims Procedure
- --- ----------------
(a) The Committee shall determine Participants and Beneficiaries'
rights to benefits under the Plan. In the event that a
Participant or Beneficiary disputes an initial determination made
by the Committee, then he may dispute the determination only by
filing a written claim for benefits.
(b) If a claim is wholly or partially denied, the Committee shall
provide the
L-3 Communications Corporation
Pension Plan
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<PAGE>
claimant with a notice of denial, written in a manner calculated
to be understood by the claimant and setting forth:
(1) The specific reasons for such denial;
(2) Specific references to the pertinent Plan provisions on which
the denial is based;
(3) A description of any additional material or information
necessary for the claimant to perfect the claim with an
explanation of why such material or information is necessary
(if applicable); and
(4) Appropriate information as to the steps to be taken if the
claimant wishes the Committee to revise its initial denial.
The notice of denial shall be given within a reasonable time
period but no later than 90 days after the claim is received,
unless special circumstances require an extension of time for
processing the claim. If such extension is required, written
notice shall be furnished to the claimant within 90 days of
the date the claim was received stating that an extension of
time and the date by which a decision on the claim can be
expected, which shall be no more than 180 days from the date
the claim was filed.
(5) If no written notice of denial is provided by the Committee,
then the claim shall be deemed to be denied, and the claimant
may appeal the claim as though the claim had been denied.
(c) The claimant and/or his representative may appeal the denied
claim and may:
(1) Request a review by making a written request to the Committee
provided that such a request is made within 60 days of the
date of the notification of the denied claim;
(2) Review pertinent documents.
(d) Upon receipt of a request for review, the Committee shall within
a reasonable time period but not later than 60 days after
receiving the request, provide written notification of its
decision to the claimant stating the specific reasons and
referencing specific plan provisions on which its decision is
based, unless special circumstances require an extension for
processing the review. If such an extension is required, the
Committee shall notify the claimant of the date, no later than
120
L-3 Communications Corporation
Pension Plan
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<PAGE>
days after the original date the request for review was received,
on which the Committee will notify the claimant of its decision.
(e) In the event of any dispute over benefits under this Plan, all
remedies available to the disputing individual under this Article
must be exhausted, within the specified deadlines, before legal
recourse of any type is sought.
2.4 QDRO Claim
- --- ----------
Claims relating to or affected by a domestic relations order (as
defined by Code Section 414(p)) or draft order shall be determined under the
Committee's procedures concerning domestic relations orders. The claims
procedure described in the preceding section shall not apply to any such
domestic relations order claim.
2.5 Indemnification of Committee Members
- --- ------------------------------------
To the fullest extent permitted by law, the Company agrees to
indemnify, to defend, and hold harmless the members of the Committee and its
delegates, individually and collectively, against any liability whatsoever for
any action taken or omitted by them in good faith in connection with this Plan
or their duties hereunder and for any expenses or losses for which they may
become liable as a result of any such actions or non-actions unless resultant
from their own willful misconduct; and the Company will purchase insurance for
the Committee and its delegates to cover any of their potential liabilities
with regard to the Plan and Trust.
2.6 Power to Execute Plan and Other Documents
- --- -----------------------------------------
Any appointed Vice President of the Company shall have the authority
to execute governmental filings or other documents including the plan document
relating to the Plan, or the Company may delegate this authority to another
officer or employee of the Company.
2.7 Conclusiveness of Records
- --- -------------------------
In administering the Plan, the Committee may conclusively rely upon
the Employer's payroll and personnel records maintained in the ordinary course
of business.
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ARTICLE III. ELIGIBILITY AND HOW TO CALCULATE SERVICE
3.1 When Participation Starts and Ends
- --- ----------------------------------
(a) Participants in Prior Plan. Each Employee who was a Participant
in the Prior Plan immediately before the Effective Date shall be
a Participant in this Plan on the Effective Date, provided he is
an Employee on the Effective Date.
(b) General Rule of Participation. Each Employee, other than an
Employee described in subsection (a) shall become a Participant
on the first day of the month coincident with or next following
the later of (1) the completion of one year of Eligibility
Service or (2) his 21st birthday.
(c) End of participation. A Participant ceases to be a Participant
when he terminates his employment (as determined within the sole
discretion of the Employer), dies, ceases to be an Employee,
incurs a Severance from Service Date, or loses his eligibility to
participate under the following Section. Any Participant who
ceases to be a Participant becomes a Former Participant.
(d) Becoming an Employee through change in status. Should any
individual who was a common-law employee of the Employer or an
Affiliate but not an Employee under the terms of this Plan,
subsequently become an Employee, then he shall be eligible to
become a Participant as set out in Subsection 3.1(b). For the
purposes of the preceding sentence only, his prior period of
employment shall be credited as "Service," under the rules of
Articles I and III.
(e) Re-entry into the Plan. Similarly, a Former Participant who again
becomes an Employee of the Employer shall be eligible to become a
Participant, subject to the Rule of Parity provisions of Section
3.4, as of the first day of the month coincident with or next
following the date he again becomes an eligible Employee under
this Article. However, a Former Participant who is fully vested
in his Plan benefit who again becomes an Employee of the Employer
shall again become a Participant as of his new Employment Date.
(f) Plan benefit of Former Participants.
(1) With respect to any individual who becomes a Former
Participant because of any provision of this Article, his
Monthly Accrued Benefit, under the Plan up to the date he
became a
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<PAGE>
Former Participant, shall be suspended. This benefit shall
not be increased through any further accruals while he
continues as a Former Participant.
3.2 General Restrictions on Participation
- --- -------------------------------------
Notwithstanding the provisions of Section 3.1:
(a) Individuals may be Participants only during those periods that
they are eligible Employees, under this Article and Article I.
(b) Further, an eligible Employee will be able to actively
participate in this Plan only during those periods during which
he is (1) in service with the Employer (rather than with any
Affiliate), and (2) the Plan is in effect.
(c) Leased employees, as described in Code Section 414(n), are not
eligible to be Participants.
3.3 How to Calculate Eligibility Service
- --- ------------------------------------
(a) General Rule. Eligibility Service shall be credited only for the
purpose of determining an Employee's eligibility to participate
in the Plan, unless another use is specifically expressed in this
Plan (such as determining a Participant's Normal Retirement
Date.) As used in this Section, "Service" shall mean "Eligibility
Service," and shall also reflect the definition set out in
Article I, and the Rule of Parity set out in the next Section.
(b) Fractional Periods. Subject to the Rule of Parity, stated in the
next Section, fractional periods of a year of Service will be
credited only if they include completed months.
(c) Service. Service begins on the date of hire, or the first day of
reemployment with the Employer or an Affiliate. Service includes
periods of lay-off, vacation, or an Employer or
Affiliate-approved leave of absence, provided that such periods
of vacation, lay-off or leave do not exceed 12 consecutive
months. (Should such periods of vacation, lay-off or leave occur
simultaneously or consecutively, they shall be aggregated in
determining the maximum period of 12 months of credited Service.)
If a period of vacation, lay-off, and/or leave exceeds 12
continuous months, then the portion that is more than 12 months
shall not be credited as Service.
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(d) Severance From Service. Service will not be credited on or after
any Severance from Service Date. As of a Severance from Service
Date, the Participant becomes a Former Participant. A Severance
from Service Date is the date of any quit, retirement, death, or
termination of employment, as determined within the sole
discretion of the Employer or Affiliate. A Severance from Service
Date also occurs if an Employee completes a Break in Service
(described in the next paragraph). If an Employee has incurred
two possible Severance from Service Dates, then the earlier date
shall control. However, notwithstanding the preceding provisions,
if an Employee quits, retires, or terminates, and returns to
active employment within 12 months of his initial Severance from
Service Date (without incurring a Break in Service), then his
entire Period of Severance will be credited as Eligibility and
Vesting Service, although not as Accrual Service.
(e) Break in Service. A Break in Service occurs when a Period of
Severance continues for twelve or more consecutive months, during
which the individual does not perform an hour of Service.
(f) Period of Severance. A Period of Severance is any continuous
period, during which the individual has had a separation from
active employment with the Employer or any Affiliate, on account
of lay-off, Employer or Affiliate-approved leave, vacation,
retirement, quit, discharge, any other reason, or any combination
of the preceding reasons. A Period of Severance dates from the
first date of absence.
(g) Quit, Retirement, Death or Termination. If a quit, retirement,
death, or termination occurs following an absence for any other
reason (such as leave or lay-off), but before a Break in Service
has occurred, then a Severance from Service Date will occur as of
the quit, retirement, death or termination. However, in this
situation, if the former Employee returns to active employment
within twelve months of his initial date of absence, so that a
Break in Service has not occurred, then his entire Period of
Severance shall be credited as Eligibility and Vesting Service.
However, a Period of Severance following a quit, retirement or
termination, shall not be treated as Accrual Service.
(h) Approved Leave. A special rule applies to an Employer or
Affiliate-approved leave on account of maternity or paternity,
meaning on account of pregnancy, the birth of a child, the
placement of a child in connection with an adoption, or the
caring for such a child immediately following the birth or
placement. Any period of Employer or Affiliate-approved leave on
account of maternity or paternity shall be credited as
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<PAGE>
Service, through the first anniversary of the first date of such
an absence. Any one-year period of such an Employer-approved
leave that continues past the first anniversary, that is, the
second year of any such leave, shall not be credited as Service,
nor shall it count as any Period of Severance. A Break in Service
on account of such leave therefore shall not occur until the end
of the second year of such a leave.
(i) Crediting Service. Subject to the Rule of Parity, no Service that
preceded a Break in Service shall be credited until the Employee
has completed 12 continuous months of Service, following the
Break.
3.4 Rule of Parity - Disregarding Prior Service
- --- -------------------------------------------
(a) Definition of Service. As used in this Section, "Service" shall
mean Eligibility, Vesting and Accrual Service, and shall also
reflect the definition set out in Article I.
(b) General Rule. Should an Employee who is not fully vested in all
his accrued Plan benefits incur a Break in Service, then the
following rules will apply, once he resumes active service and
again becomes an Employee. The Service earned before the Break in
Service shall be disregarded, only if the number of his
consecutive one-year Breaks in Service either equals or exceeds
(1) five years or (2) his pre-Break Service, whichever is
greater.
(c) Lost Service. If a Former Participant or Employee has lost
Service under the preceding paragraph, then such an individual
will be treated as a newly hired Employee, fully subject to the
requirements of this Article.
3.5 How to Calculate Accrual Service
- --- --------------------------------
(a) Purpose of Accrual Service. Accrual Service shall be accounted
only for the following purposes:
(1) determining the amount of a Participant's Monthly Accrued
Benefit under Section 5.3
(2) determining whether a Participant who is eligible for a
Deferred Vested Termination Benefit may receive such a
benefit before his Normal Retirement Date under Article VI.
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(b) Definition of Accrual Service.
(1) Accrual Service includes only the portion of an individual's
Eligibility Service performed while he was a Participant in
this Plan or the Prior Plan.
(2) Accrual Service shall not include any period during which the
individual waived participation in the Prior Plan, prior to
January 1, 1982.
(3) Accrual Service shall also reflect the definition of
"Service" in Article I.
3.6 How to Calculate Vesting Service
- --- --------------------------------
(a) Purpose of Vesting Service. Vesting Service shall be accounted
only for the purpose of determining whether a Participant is
vested in his Plan benefit, under Article IV.
(b) General Definition of Vesting Service. Except as set out in the
next subsection, Vesting Service shall include all Eligibility
Service accounted under this Plan. Vesting Service shall also
reflect the definition of "Service" in Article I.
