10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2006.

OR

(  ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-14617

ANDREW CORPORATION

(Exact name of Registrant as specified in its charter)

DELAWARE	36-2092797
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer identification No.)

3 Westbrook Corporate Center, Suite 900 Westchester, Illinois 60154

(Address of principal executive offices and zip code)

(708) 236-3600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on which Registered
Common Stock, $.01 par value	The Nasdaq Stock Market LLC
Common Stock Purchase Rights	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes X    No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act

Yes     No X

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X    No

Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer X    Accelerated filer     Non-accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).

Yes      No X

The aggregate market value of common stock held by non-affiliates of the registrant as of March 31, 2006, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $2.0 billion, based on the closing sale price as reported on The Nasdaq Stock Market. The number of outstanding shares of the Registrant’s common stock as of December 11, 2006 was 156,820,570.

Documents Incorporated by Reference:

Portions of the Proxy Statement for the annual shareholders’ meeting to be held February 7, 2007 are incorporated by reference into Part III of this annual report on Form 10-K.

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TABLE OF CONTENTS

Part I
Item 1	Business	3
Item 1A	Risk Factors	12
Item 1B	Unresolved Staff Comments	17
Item 2	Properties	17
Item 3	Legal Proceedings	18
Item 4	Submission of Matters to a Vote of Security Holders	18
	Additional Item – Executive Officers of the Registrant	19
Part II
Item 5	Market for the Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 6	Selected Financial Data	21
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	34
Item 8	Financial Statements and Supplementary Data	35
	Consolidated Statements of Operations	35
	Consolidated Balance Sheets	36
	Consolidated Statements of Cash Flows	37
	Consolidated Statements of Change in Shareholders’ Equity	38
	Notes to Consolidated Financial Statements	39
	Report of Independent Registered Public Accounting Firm	66
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	69
Item 9A	Controls and Procedures	69
Item 9B	Other Information	69
Part III
Item 10	Directors and Executive Officers of the Registrant	70
Item 11	Executive Compensation	70
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	70
Item 13	Certain Relationships and Related Transactions	70
Item 14	Principal Accountant Fees and Services	70
Part IV
Item 15	Exhibits and Financial Statement Schedules	71
	Schedule II – Valuation and Qualifying Accounts	71
	Index to Exhibits	72
	Signatures	76
	Exhibits	77

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PART I

Item 1.  Business

General Business

Andrew Corporation was incorporated in 1987 under the laws of the State of Delaware as successor to an Illinois corporation organized in 1947. Originally founded as a partnership in 1937, its executive offices are located in Westchester, Illinois, which is approximately 10 miles west of Chicago. Unless otherwise indicated herein or as the context otherwise requires, all references herein to “Andrew”, the “company”, “we”, “us” or “our” are to Andrew Corporation and its subsidiaries.

Andrew’s products are primarily based on the company’s core competency, the radio frequency (RF) path. Andrew has unique technical skills and marketing strengths in developing products for RF systems. The company’s products are used in the infrastructure for traditional wireless networks, third generation (3G) technologies, voice, data, video and internet services, as well as applications for microwave and satellite communications, and other specialized applications.

In fiscal 2006, the company operated its business in the following five segments: Antenna and Cable Products, Base Station Subsystems, Network Solutions, Wireless Innovations and Satellite Communications. Antenna and Cable Products include coaxial cables, connectors, cable assemblies and accessories as well as base station antennas and terrestrial microwave antennas. Base Station Subsystems products are integral components of wireless base stations and include products such as power amplifiers, filters, duplexers and combiners that are sold individually or as parts of integrated subsystems. Network Solutions includes software and equipment to locate wireless E-911 callers as well as equipment and services for testing and optimizing wireless networks. Wireless Innovations products are used to extend and enhance the coverage of wireless networks in areas where signals are difficult to send or receive, and include both complete systems and individual components. Satellite Communications products include earth station antennas, high frequency and radar antennas, direct-to-home (DTH) antennas and very small aperture terminal (VSAT) antennas.

In fiscal 2002 and 2003, the company completed two major acquisitions that substantially broadened its product offering and established the company as the leading global supplier of communications products and systems to the wireless subsystem infrastructure market. These acquisitions allowed the company to provide global wireless service providers and original equipment manufacturers (OEMs) with a single, global source for all of their wireless infrastructure needs. In July 2003, the company acquired Allen Telecom, a global provider of wireless infrastructure equipment and services. Allen’s product offering was complementary to the company’s product offering and there was minimal product overlap. This acquisition has allowed Andrew to market a more complete RF path product set with more value-added and integrated products. In June 2002, the company completed the acquisition of Celiant Corporation, a power amplifier manufacturer. Celiant’s engineering and technical capabilities and intellectual property have made the company a leading supplier of base station subsystems products.

In addition to the major acquisitions noted above, in the past three fiscal years, the company has also completed several smaller strategic acquisitions intended to expand its product portfolio and strengthen its market leading positions. The fiscal 2005 acquisition of ATC Tower Services and Xenicom enhanced the company’s service offerings and, with ATC Tower Services, provided an additional distribution channel for the company’s products. The fiscal 2006 acquisition of Precision Antennas, Ltd., included products and technology that allowed the company to offer more comprehensive product lines. Additionally, the fiscal 2006 acquisition of CellSite Industries (CSI) provided the company with a lower cost platform for warranty and repair services. After the close of fiscal 2006, the company acquired EMS Wireless, a Norcross, Georgia-based division of EMS Technologies, Inc.

The wireless infrastructure market has experienced growth in fiscal 2005 and 2006. As Andrew’s customers build and upgrade networks to address demand for basic voice and next generation data services, capital spending worldwide on infrastructure continues to grow. All-important measures of the industry’s health and growth, such as minutes of use, number of subscribers, wireless penetration, and third generation service adoption, are trending positive. Andrew’s total sales increased 9% year-over-year as the company continues to grow its wireless infrastructure business faster than the overall market.

The company has a significant international manufacturing and distribution presence. Sales of products exported from the United States or manufactured abroad accounted for approximately 57% of Andrew’s sales in fiscal 2006, 56% in fiscal 2005, and 54% in fiscal 2004. Over the last decade, Andrew has significantly increased its international manufacturing and distribution capabilities in some of the fastest developing wireless infrastructure markets. Developing countries represent some

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of the greatest growth opportunities for wireless communication, as wireless is the most cost efficient way to provide communications infrastructure to these regions. Andrew believes that developing markets such as China and India have significant long-term growth potential for the company. The company built new manufacturing facilities in China and India in fiscal 1998 and has continued to expand operations in these regions. These facilities have allowed the company to more effectively reach customers and increase sales in the Asian market. In fiscal 2005 the company began relocating a significant portion of the manufacturing of its filter product line to China.

Operating Segments

On September 21, 2006, the company announced the implementation of a new organizational structure for its product groups and the streamlining of its executive team to better position the company for opportunities in the rapidly changing wireless infrastructure market. Effective October 1, 2006, Andrew’s five product groups were combined into, and managed, as two operating segments. The two operating segments—Antenna and Cable Products and Wireless Network Solutions—reflect the two main product areas (passive and active electronic components, respectively) in which the company manufactures and can better leverage the many opportunities for collaboration and efficiencies in supporting global customers. The creation of these new operating segments was accompanied by changes to the executive management team that aligned with this new structure and streamlined the leadership of the company.

In fiscal 2006, the company operated its business in the following five operating segments: Antenna and Cable Products, Base Station Subsystems, Network Solutions, Wireless Innovations and Satellite Communications. The following table sets forth sales and percentages of total sales represented by Andrew’s five operating segments during the last three fiscal years:

Dollars in millions	2006	% of Sales		2005	% of Sales		2004	% of Sales
Antenna and Cable Products	$1,248	58	%	$1,050	53	%	$823	45	%
Base Station Subsystems	505	24	%	446	23	%	498	27	%
Network Solutions	91	4	%	157	8	%	175	10	%
Wireless Innovations	180	8	%	168	9	%	123	7	%
Satellite Communications	122	6	%	140	7	%	209	11	%
Total Sales	$2,146	100	%	$1,961	100	%	$1,828	100	%

Further information on Andrew’s operating segments is contained in Note 12, Segment and Geographic Information, of the Notes to Consolidated Financial Statements.

Antenna and Cable Products

Andrew is a market leader for commercial base station antennas serving global market needs for all wireless protocols. Base station antennas are the last, critical piece of wireless infrastructure that captures the wireless signal from the user’s handset and sends it to operators’ base stations. The base station antenna transmits and receives this wireless signal with a series of passive radiating elements that are tuned to the wireless operator’s frequency band. The company offers a diverse product line of base station antennas ranging in size from approximately two feet in length to large, tower-mounted antennas in excess of twenty feet in length. Base station antennas are marketed under the trade name Decibel^®. The Decibel^® product line contains a variety of innovative products including technology to optimize the performance in CDMA and W-CDMA markets. The company holds significant intellectual property that is used to create innovative products, such as the Andrew Teletilt^® system, which is a remotely-controlled variable electrical downtilt base station antenna system that can be adjusted in minutes, without costly site downtime. This allows customers to enhance their network performance while reducing operating expenses. The most recent addition to this product line is a series of multi-band variable electric downtilt antennas. The multi-band function allows operators to utilize just one antenna when overlaying an existing network with a new technology such as UMTS (W-CDMA).

The company manufactures a full line of microwave antennas for applications such as fixed-line telecommunications networks, broadband wireless, wireless infrastructure, and others. The microwave antenna takes the RF transmission from the microwave radio, focuses the beam and reflects the signal to the microwave antenna at the opposite end of the link. Microwave radio networks are commonly used by telecommunications companies for telephone, internet, video and data transmission. They are also used by cellular operators to link cell sites with switching centers and by private companies, such as gas pipelines, electric utilities and railroads, for their internal communications needs. Andrew has strengthened its leadership

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position in microwave antennas by the fiscal 2006 acquisition of Precision Antennas, Ltd., a Stratford, England-based designer and manufacturer of microwave antennas used primarily for cellular network backhaul.

Andrew combines antenna products from both the base station antenna and microwave point-to-point groups to service the emerging WiMAX market. Point-to-point and point-to-multi-point antennas are used in fixed WiMAX applications. Traditional base station antennas are used in mobile WiMAX deployments. Andrew cable products, described below, are also used to service this market segment.

Cable products include coaxial cables, connectors, cable assemblies and accessories. Coaxial cable is a two-conductor, radio frequency transmission line with the smaller of the two conductors centrally located inside the larger, tubular conductor. It is principally used to carry radio frequency signals. Andrew sells its semi-flexible and elliptical waveguide cable products under the trademark HELIAX^®. In October 2006, the company introduced a premium-quality family of corrugated aluminum cable as a cost-effective, high quality extension to its industry-leading HELIAX^® family of copper corrugated transmission line systems. HELIAX^® corrugated aluminum cable and accessories will be produced and distributed globally as a high performing but lower cost alternative to Andrew’s most popular and widely used copper-based cable.

In addition to bulk cable, the company provides cable connectors, accessories and assemblies marketed under the HELIAX^® brand name. Coaxial cable connectors attach to cable and facilitate transmission line attachment to antenna and radio equipment. Andrew provides multiple connector families, including OnePiece™ and Positive Stop™ connectors. Cable accessories protect and facilitate installation of coaxial cable and antennas on cell site towers and into equipment buildings. Accessories include lightning surge protectors, hangers, adaptors and grounding kits, including Arrestor Plus^®, ArrestorPortII™, KwikClamp™, SureGround™, and Compact SureGround™ lines. SureFlex™ coaxial cable assemblies, used to connect the main feeder cable line to the antenna, are made up of smaller sized HELIAX^® cable and the Andrew patented SureFlex™ connectors.

The company also manufactures a full line of steel infrastructure components including steel antenna mounts, coaxial cable support components, and equipment platforms. Antenna mounts are utilized to facilitate mounting of base station or terrestrial microwave antennas to any type of elevated structure. Coaxial cable support components are utilized to create a secure pathway for coaxial cable between the antenna and radio equipment. Equipment platforms are utilized to provide a secure foundation for radio equipment.

The company provides a full range of products suitable for in-cabinet applications and a wide range of traditional cable assemblies utilizing solid copper, braid, semi-rigid and conformable cables, as well as some technically unique cables for special applications. Andrew combines assemblies and supporting products according to customer specifications in “cabinet kits” to help reduce an OEMs’ overall operational cost of building cabinets.

The company also manufactures coaxial cable and connectors for the broadband cable television market. These products connect the subscriber’s home equipment such as televisions and computers to the broadband network for a final end-to-end coaxial solution. Andrew is currently selling its broadband cable products to top-tier multiple system operators both in the United States and internationally.

Andrew distinguishes itself from its competition by offering technically advanced and higher performance cable products. Two more innovative product offerings that the company produces are Andrew Virtual Air^TM (AVA) and Z-Wire^TM drop cable. AVA cables offer excellent attenuation performance and lower system costs by allowing wireless operators to utilize smaller diameter cables. AVA cables are now being manufactured in 7/8” and 1 5/8” diameters. The Z-Wire drop cable contains a patented material that provides superior corrosion resistance.

In addition to the products described above, the company has historically maintained a group of field construction employees that perform value-added services for our customers. Over the last three years the company has enhanced its services capability through two strategic acquisitions, MTS Wireless Components LLC and ATC Tower Services, Inc., a division of American Tower Corporation. The combination of the company’s existing services capability with these acquisitions enhances its ability to effectively meet the needs of its OEM and wireless operator customers.

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Base Station Subsystems

Base Station Subsystems products are integral components of wireless base stations and include products such as power amplifiers, filters, duplexers and combiners. These products cover all of the major wireless standards and frequency bands and are sold individually or as part of integrated subsystems.

Andrew designs and manufactures high power single and multi-carrier RF power amplifiers. RF power amplifiers are required by wireless communication systems to boost the radio signal power for transmission across long distances and are usually located within base stations. Andrew’s RF power amplifier products range in power from 10 to 500 watts of output power and in frequency ranges from 450 MHz to 2500 MHz. The company’s power amplifiers are custom designed for each OEM and are available for most wireless standards, including 2G, 2.5G, 3G and 4G technologies. The company markets next generation single and multi-carrier, highly linear power amplifiers with digital pre-distortion technology and is currently working with major OEMs and wireless carriers to design their next generation power amplifier products.

Andrew has developed two integrated product offerings: an integrated radio and amplifier and an integrated radio, amplifier and receiver. Both of these products were developed to meet the low-cost demands of 3G deployments. Andrew designs and manufactures filters, duplexers, combiners and integrated antenna combining units. RF transmit filters are used to filter high power unwanted transmit signals to meet frequency regulations and interference requirements in the different allocated wireless frequency bands. Transmit combiners allow the combination of multiple signals into one transmit antenna. RF receive filters are used to select intended signals and isolate these signals from unwanted interference and noise. Duplexers are used to allow one antenna to both transmit and receive signals. Andrew is a leading supplier for in-cabinet application of filters and duplexers. For this application, filters and duplexers are incorporated into base station transceiver cabinets provided to OEMs for site installations.

Andrew also supplies tower-mounted amplifiers to OEMs and wireless operators that use these products to improve network performance. Tower-mounted amplifiers improve network performance by filtering and amplifying as close as possible to the actual receiving antenna, thus eliminating additional signal loss and noise. For this application, integrated receiving filters and amplifiers are directly mounted at the top of the cell site tower.

To support more sophisticated antenna filtering applications and to improve overall performance and costs, Andrew is supplying integrated antenna combining units to leading OEMs. This product provides antenna-filtering functions for both transmitted and received signals and low power amplification for received signals. These integrated antenna combining units also have control functions for antenna supervision and antenna remote electrical tilt control.

Additionally, Andrew provides repair, replacement and excess and obsolescent equipment management services of wireless and power equipment through its After Market Services operation. Andrew entered this business segment through the acquisition of CellSite Industries based in Milpitas, California. The charter of Andrew’s After Market Service group is to provide turnkey post sales support for OEMs and wireless carriers to reduce the costs of network maintenance through a repair service that is unmatched in speed, cost effectiveness and quality.

Network Solutions

Network Solutions includes location services systems, network optimization analysis systems, and engineering and consulting services. Andrew is one of two major suppliers of network-based geolocation systems capable of providing wireless operators with the equipment and software necessary to locate wireless callers. Andrew believes its network-based Geometrix^® product can exceed the accuracy and reliability requirements set by the FCC for E-911 networks. The system can locate calls that transition between analog and digital sites, as well as calls in which the caller is a subscriber, roamer or non-subscriber. The Geometrix^® product can be used with all air interfaces including AMPS, TDMA, CDMA, and GSM, and requires no changes in wireless service and no modifications or replacement of existing handsets. In addition, the system was designed to accommodate a variety of location-based services, such as fleet management, concierge services, mobile commerce, wireless information directories and other security related location dependent services. Andrew has added location technologies such as AGPS and wireless network location-related elements to its offering as part of the Mobile Location Center (MLC). These incremental capabilities enhance Geometrix^® to better support commercial and enterprise location service enablement and expand its market reach around the world.

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Included in Network Solutions are engineering and consulting services offered under the Comsearch brand. Comsearch is a leading provider of frequency planning and coordination services as well as spectrum management consulting and field engineering services. Andrew engineering expertise in spectrum sharing, microwave and satellite interconnectivity, and regulatory license administration has enabled the company to develop a broad client base of operators, OEMs, broadcast, cable and private industry telecommunications users. The company’s spectrum sharing software is currently licensed and utilized by major operators and consultants to perform analysis in most domestic markets, and its software for microwave system design and administration is operational in Asia, Europe, North America and South America.

Wireless Innovations

Wireless Innovations solutions are used worldwide to extend and enhance the coverage of wireless networks. The products and services this group delivers provides coverage and capacity enhancement directly to the wireless operators and indirectly through OEMs and third-party entities. Andrew offers products as well as a suite of services, including system design, installation, commissioning, monitoring, and full turnkey capability from simple solutions to customized solutions for major infrastructure throughout the world. Typical turnkey projects include coverage of highway tunnels, subway and railway systems, shopping centers, airports, convention centers, store fronts, office buildings, campuses and many more applications. Andrew’s products support numerous customers, including single operators, shared networks with neutral host operators and public safety wireless networks.

Andrew provides a full line of RF repeaters and optical distribution systems, boosters, and passive components. They can be used as an efficient and low-cost alternative to base stations in areas where coverage is more critical than additional capacity. Andrew’s active products have built-in intelligence, facilitating easy setup and optimization to reduce installation costs. They have superior RF and control characteristics which translates to a reduction in customers’ operating expenses. These products can be used for both single and multi-operator applications. The products are technology agnostic and available in virtually all frequency bands from 70MHz to 2500MHz, for use in public and private wireless communications systems.

Andrew offers a wide array of coverage products consisting of both passive and active components that extend wireless network coverage into buildings and other areas where it is difficult to get wireless reception. The company’s intelligent optical network distribution product line, ION^®, is a customer solution for everything from indoor to urban city center coverage, while the RF repeater line, Node (network optimized distribution element), is used for rural area coverage, suburban communities and as a head-end solution for both passive and active indoor coverage. The RF, booster and optical products are all available in four power classes from femto, through pico and micro, to macro. This complete solution is capable of transferring multiple technologies and frequency bands.

Andrew extends its active offering with a complement of passive components including antennas, cable, hybrid couplers, combiners, power splitters, cable taps and termination loads. Andrew Cell-Max™ antennas are especially designed for in-building use and are omni-directional or directional, single or multi-band to provide high reliability and low cost. Andrew’s RADIAX^® coaxial cables, connectors and accessories are especially designed and customized for tunnel coverage. RADIAX^® is a coaxial cable with slots in the outer conductor that allow for homogenous RF coverage in elongated environments. Andrew also offers small specialty cables that meet stringent fire codes and are flexible enough to bend around corners and over walls for all in-building applications.

Satellite Communications

The Satellite Communications Group is comprised of four product groups: 1) direct-to-home (DTH) / very small aperture terminals (VSAT); 2) earth station antennas and systems (ESA); 3) government / radar products; 4) and earth station electronics (ESE). This product group includes antennas, support products, electronic equipment and systems engineering for applications in the consumer, enterprise and government/military markets.

Andrew is an OEM manufacturer of consumer DTH antennas and associated outdoor electronics for the world’s leading satellite television companies. Custom designed for specific satellite broadcast service platforms, these antenna systems range in size from 18 inches to 39 inches in diameter, and are capable of receiving premium subscription television channels, local networks and high definition television.

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Satellite communications plays an important role in “last mile” connectivity of services for the enterprise markets. Andrew manufactures a comprehensive line of VSAT antennas, outdoor electronics and installation accessories that are used in private networks to provide the air interface for bi-directional broadband internet access, video, voice and data services to corporations, small to medium sized enterprises and individual end-users. These antennas, ranging in size from three to eight feet, can often be seen on the top of gas stations, banks and office buildings. In February 2006, Andrew acquired Skyware Radio Systems, GmbH. Skyware designs, manufactures and sells electronics that are sold separately and in conjunction with the company’s DTH and VSAT products.

The larger ESA and turn-key systems engineering that Andrew provides to the marketplace complements the DTH, VSAT and high frequency (HF)/radar hardware businesses as a complete RF solution. Used as mechanisms for uplink traffic management of broadcast and internet content, earth station antenna systems range in size from 12 feet to 29 feet in diameter and are designed as teleports, gateways and network hubs to transport information to and from satellites.

The HF and radar antenna products that Andrew provides have historically been in air traffic control, primary surveillance, signal and electronic intelligence, and military communications segments. These highly specialized products include a wide range of antenna systems for applications such as air traffic control radar antenna systems, weather radar systems, low and medium earth orbit satellite ground tracking systems for airborne and shipboard applications, troposcatter terrestrial microwave for long range military communications and HF communication systems that include Andrew’s line of GRANGER^® HF antennas.

International Activities

Andrew’s international operations represent a substantial portion of its overall operating results and asset base. Principal manufacturing facilities outside the United States are located in Brazil, China, Czech Republic, Germany, India, Mexico, and the United Kingdom. Most of Andrew’s plants ship to export markets.

During fiscal 2006, sales of products exported from the United States or manufactured abroad were $1,217 million or 57% of total sales compared with $1,095 million or 56% of total sales in fiscal 2005 and $983 million or 54% of total sales in fiscal 2004. Exports from the United States amounted to $61 million in fiscal 2006, $72 million in fiscal 2005, and $80 million in fiscal 2004.

Sales and income on a country-by-country basis can vary considerably year to year. Further information on Andrew’s international operations is contained in Note 12, Segment and Geographic Information, of the Notes to Consolidated Financial Statements.

Andrew’s international operations are subject to a number of risks including currency fluctuations, changes in foreign governments and their policies, expropriation, or requirements of local or shared ownership. Andrew believes that the geographic dispersion of its sales and assets, as well as its political risk insurance, mitigate some of these risks.

Marketing and Distribution

Andrew’s worldwide sales force is organized into groups that support worldwide OEM customers and regional operator customers. Andrew supports major OEMs with dedicated global account teams focused solely on each OEM. The teams are responsible for all activity with these customers, including global coordination of the company’s relationship with the OEM. The operator and local OEM sales force is organized by region, with teams divided between the Americas, EMEA (Europe, Middle East, and Africa), Asia Pacific, and China. These regional teams are responsible for all accounts in the region, including the local offices of the worldwide OEMs, local OEMs, operators, and distributors.

Andrew’s satellite communications sales organization promotes the company’s products to service providers, system integrators, SatCom OEMs and end users for broadcast, broadband, data and voice applications of satellite communications technology. This sales force is organized under three geographic areas: Americas, EMEA and Asia Pacific.

Andrew’s sales force is responsible for relationship management and has a broad range of knowledge of Andrew’s entire product line. Sales teams are trained to sell all of the company’s products and are familiar with the company’s vast array of technical and physical resources that may be leveraged to solve customer’s problems. For example, when greater product knowledge is needed, the sales teams introduce systems engineers, who work together to satisfy customer needs.

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The company has a worldwide manufacturing and distribution network. Many of the company’s manufacturing facilities also serve as distribution centers. The company has twenty facilities that are exclusively distribution centers, located in thirteen countries around the world. These distribution centers allow the company to quickly and efficiently meet the demands of its global and regional customers.

Major Customers

The company’s largest customers are OEMs and wireless service providers. In fiscal 2006, aggregate sales to the ten largest customers accounted for 52% of total consolidated sales compared to 54% in fiscal 2005 and 55% in fiscal 2004. In fiscal 2006, the top 25 customers accounted for 69% of total sales and no single customer accounted for more than 10% of sales.

Manufacturing Locations

Andrew generally develops, designs, fabricates, manufactures and assembles the products it sells. In addition, the company utilizes contract manufacturers for power amplifiers and, starting in September 2006, certain filter products. Manufacturing facilities are located worldwide, sharing a company-wide commitment to quality and continuous improvement. Andrew has worked to ensure that its manufacturing processes and systems are based on the quality model developed by the International Organization for Standardization (ISO), and that identical management guidelines are used at different Andrew locations to produce interchangeable products of the highest quality. Quality assurance teams oversee design, international standards adherence, and verification and control of processes. To date, 40 Andrew manufacturing and distribution locations have received ISO 9000 certification, the most widely recognized standard for quality management.

Andrew’s major manufacturing facilities are as follows:

North America:    Orland Park, Illinois is Andrew’s principal manufacturing facility in the U.S. The Orland Park facility manufactures HELIAX^® coaxial cable, connectors, cable assemblies, microwave transmission lines, air dielectric cable, broadband cable, and RADIAX^® radiating cables. On August 29, 2005 the company entered into a contract to sell its Orland Park, Illinois manufacturing facility and corporate headquarters. Andrew anticipates that the sale will result in cash proceeds of approximately $26 million and expects to record a pre-tax gain of approximately $17 million before relocation expenses. See Note 3, Sale of Assets, Notes to the Consolidated Financial Statements for a description of this facility’s sale. The company’s corporate headquarters relocated to a leased facility in Westchester, Illinois in January 2006. The company has entered into a lease agreement with a third party construction company who is building a state-of-the-art manufacturing and office facility in Joliet, Illinois, and expects construction to be completed in fiscal 2007.

Other U.S. manufacturing facilities include: Forest, Virginia (geolocation systems, power amplifiers), Amesbury, Massachusetts (filters), Smithfield, North Carolina (DTH, VSAT antennas), and Euless, Texas (steel components). In addition the company operates the following non-U.S. manufacturing facilities in North America: Whitby, Canada (cable assemblies, earth station and government antennas), Nogales, Mexico (filters, pressurization equipment, cable assemblies, accessories and components) and Reynosa, Mexico, which was opened in 2003 for the manufacture of microwave, earth station and base station antennas. The company recently announced plans to close its Amesbury, Massachusetts facility as production of North American-made filter products will be outsourced to Elcoteq Network, S.A. (“Elcoteq”). The Nogales, Mexico facility will also be closed as production will be transferred to other company facilities and a portion of which will be transferred to Elcoteq.

Asia Pacific:    The Suzhou, China facility manufactures HELIAX^® coaxial cable, RADIAX^® cable, connectors, accessories, cable assemblies, filters, and base station antennas. The company also operates a filter manufacturing facility in Shenzhen, China. Power amplifier products are supplied by a third-party contract manufacturer in China. The company is currently building a new facility in Goa, India, scheduled to be completed in fiscal 2007, that will manufacture HELIAX^® coaxial cable, connectors, cable assemblies, microwave and base station antennas.

Europe:    The Lochgelly, Scotland facility manufactures HELIAX^® coaxial cable, RADIAX^® cable, elliptical waveguide, connectors, and accessories. The Stratford, England facility, acquired in April 2006 with Precision Antenna, Ltd., manufactures terrestrial microwave antennas. The company’s principal facility in Brno, Czech Republic manufactures cable assemblies, flexible waveguide and terrestrial microwave antennas. The company also operates significant facilities in Agrate and Capriate, Italy (filters), Buchdorf, Germany (repeaters and other wireless innovation products), and Faenza, Italy (fiber optic and in-building coverage systems). In September 2006, the company sold its Arad, Romania filter manufacturing facility to Elcoteq, which will continue to manufacture the company’s filters on an outsourced basis.

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South America:    Andrew’s Sorocaba, Brazil facility provides Andrew products for the Central and South American markets. This facility manufactures HELIAX^® coaxial cable, connectors, accessories, cable assemblies, elliptical waveguide, base station antennas, and terrestrial microwave products.

Raw Materials and Components

The company’s products are manufactured from both standard components and parts that are built to the company’s specifications by other manufacturers. The company uses various raw materials such as copper, aluminum and plastics in the manufacture of its products. Copper, which is used to manufacture coaxial cable, represents a significant portion of the company’s costs and, as a result, the company is exposed to fluctuations in the price of copper. In order to reduce this exposure, the company has negotiated copper purchase contracts with various suppliers to purchase approximately 34% of its forecasted copper requirements for fiscal 2007. As of September 30, 2006, the company had contracts to purchase 22.2 million pounds of copper for $53.7 million. Andrew considers its sources of supply for all raw materials to be adequate and is not dependent upon any single supplier for a significant portion of materials used in its products.

Some of the company’s products include specialized components manufactured by suppliers. Andrew is dependent upon sole suppliers for certain key components for its power amplifier operations. If these sources were not able to provide these components in sufficient quantity and quality on a timely and cost-efficient basis, it could materially impact the company’s results of operations until another qualified supplier is found. The company believes that its supply contracts and its supplier contingency plans mitigate some of this risk.

Research and Development

Andrew believes that the successful marketing of its products depends upon its research, engineering and production skills. Research and development activities are undertaken for new product development and for product and manufacturing process improvement. In fiscal years 2006, 2005 and 2004, Andrew spent $113.0 million, $107.9 million and $110.2 million, respectively, on research and development activities. A substantial amount of the fiscal 2006, 2005 and 2004 activities were focused on base station subsystems products.

Intellectual Property and Intangible Assets

As of September 30, 2006, the company had $47.2 million of intangible assets, net of accumulated amortization, consisting of patents, technology, supply agreements and various other intangible assets that the company has acquired through acquisitions. A significant portion of these intangible assets relate to patents, patent applications and related technology acquired with the fiscal 2002 Celiant and fiscal 2003 Allen Telecom acquisitions. Andrew’s internally developed intangible assets, such as patents, are not recorded on the balance sheet. Andrew holds approximately 919 active patents, expiring at various times between 2007 and 2028. Andrew attempts to obtain patent protection for significant developments whenever possible. Andrew believes that, while patents and other intangible assets in the aggregate are valuable to the company’s business, the company is not materially dependent on any one individual patent or intangible asset.

Competition

The company believes that it is a leading global supplier of communications products and systems to the wireless subsystem infrastructure market. The company has the ability to provide total customer solutions, including virtually all components of a wireless base station that are outsourced by OEMs and wireless service providers. This allows the company to better meet the performance and cost efficiency requirements of its customers who benefit from the availability of a single source for their entire wireless infrastructure needs. The company also believes that it differentiates itself by offering superior product quality, service and continual technological enhancement. While the company believes that few of its competitors can match its complete product offering, the company faces several strong competitors that compete with a significant portion of the company’s total product offering. In addition, there are a number of small independent companies that compete with portions of the company’s product lines.

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Representative competitors in the company’s five primary product groups are as follows:

Product Group	Representative Competitors
Antenna and Cable Products	RFS, NK, Huber + Suhner, Eupen, CommScope, Amphenol, Powerwave Technologies and Kathrein
Base Station Subsystems	Powerwave Technologies, RFS and Kathrein
Satellite Communications	General Dynamics, Patriot, CalAmp and NJRC
Network Solutions	True Position, Qualcomm, Agilent Technologies, Comarco Wireless Technologies and Ericsson TEMS
Wireless Innovations	Powerwave Technologies, LGC Wireless, Comba Telecom Systems, Dekolink Wireless and MobileAccess

Backlog and Seasonality

The company’s backlog of orders believed to be firm and due to ship within the next year and beyond was $316.3 million and $277.9 million as of September 30, 2006 and 2005, respectively. Due to the variability of shipments under large contracts, customers’ seasonal installation considerations and variations in product mix and in profitability of individual orders, the company can experience wide quarterly fluctuations in sales and income. These variations are expected to continue in the future. Consequently, it is more meaningful to focus on annual rather than interim results.

Environment

Andrew is committed to demonstrating the highest standard of global environmental management and achieving environmental best practices. Twelve locations have been awarded certifications for ISO 14001, an international standard for environmental management systems. The company continues to seek to improve its environmental management systems and practices, including resource conservation and pollution prevention. Andrew engages in a variety of activities to comply with various federal, state and local laws and regulations involving the protection of the environment and believes it is in compliance with relevant statutory requirements. Such environmental statutory requirements include European Union Directives EuP 2005/32/EC, which governs the design of energy-using products, RoHS 2002/95/EC, which restricts the use of certain hazardous substances, and WEEE 2002/96/EC, which governs material declaration requirements of electrical and electronic equipment. Compliance with such laws and regulations does not currently have a significant effect on the company’s capital expenditures, earnings, or competitive position. The company has no knowledge of any environmental condition that might individually or in the aggregate have a material adverse effect on its financial condition.

Employees

At September 30, 2006, Andrew employed 11,778 people, 3,174 of whom were located in the United States. Of these 11,778 people, 1,933 were temporary workers, 735 of whom were located in the United States. As a matter of policy, Andrew seeks to maintain good relations with employees at all locations. From a global, company-wide perspective, we believe we have a good relationship with our employees. Based on our experience, periods of labor unrest or work stoppage have not caused a material impact on our operations or results. As a result of outsourcing certain filter production to Elcoteq, Andrew anticipates that approximately 300 employees will be terminated in fiscal 2007 at facilities in Capriate and Agrate, Italy, Amesbury, Massachusetts and Nogales, Mexico. In September 2006, the company announced that the severance and related cost of this headcount reduction would be $10 million to $13 million. Based on further developments since the September 2006 announcement, the company now estimates that the cost of the reduction-in-force will be approximately $8 million to $10 million, which will be paid and expensed in fiscal 2007.

Regulation

Although Andrew is not directly regulated by any governmental agency in the United States, most of its customers and the telecommunications industry, in general, are subject to regulation by the Federal Communications Commission (FCC). The FCC controls the granting of operating licenses, allocation of transmission frequencies and the performance characteristics of certain products. This regulation has not adversely affected Andrew’s operations. Outside of the United States, where many of Andrew’s customers are government-owned and operated entities, changes in government economic policy and communications regulation have affected in the past and may be expected to affect in the future the volume of Andrew’s non-U.S. business. However, historically these regulations have not been detrimental to Andrew’s non-U.S. operations taken as a whole.

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Certain of the company’s wireless communications products must conform to a variety of domestic, foreign and international regulatory specifications established to, among other things, maintain public safety, avoid interference among users of radio frequencies and permit interconnection of equipment. Regulatory bodies worldwide have adopted and are adopting or revising standards for wireless communications products, which standards may change from time to time. The emergence or evolution of regulations and industry standards for wireless products, through official standards committees or widespread use by operators, could require the company to modify its products.

Andrew’s business depends on the availability of radio frequencies to service providers for use in the operation of two-way wireless communications systems. Radio frequencies are subject to extensive regulation under the laws of the United States, foreign laws and international treaties. Each country has different regulations and regulatory processes for wireless communications equipment and uses of radio frequencies. The regulatory environment in which the company’s customers operate is subject to significant change, the results and timing of which are uncertain. The process of establishing new regulations for wireless frequencies and allocating such frequencies to service providers is complex and lengthy. For example, in many countries, it may take several years before 3G wireless communications will be available to the public because of the need to: (i) determine what frequencies to use for the service; (ii) clear the necessary spectrum of its current users, if necessary; (iii) establish regulations for this new wireless service; (iv) auction the spectrum or otherwise determine the frequency licensees; and (v) build out the necessary infrastructure. Andrew’s customers and potential customers may not be able to obtain spectrum licenses for their planned uses of the company’s equipment. Failure by the regulatory authorities to allocate suitable, sufficient radio frequencies for such uses in a timely manner could deter potential customers from ordering the company’s products and seriously harm the company’s business.

Unlike calls placed from landline telephones in the U.S., calls for emergency (E-911) assistance from wireless phones historically were not traceable to specific locations in many cases. In response to this public safety issue, the FCC issued a series of orders requiring that service providers implement a system to locate E-911 callers. Andrew offers a network-based system for locating wireless phone users making E-911 calls.

Government Contracts

Andrew does not have material contracts that are subject to renegotiation of profits or termination at the election of any governmental agency.

Available Information

The SEC maintains an internet site, www.sec.gov, through which you may access the company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy and other information statements, as well as amendments to these reports. In addition, the company makes these reports available free of charge on the company’s internet website, www.andrew.com. The company is not including the information on its website as a part of, or incorporating it by reference into, this annual report on Form 10-K.

Andrew maintains a corporate governance page on the company’s website. This website includes, among other items, the Andrew Corporation Operating Principles for the Board of Directors, charters of each committee of the Board, the Andrew Code of Conduct and information regarding the company’s Whistleblower Policy. The corporate governance information can be found at www.andrew.com.

Item 1A.  Risk Factors

Cautionary Statement regarding Forward-Looking Statements

We have made forward-looking statements in this annual report, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Notes to Consolidated Financial Statements”, that are based on current expectations, estimates, forecasts and projections about our future performance, our business, our beliefs, and our management’s assumptions. In addition, we, or others on our behalf, may make forward-looking statements in press releases or other written statements or in oral communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls, and conference calls. Words such as “expect,” “anticipate,” “outlook,” “forecast,” “potential,” “could,” “project,” “intend,” “plan,” “continue,” “believe,” “seek,” “estimate,” “should,” “would”,

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“may,” “will,” “assume,” variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated, intended, expected, believed, estimated, projected or planned including, but not limited to, those described below and in other reports we file or furnish with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our business, financial condition and results of operations could be materially and adversely affected.

We wish to ensure that such forward-looking statements are accompanied by meaningful cautionary statements, so as to obtain the protections of the safe harbor established in the Private Securities Litigation Reform Act of 1995. Accordingly, such statements are qualified by reference to the discussion below of certain important factors that could cause actual results to differ materially from those projected in such forward-looking statements. We caution the reader that the list of factors may not be exhaustive. We operate in a continually changing business environment, and new risk factors emerge from time to time. We cannot predict such risk factors, nor can we assess the impact, if any, of such risk factors on our business or the extent to which any factors may cause actual results to differ materially from those projected in any forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made and, except to the extent required by law, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions, or otherwise.

Risks Related To Our Business

Deterioration of the wireless infrastructure industry could lead to reductions in capital spending budgets by wireless operators and original equipment manufacturers, which could adversely affect our revenues, gross margins and income.    Our revenues and gross margins will depend significantly on the overall demand for wireless infrastructure subsystems products. A reduction in capital spending budgets by wireless operators and original equipment manufacturers caused by an economic downturn could lead to a softening in demand for our products and services, which could result in a decrease in revenues and earnings.

The telecommunications industry has experienced significant consolidation and this trend is expected to continue. Recent examples of this consolidation are Lucent’s merger with Alcatel and AT&T Wireless’ merger with Cingular. It is possible that we and one or more of our competitors each supply products to the companies that have merged or will merge.    This consolidation could result in delays in purchasing decisions by merged companies or in us playing a decreased role in the supply of products to the merged companies. Delays or reductions in wireless infrastructure spending could have a material adverse effect on demand for our products. We depend on several large OEMs and wireless service providers for a significant portion of our business. In fiscal 2006, the top 25 customers accounted for 69% of sales. Any disruption in our relationships with our major customers could adversely affect our sales, operating margins, net income and stock price.

A substantial portion of our manufacturing capacity and business activity is outside the United States. Conducting business in international markets involves risks and uncertainties such as foreign exchange rate exposure and political and economic instability that could lead to reduced international sales and reduced profitability associated with such sales, which would reduce our sales and income.    A significant portion of our sales are outside the United States. We anticipate that international sales will continue to represent a substantial portion of our total sales and that continued growth and profitability will require further international expansion. Identifiable foreign exchange rate exposures result primarily from currency fluctuations, accounts receivable from customer sales, the anticipated purchase of products from affiliates and third-party suppliers and the repayment of inter-company loans denominated in foreign currencies with our foreign subsidiaries. International business risks also include political and economic instability, tariffs and other trade barriers, longer customer payment cycles, burdensome taxes, restrictions on the repatriation of earnings, expropriation or requirements of local or shared ownership, compliance with local laws and regulations, terrorist attacks, developing legal systems, reduced protection of intellectual property rights in some countries, cultural and language differences, difficulties in managing and staffing operations and difficulties maintaining good employee relations. We believe that international risks and uncertainties could lead to reduced international sales and reduced profitability associated with such sales, which would reduce our sales and income.

The competitive pressures we face could lead to reduced demand or lower prices for our products and services in favor of our competitors’ products and services, which could harm our sales, gross margins and prospects.    We encounter

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aggressive competition from a variety of competitors in all areas of our business, and compete primarily on the basis of technology, performance, price, quality, reliability, brand, distribution, customer service and support. If we fail to develop new products and services, periodically enhance our existing products and services, or otherwise compete successfully, it would reduce our sales and prospects. Further, we may have to continue to lower the prices of many of our products and services to stay competitive. If we cannot reduce our costs in response to competitive price pressures, our gross margins would decline.

Over the last four years we have completed several acquisitions and may continue to make acquisitions in the future. We believe that these acquisitions provide strategic growth opportunities for the company. Our failure to meet the challenges involved in successfully integrating acquisitions or to otherwise realize the anticipated benefits of acquisitions could adversely affect our results of operations. Realizing the benefits of acquisitions will depend on our ability to successfully integrate acquisitions with our existing operations.    Our inability to successfully integrate operations in a timely manner may result in the company not realizing the anticipated benefits or synergies of these acquisitions. The integration of companies is a complex, time-consuming and expensive process that could significantly disrupt our business. The anticipated benefits and synergies of acquisitions are based on projections and assumptions, not actual experience, and assume a successful integration. In addition, the company’s ability to realize these benefits and synergies could be adversely impacted by practical or legal constraints on our ability to combine operations or implement workforce reductions and by risks relating to potential unknown liabilities. The challenges involved in successfully integrating acquisitions include: consolidating and rationalizing information systems and manufacturing operations, combining product offerings, coordinating and rationalizing research and development activities, preserving distribution, marketing or other important relationships, maintaining employee morale and retaining key employees, and coordinating and combining overseas operations, relationships and facilities, which may be subject to additional constraints imposed by local laws and regulations.

If we cannot continue to rapidly develop, manufacture and market innovative products and services that meet customer requirements for performance and reliability, we may lose market share and our revenues may suffer.    The process of developing new wireless technology products and services is complex and uncertain, and failure to anticipate customers’ changing needs and emerging technological trends accurately and to develop or obtain appropriate intellectual property could significantly harm our results of operations. We must make long-term investments and commit significant resources before knowing whether our investments will eventually result in products that the market will accept. After a product is developed, we must be able to manufacture sufficient volumes quickly and at low costs. To accomplish this, we must accurately forecast volumes, product mix and configurations that meet customer requirements, which we may not be able to do successfully.

Among the factors that make a smooth transition from current products to new products difficult are delays in product development or manufacturing, variations in product costs, delays in customer purchases of existing products in anticipation of new product introductions and customer demand for the new product. Our revenues and gross margins may suffer if we cannot make such a transition effectively and also may suffer due to the timing of product or service introductions by our suppliers and competitors. This is especially challenging when a product has a short life cycle or a competitor introduces a new product just before our own product introduction. Furthermore, sales of our new products may replace sales of some of our current products, offsetting the benefit of even a successful product introduction. If we incur delays in new product introductions, or do not accurately estimate the market effects of new product introductions, given the competitive nature of our industry, future demand for our products and our revenues may be seriously harmed.

We plan to move our Orland Park, Illinois manufacturing facility.    On August 29, 2005, we entered into a contract to sell our Orland Park, Illinois manufacturing and corporate headquarters site for approximately $26 million. The first phase of this transaction, which was the sale of a portion of the land, closed in fiscal 2006. The second phase of this transaction, which will include the sale of the company’s Orland Park, Illinois facility, is expected to close in fiscal 2007. The company relocated its headquarters to Westchester, Illinois in January 2006 and is constructing a state-of-the-art manufacturing facility in Joliet, Illinois which the company plans to occupy in fiscal 2007. In order to avoid customer-related disruptions, the company has a detailed plan to transition administrative and manufacturing operations to these new facilities. However, due to the scope and nature of the move, customer shipments could be affected, which could affect customer relationships and the company’s sales and profits.

Our revenues and selling, general and administrative expenses may suffer if we cannot continue to enforce the intellectual property rights on which our business depends or if third parties assert that we violate their intellectual property rights.    We generally rely upon patent, copyright, trademark and trade secret laws in the United States and similar

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laws in other countries, and agreements with our employees, customers, partners and other parties, to establish and maintain our intellectual property rights in technology and products used in our operations. However, any of our intellectual property rights could be challenged, invalidated or circumvented, or our intellectual property rights may not provide competitive advantages, which could significantly harm our business. Also, because of the rapid pace of technological change in the wireless industry, a portion of our business and our products may rely on key technologies developed by third parties, and we may not be able to obtain licenses and technologies from these third parties on reasonable terms or at all. Third parties also may claim that we are infringing upon their intellectual property rights. Even if we do not believe that our products or business are infringing upon third parties’ intellectual property rights, the claims can be time-consuming and costly to defend and may divert management’s attention and resources away from our business. Claims of intellectual property infringement also might require us to enter into costly settlement or license agreements. If we cannot or do not license the infringed technology at all or on reasonable terms or substitute similar technology from another source, our sales, operating margins and income could suffer.