(c) Exceptions. Notwithstanding the general rule of the preceding
paragraph, Vesting Service shall be calculated as follows:
(1) In the case of a Participant who was an Employee of Loral &
Communication Ltd, his Vesting Service shall be measured from
the later of his Employment Date or January 1, 1963.
(2) In the case of a Participant who was an Employee of Lermer
Packaging Corporation, his Vesting Service shall be measured
from the later of his Employment Date or April 1, 1970.
(3) In the case of a Participant who is not described in
paragraphs (1) or (2), above, his Vesting Service shall be
measured from the later of his Employment Date or the date
the Plan or Prior Plan was adopted, or such earlier date as
shall be determined by the Board on a uniform and
non-discriminatory basis.
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<PAGE>
ARTICLE IV. VESTING AND FORFEITURES
4.1 Vesting
- --- -------
(a) Full vesting at Normal Retirement Date. Upon attainment of his
Normal Retirement Date, (while in active Service) a Participant's
rights in his Basic Benefit shall be non-forfeitable.
(b) Full Vesting in Contributory Benefit.
(1) A Contributing Participant's rights in his Contributory
Benefit shall be non-forfeitable at all times, provided his
employee contributions to the Prior Plan were not withdrawn
under Section 7.1.
(2) However, if the Contributing Participant's accrued benefit
attributable to his employee contributions (as determined in
Code Section 411(c)(2)) is less than his Contributory
Benefit, then, his Contributory Benefit shall be reduced but
not eliminated by any withdrawal under Section 7.1, under
Plan procedures.
(c) General Vesting Schedule
(1) A Participant's nonforfeitable interest in his Basic Benefit
is his Vested Percentage. A Participant's Vested Percentage
is based on his completed years of Vesting Service, as of his
Separation from Service Date. The general vesting schedule
is:
Completed Years of
Vesting Service Vested Percentage
------------------- -----------------------
Less than 5 0%
5 or more 100%
(2) For Employees who terminated employment prior to January 1,
1989, the gradual vesting schedule in effect under the Prior
Plan at the date of their termination shall control.
4.2 Changes in Vesting Schedule
- --- ---------------------------
If the Individual Plan's vesting schedule is amended or if the Plan
is
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Pension Plan
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<PAGE>
determined to be top-heavy, then any Participant with (a) at least one hour
of Service during the Plan Year for which the change is made and (b) three
years of Service with the Employer may within 60 days after receiving written
notice of such amendment (or such later date prescribed by regulations under
Code Section 411), make a Proper Application to have his Vested Percentage
computed under the Plan's prior vesting provisions.
4.3 Forfeitures
- --- -----------
Forfeitures shall arise if any Participant whose Vested Percentage is
not 100% incurs a Severance from Service Date. Such unvested accrued Plan
benefits shall then be forfeited, and these Forfeitures shall be applied to
reduce future Employer contributions and to pay Plan expenses. Forfeitures
shall not be used to increase Plan benefits.
4.4 Restoring Forfeitures
- --- ---------------------
If a Participant's nonvested interest in his accrued Plan benefit is
forfeited, and the-Participant subsequently resumes employment with the
Employer or an Affiliate, then the forfeited amount shall be restored to him
to the extent that his pre-Break Service is recognized, under Sections 3.3 and
3.4.
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ARTICLE V. AMOUNT OF RETIREMENT BENEFIT
5.1 General Rules for Calculating Amount of Plan Benefits
- --- -----------------------------------------------------
(a) Only Service with Employer will be accounted for accrued benefit.
Notwithstanding any other contrary provision of this Article or
the Plan, only Accrual Service performed (1) with the Employer
(rather than with any Affiliate), (2) while the Employee is
actively participating in the Plan or the Prior Plan, and (3)
while the Plan or the Prior Plan is in effect, will be credited
for the purpose of determining a Participant's accrued benefit
under the Plan.
(b) Must be vested. A Participant shall be paid only those accrued
Plan benefits in which he is vested.
(c) This Article limited by Article X. The provisions of this Article
shall be subject to the limitations of Article X.
(d) All terms of this Article apply. Any Plan benefit calculation
shall be subject to all the terms of this Article, and the Plan.
5.2 The Different Plan Benefits
- --- ---------------------------
A Participant's Monthly Accrued Benefit shall be paid as one of the
following:
(a) Normal Retirement Benefit. A Participant will be eligible to
receive his Normal Retirement Benefit ff he retires under the
Plan as of his Normal Retirement Date.
(b) Late Retirement Benefit. A Participant will be eligible to
receive his Late Retirement Benefit if he retires under the Plan
as of his Late Retirement Date (and continues to accrue Accrual
Service after his Normal Retirement Date).
(c) Early Retirement Benefit. A Participant will be eligible to
receive his Early Retirement Benefit if he retires under the Plan
as of his Early Retirement Date.
(d) Deferred Vested Termination Benefit. A Participant will be
eligible to receive his Deferred Vested Termination Benefit if he
terminates employment under the Plan as of his Deferred Vested
Termination Date.
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5.3 Monthly Accrued Benefit
- --- -----------------------
(a) Formula for Monthly Accrued Benefit. Subject to the provisions of
this Article, the amount of a Participant's "Monthly Accrued
Benefit" shall equal his Basic Benefit and, if he is a
Contributing Participant, his Contributory Benefit.
(b) Formula for Basic Benefit. The amount of a Participant's "Basic
Benefit" under the Plan shall equal 1/12th of the sum of
Subsections (c) and (d).
(c) Basic Benefit with respect to Accrual Service after 1988. For
each Plan Year (and completed months) of Accrual Service on and
after January 1, 1989, the sum of (1) and (2).
(1) If such year is prior to the year in which he completes 15
years of Eligibility Service, 1.20% of his Earnings not in
excess of the Social Security Wage Base for such year, plus
1.45% of his Earnings for such year in excess of the Social
Security Wage Base for such year.
(2) If such year is the year in which he completes 15 years of
Eligibility Service or any subsequent year, 1.50% of his
Earnings for such year not in excess of the Social Security
Wage Base for such year, plus 1.75% of his Earnings for such
year in excess of the Social Security Wage Base for such
year.
(d) Basic Benefit with respect to Accrual Service before 1989. For
Accrual Service prior to January 1, 1989, the greater of (1) the
sum of (A) and (B), multiplied by (C), or (2).
(1) (A) 0.8% of (C) or (D), whichever is applicable, not in excess
of $16,800.
(B) 1.2% of (C) or (D), whichever is applicable, in excess of
$16,800.
(C) His years (and completed months) of Accrual Service prior
to January 1, 1989.
(D) For a Participant who has completed at least
five years of Accrual Service as of January 1,
1989, his average Earnings for the five Plan
Years 1984 through 1988.
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(E) For a Participant who has not completed five
years of Accrual Service as of January 1, 1989,
his average Earnings for his entire period
(years and completed months) of such Accrual
Service.
(2) The Basic Benefit under the Prior Plan as in effect
immediately prior to January 1, 1989 calculated through
December 31, 1988.
(e) Formula for Contributory Benefit
(1) A Contributing Participant's "Contributory Benefit" under the
Plan shall equal the amount set forth in Exhibit B hereto,
provided his contributions to the Prior Plan were not
withdrawn. A Participant's Contributory Benefit is based on
the Accumulated Contributions he had made under the Prior
Plan.
(2) However, if a Participant has withdrawn his Contributory
Benefit under Section 7.1 and the amount of a Participant's
accrued benefit attributable to his employee contributions
(as determined by Code Section 411(c)(2)) is less than his
Contributory Benefit, then his Contributory Benefit shall be
reduced but not eliminated by the withdrawal, under Plan
procedures.
(f) Formula for Participants covered by Prior Plan. Notwithstanding
the preceding provisions of this Section, for a Participant who
was participating in the Prior Plan immediately prior to January
1, 1989, his Basic Benefit shall not be less than (1) his Basic
Benefit under the Prior Plan as in effect immediately prior to
January 1, 1989, calculated as of December 31, 1988 for any
Participant who is a Highly-Compensated Employee, or (2) his
Basic Benefit under the Prior Plan as in effect immediately prior
to January, 1 1989 calculated as of December 31, 1989 or the date
of his separation from service with the Prior Employer, if
earlier, for any Participant who is not highly compensated.
5.4 Special Section 401(a)(17) Provision Regarding Plan Benefits
- --- ------------------------------------------------------------
(a) Application. This Section shall apply only to those Participants
whose current accrued Plan benefit as of or after January 1, 1994
is based on Earnings (1) incurred during at any time prior to
January 1, 1994, (2) in excess of $150,000.
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(b) Calculation of accrued Plan benefit. Unless otherwise provided
under the Plan, each such Participant's accrued Plan benefit
shall be the greater of (1) or (2):
(1) the Participant's accrued Plan benefit determined under the
Plan, as amended effective on or after January 1, 1994, as
applied with respect to his total Accrual Service performed
as of such a date, or
(2) The sum of:
(A) the Participants's accrued Plan benefit as of
December 31, 1993, frozen as provided in Code
Regulation Section 1.401(a)(4)-13, and
(B) the Participant's accrued Plan benefit
determined under the Plan, as amended effective
on or after January 1, 1994, as applied with
respect to his Accrual Service performed on or
after January 1, 1994.
5.5 Minimum Basic Benefit for Certain Participants
- --- ----------------------------------------------
(a) 1978 Rule Participants. Paragraph (b) of this Section shall apply
only to an Employee (i) who was a Participant on and immediately
prior to January 1, 1978, and (ii) who (x) had reached his Normal
Retirement Date prior to January 1, 1978 or (y) remained in the
employment of the Employer until his Normal Retirement Date which
occurs on or after January 1, 1978 ("1978 Rule Participant").
(b) Formula for 1978 Minimum Benefit. Notwithstanding the provisions
of Section 5.2(b) or the applicable provisions of the Prior Plan
as in effect immediately prior to January 1, 1978, a 1978 Rule
Participant's Minimum Basic Benefit (or for a 1978 Rule
Participant who had reached his Normal Retirement Date prior to
January 1, 1978, his minimum Plan benefit attributable to
Employer contributions) shall equal 1/12th of .75% of his
Earnings for the Plan Year preceding his Late Retirement Date
(or, if he was compensated for less than ten full months during
such year, his Earnings for the last full prior calendar year
during which he was compensated, if greater), multiplied by his
years (and completed months) of Eligibility Service (not in
excess of 20).
(c) 1984 Rule Participants. Paragraph (d) of this Section shall apply
only to an Employee (i) who is a Participant on and immediately
prior to January 1, 1984, and (ii) who has not reached his Normal
Retirement
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Date on January 1, 1984 and remains in the employment of the
Employer until his Normal Retirement Date ("1984 Rule
Participant.")
(d) Formula for 1984 Minimum Benefit. Notwithstanding the provisions
of Section 5.2(b) or the applicable provisions of the Prior Plan
as in effect immediately prior to January 1, 1984, a 1984 Rule
Participant's Minimum Basic Benefit shall equal 1/12th of 0.75%
of his Earnings for the Plan Year 1983 (or, if he was compensated
for less than ten full months during such year, his Earnings for
the last full prior calendar year during which he was
compensated, if greater), multiplied by his years (and completed
months) of Eligibility Service on and after the first day of the
month coincident with or next following the later of (i) his 25th
birthday or (ii) the first anniversary of his Employment Date,
and prior to January 1, 1984.
(e) Formula for those who are subject to both 1978 and 1984 Rules.
For an Employee who is both a 1978 Rule Participant and a 1984
Rule Participant, his Minimum Basic Benefit shall be the amount
determined under paragraph (b) or paragraph (d) of this Section,
whichever is greater.
5.6 Normal Retirement Benefit.
- --- --------------------------
The amount of a Participant's Normal Retirement Benefit under the
Plan shall equal his vested Monthly Accrued Benefit, payable at his
Normal Retirement Date.
5.7 Late Retirement Benefit.
- --- ------------------------
(a) General rule. A Participant's Late Retirement Benefit under the
Plan shall generally equal his Monthly Accrued Benefit payable at
his Late Retirement Date.
(b) Special rule for those who reached age 65 before 1988.
(1) This Subsection applies only to those Participants who
reached age 65 before calendar year 1988.
(2) The Late Retirement Benefit of such a Participant shall equal
the greater of (i) his Monthly Accrued Benefit at his Late
Retirement Date, or (ii) his Monthly Accrued Benefit at his
Normal Retirement Date multiplied by his Late Commencement
Factor as determined in accordance with the following
Subsection (c).
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(3) Further, if the Minimum Basic Benefit rules of Section 5.4
are applicable to such a Participant, then clause (ii) of the
preceding paragraph shall not apply to his Minimum Basic
Benefit (or his minimum Plan benefit).
(c) Late Commencement Factors defined
(1) For the purpose of this Section, a Participant's "Late
Commencement Factor" means for age 70 and under a factor
determined in accordance with the schedule below based on his
age at his Annuity Starting Date (with interpolations for
actual age).
Age Late Commencement Factor
--- ------------------------
66 1.10
67 1.20
68 1.30
69 1.40
70 1.50
(2) Over age 70, "Late Commencement Factor" means a factor equal
to the Actuarial Equivalent.
5.8 Early Retirement Benefit
- --- ------------------------
(a) Timing affects amount of benefit.
(1) A Participant's Early Retirement Benefit will be affected by
the exact date of his Annuity Starting Date.
(2) Generally, the earlier that his Annuity Starting Date
precedes his Normal Retirement Date, the lower a
Participant's monthly Early Retirement Benefit payment will
be.
(b) Formula for Early Retirement Benefit.
(1) A Participant's Early Retirement Benefit shall equal his
Normal Retirement Benefit at his Early Retirement Date
multiplied by his Early Commencement Factor, as defined in
this Section.
(2) The "Early Commencement Factor" is a factor equal to (A)
minus (B). (A) and (B) shall mean:
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(A) 1.
(B) 1/180 for each of the first 60 months plus
1/360 for each of the next 60 months by which
his Annuity Starting Date precedes his Normal
Retirement Date.
(3) For the purposes of calculating the "Early Commencement
Factor," partial months shall be considered to be whole
months.
5.9 Deferred Vested Termination Benefit.
- --- ------------------------------------
(a) If a Participant has any vested accrued benefit, and his Annuity
Starting Date is on or after his Normal Retirement Date, the
amount of his Deferred Vested Termination Benefit under the Plan
shall equal his Monthly Accrued Benefit at his Deferred Vested
Termination Date.
(b) If a Participant's Vested Percentage is 0%, and his Annuity
Starting Date is on or after his Normal Retirement Date, the
amount of his Deferred Vested Termination Benefit under the Plan
shall equal 100% of his Contributory Benefit at his Deferred
Vested Termination Date, if any, or, if greater, his accrued
benefit attributable to employee contributions (as determined in
Code Section 411(c)(2)).
(c) If a Participant's Annuity Starting Date is prior to his Normal
Retirement Date, the amount of his Deferred Vested Termination
Benefit shall equal the amount determined in paragraph (a) or (b)
of this Section, whichever is applicable, multiplied by his Early
Commencement Factor as determined in the preceding Section.
(d) If any benefit under any welfare plan maintained by the Employer
or Affiliate is dependent on "retirement" under this Plan, then
the receipt of a Deferred Vested Termination Benefit shall not
constitute "retirement."
5.10 Co-ordination with Prior Plan.
- ---- ------------------------------
(a) The monthly amount of any Plan benefit being paid to a Former
Participant or any joint annuitant or Beneficiary immediately
prior to the Effective Date under the Prior Plan shall continue
to be paid to such payee on and after the Effective Date in
accordance with the applicable provisions of the Prior Plan.
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(b) The monthly amount of any Plan benefit which had not commenced as
of the Effective Date for any terminated, Vested Former
Participant whose employment with the Employer had terminated
prior to the Effective Date, shall be determined under the Prior
Plan as in effect on the date of his termination of employment.
However, the provisions of Article VI of this Plan shall apply to
the payment of such Plan benefits. Further, if the Annuity
Starting Date is prior to his Normal Retirement Date, the amount
of the payment shall be calculated using the Early Commencement
Factor as determined in accordance with this Article of this
Plan.
5.11 Effect of Deferred Payment
- ---- --------------------------
If a Participant or Former Participant who was eligible to retire
under this Plan has failed to make a Proper Application for his Plan Benefit,
so that his benefit commencement date falls after the date he terminates
employment, he shall receive, in a lump sum, an amount equal to all payments
that would have been made (but were not made), due to the delay. Similarly, a
retroactive, lump sum payment will be made if the amount of the Plan benefit
cannot be immediately ascertained by the Committee or its delegates, or if the
payee cannot be immediately located. However, there shall be no actuarial
adjustment made, under this Section.
5.12 Effect of Reemployment After Receipt of Plan Benefits
- ---- -----------------------------------------------------
(a) Reemployment. If a Former Participant who is receiving a Plan
benefit becomes re-employed as an Employee of the Employer or an
Affiliate, the payment of his Plan benefits shall immediately
cease.
(b) Suspension of Benefits. Generally, suspension of benefits under
this Section shall occur only if the re-employed Employee shall
be working a full-time schedule, as determined by the Employer
under ERISA.
(c) Offset for Error. Should such a suspension permitted under this
Section not take place, through administrative error or any other
reason, then the amounts which were paid but which were also
suspendable may be offset from future Plan benefits. Offsets may
also be taken against any survivor benefits, with respect to the
Participant.
(d) Proper Notice. No suspension of benefits under this Section may
take place unless proper notice is sent to the individual during
the calendar month of the suspension, under ERISA.
(e) Recommendation of Benefits. Plan payments to the individual shall
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recommence, generally within four months after his period of
reemployment has ended, provided he has made Proper Application
(with 90 days advance notice) for their recommencement.
(f) Amount of Benefit. Such an individual's ultimate Plan benefit
shall be reduced by the Actuarial Equivalent of Plan benefits he
has already received, but in no event shall his monthly benefit
be reduced below the amount that he was receiving, before his
reemployment and suspension of benefits.
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ARTICLE VI. PAYMENT OF RETIREMENT AND DEATH BENEFITS
6.1 How to Retire
- --- -------------
(a) General rules. Except as provided in the next Section, no Plan
benefit shall be paid unless Proper Application is made to the
Committee.
(b) Eligibility for Benefits. Each Participant or Beneficiary will be
eligible to receive a Plan benefit only when:
(1) the Participant is vested in an accrued Plan benefit, under
Article IV,
(2) the Participant has terminated his employment with the
Employer and all Affiliates, under that employer's
procedures, and
(3) the payee has met all the requirements of this Article,
particularly those described in the next paragraph.
(c) Making "Proper Application" - required forms.
(1) Retirement and death benefits will be paid only after "Proper
Application" has been made. For all purposes under this Plan,
the term "Proper Application" shall mean making any election,
granting any consent, giving any notice or information, and
making any communication whatsoever to the Committee or its
delegates, in compliance with all Plan procedures, on forms
provided by the Committee, and providing all information
required by the Committee. A Proper Application will be
deemed to have been made only if it is properly completed, as
determined by the Committee.
(d) Advance notice to Committee necessary. Generally, at least four
months advance notice must be made to the Committee, in order to
make a Proper Application to elect any particular Annuity
Starting Date.
6.2 Timing of Participant's Benefits
- --- --------------------------------
(a) General rules. Generally, a Participant's Plan benefit will be
paid, under this Article, as soon as is feasible (but no less
than 30 days) after the Retirement Date or Annuity Starting Date
that he has elected, by making a Proper Application.
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(b) Consent to distribution. With respect to this Article, making a
Proper Application for a Plan distribution shall be considered as
giving written consent to such a distribution.
(c) Payments made only on the first of the month. All benefits paid
under the Plan will be paid only as of the first day of any
relevant month. Any Retirement Date or Annuity Starting Date must
therefore fall on the first day of a month.
(d) Deferred Vested Termination Benefit rules.
(1) Normally, the Annuity Starting Date for any Participant
receiving a Deferred Vested Termination Benefit will be his
Normal Retirement Date.
(2) However, if a Participant who is eligible to receive a
Deferred Vested Termination Benefit has also completed ten
years of Accrual Service, then the Participant may make
Proper Application (with 60 days advance notice) to elect an
Annuity Starting Date with respect to his Deferred Vested
Termination Benefit that is:
(A) before his Normal Retirement Date, and
(B) after his 55th birthday.
(e) Final monthly payment. The final monthly payment of any Plan
annuity payment shall be made with respect to the month within
which the death of the Participant or his Beneficiary (whichever
is applicable) occurs.
(f) Deferred payments. Any failure to make Proper Application (as
determined within the sole discretion of the Committee), shall be
deemed to be a Proper Application to defer payment, provided that
deferred payment is permitted under this Section.
(g) Required payment date of small amounts. If the lump sum Actuarial
Equivalent of a Participant's vested Plan benefit equals or is
less than $5,000 (or any other figure set by the Code), then a
lump sum payment of such an amount shall be made as soon as is
feasible on or after his death or termination of employment with
the Employer and all Affiliates, subject to this Article. Such a
payment shall not be deferred;
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and payment shall be made even if the Participant or Beneficiary
fails to make any Proper Application for payment.
(h) General rules for required payment dates. Unless the Participant
elects to defer his benefit payment, Plan benefits will be paid
under this Article no later than the 60th day after the close of
the plan year in which the latest of the following events occurs:
(1) the Participant's Normal Retirement Date
(2) the 10th anniversary of the year in which the Participant
commenced participation in the plan
(3) the Participant terminates service with the Employer.
(i) Payments following age 70 1/2. Notwithstanding any contrary
provision of this Plan, payments to each Participant must begin
no later than the April 1st of the calendar year following the
calendar year in which he attains age 70 1/2 or separates from
service, unless otherwise required by law. With respect to any
required minimum distribution prescribed by Code Section
401(a)(9), there shall be no annual recalculation of life
expectancies.
(j) Payments on Account of Participant's Death
(1) Distribution begun before death. If the distribution of a
Participant's benefit has commenced under this Article prior
to his death, then the payment of any remaining portion that
is payable under this Article shall be paid to the
Beneficiary as soon as is practicable. The schedule of such
payments shall be at least as rapid as the schedule used at
the Participant's death. In this event, there shall be no
permitted deferral of payment.
(2) Distribution paid after death to non-spouse Beneficiary. If
the Participant dies before distribution under this Article
has begun, then the payment under this Article to any
non-spouse Beneficiary shall be made:
(A) As soon as is feasible, but no later than five
calendar years following the date of death, if
the Beneficiary is not the surviving, legally
married spouse of the Participant, and the
benefit is to be paid in any form except
payments over the life or life expectancy of
the Beneficiary.
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(B) As soon as is feasible, if the benefit is to be
paid over the life or life expectancy of a
non-spouse Beneficiary, but no later than by
December 31 of the calendar year immediately
following the calendar year in which the
Participant died.
(3) Distribution paid to Eligible Spouse
(A) Distributions to an Eligible Spouse under a
QJSA shall be paid as soon as is feasible.
(B) Distributions paid to an Eligible Spouse under
a QPSA shall be paid as provided in Section 6.8.