We are subject to risks related to product defects which could result in product recalls and could subject us to warranty claims which are greater than anticipated. If we were to experience a product recall or an increase in warranty claims compared with our historical experience, our sales and operating results could be adversely affected.    We test our products through a variety of means. However, there can be no assurance that our testing will reveal latent defects in our products, which may not become apparent until after the products have been sold into the market. Accordingly, there is a risk that product defects will occur, which could require a product recall. Product recalls can be expensive to implement and, if a product recall occurs during the product’s warranty period, we may be required to replace the defective product. In addition, a product recall may damage our relationship with our customers, and we may lose market share with our customers. We offer warranties on most products. The specific terms and conditions of the warranties offered vary depending upon the products sold. We accrue for warranty costs based on the number of units sold, the type of products sold, historical and anticipated rates of warranty claims and cost per claim. We regularly review these forecasts and make adjustments as needed. If we were to experience product recall or an increase in warranty claims compared with our historical experience, our sales and operating results could be adversely affected.

If we cannot continue to attract and retain highly-qualified people, our revenues, gross margin and income may suffer.    We believe that our future success significantly depends on our ability to attract, motivate and retain highly qualified management, technical and marketing personnel. The competition for these individuals is intense. From time to time, there may be a shortage of skilled labor, which may make it more difficult and expensive for us to attract, motivate and retain qualified employees. We believe our inability to do so could negatively impact the demand for our products and services and consequently our financial condition and operating results.

Our costs and business prospects may be affected by increased government regulation, a factor which is largely beyond our control.    We are not directly regulated in the United States, but many of our U.S. customers and the telecommunications industry generally are subject to Federal Communications Commission regulations. In overseas markets, there are generally similar governmental agencies that regulate our customers. We believe that regulatory changes could have a significant negative effect on our business and operating results by restricting our customers’ development efforts, making current products obsolete or increasing competition. Our customers must obtain regulatory approvals to operate certain of our products. Any failure or delay by any of our customers to obtain these approvals would adversely impact our ability to sell our products. The enactment by governments of new laws or regulations or a change in the interpretation of existing regulations could adversely affect the market for our products. The increasing demand for wireless communications has exerted pressure on regulatory bodies worldwide to adopt new standards for such products, generally following extensive investigation and deliberation over competing technologies. In the past, the delays inherent in this governmental approval process have caused, and may in the future cause, the cancellation or postponement of the deployment of new technologies. These delays could have a material adverse effect on our revenues, gross margins and income.

The Chinese government could delay issuance of anticipated new wireless network licenses.    The Chinese government is planning to issue licenses for its next generation wireless network. The new Chinese network will become the technical standard with which wireless infrastructure will be designed, manufactured and deployed in China. It is anticipated that these licenses will be issued during calendar year 2007. Additionally, we anticipate an increase in wireless infrastructure spending associated with the build-out of the anticipated, new network. Significant delays of license issuance could adversely affect the company’s financial results.

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Compliance with European Union environmental directives could be difficult and costly for the company.    The European Union has issued directives governing the design of energy-using products, the restriction of the use of certain hazardous substances and the waste (disposal) of electrical and electronic equipment. These directives require companies to change the way they design, manufacture, track and bring new products into the market. Certain products we manufacture and distribute throughout the European Union will need to comply with these directives. If we are not able to comply with these directives, customer shipments and financial results may be adversely affected.

The goodwill balance on our balance sheet is tested annually for possible valuation impairment and any non-cash impairment charges could adversely affect our financial results.    We test our goodwill balance annually for possible impairment based on the five reporting units of our business. On September 30, 2006 we had a goodwill balance of $883 million, of which $412 million relates to the Base Station Subsystems group. As a result of its relatively large amount of goodwill and its operating losses in fiscal 2004, 2005 and 2006, the Base Station Subsystem Group’s goodwill is at a higher risk of potential future impairment. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment. In estimating the fair value of the businesses for the purpose of our annual or periodic analyses, we make estimates and judgments about the future cash flows of these businesses. Although our cash flow forecasts are based on assumptions that are consistent with plans and estimates we are using to manage the underlying businesses, there is significant judgment in determining the cash flows attributable to these businesses. If actual results are different from the company’s forecasts, future tests may indicate an impairment of goodwill, which could result in non-cash charges, adversely affecting the company’s results of operations. If, in the course of our annual valuation testing procedures, we determine that a portion of the consolidated goodwill balance is impaired, any non-cash impairment charges would adversely affect our financial results.

The manufacture of our power amplifiers and certain of our filter products have been outsourced to companies that specialize in electronics contract manufacturing.    The manufacturing of the company’s power amplifier products has been performed by a leading electronics contract manufacturer for the past several years. Additionally, in September 2006, the company announced that it is outsourcing the manufacture of its European and North American-made filters to another leading electronics contract manufacturer. The company will continue to manufacture certain filter products at its Shenzhen, China facility. The use of contract electronics manufacturers by the company increases the risk of product supply disruption and intellectual property misappropriation. Disruption of product supplies could affect customer relationships, sales and profits. Intellectual property misappropriation could affect the company’s competitiveness in power amplifier and certain filter product lines which would depress long-term sales and profits.

Allegations of health risks from wireless equipment may negatively affect our results of operations.    Allegations of health risks from the electromagnetic fields generated by base stations and mobile handsets, and the lawsuits and publicity relating to them, regardless of merit, could affect our operations negatively by leading consumers to reduce their use of mobile phones or by causing us to allocate resources to these issues.

Beginning in fiscal 2003, the Sarbanes-Oxley Act of 2002 (“the Act”) has required the company to comply with numerous provisions focused on upgraded disclosures and corporate governance, increasing the company’s cost and complexity of being a public company.    Beginning in fiscal 2005, Section 404 of the Act required that the company include an internal control report of management in its annual report on Form 10-K. The internal control report must contain (1) a statement of management’s responsibility for establishing and maintaining adequate internal control over financial reporting, (2) a statement identifying the framework used by management to conduct the required evaluation of the effectiveness of our internal control over financial reporting, (3) management’s assessment of the effectiveness of our internal control over financial reporting as of the end of its most recent fiscal year, including a statement as to whether or not internal control over financial reporting is effective, and (4) a statement that the company’s independent auditors have issued an attestation report on management’s assessment of internal control over financial reporting.

Management acknowledges its responsibility for internal controls over financial reporting and seeks to continually improve those controls. The company believes its process for documenting, evaluating and monitoring its internal control over financial reporting is consistent with the objectives of Section 404 of the Act. The company devotes significant resources maintaining its system of internal controls. We believe the inability to implement and maintain adequate internal controls and to comply with Section 404 of the Sarbanes-Oxley Act in future periods could negatively impact investor confidence and the company’s stock price.

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Risks Related to Our Common Stock

The price of our common stock historically has been volatile.    The market price of our common stock historically has experienced and may continue to experience high volatility, and the broader stock market has experienced significant price and volume fluctuations in recent years. Some of the factors that can affect our stock price are: actual, or market expectations of, fluctuations in capital spending by wireless operators and original equipment manufacturers on wireless infrastructure; the announcement of new products, services or technological innovations by us or our competitors; continued variability in our revenue or earnings; changes in revenue or earnings estimates for us made by the investment community; delays or postponements of wireless infrastructure deployments, including 3G technology, regardless of whether such deployments have an actual impact on our orders or sales; and speculation in the press or investment community about our strategic position, financial condition, results of operations, business or significant transactions.

General market conditions and domestic or international macroeconomic and geopolitical factors unrelated to our performance may also affect the price of our common stock. For these reasons, investors should not rely on historical trends to predict future stock prices or financial results. In addition, following periods of volatility in a company’s securities, securities class action litigation against a company is sometimes instituted. This type of litigation could result in substantial costs and the diversion of management time and resources. We anticipate that we will continue to face these types of risks.

Item 1B.  Unresolved Staff Comments

None.

Item 2.  Properties

Andrew’s primary facilities are manufacturing and distribution centers of which there are over forty locations worldwide. Additionally, the company maintains over sixty sales, engineering, and operating offices worldwide. Andrew’s corporate headquarters are located in Westchester, Illinois. The company’s properties are in good condition and are suitable for the purposes for which they are used. All facilities are in operation, with the exception of the following: our Addison, Illinois facility, which the company is subleasing; the company recently announced plans to close its Amesbury, Massachusetts facility as production of North American-made filter products will be outsourced to Elcoteq; the Nogales, Mexico facility will also be closed as production will be transferred to Elcoteq or other company facilities; and finally the company’s 87,000 square foot facility in Yantai, China is idle and is for sale.

In accordance with its lease agreement, the company plans to reconfigure the manufacturing space in its leased Smithfield, North Carolina facility. Upon completion of the facility reconfiguration in 2007, the company will occupy 235,000 square feet of the current 738,000 square foot facility. The remaining 503,000 square feet will be leased by the landlord to other tenants.

On August 29, 2005 the company entered into a contract to sell its Orland Park, Illinois manufacturing facility and corporate headquarters. The sale of the Orland Park, Illinois facility will take place in two transactions. The company sold a portion of land at its Orland Park, Illinois facility in fiscal 2006. The company plans to complete the sale of the remaining portion of Orland Park, Illinois facility and land in fiscal 2007 when the new Joliet, Illinois manufacturing and administrative facility has been completed.

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The following table lists the company’s significant facilities:

Location	Owned/Leased	Approximate Floor Area in Square Feet	Principal Segment
Smithfield, North Carolina	Leased	738,000	Satellite Communications
Orland Park, Illinois	Owned	591,000	Antenna and Cable Products
Addison, Illinois	Leased	201,000	Base Station Subsystems
McAllen, Texas	Leased	112,000	Antenna and Cable Products
College Park, Georgia	Leased	103,000	Antenna and Cable Products
Richardson, Texas	Owned	100,000	Antenna and Cable Products
Chesire, Connecticut	Leased	95,000	Antenna and Cable Products
Warren, New Jersey	Leased	93,000	Base Station Subsystems
Euless, Texas	Leased	84,000	Antenna and Cable Products
Amesbury, Massachusetts	Leased	78,000	Base Station Subsystems
Forest, Virginia	Owned	75,000	Network Solutions
Ashburn, Virginia	Leased	67,000	Network Solutions
U.S. subtotal		2,337,000
Suzhou, China	Owned	268,000	Antenna and Cable Products
Shenzhen, China	Leased	191,000	Base Station Subsystems
Yantai, China	Owned	182,000	Antenna and Cable Products
Reynosa, Mexico	Owned	166,000	Antenna and Cable Products
Brno, Czech Republic	Leased	150,000	Antenna and Cable Products
Goa, India	Leased	147,000	Antenna and Cable Products
Campbellfield, Victoria, Australia	Leased	133,000	Antenna and Cable Products
Lochgelly, Fife, United Kingdom	Owned	132,000	Antenna and Cable Products
Sorocaba, Sao Paulo, Brazil	Owned	152,000	Antenna and Cable Products
Reynosa, Mexico	Owned	113,000	Antenna and Cable Products
Stratford, United Kingdom	Leased	110,000	Antenna and Cable Products
Buchdorf, Germany	Owned	109,000	Wireless Innovations
Whitby, Ontario, Canada	Owned	94,000	Satellite Communications
Yantai, China	Owned	87,000	Antenna and Cable Products
Capriate, Italy	Leased	75,000	Base Station Subsystems
Nogales, Mexico	Leased	66,000	Antenna and Cable Products
Agrate, Italy	Owned	64,000	Base Station Subsystems
Non-U.S. subtotal		2,239,000
TOTAL		4,576,000

Andrew owns approximately 370 acres of land. The company’s owned manufacturing and distribution facilities are located on this land. Of this total, approximately 162 acres are unimproved, including 98 acres in Ashburn, Canada, used for operations of the Whitby, Canada facility.

Item 3.  Legal Proceedings

On October 25, 2005, TruePosition, Inc. filed a complaint in the U.S. District Court for the District of Delaware, alleging the company’s potential sale of certain geolocation products to Saudi Telecom will infringe a TruePosition patent. As relief, the complaint seeks, among other things, injunctive relief and unspecified monetary damages. The company filed its response and counterclaim on December 15, 2005 and is vigorously defending this litigation. The parties are currently in discovery and have had no meaningful settlement talks to date.

The company is also a party to various other legal proceedings, lawsuits and other claims arising in the ordinary course of its business. The company does not believe that such other litigation, if adversely determined, would have a material effect on the company’s business, financial position, results of operations or cash flow.

Item 4.  Submission of Matters to a Vote of Security Holders

There were no matters that required a vote of security holders during the three months ended September 30, 2006.

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Additional Item—Executive Officers of the Registrant

The following information lists the executive officers of the company as of the filing date of this Annual Report on Form 10-K.

JUSTIN C. CHOI, 41, senior vice president, general counsel and secretary, joined Andrew in March 2006. Prior to joining Andrew, he was employed by Avaya Inc., where he served as vice president—law, corporate and securities. He graduated from Johns Hopkins University with a Bachelor of Arts in philosophy and a Juris Doctorate from Northwestern University.

JOHN E. DESANA, 57, executive vice president and group president, Antenna and Cable Products, joined Andrew in March 1991 as operations manager, HELIAX^® cable products. He was vice president, HELIAX^® cable and accessories from November 1996 through November 1998, when he became group president of Antenna and Cable Products. Prior to joining Andrew, he was employed by Litton Industries and Belden Wire and Cable. He graduated from Xavier University with a Bachelor of Arts in economics.

JOHN R.D. DICKSON, 52, senior vice president and chief information officer, most recently served as vice president of Global Information Systems since 1996. He joined Andrew in 1975 and has held numerous management positions in engineering, business development, marketing and business unit management. He holds a Higher National Diploma in physics from Napier University, Edinburgh, Scotland.

RALPH E. FAISON, 48, president and chief executive officer, joined Andrew in June 2002 as president and chief operating officer. He was formerly president and chief executive officer of Celiant Corporation from June 2001 until its acquisition by Andrew in June 2002. Prior to joining Celiant, he was vice president of New Ventures Group at Lucent Technologies from 1997 until June 2001. Previously, he was vice president of advertising and brand management at Lucent. Prior to Lucent, he held various positions at AT&T, including vice president and general manager of AT&T’s wireless business unit and manufacturing vice president for its consumer products unit in Bangkok, Thailand. He holds a Bachelor of Science in marketing from Georgia State University and a Master of Science in management from Stanford University. He is a member of the board of directors of NETGEAR, Inc. and Andrew, and a member of the National Foundation for Teaching Entrepreneurship Chicago Advisory Board.

DANIEL J. HARTNETT, 51, vice president, tax and treasury, joined Andrew in April 1997 as tax director and was elected vice president in July 2003. Prior to joining Andrew, he was employed by Sara Lee Corporation and the public accounting firm of Touche Ross. He holds a Juris Doctorate and Master of Science in taxation from DePaul University and a Bachelor of Science in Accountancy from Northern Illinois University. He is a CPA, member of the Illinois Bar, the AICPA and Tax Executives Institute.

ROBERT J. HUDZIK, 57, senior vice president and chief human resources officer, joined Andrew in July 1996. Previously he served as group president of the Wireless Innovations Group until October 2006. He has also been vice president, corporate development, and vice president, business development, for Andrew. Prior to joining Andrew, he was director, marketing and sales, network services for PTT Telecom (now KPN) in the Netherlands from 1994 until 1996. Prior to PTT Telecom, he was vice president, marketing for Ameritech Services from January 1990 to 1994. He holds a Bachelor of Science in electrical engineering from the University of Illinois at Urbana-Champaign and a Master of Business Administration from the University of Chicago.

MARTY R. KITTRELL, 50, executive vice president and chief financial officer, joined Andrew in June 2002 as vice president, strategic planning. He was formerly vice president and chief financial officer of Celiant Corporation. Between 1997 and 2000, he held various executive positions at BlueStar Battery Systems International, Worldtex, Inc. and Enfinity Corporation. Prior to that, he was vice president and chief financial officer from 1989 to 1997 of Exide Electronics Group, Inc. He holds a Bachelor of Science in accounting from Lipscomb University. He is a CPA, member of Financial Executives International (FEI), National Investor Relations Institute and AICPA.

ROGER J. MANKA, 44, executive vice president and group president, Worldwide Sales and Marketing, joined Andrew in 2004. He joined Andrew from Commworks, a 3Com company, where he was vice president of worldwide sales. He has over 20 years of experience in selling systems, products and services in the wireless, wireline, voice applications and packet infrastructure markets. He graduated with a Bachelor of Science from the University of Illinois at Chicago.

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CARLETON M. (MICKEY) MILLER, 43, executive vice president and group president, Wireless Network Solutions, joined Andrew in June 2004. Prior to his current role, he served as president, Base Station Subsystems Group. He came to Andrew from Tyco, where he was vice president of Tyco Electronics Power Systems. Prior to joining Tyco, he was vice president of telecom sales for Alpha Technologies, vice president of OEM sales for General Signal Best Power Division, and held various leadership positions at AT&T Microelectronics. He holds an Master of Business Administration in finance and marketing from Rockhurst College, studied finance at the London Business School, and holds a Bachelor of Science in industrial engineering from the University of Missouri.

MARK A. OLSON, 48, vice president, corporate controller and chief accounting officer, joined Andrew in 1993 as group controller. He was named corporate controller in 1998, vice president and corporate controller in 2000 and chief accounting officer in 2003. Prior to joining the company, he was employed by Nortel and Johnson & Johnson. He received a Bachelor of Arts in accounting and Spanish from Lewis University and a Master of Business Administration from DePaul University. He is a CPA and a member of the AICPA and the Illinois CPA Society.

PART II

Item 5.  Market for the Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities

Andrew’s common stock is traded on the NASDAQ Global Select Market under the symbol ANDW. As of the close of business on December 7, 2006, Andrew had 3,716 holders of common stock of record.

Information concerning the company’s stock price during fiscal 2006 and 2005 is included in Note 13, Selected Quarterly Financial Information (Unaudited), of the Notes to Consolidated Financial Statements. All prices represent high and low daily closing prices as reported by NASDAQ.

It is the present practice of Andrew’s Board of Directors to retain earnings in the business to finance the company’s operations and investments, and the company does not anticipate payment of cash dividends on common stock in the foreseeable future.

Since fiscal 1997, the company’s Board of Directors has authorized the company to repurchase up to 30.0 million common shares. As of September 30, 2006 the company had repurchased approximately 22.6 million shares. These repurchases may be made on the open market or in negotiated transactions and the timing and amount of shares repurchased will be determined by the company’s management. Included in the 22.6 million shares repurchased are 4.0 million shares repurchased in the first and fourth quarters of fiscal 2006 for $39.4 million. No shares were repurchased during the second or third quarters of fiscal 2006.

The table below lists the company’s repurchases of shares of common stock during fiscal 2006:

Fiscal Year 2006	Total Number of Shares Repurchased	Average Price Paid per Share		Total Number of Shares Repurchased as Part of Publicly Announced Plans	Shares Available for Repurchase
November 1 to November 30	525,000	$	10.61	525,000	10,864,568
December 1 to December 31	1,075,000	$	11.19	1,075,000	9,789,568
August 1 to August 31	1,900,000	$	9.01	1,900,000	7,889,568
September 1 to September 30	500,000	$	9.46	500,000	7,389,568
Total	4,000,000			4,000,000

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Item 6.  Selected Financial Data

Andrew Corporation

Five-Year Financial Highlights Summary

(in thousands, except per share data)

	2006			2005		20041		20031,2			20022
Sales	$	2,146,093		$	1,961,234	$	1,828,362	$	1,011,741		$	864,801
Gross profit		473,379			436,788		443,275		272,262			237,708
Income from continuing operations before income taxes4		69,108			63,179		42,302		20,633			13,0703
Income (loss) from continuing operations		(34,290	)9		38,858		28,897		17,041			10,4923
Net income (loss)		(34,290	)9		38,858		28,897		13,857			(26,379	)3
Preferred stock dividends		—			232		707		6,459			—
Net income (loss) available to common shareholders		(34,290	)		38,626		28,190		7,398			(26,379	)3
Basic and diluted income (loss) from continuing operations per share	$	(0.22	)	$	0.24	$	0.18	$	0.10		$	0.12 3
Basic and diluted loss from discontinued operations per share	$	—		$	—	$	—	$	(0.03	)	$	(0.42	)3
Basic and diluted net income (loss) per share	$	(0.22	)	$	0.24	$	0.18	$	0.07		$	(0.30	)3
Current assets	$	1,153,021		$	1,076,940	$	992,888	$	894,389		$	477,183
Goodwill and intangible assets, less amortization		929,871			918,836		928,871		910,5295			443,6395
Total assets		2,408,921			2,313,679		2,239,715		2,074,235			1,123,666
Current liabilities		567,886			438,268		383,360		276,623			236,570
Long-term obligations		333,760			324,859		339,232		375,3056			41,852
Total equity	$	1,507,275		$	1,550,552	$	1,517,1238	$	1,422,3077,8		$	845,2447

1. The results for fiscal 2003 and subsequent years include the July 2003 acquisition of Allen Telecom, which also resulted in the increase in sales in fiscal 2004.

2. The results for fiscal 2002 and subsequent years include the June 2002 acquisition of Celiant, which also resulted in the increase in sales in fiscal 2003.

3. In fiscal 2002 the company recognized restructuring charges of $36.0 million pre-tax and $25.2 million after-tax. Also included in fiscal 2002 is an after-tax loss on the disposal of discontinued operations of $26.4 million.

4. Pre-tax amortization expense of intangible assets included in fiscal 2006, 2005, 2004, 2003 and 2002 was $19.0 million, $22.1 million, $37.6 million, $19.0 million, and $5.1 million respectively.

5. The increase in goodwill and intangible assets in fiscal 2002 was primarily due to the Celiant acquisition and the increase in fiscal 2003 was primarily due to the Allen Telecom acquisition.

6. Long-term obligations increased in fiscal 2003 primarily due to the company issuing $240.0 million of convertible subordinated notes.

7. The fiscal 2002 increase in equity was primarily due to 16.3 million shares of common stock issued in the Celiant acquisition. The fiscal 2003 increase in equity was primarily due to 55.2 million shares of common stock issued in the Allen Telecom acquisition.

8. Total equity includes redeemable convertible preferred stock of $9.2 million in fiscal 2003 and $6.0 million fiscal 2004.

9. Includes a non-cash valuation allowance for deferred tax assets of $83.4 million, a gain on the sale of land for the Orland Park, Illinois facility of $9.0 million, merger costs of $13.5 million and a pension termination gain of $14.2 million.

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Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with the financial statements and related notes included elsewhere herein. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause a difference include, but are not limited to, those discussed under Item 1A. (Risk Factors) in this annual report on form 10K.

Overview

Andrew Corporation, together with its subsidiaries, is engaged in the design, manufacture, and supply of communications equipment, services, and systems for global communications infrastructure markets. Our products are used in the infrastructure for traditional wireless networks, third generation (3G) technologies, voice, data, video and internet services, as well as applications for microwave and satellite communications, and other specialized applications. We operate in five segments: Antenna and Cable Products, Base Station Subsystems, Network Solutions, Wireless Innovations, and Satellite Communications. With the exception of Satellite Communications, all of our operating segments sell products and services to the wireless infrastructure market.

Our financial results are influenced by factors in the markets in which we operate and by our ability to successfully execute our business strategy. Marketplace factors include competition for customers, raw material prices, product and price competition, economic conditions in various geographic regions, foreign currency exchange rates, interest rates, changes in technology, fluctuations in customer demand, patent and intellectual property issues, litigation results and legal and regulatory developments. We expect that the marketplace environment will remain highly competitive. Our ability to execute our business strategy successfully will require that we meet a number of challenges, including our ability to accurately forecast sales demand and calibrate manufacturing to such demand, develop, manufacture and successfully market new and enhanced products and product lines, control overhead spending, successfully integrate acquired businesses, and attract, motivate and retain key personnel to manage Andrew’s operational, financial and management information systems.

In fiscal 2006, we completed a number of acquisitions. We acquired Skyware Radio Systems GmbH, a German manufacturer of electronic products for broadband satellite communications networks and Precision Antennas Ltd., a Stratford, England-based designer and manufacturer of microwave antennas for use in carrying point-to-point radio signals, primarily for cellular network backhaul. We also acquired CellSite Industries (CSI), a provider of wireless equipment repair services. We believe the acquisition of CSI provides us with a lower cost platform for warranty and repair services.

On May 30, 2006, Andrew entered into a definitive merger agreement with ADC Telecommunications, Inc. for an all-stock merger transaction. On August 9, 2006, Andrew and ADC mutually agreed to terminate the merger agreement. To effect the mutual termination, we agreed to pay ADC $10 million.

Results of Operation

Sales for fiscal 2006 were $2.146 billion, an increase of 9%, or $185 million, from fiscal 2005. The sales increase resulted from higher sales in Antenna and Cable Products and Base Station Subsystems offset by an expected sales decline in Network Solutions. Sales in fiscal 2005 were $1.961 billion, an increase of 7%, or $133 million, compared to fiscal 2004 due primarily to strong growth in wireless infrastructure sales. Wireless infrastructure capital investment continued to grow across all major geographic regions worldwide in both fiscal 2006 and 2005. The fundamental sources of wireless infrastructure and network growth include increased minutes of usage, increased use of data applications, and the global growth of wireless subscribers.

The top 25 customers accounted for 69% of sales in fiscal 2006, 2005 and 2004. In fiscal 2006 and 2005, major OEMs accounted for 39% of sales. No single customer accounted for more than 10% of sales in fiscal 2006. In fiscal 2005, Cingular Wireless accounted for 11% of total sales. In fiscal 2004, large sales increases in Base Station Subsytems, Network Solutions and Wireless Innovations were primarily attributable to the Allen Telecom acquisition.

Gross profit margins decreased slightly from 22.3% in fiscal 2005 to 22.1% in fiscal 2006 due primarily to higher commodity costs, especially copper, and the expected decrease in Network Solutions margin contribution resulting from the completion of U.S. E-911 upgrade installations. Gross profit margin decreased from 24.2% in fiscal 2004 to 22.3% in fiscal 2005 primarily due to higher commodity costs and higher warranty costs.

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Operating expenses were $390 million in fiscal 2006, or 18.2% of sales, compared with $359 million in fiscal 2005, or 18.3% of sales. Operating expenses increased $30.8 million compared to fiscal 2005 due primarily to higher sales and administrative costs, which increased from 11.4% of sales in fiscal 2005 to 11.9% of sales in fiscal 2006. Research and development expenses increased $5.1 million in fiscal 2006 versus fiscal 2005, but decreased as a percentage of sales from 5.5% in fiscal 2005 to 5.3% in fiscal 2006. Andrew believes it will be able to lower operating costs as a percentage of sales by continuing to leverage its global operations and shared services operating model. In fiscal 2006, income tax expense increased $79 million from the prior year primarily as the result of recording a valuation allowance on its U.S. deferred tax assets. The fiscal 2006 diluted loss per share was $0.22, compared to earnings per share of $0.24 in fiscal 2005 and $0.18 in fiscal 2004, primarily due to recognition of the U.S. deferred tax valuation allowance.

During fiscal 2006, Andrew’s product groups and internal reporting structure and management were aligned in five operating segments in accordance with Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures about Segments of an Enterprise and Related Information. These five product groups (Antenna and Cable Products, Base Station Subsystems, Network Solutions, Wireless Innovations and Satellite Communications) were managed as separate reportable segments. Additional detailed descriptions of the operating segments are included in Item 1, Business. Sales for Andrew’s five operating segments for the last three fiscal years were as follows:

Dollars in millions	2006	% change		2005	% change		2004	% change
Antenna and Cable Products	$1,248	19	%	$1,050	28	%	$823	36	%
Base Station Subsystems	505	13	%	446	(10	%)	498	109	%
Network Solutions	91	(42	%)	157	(10	%)	175	327	%
Wireless Innovations	180	7	%	168	37	%	123	193	%
Satellite Communications	122	(13	%)	140	(33	%)	209	146	%
Total Sales	$2,146	9	%	$1,961	7	%	$1,828	81	%

Sales by Segment

Antenna and Cable Products’ sales were $1,248 million, in fiscal 2006, an increase of 19% from fiscal 2005, due to growth in all geographic markets. The largest growth areas, in terms of sales dollars contributed, were the Europe, Middle East and Africa (EMEA) region followed by Asia-Pacific and North American regions. The largest product line sales increases were in the coaxial cable and microwave antenna product lines. The increase in EMEA sales was also the result of Andrew’s acquisition of Precision Antenna, Ltd. in April of fiscal 2006, which contributed $39.4 million of revenues in fiscal 2006. In fiscal 2005, Antenna and Cable Products sales increased 28% due to strong global growth of wireless infrastructure investment and the impact of the ATC Tower Services acquisition, which allowed Andrew to enhance its services offerings and created an additional sales channel for Andrew’s products.

Base Station Subsystems’ sales were $505 million in fiscal 2006, an increase of 13% from fiscal 2005, primarily due to higher filter and power amplifier sales in North America, which was offset by decreased sales in EMEA. Base Station Subsystem sales of $446 million in fiscal 2005 were down 10% versus fiscal 2004 primarily due to lower power amplifier sales as a result of a decline in global CDMA network upgrades and expansion. This decline was partially offset by an increase in the company’s OEM customer base and new product offerings, including tower-mounted amplifiers and multi-carrier power amplifiers.

Network Solutions’ sales decreased $67 million in fiscal 2006, or 42%, versus fiscal 2005 due primarily to the continued anticipated decline in North American geolocation installations. Continuing a trend from fiscal 2005, in fiscal 2006, major U.S. service providers completed their E-911 equipment upgrades that were mandated by the U.S. government. As such, geolocation equipment revenues continue to decline. Network Solutions sales were $157 million in fiscal 2005, down 10% from fiscal 2004 also due to the anticipated reduction of geolocation hardware installations. The company anticipates that sales of geolocation products will now stabilize, at a lower annual revenue rate, as a result of ongoing maintenance and support, Tier II and Tier III operators and international opportunities.

Wireless Innovations’ sales were $180 million in fiscal 2006, up 7% from fiscal 2005, due to increased RADIAX^® sales and repeater product sales primarily in North America and EMEA, both of which have experienced increased demand for greater wireless communication coverage in densely populated urban areas. Wireless Innovations sales were $168 million in fiscal 2005, up 37% from fiscal 2004, due to increased demand for products that provide greater coverage in urban areas. Andrew anticipates that demand for universal coverage combined with new 3G applications will continue to generate growth in Wireless Innovation sales.

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Satellite Communications’ sales were $122 million in fiscal 2006, a decrease of 13% compared to fiscal 2005. Sales gains in earth station electronics and very small aperture antennas were offset by sales decreases in consumer broadband, earth station antenna and mobile antenna products. The earth station electronics increase in sales is the result of the February 2006 acquisition of Skyware Electronics. The decrease in mobile antenna products is the result of Andrew exiting that business in fiscal 2005. Satellite Communications sales decreased 33% in fiscal 2005 as a result of lower sales to the consumer satellite market.

Sales by Major Geographic Region

Dollars in millions	2006	% change		2005	% change		2004	% change
Americas	$1,140	6	%	$1,077	4	%	$1,033	89	%
Europe, Middle East, Africa (EMEA)	$681	8	%	631	17	%	541	95	%
Asia Pacific	$325	28	%	253	0	%	254	36	%
Total Sales	$2,146	9	%	$1,961	7	%	$1,828	81	%

Sales in the Americas increased 6% in fiscal 2006 compared to fiscal 2005 due to strong growth in antenna and cable products, power amplifiers and filter sales which were offset by sales decreases in geolocation equipment and satellite products. Sales in the Americas were up 4% in fiscal 2005 compared to fiscal 2004 due to modest growth in wireless infrastructure sales and Andrew’s newly acquired construction services business. Partially offsetting this growth was a significant decline in consumer broadband satellite sales and a decline in geolocation sales.

EMEA sales increased 8% in fiscal 2006 compared to fiscal 2005 due to strong Antenna and Cable Group sales, primarily resulting from the acquisition of Precision Antenna, Ltd., offset by lower Base Station Subsystems Group sales. EMEA sales increased 17% in fiscal 2005 compared to fiscal 2004 due to strong wireless infrastructure sales. In fiscal 2005, Andrew experienced good growth in the emerging markets of Russia and other eastern European countries.

Asia Pacific sales increased 28% in fiscal 2006 compared to fiscal 2005 due to increased Antenna and Cable Group sales, primarily in India, Indonesia and China. Asia Pacific sales were flat in fiscal 2005 versus 2004 due to a decline in sales in China, partially offset by continued growth in India. With the anticipated issuance of 3G licenses in fiscal 2006, Chinese operators slowed their investment in wireless infrastructure in fiscal 2005. In fiscal 2005, the Asia Pacific region, excluding China, grew 56% from fiscal 2004, due primarily to network expansion in India and Taiwan. Andrew has experienced three consecutive years of solid growth in India and believe this emerging market will continue to grow in the future. In fiscal 2004, sales increases were primarily attributable to the Allen Telecom acquisition.

Gross Profit

Gross profit as a percentage of sales was 22.1% in fiscal 2006, 22.3% in fiscal 2005, and 24.2% in fiscal 2004. Two of the more significant factors driving this margin decrease since fiscal 2004 were Andrew’s changing product mix and increased commodity costs. Over the last three years, Andrew’s gross profit percentages have changed as Andrew’s product offering has evolved from primarily passive components to complete system solutions, including more active electronic components. Additionally, higher margin geolocation sales have decreased over the past three years as U.S. service providers have implemented and completed E-911 upgrade installations. Other major factors that have contributed to this decline are continued price pressure, higher commodity prices and higher warranty costs associated with the increase in active component sales. In the last three years, Andrew has experienced significant variability in new lower-margin products and services, such as consumer satellite products and construction services, which have put downward pressure on gross profit margin percentages. Despite significant improvements from new manufacturing facilities and other cost improvements, the gross profit margin decreased to 22.1% in fiscal 2006 primarily due to higher commodity costs, principally copper, and lower geolocation sales. In fiscal 2006, Andrew used approximately 70 million pounds of copper. Andrew’s average cost per pound of copper increased by approximately $0.45 throughout fiscal 2006, resulting in an increase in cost of products sold of approximately $32 million or 1.5% of sales. In addition, in fiscal 2005, product recall costs associated with one of the company’s Base Station Subsystem products resulted in a charge of $17 million or 0.8% of sales.

Gross Profit By Segment

Gross profit margins vary across Andrew’s operating segments. Generally, Network Solutions’ and Wireless Innovations’ gross profit margin percentages are above the corporate average.

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Network Solutions’ gross margin decreased by 680 basis points in fiscal 2006 versus 2005. Combined with lower fiscal 2006 revenues, Network Solution’s fiscal 2006 gross profit dollar contribution decreased 51% or $45.1 million versus fiscal 2005. The company anticipates that sales of Network Solution’s geolocation products will now stabilize at lower annual revenues, which will result from ongoing maintenance and support, Tier II and Tier III operators, and international opportunities.

Wireless Innovations’ gross margin increased in fiscal 2006 by 160 basis points versus fiscal 2005, primarily due to higher sales of higher-margin RADIAX^® cable and repeater products.

The Antenna and Cable Products’ margin is consistent with the corporate average rate of 22.0%, but has declined slightly by 10 basis points versus fiscal 2005, due to higher raw material costs, changes in product mix and competitive price pressure. Andrew uses commodities such as copper and petrochemicals in the manufacture of its cable products. The most significant of these commodities is copper and the price of copper increased by 124% over the eighteen month period ending September 30, 2006. The company took steps to mitigate the impact of rising copper prices by implementing a copper surcharge and price increase program in fiscal 2006 with all customers in all markets. Implementation of this copper surcharge and price increase program enabled the company to partially mitigate the large increase in the cost of copper and help stabilize gross margins. Additionally, the company buys copper on a forward purchase contract basis. At the start of fiscal 2007, Andrew had approximately 34% of its forecasted copper requirements for fiscal 2007 under contract at an average price of $2.42 per pound compared to the market price of approximately $3.45 per pound at the end of September 2006. Additionally, the company’s cable sales in international markets, as a percentage of total sales, increased in both fiscal 2006 and fiscal 2005. This has negatively impacted the company’s overall gross margins as certain international wireless operators generally use smaller-diameter, lower margin cable in their networks. The acquisition of ATC Tower Services in the first quarter of fiscal 2005 also adversely impacted this segment’s gross margin rate. The company has also experienced increased pricing pressures from competitors, as well as general pricing pressure from its customers as part of their cost reduction efforts.

The Base Station Subsystems product group is comprised of active components such as filters and power amplifiers that carry a lower gross margin than the overall corporate average. Base Station Subsystems’ product margins increased in fiscal 2006 primarily due to decreased warranty and product recall costs. Additionally, over the past two years, the company has been transitioning considerable filter production to its China facility and, in fiscal 2006, the company experienced positive results from this transition. The company expects to see additional cost savings in the future as a result of outsourcing remaining North American and European filter production to Elcoteq in late fiscal 2006.

Satellite Communications is the company’s lowest gross profit margin segment. In fiscal 2006, margins in this segment decreased 560 basis points versus fiscal 2005, primarily due to higher per-unit manufacturing costs of its DTH satellite products, additional costs related to a long-term customer contract and transition costs related to Andrew’s acquisition of Skyware.

Research and development expenses were 5.3% of sales in fiscal 2006, 5.5% of sales in fiscal 2005 and 6.0% of sales in fiscal 2004. While research and development expenses decreased as a percentage of sales, they increased $5.1 million in fiscal 2006, or 4.8% from fiscal 2005. The majority of the company’s research and development spending over the last three years has been focused on its active electronic components, especially amplifiers, filters and repeaters and related products. Andrew has continued to invest heavily in the development of new products and more integrated product offerings.

Sales and administrative expenses as a percentage of sales were 11.9% in fiscal 2006, 11.4% in fiscal 2005 and 11.9% in fiscal 2004. In fiscal 2006, sales and administrative costs increased $32.4 million, or 14.5%, from fiscal 2005. Factors causing this increase were higher sales expenses to support sales growth in emerging markets and the growing direct-to-carrier sales channels, higher administrative costs of recent acquisitions that have not been fully integrated, and $4.3 million of incremental stock option expense. In fiscal 2005, sales and administrative costs increased 2.4% from fiscal 2004 due to higher Sarbanes-Oxley compliance costs, global IT system implementations and higher legal costs.

In fiscal 2006, Andrew adopted SFAS No. 123(R), Share-Based Payments, which requires Andrew to record compensation expense for stock options issued to employees. Prior to fiscal 2006, Andrew accounted for stock options granted to employees under the intrinsic value method of APB No. 25, where no compensation expense was recognized. Andrew has elected to use the modified prospective transition method where compensation expense is recorded prospectively. The adoption of SFAS No. 123(R) resulted in sales and administrative expense for stock options of $4.3 million in fiscal 2006 compared to no stock option expense being recorded in fiscal 2005 and fiscal 2004. Andrew has shifted its stock-based compensation policy from primarily stock option-based awards to restricted stock unit (RSU) awards. At September 30, 2006, Andrew had unrecognized

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compensation expense of $5.3 million for unvested stock options and $8.9 million for unvested RSUs. With the adoption of SFAS No. 123(R), the company made certain adjustments to the assumptions used to value stock options. For additional information, see Note 11, Stock-Based Compensation, of the Notes to Consolidated Financial Statements.

Intangible amortization was $19.0 million in fiscal 2006, $22.1 million in fiscal 2005 and $37.6 million in fiscal 2004. Intangible amortization is primarily due to identifiable intangible assets acquired in the Allen Telecom and Celiant acquisitions. The decrease in intangible amortization in fiscal 2006 and fiscal 2005 was due to the full amortization of certain intangible assets acquired in these acquisitions. Excluding any new acquisitions, Andrew expects that intangible amortization will decrease to approximately $15.0 million in fiscal 2007 as more intangible assets become fully amortized.

Restructuring expenses were $7.7 million in fiscal 2006, $5.3 million in fiscal 2005, and $11.1 million in fiscal 2004. These costs are primarily severance and other costs associated with integrating Andrew’s acquisitions, streamlining operations, and other cost-cutting initiatives. In the fourth quarter of fiscal 2006, as part of a plan to reorganize the company’s management and operating groups in fiscal 2007, Andrew incurred $2.0 million of severance costs.

Merger costs were $13.5 million in fiscal 2006 due to a $10 million fee to terminate Andrew’s proposed merger with ADC Telecommunications, Inc. (ADC) and other legal and professional costs related to the merger agreement. On May 30, 2006, Andrew entered into a definitive merger agreement with ADC for an all-stock merger. Under the terms of this merger agreement, Andrew would have become a wholly-owned subsidiary of ADC. On August 9, 2006 Andrew and ADC mutually agreed to terminate the merger agreement. To effect the mutual termination, Andrew agreed to pay ADC $10 million and will be obligated to pay an additional fee of $65 million under certain circumstances if the company consummates a business combination before August 9, 2007.

Pension termination gain was $14.2 million in fiscal 2006 as a result of eliminating pension obligations due to the termination of the frozen Allen Telecom defined benefit plan. In fiscal 2005, the company initiated the process of terminating the frozen defined benefit plan assumed as part of the Allen Telecom acquisition. The company fully funded and terminated the plan during fiscal 2006 when the company purchased a non-participating group annuity contract from John Hancock Life Insurance Company for all participants of the Allen Telecom plan. The company made additional contributions of $9.5 million to fully fund the plan.

Asset impairment of $3.9 million in fiscal 2006 is the result of a charge to earnings for impaired software costs that were capitalized in accordance with SFAS No. 86, Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed. The impairment charge is for a product that the company no longer emphasizes and for which the future undiscounted cash flows no longer support the value of the asset.

(Gain) loss on the sale of assets was a gain of $8.0 million in fiscal 2006, a loss of $1.2 million in fiscal 2005 and a loss of $10.2 million in fiscal 2004. The gain in fiscal 2006 was primarily the result of the $9.0 million gain on the sale of a portion of land at the company’s Orland Park, Illinois facility. The company plans to complete the sale of the remaining portion of its Orland Park, Illinois facility and land in fiscal 2007 when the company’s new Joliet, Illinois manufacturing and administrative facility has been completed. In fiscal 2005, Andrew recorded a loss of $1.2 million from the sale and disposition of certain manufacturing assets. In fiscal 2004, the company recognized a loss on the disposal of assets of $10.2 million, primarily due to the sale of two product lines. The company sold selected assets from its broadcast manufacturing operations and wrote down selected assets of its mobile antenna product line to fair value, which were subsequently sold in October 2004. See Note 3, Sale of Assets, in the Notes to Consolidated Financial Statements.

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Operating Income was $83 million in fiscal 2006, $78 million in fiscal 2005, and $57 million in fiscal 2004. Andrew’s management uses operating income as its internal measurement of segment profit and loss. Operating income (loss) by operating segment for the last three years is as follows:

Dollars in millions	2006		2005		2004
Antenna and Cable Products	$194		$162		$146
Base Station Subsystems	(7	)	(33	)	(2	)
Network Solutions	10		61		72
Wireless Innovations	35		31		17
Satellite Communications Group	(18	)	(6	)	(12	)
Items not included in segments
Unallocated Sales and Administrative Costs	(121	)	(114	)	(117	)
Intangible Amortization	(19	)	(22	)	(37	)
Merger Costs	(13	)	—		—
Pension Termination	14		—		—
Gain (loss) on Sale of Assets	8		(1	)	(10	)
Total Operating Income	$83		$78		$57

For purposes of internal management, Andrew does not allocate costs that benefit more than one operating segment. Costs such as finance, accounting, human resources, information systems, legal and executive management are not allocated to operating segments. The only sales and administrative expense that is allocated to operating segments is the cost of Andrew’s global sales force, which sells all of Andrew’s products.

Antenna and Cable Products’ operating income has increased over the last three years due to sales growth partially offset by declining gross profit margins.

Base Station Subsystems’ operating loss decreased in fiscal 2006 primarily due to increased direct-to-carrier revenues, lower warranty costs and higher margins resulting from the transition of substantial filter manufacturing operations to China. In fiscal 2005, Base Station Subsystem’s operating loss increased as a result of higher warranty costs, a decrease in filter margins and costs associated with moving filter production to China.

Network Solutions’ operating income decreased in fiscal 2006 as geolocation sales decreased as a result of the anticipated decline in North American geolocation installations. Continuing a trend from fiscal 2005, most U.S. service providers have substantially completed their E-911 equipment upgrades in fiscal 2006 that were mandated by the U.S. government.

Wireless Innovations’ operating income has continued to grow as this segment’s sales have increased over the last three years.

Satellite Communications’ losses increased in fiscal 2006 due to decreased sales and higher cost of sales due to higher per-unit manufacturing costs of DTH satellite products, additional costs related to a long-term customer contract and transition costs related to Andrew’s acquisition of Skyware. In fiscal 2005, Satellite Communication’s operating losses declined as sales of DTH products decreased.

Unallocated sales and administrative costs increased in fiscal 2006 due to higher administrative costs of recent acquisitions that have not been fully integrated and $4.3 million of incremental stock option expense. In fiscal 2005, unallocated sales and administrative costs decreased due to improved operating efficiencies which were partially offset by costs associated with global IT deployments and Sarbanes-Oxley compliance. Unallocated sales and administrative costs have increased in total, but have decreased as a percentage of sales from 6.2% in fiscal 2004 and 5.7% in fiscal 2005 to 5.6% of sales in fiscal 2006.