6.3 Normal Form of Benefits
- --- -----------------------
(a) Normal form for married Participant. The normal form of
retirement benefit for any married Participant who has an
Eligible Spouse on his Annuity Starting Date shall be a Qualified
Joint and Survivor Annuity, or a "QJSA."
(b) Normal form for unmarried Participant. The normal form of benefit
for any Participant who does not have an Eligible Spouse as of
his Annuity Starting Date shall be a single life annuity paid for
his life.
6.4 Notice and Election Period
- --- --------------------------
(a) Notice concerning benefits. The Committee shall distribute to
each Participant at least 90 days before his Annuity Starting
Date a written explanation of:
(1) the QJSA;
(2) how the Participant may waive the QJSA;
(3) the effect of the Participant's waiver of the QJSA;
(4) the need for the Participant's Eligible Spouse to consent to
such a waiver, before the waiver can be effective, and
(5) the Participant's and the spouse's right to revoke their
waiver or consent (respectively), during the Election Period
(which is described in the next paragraph).
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(b) Election Period. For the purposes of this Article, the Election
Period shall be the 90 calendar day period preceding any
Participant's Annuity Starting Date. The last business day
preceding the Annuity Starting Date is the last day of the
Election Period.
6.5 Waiver and Spousal Consent Necessary for Optional Forms of Benefit
- --- ------------------------------------------------------------------
(a) General rules. A married Participant may elect an optional form
of benefit, in lieu of the normal form of benefit, only if he and
his spouse meet all the requirements of this Section.
(b) Waiver.
(1) After receiving the notice explaining the normal form of
benefit, described in the preceding Section, the married
Participant must waive his right to the normal form of
benefit, by making a Proper Application concerning his
waiver.
(2) The waiver shall specify the optional benefit, and, if
applicable, the designated nonspouse Beneficiary (or any
single or class of contingent Beneficiaries).
(c) Spousal consent.
(1) After the Participant's receipt of notice explaining the
normal form of benefit, described in the preceding Section,
the Participant's Eligible Spouse must give written consent
to the Participant's waiver of the normal form of benefit, in
order for the waiver to be effective. (The Committee's
delivery of the explanatory notice to the Participant shall
be deemed to also be delivery to the Eligible Spouse.) The
Eligible Spouse's written consent shall be made by Proper
Application and shall:
(A) express the effect of waiving the normal form of benefit;
(B) be notarized;
(C) consent to the optional form of benefit being selected;
(D) consent to a designated Beneficiary other than herself,
if applicable, and
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(E) state whether or not the consent is revocable.
However, if the consent form is silent as to
this issue, then it shall be considered to be
revocable, under the terms of this Section.
(2) If the Participant has designated a Beneficiary other than
his spouse, then such a designation shall not be effective
unless the spouse gives written consent to the Beneficiary
designation, by making Proper Application. This consent must
state that the Beneficiary cannot be changed further without
further spousal consent, unless the written consent form
explicitly states that no such further consent with respect
to another change in designated Beneficiary is necessary.
(3) Any waiver of a QJSA or any spousal consent described in this
Section shall be binding only upon the individual spouse who
gives the consent. It shall not be binding upon any
subsequent spouse of the Participant.
(d) Deadline for waiver and spousal consent. To be effective, the
Participant's waiver of his normal form of benefit and his
Eligible Spouse's written consent must be made by Proper
Application during the 90 day Election Period.
(e) Revocation of waiver and spousal consent. Both the Participant's
waiver of the QJSA and his Eligible Spouse's consent to the
waiver may be revoked within the Election Period, by making
Proper Application. Any such revocation will cause the normal
form of benefit to be paid to the Participant, unless another
waiver and consent is made by Proper Application, within the
Election Period. Notwithstanding the previous provisions of this
paragraph, a revocation of the Eligible Spousal consent shall not
be permitted if the forms on which the consent were made
explicitly disallow such a spousal revocation.
6.6 Optional Forms of Benefit
- --- -------------------------
(a) Procedural rules. A Participant may elect an optional form of
benefit, rather than the normal form described in Section 6.3, if
he meets the requirements of the preceding Section, and makes a
Proper Application.
(b) Value of optional forms. Each optional form of benefit described
in this Section shall equal the Actuarial Equivalent of the
normal form of benefit that would be paid with respect to the
Participant as of his
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Normal Retirement Date.
(c) Optional forms available. The optional forms of benefit offered
under the Plan are:
(1) Single life annuity.
(2) Joint and survivor annuity, with any person designated by the
Participant as his joint annuitant (and Beneficiary) and with
the survivor annuity equal to a percentage, not less than 50%
and not in excess of 100%, designated by the Participant, of
the annuity payable for the life of Participant.
(3) Single life annuity with a period certain guarantee of 10,
15, or 20 years or, if less, the joint life and last survivor
life expectancy of the Participant and his Beneficiary at his
Annuity Starting Date. Upon the death of the Participant
prior to the expiration of the period certain, monthly
payments shall continue to the Beneficiary if the Beneficiary
survives the Participant or, if the Beneficiary has
predeceased the Participant or if no proper contingent
Beneficiary designation is in effect at the Participant's
death, the Actuarial Equivalent of the remaining payments
shall be paid to the Participant's next Beneficiary in a lump
sum. Upon the death of the Participant after expiration of
the period certain, no further payments shall be made under
this option. Upon the death of the properly designated
Beneficiary who survived the Participant prior to expiration
of the period certain, the Actuarial Equivalent of the
remaining payments shall be paid to the Beneficiary's
Beneficiary in a lump sum.
(4) For a Participant whose Annuity Starting Date is prior to the
earliest date Social Security old-age benefits are payable, a
level-income single life annuity taking into account the
estimated amount of Social Security old-age benefits payable
commencing at such date.
(d) Restrictions as to optional forms.
(1) Notwithstanding the foregoing, no optional form of payment
shall provide only for a survivor benefit to the
Participant's Beneficiary after his death.
(2) Under any optional form of payment, the present value of the
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payments to be made to the Participant while living must
exceed 50% of the present value of the total payments to be
made to the Participant and any joint annuitant, Beneficiary
or other survivor (other than his Eligible Spouse).
(3) Any optional form of payment shall provide for payment (i)
over the life of the Participant, (ii) over the lives of the
Participant and his Beneficiary, (iii) over a period not
exceeding the life expectancy of the Participant, or (iv)
over a period not exceeding the life expectancies of the
Participant and his Beneficiary.
6.7 Suspending Plan Payments Upon Reemployment.
- -----------------------------------------------
Plan payment under this Article will be suspended, if the Former
Participant becomes re-employed; as set out in Section 5.11.
6.8 Qualified Pre-Retirement Survivor Annuity
- --- -----------------------------------------
(a) Eligibility for QPSA. A Qualified Pre-Retirement Survivor
Annuity, or "QPSA," will be paid only in the event that a
Participant dies:
(1) with a surviving Eligible Spouse, as of his date of death,
and
(2) one of the following:
(A) while in active employment with the Employer, or
(B) after his termination of employment with the
Employer, but before his Annuity Starting Date.
(b) QPSA is paid to Eligible Spouse. The QPSA shall be paid, under
this Section, to the Eligible Spouse of a Participant who meets
the requirements of the preceding Subsection.
(c) Amount of QPSA.
(1) A QPSA shall be paid only with respect to the Participant's
vested, accrued Plan benefits. The precise amount of QPSA is
determined by referring to the 50% survivor benefit that
would have been payable, with respect to the Participant's
death, had he elected a 50% QJSA and had he died at the dates
described in this Subsection. Different dates apply,
according to the Participant's age and service history at the
time of his death.
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(2) If an eligible Participant dies after his Normal Retirement
Date, then the QPSA shall equal the 50% QJSA survivor benefit
that would have been payable had he retired with a 50% QJSA
on the day before his actual date of death, so that his QJSA
Annuity Starting Date would have been the date before his
actual date of death (or the first day of the next month).
(3) If a Participant dies (i) with 10 years of Accrual Service,
and (ii) before his Normal Retirement Date, but (iii) after
his 55th birthday, then the QPSA shall, as in the preceding
paragraph, equal the 50% QJSA survivor benefit that would
have been payable had he retired with a 50% QJSA on the date
before his actual date of death, so that his QJSA Annuity
Starting Date would have been the date before his actual date
of death (or the first day of the next month).
(4) If a Participant dies (i) before his Normal Retirement Date,
and (ii) before completing 10 years of Accrual Service, then
the amount of the QPSA shall equal the 50% QJSA survivor
benefit that would have been payable had he (a) survived, (b)
terminated employment as of either his actual termination
date, or his actual date of death (whichever came first), (c)
elected his Normal Retirement Date as his Annuity Starting
Date, and (d) died the next day.
(5) If a Participant dies (i) before his 55th birthday, and (ii)
after completing 10 years of Accrual Service, then the amount
of the QPSA shall equal the 50% QJSA survivor benefit that
would have been payable had he (a) survived, (b) terminated
employment as of either his actual termination date, or his
actual date of death (whichever came first), (c) elected the
first day of the month coincident with or next following his
55th birthday as his Annuity Starting Date, and (d) died the
next day.
(6) With respect to the four preceding paragraphs, in the event
that the Participant dies after his active employment has
ended, the four preceding paragraphs shall not be construed
to credit the Participant with any Accrual Service or
accruals that he had not earned, as of his termination of
employment.
(d) Special rule for amount of QPSA if optional benefit has been
elected. If a QPSA is payable with respect to a Participant who
had made a Proper Application for an optional form of benefit
which would have provided annuity payments to the Participant and
his Eligible Spouse, then,
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notwithstanding any other provisions of this Section, the amount
of the QPSA shall equal the Actuarial Equivalent of the survivor
benefit under the elected optional form of benefit.
(e) Form of the QPSA. The QPSA shall be paid in monthly installments,
over the life of the surviving Eligible Spouse.
(f) QPSA is subsidized. Participants are not charged, under this
Plan, for their right to a QPSA.
(g) Commencement of QPSA payments. QPSA payments shall generally be
made as soon as is feasible following the Eligible Spouse's
Proper Application. Eligible Spouses may not defer payment later
than the first day of the month coincident with or following:
(1) the Participant's 55th birthday - with respect to a
Participant who had earned 10 years of Accrual Service and
died before age 55
(2) the date of death - with respect to Participant's who had
earned 10 years of Accrual Service and died after age 55
(3) The Participant's Normal Retirement Date - with respect to
Participant's who died with less than 10 years of Accrual
Service.
6.9 Form of Benefit Fixed as of Annuity Starting Date
- --- -------------------------------------------------
(a) General Rule. The form of any Plan benefit is fixed as of the
Annuity Starting Date, and is not subject to change, except with
respect to the provision of any survivor benefit under a QJSA or
optional form of benefit.
(b) QDRO Exception. Should a QDRO become effective after a
Participant's Annuity Starting Date, the Plan payments may be
divided, as provided for under the QDRO, but the total monthly
payment that had been made monthly under Plan (before the QDRO)
shall not be changed.
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ARTICLE VII. IN-SERVICE WITHDRAWAL AND RETURN OF
CONTRIBUTIONS
7.1 In-Service Withdrawal of Pre-1970 Employee Contributions
- --- --------------------------------------------------------
(a) Withdrawal of Accumulated Contributions Benefit. A Contributing
Participant may at any time prior to his Annuity Starting Date,
by making Proper Application at least 30 days in advance,
withdraw all of his Accumulated Contributions Benefit.
(b) No Partial Withdrawal. Such a withdrawal must be made of all of
the Participant's Contributory Benefit; no partial withdrawal
shall be permitted.
(c) Spouse' Consent Required. However, if the amount of a
Participant's Contributory Benefit exceeds $5,000, then a married
Participant may make such a withdrawal only if his spouse gives
her written, notarized consent, under Committee procedures.
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ARTICLE VIII. THE TRUST, FUNDING AND CONTRIBUTIONS
8.1 Contributions to the Trust Fund
- --- -------------------------------
(a) General Rule. The Employer shall make contributions under this
Plan to the Trust Fund at least once each quarter during each
Plan Year. Notwithstanding the preceding sentence, the Committee
may direct that Contributions be made on a different schedule, as
permitted by the Code, without formal Plan amendment.
(b) Amount of Contributions. The amount of such contributions shall
be the amount recommended by the Plan's enrolled actuary, in
compliance with the Code and ERISA, to fund Plan benefits.
(c) No Contributions By Employees. Contributions by Employees shall
not be permitted.
(d) Determination of Necessary Contributions. An enrolled actuary
hired by the Committee shall make an annual actuarial valuation
to estimate the Employer contributions necessary under this
Article.
8.2 The Trust
- --- ---------
(a) Trust Agreement. Amounts contributed to the Trust shall be
managed and invested, according to the Trust Agreement.
(b) Funding Policy. The Company shall, to the extent allowed under
the Trust, establish a funding policy and method, consistent with
the objectives of the Plan the applicable requirements of ERISA
and the Code.
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ARTICLE IX. AMENDMENT AND TERMINATION
9.1 Power to Amend Plan
- --- -------------------
(a) General Rule. The Company, by action of the Board, may, subject
to this Section, at any time modify or amend, in whole or in
part, any or all of the provisions of the Plan. Any such
amendment shall be by an instrument in writing executed by the
Board, under its by-laws. Upon the execution of any such
instrument, the Plan shall be deemed to have been amended in the
manner therein set forth.
(b) Parties Bound. The Employer, the Trustee and each Employee,
Participant, Former Participant, Eligible Spouse, Beneficiary or
any person claiming under or through any of the foregoing shall
be bound by any such amendment. However, no such amendment shall
make it possible for any of the assets of the Trust Fund to be
used for or diverted to purposes other than for the exclusive
benefit of Participants and their beneficiaries, increase the
duties or responsibilities of the Trustee without its consent
thereto, or adversely affect any benefits accrued by any
Participant prior to such amendment, except as provided in
Article XI.
9.2 Power to Terminate Plan
- --- -----------------------
Although the Company intends to maintain the Plan indefinitely, the
Company, by action of the Board, may terminate the Plan.
9.3 Allocation of Assets Upon Termination
- -----------------------------------------
(a) General rule. In the event of termination of the Plan, the Plan
Administrator shall, subject to the approval of the Committee,
allocate the assets of the Trust Fund that are available among
the applicable Participants, Former Participants, and appropriate
Beneficiaries in the manner set forth in Section 4044 of ERISA.
(b) Full vesting upon termination or partial termination. Upon
termination or partial termination of the Plan as to any
Participants hereunder, all rights of such Participants to their
accrued Plan benefits theretofore accrued shall become
non-forfeitable to the extent then funded.
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9.4 Reversion of Assets Upon Termination
- --- ------------------------------------
Any Trust Fund assets which remain by reason of actuarial error after
all liabilities of the Plan to applicable Participants, Former Participants,
and other persons have been satisfied and all expenses of terminating the Plan
as to any such persons and liquidating the Trust Fund assets have been paid,
shall upon direction of the Committee be paid to the Company, provided such
payment does not contravene any applicable provisions of law.
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ARTICLE X. LIMITATION OF BENEFITS
10.1 Construction
- ---- ------------
The purpose of this Article is to comply with the provisions of
section 415 of the Code, and all terms and provisions of this Article shall be
interpreted and construed consistently with said provisions. The provisions of
this Article shall apply notwithstanding any contrary provision of the Plan.
10.2 Definitions
- ---- -----------
Solely for the purposes of this Article:
Annual Addition. "Annual Addition" means the sum for any Limitation Year of
(a) employer contributions to a plan (or portion thereof) subject to section
415(c) of the Code maintained by the Employer or an Affiliate, (b) forfeitures
under all such plans (or portions thereof), if any, credited to employee
accounts, (c) employee contributions under all such plans (or portions
thereof), and (d) amounts described in section 419A(d)(2) of the Code
(relating to post-retirement medical benefits of Key Employees (as defined in
the Article entitled "Top Heavy Provisions.")) or allocated to a pension plan
individual medical account described in section 415(l) of the Code to the
extent includable for purposes of section 415(c)(2) of the Code. The employee
contributions described in clause (c) shall be determined without regard to
(i) any rollover contributions, (ii) any repayments of loans, or (iii) any
prior distributions repaid to a plan upon the exercise of buyback rights.
Employer and employee contributions taken into account as Annual Additions
shall include "excess contributions" as defined in section 401(k)(8)(B) of the
Code, "excess aggregate contributions" as defined in section 401(m)(6)(B) of
the Code and "excess deferrals" as described in section 402(g) of the Code (to
the extent such deferrals are not distributed to the Participant before the
April 15th following the end of the taxable year of the Participant in which
such deferrals were made), regardless of whether such amounts are distributed
or forfeited. The Annual Additions for any year beginning before January 1,
1987 shall be determined under the law as in effect for such year and shall
not be recomputed to treat all employee contributions as Annual Additions.
Compensation Limit. "Compensation Limit" means 100% of the Participant's
average annual Earnings for the three consecutive years in which his Earnings
were highest.
Dollar Limit. "Dollar Limit" means, subject to the Section of this Article
entitled "Protection of Current Accrued Benefit," $90,000 as adjusted from
time to time (beginning in 1988) to reflect increases in the cost of living
pursuant to applicable
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regulations. The adjustment required pursuant to the preceding sentence for
any year shall be the cost of living adjustment which is effective as of the
January 1 which occurs in such year. No such adjustment shall be taken into
account before the year for which such adjustment first takes effect.
Earnings. "Earnings" for any year shall have the meaning set forth in Treas.
Reg. ss. 1.415-2(d)(11)(i).
10.3 Limitation on Annual Benefits
- ---- -----------------------------
(a) Unadjusted Limit. If a Participant's Plan benefit is payable as a
single life annuity or a QJSA, the annual amount of benefit
payable to the Participant shall not exceed the lesser of the
Dollar Limit or the Compensation Limit.
(b) Optional Payment Forms. If a Participant's Plan benefit is
payable in any form other than a single life annuity or a QJSA,
the annual amount of benefit payable to the Participant shall not
exceed the Actuarial Equivalent of a single life annuity which
does not exceed the lesser of the Dollar Limit or the
Compensation Limit. In making such actuarial adjustment, (a) the
actuarial assumptions used shall be those set forth in the Plan,
as appropriate according to the form and date of payment,
provided that the interest assumption used shall generally not be
less than 5%, and (b) no adjustment shall be made for any
ancillary benefit provided under the Plan (if applicable) which
is not directly related to retirement benefits, including,
without limitation, disability benefits, medical benefits, and
pre-retirement death benefits, and any death benefit coverage
described in the Plan.
(c) Multi-employer Plans. Any benefits provided under any
multi-employer plan to which the Employer or any Affiliate is a
party shall be taken into account under this Article only to the
extent that the benefits provided under such plan exceed the
benefits that would have been provided under such plan if the
Participant had no service with the Employer or any Affiliate.
10.4 Adjustments for Early or Late Payment
- ---- -------------------------------------
(a) Payments Starting Before Social Security Retirement Age But After
Age 62. If a Participant's Plan benefit begins before his Social
Security Retirement Age but on or after the date he attains age
62, the Dollar Limit shall be reduced: (1) if the Participant's
Social Security Retirement Age is 65, by 5/9th of 1% for each
month by which the
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commencement of payment of his Plan benefit precedes the month in
which he attains age 65; or (2) if the Participant's Social
Security Retirement Age is 66 or 67, by 5/9th of 1% for each of
the first 36 months and 5/12th of 1% for each additional month by
which the commencement of payment of his Plan benefit precedes
the month in which he attains his Social Security Retirement Age.
(b) Payments Starting Before Age 62. If a Participant's Plan benefit
begins before age 62, the Dollar Limit shall be reduced in
accordance with applicable regulations (using the actuarial
assumptions set forth in the Actuarial Equivalent, this Plan,
provided that the interest assumption used shall be not less than
5%), so that it is equivalent to the Dollar Limit as applied to a
pension beginning at age 62.
(c) Payments Starting After Social Security Retirement Age. If a
Participant's Plan benefit begins after his Social Security
Retirement Age, the Dollar Limit shall be increased in accordance
with applicable regulations (using the actuarial assumptions set
forth in the Actuarial Equivalent, provided that the interest
assumption shall not exceed 5%) so that it is actuarially
equivalent to the Dollar Limit as applied to a pension beginning
at his Social Security Retirement Age.
10.5 Conditional Exemption for Pensions Under $10,000
- ---- ------------------------------------------------
The Compensation Limit shall not be applicable to any Plan benefit
with respect to a Participant for any year if (a) the annual amount of
employer-provided retirement benefits payable with respect to such Participant
under this Plan and all other defined benefit plans of the Employer and all
Affiliates does not exceed $10,000 for such year or any prior year, and (b)
such Participant never participated in any defined contribution plan
maintained by the Employer or an Affiliate.
10.6 Participants with Fewer Than Ten Years of Service
- ---- -------------------------------------------------
If a Participant has fewer than 10 years of Service in the aggregate
with the Employer and all Affiliates at the time his Plan benefit starts, the
Compensation Limit and the $10,000 limit described in the Section of this
Article entitled "Conditional Exemption for Pensions under $10,000" shall be
adjusted by multiplying such amounts by a fraction (a) the numerator of which
is the Participant's number of years of Service (and fraction thereof) and (b)
the denominator of which is 10. In no event shall such fraction be less than
1/10th.
10.7 Participants with Fewer Than Ten Years of Participation
- ---- -------------------------------------------------------
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If a Participant has been credited with fewer than 10 "Years of
Participation," the Dollar Limit shall be adjusted by multiplying such amount
by a fraction (a) the numerator of which is the Participant's number of Years
of Participation in the Plan (and fraction thereof) and (b) the denominator of
which is 10. In no event shall such fraction be less than 1/10th. "Years of
Participation" means years of Service for which the Participant is credited
with future Service benefits excluding any such year of Service credited (a)
for a Plan Year prior to the Plan Year in which the individual first became a
Participant, (b) for any period of disability during which the Participant was
not permanently and totally disabled (within the meaning of section 22(e)(3)
of the Code), and (c) for any period prior to the Effective Date.
10.8 Benefits Payable under More Than One Defined Benefit Plan
- ---- ---------------------------------------------------------
If benefits that are subject to the limitations of section 415 of the
Code are payable under any other defined benefit plan maintained by the
Employer or an Affiliate, the benefits payable under this Plan, as limited by
this Article, shall be subject to further limitation in order that the amount
of employer-provided benefits payable under all defined benefit plans
maintained by the Employer and all Affiliates shall not, in the aggregate,
exceed the benefit limitations described in this Article. If a reduction in
the benefits under such defined benefit plans in the aggregate is thus
required, such reduction shall be applied in the reverse order in which
benefits under,such plans would otherwise accrue except as any such other plan
may otherwise expressly provide, provided that benefits under any
multi-employer plan shall be reduced last.