Other expenses primarily consist of interest expense, interest income and foreign exchange gains and losses. Other expenses were $14.2 million in fiscal 2006 and $14.3 in fiscal 2005 and fiscal 2004. Interest expense was $15.3 million in fiscal 2006 and $14.9 million in fiscal 2005 and fiscal 2004. The largest portion of the company’s interest expense was related to the $240 million of convertible notes issued in August 2003 and the long-term debt assumed from Allen Telecom. Interest income was $5.7 million in fiscal 2006, $5.0 million in fiscal 2005 and $3.1 million in fiscal 2004. Interest income in fiscal 2005 included $1.6 million of interest received from a favorable resolution of certain tax-related matters. Other expenses were $4.6 million in fiscal 2006, $4.5 million in fiscal 2005 and $2.4 million in fiscal 2004. The majority of other expenses were foreign exchange gains and losses. The foreign exchange losses in fiscal 2006, 2005 and 2004 were primarily due to movements in the Euro and Indian rupee against the U.S. dollar.

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Income tax expense as a percentage of pre-tax income from continuing operations was 149.6% in fiscal 2006, 38.5% in fiscal 2005 and 31.7% in fiscal 2004. Income tax expense for fiscal 2006 included a $5.1 million benefit from the repatriation of foreign subsidiary earnings under the American Jobs Creation Act (AJCA) of 2004 and an $83.4 million charge to establish a full valuation allowance against the company’s net U.S. deferred tax assets. Excluding these items, income tax expense as a percentage of pre-tax income was 36.3% in fiscal 2006. The fiscal 2006 effective tax rate, excluding the above items, was higher than the statutory rate due to a favorable impact of foreign earnings taxed at lower statutory rates being offset by the establishment of valuation allowances for tax benefits associated with losses incurred in certain states and foreign jurisdictions, foreign withholding taxes and the taxation of dividends from foreign subsidiaries outside of the AJCA repatriation. The effective tax rate for fiscal 2005 was higher than the statutory rate due to an unfavorable geographic mix shift of earnings and the establishment of valuation allowances for tax benefits associated with state and foreign losses. The effective tax rate for fiscal 2004 was lower than the statutory rate due to the favorable impact of foreign earnings taxed at lower statutory rates.

The company expects the effective tax rate for fiscal 2007 to be in the range of 35-37%. This rate could be materially affected by the level of pretax income or loss generated in the U.S., the earnings mix in foreign countries where the statutory rates are higher or lower than the federal statutory rate, or by changes in tax laws. The company is subject to examination of its tax filings by the Internal Revenue Service and other taxing authorities. The company regularly reviews and assesses the potential outcome of these examinations to determine the adequacy of its tax provisions.

Net income (loss) available to common shareholders includes preferred stock dividends of $0.2 million in fiscal 2005 and $0.7 million in fiscal 2004. As part of the Allen Telecom acquisition, the company issued shares of convertible preferred stock, issuing one share for each share of Allen Telecom convertible preferred stock. In fiscal 2005, the company converted all remaining convertible preferred shares into Andrew common shares. In fiscal 2004, the company paid preferred stock dividends of $0.7 million, comprised of a regular quarterly dividend of $0.5 million and conversion premium payments of $0.2 million to induce conversion of 63,306 shares of preferred stock into 729,663 shares of Andrew’s common stock.

Liquidity and Capital Resources

In fiscal 2006, Andrew maintained its strong balance sheet and had cash flow from operations of $91.8 million. Cash and cash equivalents were $169.6 million at September 30, 2006, a decrease of $19.2 million from September 30, 2005. Working capital was $585 million at September 30, 2006, compared to $639 million at September 30, 2005. Management believes that Andrew’s working capital position, ability to generate cash flow from operations, and ability to borrow under its revolving credit agreement will allow Andrew to meet its normal operating cash flow needs for the foreseeable future.

In fiscal 2005, Andrew entered into a new $250 million revolving credit agreement with a group of lenders that expires in September 2010 (discussed further in Note 6 of the Notes to Consolidated Financial Statements). Under the terms of this facility, Andrew is subject to various quarterly covenant requirements, including maintaining a ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) to total debt, including letters of credit, maintaining a ratio of EBITDA to senior debt, maintaining a fixed charge coverage ratio and limiting the amount of assets that Andrew can dispose of in a fiscal year. These requirements may limit the amount of borrowing under this credit agreement. As of September 30, 2006, Andrew was in compliance with all of these requirements and had the ability to utilize the entire $250 million of the credit facility.

In fiscal 2004, the company filed a universal S-3 shelf registration that allows the company to publicly issue up to $750 million of debt or equity. This shelf registration gives the company the flexibility to take advantage of strategic initiatives and other favorable long-term opportunities to enhance liquidity.

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Cash flows.    The following table sets forth certain information from Andrew’s consolidated statements of cash flows:

Dollars in thousands	2006			2005			2004
Net income (loss)	$	(34,290)		$	38,858		$	28,897
Non-cash charges for depreciation, amortization, asset sale losses, pension termination gain, stock-based compensation and deferred income taxes		138,592			93,395			109,636
Restructuring costs		(2,025	)		(6,455	)		(13,205	)
Change in operating assets and liabilities		(10,491	)		(36,422	)		(79,294	)
Net cash from operations		91,786			89,376			46,034
Net cash used for investing activities		(93,862	)		(75,804	)		(128,661	)
Net cash used for financing activities		(18,811	)		(15,149	)		(21,685	)
Effect of exchange rates on cash		1,716			1,309			7,091
Decrease in Cash for the Period	$	(19,171	)	$	(268	)	$	(97,221	)

Net cash from operations was $91.8 million in fiscal 2006, $89.4 million in fiscal 2005 and $46.0 million in fiscal 2004. In fiscal 2006, the company’s net cash from operations was relatively flat compared to fiscal 2005 as increased sales and operating income was offset by higher inventory and accounts receivable amounts in EMEA and Asia-Pacific to support Andrew’s growing business in those geographic markets. In fiscal 2005, improved working capital management resulted in increased cash flow from operations.

In fiscal 2006, cash flow from operations was the result of a net loss of $34.3 million, $79.2 million of non-cash charges for depreciation and amortization, a gain on the sale of assets of $9.5 million, a $14.2 million non-cash gain on the termination of the Allen Telecom pension plan, a net $73.7 million non-cash charge for deferred income taxes, cash restructuring costs of $2.0 million, and a net change in operating assets and liabilities that resulted in a $10.5 million decrease in cash flow. Increased sales and days sales outstanding (DSO) resulted in an increase in accounts receivable, reducing cash flow by $63.8 million. DSO was 80 days at September 30, 2006, an increase from 76 days at September 30, 2005 and September 30, 2004. Fluctuations in DSOs are primarily the result of the mix of international sales, which generally carry longer payment terms than U.S. sales. To support increased sales levels, the company increased inventory resulting in a $22.7 million decrease in cash flow, however, inventory turns increased from 4.6x at September 30, 2005 to 4.8x at September 30, 2006. Higher accounts payable and other liabilities increased cash flow by $56.7 million.

In fiscal 2005, cash flow from operations was the result of net income of $38.9 million, $84.0 million of non-cash charges for depreciation and amortization, a non-cash loss on the sale of assets of $1.2 million, a $5.7 million non-cash charge for deferred income taxes, cash restructuring costs of $6.5 million, and a net change in operating assets and liabilities that resulted in a $36.4 million decrease in cash flow. To meet increased sales levels, the company increased inventory resulting in a $5.8 million decrease in cash flow. Higher accounts payable and other liabilities increased cash flow by $45.7 million.

In fiscal 2004, cash flow from operations was the result of net income of $28.9 million, $102.7 million of non-cash charges for depreciation and amortization, a non-cash loss on the sale of assets of $10.2 million, a $4.4 million non-cash charge for deferred income taxes, cash restructuring costs of $13.2 million and a net change in operating assets and liabilities that resulted in an $79.3 million decrease in cash flow. Increased sales resulted in an increase in accounts receivable, reducing cash flow by $63.9 million. In fiscal 2004, the company increased inventory levels to meet increased demand, resulting in an $84.2 million decrease in cash flow. The increase in inventory resulted in higher accounts payable balances, which increased cash flow by $80.0 million.

Recent legislation enacted in the U.K. and guidance from the new Pensions Regulator is expected to have the effect of accelerating the rate of funding required for U.K. defined benefit pension plans. This legislation has had no effect on contributions paid to the Plan in fiscal 2006. The company is analyzing the potential impact for fiscal 2007.

Net cash used for investing activities was $93.9 million in fiscal 2006, $75.8 million in fiscal 2005 and $128.7 million in fiscal 2004. Andrew spent $71.0 million on capital expenditures in fiscal 2006, compared to $66.4 million in fiscal 2005 and $71.9 million in fiscal 2004.

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In fiscal 2006, the company spent $44.7 on the acquisition of businesses. In February 2006, Andrew acquired Skyware Radio Systems GmbH, a designer and manufacturer of satellite earth station electronics, of Krefeld, Germany for $9.5 million. In April 2006, Precision Antenna, Ltd., a Stratford, England-based provider of antennas for terrestrial and satellite communications systems, was acquired for $28.4 million. Also in April 2006, Andrew acquired CellSite Industries, a Milpitas, California provider of base station electronic equipment repair services, for $6.4 million.

In fiscal 2005, Andrew spent $23.3 million on acquisitions. In the first quarter of fiscal 2005, the company acquired certain assets of ATC Tower Services, Inc., a provider of site installation services in North America, for $6.2 million in cash and the assumption of $2.2 million in capital leases. In the second quarter of fiscal 2005, the company acquired Xenicom Ltd., a United Kingdom-based provider of software solutions that help wireless operators plan, launch and manage wireless networks for $11.3 million. In the fourth quarter of fiscal 2005, the company expanded its market-leading Geometrix™ mobile location system product line with the acquisition of certain assets of Nortel’s mobile location business for $4.2 million. Also in fiscal 2005, the company acquired the remaining 20% interest in a Czech Republic subsidiary that was acquired in the Allen Telecom acquisition for $1.3 million. Finally, the company paid $0.6 million for a Yantai Fine Cable earn-out payment. In fiscal 2004, the company spent $23.2 million on two acquisitions, acquiring selected assets of Channel Master LLC and Yantai Fine Cable.

The company paid $1.0 million in fiscal 2006, $2.0 million in fiscal 2005 and $32.0 million in fiscal 2004 to settle patent infringement litigation with True Position Inc. as part of litigation brought against Allen Telecom prior to the acquisition by the company. The total cost of this settlement was $43 million, which included cash payments of $35 million and one million warrants that allow the purchase of one million shares of the company’s common stock for $17.70 a share. This settlement was accounted for as an increase in liabilities assumed from Allen Telecom.

In fiscal 2004, the company invested $9.2 million in two strategic investments in the form of convertible interest-bearing notes that allow the company to convert these notes into an equity interest in these companies. The company invested in Andes Industries, a distributor and manufacturer of broadband cable network equipment. The company also made an investment in Cambridge Positioning Systems Ltd., a mobile location technology developer. In fiscal 2006, the company invested an additional $1.7 million, in the form of interest bearing notes, in Cambridge Positioning Systems Ltd.

Proceeds from the sale of businesses and investments were $9.5 million in fiscal 2005 and $3.0 million in fiscal 2004. In fiscal 2005, the company received net cash proceeds of $9.5 million from the sale of selected assets of its mobile antenna product line to PCTEL Inc. In fiscal 2004, the company received $3.0 million in cash from the sale of selected assets of its broadcast antenna business to Electronic Research Inc. (ERI).

Proceeds from the sale of property, plant, and equipment were $24.6 million in fiscal 2006, $6.4 million in fiscal 2005 and $4.7 million in fiscal 2004. In fiscal 2006, the company sold a portion of land at the company’s Orland Park, Illinois facility for $9.1 million, net of transaction costs, and sold certain filter manufacturing assets and inventory to Elcoteq for $10.6 million. The most significant transactions in fiscal 2005 were the sale of a facility in Reynosa, Mexico acquired from Allen Telecom, the sale of unimproved land in Suzhou, China and the sale of a facility in Livonia, Michigan that was acquired from Allen Telecom. The $4.7 million received in fiscal 2004 related primarily to the sale of the company’s Australian manufacturing facility.

In November 2006, the company announced the acquisition of EMS Wireless, a Norcross, Georgia,-based division of EMS Technologies, Inc. Under the agreement, Andrew paid $50.5 million in cash for EMS Wireless, a major designer and manufacturer of base station antennas and repeaters for cellular networks in North America.

Net cash used for financing activities was $18.8 million in fiscal 2006, $15.1 million in fiscal 2005 and $21.7 million in fiscal 2004. The company made payments on its long-term debt of $8.6 million, $14.8 million, and $23.1 million in fiscal years 2006, 2005 and 2004, respectively. Andrew periodically borrows under its various credit agreements to meet its short-term cash needs. Net borrowings under these credit agreements were $25.9 million in fiscal 2006, $16.3 million in fiscal 2005, and repayments of $0.3 million in fiscal 2004. As of September 30, 2006, the company is scheduled to make payments for maturing debt obligations of $10.5 million in fiscal 2007 and $19.0 million in fiscal 2008. On November 28, 2006, the company notified holders of the 6.65% senior notes and the 6.74% senior notes of its intention to redeem the notes as of December 29, 2006. See Note 6, Financing, in the Notes to the Consolidated Financial Statements.

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Payments for preferred stock dividends and conversion premium payments were $0.2 million in fiscal 2005 and $0.7 million in fiscal 2004. Payments to acquire treasury shares were $39.4 million for 4.0 million shares in fiscal 2006, $18.1 million for 1.6 million shares in fiscal 2005 and $2.5 million for 0.2 million shares in fiscal 2004. The company receives cash from the sale of stock under employee and director option plans. Under these plans, the company received $3.3 million, $1.8 million and $3.3 million in fiscal 2006, 2005 and 2004, respectively.

Dividend policy.    Although the company has never paid dividends to common shareholders, the Board of Directors periodically reviews this practice and, to date, has elected to retain earnings in the business to finance future investments and operations.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make judgments, assumptions, and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. The first footnote to the company’s consolidated financial statements (Summary of Significant Accounting Policies) describes the major accounting policies and methods used in the preparation of the consolidated financial statements. Estimates are used for, but not limited to, accounting for the allowance for doubtful accounts, sales returns, inventory reserves, revenue recognition, warranty costs, depreciation and amortization, goodwill and intangible impairments, contingencies, taxes, pension liabilities, and restructuring and merger integration costs. Actual results could differ materially from these estimates. A material change in these or other estimates could potentially have a material impact on results of operations. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates:

Revenue recognition

During fiscal 2006, approximately 91% of the company’s total revenue was recognized when products were shipped and title passed, 3% based on Statement of Position (SOP) No. 97-2, Software Revenue Recognition, 2% based on EITF No. 00-21, Revenue Arrangements with Multiple Deliverables, 3% based on SOP No. 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts, and 1% based on when services were performed.

Revenue for software products is recognized pursuant to the provisions of SOP No. 97-2, Software Revenue Recognition, and related interpretations. The fair value of each revenue element is determined based on vendor-specific objective evidence of fair value determined by stand-alone pricing of each element. These contracts typically contain post contract support (PCS) services which are sold both as part of a bundled product offering and as a separate contract. Revenue for PCS services is recognized ratably over the term of the PCS contract. Revenue for certain of the company’s products relates to multiple element contracts. The fair value of these revenue elements is based on negotiated contracts and stand-alone pricing for each element.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is based on the company’s assessment of the collectibility of accounts receivable. Although management believes that the current allowance is sufficient to cover existing exposures, there can be no assurance against the deterioration of a major customer’s creditworthiness, or against defaults that are higher than what has been experienced historically. If our estimates of the recoverability of amounts due to us are overstated, it could have an adverse impact on results of operations.

Inventories

Inventories are stated at the lower of cost or market. Inventory obsolescence reserves are maintained based on management’s estimates, historical experience and forecasted demand for the company’s products. A material change in these estimates could adversely impact gross profit.

Warranty Costs

The company offers warranties on most of its products. The specific terms and conditions of these warranties vary depending upon the products sold. The company accrues for warranty costs based on the number of units sold, the type of products sold, historical and anticipated rates of warranty claims and cost per claim. The company regularly reviews these forecasts and makes adjustments as needed. In general over the past three years, the company’s warranty costs have increased as a percentage of sales as the company has been experiencing a higher rate of active electronic product sales. If the company were to experience an increase in warranty claims compared with the company’s historical experience, gross profit could be adversely affected.

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Goodwill

The company performs an annual impairment test of goodwill on the first day of the company’s fiscal fourth quarter. In fiscal 2006, the company managed its business as five operating segments. In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, the company determined these operating segments were the company’s reporting units. The company tested each reporting unit for possible goodwill impairment by comparing each segment’s net book value to fair value. As each reporting unit’s fair value was greater than its net book value and no other impairment indicators existed, further impairment tests were not deemed necessary and no impairment loss was recorded. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment. In estimating the fair value of the reporting units for the purpose of our annual or periodic analyses, we make estimates and judgments about the future cash flows of these businesses as well as fair value on a comparable business basis. Although our cash flow forecasts are based on assumptions that are consistent with plans and estimates we are using to manage the underlying businesses, there is significant judgment in determining the cash flows attributable to these businesses over their estimated remaining useful lives. If actual results are different from the company’s forecasts, future tests may indicate an impairment of goodwill, which could result in non-cash charges, adversely affecting the company’s results of operations.

The company performed a sensitivity analysis on the fair value of its operating segments based on a one percentage point increase in discount rates, which were 13% to 14% in the annual impairment test. Based on this additional sensitivity analysis, step two testing in accordance with SFAS No. 142 was not required for any of the five operating segments. However, as a result of its relatively large amount of goodwill and its operating losses in fiscal 2004, 2005 and 2006, the Base Station Subsystem Group’s goodwill is at a higher risk of potential future impairment.

Income Taxes

The company’s balance sheet reflects significant deferred tax assets, primarily related to net operating losses and tax credits carried forward. To the extent management believes it is more likely than not that the company will not be able to utilize some or all of its deferred tax assets prior to their expiration, the company is required to establish valuation allowances against that portion of the deferred tax assets. The determination of required valuation allowances involves significant management judgments and is based upon the company’s best estimates of anticipated taxable profits in the various jurisdictions with which the deferred tax assets are associated. Changes in expectations could result in significant adjustments to the valuation allowances and material changes to the company’s provision for income taxes.

Valuation allowances have been established for the portion of deferred tax assets representing net U.S. deferred tax assets (including book and tax asset basis differences, federal and state loss carryforwards, and federal and state tax credit carryforwards) and certain foreign loss carryforwards and book and tax asset basis differences in jurisdictions where management feels future realization is sufficiently uncertain (see Note 8, Income Taxes, in the Notes to Consolidated Financial Statements). No valuation allowances have been established for the remaining net deferred tax assets in foreign jurisdictions, as management expects future taxable income based on a recent history of taxable income and the reversal of deferred tax liabilities will make the realization of such deferred tax assets more likely than not. The company currently anticipates that it will be required to earn taxable profits of approximately $34 million in various foreign jurisdictions in order to fully utilize its remaining net deferred tax assets. These deferred tax assets are primarily related to book and tax asset basis differences.

Restructuring

At September 30, 2006, the company had a restructuring reserve of $6.2 million for the integration of Allen Telecom, Channel Master and Skyware operations and for the completion of its fiscal 2002 restructuring plan. These accruals are based on the company’s best estimate of the costs associated with merger integration and restructuring plans, including employee termination costs, lease cancellations, and other costs. If actual costs of these activities differ significantly from these forecasts, results of operations could be impacted.

In the fourth quarter of fiscal 2006, as part of a plan to reorganize the company’s management and operating groups in fiscal 2007, the company incurred $2.0 million of severance costs. In September 2006, the company announced that it would outsource European and North American filter production in fiscal 2007 to Elcoteq. The severance and related cost of this plan will be approximately $8 million to $10 million, which will be paid and expensed in fiscal 2007.

Defined Benefit Plans

Some of the company’s employees are covered by defined benefit plans. Approximately 663 current and former employees of the company’s United Kingdom subsidiary, Andrew Ltd., participate in a defined benefit plan. The company also assumed a

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defined benefit plan from Allen Telecom (“Allen Telecom Plan”). In fiscal 2005, the company initiated the process of terminating the Allen Telecom Plan. The company fully funded and terminated this plan during fiscal 2006 when the company purchased a non-participating group annuity contract from John Hancock Life Insurance Company for all participants of the Allen Telecom Plan.

The costs and obligations recorded for these plans are dependent on actuarial assumptions. These assumptions include discount rates, expected return on plan assets, interest costs, expected compensation increases, benefits earned, mortality rates, and other factors. If actual results are significantly different than those forecasted or if future changes are made to these assumptions, the amounts recognized for these plans could change significantly. In accordance with accounting principles generally accepted in the United States, actual results that differ from the assumptions are accumulated and amortized over future periods.

The discount rate enables management to state expected future cash flows as a present value on the measurement date. A lower discount rate increases the present value of benefit obligations and increases pension expense. The company estimates that a one percentage point decrease in the assumed discount rate would have increased benefit expense in fiscal 2006 by $2.7 million. A one percentage point increase in the assumed discount rate would have decreased benefit expense in fiscal 2006 by $1.9 million.

To determine the expected return on plan assets, management considers the current and expected asset allocation, as well as historical returns on plan assets. A lower expected rate of return on pension plan assets would increase pension expense. A one percentage point increase or decrease in the expected return on pension plan assets would have decreased or increased pension expense in fiscal 2006 by $0.8 million.

In September 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans. This statement requires an entity to (1) recognize in its statement of financial position an asset for a defined benefit postretirement plan’s overfunded status or a liability for a plan’s underfunded status, (2) measure a defined benefit postretirement plan’s assets and obligations that determine its funded status as of the end of the employer’s fiscal year, and (3) recognize changes in the funded status of a defined benefit postretirement plan in comprehensive income in the year in which the change occurs. SFAS No. 158 will be effective for the company beginning in fiscal 2007. The company is evaluating the impact this Statement will have on the financial statements.

Off-Balance Sheet Arrangements

As of September 30, 2006, we do not have material exposure to any off-balance sheet arrangements. The term “off-balance sheet arrangement” generally is any contractual arrangement involving an unconsolidated entity under which a company has (i) made guarantees, (ii) a retained or a contingent interest in transferred assets, (iii) any obligation under certain derivative instruments or (iv) any obligation under a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk, or credit risk support to a company, or engages in leasing, hedging, or research and development services within a company.

Aggregate Contractual Obligations and Commitments

As of September 30, 2006, expected future cash payments under contractual obligations and commitments and the estimated timeframe in which such obligations are expected to be fulfilled were as follows:

	Payments Due by Period
Dollars in millions	Total	Less than 1 Year	1-3 Years	3-5 Years	More Than 5 Years
Long-term debt (a)	$336	$20	$38	$19	$259
Operating leases (b)	92	21	35	22	14
Capital leases (b)	52	2	7	7	36
Purchase obligations (c)	360	182	178	—	—
Copper purchases (d)	54	54	—	—	—
Benefit plan obligations (e)	18	2	3	4	9
Total	$912	$281	$261	$52	$318

(a) Long-term debt includes maturities and interest obligations. Included in the long-term debt obligations are $240.0 million of 3.25% convertible subordinated notes due fiscal 2013. The company may not redeem the notes prior to August 20, 2008, after which time it may redeem the notes at 100% of their principal amount plus accrued and unpaid interest, if any. Holders may require the company to

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repurchase the notes at 100% of the principal amount of the notes plus accrued and unpaid interest on August 15, 2008. Refer to Note 6, Financing, in the Notes to Consolidated Financial Statements for a discussion of the use and availability of debt and revolving credit agreements.

(b) See Note 9, Commitments and Contingencies, in the Notes to Consolidated Financial Statements for a further discussion of leases.

(c) Purchase obligations of $360 million represent purchase orders or contracts for the purchase of inventory, as well as other goods and services, in the ordinary course of business, and exclude balances for purchases currently recognized as liabilities on the balance sheet.

(d) In order to reduce exposure to copper price fluctuations, the company has entered into contracts with various suppliers to purchase approximately 34% of its forecasted copper requirements for fiscal 2007, which represents contracts to purchase 22.2 million pounds of copper for $53.7 million.

(e) Benefit plan obligations of $18 million include estimated future contributions and benefit payments under the company’s defined benefit and post-retirement medical and life insurance plans, to the extent the plans are not sufficiently funded. See Note 5, Benefit Plans, in the Notes to Consolidated Financial Statements, for further discussion of the company’s benefit plan obligations.

The expected timing of payments of the obligations above is estimated based on current information. Timing of payments and actual amounts paid may be different, depending on the time of receipt of goods or services, or changes to agreed-upon amounts for some obligations.

The company believes that its existing cash balances and funds expected to be generated from future operations will be sufficient to satisfy these contractual obligations and commitments and that the ultimate payments associated with these commitments will not have a material adverse effect on its liquidity position.

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

Andrew is exposed to market risk from changes in interest rates, foreign exchange rates and commodities as follows:

Interest Rate Risk.    The company had $345.8 million in debt outstanding at September 30, 2006 in the form of debt agreements and capital lease obligations at both fixed and variable rates. The company is exposed to interest rate risk primarily through its variable rate debt, which totaled $48.1 million or 13.9% of the company’s total debt. A 100 basis point increase in interest rates would not have a material effect on the company’s financial position, results of operations or cash flows. Andrew currently does not use derivative instruments to manage its interest rate risk.

Foreign Currency Risk.    The company’s international operations represent a substantial portion of its overall operating results and asset base. In many cases, the company’s products are produced at manufacturing facilities in foreign countries to support sales in those markets. During fiscal 2006, sales of products exported from the United States or manufactured abroad were 57% of total sales. The company’s identifiable foreign exchange rate exposures result primarily from accounts receivable from customer sales, anticipated purchases of product from affiliates and third-party suppliers and the repayment of intercompany loans with foreign subsidiaries denominated in foreign currencies. The company primarily manages its foreign currency risk by making use of naturally offsetting positions that include the establishment of local manufacturing facilities that conduct business in local currency. The company also selectively utilizes derivative instruments such as forward exchange contracts to manage the risk of exchange fluctuation. These instruments are not leveraged and are not held for trading or speculative purposes. These contracts are not designated as hedges for hedge accounting and are marked to market each period. The company estimates that a hypothetical 10% increase or decrease in all non-U.S. dollar currencies would have decreased or increased reported net loss by approximately $7.9 million in fiscal 2006.

Commodity Risk.    The company uses various metals in the production of its products. Copper, which is used to manufacture coaxial cable, is the most significant of these metals. As a result, the company is exposed to fluctuations in the price of copper. In order to reduce this exposure, the company has implemented surcharges and price increases on its coaxial cable products, and has entered into forward purchase contracts with various copper suppliers. As of September 30, 2006, the company entered into contracts to purchase approximately 34% of its forecasted copper requirements for fiscal 2007, which represents contracts to purchase 22.2 million pounds of copper for $53.7 million. The company estimates that a 10% change in the price of copper could increase or decrease the cost of the company’s forecasted fiscal 2007 copper purchases that are not under contract at September 30, 2006 by approximately $14.9 million. The company also uses certain petrochemicals for cable coatings, and a 10% change in the price of these petrochemicals would have an estimated $4.8 million impact on the company’s forecasted cost of products sold in fiscal 2007.

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Item 8.  Financial Statements and Supplementary Data

Consolidated Statements of Operations

	Year Ended September 30
In thousands, except per share amounts	2006			2005			2004
Sales	$	2,146,093		$	1,961,234		$	1,828,362
Cost of products sold		1,672,714			1,524,446			1,385,087
Gross Profit		473,379			436,788			443,275
Operating Expenses
Research and development		112,985			107,850			110,245
Sales and administrative		255,210			222,830			217,591
Merger costs		13,476			—			—
Pension termination gain		(14,228	)		—			—
Intangible amortization		19,011			22,100			37,583
Restructuring		7,729			5,304			11,132
Asset impairment		3,874			—			—
(Gain) loss on sale of assets		(8,008	)		1,202			10,164
		390,049			359,286			386,715
Operating Income		83,330			77,502			56,560
Other
Interest expense		15,345			14,912			14,868
Interest income		(5,720	)		(5,040	)		(3,052	)
Other expense, net		4,597			4,451			2,442
		14,222			14,323			14,258
Income Before Income Taxes		69,108			63,179			42,302
Income taxes		103,398			24,321			13,405
Net Income (Loss)		(34,290	)		38,858			28,897
Preferred Stock Dividends		—			232			707
Net Income (Loss) Available to Common Shareholders	$	(34,290	)	$	38,626		$	28,190
Basic and Diluted Net Income (Loss) per Share	$	(0.22	)	$	0.24		$	0.18
Average Basic Shares Outstanding		159,474			161,578			159,659
Average Diluted Shares Outstanding		159,474			161,953			160,258

See Notes to Consolidated Financial Statements.

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Consolidated Balance Sheets

	September 30
Dollars in thousands		2006			2005
Assets
Current Assets
Cash and cash equivalents	$	169,609		$	188,780
Accounts receivable, less allowances (2006–$7,112; 2005–$8,939)		557,834			468,314
Inventory		388,296			353,402
Other current assets		37,282			66,444
Total Current Assets		1,153,021			1,076,940
Other Assets
Goodwill		882,666			862,083
Intangible assets, less amortization		47,205			56,753
Other assets		62,018			86,341
Property, Plant and Equipment
Land and land improvements		22,578			21,693
Buildings		160,244			131,335
Equipment		566,482			533,317
Allowance for depreciation		(485,293	)		(454,783	)
		264,011			231,562
Total Assets	$	2,408,921		$	2,313,679
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	324,295		$	230,620
Accrued expenses and other liabilities		115,952			112,596
Compensation and related expenses		60,596			52,002
Restructuring		6,167			13,432
Income tax payable		5,433			2,652
Notes payable and current portion of long-term debt		55,443			26,966
Total Current Liabilities		567,886			438,268
Deferred Liabilities		43,382			49,255
Long-Term Debt, less current portion		290,378			275,604
Shareholders’ Equity
Common stock (par value, $.01 per share: 400,000,000 shares authorized; 162,476,513 shares issued at Sept. 30, 2006 and Sept. 30, 2005, including treasury stock)		1,625			1,625
Additional paid-in capital		684,868			676,262
Accumulated other comprehensive income		37,743			19,720
Retained earnings		836,298			870,588
Treasury stock, common stock at cost (5,215,977 shares at September 30, 2006 and 1,557,030 shares at September 30, 2005)		(53,259	)		(17,643	)
Total Shareholders’ Equity		1,507,275			1,550,552
Total Liabilities and Shareholders’ Equity	$	2,408,921		$	2,313,679

See Notes to Consolidated Financial Statements.

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Consolidated Statements of Cash Flows

	Year Ended September 30
Dollars in thousands	2006			2005			2004
Cash Flows from Operations
Net income (loss)	$	(34,290	)		$38,858			$28,897
Adjustments to Net Income (Loss)
Depreciation		60,217			61,902			65,127
Amortization		19,011			22,100			37,583
(Gain) loss on sale of assets		(9,497	)		1,202			10,164
Pension termination gain		(14,228	)		—			—
Restructuring costs		(2,025	)		(6,455	)		(13,205	)
Stock based compensation		9,381			2,488			1,180
Deferred income taxes		73,708			5,703			(4,418	)
Change in Operating Assets/Liabilities
Accounts receivable		(63,775	)		(46,397	)		(63,885	)
Inventories		(22,713	)		(5,826	)		(84,156	)
Other assets		19,313			(29,878	)		(11,213	)
Accounts payable and other liabilities		56,684			45,679			79,960
Net Cash From Operations		91,786			89,376			46,034
Investing Activities
Capital expenditures		(71,033	)		(66,369	)		(71,913	)
Acquisition of businesses		(44,742	)		(23,325	)		(23,227	)
Settlement of pre-acquisition litigation		(1,000	)		(2,000	)		(32,000	)
Investments		(1,722	)		—			(9,208	)
Proceeds from sale of businesses and investments		—			9,494			3,000
Proceeds from sale of property, plant and equipment		24,635			6,396			4,687
Net Cash Used for Investing Activities		(93,862	)		(75,804	)		(128,661	)
Financing Activities
Long-term debt payments		(8,629	)		(14,801	)		(23,103	)
Long-term debt borrowings		—			—			1,573
Notes payable (payments) borrowings, net		25,864			16,264			(265	)
Preferred stock dividends		—			(232	)		(707	)
Payments to acquire common stock for treasury		(39,373	)		(18,140	)		(2,472	)
Stock purchase and option plans		3,327			1,760			3,289
Net Cash Used for Financing Activities		(18,811	)		(15,149	)		(21,685	)
Effect of exchange rate changes on cash		1,716			1,309			7,091
Decrease for the Year		(19,171	)		(268	)		(97,221	)
Cash and equivalents at beginning of year		188,780			189,048			286,269
Cash and Equivalents at End of Year	$	169,609		$	188,780		$	189,048

See Notes to Consolidated Financial Statements.

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Consolidated Statements of Change in Shareholders’ Equity

	Redeemable Convertible Preferred Stock		Common Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Treasury Stock			Total
Dollars in thousands
Balance at September 30, 2003	$9,186		$	1,609	$	649,667		$	(14,115	)	$	803,772		$	(27,812	)	$	1,422,307
Repurchase of shares															(2,732	)		(2,732	)
Stock purchase and option plans						1,889									5,133			7,022
Shares issued for acquisitions						10,140									17,220			27,360
Preferred stock conversion	(3,165	)		1		(3,448	)								6,612			—
Warrants issued for settlement of pre-acquisition litigation						8,498												8,498
Preferred stock dividends												(707	)					(707	)
Decrease in minimum pension liability									3,083									3,083
Foreign currency forward contracts									418									418
Foreign currency translation adjustments									22,977									22,977
Net income												28,897						28,897
Comprehensive Income																		55,375
Balance at September 30, 2004	$6,021		$	1,610	$	666,746			$12,363		$	831,962		$	(1,579	)	$	1,517,123
Repurchase of shares															(18,140	)		(18,140	)
Stock purchase and option plans				1		3,667									1,918			5,586
Preferred stock conversion	(6,021	)		14		5,849									158			—
Preferred stock dividends												(232	)					(232	)
Foreign currency translation adjustments									7,357									7,357
Net income												38,858						38,858
Comprehensive Income																		46,215
Balance at September 30, 2005	$—		$	1,625	$	676,262			$19,720		$	870,588		$	(17,643	)	$	1,550,552
Repurchase of shares															(39,373	)		(39,373	)
Stock purchase and option plans						8,606									3,757			12,363
Foreign currency translation adjustments									19,512									19,512
Realized foreign currency translation adjustments									(1,489	)								(1,489	)
Net loss												(34,290	)					(34,290	)
Comprehensive Loss																		(16,267	)
Balance at September 30, 2006	$—		$	1,625	$	684,868			$37,743		$	836,298		$	(53,259	)	$	1,507,275

See Notes to Consolidated Financial Statements

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Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Principles of consolidation

The consolidated financial statements include the accounts of the company and its subsidiaries. All intercompany accounts and transactions have been eliminated.

Cash equivalents

The company considers all highly-liquid investments purchased with maturities of three months or less to be cash equivalents. The carrying amount of cash equivalents approximates fair value due to the relative short-term maturity of these investments.

Allowance for doubtful accounts

The company maintains an allowance for doubtful accounts for estimated uncollectible accounts receivable. The allowance is based on the company’s assessment of known delinquent accounts, historical experience, and other currently available evidence of the collectibility of accounts receivable. The company’s total allowance for doubtful accounts was $7.1 million and $8.9 million at September 30, 2006 and 2005, respectively. Accounts are written-off against the allowance when the company determines they are no longer collectible.

Inventories

At September 30, 2006, the company’s inventories were stated at the lower of cost or market using the first-in, first-out (FIFO) method.

Inventories consisted of the following at September 30, 2006 and 2005, net of reserves:

Dollars in thousands	2006		2005
Raw materials	$	110,431	$	97,781
Work in process		110,936		93,917
Finished goods		166,929		161,704
	$	388,296	$	353,402

These inventories are reported net of excess and obsolete reserves of $57.6 million and $41.9 million as of September 30, 2006 and 2005, respectively. Reserves for excess inventory are calculated based on the company’s estimate of inventory in excess of normal and planned usage. Obsolete reserves are based on the company’s identification of inventory having no realizable value.

Property, plant and equipment

Property, plant and equipment are recorded at cost. Depreciation expense for 53% of the company’s assets is recorded based on the straight–line depreciation method and the remaining assets are depreciated using accelerated depreciation methods. In fiscal 2005, the company began recording depreciation for all newly acquired assets based on the straight-line method and no longer uses accelerated depreciation methods for newly acquired assets. Assets that are currently in place that are being depreciated based on accelerated depreciation methods will continue using these methods until these assets become fully depreciated. The company believes that the straight-line method more accurately reflects the probable pattern of losses in the assets’ service lives. This change did not have a material impact on the company’s results of operations.

The company’s depreciation expense is based on estimated useful lives of these assets. Buildings are depreciated over ten to thirty years and equipment is depreciated over three to eight years. Depreciation of leasehold improvements is based on the term of the related lease or the estimated useful life, whichever is shorter. Internally developed software is reported as equipment and depreciated over five years. Maintenance, repairs, and minor renewals and betterments are charged to expense as incurred. Depreciation expense was $60.2 million, $61.9 million and $65.1 million for fiscal years 2006, 2005 and 2004, respectively.

During fiscal 2006, the company entered into a lease agreement for its new Joliet manufacturing facility, which is being constructed by the landlord during fiscal 2006 and 2007. Lease payments will commence in fiscal 2007, which is when the

39

company plans to occupy the building. In 2006, the company executed a lease amendment with the landlord whereby the landlord would build additional structural features in the Joliet facility for one-time cash payments that will be excluded from the lease payment schedule. As such, in accordance with Emerging Issues Task Force (EITF) No. 97-10, The Effect of Lessee Involvement in Asset Construction, the company is considered the owner of the facility during the construction period. Therefore, the company capitalized, as construction in progress (within Buildings on the balance sheets), $25.2 million, which is the construction project’s estimated cost incurred by the landlord as of September 30, 2006.

Capitalized software

The company capitalizes software development costs in accordance with SFAS No. 86, Accounting for Costs of Computer Software to be Sold, Leased or Otherwise Marketed, under which certain software development costs incurred subsequent to the establishment of technological feasibility may be capitalized. Capitalization ceases when the software is available for release to customers and amortized over the estimated life of the related products. Capitalized software costs, net of accumulated amortization, included in other assets were $11.3 million and $12.2 million at September 30, 2006 and 2005, respectively. Software amortization costs included in cost of products sold were $3.1 million, $2.0 million and $0.0 million for fiscal 2006, 2005 and 2004, respectively. In fiscal 2006, the company recorded an impairment charge to operating expense of $3.9 million for a product that the company no longer emphasizes and for which the future undiscounted cash flows no longer support the value of the asset.

Revenue recognition

During fiscal 2006, approximately 91% of the company’s total revenue was recognized when products were shipped and title passed, 3% based on Statement of Position (SOP) No. 97-2, Software Revenue Recognition, 2% based on EITF No. 00-21, Revenue Arrangements with Multiple Deliverables, 3% based on SOP No. 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts, and 1% based on when services were performed.

Revenue for software products is recognized pursuant to the provisions of SOP No. 97-2, Software Revenue Recognition, and related interpretations. The fair value of each revenue element is determined based on vendor-specific objective evidence of fair value determined by stand-alone pricing of each element. These contracts typically contain post contract support (PCS) services which are sold both as part of a bundled product offering and as a separate contract. Revenue for PCS services is recognized ratably over the term of the PCS contract. Revenue for certain of the company’s products relates to multiple element contracts. The fair value of these revenue elements is based on negotiated contracts and stand-alone pricing for each element.

Shipping and handling charges

Shipping and handling costs billed to customers are recorded as revenue and the related expenses are recorded in cost of products sold.

Advertising costs

Advertising costs are expensed in the period in which they are incurred. Advertising expense was $4.8 million in fiscal 2006, $3.1 million in fiscal 2005 and $3.1 million in fiscal 2004.

Identifiable intangible assets

The company reports identifiable intangible assets net of accumulated amortization. Accumulated amortization for intangible assets was $61.8 million and $68.6 million at September 30, 2006 and 2005, respectively. The company amortizes intangible assets, excluding goodwill and trademarks, over their estimated useful lives, which range from one to ten years for customer contracts and relationships, one to eight years for patents and technologies and two years for other intangibles. The decrease in intangibles of $9.5 million is primarily due to amortization expense of $19.0 million and purchase accounting adjustments of $3.6 million offset by an increase of $13.9 million for acquired intangible assets. Of the $13.9 million of acquired assets, $10.9 million were for customer contracts and relationships whose estimated useful lives ranged from one to ten years and $3.0 million for patents and technology whose estimated useful lives ranged from one to eight years. In fiscal 2006, the company retired $26.2 million of intangible assets that were fully amortized.

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Under the provisions of SFAS No. 142, Goodwill and Other Intangible Assets, the company tests intangibles with an indefinite life for impairment on an annual basis. The impairment review performed for fiscal 2006 indicated no impairment of these intangibles. Intangible assets consisted of the following:

	September 30
Dollars in thousands	2006	2005
Customer contracts and relationships, net of accumulated amortization of $6,037 in 2006 and $25,255 in 2005	$19,969	$11,870
Patents and technology, net of accumulated amortization of $55,381 in 2006 and $42,021 in 2005	21,374	38,040
Trademarks–indefinite life	5,600	5,905
Other, net of accumulated amortization of $399 in 2006 and $1,364 in 2005	262	938
Total Intangible Assets	$47,205	$56,753

The company’s scheduled amortization expense over the next five years is as follows:

Dollars in millions	2007	2008	2009	2010	2011
	$15.0	$6.4	$6.0	$4.2	$2.6

Goodwill

Under the provisions of SFAS No. 142, Goodwill and Other Intangible Assets, the company tests goodwill of each operating segment for impairment on an annual basis. Goodwill is assigned to the reporting unit based on which reporting unit integrates the acquisition, or, if the acquisition relates to multiple reporting units, goodwill is assigned based on the difference between net assets acquired as allocated to the reporting units and purchase price as allocated to reporting units.

The company has elected to perform its annual impairment review on the first day of its fiscal fourth quarter. The impairment review performed for fiscal 2006 indicated no impairment of goodwill. However, due to uncertain market conditions, it is possible that future impairment reviews may indicate impairment of the fair value of goodwill, which could result in non-cash charges adversely affecting the company’s results of operations. During fiscal 2006, goodwill increased by $20.6 million, due primarily to an increase of $21.9 million for acquisitions, see Note 2, Business Acquisitions, offset by a decrease of $1.0 million for purchase accounting adjustments and a decrease of $0.5 million on the sale of assets. The remaining increase of $0.2 million was due to foreign currency translation adjustments.

Foreign currency translation

The functional currency for the company’s foreign operations is predominantly the applicable local currency. Accounts of foreign operations are translated into U.S. dollars using year-end exchange rates for assets and liabilities and average monthly exchange rates for revenue and expense accounts. Adjustments resulting from translation are included in accumulated other comprehensive income (loss), a separate component of shareholders’ equity. Gains and losses resulting from foreign currency transactions are included in determining net income (loss). Net foreign exchange losses resulting from foreign currency transactions that are included in other expense (income), net were $4.0 million, $4.9 million and $2.5 million for fiscal years 2006, 2005 and 2004, respectively. Included in the foreign exchange loss in fiscal 2006 is a $1.5 million gain for the liquidation of one of the company’s foreign subsidiaries for amounts previously carried in accumulated other comprehensive income.

Hedging and derivative instruments

The company is exposed to changes in foreign exchange rates as a result of its foreign operations. The company primarily manages its foreign currency risk by making use of naturally offsetting positions. These natural hedges include the establishment of local manufacturing facilities that conduct business in local currency. The company also selectively utilizes derivative instruments such as forward exchange contracts to manage the risk of exchange fluctuations. These instruments held by the company are not leveraged and are not held for trading or speculative purposes. In fiscal 2006, the company used forward exchange contracts to manage its foreign currency exposure. These contracts were not designated as hedges for hedge accounting, and were marked to market each period through earnings and as such, as of September 30, 2006, there were no unrecognized gains or losses on forward contracts.

The company enters into agreements with various suppliers to purchase copper at fixed prices. As of September 30, 2006, the company entered into contracts to acquire 22.2 million pounds of copper for $53.7 million, which represents an estimated 34% of the company’s fiscal 2007 projected copper usage. The copper supply agreements are settled when the company purchases copper under the supply agreements for use in its manufactured products. Copper is capitalized as inventory when purchased. These forward commodity contracts are not marked to fair value because they meet the “normal purchase” exception under applicable derivative accounting rules.

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Income taxes

Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes.

Stock-based compensation

In the first quarter of fiscal 2006, the company adopted SFAS No. 123(R), Share-Based Payments, which revised SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) requires the company to record compensation expense for all share-based payments, including employee stock options, at fair value. Prior to fiscal 2006, the company had accounted for its stock-based compensation awards pursuant to Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees, and its related interpretations, which allowed the use of the intrinsic value method. Under the intrinsic value method, compensation expense for stock option-based employee compensation was not recognized in the income statement as all stock options granted by the company had an exercise price equal to the market price of the underlying common stock on the option grant date.

The company has elected to use the modified prospective transition method to adopt SFAS No. 123(R). Under this transition method, beginning in fiscal 2006, compensation expense recognized includes: (a) expense for all share-based payments granted prior to, but not vested as of October 1, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) expense for all share-based payments granted subsequent to October 1, 2005, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123(R). As required under the modified prospective transition method, the company has not restated prior period results. As a result, certain components of the company’s quarterly financial statements will not be comparable until the first quarter of fiscal 2007, the first anniversary of the adoption of SFAS No. 123(R).

In the first quarter of fiscal 2005, the company granted 1.4 million stock options that vested immediately and included a restriction on the resale of the underlying shares of common stock. For pro forma disclosure purposes, these options were treated as if they were expensed in the first quarter of fiscal 2005, increasing pro forma expense, net of tax, by approximately $8.4 million. During the fourth quarter of fiscal 2005, the company accelerated the vesting of approximately 270,000 stock options with an exercise price of $12 or more per share, increasing pro forma stock-based compensation expense by approximately $1.6 million, net of tax. In fiscal 2004, the company vested all outstanding options with an exercise price of $15 or more per share, increasing pro forma stock-based compensation expense by approximately $2.5 million. The company accelerated the vesting of these stock options in fiscal 2005 to avoid recording compensation expense for these stock options in the company’s results of operations in fiscal 2006 as required when the company adopted SFAS No. 123(R).

The following table illustrates the pro forma effect on net income and earnings per share if the company had applied the fair value recognition provisions of SFAS No. 123 to stock options for the twelve months ended September 30, 2005 and 2004:

Year Ended September 30
Dollars in thousands, except per share amounts	2005		2004
Reported net income	$38,858		$28,897
Preferred stock dividends	(232)		(707)
Reported income available to common shareholders	38,626		28,190
Add: RSU expense, net of tax	1,555		750
Less: Stock-based compensation, net of tax	(15,231	)	(10,557	)
Pro forma net income available to common shareholders	$24,950		$18,383
Reported basic and diluted net income per share	$0.24		$0.18
Pro forma basic net income per share	$0.15		$0.12
Pro forma diluted net income per share	$0.15		$0.11

Use of estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications

Certain previously reported amounts have been reclassified to conform to the current year’s presentation.

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Recently issued accounting policies

In May 2005, the Financial Accounting Standards Board (FASB) issued revised Statement of Financial Accounting Standards (SFAS) No. 154, Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements. This statement applies to all voluntary changes in accounting principle, and requires retrospective application to prior periods’ financial statements for changes in accounting principle. SFAS No. 154 will be effective for the company beginning in fiscal 2007 and the company is in the process of determining any potential impact to the financial statements.

In July 2006, the FASB issued Interpretation (FIN) 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109. FIN 48 prescribes a recognition threshold and measurement attributes for tax positions. The company is required to adopt FIN 48 at the beginning of fiscal 2008 and is in the process of determining any potential impact to the financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. SFAS No. 157 will be effective for the company beginning in fiscal 2008, and the company is in the process of determining any potential impact to the financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans. This statement requires an entity to (1) recognize in its statement of financial position an asset for a defined benefit postretirement plan’s overfunded status or a liability for a plan’s underfunded status, (2) measure a defined benefit postretirement plan’s assets and obligations that determine its funded status as of the end of the employer’s fiscal year, and (3) recognize changes in the funded status of a defined benefit postretirement plan in comprehensive income in the year in which the change occurs. SFAS No. 158 will be effective for the company beginning in fiscal 2007. The company is evaluating the impact this Statement will have on the financial statements.

Adoption of new accounting policies

In January 2005, the FASB issued revised Statement of Financial Accounting Standards (SFAS) No. 151, Inventory Costs, an amendment of ARB No. 43. The amendments made by SFAS No. 151 clarify that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges and require the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. The company adopted SFAS No. 151 beginning in fiscal 2006. The adoption of SFAS No. 151 did not have a material impact on the company’s results of operations.

In March 2005, the FASB issued Interpretation (FIN) No. 47, Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB No. 143. This Interpretation clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. The company adopted FIN No. 47 beginning in fiscal year 2006. The adoption of FIN No. 47 did not have a material impact on the company’s results of operations.

In October 2005, the FASB issued Staff Position (“FSP”) 13-1, Accounting for Rental Costs Incurred during a Construction Period. The guidance requires that the rental costs for ground or building operating leases during the construction period be recognized as rental expenses. The guidance permits either retroactive or prospective treatment for the first reporting period beginning after December 15, 2005. The company adopted FSP 13-1 in fiscal 2006. The adoption of FSP 13-1 did not have a material impact on the company’s results of operations.

Beginning in fiscal 2006, the company has adopted Statement of Financial Accounting Standards (SFAS) No. 123(R), Share-Based Payments, as described in Note 11, Stock-Based Compensation.

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2. Business Acquisitions

In February 2006, the company acquired Skyware Radio Systems GmbH (Skyware), a German manufacturer of electronic products for broadband satellite communications networks for approximately $9.5 million. The Skyware acquisition agreement includes an earn-out provision, which could result in additional purchase consideration of up to $6.0 million if certain financial targets are met over a two-year period. A preliminary allocation of the purchase price resulted in $7.1 million of goodwill and $2.4 million of intangible assets, which were assigned to the Satellite Communications operating segment.

In April 2006, the company acquired Precision Antennas Ltd., a Stratford, England-based designer and manufacturer of microwave antennas for use in carrying point-to-point radio signals, primarily for cellular network backhaul. The company paid approximately $28.4 million to acquire Precision Antennas Ltd. A preliminary allocation of the purchase price resulted in $11.2 million of goodwill and $7.7 million of intangible assets, which were assigned to the Antenna and Cable Products operating segment.

Also in April 2006, the company acquired CellSite Industries (CSI), a privately-held provider of wireless equipment repair services based in Milpitas, California for approximately $6.4 million. A preliminary allocation of the purchase price resulted in $3.5 million of goodwill and $3.8 million of intangible assets, which were assigned to the Base Station Subsystems operating segment. The CSI acquisition agreement includes an earn-out provision which could result in additional purchase consideration of up to $14.0 million if certain financial targets are met over a three-year period.

After the close of fiscal 2006, the company acquired EMS Wireless, a Norcross, Georgia-based division of EMS Technologies, Inc. Under the agreement, the company paid $50.5 million in cash for EMS Wireless, a major designer and manufacturer of base station antennas and repeaters for cellular networks in North America. Its customers include the major wireless operators in the U.S.

In the first quarter of fiscal 2005, the company acquired selected assets of ATC Tower Services, Inc., a division of American Tower Corporation that provides site installation services to wireless operators in North America. Total purchase consideration was $8.4 million, consisting of $6.2 million in cash and the assumption of $2.2 million of capital leases. An allocation of the purchase price resulted in $2.4 million of goodwill, which was assigned to the Antenna and Cable Products operating segment. Also in the first quarter of fiscal 2005, the company paid $1.3 million to acquire the remaining 20% interest in a Czech Republic subsidiary that was acquired in the fiscal 2003 Allen Telecom acquisition.

In the second quarter of fiscal 2005, the company acquired Xenicom Ltd., an United Kingdom-based provider of software solutions that help telecommunications operators plan, launch and manage wireless networks. Total purchase consideration was $11.3 million. An allocation of the purchase price resulted in $5.5 million of goodwill, which was assigned to the Network Solutions operating segment, $7.9 million of intangible assets and $2.1 million of deferred tax liabilities. The Xenicom acquisition included an earn-out provision, which could result in additional purchase consideration of up to 3.0 million British Pounds, or approximately $5.7 million based on current exchange rates, over a two-year period. The company did not make any payments under this earn-out provision in fiscal 2006.

In the fourth quarter of fiscal 2005, the company expanded its market-leading Geometrix^® mobile location system product line with the acquisition of certain assets of Nortel’s mobile location business for $4.2 million. An allocation of purchase price, which was assigned to the Network Solutions operating segment, resulted in $3.4 million of identifiable intangibles and $0.4 million of goodwill.

In fiscal 2004, the company made three acquisitions. In the first quarter, the company acquired selected assets of Channel Master LLC, a U.S. manufacturer of high volume antenna and antenna-related products for the consumer direct-to-home market. Also in the first quarter, the company acquired selected assets of Yantai Fine Cable Company, a Chinese manufacturer of products for telecommunications and broadband cable TV infrastructure markets. The company paid a total of $23.2 million for these acquisitions. These acquisitions resulted in $2.9 million of goodwill, which was assigned to the Antenna and Cable Products operating segment, and $11.8 million of intangible assets. The Yantai Fine Cable acquisition included an earn-out provision, which resulted in additional purchase consideration. Under this earn-out provision the company paid $0.6 million in fiscal 2005 and $0.4 million in fiscal 2006.

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In the second quarter of fiscal 2004, the company acquired selected assets of MTS Wireless Components LLC, a supplier of cable accessories and steel components that support the installation of wireless systems including antenna mounts and other equipment support solutions. Total purchase consideration was $27.9 million, consisting primarily of 1,650,000 shares of common stock valued at an average price of $16.88 per share. The MTS Wireless Components acquisition resulted in $15.8 million of goodwill, which was assigned to the Antenna and Cable Products operating segment, and $1.4 million of intangible assets.

Pro forma results of operations, assuming the fiscal 2006, 2005 and 2004 acquisitions occurred at the beginning of the period, were not materially different from the reported results of operations.

3. Sale of Assets

The company has completed several asset sales over the last three years as part of the company’s ongoing efforts to rationalize its assets. The company recognized a (gain) loss on the sale of assets of $(8.0) million, $1.2 million and $10.2 million in fiscal years 2006, 2005 and 2004, respectively. Proceeds from the sale of assets were $24.6 million, $15.9 million and $7.7 million in fiscal years 2006, 2005 and 2004, respectively.

In fiscal 2006, the company recognized a gain on the sale of assets of $8.0 million and cash proceeds of $24.6 million from the sale of assets. The two significant transactions that occurred in fiscal 2006 were the sale of a portion of the land at the company’s Orland Park, Illinois facility and the sale of filter manufacturing assets and inventory to Elcoteq, a third-party electronics manufacturing firm.

On August 29, 2005 the company entered into a contract to sell its Orland Park, Illinois manufacturing facility and corporate headquarters. Andrew anticipates that the sale will result in cash proceeds of approximately $26.0 million and expects to record a pre-tax gain of approximately $17.0 million before relocation expenses. The sale of the Orland Park, Illinois facility will take place in two transactions. The first transaction took place in fiscal 2006 and the company recognized a gain of $9.0 million on the sale of a portion of the land and received cash proceeds, net of transaction costs, of $9.1 million. The second transaction is expected to close in fiscal 2007 when construction of the company’s state-of-the-art manufacturing and office facility in Joliet, IL is completed. In fiscal 2006, the company’s corporate headquarters were relocated from Orland Park, Illinois to a leased facility in Westchester, Illinois.

Also in fiscal 2006, the company received cash proceeds of $10.6 million from the sale of filter manufacturing inventory and assets including the company’s Arad, Romania facility to Elcoteq. The inventory and Arad, Romania facility were sold at book value. Included in the $10.6 million proceeds was $3.1 million of proceeds for the sale of certain manufacturing fixed assets with a net book value of $1.4 million, which were not yet transferred to Elcoteq as of September 30, 2006 and are expected to be transferred in fiscal 2007. The $3.1 million of cash proceeds has been classified as other liabilities in the September 30, 2006 balance sheet. The fixed assets have been accounted for as assets held for sale, which is included in other assets in the September 30, 2006 balance sheet. The remaining proceeds from the sale of assets in fiscal 2006 of $5.0 million were for various small transactions none of which were significant.

In fiscal 2005, the company recognized a loss of the sale of assets of $1.2 million and cash proceeds of $6.4 million from the sale of assets. The most significant transactions were the sale of a facility in Reynosa, Mexico acquired from Allen Telecom, the sale of unimproved land in Suzhou, China, and the sale of a facility in Livonia, Michigan that was acquired from Allen Telecom that was accounted for as an asset held for sale. Also in fiscal 2005, the company received net cash proceeds of $9.5 million from the sale of selected assets of its mobile antenna product line to PCTEL, Inc. The loss on sale of these assets was recognized in fiscal 2004.

In fiscal 2004, the company recognized a loss of $10.2 million on the sale of assets, mainly due to a loss of $11.6 million on the sale of assets of two product lines. The company recognized a $7.1 million loss to write-down assets of its mobile antenna product line to fair value. This loss included $4.5 million of goodwill allocated to these assets based on their relative fair value. The company also sold selected assets from its broadcast manufacturing operations to Electronics Research, Inc. For these assets, the company received $3.0 million in cash and $5.8 million in promissory notes. Also in fiscal 2004, the company recognized a gain of $1.4 million on several real estate transactions, principally due to the sale of a manufacturing facility in Australia. The net cash proceeds from these transactions were $3.0 million.

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4. Per Share Data

The following table sets forth the computation of basic and diluted earnings per share:

	Year Ended September 30
Dollars in thousands, except per share amounts	2006			2005			2004
Basic Earnings per Share
Net income (loss)	$	(34,290	)	$	38,858		$	28,897
Preferred stock dividends		—			(232	)		(707	)
Income (loss) available to common shareholders		(34,290	)		38,626			28,190
Average basic shares outstanding		159,474			161,578			159,659
Basic net income (loss) per share	$	(0.22	)	$	0.24		$	0.18
Diluted Earnings per Share
Net income (loss)	$	(34,290	)	$	38,858		$	28,897
Preferred stock dividends		—			(232	)		(707	)
Income (loss) available to common shareholders		(34,290	)		38,626			28,190
Average basic shares outstanding		159,474			161,578			159,659
Effect of dilutive securities: stock options		—			375			599
Average diluted shares outstanding		159,474			161,953			160,258
Diluted net income (loss) per share	$	(0.22	)	$	0.24		$	0.18

The company did not include the dilutive effect of stock options for the twelve months ended September 30, 2006. Including these shares would have decreased diluted loss per share. Dilutive shares outstanding are equal to basic shares outstanding for the year-ended September 30, 2006 as including the effect of stock options would be anti-dilutive.

The company had 120,414 shares of convertible preferred stock outstanding at September 30, 2004 that could have been potentially converted into 1,387,892 shares of the company’s common stock. These shares were not included in the calculation of diluted earnings per share at September 30, 2004 because including these shares and excluding the convertible preferred stock dividends would have increased reported diluted earnings per share. In the second quarter of fiscal 2005, the company converted 120,414 shares of convertible preferred stock into 1,387,892 shares of common stock. Under the if-converted method, these convertible shares would have increased the diluted average shares outstanding by 621,081 for the twelve months ended September 30, 2005. These shares were not included in the calculation of diluted earnings per share at September 30, 2005. Including these shares and excluding the convertible preferred stock dividends would have increased reported diluted earnings per share.

The company’s convertible subordinated notes are potentially convertible into 17,531,568 shares of the company’s common stock. These shares were not included in the calculation of diluted earnings per share. Including these shares and excluding the interest expense on these notes would have increased reported diluted earnings per share in fiscal 2005 and 2004 and decreased the diluted loss per share in fiscal 2006.

Options to purchase 7,117,921 and 6,363,000 shares of common stock in fiscal years 2005 and 2004, respectively, were not included in the computation of diluted shares because the options’ exercise prices were greater than the average market price of the common shares.

The company also has outstanding warrants issued as part of a fiscal 2004 litigation settlement with True Position, Inc. that could result in the issuance of up to 1,000,000 shares of common stock. These warrants have an exercise price of $17.70 per share and expire on January 16, 2008. These shares were not included in the calculation of diluted earnings per share because the exercise price of these warrants was greater than the average market price of the common shares in all periods presented.

5. Benefit Plans

The company had two defined benefit plans, one that covers approximately 663 current and former employees of the company’s United Kingdom subsidiary (U.K. Plan) and the Allen Telecom Inc. Corporate Retirement Plan (Allen Telecom Plan), a plan that was acquired from Allen Telecom.

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In addition to these defined benefit plans, other employees of Andrew Corporation and its subsidiaries participate in various retirement plans, principally defined contribution profit sharing plans. The amounts charged to earnings for these plans in fiscal years 2006, 2005 and 2004 were $9.0 million, $8.6 million and $8.0 million, respectively.

U.K. Plan

Benefits payable under the United Kingdom defined benefit plan are based on employees’ final pension-eligible salaries. The measurement date for the plan is September 30. The company’s accumulated benefit obligation under this plan was $72.4 million and $59.4 million at September 30, 2006 and 2005, respectively. At September 30, 2006 and 2005 the fair value of plan assets exceeded the accumulated benefit obligation by $3.8 million and $5.7 million, respectively. Therefore no minimum pension liability was recorded to deferred liabilities nor as comprehensive loss.

A reconciliation of the U.K. Plan’s projected benefit obligations, fair values of plan assets, and funded status is as follows:

	September 30
Dollars in thousands	2006		2005
Change in projected benefit obligation
Projected benefit obligation at beginning of the year	$92,218		$78,025
Service costs	1,892		1,659
Interest costs	4,905		4,186
Contribution by plan participants	1,045		862
Actuarial loss	1,331		11,147
Disbursements	(1,883	)	(1,977	)
Foreign currency translation adjustment	5,903		(1,684	)
Projected benefit obligation at end of the year	105,411		92,218
Change in plan assets
Fair value of plan assets at beginning of the year	65,096		44,823
Actual return on plan assets	7,818		11,013
Company contribution	—		11,424
Contribution by plan participants	1,045		862
Disbursements	(1,883	)	(1,977	)
Foreign currency translation adjustment	4,153		(1,049	)
Fair value of plan assets at end of the year	76,229		65,096
Funded status of the plan	(29,182	)	(27,122	)
Unrecognized prior service costs	4,746		4,780
Unrecognized actuarial loss	22,785		24,434
Net amount recognized	$(1,651	)	$2,092
Amounts recognized on balance sheet consist of:
(Deferred liabilities)/prepaid asset	(1,651	)	2,092
Net amount recognized	$(1,651	)	$2,092

The components of net periodic pension costs recognized in income are as follows:

Dollars in thousands	2006		2005		2004
Service costs	$1,892		$1,659		$2,767
Interest costs	4,905		4,186		3,793
Expected return on plan assets	(4,094	)	(3,159	)	(2,499	)
Amortization of unrecognized prior service costs	346		327		227
Amortization of net loss	857		756		1,149
	$3,906		$3,769		$5,437

The following actuarial rate assumptions were used in determining the net periodic pension costs recognized in income:

	2006		2005		2004
Discount rate	5.00	%	5.50	%	5.30	%
Annual compensation increase	3.90	%	3.70	%	3.70	%
Expected return on plan assets	5.90	%	6.40	%	6.45	%
Post-retirement pension increase	2.90	%	2.70	%	2.70	%

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The weighted-average actuarial rate assumptions used to determine the benefit obligation at September 30 were as follows:

	2006		2005
Discount rate	5.00	%	5.00	%
Annual compensation increase	4.00	%	3.90	%
Post-retirement pension increase	3.00	%	2.90	%

The U.K Plan’s assets are held by a trust, the Andrew Ltd. Pension and Life Assurance Plan. An independent third party manages the investments. The plan assets are invested in equity and debt securities and are not directly invested in the company’s common stock. The percentages of equity securities in total plan assets were 78% and 79% at September 30, 2006 and 2005, respectively. Debt securities were 22% and 21% of total plan assets at September 30, 2006 and 2005, respectively.

The trustees of the Andrew Ltd. Pension and Life Assurance Plan have determined a long-term strategic benchmark mix of asset types and ranges within which the investment manager may operate with discretion. Target allocation percentages of equity securities were 75% and 79% at September 30, 2006 and 2005, respectively. Target allocations of debt securities were 25% and 21% at September 30, 2006 and 2005, respectively, and are split evenly between government bonds and corporate bonds.

The expected return on assets is calculated assuming the target asset allocation and equity returns of 2.5% in excess of an appropriate government bond index together with the gross redemption yields on an appropriate government bond index and corporate bond index.

The company contributed $11.4 million to the U.K. Plan in fiscal 2005. This amount was an advance contribution and, as such, the company made no contributions to the plan in fiscal 2006. Recent legislation enacted in the U.K. and guidance from the new Pensions Regulator is expected to have the effect of accelerating the rate of funding required for U.K. defined benefit pension plans. This legislation has had no effect on contributions paid to the U.K. Plan in fiscal 2006. The company is analyzing the potential impact for fiscal 2007. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the plan over the next ten years:

Dollars in thousands
2007	$	1,342
2008		1,670
2009		1,565
2010		2,312
2011		1,753
2012 – 2016		15,695
Total estimated benefits	$	24,337

Allen Telecom Plan and Other Plans

With the acquisition of Allen Telecom on July 15, 2003, the company assumed the Allen noncontributory defined benefit plan as well as supplemental pension benefit, post-retirement medical and life insurance plans. The Allen defined benefit pension plan was frozen following the completion of the acquisition and covered the majority of the full-time domestic salaried and hourly employees of the former Allen Telecom. At the time this plan was frozen, the pension benefit provided to salaried employees was based on years of service and compensation for up to a ten-year period prior to the date the plan was frozen, while the benefit provided to hourly employees was based on specified amounts for each year of service prior to the date the plan was frozen.

In fiscal 2005 the company initiated the process of terminating the frozen defined benefit plan assumed as part of the Allen Telecom acquisition. The company fully funded and terminated the plan during fiscal 2006 when the company purchased from John Hancock Life Insurance Company (“John Hancock”) a non-participating group annuity contract for all participants of the Allen Telecom Plan and John Hancock assumed the full responsibility for all benefit obligations of the Allen Telecom Plan. The company made additional contributions of $9.5 million to fully fund the plan and recognized a gain of $14.2 million when the plan was terminated. The remaining pension benefit obligations as of September 30, 2006 are related to the individual employment contracts for certain former executives of Allen Telecom.

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Domestic pension costs are funded in compliance with requirements of the Employee Retirement Income Security Act of 1974. The measurement date for these plans is September 30. At September 30, 2006, the accumulated benefit obligation under these plans was $3.3 million, which exceeded the fair value of the plan assets by $3.3 million.

The medical and life insurance plans provide post-retirement health care and life insurance benefits for approximately 500 retired employees and active employees who will reach retirement age while working with the company.

A reconciliation of the plans’ projected benefit obligations, fair values of plan assets, and funded status are as follows:

	Pension Benefits				Medical Plans and Other Benefits
Dollars in thousands	2006		2005		2006		2005
Change in projected benefit obligation
Projected benefit obligation at beginning of the year	$52,174		$66,198		$13,538		$12,778
Service costs	149		124		408		199
Interest costs	2,167		1,885		971		691
Amendments	—		—		(1,643	)	—
Settlements	(46,900	)	—		—		—
Actuarial (gain) loss	(1,497	)	(13,281	)	4,832		996
Disbursements	(2,787	)	(2,752	)	(928	)	(1,126	)
Projected benefit obligation at end of the year	3,306		52,174		17,178		13,538
Change in plan assets
Fair value of plan assets at beginning of the year	40,299		36,707		—		—
Actual return on plan assets	(358	)	3,061		—		—
Company contribution	9,746		3,283		928		1,126
Disbursements	(2,787	)	(2,752	)	(928	)	(1,126	)
Settlements	(46,900	)	—		—		—
Fair value of plan assets at end of the year	—		40,299		—		—
Funded status of the plan	(3,306	)	(11,875	)	(17,178	)	(13,538	)
Unrecognized actuarial (gain) loss	(491	)	(15,896	)	10,749		7,263
Unrecognized prior service costs	—		—		(3,430	)	(2,326	)
Net accrued pension costs (recorded in deferred liabilities)	$(3,797	)	$(27,771	)	$(9,859	)	$(8,601	)

The components of net periodic pension costs are as follows:
	Pension Benefits							Medical Plans and Other Benefits
Dollars in thousands	2006			2005		2004		2006		2005		2004
Service costs		$149		$124		$151		$408		$199		$691
Interest costs		2,167		1,885		1,928		971		691		819
Expected return on plan assets		357		(2,635	)	(2,315	)	—		—		—
Amortization of prior service costs		—		—		—		(539	)	(539	)	(45	)
Amortization of initial net obligation		—		—		—		—		—		136
Amortization of net (gain) loss		(2,673	)	—		—		1,346		635		340
Settlement (gain) loss		(14,228	)	—		61		—		—		—
	$	(14,228	)	$(626	)	$(175	)	$2,186		$986		$1,941

The following actuarial rate assumptions were used in determining the net periodic pension costs recognized in income and the benefit obligation at September 30, 2006, 2005, and 2004:

	Pension Benefits						Medical Plans and Other Benefits
	2006		2005		2004		2006		2005		2004
Net Periodic Benefit Costs
Discount rate	5.00	%	2.90	%	2.90	%	5.00	%	5.75	%	5.75	%
Return on plan assets	4.60	%	7.00	%	7.00	%	NA		NA		NA
Benefit Obligation
Discount rate	4.50	%	5.00	%	2.90	%	5.50	%	5.00	%	5.75	%

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The increase in the pension plan benefit obligation discount rate from 2.9% in 2004 to 5.0% in 2005 is the result of revised assumptions related to the plan’s expected fiscal 2006 termination. The change in the unrecognized actuarial gain of $13.3 million in fiscal 2005 is primarily the result of this discount rate change.

For measurement purposes, a 9% annual rate of increase in the per capita cost of covered health care benefits was assumed for fiscal 2007. The rate was assumed to decrease gradually to 5% for fiscal 2011 and remain at that level thereafter. A one-percentage-point increase or decrease in the assumed health care cost trend rates would affect the aggregate of service and interest cost components by $0.1 million or ($0.1) million, respectively, and would affect the post-retirement benefit obligation by $0.7 million and ($0.7) million, respectively.

In fiscal 2005, the assets of the pension plan were transferred 100% to debt securities from primarily equity securities. The asset transfers were completed to create a more conservative, stable asset base from which to provide benefits for the frozen plan.

The company expects to contribute $0.3 million to its supplemental pension benefit plans and $1.4 million to its medical and other benefit plans in fiscal 2007. The following benefit payments are expected to be paid by the company over the next ten years:

Dollars in thousands	Pension Benefits		Medical Plans and Other Benefits
2007	$	282	$	1,441
2008		280		1,432
2009		278		1,425
2010		274		1,474
2011		270		1,553
2012 – 2016		1,259		7,509
Total estimated benefits	$	2,643	$	14,834

6. Financing

Lines of Credit and Short Term Borrowings

In fiscal 2005, the company entered into a $250 million revolving line of credit with a group of fourteen lenders led by Bank of America, NA as administrative agent and Citicorp North America, Inc. as the syndication agent. This agreement expires in September 2010. The maximum outstanding during fiscal 2006 under these lines of credit was $85.1 million compared to $42.4 million in fiscal 2005. The weighted average interest rate for these borrowings was 7.2% in fiscal 2006 compared to 6.8% in fiscal 2005. The company had $35.2 million in borrowings under this line of credit at September 30, 2006 compared to $8.2 million at September 30, 2005.

Under the terms of the revolving line of credit agreement, the company is subject to various requirements, including maintaining a minimum net worth, maintaining a ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) to total debt, including letters of credit, maintaining a fixed charges coverage ratio, maintaining a minimum debt borrowing amount from its subsidiaries and maintaining limits on the amount of assets that the company can dispose of in a fiscal year. These requirements may limit the borrowing under this credit agreement. At September 30, 2006, the company had the ability to utilize the entire $250 million. The company is in compliance with all of these requirements as of September 30, 2006.

Several of the company’s foreign subsidiaries maintain credit agreements. In fiscal 2006, the company’s Brazilian subsidiary had the ability to borrow under a $20 million multicurrency line of credit with ABN-AMRO for which there were no borrowings or outstanding amounts during fiscal 2006. Also in fiscal 2006, the company’s Suzhou, China based subsidiary entered into a new $32 million line of credit agreement with the Agricultural Bank of China. This credit line had maximum borrowings of $11.4 million with an average interest rate of 5.8% during fiscal 2006 with no outstanding amounts at September 30, 2006.

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The company’s Indian subsidiary increased their line of credit with Bank of America, New Delhi, to $25 million from a previous $15 million line of credit agreement in fiscal 2005. The maximum borrowings under this agreement were $21.0 million at an average interest rate of 8.6%. At September 30, 2006 there was $3.9 million outstanding under this agreement. In September 2006, the company’s Shenzhen, China subsidiary entered into a new $3.8 credit agreement with the China Merchants Bank. This line of credit had no borrowings during fiscal 2006.

In fiscal 2006, the company’s Italian subsidiary borrowed against its existing credit line of $16 million with Banca Nazionale de Lavoro. The maximum borrowings by the Italian subsidiary amounted to approximately $3.8 million, none of which was outstanding at September 30, 2006. The average interest rate on this credit line was 3.4%. Finally, in September 2006, the company’s Japanese subsidiary entered into a new $5 million line of credit with the Bank of Tokyo-Mitsubishi UFJ, Ltd. This line of credit had maximum borrowings of $3.3 million, all of which were outstanding at September 30, 2006 with an average interest rate of 1.6%.

Long-Term Debt

Long-term debt at September 30, 2006 consisted of the following:

Dollars in thousands	2006		2005
Convertible subordinated notes	$240,000		$240,000
6.65% senior notes payable to insurance companies in annual installments through 2008	15,666		23,500
6.74% senior notes payable to insurance companies in 2008	9,000		9,000
EURO loans from Italian Ministry of Industry; $2,126 at a fixed rate of 2.85%, and $3,083 at rates ranging from 0.89% to 0.92%	5,209		3,576
EURO loans from San Paolo Bank; $1,707 at a fixed rate of 2.00% and $5,677 at an averaged variable rate of 3.10%	7,384		7,775
Capital lease obligations (see Note 9)	404		1,377
Facility lease obligation (see Note 9)	25,200		—
Other	583		933
Total Debt	303,446		286,161
Less: Current portion	(13,068	)	(10,557	)
Total Long-Term Debt	$290,378		$275,604

In August 2003, the company sold $240.0 million of 3.25% convertible subordinated notes due fiscal 2013. Holders may convert the notes into shares of common stock at a conversion price of $13.69 per share (73.0482 shares per $1,000 of principal), subject to adjustment, before the close of business on August 15, 2013 only under the following circumstances: (1) during any fiscal quarter commencing after September 30, 2003, if the closing sale price of common stock exceeds $16.43 (120% of the conversion price) for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; (2) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the notes for each day of that period was less than 98% of the product of the closing sale price of common stock and the number of shares of common stock to be issued upon conversion of $1,000 principal amount of the notes; (3) if the notes have been called for redemption; or (4) upon the occurrence of certain specified corporate transactions. The company may not redeem the notes prior to August 20, 2008, after which time it may redeem the notes at 100% of their principal amount plus accrued and unpaid interest, if any. Holders may require the company to repurchase the notes at 100% of the principal amount of the notes plus accrued and unpaid interest on August 15, 2008.

The amounts of long-term debt borrowings maturing after September 30, 2006 are as follows:

Dollars in millions	2007	2008	2009	2010	2011	Thereafter
	$10.5	$19.0	$1.8	$1.5	$1.6	$243.8

The above debt maturities schedule does not include a lease obligation of $25.2 million for the new Joliet, Illinois facility. See Note 9, Commitments and Contingencies. On November 28, 2006, the company notified holders of the 6.65% senior notes and the 6.74% senior notes of its intention to redeem the notes as of December 29, 2006.

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Cash payments for interest on all borrowings were $13.9 million, $12.9 million and $13.2 million in fiscal years 2006, 2005 and 2004, respectively. The company had assets pledged of $2.6 million to support its Italian loans which are classified as long-term assets on the balance sheet.

At September 30, 2006 the company estimated the fair value of its long-term debt to be $297.7 million compared to its carrying value of $303.4 million. The difference between fair value and carrying value was predominantly due to the convertible subordinated notes, for which the company estimated the fair value based on current market price. The company estimated the fair value of its remaining long-term debt by discounting the future cash outflows of debt and interest payments using estimated current market rates for instruments with similar risk and term to maturity.

Letters of Credit

The company utilizes letters of credit to support certain contracts, insurance policies and payment obligations. These letters of credit are issued from the $250 million credit facility and have terms of three years or less. The letters of credit outstanding at September 30, 2006 and 2005 were $15.3 million and $14.2 million, respectively.

7. Restructuring and Integration

At September 30, 2006, the company’s total restructuring reserve balance was $6.2 million, which is comprised of $1.2 million for its fiscal 2002 restructuring plan, $3.6 million for its Allen Telecom acquisition integration plan, $0.6 million for the Channel Master integration plan and $0.7 million for its Skyware acquisition integration plan. The company incurred restructuring charges in operating expense of $7.7 million and $5.3 million in fiscal years 2006 and 2005, respectively, as part of the company’s acquisition integration plans and other cost cutting initiatives that were expensed as incurred.

Restructuring Reserve

In fiscal 2002, the company initiated a plan to restructure its operations. As part of this plan, the company consolidated its operations into fewer, more efficient facilities and opened two new manufacturing facilities in Mexico and the Czech Republic. In fiscal 2002, when the company initiated its restructuring efforts, it incurred pre-tax charges of $36.0 million, consisting of inventory provisions, charged to cost of products sold, of $11.1 million and an operating expense charge of $24.9 million. In fiscal 2003 and 2004, the company made additional accruals to operating expense of $7.9 million and $7.5 million, respectively, primarily for additional severance and lease cancellation costs.

Since the start of this restructuring initiative in fiscal 2002, the company has paid severance costs of $17.3 million to 1,226 employees and $11.2 million for lease cancellation and other costs. The company did not pay any severance benefits under this plan in fiscal 2006 and paid severance benefits of $1.5 million to 126 employees under this plan in fiscal 2005. The company incurred total cash costs under this plan of $1.6 million and $3.4 million in fiscal years 2006 and 2005, respectively. In fiscal 2006, the company reversed $0.9 million of the reserve as the company terminated a portion of the lease obligation. At September 30, 2006 the company had a remaining reserve of $1.2 million for lease cancellation costs related to a leased facility previously used by the Base Station Subsystems operating segment. These payments are scheduled to continue through fiscal 2007. A summary of the restructuring reserve activity for fiscal 2005 and 2006 is as follows (dollars in thousands):

2005 Restructuring Reserve Activity	Reserve Balance Sept. 30, 2004		Utilization of Reserve in 2005			Reversal of Reserve			Reserve Balance Sept. 30, 2005
Severance	$	1,502	$	(1,502	)	$	—		$	—
Lease cancellation and other costs		5,836		(1,870	)		—			3,966
Total Restructuring Reserve Balance	$	7,338	$	(3,372	)	$	—		$	3,966
2006 Restructuring Reserve Activity	Reserve Balance Sept. 30, 2005		Utilization of Reserve in 2006			Reversal of Reserve			Reserve Balance Sept. 30, 2006
Severance	$	—	$	—		$	—		$	—
Lease cancellation and other costs		3,966		(1,810	)		(920	)		1,236
Total Restructuring Reserve Balance	$	3,966	$	(1,810	)	$	(920	)	$	1,236

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Allen Telecom Acquisition Integration Reserve

As part of the Allen Telecom acquisition, the company accrued an integration reserve for costs to integrate Allen’s operations with those of the company and to eliminate duplicate operations. The initial cost estimate of $29.9 million was comprised of a $16.2 million provision for inventory and fixed assets write-offs and a restructuring reserve of $13.7 million for employee termination, lease cancellation and other costs. During fiscal 2004, the company adjusted this initial estimate and recorded an additional $13.6 million of reserves consisting of $14.1 million of additional employee termination, lease cancellation and other costs, and a $0.5 million reduction in expected inventory provisions. Integration reserves established in purchase accounting were accounted for as a decrease in assets acquired and an increase in liabilities assumed from Allen Telecom.

Included in the fiscal 2004 Allen Telecom integration reserve were costs to close a facility in France. In fiscal 2005, the company determined that it would continue to operate in this facility. The company reversed $2.7 million in severance and $0.9 million of lease cancellation and other costs that had been accrued for the closing of this facility. The reversal of this accrual was treated as a decrease in liabilities acquired from Allen Telecom resulting in a $3.6 million decrease in goodwill.

In fiscal 2006, the company increased the reserve and recorded $0.9 million of expense for additional lease cancellation costs related to the Amesbury, Massachusetts facility and decreased the reserve and goodwill by $1.1 million for severance and other costs that will not be incurred.

Since the start of these integration efforts in fiscal 2003, the company has paid severance costs of $14.4 million to 407 employees and $9.6 million for lease cancellation and other costs. In fiscal 2006, the company paid severance benefits of $0.1 million to 2 employees. Net cash costs incurred under this plan in fiscal 2006 were $0.5 million. The company anticipates paying severance benefits to 60 employees and expects to substantially complete its integration activities in fiscal 2007. The remaining reserve balance at September 30, 2006 of $3.6 million primarily relates to the Base Station Subsystems business. A summary of integration reserve activity for fiscal 2005 and 2006 is as follows (dollars in thousands):

2005 Integration Reserve Activity	Reserve Balance Sept. 30, 2004		2005 Expense		Utilization of Reserve In 2005			Reversal of Accrual			Reserve Balance Sept. 30, 2005
Severance	$	6,279	$	—	$	(2,170	)	$	(2,683	)	$	1,426
Lease cancellation and other costs		5,270		—		(1,530	)		(872	)		2,868
Total Integration Reserve Balance	$	11,549	$	—	$	(3,700	)	$	(3,555	)	$	4,294
2006 Integration Reserve Activity	Reserve Balance Sept. 30, 2005		2006 Expense		Utilization of Reserve In 2006			Reversal of Accrual			Reserve Balance Sept. 30, 2006
Severance	$	1,426	$	—	$	(66	)	$	(630	)	$	730
Lease cancellation and other costs		2,868		937		(423	)		(463	)		2,919
Total Integration Reserve Balance	$	4,294	$	937	$	(489	)	$	(1,093	)	$	3,649

Channel Master Acquisition Integration Reserve

As part of the Channel Master acquisition, the company accrued an integration reserve for costs to restructure Channel Master’s U.S. manufacturing operations. The initial cost estimate of $5.2 million was comprised of a $2.9 million provision for relocation and restructuring of manufacturing operations and $2.3 million to pay severance benefits to approximately 245 employees. The $5.2 million was treated as a purchase accounting adjustment and was recorded as an increase in the value of net assets acquired.

In fiscal 2006, $4.6 million of the previously established reserves were reversed as the company executed a lease agreement to retain a smaller, more cost-effective portion of its existing facility in Smithfield, North Carolina that eliminated the need for employee severance and the majority of facility-related costs. This resulted in a purchase accounting adjustment to decrease the net assets acquired (there was no goodwill acquired in this acquisition). Channel Master’s operations are included in the Satellite Communications operating segment.

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The company expects to substantially complete its integration activities in fiscal 2007. A summary of integration reserve activity for fiscal 2005 and 2006 is as follows (dollars in thousands):

2005 Channel Master Reserve Activity	Reserve Balance Sept. 30, 2004		2005 Purchase Accounting		Utilization of Reserve in 2005			Reversal of Accrual			Reserve Balance Sept. 30, 2005
Severance		$—	$	2,327	$	(34	)		$—		$	2,293
Lease cancellation and other costs		—		2,879		—			—			2,879
Total Channel Master Reserve Balance		$—	$	5,206	$	(34	)		$—		$	5,172
2006 Channel Master Reserve Activity	Reserve Balance Sept. 30, 2005		2006 Purchase Accounting		Utilization of Reserve in 2006			Reversal of Accrual			Reserve Balance Sept. 30, 2006
Severance	$	2,293		$—		$—		$	(2,293	)		$—
Lease cancellation and other costs		2,879		—		—			(2,272	)		607
Total Channel Master Reserve Balance	$	5,172		$—		$—		$	(4,565	)		$607

Skyware Acquisition Integration Reserve

As part of the Skyware acquisition in fiscal 2006, the company accrued an integration reserve for costs to integrate Skyware’s operations with those of Andrew. This initial cost estimate of $0.7 million was comprised of a $0.4 million provision for restructuring manufacturing operations and $0.3 million to pay severance benefits. The $0.7 million restructuring reserve was treated as a purchase accounting adjustment and recorded as an increase in the value of net assets acquired. The company expects to finalize the plan in fiscal 2007.

The company expects to substantially complete its integration activities in fiscal 2007. A summary of integration reserve activity for fiscal 2006 is as follows (dollars in thousands):

2006 Skyware Reserve Activity	Reserve Balance Sept. 30, 2005	2006 Purchase Accounting	Utilization of Reserve in 2006	Reserve Balance Sept. 30, 2006
Severance	$—	$337	$—	$337
Lease cancellation and other costs	—	338	—	338
Total Skyware Reserve Balance	$—	$675	$—	$675

8. Income Taxes

The income tax provision consists of the following:

	Year Ended September 30
Dollars in thousands	2006	2005			2004
Current Provision
U.S. Federal	$711		$—			$—
U.S. State	664		742			600
Foreign	28,315		17,876			17,223
	29,690		18,618			17,823
Deferred Provision (Benefit)
U.S. Federal	65,862		(3,842	)		(4,342	)
U.S. State	6,790		5,012			(403	)
Foreign	1,056		4,533			327
	73,708		5,703			(4,418	)
Provision for Income Tax Expense	$103,398	$	24,321			$13,405
Income Taxes Paid (net of income tax refunds received)	$23,735		$9,852			$17,649
Components of Income (Loss) from Continuing Operations before Income Taxes
United States	$(16,993)		$4,355		$	(28,771	)
Non-United States	86,101		58,824			71,073
	$69,108	$	63,179			$42,302

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A reconciliation of the federal statutory rate to the company’s actual tax rate is provided below:

	Year Ended September 30
	2006		2005		2004
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
Export sales benefit	(0.8	)	(0.8	)	(1.1	)
State taxes, net of federal benefit	(0.7	)	(0.4	)	2.2
Foreign income at other than U.S. rates	(14.6	)	(2.1	)	(8.4	)
Foreign dividends	(2.9	)	1.2		0.3
Income tax credits	(6.6	)	(10.6	)	(10.9	)
Withholding taxes	2.7		2.0		2.2
Settlement of statutory examinations	(2.0	)	(3.6	)	—
Change in Ohio state tax law	—		8.5		—
Valuation allowances	137.0		13.6		15.1
Other	2.5		(4.3	)	(2.7	)
Effective Tax Rate	149.6	%	38.5	%	31.7	%

The impact of state taxes, net of federal benefit, and foreign income taxed at other than U.S. rates fluctuates year over year due to changes in the mix of operating income and losses among the various states and foreign jurisdictions in which the company operates.

As of September 30, 2006, after reviewing and evaluating several significant developments which occurred during the fourth quarter of fiscal 2006 and a continuing pretax loss from U.S. operations, the company concluded that a full valuation allowance against its remaining net U.S. deferred tax assets was appropriate. As a result of its assessment, the company established a full valuation allowance for its remaining net U.S. deferred tax assets in the amount of $83.4 million; $70.2 million of which is an adjustment to the beginning of year valuation allowance as a result of changes of circumstances which caused a change in judgment regarding the realizability of the net U.S. deferred tax assets. The company expects to continue to maintain a full valuation allowance on future U.S. tax benefits until an appropriate level of profitability is sustained or the company is able to conclude there are available tax planning strategies that would enable the company to conclude that it is more likely than not that a portion of the U.S. deferred tax assets would be realizable.

The American Jobs Creation Act (AJCA) of 2004, created a temporary incentive for U.S. corporations to repatriate accumulated income earned abroad and reinvest the repatriated earnings in qualified domestic U.S. business activities by providing an 85% dividends received deduction for certain dividends from controlled foreign corporations. During fiscal 2006, the company repatriated $124.8 million from controlled foreign corporations. The tax cost of repatriation was offset by the reversal of previously established deferred tax liabilities related to undistributed earnings of the company’s Chinese subsidiaries resulting in a net income tax benefit of $5.1 million for fiscal 2006.

During fiscal 2005, the state of Ohio enacted changes to its tax laws whereby the Ohio franchise tax will be phased out between 2006 and 2010 and the company recorded a valuation allowance of $5.0 million against its deferred tax asset for Ohio net operating loss carryforwards and a tax provision of $0.4 million to adjust the carrying value of its net deferred tax asset for the change in Ohio tax law.

The Internal Revenue Service concluded an examination of the company’s fiscal 1999 through fiscal 2002 income tax returns in November 2004. The company recognized a tax benefit of $0.8 million during fiscal 2005 relating to the favorable resolution of previously reserved tax positions. In addition, the company also recognized tax benefits of $1.3 million and $1.5 million during fiscal 2006 and fiscal 2005, respectively, relating to the favorable resolution of examinations in foreign jurisdictions.

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Principal components of the company’s net asset/(liability) representing deferred income tax balances are as follows:

	Year Ended September 30
Dollars in thousands	2006			2005
Deferred Tax Assets
Restructuring reserves	$	2,236		$	5,468
Equity compensation		4,054			1,015
Tax loss carryforwards		80,831			86,173
Tax credit carryforwards		49,404			36,010
Employee benefits		14,947			20,817
Inventory and warranty		20,639			16,205
Deferred revenue		4,522			7,960
Other accrued liabilities		10,946			16,850
Total Deferred Tax Assets		187,579			190,498
Less: Valuation allowances		(159,443	)		(49,186	)
Net Deferred Tax Assets	$	28,136		$	141,312
Deferred Tax Liabilities
Depreciation and amortization		(16,856	)		(21,276	)
Undistributed foreign earnings		(1,927	)		(23,831	)
LIFO reserve		(3,228	)		(6,021	)
Research and development costs		(1,930	)		(4,233	)
Other deferred income/expense		(13,827	)		(21,699	)
Total Deferred Tax Liabilities		(37,768	)		(77,060	)
Net Deferred Tax Asset/(Liability)	$	(9,632	)	$	64,252
Deferred Taxes as Recorded on the Balance Sheet
Current deferred tax asset	$	6,616		$	35,230
Non-current deferred tax asset /(liability)		(16,248	)		29,022
Net Deferred Tax Asset/(Liability)	$	(9,632	)	$	64,252

At September 30, 2006, the net current deferred tax asset offset by current taxes payable was reported in other current liabilities on the consolidated balance sheet. The non-current deferred tax liability, offset by non-current deferred tax assets, was reported in other liabilities on the consolidated balance sheet.