10.9 Participation in Defined Contribution Plan
- ---- ------------------------------------------
(a) Combined Limitation. Subject to the later paragraph of this
Subsection, entitled "Adjustment of Defined Contribution Plan
Fraction," if a Participant participates (or participated) in one
or more defined contribution plans maintained by the Employer or
an Affiliate (including any plan so considered as a result of any
employee contributions to a defined benefit plan) the sum of his
Defined Contribution Plan Fraction and Defined Benefit Plan
Fraction as of the close of any year shall in no event exceed
1.0. In order to prevent such sum from exceeding 1.0, benefits
under this Plan shall be reduced to the extent necessary for that
purpose. Such reduction shall be made prior to any reduction of
allocations of Annual Additions under such defined contribution
plans which would otherwise be made in order to prevent such sum
from exceeding 1.0.
(b) Defined Contribution Plan Fraction Determination. For purposes of
this Section, a Participant's "Defined Contribution Plan
Fraction" shall
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be determined as follows:
(1) Numerator. For any year, the numerator shall be the sum of
the Annual Additions to the Participant's accounts under all
such defined contribution plans maintained by the Employer or
an Affiliate in such year and in all prior years.
(2) Denominator. For any year, the denominator shall be the sum
of the lesser of the following amounts, determined for such
year and for each prior year of service with the Employer and
all Affiliates as if the Participant were covered by a
defined contribution plan maintained by the Employer or
Affiliates for all such years, but were not covered by any
defined benefit plan for any such year:
(A) 125% of the maximum dollar limitation
applicable to defined contribution plan
allocations for such year (as provided in
section 415(c)(1)(A) of the Code determined
without regard to section 415(c)(6)), or
(B) 35% of the Participant's Earnings for such year.
(c) Notwithstanding the foregoing, in computing the denominator of
the Defined Contribution Plan Fraction for any year ending after
1982, the Committee may elect to determine the portion of such
denominator which relates to 1982 and prior years under the
method described in section 415(e)(6) of the Code, in lieu of the
method described above. Such election may be made at such time
and in such manner as may be provided in applicable Treasury
regulations.
(d) Defined Benefit Plan Fraction Determination. For purposes of this
Section, a Participant's "Defined Benefit Plan Fraction" shall be
determined as follows for any year:
(1) Numerator. The numerator shall be the total projected annual
benefit (as defined in section 415(b)(2) of the Code) of the
Participant under all defined benefit plans maintained by the
Employer or any Affiliate as of the close of such year, as
determined for each such plan for purposes of section
415(e)(2)(A) of the Code, disregarding benefits derived from
employee contributions.
(2) Denominator. The denominator shall be the lesser of the
following amounts:
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(i) 125% of the Dollar Limit, deter mined after
giving effect to the Section of this Article
entitled "Protection of Current Accrued
Benefit", or
(ii) 140% of the Compensation Limit.
For purposes of computing the denominator of the Defined
Benefit Plan Fraction, (A) the Dollar Limit and the
Compensation Limit shall be determined as if years of Service
for purposes of the Section of this Article entitled
"Participants with Fewer than Ten Years of Service" included
future years before the Participant will attain age 65,
provided that the year in which the Participant will attain
age 65 shall not count as a future year unless it can be
reasonably anticipated that the Participant will receive a
year of Service for such year and (b) the Dollar Limit shall
be determined as if all years of Service (determined after
application of clause (A) above) were Years of Participation
(and fractions thereof) solely for purposes of the Section of
this Article entitled "Participants with Fewer than Ten Years
of Participation."
(e) Adjustment of Defined Contribution Plan Fraction. If the sum
of a Participant's Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction determined as of December 31, 1986
would have exceeded 1.0 had the provisions of this Article as
in effect after December 31, 1986 been used to compute such
sum, an amount shall be subtracted from the numerator of the
Defined Contribution Plan Fraction (not exceeding such
numerator) so that the sum of the Defined Contribution Plan
Fraction and Defined Benefit Plan Fraction as of the first
day of the Limitation Year beginning in 1987 does not exceed
1.0. Such amount shall be equal to the product of:
(1) the sum of the Defined Contribution Plan Fraction plus the
Defined Benefit Plan Fraction as of the determination date
minus one, times
(2) the denominator of the Defined Contribution Plan Fraction as
of the determination date.
10.10 Limitation Year
- ----- ---------------
All determinations under this Article shall be made by reference to
the Limitation Year, which shall be the Plan Year.
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10.11 Protection of Current Accrued Benefit
- ----- -------------------------------------
If a Participant's Plan benefit, determined as if the Participant had
terminated employment as of the close of 1986 and expressed in the form of a
Qualified Joint and Surviving Spouse Annuity or a single life annuity, as of
January 1, 1987 exceeds the limitations of this Article, then the Dollar Limit
with respect to such Participant shall be equal to his Plan benefit determined
as described in this Section. The Dollar Limit as so determined shall include
optional benefit forms and early retirement benefits or retirement subsidies
that are protected under section 411(d)(6) of the Code, whether or not the
Participant has met all the requirements to qualify for such forms or benefits
or subsidies, if and to the extent that they remain so protected as of the
date on which the limitations of this Article are applied.
10.12 Rules Regarding 25 Top-Paid Employees
- ----- -------------------------------------
(a) For purposes of this Section, the following terms shall have the
indicated meaning:
Benefits. The term "Benefits" means the sum of the Participant's
accrued benefit and all other benefits to which he is entitled
under the Plan.
Restricted Participant. The term "Restricted Participant" means,
with respect to a Plan Year, a Highly Compensated Employee who is
a Participant and who, if there are more than 25 Highly
Compensated Employees, is one of the 25 Highly Compensated
Employees with the highest Total Annual Pay. An individual who is
a Restricted Participant in a Plan Year shall be a Restricted
Participant in a subsequent Plan Year only if he satisfies the
conditions of the previous sentence in that subsequent Plan Year.
If more than one individual has the same Total Annual Pay, the
younger individual shall be deemed to have the higher Total
Annual Pay.
Total Annual Pay. The term "Total Annual Pay" means, with respect
to any Plan Year, (a) in the case of a Highly Compensated
Employee who is not currently employed by the Employer or an
Affiliate, the greater of his Earnings (as defined in this
Article) for the Plan Year he ceased to be employed by the
Employer or an Affiliate or his Earnings for the Plan Year
immediately preceding such Plan Year and (b) in the case of a
Highly Compensated Employee who is currently employed by the
Employer or an Affiliate, the greater of his Earnings for the
Plan Year in question or for the prior Plan Year.
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(b) Limitation on Distributions. Subject to the further provisions of
this Section, a Restricted Participant may not receive his
benefits under this Plan in the form of a single sum payment, or
other benefit form under which payments during a single year
would exceed the annual payments that would be made on behalf of
the Participant under a single life annuity that is the Actuarial
Equivalent of his Benefits (other than benefits described in
paragraph (c)(1) of this Section.
(c) Application of Limitation. The limitation of this Section shall
not apply to:
(1) payment of benefits attributable to transferred balances from
defined contribution plans or to employee contributions,
(2) any payment, if the value of Plan assets after such payment
equals or exceeds 110 percent of the value of the Plan's
"current liabilities" (within the meaning of section
412(l)(7) of the Code), or
(3) any payment, if the value of the Restricted Participant's
benefits is less than one percent of the value of such
"current liabilities."
(d) Changes in Law. In the event that Congress should provide by
statute, or the Internal Revenue Service should provide by
regulation or ruling, that the limitations set forth in this
section are no longer necessary for the Plan to meet the
requirements of section 401(a) of the Code or other applicable
provisions of the Code then in effect, such limitations shall
become void and shall no longer apply without the necessity of
further amendment to the Plan.
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ARTICLE XI. GENERAL PROVISIONS
11.1 No Contract of Employment
- ---- -------------------------
Nothing contained in the Plan shall be construed as a contract of
employment between the Company, the Employer and any Employee, and the Plan
shall not afford an Employee a right of continued employment with the Company
or the Employer.
11.2 Employer Not Liable for Plan Benefits
- ---- -------------------------------------
All benefits payable under the Plan shall be paid or provided for
solely from the Trust Fund, and neither the Company nor the Employer assumes
any liability or responsibility therefor.
11.3 Exclusive Benefit and Return of Employer Contributions
- ---- ------------------------------------------------------
(a) General Rule. Except as provided in this Section, the assets of
the Trust Fund shall be used for the exclusive purposes of
providing Plan benefits to Participants and their Beneficiaries
and defraying reasonable expenses of administering the Plan.
(b) Tax Deductibility. Contributions are always conditioned upon
their deductibility under Code Section 404.
(c) Return of Contributions. Contributions may be returned to the
Company only:
(1) if a contribution is made to the Trust Fund by the Company
(or the Employer) by a mistake of fact, then such
contribution may be returned to the Company within one year
after the payment of the contribution;
(2) if any part or all of a contribution is disallowed as a
deduction under Section 404 of the Code, then to the extent a
contribution is disallowed as a deduction it may be returned
to the Company within one year after the disallowance;
(3) if the Internal Revenue Service initially determines that the
Plan does not meet the requirements of Section 401(a) of the
Code, the Plan shall be null and void from the Effective Date
and any contributions shall be returned to the Company less
expenses paid unless the Company elects to make the changes
to the Plan
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necessary to receive a determination from the Internal
Revenue Service that the requirements of Section 401(a) are
met;
(4) if the Plan has been terminated, and the rules set out in
Section 9.4 are met, then the excess Plan assets shall revert
to the Company.
11.4 Tax Withholding
- ---- ---------------
The Committee hereby specifically delegates to the Trustee the
responsibility to be liable for income tax withholding, and to withhold the
appropriate amount from any payment made from the Trust to any payee under the
provisions of applicable law and regulation.
11.5 Incompetency or Minority of Payee
- ---- ---------------------------------
(a) General Rule. In the event the Committee determines in its
discretion that any Participant or Beneficiary, receiving or
entitled to receive benefits under the Plan is incompetent to
care for his affairs, and in the absence of the appointment of a
legal guardian of the property of the incompetent, benefit
payments due under the Plan (unless prior claim thereto has been
made by a duly qualified guardian, committee or other legal
representative) may be made to the spouse, parent, brother or
sister or other person, including a hospital or other
institution, deemed by the Committee to have incurred or to be
liable for expenses on behalf of such incompetent
(b) Payment to Adult. In the absence of the appointment of a legal
guardian of the property of a minor, any minor's share of
benefits payable under the Plan may be paid to such adult or
adults as in the discretionary opinion of the Committee have
assumed the custody and principal support of such minor.
(c) Legal Guardian May Be Required. The Committee, however, in its
sole discretion, may require that a legal guardian for the
property of any such incompetent or minor be appointed, before
authorizing the payment of benefits in such situations.
(d) Court Determination. If the Committee is in doubt as to the right
of any person to receive a Plan benefit, the Committee may direct
the Trustee to retain such amount, without liability for any
interest thereon, until the rights thereto are determined, or the
Committee may direct the Trustee to pay such amount into any
court of appropriate
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jurisdiction.
(e) No Verification or Insurance Required. The Trustee shall not be
required to verify or insure that any distributions made to any
third parties under this Section are applied for the benefit of
such minor or incompetent or incapacitated Beneficiary.
11.6 Missing Payees
- ---- --------------
If all or portion of a Participant's vested Plan benefit becomes
payable under the Plan and the Committee after a reasonable search cannot
locate the Participant (or his Beneficiary if such Beneficiary is entitled to
payment), then, five years after the Participant's benefit first became
payable under the Plan, a notice shall be mailed to the last known address of
the Participant. If the Participant does not respond within three months, the
Committee may elect, upon advice of counsel, to remove all records of the
Participant's accrued benefit from the Plan's current records and that benefit
shall be used to offset future Employer contributions. If the Participant or
his Beneficiary subsequently presents a valid claim for benefits to the
Committee, the Committee shall restore and pay the appropriate Plan benefit.