The deferred tax asset for tax loss carryforwards includes U.S. net operating loss carryforwards of $118.0 million, which will begin to expire in fiscal 2021; state net operating loss carryforwards of $215.1 million, which will begin to expire in fiscal 2007; and foreign net operating loss carryforwards of $74.4 million, which will begin to expire in fiscal 2007. The deferred tax asset for tax credit carryforwards includes U.S. foreign tax credit carryforwards of $26.8 million, which will begin to expire in fiscal 2009, U.S. research tax credit carryforwards of $21.0 million, which will begin to expire in fiscal 2010, and U.S. and state alternative minimum tax credit carryforwards of $1.6 million with no expiration.

Valuation allowances totaling $159.4 million have been established and include $25.7 million related to the company’s book and tax asset basis differences, $41.3 million related to U.S. net operating loss carryforwards, $14.5 million related to state net operating loss carryforwards, $21.7 million related to foreign net operating loss carryforwards, $26.4 million related to the foreign tax credit carryforwards, $21.0 million related to research tax credit carryforwards, $1.6 million related to U.S. and state alternative minimum tax credit carryforwards, and $7.2 million related to other foreign deferred tax assets. The current year increase includes valuation allowances attributable to (1) the establishment of a full valuation allowance against the company’s U.S. deferred tax assets and (2) additional state and foreign net operating losses and tax credits carried forward, primarily related to losses and credits from current year operations. The portion of the company’s valuation allowances established in purchase accounting is $20.7 million.

No provision has been made for income taxes which would be payable in the event that all undistributed earnings of the company’s foreign subsidiaries were repatriated. Due to the company’s full valuation allowance position against its net U.S. deferred tax assets, no additional tax provision would be due if all of the non-U.S. earnings as of September 30, 2006 were repatriated to the U.S., save for $20.9 million for cash withholding taxes due in foreign jurisdictions. The company plans to continue to permanently reinvest future earnings of its foreign operations. As of September 30, 2006, the company has a

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liability in the amount of $1.9 million to reflect the tax cost associated with the repatriation of that portion of undistributed earnings of the company’s Chinese subsidiaries not considered to be permanently reinvested. The company currently realizes local tax benefits from tax holidays in China which expire by 2008.

9. Commitments and Contingencies

Leases

The company’s leases consist primarily of facilities and equipment and expire between 2007 and 2022. Annual rental expense for operating leases included in results from operations was $35.2 million, $24.3 million, and $19.6 million in fiscal years 2006, 2005, and 2004, respectively. Future minimum payments under non-cancellable operating and capital leases having a remaining term in excess of one year at September 30, 2006 are as follows:

Dollars in thousands	Operating	Capital
2007	$21,000	$2,363
2008	18,336	3,359
2009	16,586	3,359
2010	12,629	3,359
2011	8,926	3,359
Thereafter	14,407	36,516
Total minimum lease payments	$91,884	$52,315

During fiscal 2006, the company entered into a lease agreement for its new Joliet manufacturing facility, which is being constructed by the landlord during fiscal 2006 and 2007. Lease payments will commence in fiscal 2007, which is when the company plans to occupy the building. Included in the minimum payments schedule for capital lease obligations is $51.9 million for this lease based on Andrew’s payment obligation under the lease agreement. In fiscal 2006, the company executed a lease amendment with the landlord whereby the landlord would build additional structural features in the Joliet facility for one-time cash payments that will be excluded from the lease payment schedule. As such, in accordance with EITF 97-10, The Effect of Lessee Involvement in Asset Construction, the company is considered the owner of the facility during the construction period. Therefore, the company capitalized, as construction in progress, $25.2 million, which is the construction project’s cost incurred by the landlord as of September 30, 2006.

At September 30, 2006 and 2005 the company had $25.9 million and $2.5 million, respectively, of assets recorded under capital leases that are included in Property, Plant and Equipment. Amortization expense for these assets, once placed in use, is included with depreciation expense.

Warranty Reserve

The company offers warranties on most of its products. The specific terms and conditions of the warranties offered by the company vary depending upon the product sold. The company estimates the costs that may be incurred under its warranty plans and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the company’s warranty liability include the number of units sold, the type of products sold, historical and anticipated rates of warranty claims and cost per claim. The company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

The following is an analysis of product warranty reserves, which is included in accrued expenses and other liabilities in the September 30, 2006 and 2005 balance sheets:

	September 30
Dollars in thousands	2006	2005
Warranty reserves at beginning of the year	$26,754	$18,900
Accrual for warranties issued	14,772	15,851
Warranty settlements made	(22,331)	(24,485)
Warranty expirations and adjustments	(2,151)	(136)
Product recall	—	16,624
Warranty reserves at end of the year	$17,044	$26,754

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In fiscal 2005, the company incurred $16.6 million of costs above normal warranty provisions associated with abnormally high field failure rates for a specific component supplied by a third-party vendor used in certain base station subsystem product lines. This $16.6 million was comprised of a first quarter fiscal 2005 charge of $19.8 million and a fourth quarter recovery from a third-party vendor of $3.2 million. In fiscal 2006, the company paid $9.4 million, net of recoveries, for this component failure, which is included in warranty settlements in the table above. The company anticipates that the repair and replacement of installed units will be completed over the next three months.

Legal Proceedings

On October 25, 2005, TruePosition, Inc. filed a complaint in the U.S. District Court for the District of Delaware, alleging the company’s potential sale of certain geolocation products to Saudi Telecom will infringe a TruePosition patent. As relief, the complaint seeks, among other things, injunctive relief and unspecified monetary damages. The company filed its response and counterclaim on December 15, 2005 and is vigorously defending this litigation. The parties are currently in discovery and have had no meaningful settlement talks to date.

The company is also a party to various other legal proceedings, lawsuits and other claims arising in the ordinary course of its business. The company does not believe that such other litigation, if adversely determined, would have a material effect on the company’s business, financial position, results of operations or cash flow.

10. Shareholders’ Equity

Common Stock

Shareholders of the company have authorized the issuance of 400,000,000 shares of common stock with a par value of $.01 per share. As of September 30, 2006, 157,260,536 shares of common stock were outstanding. Each outstanding common share has attached to it a one share purchase right that, until exercisable, cannot be transferred apart from the company’s common stock. Such rights, as amended, become exercisable under certain circumstances when a potential acquiror acquires or takes certain steps to acquire 15% or more of the company’s common stock. Upon the occurrence of such an event, each right held by shareholders other than the acquiror may be exercised to receive that number of shares of common stock of the company (or in certain circumstances, preferred stock, debt securities, cash or other assets of the company or stock of the acquiring company), which at the time of such a transaction would have a market value of two times the exercise price of the right. The rights expire on December 16, 2006 unless extended by the Board, and are redeemable by the Board at a price of $0.001 per right at any time before any person or group acquires 15% or more of the company’s common stock.

In fiscal 1997, the company’s Board of Directors authorized the company to repurchase up to 15 million common shares. Under this plan, the company repurchased a total of 11,785,432 shares at a cost of $222.2 million from 1997 to 2000. In August 2003, the company’s Board of Directors authorized the company to repurchase an additional 15 million shares of its common stock. These repurchases may be made on the open market or in negotiated transactions and the timing and amount of shares repurchased will be determined by the company’s management. In fiscal years 2006, 2005 and 2004, the company repurchased 4,000,000 shares at a cost of $39.4 million, 1,600,000 shares at a cost of $18.2 million and 225,000 shares at a cost of $2.5 million under this share repurchase programs, respectively. At September 30, 2006, there were 7,389,568 shares available for repurchase under the share repurchase program.

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Common stock issued, outstanding and held in treasury is summarized in the table below:

	Year Ended September 30
	2006		2005		2004
Shares of Common Stock – Issued
Balance at beginning of year	162,476,513		161,015,917		160,900,657
Shares issued for the conversion of preferred stock	—		1,372,906		115,260
Shares issued for stock options	—		87,690		—
Balance at End of Year	162,476,513		162,476,513		161,015,917
Shares of Common Stock – Held in Treasury
Balance at beginning of year	1,557,030		148,950		2,608,290
Stock repurchase	4,000,000		1,600,000		225,000
Shares issued in MTS acquisition	—		—		(1,621,429	)
Shares issued for conversion of preferred stock	—		(14,984	)	(614,403	)
Stock options and other plans	(341,053	)	(176,936	)	(448,508	)
Balance at End of Year	5,215,977		1,557,030		148,950

At September 30, 2006 the company had 16,486,627 shares of common stock that could potentially be issued under various stock-based compensation plans described in Note 11, Stock-Based Compensation. The company also has outstanding warrants issued as part of a fiscal 2004 litigation settlement with True Position (see Note 2, Business Acquisitions) that could result in the issuance of 1,000,000 shares. These warrants have an exercise price of $17.70 per share and expire on January 16, 2008. The company also has an additional 17,531,568 shares that could potentially be issued if the company’s convertible notes are converted. (see Note 6, Financing)

Convertible Preferred Stock

In fiscal 2003, as part of the Allen Telecom merger, the company issued 991,070 shares of Series A 7.75% convertible preferred stock. The company paid regular quarterly preferred stock dividends of $0.2 million and $0.7 million in fiscal years 2005 and 2004, respectively. In fiscal 2004, the company paid and expensed $0.2 million to convert 63,306 shares into 729,663 shares of the company’s common stock. On or after February 20, 2005, the company had the option to require conversion of all outstanding convertible preferred shares. In March 2005, the company exercised this option and converted the remaining 120,414 preferred shares into 1,387,890 shares of the company’s common stock.

11. Stock-Based Compensation

In the first quarter of fiscal 2006, the company adopted SFAS No. 123(R), Share-Based Payments, which revised SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) requires the company to record compensation expense for all share-based payments, including employee stock options, at fair value. Prior to fiscal 2006, the company had accounted for its stock-based compensation awards pursuant to Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees, and its related interpretations, which allowed the use of the intrinsic value method. Under the intrinsic value method, compensation expense for stock option-based employee compensation was not recognized in the income statement as all stock options granted by the company had an exercise price equal to the market price of the underlying common stock on the option grant date.

The company has elected to use the modified prospective transition method to adopt SFAS No. 123(R). Under this transition method beginning in fiscal 2006, compensation expense recognized includes: (a) expense for all share-based payments granted prior to, but not vested as of October 1, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) expense for all share-based payments granted subsequent to October 1, 2005, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123(R). As required under the modified prospective transition method, the company has not restated prior period results. As a result, certain components of the company’s quarterly financial statements will not be comparable until the first quarter of fiscal 2007, the first anniversary of the adoption of SFAS No. 123(R).

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The company maintains long-term management incentive plans (LTIPs) which provide for the issuance of equity-based awards including stock options, which vest over a four- or five-year period. Prior to fiscal 2006, the company used the intrinsic value method to value all stock options issued under these plans and therefore recorded no compensation expense for these stock options. At the beginning of fiscal 2006, the company had approximately 1.0 million unvested stock options outstanding under its LTIPs. Beginning in fiscal 2006, the company has recognized compensation expense ratably over the remaining vesting period of these options. The fair value of these options was calculated using the Black-Scholes option-pricing model using the original provisions of SFAS No. 123. During fiscal 2006, the company recognized pre-tax compensation expense of $3.2 million for these options.

During fiscal 2006, the company granted 548,400 stock options under its LTIPs. The company has elected to value these options using the Black-Scholes option-pricing model and has determined that the weighted average fair value of these options is $5.46 per option. Based on this valuation, the company recorded $0.6 million of compensation expense in fiscal 2006 for these options.

Total pre-tax compensation expense recognized in fiscal 2006 for all stock options was $4.3 million, an increase in net loss of $2.3 million, or $0.01 per basic and diluted share. As of September 30, 2006, unrecognized compensation expense for the unvested portion of outstanding stock options was approximately $5.3 million and the weighted average remaining vesting period of these options was 2.3 years.

The fair value of each unvested option was estimated based on the date of grant using the Black-Scholes option valuation model with the following assumptions:

	2006	2005	2004	2003
Risk-free interest rate	4.42%	4.25%	4.00%	3.98%
Expected life	5.5 years	6.0 years	6.0 years	6.0 years
Expected volatility	50%	66%	61%	58%
Dividend yield	0%	0%	0%	0%
Estimated forfeitures	10%	NA	NA	NA

The risk-free interest rate was based on U.S. Treasury yields with a remaining term that approximates the expected life of the options granted. The expected life used for options granted in fiscal 2006 was based on historical data of employee exercise performance. Prior to fiscal 2006, the expected life was based on the average life of exercised options. The estimated volatility for fiscal 2006 was based both on the company’s historical stock price volatility and the market-implied volatility from traded options. Prior to fiscal 2006, the company calculated volatility based only on historical stock price volatility. The company used an expected dividend yield of 0% for all periods because the company has never paid, and does not anticipate paying, dividends in the foreseeable future. Beginning in fiscal 2006, the company has used an estimated forfeiture rate of 10% based on historical data. Prior to fiscal 2006, the company used the actual forfeiture method allowed under SFAS No. 123 which assumed that all options would vest and pro forma expense was adjusted when options were forfeited.

A summary of the company’s stock option activity and related information follows:

	Year Ended September 30
	2006		2005		2004
Outstanding at beginning of year	8,535,804		8,129,643		6,818,117
Granted	548,400		1,553,400		1,786,875
Expired or cancelled	(1,068,607	)	(1,042,892	)	(142,614	)
Exercised	(275,481	)	(104,347	)	(332,735	)
Outstanding at End of Year	7,740,116		8,535,804		8,129,643
Exercisable at End of Year	6,930,574		7,527,072		5,713,252
Weighted Average Exercise Price
Outstanding at beginning of year	$17.41		$18.17		$19.32
Granted	10.71		14.38		12.16
Expired or cancelled	21.75		19.45		16.79
Exercised	9.65		10.97		9.96
Outstanding at End of Year	16.65		17.41		18.17
Exercisable at End of Year	$17.35		$18.29		$21.02

60

The weighted average fair value of options granted during fiscal years 2006, 2005, and 2004, was $5.46, $8.88, and $7.07, per share, respectively. During fiscal 2006, 2005, and 2004, 275,481, 104,347 and 332,735 of stock options were exercised, respectively, and the intrinsic value of these stock options was $0.9 million, $0.2 million and $2.4 million for fiscal 2006, 2005 and 2004, respectively. The aggregate intrinsic value of outstanding and exercisable options were $0.0 million, $1.3 million and $4.5 million in 2006, 2005 and 2004, respectively.

The range of exercise prices for options outstanding and exercisable at September 30, 2006 was $8.91 to $38.17.

Range of Exercise Prices	$8.91 $10.63	-	$11.09 $12.91	-	$13.03 $16.84	-	$17.40 $18.65	-	$19.12 $22.19	-	$22.65 $24.00	-	$27.19 $38.17	-		Total
Outstanding Options	1,185,782		1,547,226		1,873,975		646,428		754,255		1,438,125		294,325			7,740,116
Weighted Average
Exercise Price	$9.72		$11.43		$14.83		$17.62		$21.84		$23.16		$36.87		$	16.65
Average Life	7.25		7.19		7.16		3.34		5.30		3.27		0.28			5.68
Exercisable Options	818,126		1,105,340		1,873,975		646,428		754,255		1,438,125		294,325			6,930,574
Weighted Average
Exercise Price	$9.51		$11.47		$14.83		$17.62		$21.84		$23.16		$36.87		$	17.35
Average Life	6.53		7.09		7.16		3.34		5.30		3.27		0.28			5.41

The company also grants restricted stock units (RSUs) to officers, key employees and directors under its LTIPs. Each RSU entitles the participant to one share of the company’s common stock on the vesting date. SFAS No. 123(R) requires compensation expense to be adjusted for an estimated forfeiture factor. The company uses an estimated forfeiture rate of 10% based upon its historical experience. Compensation expense for RSUs is recognized on a straight-line basis over the vesting period and is based on the market price of the company’s common stock on the grant date. RSUs generally vest over service periods ranging from three to four years. In fiscal 2006, the company granted RSUs that vest based on the company achieving a target return on invested capital (ROIC) goal in fiscal 2008. The number of RSUs that vest will range from 0% to 125% of the grant based on the ROIC in fiscal 2008. In determining compensation expense, the company assumed that the ROIC target will be achieved at 100% of the grant. The company evaluates this assumption periodically. The fair value of these RSUs was based on the company’s common stock price at the date of grant. The company recognized pre-tax compensation expense for RSUs of $5.1 million in fiscal 2006, and $2.5 million in fiscal 2005, respectively. During fiscal 2006, the company issued 65,572 shares of common stock for RSUs granted in fiscal 2005 that vest ratably over a four-year period.

The table below shows the company’s outstanding RSUs at September 30, 2006:

Grant Year	RSU’s Outstanding	Vesting Period	Weighted Average Fair Value	Unearned Compensation Expense (Dollars in thousands)	Weighted Average Life
2004	298,800	3 years	$12.04	$283	0.24 years
2005	417,350	4 years	$13.39	2,663	2.27 years
2006	117,800	4 years	$12.25	1,198	3.04 years
2006	684,073	performance based	$10.21	4,765	3.10 years
Total	1,518,023			$8,909

A summary of the company’s RSU activity and related information follows:

	Year Ended September 30
	2006		2005		2004
Outstanding at beginning of year	791,400		345,300		—
Granted	827,059		499,800		363,200
Expired or cancelled	(34,864	)	(53,700	)	(17,900	)
Exercised	(65,572	)	—		—
Outstanding at End of Year	1,518,023		791,400		345,300
Weighted Average Fair Value
Outstanding at beginning of year	$12.80		$11.94		$—
Granted	10.50		13.28		11.91
Expired or cancelled	11.11		11.65		11.30
Exercised	12.60		—		—
Outstanding at End of Year	11.60		12.80		11.94

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SFAS No. 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost be reported as a financing cash flow rather than as an operating cash flow as required under SFAS No. 123. This requirement reduces net operating cash flows and increases net financing cash flows in periods after adoption. The impact of this change was $0.7 million for fiscal 2006. Operating cash flows recognized in fiscal 2005 for such excess tax deductions were approximately $0.1 million.

Included in the statement of cash flows in net cash from operations for fiscal 2006 is $9.4 million of stock-based compensation expense. This $9.4 million includes $4.3 million of stock option expense and $5.1 million of RSU amortization expense. Prior to the adoption of SFAS No. 123(R), there was no stock option expense included in the fiscal 2005 statement of cash flows or net income. The $2.5 million and $1.2 million of stock-based compensation expense included in cash from operations for fiscal years 2005 and 2004, respectively, is comprised entirely of RSU amortization expense. Financing activities include stock option exercises of $3.3 million and $1.8 million, for fiscal years, 2006 and 2005 respectively. For fiscal 2006, this $3.3 million was comprised of $2.6 million of proceeds received from the exercise of stock options and $0.7 million for the benefits of tax deductions in excess of recognized compensation expense. For fiscal 2005, the entire $1.8 million was from the proceeds on exercise of stock options. In fiscal 2006, the company terminated its Employee Stock Purchase Plan (ESPP).

12. Segment and Geographic Information

In fiscal 2006, the company operated its business in the following five operating segments: Antenna and Cable Products, Base Station Subsystems, Network Solutions, Wireless Innovations and Satellite Communications. Antenna and Cable Products include coaxial cables, connectors, cable assemblies and accessories as well as base station antennas and terrestrial microwave antennas. Base Station Subsystems products are integral components of wireless base stations and include products such as power amplifiers, filters, duplexers and combiners that are sold individually or as parts of integrated subsystems. Network Solutions includes software and equipment to locate wireless E-911 callers, as well as equipment and services for testing and optimizing wireless networks. Wireless Innovations products are used to extend and enhance the coverage of wireless networks in areas where signals are difficult to send or receive, and include both complete systems and individual components. Satellite Communications products include earth station antennas, high frequency and radar antennas, direct-to-home antennas and very small aperture terminal antennas.

The company sells to a wide range of customers worldwide. In fiscal 2006 and 2005, no country outside of the United States accounted for 10% or more of total sales. In fiscal 2004, sales originating from Italy accounted for 11% of total sales.

No single customer accounted for 10% or more of total sales in fiscal 2006. In fiscal 2005, Cingular Wireless accounted for 11% of total company sales and in fiscal 2004, Lucent Technologies accounted for 14% of total company sales.

Principal financial data by segment and geographic selling location is as follows:

	Year Ended September 30
Dollars in thousands	2006	2005	2004
Sales by Segment
Antenna and Cable Products 1	$1,248,418	$1,049,775	$823,258
Base Station Subsystems	504,865	446,001	497,645
Network Solutions	90,808	157,405	175,431
Wireless Innovations	180,169	168,459	123,155
Satellite Communications	121,833	139,594	208,873
Total Sales	$2,146,093	$1,961,234	$1,828,362
Sales by Geographic Area
United States – Domestic	$929,417	$866,108	$844,972
United States – Export	61,176	72,181	80,134
Europe, Middle East, Africa	681,123	630,803	540,837
Asia-Pacific	324,772	253,080	254,613
Other Americas	149,605	139,062	107,806
Total Sales	$2,146,093	$1,961,234	$1,828,362

1. Includes sales for freight and distribution services of $30.0 million in fiscal 2006, $26.0 million in fiscal 2005 and $22.8 million in fiscal 2004 that are not included in the Antenna and Cable Products results for internal management reporting purposes.

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	Year Ended September 30
Dollars in thousands	2006			2005			2004
Operating Income (Loss)2
Antenna and Cable Products1	$	194,302		$	161,671		$	146,245
Base Station Subsystems3		(6,925	)		(32,856	)		(1,605	)
Network Solutions		9,725			61,097			71,495
Wireless Innovations		35,294			30,647			17,388
Satellite Communications		(18,294	)		(5,511	)		(12,075	)
Items not included in segments
Unallocated Sales and Administrative Costs1		(119,769	)		(114,244	)		(117,141	)
Intangible Amortization		(19,011	)		(22,100	)		(37,583	)
Gain (loss) on Sale of Assets		8,008			(1,202	)		(10,164	)
Total Operating Income	$	83,330		$	77,502		$	56,560
Assets Identifiable to
United States	$	562,609		$	570,873		$	550,782
Europe, Middle East, Africa		491,243			442,432			450,366
Asia-Pacific		296,044			273,344			214,787
Other Americas		129,154			108,194			97,483
Goodwill & Other Intangible Assets		929,871			918,836			928,871
Consolidated Assets	$	2,408,921		$	2,313,679		$	2,242,289
Assets Identifiable by Segment
Antenna and Cable Products	$	219,901		$	193,164		$	153,772
Base Station Subsystems		94,778			87,086			103,206
Network Solutions		8,398			5,950			10,522
Wireless Innovations		38,149			45,032			40,879
Satellite Communications		27,114			22,224			53,429
Unallocated Assets		2,020,581			1,960,223			1,880,481
Consolidated Assets	$	2,408,921		$	2,313,679		$	2,242,289
Goodwill Identifiable by Segment
Antenna and Cable Products	$	196,299		$	186,308		$	183,458
Base Station Subsystems		411,782			402,799			410,503
Network Solutions		117,178			113,233			111,578
Wireless Innovations		143,200			152,658			152,757
Satellite Communications		14,207			7,085			7,085
Total Goodwill	$	882,666		$	862,083		$	865,381

1. Includes operating income (loss) for freight and distribution services of $2.7 million in fiscal 2006, $2.9 million in fiscal 2005 and $3.5 million in fiscal 2004, which are not included in the Antenna and Cable Products results for internal management reporting purposes. The company has also reclassified freight and distribution services operating income of $2.9 million in fiscal 2005, and $3.5 million in fiscal 2004. These were previously classified as unallocated sales and administrative costs.

2. Segment operating income (loss) includes depreciation expense as provided in the following table.

3. On February 7, 2005, the company agreed to a request by one of its significant customers to conduct a field retrofit of a product the company sold which contained a defective component supplied by a third party. The company recorded a $16.6 million charge for this retrofit.

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	Year Ended September 30
Dollars in thousands	2006	2005	2004
Depreciation Expense
Antenna and Cable Products	$25,276	$24,859	$24,716
Base Station Subsystems	14,993	16,823	17,631
Network Solutions	3,719	3,140	3,172
Wireless Innovations	2,786	2,761	2,365
Satellite Communications	2,456	2,240	2,870
Items not included in segments
Unallocated Depreciation Expense	10,987	12,079	14,373
Total Depreciation Expense	$60,217	$61,902	$65,127
Capital Expenditures1
Antenna and Cable Products	$26,625	$25,241	$28,598
Base Station Subsystems	16,053	20,560	26,061
Network Solutions	3,240	3,187	4,052
Wireless Innovations	3,122	3,892	2,046
Satellite Communications	4,683	2,652	2,091
Items not included in segments
Unallocated Capital Expenditures	17,310	10,837	9,065
Total Capital Expenditures	$71,033	$66,369	$71,913

1. The amounts in 2006 exclude the lease obligation of $25.2 million for the new Joliet, Illinois facility.

13. Selected Quarterly Financial Information (Unaudited)

Due to variability of shipments under large contracts, customers’ seasonal installation considerations, variations in product mix and in profitability of individual orders, the company may experience wide quarterly fluctuations in sales and operating results. Consequently, it is more meaningful to focus on annual rather than quarterly results.

Dollars in thousands, except per share amounts	December			March		June		September			Total
2006
Sales	$	514,699		$	481,653	$	550,688	$	599,053		$	2,146,093
Gross profit		117,006			99,417		121,611		135,345			473,379
Gain (Loss) on sale of assets		(1,461	)		72		262		9,1352			8,008
Operating income		21,264			8,588		18,026		35,4523			83,330
Income before income taxes		18,530			5,113		14,241		31,224			69,108
Net income (loss)		14,843			3,569		6,963		(59,665	)1		(34,290	)
Basic and diluted income (loss) from continuing operations		0.09			0.02		0.04		(0.38	)1		(0.22	)
Basic and diluted net income (loss) per share		0.09			0.02		0.04		(0.38	)1		(0.22	)
Common Stock Closing Price Range:
High		11.57			13.74		12.24		9.60
Low		10.21			10.62		8.75		7.42

1. Includes a non-cash valuation allowance for deferred taxes of $83.4 million.

2. Includes a gain on the sale of land at the Orland Park, Illinois facility of $9.0 million.

3. Includes merger costs of $10.0 million and a pension termination gain of $14.2 million.

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Dollars in thousands, except per share amounts	December	March	June		September		Total
2005
Sales	$473,837	$481,747	$487,235		$518,415		$1,961,234
Gross profit	91,1601	116,541	112,923		116,1641		436,788
Gain (Loss) on sale of assets	—	1,033	(1,522	)	(713	)	(1,202	)
Operating income	3,8721	27,376	23,833		22,4211		77,502
Income before income taxes	354	24,903	21,003		16,919		63,179
Net income	2,9781,2	15,353	12,989		7,5381,3		38,858
Preferred stock dividends	117	115	—		—		232
Net income available to common shareholders	2,8611,2	15,238	12,989		7,5381,3		38,626
Basic and diluted income from continuing operations	0.021,2	0.09	0.08		0.051,3		0.24
Basic and diluted net income per share	0.021,2	0.09	0.08		0.051,3		0.24
Common Stock Closing Price Range:
High	15.33	13.62	13.91		13.93
Low	12.51	11.32	11.03		10.67

1. Includes a $19.8 million product recall charge due to a defective component supplied by a third party in the December quarter, and a recovery of $3.2 million in the September quarter.

2. Includes a tax benefit of $4.5 million for favorable resolution of certain income tax matters.

3. Includes a deferred tax valuation allowance of $5.4 million.

65

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Andrew Corporation

We have audited the accompanying consolidated balance sheets of Andrew Corporation and subsidiaries as of September 30, 2006 and 2005, and the related consolidated statements of operations, change in shareholders’ equity and cash flows for each of the three years in the period ended September 30, 2006. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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 consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Andrew Corporation and subsidiaries at September 30, 2006 and 2005, and the consolidated results of their operations and their cash flows for each of the three years in the period ended September 30, 2006, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Note 1 to the Financial Statements, the Company adopted the provisions of the Financial Accounting Standards Board’s Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” in fiscal year 2006.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Andrew Corporation’s internal control over financial reporting as of September 30, 2006, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated December 8, 2006 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Chicago, Illinois

December 8, 2006

66

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

We, the management of Andrew, are responsible for establishing and maintaining adequate internal control over financial reporting of the company. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, a control system can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Management has assessed the effectiveness of the company’s internal control over financial reporting as of September 30, 2006. Based on this assessment, we believe that the internal control over financial reporting of the company was effective as of September 30, 2006 based on the COSO criteria. In connection with this assessment, there were no material weaknesses in the company’s internal control over financial reporting identified by management.

Ernst & Young LLP, an independent registered public accounting firm, as auditors of the company’s financial statements included in this annual report, issued an attestation report on management’s assessment of the effectiveness of our internal control over financial reporting as of September 30, 2006. Ernst & Young LLP’s report, which expresses unqualified opinions on management’s assessment and on the effectiveness of our internal control over financial reporting, is included herein.

/s/    Ralph E. Faison	/s/    Marty R. Kittrell
Ralph E. Faison	Marty R. Kittrell
President and Chief Executive Officer	Executive Vice President and Chief Financial Officer

67

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Board of Directors and Shareholders of

Andrew Corporation

We have audited management’s assessment, included in the accompanying management’s report on internal control over financial reporting, that Andrew Corporation and subsidiaries maintained effective internal control over financial reporting as of September 30, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Andrew Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that Andrew Corporation and subsidiaries maintained effective internal control over financial reporting as of September 30, 2006, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, Andrew Corporation and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of September 30, 2006, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the accompanying consolidated balance sheets of Andrew Corporation and subsidiaries as of September 30, 2006 and 2005, and the related consolidated statements of operations, change in shareholder’s equity and cash flows for each of the three years in the period ended September 30, 2006 and our report dated December 8, 2006 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Chicago, Illinois

December 8, 2006

68

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures:

As of September 30, 2006, the company’s management, including its Chief Executive Officer and Chief Financial Officer, reviewed and evaluated the effectiveness of the company’s disclosure controls and procedures pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). Based on that review and evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company’s disclosure controls and procedures were effective as of September 30, 2006 in providing reasonable assurance that information required to be disclosed by the company in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

Management’s Report on Internal Control over Financial Reporting

Management’s Report on Internal Control over Financial Reporting is set forth in Part II, Item 8 of this annual report on Form 10-K.

Changes in Internal Controls

There were no changes in the company’s internal control over financial reporting during the fiscal quarter ended September 30, 2006 that were identified in connection with the evaluation referred to above that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

The company’s management, including its Chief Executive Officer and Chief Financial Officer, do not expect that the company’s disclosure controls and procedures or the company’s internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Item 9B.  Other Information

None.

69

PART III

Item 10.  Directors and Executive Officers of the Registrant

The information called for by Item 401 of Regulation S-K concerning Andrew’s executive officers is furnished in Part I of this Annual Report on Form 10-K under the caption “Additional Item—Executive Officers of the Registrant” and is incorporated herein by reference. The other information required by this Item (except as set forth below) is contained in the company’s fiscal 2006 Proxy Statement (the “Proxy Statement”) under the captions “Election of Directors,” “Section 16(a) Beneficial Ownership Reporting Compliance,” and “Meetings and Committees of the Board of Directors.”

Andrew has adopted a Code of Conduct that applies to our directors, principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions, as well as other employees. Information concerning Andrew’s Code of Conduct is incorporated herein by reference from the Proxy Statement under the caption “Corporate Governance Policies and Practices.”

Item 11.  Executive Compensation

Information required by this Item is contained in the Proxy Statement under the captions “Director Compensation,” “Executive Compensation,” and “Report of the Compensation and Human Resources Committee of the Board of Directors” and is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters

Information required by this Item is contained in the Proxy Statement under the captions “Ownership of Andrew Common Stock” and “Equity Compensation Plan Information Table” and is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions

None.

Item l4.  Principal Accountant Fees and Services

Information required by this Item is contained in the Proxy Statement under the caption “Appointment of Independent Auditors” and is incorporated herein by reference.

70

PART IV

Item l5.  Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

The Consolidated Financial Statements are included in Part II, Item 8 of this Annual Report on Form 10-K, on pages 37 to 68.

(a)(2) Financial Statement Schedule

Schedule II Valuation and Qualifying Accounts

Column A	Column B	Column C				Column D		Column E
		Additions
Year Ended September 30, 2006	Balance at beginning of period	Charged to costs & expenses	Balance due to acquisition	Charged to other accounts		Deductions		Balance at end of period
Allowance for doubtful accounts	8,939	1,990	1331			(3,950	)2	7,112
Inventory reserves	41,916	26,353	1,2011			(10,170	)5	59,300
Deferred tax assets valuation allowance	49,186	102,2093	645	7,4034				159,443
Year Ended September 30, 2005
Allowance for doubtful accounts	9,556	1,421	—	941		(2,979	)2	8,939
Inventory reserves	50,903	19,525	—	—		(28,512	)5	41,916
Deferred tax assets valuation allowance	42,289	12,075	—	(5,178	)6	—		49,186
Year Ended September 30, 2004
Allowance for doubtful accounts	9,251	6,096	5697	(2,831	)	(3,529	)2	9,556
Inventory reserves	43,531	17,372	9,1288	—		(19,128	)5	50,903
Deferred tax assets valuation allowance	24,625	6,404	4,218	7,0429		—		42,289

1. Includes Precision Antenna, Skyware, and Cell Site Industries

2. Accounts receivable written-off against allowance for doubtful accounts

3. Includes $83 million valuation allowance against net U.S. deferred tax assets, which was recorded in September 2006

4. Includes losses in foreign jurisdictions for which no benefit has been recorded

5. Inventory scrapped against inventory reserves

6. Adjustment to purchase accounting (i.e. goodwill) for the Allen Telecom acquisition

7. MTS Wireless Components acquisition in March 2004

8. Channel Master acquisition in November 2003

9. Represents increase in deferred tax assets related to foreign losses carried forward

All other schedules have been omitted because they are either not required under the applicable instructions, are not applicable, or the information is included in the notes to the consolidated financial statements.

71

(a)(3) Exhibit Index:

Exhibit No.	Description	Reference
3.1	Restated Certificate of Incorporation	Filed as Exhibit 4.1 to Form S-8 filed on July 22, 2003 and incorporated herein by reference. (SEC File No. 333-107243)
3.2	By-Laws of Registrant	Filed as Exhibit 3.2 to Form S-3 filed on October 28, 2003 and incorporated herein by reference. (SEC File No. 333-110014)
4.1	Note Assumption and Exchange Agreement dated as of July 15, 2003	Filed as Exhibit 4.3 to Form S-3 filed on October 28, 2003 and incorporated herein by reference. (SEC File No. 33-110014)
4.2	Stockholder Rights Agreement dated November 14, 1996	Filed as Exhibit 4 to Form 8-A filed on November 26, 1996 and incorporated herein by reference. (SEC File No. 000-09514)
4.3	First Amendment, dated October 26, 2005, to the Stockholder Rights Agreement dated November 14, 1996	Filed as Exhibit 4.2 to Form 8-A/A filed on October 31, 2005 and incorporated herein by reference. (SEC File No. 000-09514)
4.4	Second Amendment, date May 30, 2006, to Stockholders Rights Agreement dated November 14, 1996	Filed as Exhibit 4.1 to Form 8-K filed on June 1, 2006 and incorporated herein by reference. (SEC File No. 001-14617)
4.5	Registration Rights Agreement dated as of June 4, 2002 between Andrew Corporation and each of the stockholders named therein.	Filed as Exhibit 4.1 to Form S-3 filed on August 19, 2002 and incorporated herein by reference. (SEC File No. 333-98333)
4.6	Indenture, dated as of August 8, 2003, between the Registrant and BNY Midwest Trust Company, as Trustee	Filed as Exhibit 4.6 to Form S-3 filed on October 28, 2003 and incorporated herein by by reference. (SEC File No. 333-110014)
4.7	Form of 3 1/4% Convertible Subordinated Note due 2013 (included as Exhibit A to the Indenture filed as Exhibit 4.6)	Filed as Exhibit 4.7 to Form S-3 filed on October 28, 2003 and incorporated herein by reference. (SEC File No. 333-110014)
4.8	Registration Rights Agreement, dated as of August 8, 2003, among the Registrant and Morgan Stanley & Co. Incorporated, Banc of America Securities LLC and Citigroup Global Markets Inc., as representatives of the Initial Purchasers	Filed as Exhibit 4.8 to Form S-3 filed on October 28, 2003 and incorporated herein by reference. (SEC File No. 333-110014)
4.9	Warrant to Purchase Common Stock issued on January 16, 2004	Filed as Exhibit 99.2 to Form 8-K filed on February 3, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.1*	Management Incentive Plan dated February 4, 1988	Filed as Exhibit 10(c) to Form 10-K for fiscal year ended September 30, 1993 and incorporated herein by reference. (SEC File No. 000-09514)
10.2*	Non-employee Directors’ Stock Option Plan dated February 10, 1998, as amended November 18, 1999	Filed as Exhibit 10(c) to Form 10-K for fiscal year ended September 30, 1999 and incorporated herein by reference. (SEC File No. (001-14617)
10.3	Credit Agreement dated as of September 29, 2005	Filed as Exhibit 99.2 to Form 8-K filed on October 5, 2005 and incorporated herein by reference. (SEC File No. 001-14617)
10.4	Amended and Restated Employee Stock Purchase Plan adopted November 12, 1998	Filed as Exhibit 10(E) to Form 10-K for fiscal year ended September 30, 1998 and incorporated herein by reference. (SEC File No. 001-14617)

72

Item 15. cont.

10.5*	Amended and Restated Employee Retirement Benefit Restoration Plan	Filed as Exhibit 10(G) to Form 10-K for fiscal year ended September 30, 1998 and incorporated herein by reference. (SEC File No. 001-14617)
10.6*	Management Incentive Program, Dated November 18, 1999	Filed as Exhibit 10.18 to Form 10-K for fiscal year ended September 30, 2000 and incorporated herein by reference. (SEC File No. 001-14617)
10.7*	Management Incentive Plan, Dated November 17, 2004	Filed with Proxy Statement in connection with Annual Meeting held February 8, 2005 (filed on January 5, 2005) and incorporated herein by reference. (SEC File No. 001-14617)
10.8*	Long-Term Incentive Plan, Dated November 17, 2004	Filed with Proxy Statement in connection with Annual Meeting held February 8, 2005 (filed on January 5, 2005) and incorporated herein by reference. (SEC File No. 001-14617)
10.9+	Supply Agreement dated as of April 3, 2003 between Lucent Technologies Inc. and Celiant Corporation.	Filed as Exhibit 99.1 to Form 8-K file on April 9, 2003 and incorporated herein by reference. (SEC File No 001-14617)
10.10*	Allen Telecom Inc. Employee Before-Tax Savings Plan	Filed as Exhibit 4.4 to Form S-8 filed on August 1, 2003 and incorporated herein by reference. (SEC File No. 333-107550)
10.11*	Allen Telecom Inc. Amended and Restated 1992 Stock Plan	Filed as Exhibit 4.5 to Form S-8 filed on August 1, 2003 and incorporated herein by reference. (SEC File No. 333-107550)
10.12*	Allen Telecom Inc. Amended and Restated 1994 Non-Employee Director Stock Plan	Filed as Exhibit 4.6 to Form S-8 filed on August 1, 2003 and incorporated herein by reference. (SEC File No. 333-107550)
10.13*	Andrew Corporation Executive Severance Benefit Plan	Filed as Exhibit 10.1 to Form 10-Q for fiscal quarter ended June 30, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.14*	Executive Severance Benefit Plan Agreement with Ralph Faison	Filed as Exhibit 10.2 to Form 10-Q for fiscal quarter ended June 30, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.15*	Executive Severance Benefit Plan Agreement with Marty Kittrell	Filed as Exhibit 10.3 to Form 10-Q for fiscal quarter ended June 30, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.16*	Executive Severance Benefit Plan Agreement with Dan Hartnett	Filed as Exhibit 10.4 to Form 10-Q for fiscal quarter ended June 30, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.17*	Executive Severance Benefit Plan Agreement with John DeSana	Filed as Exhibit 10.6 to Form 10-Q for fiscal quarter ended June 30, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.18*	Executive Severance Benefit Plan Agreement with Mark Olson	Filed as Exhibit 10.9 to Form 10-Q for fiscal quarter ended June 30, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.19*	Executive Severance Benefit Plan Agreement with John Dickson	Filed as Exhibit 10.13 to Form 10-Q for fiscal quarter ended June 30, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.20*	Executive Severance Benefit Plan Agreement with Robert Hudzik	Filed as Exhibit 10.14 to Form 10-Q for fiscal quarter ended June 30, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.21*	Executive Severance Benefit Plan Agreement with Roger Manka	Filed as Exhibit 10.16 to Form 10-Q for fiscal quarter ended June 30, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.22*	Executive Severance Benefit Plan Agreement with Mickey Miller	Filed as Exhibit 10.17 to Form 10-Q for fiscal quarter ended June 30, 2004 and incorporated herein by reference. (SEC File No. 001-14617)

73

Item 15. cont.

10.23	Settlement Agreement, dated as of January 16, 2004, by and among True Position Inc., KSI Inc., Allen Telecom LLC and Andrew Corporation	Filed as Exhibit 10.1 to Form 10-Q for fiscal quarter ended March 31, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.24*	Stock Option Agreement, under Management Incentive Program (Form of Agreement adopted November 16, 2004)	Filed as Exhibit 10.1 to Form 8-K filed on November 19, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.25*	Form of Deferred Stock Unit Agreement under Management Incentive Program	Filed as Exhibit 10.2 to Form 8-K filed on November 19, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.26*	Form of Stock Option Agreement under Management Incentive Program	Filed as Exhibit 10.3 to Form 8-K filed on November 19, 2004 and incorporated herein by reference. (SEC File No. 001-14617)
10.27*	Form of Non-Employee Director Deferred Stock Unit Agreement under Andrew Corporation Long-Term Incentive Plan	Filed as Exhibit 10.1 to Form 10-Q for fiscal quarter ended June 30, 2005 and incorporated herein by reference. (SEC File No. 001-14617)
10.28	Agreement for Purchase and Sale of Real Estate dated August 25, 2005	Filed as Exhibit 99.1 to Form 8-K filed on December 2, 2005 and incorporated herein by reference. (SEC File No. 001-14617)
10.29	First Amendment, dated November 28, 2005, to Agreement to purchase and sale of Real Estate dated August 25, 2005	Filed as Exhibit 99.2 to Form 8-K filed on December 2, 2005 and incorporated herein by reference. (SEC File No. 001-14617)
10.30*	Form of Deferred Stock Unit Agreement under Long-Term Incentive Program	Filed as Exhibit 10.1 to Form 10-Q for fiscal quarter ended March 31, 2005 and incorporated herein by reference. (SEC File No. 001-14617)
10.31*	Amendment to Stock Option Agreement(s)	Filed as Exhibit 99.1 to Form 8-K filed on August 18, 2005 and incorporated herein by reference. (SEC File No. 001-14617)
10.32*	Form of Performance Cash Agreement under Management Incentive Program	Filed as Exhibit 10.1 to Form 8-K filed on November 22, 2005 and incorporated herein by reference. (SEC File No. 001-14617)
10.33*	Form of Restricted Stock Unit Agreement under Long-Term Incentive Program	Filed as Exhibit 10.2 to Form 8-K filed on November 22, 2005 and incorporated herein by reference. (SEC File No. 001-14617)
10.34*	Form of Stock Option Agreement under Long-Term Incentive Program	Filed as Exhibit 10.3 to Form 8-K filed on November 22, 2005 and incorporated herein by reference. (SEC File No. 001-14617)
10.35	Industrial Building Lease Agreement dated November 18, 2005	Filed as Exhibit 99.1 to Form 8-K filed on November 23, 2005 and incorporated herein by reference. (SEC File No. 001-14617)
10.36	First Amendment to Credit Agreement dated June 16, 2006 among the Registrant, the Designated Subsidiaries of the Registrant, certain financial institutions named therein and Bank of America, National Association, as Administrative Agent for the lenders as L/C issuer.	Filed as Exhibit 10.1 to Form 8-K filed on June 20, 2006 and incorporated herein by reference. (SEC File No. 001-14617)
10.37+	Manufacturing Supply Agreement dated September 14, 2006 among the Registrant, Andrew Telecommunication Products S.R.L. and Elcoteq Network S.A.	Filed herewith.

74

Item 15. cont.

10.38	Asset Purchase Agreement dated October 31, 2006 between the Registrant and EMS Technologies, Inc.	Filed herewith.
10.39	Form of Indemnification Agreement	Files as Exhibit 10.2 to Form 10-Q for fiscal quarter ended March 31, 2006 and incorporated herein by reference. (SEC File No. 001-14617)
10.40	Executive Severance Benefit Plan Agreement with Justin Choi	Filed as Exhibit 99.1 to Form 8-K filed on April 20, 2006 and incorporated herein by reference. (SEC File No. 001-14617)
10.41	Mutual Termination Agreement dated as of August 9, 2006 with ADC Telecommunications Inc.	Filed as Exhibit 99.1 to Form 8-K files on August 11, 2006 and incorporated herein by reference. (SEC File No. 001-14617)
10.42*	First Amendment to Management Incentive Program	Filed herewith.
10.43*	Second Amendment to Management Incentive Program	Filed herewith.
12	Statement regarding ratio of earnings/(loss) to fixed charges	Filed herewith.
21	List of Significant Subsidiaries	Filed herewith.
23	Consent of Independent Registered Public Accounting Firm	Filed herewith.
31.1	Certification by Ralph E. Faison pursuant to Rule 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.
31.2	Certification by Marty R. Kittrell pursuant to Rule 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002	Filed herewith.
32	Section 1350 Certification	Furnished herewith.

* Indicates compensatory plan or arrangement.

+ Certain confidential information has been omitted from this agreement and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

75

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on December 13, 2006.

Andrew Corporation
By	/s/  Ralph E. Faison
	Ralph E. Faison
	President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on December 13, 2006 by the following persons on behalf of the Registrant in the capacities indicated.

By	/s/  Ralph E. Faison	/s/  Marty R. Kittrell
	Ralph E. Faison	Marty R. Kittrell
	President and Chief Executive Officer       (Principal Executive Officer)	Executive Vice President and       Chief Financial Officer       (Principal Financial Officer)
	/s/  Mark A. Olson	/s/  Charles R. Nicholas
	Mark A. Olson	Charles R. Nicholas
	Vice President, Corporate Controller       and Chief Accounting Officer       (Principal Accounting Officer)	Chairman
	/s/  William L. Bax	/s/  Thomas A. Donahoe
	William L. Bax	Thomas A. Donahoe
	Director	Director
	/s/  Jere D. Fluno	/s/  William O. Hunt
	Jere D. Fluno	William O. Hunt
	Director	Director
	/s/  Gerald A. Poch	/s/  Anne F. Pollack
	Gerald A. Poch	Anne F. Pollack
	Director	Director
	/s/  Glen O. Toney	/s/  Andrea L. Zopp
	Glen O. Toney	Andrea L. Zopp
	Director	Director

76

EXHIBIT INDEX

Item Number	Description
12	Ratio of earnings to fixed charges and preferred stock
21	List of Significant Subsidiaries
23	Consent of Independent Registered Public Accounting Firm
31.1	Certification by Ralph E. Faison pursuant to Rule 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by Marty R. Kittrell pursuant to Rule 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Section 1350 Certification

77

Shareholder Information

Transferring Stock or Making a Name Change

A stock transfer is required when shares are donated as a gift or when there is a change in name or ownership. To transfer stock, complete and sign the assignment section on the back of the certificate or on an assignment form separate from the stock certificate. Then forward it, via registered mail, to Computershare Investor Services, LLC. Be sure to include all necessary names, addresses, and Social Security or tax identification numbers for the new registration. The signature(s) must be guaranteed by an approved eligible financial institution acceptable to the transfer agent before the certificate is submitted to Computershare Investor Services, LLC.

Change of Address

Registered shareholders should send change-of-address information to Computershare Investor Services, LLC as soon as possible to ensure proper and timely delivery of mailings from the company.

Missing Certificates

If stock certificates are lost, stolen, or destroyed, you should immediately notify Computershare Investor Services, LLC by mail. Include exact name(s) in which the stock is registered and, if possible, the numbers and issue dates of the missing certificates.

Common Stock

Andrew Corporation Common Stock is traded on the NASDAQ Global Select Market under the symbol ANDW.

Duplicate Mailings

Shares owned by one person but held in different forms of the same name (e.g., John Smith, John B. Smith, J.B. Smith) result in duplicate mailing of shareholder information at added expense to the company and to you as a shareholder. Such duplication can be eliminated only at the request of the shareholder by notifying Computershare Investor Services, LLC.

Consolidating Accounts

Some stockholders have more than one account in the same name, which results in the required mailing of separate company material for each account. To consolidate accounts, send stock certificates, via registered mail, to Computershare Investor Services, LLC with signatures guaranteed as noted above in the section regarding transferring stock.

Dividends

Andrew Corporation has never paid cash dividends on its common stock. The Board of Directors periodically reviews this practice and, to date, has elected to retain earnings in the business to finance investments and operations.

Historical Closing Price Range of Common Stock

Fiscal Year Ended September 30

	2006		2005		2004		2003		2002
Low-High Closing Prices as Reported by NASDAQ:
First Quarter	$	10.21–$11.57	$	12.51–$15.33	$	10.05–$13.76	$	6.06–$12.45	$	17.38–$23.82
Second Quarter		10.62–13.74		11.32–13.62		12.36–18.83		5.50–11.27		15.79–24.43
Third Quarter		8.75–12.24		11.03–13.91		16.58–21.26		5.73–10.04		13.35–18.00
Fourth Quarter		7.42–9.60		10.67–13.93		9.40–19.92		9.34–14.17		6.50–14.36
Fiscal Year Range		7.42–13.74		10.67–15.33		9.40–21.26		5.50–14.17		6.50–24.43
Stock Price–Fiscal Year End	$	9.25	$	11.15	$	12.24	$	12.08	$	6.55

Investor Relations

To receive company material, including the annual report on Form 10-K filed with the Securities and Exchange Commission, or to obtain information on other matters of investor interest, please visit our website at www.andrew.com.

Address

Andrew Corporation

Worldwide Headquarters

3 Westbrook Corporate Center, Suite 900

Westchester, IL USA 60154

800-232-6767

+1 (708) 236-6616

Transfer Agent Contact Information

+1 (312) 360-5167

800-357-1910

www.computershare.com

First Class, Registered and Certified Mail:

Computershare Investor Services, LLC

P.O. Box 43036

Providence, RI 02940-3036

Overnight Courier:

Computershare Investor Services, LLC

250 Royall Street Mail Stop 1A

Canton, MA 02021-1011

Annual Meeting

The 59th Annual Meeting of Shareholders (27th as a publicly-owned company) will be held at 10:00 a.m. CST Wednesday, February 7, 2007 at the Westbrook Conference Center, 2 Westbrook Corporate Center, Westchester, IL 60154.

Andrew Corporation (NASDAQ:ANDW) designs, manufactures, and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries. Andrew (www.andrew.com), headquartered in Westchester, Illinois, is an S&P MidCap 400 company founded in 1937.

EX-10.37

EXHIBIT 10.37

CONFIDENTIAL TREATMENT REQUESTED

MANUFACTURING SUPPLY AGREEMENT

BETWEEN

ANDREW CORPORATION

AND

ANDREW TELECOMMUNICATION PRODUCTS S.R.L.

AND

ELCOTEQ NETWORK S.A.

* CONFIDENTIAL TREATMENT: The registrant has submitted a confidential treatment request for portions of this document. The redacted portions, which are indicated by an “[*]”, have been filed separately with the Securities and Exchange Commission.

Andrew – Elcoteq Proprietary

Use Pursuant to Company Instructions

CONFIDENTIAL TREATMENT REQUESTED

Table of Contents

ARTICLE 1	DEFINITIONS	1
ARTICLE 2	EFFECTIVE PERIOD OF AGREEMENT	1
ARTICLE 3	BUSINESS RELATIONSHIP/NON-COMPETITION	2
ARTICLE 4	PRODUCTS AND COMMERCIALLY PURCHASED ITEMS	3
ARTICLE 5	SERVICES	3
ARTICLE 6	PURCHASE COMMITMENT	4
ARTICLE 7	SUPPLIER COMPENSATION	4
ARTICLE 8	PAYMENT TERMS	7
ARTICLE 9	TRANSFER OF TITLE AND RISK OF LOSS/DELIVERY TERMS	8
ARTICLE 10	PURCHASE ORDERS	8
ARTICLE 11	DELIVERY/LATE DELIVERY	9
ARTICLE 12	PERFORMANCE METRICS AND PERFORMANCE METRICS DEFAULT RESOLUTION PROCESS	11
ARTICLE 13	EXCESS AND OBSOLETE MATERIAL AND FINISHED GOODS INVENTORY AND EXCESS BUFFER STOCK	11
ARTICLE 14	MATERIAL PROCUREMENT BY SUPPLIER	15
ARTICLE 15	PURCHASE OF GOODS AND SERVICES BY SUPPLIER UTILIZING COMPANY’S PRICING OR TERMS	16
ARTICLE 16	PRODUCT FORECASTING AND CAPACITY PLANNING	17
ARTICLE 17	EMERGENCY BACKUP MANUFACTURING PLAN	18
ARTICLE 18	NEW PRODUCT INTRODUCTION AND TARGET COSTING	19
ARTICLE 19	ELECTRONIC COMMERCE	19
ARTICLE 20	SHIPPING	21
ARTICLE 22	TRANSFER OF MANUFACTURE	21
ARTICLE 22	QUALITY	22
ARTICLE 23	WARRANTY	28
ARTICLE 24	REPAIRS NOT COVERED UNDER SUPPLIER’S WARRANTY	30
ARTICLE 25	SCRAP PROCEDURES	30
ARTICLE 26	QUARTERLY PERFORMANCE REVIEW PROCESS	31
ARTICLE 27	NOTICES	32
ARTICLE 28	DISPUTE RESOLUTION PROCESS/ARBITRATION	33
ARTICLE 29	ASSIGNMENT AND SUBCONTRACTING	33
ARTICLE 30	ATTENDANCE AT SUPPLIER’S FACILITY	35
ARTICLE 31	AUDIT	35
ARTICLE 32	BANKRUPTCY AND TERMINATION FOR FINANCIAL INSECURITY	36
ARTICLE 33	CHOICE OF LAW	36
ARTICLE 34	CONFIDENTIAL INFORMATION	36
ARTICLE 35	DEFAULT	37
ARTICLE 36	DEVELOPED INFORMATION AND INVENTIONS	38
ARTICLE 37	DOCUMENTATION NEEDED FOR PREFERENTIAL DUTY TREATMENT	39
ARTICLE 38	DUTY DRAWBACK	39
ARTICLE 39	ENVIRONMENTAL MANAGEMENT SYSTEMS	39
ARTICLE 40	ENVIRONMENTALLY HAZARDOUS SUBSTANCES	39
ARTICLE 41	EXPORT CONTROL	41
ARTICLE 42	FORCE MAJEURE	42
ARTICLE 43	IDENTIFICATION/PUBLICITY OF TERMS	42
ARTICLE 44	INDEMNITY	42
ARTICLE 45	INFRINGEMENT INDEMNITY	43
ARTICLE 46	INSURANCE	43
ARTICLE 47	INVOICING	44
ARTICLE 48	LIMITATION OF LIABILITY	45
ARTICLE 49	MANUFACTURING RIGHTS/DISPOSITION OF UNIQUE EQUIPMENT	45

Andrew – Elcoteq Proprietary

Use Pursuant to Company Instructions

CONFIDENTIAL TREATMENT REQUESTED

ARTICLE 50	MARKING	46
ARTICLE 51	OFFSET CREDITS	46
ARTICLE 52	OFFSETTING OF INVOICES	47
ARTICLE 53	ORDERING COMPANIES AND SUPPLIER ENTITIES	47
ARTICLE 54	COMPLIANCE WITH LAWS	47
ARTICLE 55	PACKING, LABELING AND SERIALIZATION	48
ARTICLE 56	PROCESS CERTIFICATION	48
ARTICLE 57	PRODUCT CONFORMANCE	48
ARTICLE 58	PRODUCT DOCUMENTATION	49
ARTICLE 59	PRODUCT/SPECIFICATION/PROCESS CHANGES	49
ARTICLE 60	REGISTRATION AND REGISTRATION STANDARDS	50
ARTICLE 61	RELEASES VOID	51
ARTICLE 62	RULES OF CONSTRUCTION REGARDING TIME	51
ARTICLE 63	SURVIVAL OF OBLIGATIONS/SEVERABILITY	51
ARTICLE 64	TAXES, DUTIES AND INSURANCE CONTRIBUTIONS	51
ARTICLE 65	TEST SCOPE	52
ARTICLE 66	TITLE TO MATERIAL AND SPECIAL TOOLING AND EQUIPMENT CONSIGNED BY COMPANY	53
ARTICLE 67	WAIVER AND AMENDMENT	54
ARTICLE 68	ENTIRE AGREEMENT/MODIFICATIONS/COUNTERPARTS	55

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LIST OF ATTACHMENTS

The following attachments are hereby made part of this Agreement:

ATTACHMENT A - DEFINITIONS

ATTACHMENT B – PRODUCTS

ATTACHMENTS C

ATTACHMENT C1 – PURCHASE COMMITMENT FOR EUROPE

ATTACHMENT C2 – PURCHASE COMMITMENT FOR NORTH AMERICA

ATTACHMENT D – MANUFACTURER PER UNIT PRICING FORMULA

ATTACHMENT E – PERFORMANCE METRICS

ATTACHMENT F – COST SAVINGS SUBMITTAL FORM

ATTACHMENTS G

ATTACHMENT G1 – MANUFACTURER PER UNIT PRICING FORMULA RATES AND

SERVICES FEES FOR EUROPE

ATTACHMENT G2 – MANUFACTURER PER UNIT PRICING FORMULA RATES AND

SERVICES FEES FOR NORTH AMERICA

ATTACHMENT H – EXAMPLE PRODUCT PLAN

ATTACHMENT I – FLEXIBLE DELIVERY ARRANGEMENTS

ATTACHMENT J – RETURN AND REPAIR SERVICES

ATTACHMENT K – MATERIAL AUTHORIZATION LETTER

ATTACHMENT L – INTENTIONALLY OMITTED

ATTACHMENT M – NEW PRODUCT INTRODUCTION (NPI) PROCESS

ATTACHMENT N – ORDERING COMPANY ACKNOWLEDGEMENT

ATTACHMENT O – CATEGORIZATION OF MATERIAL

ATTACHMENT P – MINIMUM CANCELLATION PROVISIONS

ATTACHMENT Q – INITIAL OVERSIGHT COMMITTEE MEMBERS

ATTACHMENT R – RESPONSIBILITY MATRIX

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THIS MANUFACTURING SUPPLY AGREEMENT (this “Agreement”) is entered into this 14th day of September, 2006, (the “Effective Date”) by Andrew Corporation, a Delaware corporation, having a principal place of business at 3 Westbrook Corporate Center, Suite 900, Westchester, IL 60154, United States of America (“Company”), Andrew Telecommunication Products s.r.l., an Italian corporation, having a principal place of business at Via Archimede, Agrate, Brianza 20041, Italy, and Elcoteq Network S.A., a Luxemburg corporation having a principal place of business at 69A, Boulevard de la Petrusse, L-2320 Luxemburg (“Supplier”) (collectively, the “Parties” and each a “Party”).

WHEREAS, Company and its Ordering Companies desire to purchase directly from Supplier and its Affiliates on an as-ordered basis the Products, Commercially Purchased Items, and Services, each as defined below;

AND WHEREAS, Supplier desires to sell to Company such Products, Commercially Purchased Items, and Services ordered from time to time by Company in accordance with the terms and conditions set forth below;

NOW THEREFORE, in exchange for mutually beneficial consideration, the sufficiency of which is hereby acknowledged, Company and Supplier agree as follows:

ARTICLE 1 - DEFINITIONS

1.1 All defined terms are as set forth in Attachment A to this Agreement or as stated in the Articles and Attachments of this Agreement.

ARTICLE 2 – EFFECTIVE PERIOD OF AGREEMENT

2.1 The effective period of this Agreement shall commence on the Effective Date and shall, except as otherwise provided in this Agreement, continue in effect for a period of three (3) years (the “Initial Term”). After the Initial Term, this Agreement shall automatically be renewed for successive periods of twelve (12) months each (each a “Renewal Term”) on the same applicable terms and conditions, unless either Party elects to terminate this Agreement in accordance with Article 2.2 by delivering to the other Party a written termination notice not less than one hundred eighty (180) days prior to the end of the Initial Term or Renewal Term, as the case may be. Further, either Party shall have the right to terminate any Renewal Term, without cause, by delivering to the other Party a prior written termination notice of not less than ninety (90) days. The Initial Term, as it may be extended in accordance with this Article 2.1, is hereinafter referred to as the “Term”.

2.2 If a termination notice is delivered pursuant to Article 2.1, the Parties shall co-operate fully with each other to effect the transfer of the manufacturing of the Products from Supplier to Company, or a third party designated by Company, in order to help minimize any potential disruption of continuity of supply of Products and to minimize transfer costs and risks. Supplier shall provide all commercially reasonable termination assistance (“Termination Assistance”) requested by Company to allow for the orderly transfer of the manufacturing of the Products from Supplier to Company or such third party, as the case may be. In the event that such Termination Assistance is required beyond the termination date pursuant to Article 2.1, the parties shall, acting reasonably and in good faith, continue to provide such Termination Assistance and extend the Term of this Agreement on such appropriate terms as the parties may agree for one or more thirty (30) day periods, until such time as the Termination Assistance is no longer needed by Company.

2.3 In the event that Company decides to transition a Product or Product line from Supplier to a third party during the Term of this Agreement, provided that Company continues to meet its Purchase Commitment to Supplier in accordance with Article 6, Supplier shall co-operate fully and in good faith with Company to effect such transition of the manufacturing of such Product or such Product line from Supplier to Company, or a third party designated by Company, in order to help minimize any potential disruption of continuity of supply of Product. Supplier shall, acting in good faith, provide all commercially reasonable transition assistance requested by Company to allow for the

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orderly transfer of the manufacturing of such Product from Supplier to Company or such third party, as the case may be.

2.4 Any termination or expiration of this Agreement shall not affect either Party’s outstanding obligations or payments due hereunder or under accepted Orders prior to such termination or expiration, nor shall it prejudice any other remedies that the Parties may have under this Agreement for events, actions or occurrences prior to such date. In any event, Supplier will accept Orders during the Term for delivery up to six (6) months, or the standard lead-time for delivery of the ordered Products, whichever is longer, after termination or expiration of this Agreement.

ARTICLE 3 – BUSINESS RELATIONSHIP/NON-COMPETITION

3.1 Company and Supplier acknowledge that a strategic relationship is required in order to ensure the ongoing continuity of supply of Products and services to Company’s customers. To that end, the Parties agree to establish an Oversight Committee that will meet quarterly, coinciding with the Quarterly Performance Review Process, as described in Article 25, and at such other times as may be required by this Agreement or mutually agreed by the Parties.

3.2 The Oversight Committee shall be established within thirty (30) days of the date of this Agreement. The initial members of the Oversight Committee are identified in Attachment Q. The Parties shall mutually agree, from time to time, on the number of persons from each Party that will comprise the committee. The Parties shall have equal representation on the committee. Meetings shall be held in person, by telephone or such other method as the committee shall reasonably determine. A Party may change a person designated to represent it by giving written notice thereof in the manner provided in Article 26.

3.3 Each Party expressly acknowledges that, unless it has received the other Party’s express authorization to do so, it has no right under this Agreement to divulge to any other third party information shared amongst the Parties at meetings of the Oversight Committee or the agreements or results of any discussions occurring at such meetings.

3.4 It is the intention of the Parties that the relationship of Supplier to Company shall be that of an independent third-party supplier. Neither Party intends to create a partnership, joint venture or similar type of legal entity or any entity of any kind, implied or direct.

3.5 It is the intention of the Parties to work closely together to manufacture the lowest cost products with the best quality and delivery performance in order to capture market demand and grow our business together. If the terms of this Agreement impede Company’s ability to win new business with its customers for product Supplier would manufacture, the Parties mutually agree to renegotiate the applicable terms in good faith.

3.6 During the Term, Supplier shall not, directly or indirectly, design, manufacture or market (1) any Supplier-branded products competitive with products marketed by Andrew Corporation or any of its Affiliates, or (2) any products that are competitive with the Products furnished hereunder; provided, however, nothing herein is intended to bar Supplier from:

(i) manufacturing and selling such competitive products to third parties (who are not Affiliates of Supplier) pursuant to such third parties’ designs, even though such third parties may be in competition with Andrew; and

(ii) establishing a design capability, independent of Supplier’s manufacturing function used to produce Products for sale to Company hereunder and, subject to Article 34, designing such competitive products for third parties who will own such designs and who are not Affiliates of Supplier, provided that Supplier, to the extent Supplier is not barred from doing so, gives Company the first right of refusal to produce such design. If Company

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rejects the offer to create such design and Supplier creates such design, Supplier shall also have the right to manufacture for and sell to the third party a product to such design pursuant to Sub-article 3.6(i) above.

ARTICLE 4 – PRODUCTS AND COMMERCIALLY PURCHASED ITEMS

4.1 This Agreement is intended to provide the terms and conditions upon which Company shall obtain Products and their Successor Products, Commercially Purchased Items and Services for its own use or for resale to its Affiliates and to its and/or their customers.

4.2 The term “Product” or “Products” includes the various printed circuit board assemblies, sub-systems, orderable item kits, and full systems described in Attachment B, and any additional products (including New Products) that the Parties may in the future agree that Supplier shall manufacture for Company in accordance with the terms and conditions of this Agreement. For certainty, the term “Products” shall include all Successor Products to the foregoing products.

4.3 In addition to providing Company with Products pursuant to this Agreement, Company may also ask Supplier to provide commercially purchased items (“Commercially Purchased Items”). Commercially Purchased Items include but shall not be limited to various types of components, raw materials, cables, and cable assemblies for which Supplier adds no customization but purchases such Commercially Purchased Items solely for resale to Company.

4.4 Products shall be manufactured in accordance with the Specifications identified and incorporated into the applicable Orders and with all applicable Laws.

4.5 In no event shall Supplier sell, license or otherwise transfer to any party other than Company or an Ordering Company any Products (including, for certainty, Successor Products and New Products), the design of which is proprietary to Company and which have been or are being manufactured for Company or an Ordering Company under this Agreement, without the prior written consent of Company.

ARTICLE 5 – SERVICES

5.1 The term “Service” or “Services” includes but shall not be limited to development, design, engineering, out-of-Warranty repair, prototyping, distribution, other activities identified as a Service in this Agreement as well as other services as Company may request and Supplier may provide from time to time that may be described in more detail in various statements of work or Orders.

5.2 Except as may be set out expressly in this Agreement, as part of its production and delivery of Products and Commercially Purchased Items pursuant to this Agreement, Supplier shall perform, at no charge to Company, all support, services and activities typically performed at no additional charge by a contract manufacturer in connection with such production and delivery, including, but not limited to: supply chain management of the purchase and storage of Material; warranty administration (including applicable repair or replacement when Supplier has warranty liability); BOM, Material and inventory analyses; supplier issues escalation; supplier quality assessment and management, including but not limited to on-site commercial and quality audits; component qualifications; receiving Material inspection; and dedicated supply chain planners and product engineers to support Company’s development teams, and information technology support. For those Services that are provided as a billable service pursuant to this Agreement, Supplier shall perform such Services in accordance with the fees shown in the applicable Attachment G, if any, or, if no such fees exist, at a price mutually agreed pursuant to Article 7.7 If the Parties cannot agree whether a particular activity is support hereunder for which Supplier shall not make any charge, or a billable Service, the matter shall be submitted to the Oversight Committee for resolution.

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5.3 In the event that Company provides personnel or other resources to assist Supplier in Supplier’s performance of its obligations under this Agreement, Company shall be entitled to compensation for such assistance; provided, however, Company shall not provide any such assistance for which it will seek such compensation without prior approval of Supplier. Any fees to be paid by Supplier to Company for such assistance shall be negotiated by the Parties in good faith. When, pursuant to other agreements of the Parties, the manufacture of Products is being transferred to Supplier and thereafter sales of such Products will be made pursuant to the terms of this Agreement, it is the general understanding of the Parties that their respective Party’s efforts to effect such transfer shall be without cost to the other Party. Exceptions to such general understanding require mutual agreement of the Parties.

ARTICLE 6 – PURCHASE COMMITMENT/NO EXCLUSIVITY

6.1 Company’s commitments to purchase from Supplier under this Agreement are set forth in Attachments C. It is expressly understood and agreed that this Agreement neither grants to Supplier an exclusive right or privilege to sell to Company any or all Products, Commercially Purchased Items or Services of the type described in this Agreement that Company may require, nor requires the purchase of any Product, Commercially Purchased Items, or Services from Supplier by Company, except as set forth in any applicable Attachment C. In addition, Company shall at its sole discretion, decide the extent to which Company will market, advertise, promote, support, or otherwise assist in further offerings of the Product or Services.

ARTICLE 7 – SUPPLIER COMPENSATION

7.1      (a) The price for a unit of Product (individually, a “Price” and collectively, the “Prices”) manufactured by Supplier and/or its Affiliates for Company under this Agreement as of the date of this Agreement shall be calculated in accordance with the Manufacturer Per Unit Pricing Formula set out in Attachment D and by using the applicable Manufacturer Per Unit Pricing Formula Rates set out in the applicable Attachment G. Except as set forth in this Agreement or as otherwise agreed by the Parties, Prices include inbound freight charges associated with the transport of Material to Supplier. Notwithstanding the foregoing, if filter bodies necessary for the production of Products or Commercially Purchased Items are sourced from a vendor’s premises that is located in a different continent than Supplier’s premises where such Products are made or held for distribution, and if Company authorizes transportation by air, the total cost of transport in such case, including the cost of the air transport, shall be deemed a Premium Expedited Service subject to payment by Company as set out in Article 7.3. For the avoidance of doubt, there shall be credited against such costs the amount that has been included in the Price to account for normal transportation.

(b) Unless otherwise agreed by the Parties, ten (10) days prior to the end of each calendar quarter, the Parties will review the Price to be paid by Company for each Product in the subsequent quarter. Notwithstanding anything to the contrary in this Article 6, the Parties may agree to re-price a Product during the course of a calendar quarter (any such re-pricing, an “In-Quarter Repricing”), provided that Supplier’s costs of manufacturing the forecasted quantity of such Product in the remaining portion of the calendar quarter is anticipated to change by more than [*] or the then current monetary equivalent in the relevant currency.

(c) If Prices are revised at the end of a calendar quarter as provided in Article 7.1 (any such repricing, a “Quarterly Repricing”) or as a result of an In-Quarter Repricing, such revised Prices shall be calculated in accordance with the Manufacturer Per Unit Pricing Formula set out in Attachment D and by using the applicable Manufacturer Per Unit Pricing Formula Rates, and shall be effective in the case of a Quarterly Repricing from the first day of the calendar quarter, and in the case of an In-Quarter Repricing when the Parties mutually agree.

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7.2      (a) If any Product is re-priced pursuant to Article 7.1 and the Price for such Product as a result of the Quarterly Repricing, or the In-Quarter Repricing, as applicable, is lower than the Price for such Product prior to the Quarterly Repricing, or the In-Quarter Repricing, as applicable, Company shall pay to Supplier an inventory re-valuation charge equal to the difference between the Price for such Product prior to the Quarterly Repricing, or the In-Quarter Repricing, as applicable, and the Price for such Product as a result of the Quarterly Repricing, or the In-Quarter Repricing, as applicable, multiplied by the total quantity of such Product owned by Supplier immediately prior to the time when such revised Prices take effect pursuant to Article 7.1(c). Invoices hereunder shall be directed to Company or such other party as Company may reasonably direct and paid in accordance with Article 8.

(b) If any Product is re-priced pursuant to Article 7.1 and the Price for such Product as a result of the Quarterly Repricing, or the In-Quarter Repricing, as applicable, is higher than the Price for such Product prior to the Quarterly Repricing, or the In-Quarter Repricing, as applicable, Supplier shall credit Company’s account with an inventory re-valuation charge equal to the difference between the Price for such Product prior to the Quarterly Repricing, or the In-Quarter Repricing, as applicable, and new Price for such Product as a result of the Quarterly Repricing, or the In-Quarter Repricing, as applicable, multiplied by the total quantity of such Product owned by Supplier immediately prior to the time when such revised Prices take effect pursuant to Article 7.1(c).

7.3 Premium Expedited Services shall be invoiced at cost from Supplier to Company monthly on a per Product basis. Supplier agrees that no expenses associated with Premium Expedited Services or Purchase Price Variance shall be incurred by Supplier without prior written approval from Company. Purchase Price Variance shall be invoiced based on the Price for the relevant Product calculated in accordance with Article 7.1.

7.4 The Price for a Commercially Purchased Item shall be the price paid by Supplier to the vendor plus [*] of such amount.

7.5 Company may from time to time submit to Supplier requests for proposals to perform Services in accordance with Article 5.1. Such requests for proposals shall reference the terms and conditions of this Agreement and include but not be limited to such information as statements of work, required milestones, deliverables, methods of compensation and the period of time in which Supplier will have to respond to Company’s request for proposal. Where applicable fees for such Services do not already exist in any Attachment G, other provisions of this Agreement or other agreements of the Parties, and Company is not entitled to such Services free of charge as provided in this Agreement or other agreement of the Parties, Company and Supplier shall negotiate appropriate fees in good faith and such fees will be reflected in an Order for such Services prior to the commencement of any work by Supplier.

7.6 Company requires that all non-recurring engineering charges for which Company is required to compensate Supplier under this Agreement be itemized, and Supplier acknowledges that no Profit shall be accrued for non-recurring engineering charges for hard tooling (such as stencils, fixtures, backing plates, etc.). Non-recurring engineering charges for such tooling shall be invoiced at Supplier’s actual cost for such tooling and in accordance with Article 16.1. Supplier shall obtain Company’s written approval of any non-recurring engineering charges before Supplier incurs any expenditure in connection therewith.

7.7 Company acknowledges and agrees that all information provided by Supplier to Company in connection with the determination of Product Prices, and marked or otherwise identified to Company by Supplier as proprietary or confidential information and all information derived therefrom by Company (collectively, the “Pricing Information”) is highly sensitive to Supplier, constitutes Supplier Proprietary Information and shall be deemed to be Confidential Information

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pursuant to Article 34. Company shall use Pricing Information only for the purpose of establishing and verifying the Prices and Company shall share such Pricing Information only with those employees within Company (or any Ordering Company) who have an expressed need to know such information in order to perform their job function within Company, and Company will instruct such individuals regarding their obligation to maintain such Pricing Information as confidential.

7.8 Supplier agrees to provide, with Company’s assistance, annual cost reduction road maps, on a mutually agreed to basis, thirty (30) days prior to the start of Company’s Fiscal Year (October 1).

7.9 All reductions in costs associated with the manufacture of Products that are achieved as a result of specific changes proposed by Company shall for all Products affected by Company’s cost reduction efforts, accrue to Company immediately upon their implementation and after full recovery of Supplier’s implementation costs, if any, and shall, as the Parties may agree, be reflected either:

(i) in the Prices established for each Product for the following calendar quarter, in accordance with Article 7.1, or

(ii) by means of an adjustment of the Prices during a calendar quarter, in accordance with Article 7.1.

7.10 Supplier will keep abreast of major developments in Supplier’s industry and implement them in its facilities used to manufacture the Products

7.11 Prior to implementing any cost improvements in labor hours, the prices paid for Material or supply chain or manufacturing processes that Supplier recommends, Supplier must advise Company of the features and advantages of Supplier’s recommendation, using the formal written communication process outlined in Attachment F. (For the avoidance of doubt, any such cost improvement that is one that is the same or substantially similar to one that Company, without input from Supplier, is aware of, has documented and has expended substantial effort in developing, even though it has not at that time yet been communicated to Suppler, shall be treated under Article 7.9.) Supplier’s formal written communication will address: (a) description of Supplier’s cost reduction recommendation; (b) the feature or advantage of Supplier’s cost reduction recommendation; (c) financial impact of Supplier’s cost reduction recommendation to the overall operation; (d) process flow and time line for Supplier’s cost reduction recommendation implementation; and (e) proposed sharing of the financial expense from Supplier’s cost reduction recommendation implementation. Once Supplier and Company have agreed upon the recommended Supplier’s cost reduction, such cost reductions shall be implemented.

7.12    (i) Supplier shall actively pursue continuous cost improvements through design, process and supply-chain innovation, as they relate to the scope of this Agreement, and improve upon the performance of the activities to be conducted under the scope of this Agreement. It is agreed that any cost improvement recommendations made by Supplier, in written documentation as set forth in Attachment F, will be implemented upon joint review and agreement by the Oversight Committee. It is expected that opportunities for cost and process improvement(s) may arise in many categories including, but not limited to: (a) Material costs; (b) design for manufacturing, test and installation; (c) operations at Supplier’s locations where Product is being manufactured for Company; (d) information technology; (e) selecting, packaging, palletizing, marking and bar coding Products and/or Materials; (f) utilization of personnel; (g) inventory management; (h) interval reductions; (i) Material availability; (j) warehousing processes; (k) Order fulfillment, (l) tuning time, and (m) board level testing.

(ii) Promptly after the initial transfer and production ramp up of the Products, Supplier will invest in the development of engineering cost reduction initiatives for the filter Products listed in Attachment B.

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7.13 Any cost savings which are achieved by Supplier as a result of changes proposed by Supplier will be subject to this Article 7.13, and the calculation of such cost savings sharing will commence in the quarter following the quarter in which Supplier’s implementation costs were fully recovered. Cost savings shall accrue to Company in the Prices established for the relevant Product in accordance with the following schedule:

(i) [*] of the cost savings will accrue to Company during the first two (2) full quarters after Supplier fully recovers any costs of implementation of the cost improvement; and

(ii) thereafter, [*] of the cost savings will accrue to Company.

7.14 The Parties acknowledge that the success of the relationship established by this Agreement is dependent upon the Parties working together to identify, and pursue in a mutually beneficial manner, strategic initiatives that will result in Company increasing its amount of business under the contractual relationships it has with its existing customers and by entering into contracts with new customers for the sale of Product(s) to such customers (each such event a “Potential Opportunity”).

In the event that Company is unable to realize a Potential Opportunity solely because the Manufacturer Per Unit Pricing Formula Rates generate a price for the Product(s) which would be too high to enable Company to succeed in realizing the Potential Opportunity, or which is materially higher than the verifiable prices offered by other electronic manufacturing service providers (for equivalent levels of quality, caliber of services, delivery, performance and under terms and conditions equivalent to those in this Agreement), the Parties may wish to deviate from the Manufacturer Per Unit Pricing Formula Rates in order for Company to realize the Potential Opportunity and to use Supplier as the manufacturer of the Product(s) for this Potential Opportunity.

In such an event, Company shall notify Supplier of the details of the Potential Opportunity and shall provide Supplier, on a timely basis, with the documentation and information required by Supplier to properly assess the ability of Company to realize such Potential Opportunity with Product Pricing based on the Manufacturer Per Unit Pricing Formula Rates.

Upon Supplier being so notified, the Parties shall discuss the need for Supplier to deviate from the Manufacturer Per Unit Pricing Formula Rates, so as to allow Company to succeed in realizing the Potential Opportunity on terms and conditions satisfactory to, and for the mutual benefit of, the Parties. If Supplier is unwilling to so deviate from the Manufacturer Per Unit Pricing Formula Rates in such circumstance, Company shall have the right to award such business to an alternate third party electronics manufacturing service provider and any purchases made from such third party shall be credited against Company’s Purchase Commitment, if any such commitment is made a part of this Agreement.

ARTICLE 8 - PAYMENT TERMS

8.1 All payments by Company to Supplier under this Agreement shall be in the currency in which Prices are calculated herein or as specified in any other applicable agreement of the Parties, unless otherwise specified in the applicable Order or other agreement of the Parties, and provided that the Parties have entered into a foreign exchange agreement on mutually agreeable terms. Subject to Article 8.2, payment terms shall be net forty-five (45) days from the date of invoice from Supplier.

8.2 On a quarterly basis, the payment terms experienced by Supplier with third party vendors providing Material used by Supplier in the production of Products pursuant to this Agreement will be reviewed by the Parties. For convenience, the Parties shall use as a surrogate for such payment terms Supplier’s then derived average “days payable outstanding” applicable to

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purchases from Material vendors. Thereafter, until the next such quarterly calculation, such surrogate shall be used as Company’s payment period in lieu of the payment period set forth in Article 8.1. In no event however, shall such period be established at less than forty-five (45) days.

8.3 Supplier and Company agree that they will work diligently to implement EDI capabilities for invoicing.

8.4 Supplier shall not make any claim or take any other action against Company with respect to any invoice that is past due until it has first been submitted by Supplier to the Oversight Committee for review. The Oversight Committee shall review all outstanding past due invoices submitted to it by Supplier by the fifth (5th) day of a month and confirm the amount of the outstanding invoices and/or resolve any dispute concerning the amount of the invoices by the fifteenth (15th) day of such month.

ARTICLE 9 – TRANSFER OF TITLE AND RISK OF LOSS/DELIVERY TERMS

9.1 Unless otherwise agreed by the Parties: (a) where an Orderable Item is required to be delivered by Supplier to Company’s or its customer’s integration, repair or distribution center which is at the same location as the facility from which the relevant Orderable Item is to be shipped, title and risk of loss and damage to such Orderable Item shall transfer from Supplier to Company at such time as such Orderable Item has been delivered by Supplier to the designated receiving area in the integration, repair or distribution center; (b) in all other cases, title and risk of loss and damage to Orderable Items shall transfer from Supplier to Company at such time as the relevant Orderable Item has been delivered by Supplier, at the shipping dock at the facility at which the relevant Orderable item is shipped to Company or its customer or to Company’s or its customer’s specified carrier, FCA (Incoterms 2000).

9.2 Orderable Items purchased under this Agreement that are to be delivered by Supplier to an integration, repair or distribution center, including, without limitation, such a center operated by a customer of Company, where such center is at the same location as the facility from which the relevant items are to be shipped, shall be delivered by Supplier to such center, at no additional charge to Company.

ARTICLE 10 - PURCHASE ORDERS

10.1 The Parties contemplate that Orders will be placed from time to time by Company and Ordering Companies, incorporating by reference the terms and conditions of this Agreement. The pre-printed terms and conditions found, normally, on the reverse side of Orders shall be excluded and deemed deleted. Each Order may set forth the terms and conditions reflecting business requirements unique to a particular ordering location. In the event of any contradiction between the terms and conditions of this Agreement and the terms and conditions of an Order, the terms and conditions of this Agreement shall supersede and override the terms and conditions of such Order to the extent of such contradiction. Orders will describe in detail the required Product, Commercially Purchased Item, and/or the Service to be provided by Supplier and may include, without limitation, the following types of items: statements of work, drawings, plans, designs, procedures, Specifications (Product, quality, design and test), BOMs, methods of packaging, marking specifications, repair and return processes, quantities of units or other equipment to be furnished by Company’s ordering location, if any, delivery schedules and inspection criteria.

10.2 Supplier shall promptly notify Company of its receipt of an Order. If a notice of rejection of an Order is not received by Company from Supplier within two (2) Business Days from the date of the receipt thereof by Supplier, such Order shall be deemed to have been accepted by Supplier. In no event shall Supplier reject an Order due to Company’s increase in Forecast or unforecasted Product demand. In such an event, Supplier shall use reasonable commercial efforts to meet the delivery dates of such excess Product, but the failure by Supplier to meet the delivery date requested in such an event shall not be deemed (i) a breach by Supplier of its obligation to meet

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the delivery date requested or (ii) to affect any measure of Supplier’s performance related to the requested delivery hereunder; provided, however, once the Parties agree upon a delivery date, delivery performance shall be measured in accordance with this Agreement.

10.3 Company may at any time during the course of Supplier’s manufacture of a Product, performance of a Service, and/or supply of a Commercially Purchased Item require additions to or deductions or deviations from (each, an “Order Change”) the quantity of the Product, Commercially Purchased Item and/or Service ordered or forecasted for delivery on a specific date (the “Original Delivery Date”). In addition, upon request by Company, Supplier shall use commercially reasonable efforts to: (a) accept unplanned Orders, (b) accelerate delivery dates for existing Orders or Forecasts, or (c) accept increases in quantities of Orderable Items subject to existing Orders or Forecasts, subject in each case to Company agreeing to meet any increased costs or premium charges incurred by Supplier as a result of meeting such requests.

10.4 Company may from time to time, by written order to Supplier, suspend Supplier’s performance of any Order, in whole or in part. In the case of suspension, Supplier will take all reasonable steps to avoid any additional costs allocable to such Order, except that Supplier shall be entitled to complete any Product that Supplier has actually commenced manufacture of prior to receipt of Company’s order of suspension. If any such suspension causes an increase or decrease in the cost of or time (including labor hours) required for performance, an equitable adjustment shall be made in the Price or Delivery Schedule, or both, by mutual agreement. Claims for adjustment under this clause must be made by Supplier in writing within thirty (30) days from the date of notice of suspension. Any such claim must be supported as soon as practicable by information and records necessary to permit Company to make an equitable disposition thereof. Nothing in this clause shall excuse Supplier from continuing with its performance as changed or after Company’s rescission of such suspension, nor shall anything herein be deemed to bar Company its right under this Agreement to cancel any such Order.

10.5 Company may at any time terminate an Order without cause for Services, in whole or in part, upon five (5) days’ written notice to Supplier. In such an event, Company’s liability shall be limited to payment of the amount due for the Services performed (including materials needed for such Services that are already on order that cannot be cancelled) up to and including the date on which such Services terminate (which amount shall be supported with proof satisfactory to Company), and no further Services pursuant to such terminated Order will be rendered by Supplier. Supplier shall use reasonable commercial efforts to terminate the provision of such Services as soon as practicable pursuant to such notice of termination. Such payment by Company shall constitute a full and complete release and discharge of Company’s obligations in respect of such terminated Order for Services. In no event shall Company’s liability exceed the price identified in the applicable Order for the Services being terminated.

ARTICLE 11 – DELIVERY/LATE DELIVERY

11.1 Promptly after the Effective Date, Supplier shall mutually agree with Company to implement flexible delivery arrangements set out in Attachment I (the “Flexible Delivery Arrangements”). At Company’s request, Supplier will enter into other flexible delivery arrangements, such as, without limitation, a “Vendor Managed Inventory” program, as may be agreed by the Parties. Any such “Vendor Managed Inventory” program agreed to by the Parties with respect to Products provided by Supplier to Company under this Agreement will be set out and incorporated in this Agreement as Attachment L.

11.2 Supplier agrees that except for the liability as set forth in Article 13 or as otherwise provided in this Agreement, and subject to the provisions of Article 10, all Forecasts provided by Company in relation to a Flexible Delivery Arrangement are for planning purposes only and shall not be deemed a commitment by Company. Supplier shall use its reasonable commercial efforts to satisfy Company’s requirements exceeding any upside flexible delivery or Forecast increase limits as may be agreed to as part of the Flexible Delivery Arrangements. Notwithstanding anything to

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the contrary, any failure by Supplier to satisfy any such requirements of Company shall not be deemed to constitute a breach by Supplier of its obligations under this Agreement, and shall not be deemed to affect any measure of Supplier’s performance of its obligations under this Agreement.

11.3 For certain Products or Commercially Purchased Items ordered pursuant to this Agreement, Supplier and Company shall agree on a stated delivery interval or lead-time. For the purposes of evaluating Supplier’s delivery performance against lead-time, it is understood by the Parties that lead-time is measured from the time the Order or Product or Commercially Purchased Item delivery request is received by Supplier in writing or electronically from Company until the time the conforming Product or Commercially Purchased Item is delivered to Company pursuant to Article 8. Unless otherwise agreed to by the Parties, Products or Commercially Purchased Items may be delivered by Supplier to Company up to three (3) days early and zero (0) days late.

11.4 Company intends to monitor Supplier’s delivery performance in accordance with the Performance Metrics set forth in Attachment E. Failure by Supplier to meet such delivery Performance Metrics shall be subject to any resolution and consequences provisions set forth in Attachment E.

11.5    (a) In the event that due to causes attributable to Supplier, Supplier is unable to deliver a particular Product within the time frame agreed to between the Parties in this Agreement or in an Order, Company shall have the right to: (i) cancel such Order (or the outstanding portion of any partially fulfilled Order) and purchase the relevant Product from a source other than Supplier or (ii) extend such delivery time frame to a later date, subject, however, to the right to cancel as in clause (i) above if delivery is not made or performance is not completed on or before such extended delivery date. Company shall pay for any Product it retains at the prices set forth in the Order issued pursuant to this Agreement and any other deductions as may be allowed in this Agreement. If Supplier is unable to meet the acknowledged delivery date(s) set forth in an Order, Supplier shall be responsible for paying all reasonable incremental transportation costs necessary to deliver the requested Product to Company by the acknowledged delivery date(s) indicated in the Order. Any failure by Company to comply with its Purchase Commitment as a result of purchases of Products from a source other than Supplier pursuant to clause (i) hereof shall be subject to the applicable Attachment C.

(b) In the event that due to causes attributable to Supplier, Supplier is unable to perform a Service in the manner or within the time frame specified herein or in the relevant Order for such Service, Company shall have the right to cancel such Service and procure the Service from a source other than Supplier.

11.6 Supplier agrees to immediately notify Company’s representative, as identified on the Order, and, if requested by Company, Company’s customer of any foreseeable condition that would affect Supplier’s ability to meet the acknowledged delivery date and time and Company’s expected delivery date and time. Supplier’s compliance with the foregoing does not relieve Supplier of the delivery performance requirements or other conditions set forth in this Article 11.

11.7 [*]

11.8 The Parties acknowledge that at the Effective Date Supplier will purchase from Andrew Telecommunication Products s.r.l. certain equipment that Supplier will use to manufacture Products that Supplier will sell under the terms of this Agreement (the “Purchased Equipment”) Notwithstanding any other provision in this Article 11, during the period of ninety (90) days following the Effective Date Supplier shall not be responsible for delays in delivery of Products sold to Company that result solely from defects in such Purchased Equipment; provided, however, that such excuse of Supplier’s liability shall not apply:

(i) With respect to defects in the Purchased Equipment that Supplier does not identify in a written notice and claim issued during the agreed inspection and return period applicable to the Purchased Equipment; and

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(ii) With respect to defects in the Purchased Equipment occurring as a result of improper operation and/or maintenance of the Purchased Equipment by Supplier.

ARTICLE 12 – PERFORMANCE METRICS AND PERFORMANCE METRICS DEFAULT RESOLUTION PROCESS

12.1 The performance metrics (“Performance Metrics”) shall be as set forth in Attachment E. Company intends to monitor such Performance Metrics on a quarterly basis or on a more frequent basis as outlined in Attachment E. Supplier agrees to provide any relevant information that the Oversight Committee may require and in the time frames needed in order to support the Performance Metrics process. Supplier recognizes that the measurable Performance Metrics as described in Attachment E represent Company’s current minimum performance requirements and agrees to the resolution process and consequences, as described in Article 12.2, of not meeting such defined minimum requirements. The Performance Metrics may be revised periodically by the Parties’ agreement, with the objective of continuous performance improvement.