11.7 Alienation and QDROs
- ---- --------------------
(a) General Rule. Except as provided in this Section, no accrued Plan
benefit whether vested or not, shall be subject to alienation,
assignment, pledging, encumbrance, attachment, garnishment;
including but not limited to execution, sequestration, or other
legal or equitable process, or transferability by operation of
law in the event of bankruptcy, insolvency or otherwise.
(b) QDRO Exception. The provisions of the preceding paragraph shall
not prevent the creation, assignment or recognition of any
individual's right to a benefit payable with respect to a
Participant pursuant to a Qualified Domestic Relations Order
(QDRO).
(c) QDRO Definition. "Qualified Domestic Relations Order" or "QDRO"
shall mean any judgment, decree or order which (1) meets the
basic requirements of Code Section 414(p) and further (2) meets
the QDRO requirements set out in the Plan procedures, concerning
domestic relations orders, as determined by the final,
discretionary authority of the Committee.
(d) QDRO Procedures. The Committee shall establish reasonable
procedures to determine whether a domestic relations order is a
QDRO
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and to administer distributions under a QDRO. If any domestic
relations order is received by the Plan, the Committee shall (1)
promptly notify the Participant and any Alternate Payee that the
order has been received and of the Plan's procedures for
determining whether the order is a QDRO and (2) notify the
Participant and each Alternate Payee (or their representatives)
of the Committee's determination.
(e) Definition of Alternate Payee. "Alternate Payee" shall mean any
spouse, former spouse, child or other dependent of a Participant
recognized by a proper domestic relations order as having a right
to receive all, or a portion of, a Participant's benefits under
the Plan, as prescribed under Code Section 414(p).
(f) Court Order After Death. Should any court order be issued after a
Participant's or Alternate Payee's death, it will be considered a
QDRO only if it (1) relates to and reflects an earlier order
issued before death, and (2) meets the QDRO requirements.
(g) Committee Authority. The Committee shall have final,
discretionary authority to administer and interpret any QDRO,
including any uncertain terms.
11.8 Notice to Committee, Elections
- ---- ------------------------------
Any election made or notice given by a Participant pursuant to the
Plan shall be in writing to the Committee or to such representative as may be
designated by it for such purpose and shall be deemed to have been made or
given on the date received by the Committee or its representative.
11.9 Merger or Transfer With Other Plans
- ---- -----------------------------------
The Board shall have the power to fully or partially merge or
consolidate this Plan with any other plan. In the event of any merger or
consolidation of the Plan (by action of the Board) with, or a transfer of the
assets and liabilities of the Plan to, any other plan, each Participant must
(if such other plan were terminated immediately after such merger,
consolidation or transfer) receive a benefit under such other plan which is
equal to or greater than the benefit he would have been entitled to receive
under the Plan (if the Plan had been terminated immediately prior to such
merger, consolidation or transfer).
11.10 Fiduciaries
- ----- -----------
Any person or group of persons may serve in more than one fiduciary
capacity
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with respect to the Plan.
11.11 Plans Shall Comply with Law; and Choice of Law
- ----- ----------------------------------------------
It is intended that the Plan conform to and meet the applicable
requirements of ERISA and the Code. Except to the extent preempted by ERISA,
the validity of the Plan or of any of its provisions shall be determined
under, and it shall be construed and administered according to, the laws of
the State of New York (including its statute of limitations and all
substantive and procedural law, and without regard to its conflict of laws
provisions).
11.12 Deemed Distribution of Unvested Amounts
- ----- ---------------------------------------
Notwithstanding any contrary provision of the Plan, in the event that
(a) a Participant separates from the Service with the Company, and (b) the
Participant has not, as of the date he separates from service, met the Service
and other requirements that would enable him to be 100% vested in all his
accrued Plan benefits, then, (c) as of the date he separates from Service, he
shall be deemed to have received a distribution of his unvested accrued
benefits under the Plan. The amount of this deemed distribution shall be zero.
Following this deemed distribution, the Participant's remaining accrued Plan
benefits shall be only those benefits in which is 100% vested.
11.13 Gender and Number
- ----- -----------------
Whenever any words are used herein in the masculine gender, they
shall be construed as though they were also used in the feminine gender in all
cases where they would so apply, and whenever any words are used herein in the
singular or plural form, they shall be construed as though they were also used
in the other form in all cases where they would so apply.
11.14 Headings
- ----- --------
The headings of Sections and Articles are included solely for
convenience of reference, and if there is any conflict between such headings
and the text of the Plan, the text shall control.
11.15 Illegality of Particular Provisions
- ----- -----------------------------------
The illegality of any particular provision of this Plan shall not
affect the other provisions thereof, but the Plan shall be construed in all
respects as if such invalid provision were omitted.
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11.16 Receipt and Release for Payments
- ----- --------------------------------
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for each Participant,
or Beneficiary in accordance with the provisions of this Plan shall, to the
extent thereof, be in full satisfaction of all claims hereunder against the
Trustee, the Company, and the Employer, any of whom may require such
Participant, legal representative, Beneficiary, guardian or committee, as a
condition precedent to such payment, to execute a receipt and release thereof
in such form as shall be determined by the Trustee or the Company.
11.17 Action by the Company
- ----- ---------------------
Whenever the Company under the terms of this Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
11.18 Mistaken Payments
- ----- -----------------
No Participant or Beneficiary shall have any right to any payment
made (a) in error, (b) in contravention to the terms of the Plan, the Code, or
ERISA, or (c) because the Committee or its delegates were not informed of any
death. The Committee shall have full rights under the law and ERISA to recover
any such mistaken payment, and the right to recover attorney's fees and other
costs incurred with respect to such recovery. Recovery shall be made from
future Plan payments, or by any other available means.
11.19 Participants and Beneficiaries Bound by the Plan
- ----- ------------------------------------------------
All Employees, Participants, Beneficiaries, as well as their heirs,
successors, and assigns shall be bound by the terms of this Plan.
11.20 Direct Rollover Distributions to Other Plans or IRAs
- ----- ----------------------------------------------------
(a) General Rule. A Distributee (as defined in this Section) may
elect, under Plan procedures, to have all or any portion of his
proper Plan distribution transferred in a trust-to-trust transfer
from the Trust Fund to another qualified plan, certain "IRAs" and
certain other vehicles, subject to the restrictions of this
Section.
(b) Definition of "Distributee". For the purposes of this Section
only, a "Distributee" is a Participant, Former Participant,
surviving spouse, or Alternate Payee, who is eligible under the
Plan and Plan procedures to
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receive any Plan distribution. Distributees shall not include any
other non-spouse Beneficiary.
(c) Limits on Distributions Eligible for Direct Rollover. Generally,
all or any portion of the accrued, vested Plan benefit payment
attributable to the Distributee would be eligible for a
trust-to-trust transfer under this Section, provided that the
amount is includable in gross income. However, the following
distributions are not eligible:
(1) periodic payments paid out over the life or life expectancy
of the Distributee (or joint lives of the Distributee and his
Beneficiary);
(2) equal installment payments scheduled to be made over 10 or
more years;
(3) the portion of any distribution that is required to be paid
under Code Section 401(a)(9).
(d) Limits on recipient plans and IRAs. A trust-to-trust transfer
from the Trust Fund under this Section can be made only to the
trustee or custodian of one of the following "eligible retirement
plans" listed below, provided that the transfer is made under
Plan procedures, and that the trustee or custodian accepts the
trust-to-trust transfer. However, only one trust-to-trust
transfer can be made with respect to any single distribution.
Such "eligible retirement plans" are:
(1) a qualified defined contribution plan;
(2) an individual retirement account or "IRA," which holds or
which will hold only amounts attributable to qualified
employer plans, as described by Code Section 408(d)(3);
(3) an individual retirement annuity described in Code Section
408(b); and
(4) an annuity plan described in Code Section 403(a).
(e) Limits on direct rollovers made by surviving spouses.
Distributees who are surviving spouses, but who are not alternate
payees as described by Code Section 414(p), will be able to elect
a trust-to-trust transfer only to an IRA or an individual
retirement annuity, subject to all of the preceding rules of this
Section.
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11.21 Transfers Among Affiliates
- ----- --------------------------
(a) Service among Affiliates credited for eligibility and vesting.
Generally, Service performed for the Employer or any Affiliate
will be credited among all Affiliates for the purposes of
eligibility and vesting. Should a Plan Participant be transferred
and become an Employee of an Affiliate, then he may be eligible
to immediately become a participant in the new employer's plan,
provided that (i) he has sufficient Service under the new plan's
eligibility provisions and (2) he has submitted to the new plan
all the proper forms by the appropriate deadline.
(b) Vesting continues after transfer. Any Participant who transfers
employment to an Affiliate shall not be treated as having
terminated employment for vesting and distribution purposes. That
is, his vesting under the Plan shall continue during his Service
with the Affiliate, and he may not receive a distribution of Plan
benefits until his Service with the Employer and any Affiliate
ceases (or until the April 1, following the year he reaches age
70 1/2 or retires). However, no Accrual Service shall accrue
under this Plan, upon his transfer to the Affiliate.
(c) Transfer following a Break in Service. This Subsection (c)
concerns the situation of an individual who has worked for the
Employer or an Affiliate, terminates employment from that
employer, but does not immediately transfer to the Employer or an
Affiliate. Instead, this Subsection (c) concerns those
individuals who incur a period during which they are not employed
by the Employer or an Affiliate, and then, subsequently, become
reemployed by the Employer or an Affiliate.
(1) If such an individual (described in the introductory
paragraph of this Subsection (c) does not incur a Break in
Service prior to his subsequent reemployment with the
Employer or an Affiliate (determined under the sole
discretion of the administrator of the new employer's plan
under the terms of that plan), then the period of time
preceding his employment with the Employer or an Affiliate
(following his termination with the Employer or Affiliate)
shall be credited for the purpose of eligibility and vesting.
(2) If such an individual has incurred a Break in Service
(determined under the sole discretion of the administrator of
the new employer's plan, under the terms of that plan) then
the terms of the new employer's plan shall govern how the
individual's total service among the Employer and all
Affiliates shall be credited, for the purposes of the new
employer's plan.
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(3) If an individual described in this Subsection (c) has
incurred one or more Breaks in Service under the terms of his
first employer's plan, and has consequently lost the
recognition of pre-Break in Service under the first
employer's plan, then any provisions in the first employer's
plan regarding (i) repayment of distributed amounts back into
the first employer's plan, within five years of "rehire" by
the Employer or an Affiliate in order to have forfeited
amounts restored by the first employer's plan and pre-Break
Service recognized by both plans and (ii) completing one year
of Service with the new employer in order to have forfeited
amounts restored under the former employer's plan and
pre-Break Service recognized by both plans must be
acknowledged and effected by the administrator of the new
employer's plan, as if these provisions in the first
employer's plan were fully a part of the new employer's plan.
It will therefore be necessary for the administrators of the
two plans to share information concerning the individual.
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ARTICLE XII. TOP-HEAVY PROVISIONS
12.1 Applicable Plans Included in Determination of "Top Heavy" Status
- ---- ----------------------------------------------------------------
For purposes of this Article, "Applicable Plans" shall include (a)
each plan of the Employer or an Affiliate in which a Key Employee (as defined
in the next Section for this Plan, and as defined in section 416(i) of the
Code for each other Applicable Plan) participates and (b) each other plan of
the Employer or an Affiliate which enables any plan described in clause (a) of
this sentence to meet the requirements of section 401(a)(4) or 410 of the
Code. Any plan not required to be included under the preceding sentence may
also be included, at the option of the Committee, provided that the
requirements of sections 401(a)(4) and 410 of the Code continue to be
satisfied for the group of Applicable Plans after such inclusion. Applicable
Plans may include terminated plans, frozen plans and, to the extent that
benefits are provided with respect to Service with the Employer or an
Affiliate, multi-employer plans (described in section 414(f) of the Code) and
multiple employer plans (described in section 413(c) of the Code) to which the
Employer or an Affiliate makes contributions.