12.2 In the event Supplier’s performance levels fall below any of the minimum thresholds set forth in the Performance Metrics identified in Attachment E, other than for reasons attributable to Company, Company may give notice to Supplier of performance default. After receipt of such notice, Supplier shall deliver to Company within ten (10) days a Corrective Action Plan to correct such default condition within twenty (20) days of receipt of the Corrective Action Plan. In the event Supplier fails to deliver a Corrective Action Plan within the ten (10) day period, or if the Corrective Action Plan is determined to be unacceptable by Company, acting reasonably, or if the Corrective Action Plan fails to cure the default for such Product or Commercially Purchased Item within the twenty (20) day period, this shall be deemed a default under Article 35, and in addition to its other remedies, Company may purchase the Product from a source other than Supplier by invoking all of its rights under this Agreement. In the event of a dispute over Supplier’s failure to meet the minimum standards or Company’s failure to accept the Corrective Action Plan, the Parties shall attempt to resolve such dispute through the process set forth in Article 28.

12.3 Any failure by Company to comply with its Purchase Commitments as a result of purchases of Products from a source other than Supplier as permitted under this Agreement shall be subject to the applicable Attachment C.

ARTICLE 13 – EXCESS AND OBSOLETE MATERIAL, AND FINISHED GOODS INVENTORY, AND EXCESS BUFFER STOCK

13.1 Material used in the production of Products under this Agreement shall be categorized as “Company Material” or “Supplier-Controlled Material” or “Supplier-Controlled Custom Material”. “Company Material” is Material as to which Company typically controls the price and/or other terms upon which it is purchased from the vendor. “Supplier-Controlled Material” is other Material used in the production of Products under this Agreement that can also be used by Supplier in the performance of manufacturing services for some or all of its other customers, as to which Supplier typically controls the price and/or other terms upon which it is purchased from the vendor. “Supplier-Controlled Custom Material” is Supplier-Controlled Material that is unique to the manufacture of Products for Company and, consequently, cannot be used by Supplier in the performance of Supplier’s services for its other customers. Commercially Purchased Items purchased by Supplier for sale under this Agreement shall be categorized as “Company Commercially Purchased Items” or “Supplier-Controlled Commercially Purchased Items”. In general, a “Company Commercially Purchased Item” is a Commercially Purchased Item as to which Company controls the price and/or other terms upon which it is purchased from the vendor. “Supplier-Controlled Commercially Purchased Items” comprise all other Commercially Purchased Items purchased by Supplier for sale under this Agreement

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13.2    (a) Attachment O sets out the Parties agreed categorizations of Material purchased for use in manufacturing Products listed on Attachment B and for Commercially Purchased Items, as of the Effective Date. Any Material utilized in producing Products under this Agreement as of the Effective Date that is not listed on Attachment S shall be deemed to be Company Material. Categorizations occurring under the Article 13.2(a) are subject to change as set forth in Article 13.2(b).

(b) During the quarterly pricing meetings held pursuant to Article 7, the Parties will jointly determine how Material and Commercially Purchased Items should be categorized. Any agreement of the Parties that would change a prior categorization shall be applied only on a going forward basis, unless the Parties otherwise expressly agree. In categorizing items, the Parties shall follow the procedures and principles set out in Attachment R, unless they otherwise expressly agree. Any conflict between the terms set forth in this Article 13 and the terms in Attachment R shall be governed by the terms of this Article 13.

(c) For each New Product and Successor Product, at least twenty-eight (28) days prior to the date on which the Product is designated to be “Generally Available” (GA) in Company’s Forecast, the Parties shall categorize Material on the BOM for such New Product or Successor Product as Company Material or Supplier-Controlled Material or Supplier-Controlled Custom Material.

13.3 Subject in each case to Article 13.3(d):

(a) If at any time the aggregate quantity of any Orderable Item that Supplier and its Affiliates own is greater than the sum of (i) the quantity of such Orderable Item ordered by Company, Ordering Companies and Authorized Purchasers from Supplier and its Affiliates under this Agreement or otherwise in the preceding [*] and (ii) the quantity of such Orderable Item forecasted to be ordered by Company, Ordering Companies and Authorized Purchasers in the subsequent [*] then such excess quantity of Orderable Items shall be deemed “Excess Inventory”. In the event of such a situation, Supplier shall provide Company with a notice, but no more frequently than quarterly, outlining the amount and value of such Excess Inventory, and Company shall, within ten (10) Business Days of receiving such notice, issue an inventory purchase order to Supplier for such Excess Inventory, pursuant to paragraph (f) below. Each such notice shall include a description of the manner in which Supplier calculated the amount of Excess Inventory and otherwise be in a form and contain the content satisfactory to Company. Supplier shall provide Company with a notice on or about the tenth (10th) of the third month of each quarter setting out the amount and value of any Excess Inventory, as determined in accordance with this Article 13.3(a). The calculation described herein shall occur after a calculation of Excess Buffer Stock, if any, pursuant to Article 13.4.

(b) If at any time the aggregate quantity of any item of Company Material or Supplier-Controlled Custom Material that Supplier and/or its Affiliates owns is greater than the sum of (i) the quantity of such item of such Material consumed by Supplier and its Affiliates in the manufacture of Products for Company and the Ordering Companies under this Agreement or otherwise in the preceding [*] and (ii) the quantity of such Material reasonably forecasted by Supplier to be consumed by Supplier and its Affiliates in the manufacture of Products for Company and the Ordering Companies under this Agreement in the subsequent [*] on the basis of the Forecast, then such excess quantity of Material shall be deemed “Excess Inventory”. The calculations and procedures set out herein shall be performed no more than quarterly.

Supplier shall provide Company with a notice on or about the tenth (10th) of the third month of each quarter setting out the amount and value of any Excess Inventory, as determined in accordance with this Article 13.3(b) as of the date of the notice. Each such notice shall include a description of the manner in which Supplier calculated the amount

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of Excess Inventory and otherwise be in a form and contain the content satisfactory to Company. Within ten (10) days of the date on which Company receives such notice from the Supplier (the “Notice Receipt Date”), Company shall issue to Supplier an inventory purchase order for such remaining Excess Inventory, pursuant to Sub-article 13.3 (e) below.

(c) Company shall keep Supplier’s procurement organization apprised of any Material purchased by Company from Supplier under this Article 13 that is suitable for use in the manufacture of Products and Supplier shall purchase such Material from Company, on an as-needed basis, prior to purchasing such Material from Material vendors. The purchase price of such Material shall be at the cost reflected in the then current Product pricing set forth in Article 7.

(d) Except where the action is justified by a default of this Agreement by Supplier, in the event of (i) a complete or partial termination, rescheduling or cancellation of an Order, (ii) reduction in Forecast, (iii) the termination of all or any part of this Agreement, or (iv) any other event, including a change in Specifications or an engineering change, which results in any Company Material or Supplier-Controlled Custom Material that Supplier has purchased or issued an uncancellable purchase order to the Material vendor for, no longer being required by Supplier to manufacture Products (or being otherwise unsuitable for use in the manufacture of Products due to the passage of time) within the [*] such Material shall be considered “Obsolete Inventory”. The calculations and procedures set out herein shall be performed no more frequently than as set forth below.

Supplier shall provide Company with a notice on or about the tenth (10th) of the third month of each quarter setting out the amount and value of any Obsolete Inventory, as determined in accordance with Article this 13.3(d) as of the date of such notice. Notwithstanding the foregoing sentence, Supplier shall have the right to issue such a notice at any time that the amount of Obsolete Inventory Supplier holds exceeds [*]. Each such notice shall include a description of the manner in which Supplier calculated the amount of Obsolete Inventory and otherwise be in a form and contain the content satisfactory to Company. Within ten (10) days of the date on which Company receives such notice from the Supplier (the “Notice Receipt Date”), Company shall issue to Supplier an inventory purchase order for such remaining Obsolete Inventory, pursuant to Sub-article 13.3 (e) below.

(e) Company will purchase the Excess Inventory and/or the Obsolete Inventory and or Excess Buffer Stock as required herein, as the case may be, pursuant to an inventory purchase order at the following prices: [*]. Any Excess Inventory, Excess Buffer Stock and Obsolete Inventory, as the case may be, purchased by Company from Supplier pursuant to an inventory purchase order shall be deemed “Company Owned Inventory”. The inventory purchase order shall include the costs of mitigation incurred by Supplier pursuant to Article 13.3(i), including under-recoveries resulting from the sale of Material at prices less than the price paid for such Material and costs relating to re-stocking or return charges, but excluding labor costs incurred by Supplier. With respect to any Excess Inventory and/or Excess Buffer Stock purchased by Company pursuant to an inventory purchase order, Supplier shall, at Company’s option, either store such Company Owned Inventory pursuant to terms to be mutually agreed, deliver it to Company or any third party designated by Company, or dispose of it in accordance with Article 25, at Company’s cost and direction.

(f) Articles 13.3(a) and 13.3(b) above require, in each case, that Excess Inventory shall at any time be determined in part by reference to a quantity of inventory consumed, forecasted, or ordered, as applicable, prior to such time. However, if such historical information is not available for any given Product or Commercially Purchased Item, then given that this historical information will not be determinable until [*], from the date (the “Implementation Date”) that Supplier commences the manufacturing of such Product,

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Excess Inventory shall at all times in such circumstances be determined by reference to the quantity of Material or Orderable Item, as applicable, anticipated to be required by Supplier and its Affiliates in the [*] following the Implementation Date for such Product, based on the then current Forecasts.

(g) Notwithstanding the persons designated in Article 27, all notices, inventory purchase orders and any other communication required to be made or delivered by either Party to the other Party pursuant to this Article 13 shall be sent to representatives agreed to by the Parties.

(h) Company shall have no liability for Material or Commercially Purchased Items:

(1) Not ordered in accordance with Article 14.4;

(2) That is Supplier-Controlled Material or a Supplier-Controlled Commercially Purchased Item; and

(3) That would not have been delivered to Supplier had Supplier timely exercised rights of cancellation that are applicable to its order(s) for such Material.

(i) Supplier shall in all circumstances take steps to mitigate Company’s liability for Excess Inventory and/or Obsolete Inventory, including but not limited to:

(j) Attempt to utilize Material for other Products manufactured for Company;

(ii) Attempt to utilize Material for products manufactured for companies other than Company;

(iii) Attempt to return Material to the Material vendor utilizing all applicable return and sell-back privileges; and

(iv) Attempt to sell any of the Material to a third party to the extent authorized by Company.

Supplier shall provide Company with documentation regarding mitigation efforts.

No charges for storage shall be applicable during the period of mitigation.

13.4 The Parties agree that Supplier will seek to manage its production of each Product such that Supplier will always have on hand a stock of [*] needs of finished Products buffer stock (“Buffer Stock”). For purposes hereof, Buffer Stock shall equal [*]. Company may, nonetheless and without having to issue an Order for the purchase of a Product, direct Supplier to build that Product in such numbers that will cause Supplier’s inventory of such Product to exceed the Buffer Stock for such Product (“Excess Buffer Stock”). Supplier shall provide Company with a notice on or about the tenth (10th) of the third month of each quarter setting out the amount and value of any Excess Buffer Stock, as determined in accordance with this Article 13.4 as of the date of the notice. Each such notice shall include a description of the manner in which Supplier calculated the amount of Excess Buffer Stock and otherwise be in a form and contain the content satisfactory to Company. Within twenty one (21) days of the date on which Company receives such notice from the Supplier (the “Notice Receipt Date”), Company shall issue to Supplier an inventory purchase order for such remaining Excess Buffer Stock, pursuant to Article 13.3(e). For the avoidance of doubt, the parties intend to conclude all Excess Buffer Stock discussions resulting in Company issuing an inventory purchase order as appropriate by the last business day of the month of each calendar quarter. The calculations under this Article 13.4 shall be made prior to the calculation of Excess Inventory pursuant to Article 13.3(a).

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ARTICLE 14 – MATERIAL PROCUREMENT BY SUPPLIER

14.1 Supplier shall adhere to Company’s Approved Vendor List and specific Bills of Materials, as provided by Company to Supplier, for the procurement of all Material used in the manufacture or repair of Products unless otherwise agreed by the Parties.

14.2 Prior to Supplier manufacturing New Products or Successor Products for Company, Supplier agrees to provide Company with a detailed, itemized costed BOM showing Supplier’s best agreed upon price at the Material item level. Upon receipt and review of such BOM, Company shall provide Supplier with an authorized final costed BOM comprised of the best-negotiated prices for Material available to Company and/or Supplier. Upon verification of Material pricing with the Material vendors, Supplier agrees to pass through all Material price benefits as a result of Company’s price negotiations with the Material vendors directly to Company after Supplier has been able to take the newly priced Material in use. Disclosure by either Party of Material pricing under this Article 14.2 shall be subject to any confidentiality obligations that either Party may have to its respective vendors.

14.3 Should Company request that Supplier utilize the services of one or more third-party logistics providers or Material distributors in the procurement of Material, Supplier agrees to utilize the third party logistics provider(s) or Material distributor(s) selected by Company. Cost and timing impacts utilizing such third parties will be mutually agreed.

14.4 Unless otherwise agreed to between the Parties, Supplier will purchase all Material that is required to manufacture the Products pursuant to the AVL. Supplier is authorized to purchase Material and Commercially Purchased Items, based on the actual lead-times applicable to the respective item, minimum order quantities and economic order quantities in order to support production and delivery requirements based on Orders and Forecasts. Supplier shall obtain written approval from Company’s designated representative prior to purchasing those Materials or Commercially Purchased Items that have delivery lead times in excess of Company’s demand intervals in the Forecast. Supplier shall also take all reasonable commercial steps to manage the ordering, delivery and stocking of Material and Commercially Purchased Items in a manner that will minimize the potential levels of Excess Inventory or Obsolete Inventory as described in Article 13. Upon Company’s request, Supplier will review with Company all actual lead-times for Material or Commercially Purchased Items during the Quarterly Performance Review Process in order to discuss lead times, minimum order quantities and economic order quantities and to formulate lead time reduction plans for such Material or Commercially Purchased Items. Supplier shall, as provided in Article 15.3 and subject to appropriate confidentiality provisions, in order to assure a readily available supply of Material and Commercially Purchased Items from the third party vendors supplying such Material, provide to such vendors any forecasts of the need for such Material and Commercially Purchased Items prepared by Company.

Supplier agrees to use all commercially reasonable efforts to obtain from its vendors protective terms that are favorable to Supplier and may be passed through to Company. Such terms include, but are not necessarily limited to, provisions involving warranty, epidemic failure and indemnity, and shall, in any case be no less favorable than comparable provisions in Supplier’s agreements with the same vendors pursuant to which Supplier purchases material for use in products manufactured for Supplier’s other customers. Further, Supplier shall use commercially reasonable efforts to minimize lead times and to obtain favorable order cancellation provisions in order to minimize the potential for Company’s liability under Article 13. For purposes hereof, Attachment P sets forth those lead times and cancellation provisions that Company considers to be minimum requirements. Prior to purchasing any Material or Commercially Purchased Items from a third party in connection with Supplier’s obligations under this Agreement, and promptly upon any change in such terms, Supplier shall disclose to Company the terms pursuant to which Supplier intends to purchase such Material from such vendor. Company shall have the right to

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bar purchases of Material by Supplier from any vendor whose terms are not acceptable to Company.

14.5 In the event Supplier receives notification from a third party vendor that a Material item listed on a BOM for a Product or a Commercially Purchased Item will be discontinued, Supplier will promptly forward the notification to Company along with a recommended plan of action. In the event that the Material being discontinued does not have a readily available replacement or substitute identified prior to the time at which the Material can no longer be ordered, pursuant to written authorization from the Company, Supplier agrees to procure, manage such Material or, Commercially Purchased Items and store such discontinued Material or Commercially Purchased Items on behalf of Company to enable the continued manufacturing of Products or purchase of Commercially Purchased Items until such time as Company can provide a Material or Commercially Purchased Item substitution or Product redesign. The costs, duration and quantity associated with the Material or Commercially Purchased Item to be purchased and stored by Supplier for Company shall be agreed upon between Company and Supplier. For the avoidance of doubt, a notice received by Supplier from a third party vendor that the composition or manner of manufacturing of any Material or Commercially Purchased Item purchased from such vendor will change constitutes a notice of discontinuance of the item that is the subject of such notice. Unless expressly agreed by Company in writing, no changed Material, changed Commercially Purchased Item, or proposed replacement or substitute item shall be purchased for use in fulfillment of Supplier’s obligations under this Agreement.

14.6 Supplier agrees to allow Company to purchase Material from Supplier for the Products being manufactured for Company as necessary in such quantities as required for Company’s, its Affiliates, the Ordering Companies and/or their respective customers’ in-house Product repair operations. Company shall pay Supplier a price for such Material equal to [*].

14.7 Prior to ordering Material or Commercially Purchased Items from any third party Material vendor to support the manufacture of Products by Supplier or the sale of Commercially Purchased Items, Supplier agrees to first purchase, subject to Article 13.1(c), at agreed prices and terms and on an as-required basis, any equivalent Material in the Company Owned Inventory of Material the possession of which is managed by Supplier and that Company has communicated to Supplier is for sale to Supplier.

14.8 Upon request of Company, Supplier will assist Company and its Affiliates in disposing of all or any part of the Company Owned Inventory upon commercially reasonable terms, or dispose of such Material pursuant to Article 24.

14.9 Supplier agrees to implement a first in first out (“FIFO”) inventory system for purchases of Material and Commercially Purchased Items. Supplier shall monitor this FIFO inventory system to ensure the Material purchased and received first by Supplier shall be the first consumed.

ARTICLE 15 - PURCHASE OF GOODS AND SERVICES BY SUPPLIER UTILIZING COMPANY’S PRICING OR TERMS

15.1 Prior to the manufacture of any Product for Company by Supplier, Company shall provide Supplier a Product BOM that will include Material identification information, including the applicable approved Material vendors and such Vendors’ terms and conditions to the extent available. In addition, Company will provide Supplier with Material identification, including the respective approved Material vendors for Commercially Purchased Items ordered by Company from Supplier pursuant to this Agreement. At Company’s option, Company shall facilitate the purchase of such designated BOM items or Commercially Purchased Items by Supplier at Company’s negotiated Material purchase prices with the approved Material vendors, subject to the following conditions:

(a) Company shall have provided Supplier with a written authorization in the form of Attachment K – Material Authorization Letter, prior to Supplier purchasing such

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designated BOM item or Commercially Purchased Item at the prices set forth in Company’s purchase agreements with the respective Material vendor;

(b) Supplier shall purchase such Material or Commercially Purchased Item with the sole intent of using such items in fulfillment of its obligations under this Agreement or Order(s) issued pursuant to this Agreement or as otherwise provided in this Agreement;

(c)      (i) It shall be the obligation of Supplier and the Material vendor to agree upon terms and conditions that will govern the sale of the Material and Commercially Purchased Items, in accordance with Article 14.4. In the event that at Company’s request, the vendor agrees to sell to Supplier, or the vendor is contractually required to permit Supplier to purchase Material or Commercially Purchased Items, in each case, on the terms and conditions negotiated by Company, Supplier shall purchase such Material or Commercially Purchased Items from such vendors, provided that the terms and conditions negotiated by Company are acceptable to Supplier, acting reasonably; and

(ii) If, as described in Sub-article 15.1(c)(i), Supplier has the right to purchase Material or Commercially Purchased Items from a vendor under terms negotiated by Company, Company shall nevertheless have the right to direct Supplier to purchase such items under Supplier’s terms with the vendor, if in Company’s discretion Company believes that the Supplier’s terms are more favorable than those negotiated by Company.

(d) Supplier shall hold in confidence any and all information related to Company’s purchase agreement(s) with the vendors, including, but not limited to, technical information, forecasts and Company’s prices. Supplier hereby agrees to use such information only for the purpose of fulfilling its obligations under this Agreement or any Order placed pursuant to this Agreement. Supplier shall share such information only in accordance with and subject to Article 34; and

(e) Supplier acknowledges and agrees that Company may at any time withdraw its authorization from Supplier to purchase at Company’s negotiated prices and/or terms as described herein. In the event of any such withdrawal, Company shall give Supplier reasonable advance notice thereof in writing.

15.2 Company and Supplier shall use reasonable commercial efforts to identify and pursue possible purchasing opportunities with companies that will benefit the respective Parties through volume discounts, process and cost efficiencies for goods and services.

ARTICLE 16 - PRODUCT FORECASTING AND CAPACITY PLANNING

16.1 Supplier shall work with Company to maintain a level of Product manufacturing capability and flexibility that is consistent with Company’s business requirements. Unless otherwise agreed, Company shall compensate Supplier in the manner set out herein for any costs incurred by Supplier after the Effective Date associated with replicating existing stencils, fixtures, tooling, assembly and/or test equipment uniquely required to support Company’s production requirements or building new unique stencils, fixtures, tooling, assembly, and/or test equipment in support of Company’s production requirements. The costs associated with the foregoing activities shall, by mutual agreement of the Parties either (a) be amortized and recovered over a period not greater than twelve (12) months in the cost of the Product; or (b) be charged by Supplier to Company as a separately billable non-recurring engineering charge for which Company shall issue to Supplier a purchase order in accordance with Article 10 of this Agreement. Notwithstanding the foregoing, in the event that for any reason whatsoever such costs are not fully recovered by Supplier within the agreed to time frame, Company acknowledges that the full amount of such costs shall be

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recovered by Supplier in accordance with clause (b) hereof. Title and ownership of such stencils, fixtures, tooling, assembly and/or test equipment that do not contain Supplier Proprietary Information shall pass to Company once Supplier has been fully compensated by Company for the costs referred to herein, whether pursuant to the amortization schedule, the purchase order, or if Company otherwise at any time fully compensates Supplier for such costs. When Company takes title of such equipment as provided herein, such equipment shall remain in Supplier’s possession and be maintained by Supplier as provided in Article 66.2. Prior to fabricating or procuring any stencils, fixtures, tooling, assembly and/or test equipment that is unique to the manufacture of Company’s Products, Supplier agrees to review such plans with Company. Supplier agrees that all stencils, fixtures, tooling, assembly and/or test equipment used in the production of Products shall be subject to the terms set forth in Article 36 and Article 49.

16.2 Company will use reasonable commercial efforts to provide to Supplier, on a weekly basis, a fifty-two (52) week rolling forecast, in sufficient detail, for all Products required under this Agreement (the “Forecast”), or to provide forecasts using other forecasting methods as may be agreed to by the Parties. Except as otherwise provided in this Agreement and subject to the provisions of Articles 9 and 13, all Forecasts are for planning purposes only and do not constitute a commitment to purchase by Company. Company’s requirements for Commercially Purchased Items may, at Company’s option, be included in a Forecast or be ordered on a discrete order basis.

16.3 As part of Company’s and Supplier’s supply chain management process, Supplier agrees to provide Company’s forecasted requirements to all third party vendors of Material to support the timely manufacture of Products by Supplier for Company under this Agreement; provided, however, such information is proprietary to Company and shall not be furnished by Supplier to any such third party unless such third party has previously executed a confidentiality agreement in favour of Supplier or until such third party agrees in writing, in a form acceptable to Supplier, to treat such information as confidential. At Company’s request, Supplier shall provide Company with reports and allow Company to verify that Supplier is satisfactorily complying with this Article 16.3.

16.4 Company shall use reasonable commercial efforts to provide Supplier with at least six (6) months prior notice of the time at which a Product is scheduled for end-of-life designation. Upon receipt of such notice, the Parties shall work together to prepare an end-of-life plan.

ARTICLE 17 - EMERGENCY BACKUP MANUFACTURING PLAN

17.1 Supplier will provide to Company a draft emergency backup manufacturing proposal (the “Emergency Backup Manufacturing Proposal”) within the earlier to occur of: (i) six (6) months after the Effective Date, and (ii) thirty (30) Business Days after Supplier qualifies each of the Company Chosen Subcontractors, and within ninety (90) days following transfer of production of any Product to another facility, which identifies the challenges, hurdles, timing, costs and any other issues associated with implementing an Emergency Backup Manufacturing Plan which, following a catastrophic event, a condition listed in Article 42, or any other condition in which Supplier is unable to produce and ship Product to meet Company’s requirements for at least ten (10) Business Days, would allow Supplier to:

(a) Manufacture and ship the impacted Product(s) at the levels set forth in paragraph (c) from one or more of its other manufacturing facilities upon the written approval of Company to meet Company’s delivery requirements for such Product(s);

(b) Commence shipments of the impacted Product(s) at the levels set forth in paragraph (c) to Company from such other manufacturing facilities no later than thirty (30) Business Days after the commencement of the catastrophic event or other condition; and

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(c) Achieve, subject to the availability of Product-specific equipment, the following levels of shipments from such other manufacturing facilities:

(i) A minimum of fifty percent (50%) of Company’s then current Forecast after thirty (30) Business Days of the commencement of the catastrophic event or other condition;

(ii) A minimum of seventy-five percent (75%) of Company’s then current Forecast after forty-five (45) Business Days of the commencement of the catastrophic event or other condition; and

(iii) A minimum of one hundred percent (100%) of Company’s then current Forecast after sixty (60) Business Days of the commencement of the catastrophic event or other condition.

17.2 The Parties shall review such Emergency Backup Manufacturing Proposal and determine the feasibility of developing and implementing such an Emergency Backup Manufacturing Plan, either in its full form, or in a variation thereof. Should the Parties agree to implement such an Emergency Backup Manufacturing Plan and agree upon the conditions under which it would be implemented, Supplier agrees to implement such plan.

17.3 In the event that an Emergency Backup Manufacturing plan is implemented, Supplier will hold annual trials and drills, and will provide the results, findings and subsequent action plans to the Company for review. Supplier and Company will agree on acceptable resolutions to negative findings.

17.4 In the event that the Emergency Backup Manufacturing Plan prepared by Supplier fails to achieve its purpose as set out in Article 17.1 and no resolution can be found through escalation to the Oversight Committee, Company may at its option, terminate this Agreement or an Order (with respect to the Product identified in the Order and affected by such delay or failure) in accordance with Article 42 at no charge, and/or exercise any other rights and remedies it may have, pursuant to this Agreement and at law or at equity.

ARTICLE 18 - NEW PRODUCT INTRODUCTION AND TARGET COSTING

18.1 At Company’s request, Supplier agrees to provide the necessary manufacturing assistance to Company to support the timely development, design, and introduction of New Products and Successor Products. As part of this assistance, Supplier agrees to the terms and processes set forth in Attachment M - New Product Introduction (NPI) Process and shall keep abreast of major developments in Supplier’s industry, including such areas as new production methods, processes and techniques or materials and shall regularly advise Company of any developments that could impact Company’s Product price, performance, quality and time to market objectives. Except to the extent provided in Attachment M or otherwise agreed by the Parties, such support shall be provided at no cost to Company.

18.2 At Company’s request, Supplier agrees to participate with Company in utilizing target-costing methodology for New Products and Successor Products introduced into Supplier’s manufacturing process. The methodology used to perform this target-costing will be jointly determined by the Parties. Supplier agrees to target and document cost reductions in accordance with the specific product cost reduction roadmap. Both parties commit to work aggressively to pursue the achievement of such target cost reductions.

ARTICLE 19 - ELECTRONIC COMMERCE

19.1 Supplier and Company agree that they will work diligently to implement and utilize electronic means to issue Orders, Order acknowledgments, Order changes, forecasts and ship notices, to

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view Product and Material inventory information, and to facilitate electronic mail and such other communications as may be agreed upon by Supplier and Company for the transmission and receiving of information under this Agreement (“Electronic Commerce”).

19.2 Supplier shall have Electronic Commerce capability established within an agreed upon time period from the date of this Agreement. If Company elects to utilize EDI or XML as a means to electronically transmit data, Supplier and Company shall negotiate in good faith the required specifications, agreements and timelines for implementation. Such Electronic Commerce shall also include the capability of transmitting and receiving the items referenced in Articles 19.1 and 19.3 by means of Internet communications.

19.3 In addition to the requirements set forth in Article 19.1, Supplier agrees to work with Company to provide Company access, in accordance with and subject to Supplier’s security policies and procedures, to Supplier’s information systems in order to view and download the following Product data: (a) test and inspection data, (b) warranty and return and repair service data, (c) functional parametric data, (d) current “build to” production BOMs, and (e) Supplier and Company Product levels. Company acknowledges that Supplier’s policies and procedures may require that such access will be to/through a computer facility separate from Supplier’s internal information system(s). The Parties have established a goal to work together to enable Supplier to provide to Company the following, to a common standard for all Company locations, via real-time/near-real-time electronic transactions: (a) detailed (manufactured and purchased) finished Product/sub-assembly supply plans to support Company’s customer available to promise processes, (b) jeopardy notification and re-promise date(s) if a scheduled item will not ship on the day scheduled, (c) hierarchical Product serialization data to support serialization capture processes in effect at the time, and (d) component engineering and component management data.

19.4 The Parties hereby agree that Supplier will meet with each Ordering Company to determine the necessary information systems, software, and configurations that are required to enable each ordering Company to electronically transmit the Bill of Material, Specifications, technical drawings and all other relevant information needed for the manufacture of Product by Supplier for such Ordering Company. If Company requires different information systems, hardware, communications technology software or configurations, then the Parties agree to negotiate in good faith the costs associated with the installation of such information systems, hardware, communications technology software or configurations. These requirements shall be set forth in writing.

19.5 Supplier shall establish, at Supplier’s expense, appropriate measures (including, but not limited to, fire walls) to ensure Supplier’s and Company’s Information related to the manufacture and supply of Product can only be accessed by Supplier and Company. For certainty, and without limitation, Supplier shall use its reasonable commercial efforts to ensure that such information is not accessed by any third party, including any customer of Company, except as Company may authorize in writing. In the event Supplier is provided access to certain Company information systems, Supplier agrees to (a) use Information obtained from such systems solely for the purpose of performing its obligations under this Agreement or an Order placed pursuant to this Agreement and (b) take the necessary steps at Supplier’s expense, including but not limited to establishing firewalls, secured modems, etc. in order to ensure Company’s Information (including Company IP as part thereof) is sufficiently protected.

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ARTICLE 20 – SHIPPING

20.1 Unless otherwise specified in an Order, Supplier shall: (a) deliver or ship the Product or Commercially Purchased Item covered by this Agreement or Order complete; (b) deliver or ship to the destination designated in the Order; (c) ship according to routing instructions as set forth in the Order and provided by Company’s ordering location; (d) identify this Agreement and Order number on all subordinate documents; (e) enclose a packing memorandum with each shipment, encase the packing memorandum in a moisture resistant pouch or holder, place the packing memorandum on the side of the delivery or shipping container, and in the case of multiple containers, place it on the first container and, when more than one package is delivered or shipped, identify the package containing the memorandum; and (f) mark this Agreement and Order number on all packages and delivery or shipping papers. The following information shall be placed on all packing memorandums: (a) Company’s name; (b) address of location from which delivery or shipping is made; (c) Order number; (d) Order item or line number; (e) Company’s Andrew Part Number as stated on the Order; (f) Product or Commercially Purchased Item description as stated on the Order; (g) quantity delivered or shipped; (h) unit of measure as stated on the Order; (i) Company’s customer’s order number, Company’s customer’s specification/requirements number, and Company’s customer’s item number when identified on the Order; and (j) a list of all serial numbers for Product or Commercially Purchased Items shipped. Adequate protective packing shall be utilized, in accordance with the applicable Specifications. Shipping and routing instructions may be furnished or altered by Company in writing. If Supplier does not comply with Company’s shipping or routing instructions, Supplier authorizes Company to deduct from any invoice of Supplier (or to charge back to Supplier) any increased transportation costs actually incurred by Company as a result of Supplier’s noncompliance, provided that such increased costs shall be first submitted to and approved by Supplier.

20.2 When Supplier delivers Products or Commercially Purchased Items to Company or Company’s end customer, or its agent, at Supplier’s dock or to an integration, repair or distribution center which is at the same location as the facility from which delivery is to be made, Supplier shall obtain a delivery receipt from the party to whom the delivery was made.

20.3 Supplier shall retain the original or copies, as applicable, of all shipping documents and delivery receipts generated or obtained by Supplier in performance of the provisions of this Article 20. Such documents are subject to audit, as provided in Article 30.

20.4 Supplier shall provide summary shipping reports in the detail and upon the frequency required in the applicable Product Plan. Supplier hereby expressly acknowledges that Company may rely upon such reports in making its own submissions to auditors and other entities, including taxing authorities. Supplier hereby indemnifies Company and its Affiliates against any claim arising from inaccuracies in such reports.

ARTICLE 21 –TRANSFER OF MANUFACTURE

21.1 The manufacturing operations in respect of any Product under this Agreement shall not be transferred among the manufacturing facilities of Supplier or its Affiliates without the prior written consent of Company, which such consent shall not be delayed or withheld unreasonably. In the event that Company approves any such transfer of the manufacturing operations in respect of Products under this Agreement among Supplier’s manufacturing facilities, Company and Supplier shall cooperate in the implementation of a smooth and expeditious transition of the manufacture of such Products without interrupting supply and service to Company and Company’s customers. To that end, the Parties may agree to jointly establish a transition or implementation team (“Transition Team”), which will meet on a regular basis.

21.2 Appointees to the Transition Team and their qualifications and required expertise shall be as agreed to by the Parties.

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21.3 Each Party shall be entirely responsible for its own costs associated with participating in the activities described in this Article 21.

ARTICLE 22 - QUALITY

22.1 Supplier shall meet Company’s quality requirements as set forth in Specifications and otherwise in this Agreement. If within twenty-eight (28) days, or as otherwise agreed to by the Parties on a case by case basis, of transfer of title to Product from Supplier to Company, Company rejects any or all Product for failing to meet any of the Specifications agreed to by Supplier, Company may exercise one or more of the following remedies: (a) return rejected Product for full credit at the price charged plus return transportation charges, duties, and taxes, as may be applicable; (b) accept a conforming part of any shipment; or (c) have rejected Product replaced by Supplier at the purchase price stipulated in this Agreement or the applicable Order. If notification of rejection of any or all Product is not received by Supplier within this twenty-eight (28) day period or as otherwise agreed to between the Parties, such Product will be deemed to have been accepted by Company. Company shall obtain a return materials authorization (“RMA”) number from Supplier prior to returning any Product and shall return any Product rejected under this Article 22 within fifteen (15) Business Days of such rejection, unless otherwise agreed between the Parties.

22.2 Except as provided herein, Supplier shall maintain facility registration by an accredited registrar in compliance with ISO 9000 for all Supplier’s facilities Supplier uses to manufacture Products and/or perform Services hereunder. Supplier commits that all manufacturing and design operations, including any key sub-contractors selected by Supplier that contribute to the design, development, production, delivery and service of Product under this Agreement are ISO 9000 registered by an accredited registrar. The foregoing commitments shall not apply on the Effective Date with respect to Supplier’s ARAD, Romania facility and the Company Chosen Subcontractors, Supplier agrees to work towards achieving ISO 9000 registration in such facilities in accordance with a plan acceptable to Company, acting reasonably, but in any case such registration shall be achieved within twelve (12) months after the Effective Date. When requested by Company, Supplier shall furnish subsequent to each of its re-certification/surveillance audits, a copy of its quality policy manual and periodic audit documentation (including findings and corrective actions) for the locations manufacturing Products or performing Services under this Agreement. In the event Company requests Supplier to adopt or comply with other types of quality and similar requirements or certifications to those stated above in order for Company to sell Products, the Parties shall negotiate in good faith the timing and costs associated with achieving such requirements or certifications.

22.3 Subject to complying with Supplier’s plant rules and regulations, internal security and confidentiality requirements, security clearance regulations and other procedures as applicable, Supplier shall allow on-site quality management system type audits (e.g. ISO 9000, ISO 14001, and ANSI/ESD 20.20) as well as on-site process evaluations by Company or Company’s designated representative. All such on-site visits shall be at Supplier’s locations and, with their consent, at the locations of Supplier’s subcontractors who supply Material used in the manufacture of Product. The timing of such on-site visits shall be at Company’s discretion, subject to fourteen (14) days prior notice to Supplier by Company except in those situations in which Company has identified a quality problem that would prohibit Company or Supplier from shipping Products. Supplier agrees to implement and report the status of a Corrective Action Plan for all unacceptable issues within a time frame agreeable to the Parties and in a manner which is consistent with corrective action processes that are acceptable to Company, acting reasonably, and in compliance with procedures sufficient to maintain Supplier’s applicable registration. Supplier shall agree to have an improvement program in place, which will allow it to attain and maintain acceptable ratings or equivalent on all quality management system elements as agreed to by Company and Supplier.

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22.4 Supplier’s internal process controls shall be based on the Company requirements set forth in a specific product plan (“Product Plan”) in a form similar to Attachment H - Product Plan or as otherwise agreed by the Parties, and must, in any case, include incoming inspection procedures acceptable to Company. The Product Plan will contain Product-specific requirements and will define data reporting frequencies as agreed to by Company and Supplier. This is a process of “qualifying” the Supplier’s manufacturing location by periodic assessment of processes and Products.

22.5 Subject to complying with Supplier’s plant rules and regulations, internal security and confidentiality requirements, security clearance regulations and other procedures, as applicable, Supplier shall permit Company, at Company’s discretion to inspect and test Product at Supplier’s location (“Source Inspection”). If the Product inspection performance results do not meet Company’s Specifications, after an agreed up on period of time or number of lots inspected, as specified in the applicable Product Plan, the cost of continued Source Inspections shall be borne by Supplier. Source Inspections may be discontinued or reinstated, depending upon the shipped Product quality level, at the reasonable discretion of Company.

Subject to the terms of Article 30, Supplier shall, subject to prior request or written approval of Company, allow Company’s customers and customers of Company’s customers (collectively, “customer”) to conduct onsite evaluations of Product, or allow for inspection of Product by Supplier or Company, in accordance with customer inspection requirements. However, in no event shall Supplier allow any customer to remove any Product from Supplier’s premises where such evaluations and/or inspections are normally conducted without the written approval of Company. Supplier shall maintain records, including serial numbers, with respect to any Products so evaluated, inspected or removed.

22.6 Supplier shall perform a first article inspection and prepare a first article inspection report in a form acceptable to Company, acting reasonably, whenever any of the following occur in respect of a Product at Supplier’s location: Specification issue change, Material change, manufacturing location change, new Material incorporated into Product, new Material vendor added to the AVL, and at Company’s discretion, acting reasonably, a process change or a tooling change. The first article inspection report shall be sent to Company by Supplier on or before delivery or shipment of the Product. Supplier shall show the Andrew Part Number, Specification Issue number, and Order number on the top of the first page of the first article inspection report. The report should identify the specification element verified, the allowable tolerance, and the actual measurements.

22.7 Prior to Product production approval, Supplier shall make available (on-site at Company’s discretion and at Company’s request, acting reasonably), a minimum quantity of sample Product produced in a continuous run on permanent manufacturing equipment to Company’s designated representative for examination and subsequent approval by Company. Supplier shall not make any deliveries or shipments under an Order prior to approval of such sample production units by Company, unless authorized by Company in writing. Unless otherwise specified in this Agreement, the sample production units shall be retained by and title shall vest in Company upon delivery in accordance with an Order.

Upon Company’s request, Supplier is expected to inspect Product samples to all applicable Specifications, and then to provide this information, along with a certificate of compliance, to Company.

22.8 Supplier shall, except as provided in the applicable Product Plan or other agreement of the Parties, meet the Product requirements defined in IPC/EIA J-STD-001C “Requirements for Soldered Electrical and Electronic Assemblies” in its entirety, including referenced documents, as it or they may be modified from time to time by Company through the issuance of an Engineering Change Order in accordance with Article 59.3, and all other agreed to Specifications as listed in the applicable Product Plan.

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Supplier shall perform any Environmental Stress Testing (“EST”) required and described in the applicable Product Plan.

Supplier commits to establishing verification points throughout its manufacturing process. Supplier also commits to meeting the verification point requirements described in the applicable Product Plan. The scope of these verification points shall be to validate through visual and mechanical inspections and tests, and with the use of statistically valid sampling plans (e.g., per ANSI/ASQC Z1.4 and Z1.9-1993 or then current equivalent), that Product conforms to applicable manufacturing, Product and process Specifications, standards of acceptable workmanship, as well as other Specifications which may be provided by Company. Verification of in process data, a root cause analysis of problems identified, and corrective action associated with this data may be requested by Company periodically. Company reserves the right to make suggestions for improvement based on this data. Supplier’s corrective actions shall be consistent with processes that are acceptable to Company, acting reasonably, and in compliance with procedures sufficient to maintain Supplier’s applicable registration.

At a minimum, Supplier shall provide weekly:

Test process yield data for each test station for each Product.

Pareto of defects by test station by Product.

Repair data, “Test and Repair” at the serial number level of the applicable Product

Root cause analysis and CAP for problems by incidence.

FMAs by incidence

At a minimum, Supplier shall provide the following:

A chart of Defects Per Million Opportunities (DPMO) by PCBA produced by Supplier (Monthly).

A chart of Defects Per Million Opportunities (DPMO) by vendor (Monthly).

Vendor Corrective Action Summaries (Monthly).

Vendor Quality Scorecards (Semi—annually).

Product Scrap Reports (Monthly).

Report of Corrective Actions assigned by the Company to Supplier (Monthly).

Supplier shall continuously review Product return data, including data from field returns (when provided by Company), to ensure that the scope of the verification process includes verification of the requirement(s) or condition(s) under which the returned Product failed. Supplier shall perform and provide to Company a detailed analysis of all returned Product found to be defective, identify root cause, and implement any appropriate corrective action. Any Product found to be defective shall be corrected before shipment to Company. Supplier’s corrective actions shall be consistent with processes that are acceptable to Company, acting reasonably, and in compliance with procedures sufficient to maintain Supplier’s applicable registration.

22.9 Supplier and its subcontractors utilized in the manufacture of Products pursuant to this Agreement, except as set forth in the applicable Product Plan or otherwise agreed, shall be

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compliant with following ESD Industry Standards to the extent applicable:

ESDA - S1.1 “for the Protection of Electrostatic Discharge Susceptible Items – Wrist Straps”.

ESD STM3.1-2000, “for Protection of Electrostatic Discharge Susceptible Items – Ionization”.

ESD SP3.3-2000, “for The Protection of Electrostatic Discharge Susceptible Items – Periodic Verification of Air Ionizers”.

ESD S4.1 - 1997, for The Protection of Electrostatic Discharge Susceptible Items – Worksurfaces - Resistance Measurements”.

ANSI/ESD S6.1 “for the Protection of Electrostatic Discharge Susceptible Items – Grounding -Recommended Practice”.

ANSI ESD S7.1-1994: “for the Protection of Electrostatic Discharge Susceptible Items Floor Materials – Resistive Characterization of Materials”.

ESD SP10.1 - 2000, “for Protection of Electrostatic Discharge Susceptible Items – Automated Handling Equipment (AHE)”.

ANSI/ESD - S20.20 - “for The Development of an Electrostatic Discharge Control Program for Protection of Electrical and Electronic Parts, Assemblies and Equipment (Excluding Electrically Initiated Explosive Devices”.

Subject to Article 30, Supplier and its subcontractors may be audited by Company or any designated third party to verify compliance.

In the event that any of the Company Chosen Subcontractors is on the Effective Date not in compliance with any of the foregoing applicable standards the Parties shall mutually agree on the period, not to exceed twelve (12) months from the Effective Date, during which such subcontractor must come into compliance.

22.10 Supplier and its subcontractors shall be capable of handling moisture sensitive devices (MSD) per IPC/JEDEC J-STD-033 requirements. At Company’s request, Supplier agrees to provide an internal document detailing Supplier’s and such subcontractor’s MSD handling procedures.

In the event that any of the Company Chosen Subcontractors is on the Effective Date not in compliance with any of the foregoing applicable standards the Parties shall mutually agree on the period, not to exceed twelve (12) months after the Effective Date, during which such subcontractor must come into compliance.

22.11 Supplier shall establish a maximum DPMO acceptable to Company for each component used in a Product. Supplier shall work with Supplier’s vendor to secure corrective actions and alert Company on a periodic basis in accordance with Article 22.8.

22.12 The procedure for Supplier responding to Company for Product non-conformities detected by Company shall be as follows:

When a Corrective Action Request is initiated by Company, a complaint notification letter shall be sent by Company by electronic mail or facsimile transmission directly to Supplier’s program manager (or other designated person) requesting a response with a root cause analysis and Corrective Action Plan. The Corrective Action Plan response shall include the following information:

(a) The initial actions taken to contain the problem;

(b) A description of the root cause of the problem;

(c) The proposed corrective action or solution to the problem;

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(d) The actual or planned implementation date of the corrective action;

(e) The plans for verifying that the corrective action was effective; and

(f) The actual or planned date of the verification of effectiveness.

Supplier’s response to Product non-conformities detected by Company is expected to occur within the timeframe described in the applicable Product Plan.

22.13 If during the Term of this Agreement and for five (5) years after the last shipment date of any Product under this Agreement, Company notifies Supplier that such Product shows evidence of an Epidemic Condition (as defined below), Supplier shall prepare and propose a Corrective Action Plan with respect to such Product within five (5) Business Days, or such extended period as may be agreed to, of such notification, addressing implementation and procedure milestones for remedying such Epidemic Condition(s). An extension of this time frame is permissible upon mutual written agreement of the Parties.

Upon notification by Company of the Epidemic Condition to Supplier, Company shall have the right to postpone all or part of the shipments of unshipped affected Product, by giving written notice of such postponement to Supplier, pending correction of the Epidemic Condition. Such postponement shall temporarily relieve Supplier of its shipment liability and Company of its shipment acceptance liability.