12.2 "Key Employee"
- ---- --------------
For purposes of this Article, "Key Employee" shall mean an employee
(including a former employee, whether or not deceased) of the Employer or an
Affiliate who, at any time during a given Plan Year or any of the four
preceding Plan Years, is one or more of the following:
(a) An officer of the Employer or an Affiliate having "compensation"
(as defined in section 414(q)(7) of Code) ("Top-Heavy
Compensation") greater than fifty percent (50%) of the maximum
dollar limitation described in the Article entitled "Limitation
of Benefits" for any such Plan Year; provided, that the number of
employees treated as officers shall be no more than 50 or, if
fewer, the greater of three employees or 10% of the employees
(including leased employees as described in Code Section 414),
exclusive of employees described in section 414(q)(8) of the
Code.
(b) One of the 1) employees (a) having Top-Heavy Compensation of more
than the maximum dollar limitation for defined contribution plans
in effect under section 415(c)(1)(A) of the Code and (b) owning
(or considered as owning, within the meaning of section 416(i)
the Code), the largest percentage interests in value of the
Employer or an Affiliate, provided that such percentage interest
exceeds 0.5% in value. If two employees have the same interest in
the Employer or an Affiliate, the
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employee having the greater Top-Heavy Compensation shall be
treated as having the larger interest.
(c) A person owning or considered as owning, within the meaning of
section 416(i) of the Code, more than 5% of the outstanding stock
of the Employer or an Affiliate, or stock possessing more than 5%
of the total combined voting power of all stock of the
corporation (or having more than 5%) of the capital or profits
interest in the Employer or an Affiliate that is not a
corporation, determined under similar principles).
(d) A 1% owner of the Employer or an Affiliate having Top-Heavy
Compensation of more than $150,000. "One-percent owner" means any
person who would be described in the preceding paragraph if "1%"
were substituted for "5%" in each place where it appears therein.
12.3 "Top Heavy" Test
- ---- ----------------
In any Plan Year during which the sum, for all Key Employees (as
defined in this Section and as defined in section 416(i) of the Code for each
other Applicable Plan) (and their beneficiaries) of the present value of the
cumulative accrued benefits under all Applicable Plans which are defined
benefit plans (determined based on an interest assumption of 5% and the
UP-1984 mortality table) and the aggregate of the accounts under all
Applicable Plans which are defined contribution plans, exceeds 60% of a
similar sum determined for all participants in such plans (but excluding
participants who are former Key Employees), the Plan shall be deemed "Top
Heavy". Solely for purposes of determining whether this Plan or any other
Applicable Plan is "Top Heavy" for a given Plan Year, the accrued benefit of a
participant other than a Key Employee shall be determined under (a) the
method, if any, that uniformly applies for accrual purposes under all
Applicable Plans that are defined benefit plans maintained by the Employer or
an Affiliate, or (b) if there is no method, as if such benefit accrued not
more rapidly than the slowest accrual rate permitted under the fractional rule
of section 411(b)(1)(C) of the Code.
12.4 Determination Dates
- ---- -------------------
The determination as to whether this Plan is "Top Heavy" for a given
Plan Year shall be made as of the last day of the preceding Plan Year (the
"Determination Date"); and other Applicable Plans shall be included in
determining whether this Plan is "Top Heavy" based on the determination date
(as defined in section 414(g)(4)(C) of the Code) for each such plan which
occurs in the same calendar year as such Determination Date for this Plan. The
date on which plan benefits are valued for the purpose of determining the
topheaviness of any Applicable Plan which
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is a defined benefit plan shall be the most recent valuation date used for
determining such plan's minimum funding requirements that occurs during the
12-month period ending on the Determination Date. The date on which plan
assets are valued for the purpose of determining the topheaviness of an
Applicable Plan which is a defined contribution plan is the most recent
valuation date used for valuing plan assets that occurs during the 12-month
period ending on the Determination Date.
12.5 Add-Back of Prior Distributions
- ---- -------------------------------
Subject to the next Section, distributions from the Plan or any other
Applicable Plan during the five-year period ending on the applicable
determination date shall be taken into account in determining whether the Plan
is "Top Heavy."
12.6 Former Employees Disregarded after Five Plan Years
- ---- --------------------------------------------------
Benefits and distributions under this Plan or any other Applicable
Plan shall not be taken into account with respect to any individual who has
not performed any services as an employee for the Employer or an Affiliate at
any time during the five-year period ending on the applicable determination
date.
12.7 Compliance with Section 416 of the Code
- ---- ---------------------------------------
The calculation of the Top-Heavy ratio, and the extent to which
distributions, amounts attributable to rollovers or similar transfers to and
from this Plan or any other Applicable Plan shall be taken into account in
accordance with section 416 of the Code and applicable regulations.
12.8 Beneficiaries
- ---- -------------
The terms "Key Employee" and, for purposes of this Article
"participant" include their beneficiaries.
12.9 Provisions Applicable in "Top Heavy" Plan Years
- ---- -----------------------------------------------
For any Plan Year in which the Plan is deemed to be "Top Heavy", the
following provisions shall apply:
(a) Minimum Accrued Benefit. The accrued benefit derived from
Employer contributions under the Plan of each Participant who is
not a Key Employee, expressed as an annual benefit in single life
annuity form beginning at Normal Retirement Date, shall be at
least (a) 2% of the average of such Participant's Top-Heavy
Compensation not in excess of the limits under section 401(a)(17)
of the Code, for the five calendar
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years in which such average is highest (excluding any such year
after the Plan ceased to be "Top Heavy" or during which the
Participant had less than 1,000 Hours of Service) multiplied by
(b) the number of Plan Years beginning on or after January 1,
1984 during which the Plan is "Top Heavy" and he has at least
1,000 Hours of Service, but not more than 10 years. The foregoing
provisions of this paragraph shall apply before the corresponding
provision of any Applicable Plan that is a defined contribution
plan, and shall, to the extent necessary or appropriate, be
deemed satisfied in whole or in part by benefits to the
Participant provided under any other Applicable Plan, including
without limitation, the actuarial equivalent of accumulated
account balances derived from employer contributions under any
defined contribution plan (other than employer contributions
described in section 401(k) of the Code). A Participant's accrued
benefit, determined as of the last day of any Plan Year in which
the Plan ceases to be "Top Heavy", shall not be reduced because
the Plan ceased to be "Top Heavy".
(b) Adjustment of Combined Limits. Except as otherwise provided by
law, "125%" in the Article entitled Limitation of Benefits shall
become "100%" unless the following conditions are met:
(a) the percentage described in the Top-Heavy Test in this Article
does not exceed 90%, and
(b) the Company amends paragraph (a) of this Section to substitute
"3%" for "2%" therein.
Notwithstanding any other provision of this Plan, if the sum
of the combined limitation fractions described in the Article
entitled Limitation of Benefits, calculated by substituting
"100%" for "125%" therein, for any Participant exceeds 100%
for the last Plan Year before the Plan becomes "Top Heavy",
such fractions shall be adjusted, in accordance with
applicable regulations, so that their sum does not exceed 100%
for such Plan Year.
(c) Vesting. Any Participant shall be vested in his accrued benefit
derived from employer contributions on a basis at least as
favorable as is provided under the following schedule:
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Completed
Years of Vesting Service Nonforfeitable Interest
- -------------------------- -------------------------
2 20%
3 40
4 60
5 100
In any Plan Year in which the Plan is not deemed to be "Top Heavy",
the minimum vested percentage shall be no less than that which was
determined as of the last day of the last Plan Year in which the Plan
was deemed to be "Top Heavy".
IN WITNESS WHEREOF, this L-3 Communications Corporation Pension Plan
is hereby adopted effective April 30, 1997.
L-3 COMMUNICATIONS CORPORATION
By:_______________________________
Title:____________________________
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EXHIBIT A. ACTUARIAL EQUIVALENT FACTORS
1. Conversion of life annuity into 50% joint and survivor annuity --
multiply life annuity benefit by 86% minus (or plus) 0.6% for each full year
the Participant is older (or younger) than age 65, minus (or plus) 0.5% for
each full year the Participant is older (or younger) than the Eligible Spouse.
2. Conversion of life annuity into 100% joint and survivor annuity --
multiply life annuity benefit by 75% minus (or plus) 0.6% for each full year
the Participant is older (or younger) than age 65, minus (or plus) 1.0% for
each full year the Participant is older (or younger) than the Eligible Spouse.
3. Conversion of life annuity into life annuity with 10-year period
certain guarantee -- multiply life annuity benefit by 91% plus 0.7% for each
full year the Participant is younger than age 65, or minus 0.7% for each full
year the participant is older than age 65.
4. Conversion of life annuity into life annuity with 15-year period
certain guarantee -- multiply life annuity benefit by 82.5% plus 1.3% for each
full year the Participant is younger than age 65, or minus 1.3% for each full
year the Participant is older than age 65.
5. Conversion of life annuity into life annuity with 20-year period
certain guarantee -- multiply life annuity benefit by 74% plus 1.6% for each
full year the Participant is younger than age 65, or minus 1.6% for each full
year the Participant is older than age 65.
6. All other conversions -- use 1971 Group Annuity Mortality Table
assuming an 80% male mix and 7% annual interest (5% annual interest for
purposes of Article X); provided, however, that for purposes of converting a
retirement benefit or spouse's benefit into a lump sum, the lump sum will be
determined on the basis of the Pension Benefit Guaranty Corporation interest
rate for immediate and deferred annuities on plan terminations in effect on
the January 1 of the calendar year in which such lump sum is paid.
NOTE: All ages are to be determined as age at nearest birthday; and
all conversion factors are not to exceed 99%.
7. In determining the present value of any vested accrued benefit
under this Plan, the interest rate used shall be no greater than the rate that
would be used, as of the distribution date, by the Pension Benefit Guaranty
Corporation for the purposes of determining the present value of a
distribution (immediate or deferred, as is applicable) on plan termination
(the "Applicable Interest Rate"). The
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Applicable Interest Rate used shall be the rate in effect by the PBGC on the
first day of the calendar year that contains the relevant Annuity Starting
Date. The Applicable Interest Rate shall be used only if the present value of
the vested accrued benefit is $25,000 or less, (as a result of using the
Applicable Interest Rate).
8. However, if after using the Applicable Interest Rate, the present
value of the vested accrued benefit exceeds $25,000, then the present value
shall be recalculated, using an interest rate that is no greater than 120% of
the Applicable Interest Rate. However, in this event, the distributed amount
shall not be reduced to any amount below $25,000.
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EXHIBIT B. CONTRIBUTORY BENEFITS
Monthly Amount of Contributory
Name of Contributory Benefit Payable as a Life
Participant Annuity Commencing at Age 55
- ---------------------- ---------------------------------
BENENSON, C. 187.77
CARROLL, MELVIN 69.84
CIPRIANI, PHILIP 63.69
DAVIS, ALLEN H. 47.92
GLEIMER, LEON 35.29
HISCHE, EDWARD H. 16.11
IERVOLINO, NICK 45.24
IRIZARRY, REYNALDO 3.92
MARCIANO, JOHN 9.99
OWSICK, ALEXANDER 37.54
PENN, HAROLD 144.67
PLOTKIN, MURRAY 55.07
SACKS, MARVIN 69.97
SCHWARTZ, WALTER 30.30
SOLOMON, MURRAY 161.58
TURF, HAROLD 32.99
WONG, KENNETH L. 74.37
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