Should Supplier contest the existence of an Epidemic Condition or should Company reject the CAP, then Company shall have the right to suspend all or part of its unshipped Orders for the affected Product, without liability to Company until such time as a mutually acceptable solution is reached.

An Epidemic Condition will be deemed to exist when one or more of the following conditions occur and the Epidemic Condition is due to the same root cause:

(a) Failure reports or statistical samplings show that [*] of a Product, whichever is greater, or such other percentage and/or number as may be in the Product Plan, of Product installed or shipped during any [*] consecutive months exhibit a highly objectionable symptom (such as emissions of smoke, loud noises, deformation of housing, severe corrosion or non-functionality or other symptoms of this type;

(b) Failure reports or statistical sampling show one or more instances of Product tracked by Company to contain a potential safety hazard (such as personal injury or death, fire, explosion, toxic emissions, etc.);

(c) Failure reports show that Out of Box (“OOB”) failures exceed [*] of a Product, whichever is greater, or such other level(s) specified in the applicable Product Plan, or that any of Company’s customers purchasing such Product claims an epidemic condition based on OOB. For the purposes of this Agreement, OOB shall be defined as any Product that during test, installation or upon its first use fails to operate in accordance with the Specification or that contains one or more major visual, appearance or mechanical defects that would make the Product unfit for use or installation.

Only major functional and visual, mechanical or appearance defects shall be considered in determining Epidemic Condition. Product may be sampled or, at Company’s option, one hundred percent (100%) audited at Company’s or Supplier’s warehouses, factories or Company’s customer locations. If Product is sampled, the data must have ninety-five percent (95%) or better statistical confidence.

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In the event that Supplier develops a remedy for the defect(s) that caused the Epidemic Condition and Company agrees in writing that the remedy is acceptable, Supplier shall:

(a) Incorporate the remedy in the affected Product in accordance with Article 59;

(b) Deliver or ship all subsequent Product incorporating the required modification correcting the defect(s) at no additional charge to Company provided that the Epidemic Condition is due to a cause covered by the Warranty in accordance with Article 23;

(c) Repair and/or replace Product that caused the Epidemic Condition, if determined by Company to be necessary, at no additional charge to Company provided that the Epidemic Condition is due to a cause covered by the Warranty in accordance with Article 23. In the event that Company incurs costs due to such repair and/or replacement, including but not limited to labor and shipping costs and the root cause is caused by Supplier, Supplier shall reimburse Company for such costs.

In the event that Supplier develops and/or implements a remedy for the defects that caused the Epidemic Condition, but Supplier was not responsible for such defects, as, for example, defects due to Specifications, design, test, tooling, documentation, instruction, or Materials, , supplied by Company, Supplier shall be entitled to recover its costs of such effort. The Parties shall mutually agree upon charges due to Supplier before Supplier commences any such effort.

Supplier and Company shall agree as to the remedy’s implementation schedule. Supplier shall use reasonable commercial efforts to implement the remedy in accordance with the agreed-upon schedule.

Provided that the Epidemic Condition is due to a cause covered by the Warranty in accordance with Article 23, if Supplier is unable to develop a mutually agreeable remedy, or does not adequately take into account the business interests of Company, as reasonably agreed by the Parties, Company may (a) develop and implement such remedy and, in such case, implementation costs and risk of in-transit loss shall be borne by Supplier, (b) suspend Orders for the affected Product or cancel Orders for the affected Product without liability and return all Product affected by such Epidemic Condition for full refund, payable by Supplier within thirty (30) days after receipt of such returned Product (with risk of loss or in-transit damage borne by Supplier), and purchase the Products affected by such Epidemic Condition from a source other than Supplier, and/or (c) terminate this Agreement with respect to the affected Product without further liability to Company, subject to Article 13. Any failure by Company to comply with its Purchase Commitment as a result of purchases of Products from a source other than Supplier pursuant to clause (c) hereof shall be subject to the applicable Attachment C.

22.14 As part of a program of continuous improvement, set out in the Operational Metrics, Supplier agrees to annually establish improvement goals for a series of key quality objectives. These key objectives should include, but are not limited to:

(a) Customer return rates and on time delivery performance as may be mutually agreed upon by the Parties.

(b) Certification test and Product workmanship results;

(c) In-circuit, functional and final system Product test yields; and

(d) Reduction in accumulation of defective work-in-process (i.e., the “Bonepile”).

Supplier agrees to track and report performance against goals on at least a monthly basis, and to commit the resources reasonably necessary for the attainment of these goals.

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22.15 Company intends to monitor Supplier’s quality performance in accordance with the Performance Metrics set forth in Attachment E. Failure by Supplier to meet quality Performance Metrics shall be subject to the resolution and consequences provisions set forth in Article 12.

ARTICLE 23 – WARRANTY

23.1    (a) Supplier warrants to Company that Products delivered or shipped by Supplier under this Agreement will be new, free from defects in Supplier’s workmanship, and manufactured in accordance with applicable Specifications, and shall repair or replace, as the Parties may mutually agree, without charge, any Products which are proved to be defective as a result of Supplier’s workmanship or failure to comply with applicable Specifications, including Supplier’s use of incorrect Materials in manufacturing Products, even if the Material vendor failed to accurately mark such Material (if such inaccuracy would have been disclosed by incoming inspections and/or testing thereof prior to delivery), provided that:

(i) Company shall promptly notify Supplier in writing upon discovery of any defect due to the causes referenced to above; and

(ii) Such defective Product has been returned, freight charges prepaid, to Supplier’s designated location within two (2) years from the original delivery date by Supplier to Company or Company’s customer, or one (1) year from the date of installation of such Product, whichever is shorter (the “Warranty Period”).

(b) Commercially Purchased Items are expressly excluded from the Warranty set out in this Article 23. Supplier shall deliver or ship with such items all warranty documentation received from the vendors thereof. In addition, to the extent it is permitted to do so, Supplier will assign to Company all warranties for such items received from the vendors thereof. Such assignment shall be effective as of delivery or shipment by Supplier.

(c) Notwithstanding the Warranty Period for Products, Supplier warrants the workmanship of any repair performed on a Product during the Warranty Period for one (1) year, or the remainder of the original Warranty Period, whichever is longer.

23.2 A RMA is required from Supplier prior to returning any Products. Such RMA shall not be unreasonably delayed or withheld. All returned Products shall include documentation describing the nature of the defect and under what conditions it occurred.

23.3 Company or its customers shall bear the cost of the return of Products to Supplier’s designated premises. Supplier shall bear all costs of the redelivery to Company’s or Company’s customer’s premises, including duties and customs clearance on international returns, of all Products which are found by Supplier to contain a defect to which the Warranty in Article 22.1(a) applies. In respect of any Products that are found by Supplier not to contain such a defect, Company shall pay to Supplier a NTF charge in addition to all redelivery costs. If upon the Effective Date, Attachment J does not establish an applicable NTF charge for each Product listed on Attachment B, then, until such a specific NTF charge is established, the NTF charge shall be [*], or the monetary equivalent thereof as determined by the location of Supplier’s Warranty repair center The Parties agree that the definitive NTF charges for each Product will be made a part of Attachment J as soon as reasonably practical. In the case of Product repair and replacement, title (if the returned Product is replaced) and risk of loss of a returned Product will pass to Supplier upon delivery to Supplier, and title (of any replacement Product) and risk of loss of the repaired or replacement Product will pass to Company upon delivery to Company or to Company’s customer upon delivery to such customer.

23.4 The Warranty shall not apply to:

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(a) Products which Company, Ordering Companies, third parties under Company’s direction, or Company’s customers, have (i) caused to have been misused, modified, damaged, placed in an unsuitable (as determined by the Specifications) physical or operating environment, (ii) maintained improperly, (iii) caused to fail by any product not supplied by Supplier, or (iv) caused to fail by any service not supplied by Supplier;

(b) Any Products which have been subjected to any repair not authorized in writing in advance by Supplier;

(c) Any defect caused by Company or a third party or by an error or omission or design or other fault in any Specification or other drawings, documentation, data, software, information or know-how or Product provided or specified by Company;

(d) subject to Article 23.5, any defect caused by, or arising directly or indirectly out of or in connection with a defect in Material; or

(e) Products in respect of which Supplier has been requested by Company not to perform Supplier’s standard inspection and mutually agreed upon test procedure(s).

23.5 Notwithstanding Article 23.4(d), Supplier shall retain warranty responsibility for any Products that are defective as a result of:

(a) Damage caused by Supplier to Material incorporated in the Products;

(b) A defect in Material incorporated in the Products as a result of design or Material selection choice by Supplier not approved by Company;

(c) A defect in Supplier-Controlled Material or Supplier-Controlled Custom Material; and

(d) A defect in Material that Supplier knew or should have known existed, based on standard inspection tests or tests required by the applicable Product Plan or other agreement of the Parties, at the time Supplier incorporated such Material in the Products.

23.6 To the extent permissible, Supplier shall extend to Company the rights and warranties that Supplier received from the original Material vendor for the Material used in the manufacture of Products. The Parties shall work in good faith on other warranty claims that Supplier is able to assert against the Material vendors. As required by Article 14.4, Supplier shall disclose the warranties that it receives from its vendor(s) so far as not prohibited by agreement with such vendor(s). Supplier shall work together with Company to develop a mutually agreeable process to review the terms and conditions of the Material warranties provided by approved vendors in an effort, jointly with Company where appropriate, to extend the terms of such Material warranties to the purchaser of Products hereunder incorporating such material and so that the warranty period of such Material warranties becomes co-extensive with the Warranty Period provided for in Article 23.1 in respect of the Product provided by Supplier to Company.

23.7 Supplier warrants to Company that prototypes and preproduction units of Product, and all other deliverables will be new, free from defects in workmanship and will conform to and perform in accordance with the Specifications (to the extent that Supplier is capable of assuring that prototypes and preproduction units can conform to and perform in accordance with the Specifications). Supplier also warrants to Company that any development will be performed in a workmanlike manner and to Company’s reasonable satisfaction. These warranties shall continue for a period of one hundred eighty (180) days after the Product is delivered to Company.

23.8 AS RELATED TO PRODUCT WARRANTY, THIS ARTICLE 23 SETS OUT SUPPLIER’S SOLE OBLIGATION AND LIABILITY (SUBJECT TO THE EPIDEMIC CONDITION PROVISIONS IN ARTICLE 22 AND ANY OTHER SPECIFIC REMEDIES SET FORTH HEREIN), AND

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COMPANY’S EXCLUSIVE REMEDIES, FOR CLAIMS BASED ON DEFECTS IN OR FAILURE OF ANY PRODUCT AND, TO THE EXTENT PERMISSIBLE BY APPLICABLE LAW, REPLACES ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING IMPLIED CONDITIONS OF SATISFACTORY QUALITY OR FITNESS FOR A PARTICULAR PURPOSE.

ARTICLE 24 - REPAIRS NOT COVERED UNDER SUPPLIER’S WARRANTY

24.1 In addition to Supplier’s repair and replacement Warranty obligations set forth in Article 23, subject to the availability of Material and test equipment, Supplier shall provide for Company and its designated customers out of Warranty repair and replacement services for Product during the Term of this Agreement. If Company requests that Supplier provide such out of Warranty repair and replacement Services directly to Company’s customer, the terms and conditions of the provision of such services shall be as mutually agreed by Supplier and such customer of Company.

24.2 The terms and conditions pursuant to which Supplier will provide out of Warranty repair and replacement Services and the procedures to which Supplier shall adhere in performing such Services shall be as agreed to by the Parties and will be incorporated in this Agreement as Attachment J. It is the Parties’ intention that the terms and conditions applicable to out of Warranty repair and replacement Services will be agreed to within one hundred eighty (180) days of the date of this Agreement.

24.3 Company will be responsible for all return transportation costs for Product returned for repair if such Product is not covered by the Warranty. Company shall assume the risk of loss and damage until delivery to Supplier’s repair facility and from Supplier’s repair facility back to Company or its customer. Supplier shall assume the risk of loss and damage from the time that the returned Product arrives at Supplier’s repair facility until delivery at Supplier’s repair facility to Company, to Company’s customer or to the freight carrier selected by Company or such customer, or, if applicable, delivery to Company’s or its customer’s integration, repair or distribution center, if such center is at the same location as Supplier’s repair facility, in accordance with Article 9.

24.4 Where mutually agreed by the Parties and to the extent available, Supplier agrees to offer for sale to Company and, if requested by Company, to Company’s customers, during the Term of this Agreement, functionally equivalent maintenance, replacement, and repair parts (“Parts”) for the Products at the prices set forth in Supplier’s then current agreement with Company for such Parts or, if no such agreement exists, at prices agreed upon by Company and Supplier. If the Parties fail to agree on a price, the price shall be a reasonably competitive price for such Parts at the time of delivery. If Supplier makes such a sale of Parts directly to Company’s customer, the terms and conditions of such sale (other than price) shall be as mutually agreed by Supplier and such customer of Company.

24.5 The Parties agree that Attachment J will set out terms, conditions and metrics associated with out of Warranty repairs performed by Supplier, some of which terms, conditions and metrics are also applicable to repairs performed by Supplier under the Warranty set out in Article 23 of this Agreement. As part of the terms and conditions of out Warranty repair and replacement Services to be incorporated in Attachment J, the Parties shall agree on the specific terms, conditions and metrics contained in Attachment J that will also apply to repairs performed by Supplier under the Warranty set out in Article 22 of this Agreement.

ARTICLE 25 – SCRAP PROCEDURES

25.1 Material or Products which: (i) fail to meet the required Specifications prior to shipment; (ii) are considered Obsolete Inventory and Company does not require storage by Supplier of such Obsolete Inventory, finished Product, or work-in-process Product; or (iii) which cannot be repaired (collectively, “Scrap”), will not be sold to a third party by Supplier except as approved by Company.

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Disposition of such Scrap shall be in accordance with this Article 25. Supplier shall advise Company of any Scrap and if the Parties agree that such designated Scrap is not suitable for reuse in the manufacture of Products in whole or in part, such Scrap shall be provided only to a Company approved Scrap dealer for reclamation. Supplier shall provide upon Company’s request a report outlining the types and amounts of Scrap provided to Company’s scrap dealer. The costs of scrapping Material and Products shall be borne by Supplier, except to the extent such costs are Company’s liability pursuant to Articles 13 and 23. Any reclamation value received from a Scrap dealer shall accrue to Supplier, except in the case that Company bears the Scrap costs, in which event any reclamation value shall accrue to Company or such other entity as Company may instruct.

25.2 Supplier shall have the sole responsibility for the disposition of any hazardous or regulated waste as required by applicable Laws. Supplier shall indemnify, defend and hold harmless Company and its Affiliates against claims and actions brought by or on behalf of third parties alleging a disposition in violation of the provisions of such Laws.

ARTICLE 26 - QUARTERLY PERFORMANCE REVIEW PROCESS

26.1 Company and Supplier, through their respective representatives, will participate in mutual performance reviews on a quarterly basis, or as frequently as needed or requested by either Supplier or Company (the “Quarterly Performance Review Process”), for the purpose of reviewing the following information:

(a) Transitional and implementation related issues impacting Supplier or Company;

(b) Market conditions and industry trends (telecommunications and electronics manufacturing);

(c) Supplier’s current and projected global manufacturing capacity plans and Company’s current and projected global Product and Services requirements;

(e) Actual Product cost vs. target Product cost objectives;

(f) Current Product pricing;

(g) Supplier’s performance against Company’s performance metrics;

(h) Ongoing open Corrective Action Plans if applicable;

(i) Supply line issues and Product and Material inventory status including vendor managed Material;

(j) Electronic commerce engagement;

(k) Accomplishments and challenges in the past quarter;

(l) Company’s quarterly actual performance including Forecast accuracy, NTF returns, documentation accuracy, engineering changes (quantity and quality), responsiveness, payment performance, overall strengths and areas for improvement;

(m) Changes in Product conformance requirements and Supplier’s capability to implement them;

(n) Upcoming technology requirements (rolling twelve (12) months);

(o) Environmental, health and safety performance;

(p) Other information as the parties may agree upon from time to time;

(q) List of custom and non-cancelable non-returnable Material; and

(r) Company’s scorecard concerning Supplier’s performance.

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26.2 The specific details (meeting dates and places, planning horizons, data requirements, etc.) for the first of these Quarterly Performance Review Process meetings will be agreed to between the Parties within thirty (30) Business Days of the date of this Agreement.

26.3 Each Party shall be entirely responsible for its own costs associated with participating in the activities described in Article 26.1.

ARTICLE 27 – NOTICES

27.1 Unless otherwise specified herein, any notice, approval, request, authorization or other communication required or permitted to be given hereunder shall be in writing and shall be delivered in person, transmitted by telecopy or similar means of recorded electronic communication or sent by registered mail, charges prepaid, addressed as follows:

if to Company:	Andrew Corporation
	140 Technology Drive
	Warren, NJ 07059
	United States
	Attention: Matthew Douglas
	Telecopier No.: 1 908.546.4504
with a copy to:
	Andrew Corporation
	Andrew Legal Department
	3 Westbrook Corporate Center, Suite 900
	Westchester, Illinois 60154
	United States
	Attention: James Petelle
	Telecopier No.: 1 708 492 3823
if to Supplier:    Elcoteq SE
	Group Office
	Sinimaentie 8B
	P.O. Box 8
	Fl-02631 Espoo
	Finland
	Attention: Sari Kolu
	Telecopier No.: 358 (0) 10 41 311
with a copy to:
	Elcoteq Americas
	909 Lake Carolyn Parkway
	5th Floor
	Irving, TX 75039
	United States
	Attention: David Murphy
	Telecopier No.: 1 517 545 9372

Any such notice or other communication shall be deemed to have been given and received on the day on which it was personally delivered or transmitted by telecopier, receipt confirmed (or, if such day is not a Business Day, on the next following Business Day) or, if mailed, on the fifth (5^th) Business Day following the date of mailing or, if couriered overnight, on the second (2^nd) Business

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Day following the date of couriering; provided, however, that, if at the time of mailing or within three (3) Business Days thereafter there is or occurs a labor dispute or other event which might reasonably be expected to disrupt the delivery of documents by mail, any notice or other communication hereunder shall be delivered or transmitted by means of telecopier as aforesaid.

Either Party may change its address for service at any time by giving notice to the other Party in accordance with this Article 27.

ARTICLE 28 – DISPUTE RESOLUTION PROCESS/ARBITRATION

28.1 If an unresolved dispute arises out of, or relates to, this Agreement or an Order, the Parties agree to attempt to resolve the dispute in the following manner:

(a) The Parties shall first attempt to resolve the dispute at the executive level in the geographical region in which the dispute arises. The Parties shall have ten (10) Business Days to resolve the dispute;

(b) In the event that the dispute is not resolved as provided in (a) above, either Party shall issue notice to the other Party outlining the nature of the dispute. The Oversight Committee shall have ten (10) Business Days after receipt of such notice (as defined in Article 27) to resolve the dispute; and

(c) in the event that the dispute is not resolved by the Oversight Committee within ten (10) Business Days, the dispute shall be submitted to the President of Company and Chief Operating Officer of Supplier’s parent company for resolution within a further ten (10) Business Days.

28.2 If the Parties have been unsuccessful in resolving a dispute pursuant to Article 28.1, the Parties shall refer the dispute to a panel of three (3) arbitrators. The arbitration shall be final and binding. The arbitration, including arguments and briefs, shall be in the English language. The arbitrators may not limit, expand or otherwise modify the term of this Agreement or award exemplary or punitive damages. The arbitrators shall apply the substantive (not conflicts) Laws of the applicable jurisdiction set out in Attachment R. Judgment upon the award rendered in the arbitration may be entered in any court having jurisdiction thereof. Each party shall bear its own expenses and an equal share of the expenses and fees of the arbitration, except that the arbitrators may award reasonable attorneys’ fees to the prevailing party. The Parties, their representatives, other participants and the arbitrators shall hold the existence, content and result of the arbitration in confidence. The three (3) arbitrators shall be selected and the arbitration shall be conducted pursuant to the rules of the American Arbitration Association, when the Law applicable in the arbitration is the Law of any of the United States of America, and in such case the arbitration shall be held in Chicago, Illinois. The three (3) arbitrators shall be selected and the arbitration shall be conducted pursuant to the rules of the International Chamber of Commerce, when the Law applicable in the arbitration is Swiss Law, and in such case the arbitration shall be held in Switzerland. When and if transactions under this Agreement become subject to the Law of any other jurisdiction, the three (3) arbitrators shall be selected and the arbitration conducted pursuant to rules of the American Arbitration Association and the arbitration shall be held in Chicago, Illinois, unless the Parties otherwise mutually agree.

28.3 Nothing in this Article shall be construed to preclude either Party from seeking injunctive or other affirmative relief in order to protect its rights pending dispute resolution in accordance with Articles 28.1 or 28.2.

ARTICLE 29 – ASSIGNMENT AND SUBCONTRACTING

29.1    (a) Subject to Company’s approval, which shall not be unreasonably withheld or delayed, Supplier shall have the right to subcontract any or all of its obligations under this

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Agreement to an Affiliate of Supplier or a third party subcontractor, including, expressly, an Affiliate of Supplier’s parent, Elcoteq SE, provided Supplier remains responsible for the performance of such Affiliate or subcontractor. Subject to Sub-article 29.1(b) below, Supplier shall be responsible to Company for all services performed by Supplier’s subcontractor(s) in connection with the fulfillment of Supplier’s obligations under this Agreement at any tier. Supplier shall cause its Affiliates to which it has subcontracted any or all of its obligations under this Agreement in accordance with this Article 29.1 to abide by the terms and conditions of this Agreement. All references to Supplier in this Agreement shall be deemed to be, where applicable, a reference to Supplier’s Affiliates and subcontractors to which Supplier has subcontracted any or all of its obligations under this Agreement in accordance with this Article 29.1.

(b) The Parties acknowledge that at the Effective Date it will be necessary for Supplier to utilize certain subcontractors that Company has utilized in its manufacture of certain Products that Supplier will produce and sell under the terms of this Agreement, to wit: BTG International HD S.R.L, C.G.B Telecomsystem S.R.L., and R.T.T. Romania Telecomunication (“Company Chosen Subcontractors”). Supplier commits to use such Company Chosen Subcontractors for a minimum of six (6) months following the Effective Date, provided that Supplier shall have the right to engage other subcontractors or itself to perform work necessary to avoid negative impacts on scheduled deliveries to Company. Notwithstanding Sub-article 29.1(a) above, until such time as Supplier has qualified a Company Chosen Subcontractor in accordance with its standard qualification procedures, or nine (9) months following the Effective Date, whichever first occurs, Supplier shall not be responsible for defects in workmanship in or delays in delivery of Products sold to Company that result solely from defects in workmanship in or delays in delivery of items produced or services performed by such subcontractor; provided, however, that such excuse of Supplier’s liability shall not apply:

(i) With respect to defects of such subcontractor that Supplier discovered or should have discovered before delivery of the Product;

(ii) With respect to defects or delays that would or should not have occurred had Supplier exercised commercially reasonable measures of management and control of such subcontractor; and

(iii) With respect to obligations imposed by Supplier on the subcontractor that are additional to and/or different than the obligations that were owed by such subcontractor to Company.

29.2 This Agreement shall inure to the benefit of, and shall be binding on and enforceable by, the Parties and their respective successors and permitted assigns. Neither Party may assign this Agreement or any part thereof without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed; provided, however, that either Party may assign any part(s) of this Agreement or this Agreement to any of its Affiliates or to a successor to all or substantially all of its business, provided that (i) such assignee executes an agreement with the non-assigning Party and the assigning Party whereby the assignee agrees to be bound hereunder, and (ii) Supplier is satisfied that the proposed assignee has the financial capacity and creditworthiness to fulfill its obligations under this Agreement.

29.3 In the event that Company intends to sell all or any part of a Product line or all or a portion of its business to a third party and Company wishes to maintain continuity of supply of such Products as part of the terms of such sale, Company shall notify Supplier of such sale as soon as is reasonably practicable prior to such sale (subject to confidentiality requirements). Subject to Supplier: (a) executing an interim manufacturing agreement with such third party, which contains confidentiality and intellectual property terms agreeable to Supplier and such third party, and (b) being satisfied, acting reasonably, that the third party has the financial capacity and

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creditworthiness to fulfill its obligations to Supplier under such agreement, Supplier shall continue to manufacture such Products for such third party after such sale, on the same economic terms as under this Agreement, for a period of six (6) months. Supplier agrees to use good-faith efforts to negotiate a new manufacturing supply agreement with such third party for such Products, prior to the end of such six (6) month period.

29.4 Notwithstanding any of the foregoing provisions of this Article 29, Company. may at any time and without consent of Supplier, assign this Agreement to its then current parent company, if any.

ARTICLE 30 – ATTENDANCE AT SUPPLIER’S FACILITY

30.1 Upon reasonable prior notice and subject to complying with Supplier’s plant rules and regulations, internal security and confidentiality requirements, security clearance regulations and other procedures as applicable, Company may place one or more personnel in Supplier’s facility at which Supplier manufactures Products for Company under this Agreement to carry out the functions Company may deem necessary in the portion of the facility in which Supplier kits Material and manufactures, inspects, repairs, distributes and ships Product. Compensation for such personnel shall be borne by Company. Supplier agrees to furnish such personnel with reasonable working facilities, as necessary, to perform their work, which shall include access during normal working hours to areas where Product is manufactured, repaired, stored and distributed, all at no charge to Company. If requested by Company, Supplier shall also provide office space and support services as required at Company’s expense at Supplier’s actual cost.

ARTICLE 31 – AUDIT

31.1 Supplier shall maintain accurate and complete records including, but not limited to, (i) a physical inventory, if applicable, of all costs incurred under this Agreement which may affect: (a) verification, re-determination, or revision of Product prices under this Agreement; (b) termination charges payable by Company under this Agreement; (c) all costs incurred for Tooling purchased under this Agreement; (d) Product quality conformance; (e) compliance with approved manufacturing, distribution, warranty and repair processes and adherence to Company’s BOM and AVL; (f) inventory of Company Material and Supplier-Controlled Custom Material used to manufacture Product and Supplier-Controlled Commercially Purchased Items; (g) conformance with Specifications; and (h) volumes purchased and purchase prices paid for all Material procured in the performance of this Agreement; and (ii) at Company’s option, for environmental assessment purposes, all applicable records relating to the life cycle of any Product manufactured under this Agreement.

31.2 The records referenced in Article 31.1 shall be maintained in accordance with recognized commercial accounting practices so they may be readily reviewed in accordance with Article 31.3 and shall be held until all costs and compliance with the terms of this Agreement have been finally determined and payment or final adjustment of payment under this Agreement or the necessary corrective action under this Agreement has been taken.

31.3 Company shall, at its cost and expense, have the right exercisable on a quarterly basis upon reasonable notice to Supplier during Supplier’s normal business hours to examine and audit (“Audit”) the records described in Article 31.1. The Parties agree that such Audits shall conform to procedures mutually agreed upon by the parties. No such audits shall be made later than two (2) calendar year(s) after the later of (a) final delivery date of Product ordered or completion of Services rendered or (b) two (2) years after the termination of this Agreement. If Company identifies any issues or concerns related to such records and the pricing of the Product or the Services, Company shall provide a statement to Supplier setting out in reasonable detail the nature of such issues or concerns. Supplier and Company shall attempt to resolve the matters in dispute in a timely manner and make such adjustments, if any, to the pricing of the relevant Products or Services as may be required. For certainty, Company acknowledges and agrees that any right to review and Audit under this Article 31.3 may be limited by and is subject to any

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confidentiality obligations that Supplier or its Affiliates may have to Material vendors or other suppliers and subcontractors as well as limitations imposed by Law or regulatory requirements.

ARTICLE 32 – BANKRUPTCY AND TERMINATION FOR FINANCIAL INSECURITY

32.1 Either Party may terminate this Agreement by notice to the other Party (a) if the other Party makes an assignment for the benefit of creditors (other than solely an assignment of moneys due); or (b) if the other Party evidences an inability to pay debts as they generally become due, unless adequate assurance of its ability to pay is provided within thirty (30) Business Days of such notice.

32.2 If a proceeding is commenced under any provision of the United States Bankruptcy Code or the bankruptcy and/or insolvency legislation of any other jurisdiction, voluntary or involuntary, by or against either Party, and this Agreement has not been terminated, the non-debtor Party may file a request with the bankruptcy court to have the court set a date within sixty (60) Business Days after the commencement of the case, by which the debtor Party will assume or reject this Agreement, and the debtor Party shall cooperate and take whatever steps necessary to assume or reject this Agreement by such date.

ARTICLE 33 - CHOICE OF LAW

33.1 All disputes with respect to purchases under this Agreement of Products that are manufactured at or delivered from any location in the United States, Mexico or Canada, and all performance of the Parties related thereto, including Warranty and out-of-Warranty Services, wherever performed, shall be governed by the Laws of the State of Illinois, United States of America, excluding its choice of laws rules and excluding the Convention for the International Sale of Goods. With respect to disputes between the Parties that are herein agreed to be subject to Illinois Law, the Parties agree to submit to the jurisdiction of the state and federal courts in Illinois.

33.2 Unless otherwise expressly agreed by the Parties in writing, this Agreement and all transactions under it and all performance of the Parties related thereto shall be governed by the Laws of Switzerland, excluding its choice of laws rules and excluding the Convention for the International Sale of Goods. With respect to disputes between the Parties that are herein agreed to be subject to Swiss Law, the Parties agree to submit to the jurisdiction of the courts (provincial, state, national and federal) of Switzerland.

ARTICLE 34 – CONFIDENTIAL INFORMATION

34.1 Any Company Proprietary Information provided or made available by Company or its Affiliates to or coming into possession of Supplier and its Affiliates and any Supplier Proprietary Information provided or made available by Supplier or its Affiliates to or coming into the possession of Company and/or its Affiliates shall be deemed for the purposes of this Agreement to be “Confidential Information” of the Party disclosing (“discloser”) such information to the other Party (“recipient”), except if such information disclosed to recipient is: (i) in or becomes part of the public domain through no fault of recipient; (ii) disclosed to recipient by a third party without breach of any obligation or other restriction; (iii) known to recipient at the time of disclosure and has been so documented prior to receipt thereof; or (iv) independently developed by recipient without access to any information furnished to it by discloser and has been or is so documented.

34.2 All Confidential Information shall, as between the Parties, be owned and remain the sole and exclusive property of discloser. All Confidential Information of discloser shall be held in confidence by recipient, shall be protected from all harm, loss, theft and unauthorized access and, if in a form of any physical medium of any kind, returned by recipient upon request of discloser. Upon the termination or expiration of this Agreement, each Party shall return to the other Party all Confidential Information of the other party in its possession or certify in writing that such Confidential Information has been destroyed.

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34.3 Recipient shall not use the Confidential Information for any purposes other than those contemplated under this Agreement.

34.4 The existence and terms of this Agreement shall be treated as Confidential Information; provided, however, that either of the Parties may disclose the existence and terms of this Agreement to: (i) their respective legal and financial advisors; (ii) their underwriters and their respective counsel, as part of their due diligence in connection with any offering of securities of such Party; (iii) their lenders and their counsel, as part of their due diligence in connection with any financings; (iv) their Affiliates having a need to know; (v) stock exchanges, securities commissions or other similar bodies (including in public filings) or (i) to any governmental investigative or judicial agency pursuant to proceedings over which such agency has jurisdiction, to the extent required by Laws; provided, however, that prior to any such disclosure, the receiving party shall (a) assert the confidential nature of the confidential information to the agency; (b) immediately notify the disclosing party in writing of the agency’s order or request to disclose; and (c) cooperate fully with the disclosing party in protecting against any such disclosure or seeking redaction and/or obtaining a protective order narrowing the scope of the compelled disclosure and protecting its confidentiality.

34.5 The Parties agree that Confidential Information shall be disclosed to only those people within their respective organizations, including Affiliates, who have a need to know the information for the purposes of this Agreement or to those third party consultants, other than those referred to in Article 34.4, and subcontractors who have agreed to be bound by the confidentiality terms contained herein. Nothing herein shall be deemed to permit disclosure of Confidential Information to any of Company’s customers without prior written approval of Company.

34.6 Each Party represents and warrants that it has the right to disclose to the other the information disclosed under this Agreement. Neither Party shall, without consent or approval, at any time disclose to the other Party any information that is confidential or otherwise restricted by reason of any oral, written or implied agreement or other understanding it has with any third party.

34.7 Each Party acknowledges that monetary damages may provide an inadequate remedy in the event of a breach of this Article by the other Party, and each Party shall be entitled to injunctive or other affirmative relief and/or to give notice of default pursuant to this Agreement, or both against the other Party.

34.8 NEITHER PARTY SHALL, WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY, PUBLICLY ANNOUNCE THE EXISTENCE OF THIS AGREEMENT OR DISCLOSE ITS CONTENTS. THIS AGREEMENT AND THE CONTENTS OF THIS AGREEMENT SHALL BE DEEMED THE PROPRIETARY INFORMATION OF BOTH PARTIES AND BE POSSESSED AND USED SUBJECT TO THE TERMS OF THIS ARTICLE 34.

ARTICLE 35 – DEFAULT

35.1 Notwithstanding any other provision of this Agreement, but subject to Article 42.1:

(a) Subject to paragraph (c) below, in the event Supplier shall be in material breach of any of the terms, conditions, or covenants of this Agreement and such breach shall continue for a period of sixty (60) Business Days after the giving of written notice to Supplier thereof by Company, then in addition to all other rights and remedies which Company may have at law or equity or otherwise, Company shall have the right to terminate this Agreement without any charge to or obligation or liability of Company (other than as set forth in Article 13).

(b) Subject to paragraph (c) below, in the event Company shall be in material breach of any of the terms, conditions, or covenants of this Agreement and such breach shall continue for a period of sixty (60) Business Days after the giving of written notice to Company

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thereof by Supplier, then in addition to all other rights and remedies which Supplier may have at law or equity or otherwise, Supplier shall have the right to terminate this Agreement without any charge to or obligation or liability of Supplier.

(c) Prior to issuing a notice of material breach to the other Party in accordance with paragraph (a) or (b) above, as applicable, the notifying party shall have requested an emergency meeting of the Oversight Committee to consider and resolve the claimed material breach. Should the Oversight Committee fail to agree on a resolution to the claimed material breach within ten (10) days of such request, the notifying Party may declare the other Party in material breach and may serve notice in accordance with paragraph (a) or (b) above, as applicable.

ARTICLE 36 – DEVELOPED INFORMATION AND INVENTIONS

36.1 Except as may otherwise be agreed by the Parties, the terms of this Article 36 apply to intellectual property of the Parties used in the performance of the Parties’ respective obligations under this Agreement. Supplier agrees that Supplier shall and, where applicable, shall have Supplier’s Affiliates, employees, consultants, subcontractors (but only those subcontractors permitted pursuant to Section 29.1), representatives or agents (collectively “Supplier Associates”) disclose and furnish promptly to Company all Company IP. Supplier further agrees that all Company IP, other than any Supplier Background Information incorporated therein and all Company Background Information, shall be: (i) solely and exclusively owned (including all right, title and interest thereto) by Company, and Supplier shall take all reasonable actions which Company may request in order to vest and document such ownership in Company, (ii) kept in confidence by Supplier and Supplier Associates in accordance with Article 34, and (iii) used by Supplier and Supplier Associates only for the purposes of performing Supplier’s obligations in accordance with the terms of this Agreement. If such Company IP includes, or requires for its use, any Supplier Background Information, Supplier agrees to grant and hereby grants to Company an irrevocable, non-exclusive, royalty-free, non-transferable, sub-licensable (as provided in Article 36.4) license to use and copy such Supplier Background Information to the extent required for Company to manufacture, distribute, test, repair or service Products. Ownership of the Supplier Background Information shall remain with Supplier. Company agrees to grant and hereby grants to Supplier a revocable (upon termination of this Agreement), non-exclusive, world-wide, royalty-free, non-transferable license to use and copy Company IP and Company Background Information, but only to the extent required for Supplier or Supplier Associates to manufacture, distribute, test, repair or service Products under this Agreement.

36.2 Any Developed IP which is developed jointly by the Parties and which is not Company IP (“Co-Developed IP”) shall be owned jointly by the Parties, each of which shall have an equal undivided joint interest therein. Company and Supplier agree that they shall each have the right to use the Co-Developed IP and grant licenses for the use of the Co-Developed IP without the consent of, and without accounting to, the other party.

36.3 The Parties acknowledge and agree that as between Supplier and Company, Supplier shall solely and exclusively own all right, title and interest in and to all aspects of all Developed IP originated or developed by Supplier or Supplier Associates that is not Company IP or Co-Developed IP (“Supplier IP”). Where Supplier IP is necessary to permit Company to ensure Product continuity, consistency and/or ongoing sources of supply (such Supplier IP being “Supplier Product IP”), Supplier agrees to grant and hereby grants to Company an irrevocable, non-exclusive, royalty-free, non-transferable, sub-licensable (as provided in Article 36.4) license to use and copy such Supplier Product IP, but only to the extent required for Company to manufacture, distribute, test, repair or service Products.

36.4 If Supplier fails to deliver or is unwilling to produce a Product, if Supplier is in breach of this Agreement, if Company terminates this Agreement for cause, or if Company is entitled under Article 42 or any other provision of this Agreement to purchase Products from sources other than

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Supplier, Company may grant a sub-license to the Background Information licensed to it in Article 36.1 and/or a sub-license to the Supplier Product IP licensed to it in Article 36.3, but only for the purpose of any such sub-licensee (“Sublicensee”) manufacturing, distributing, testing, repairing or servicing Products for Company, provided that any Sublicensee of the Supplier Background Information or the Supplier Product IP acknowledges in writing, for the benefit of Supplier, that it will observe and be bound by all of Company’s confidentiality obligations under this Agreement in respect of the sublicensed Supplier Background Information or Supplier Product IP, as the case may be. Supplier Background Information and Supplier IP shall be deemed to be Confidential Information of Supplier pursuant to Article 35.

36.5 The Parties agree that this Article 36 shall be subject to the terms and conditions of any development agreement relating to the subject matter herein, which the Parties may enter into subsequent to the date of this Agreement, to the extent such terms and conditions are inconsistent with terms of this Article 36.

ARTICLE 37 - DOCUMENTATION NEEDED FOR PREFERENTIAL DUTY TREATMENT

37.1 Supplier shall provide Company with a valid, accurately completed certificate of origin prior to the first shipment of Product sufficient to be used by Company as proof of eligibility for any applicable duty preferential treatment programs. Supplier further agrees to cooperate to Company in the substantiation of preferential duty program claims, preparation of responses to customs inquiries, or other treaty claims that arise out of Product shipped under this Agreement or any Order. Supplier shall notify Company prior to making any pricing or sourcing changes for Product that may affect the application of preferential duty treatment programs.

ARTICLE 38 - DUTY DRAWBACK

38.1 Company reserves the right to claim duty drawback on all purchases from Supplier. In the event that Company wishes to exercise this right, the Parties shall determine the feasibility and cost associated with implementing a duty drawback program as a Service in accordance with Article 4.

ARTICLE 39 – ENVIRONMENTAL MANAGEMENT SYSTEMS

39.1 Supplier warrants with respect to Supplier’s manufacturing and repair operations involved in the performance of Supplier’s obligations under this Agreement that it intends no later than three (3) years from the date of acquisition of such manufacturing and repair services to implement elements of an internationally then recognized Environmental Management System (“EMS”) standard, for example ISO 14001: 1996, or the Eco-Management and Audit Scheme (“EMAS”) for certification by an accredited third party registrar; or, where such certification already exists, that it will maintain such certification in good standing with the third party registrar.

39.2 In the event that Company requests Supplier to accelerate the adoption of an EMS standard in order to enable Company to meet a requirement of its customer, the Parties shall negotiate in good faith the timing for achieving such standards or certifications.

39.3 Supplier commits to provide to Company, on a regular basis, environmental performance data on both Products and processes, as may be mutually agreed by the Parties.

39.4 Notwithstanding the foregoing provisions of this Article 39, Supplier shall develop and maintain the records required in Article 40.

ARTICLE 40 – ENVIRONMENTALLY HAZARDOUS SUBSTANCES

40.1 Supplier warrants to Company that none of the substances that have been banned by Company for Products, processes and/or packaging materials, as listed in Specification B71SQM01-1, dated June 9.2006, titled “Supplier Requirements for Control and Reporting of Material Content”, or

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other comparable Specification as set forth in the applicable Product Plan or other agreement of the Parties (as may be modified from time to time by Company through the issuance of an Engineering Change Order in accordance with Article 59.3), are used or will be used by Supplier in the manufacture, processing or packaging of Product supplied to Company, or that it is working to reduce and will, in an expeditious manner, eliminate their use. If Supplier is not the manufacturer of the Material used in the Product, Supplier shall work with the Material vendor to reduce and will, in an expeditious manner, eliminate the use of such substances. Upon request, and at no charge to Company, Supplier shall provide to Company certificates of compliance certifying that its processes, the Products and the packaging and/or packaging Material provided under this Agreement are in compliance with the requirements set forth above in this Article 41.1.

40.2 For those Products where Supplier has any level of design control (including Material and/or vendor selection), Supplier shall:

(a) Use reasonable efforts to minimize the use of environmentally hazardous substances in such Products, processes and packing Materials as listed in Specification B71SQM01-1, dated June 9.2006, titled “Supplier Requirements for Control and Reporting of Material Content”, or other comparable Specification as set forth in the applicable Product Plan or other agreement of the Parties, as may be modified from time to time by Company through the issuance of an Engineering Change Order in accordance with Article 59.3;

(b) Establish and/or maintain a program of tracking the use of environmentally hazardous substances, at a minimum covering the substances referenced in said Specification B71SQM01-1, or other comparable Specification as set forth in the applicable Product Plan or other agreement of the Parties, in any such Products or Services, including any packing materials, provided to Company by Supplier;

(c) Report to Company the use of environmentally hazardous substances, at a minimum covering the substances referenced in said Specification B71SQM01-1, in any Products or Services, including any packing Materials, or other comparable Specification as set forth in the applicable Product Plan or other agreement of the Parties, provided to Company. Updates on usage will be provided to Company by Supplier on a per change basis; and

(d) Upon Company’s request, provide, within a reasonable time frame, information on Materials added to said Specification B71SQM01-1, or other comparable Specification as set forth in the applicable Product Plan, or other agreement of the Parties.

40.3 For those Products that Company declares must be compliant with RoHs and WEEE directives and/or similar governmental directives (the “directives”), Supplier agrees:

(a) As of the earlier of the Effective Date and the effective date(s) of such directives, that Supplier’s processes and such Products and the packaging therefore will be in compliance with the terms and conditions of the directives, which are described on the Andrew Corporation website and which may be changed from time-to-time;

(b) Except to the extent that Company may indicate as to specific vendors that Supplier does not need to do so, that Supplier will, at no charge to Company, use commercially reasonable efforts to collect, on templates provided or approved by Company, material data sheets and/or certificates of compliance with the directives from vendors of the Material and Commercially Purchased Items that Supplier in fulfillment of this Agreement, and that, further, it will use commercially reasonable efforts to assure the accuracy thereof, including the accuracy of any claimed exemptions to compliance;

(c) That with respect to such Products Supplier will provide to Company, upon request or and at no charge to Company, Certificates of Compliance certifying that Supplier’s processes, the

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Products and the packaging and/or packaging Material provided under this Agreement are in compliance with the requirements set forth above in this Article 40.3;

(d) That with respect to such Commercially Purchased Items Supplier will provide to Company, upon request and at no charge to Company, a copy of the vendor’s certificate of compliance collected by Supplier; and

(e) That Supplier will maintain records pursuant to Article 59.6 with respect to its compliance with the requirements of this Article 40.3 for a period no less than seven (7) years. Such records shall include the material data sheets and/or certificates of compliance collected by Supplier.

Unless the Product Plan or Company expressly requires otherwise in writing, for purposes of this clause, Company shall be presumed to have declared compliance with WEEE/RoHS to be required with respect to any Product supplied under this Agreement. Company shall make reasonable efforts to indicate in the Product Plan or other documentation provided to Supplier prior to manufacture of a Product, the scope of compliance with such directives required by Company (e.g., 5-6 vs. 6-6). In any case, however, before manufacturing any specific Product for sale to Company hereunder, Supplier shall confirm whether such compliance is required.

40.4 In the event that Supplier is unable to furnish Products and/or Commercially Purchased Items meeting the requirements of Articles 40.1 – 40.3, or is unable or unwilling to provide certificates of compliance as required therein, Supplier shall promptly inform Company in writing of the reason(s) therefor. Supplier shall not furnish under this Agreement any Product or Commercially Produced Item that is the subject of such a writing, unless and until Company shall give Supplier Company’s written permission to do so.

40.5 If Supplier furnishes any Product or Commercially Purchased Item in violation of the provisions of this Article without approval of Company as provided in Article 40.4, then in addition to all other remedies to which Company may be entitled, Supplier shall bear the expense of any recall that may be necessary and also the expense of implementing a prompt workaround that will eliminate the non-compliance, which may include (i) removing the offending material and substituting compliant material, (ii) removing the prohibited excess of non-compliant material, or (iii) substituting a functionally equivalent item. Supplier shall also bear the expense of correcting the non-compliance or substituting functionally equivalent, compliant, products going forward. Further, notwithstanding any limitation that may exist therein, Supplier shall indemnify, defend and hold harmless, Company, Ordering Companies, and their Affiliates and their customers against any claims that may arisen as a result of Supplier’s breach of this Article 40. The right to indemnity hereunder includes the right to recover any damages or penalties that may be required to pay to customers to whom the non-compliant material was furnished.

ARTICLE 41 - EXPORT CONTROL

41.1 Supplier shall not use, distribute, transfer or transmit any Products, software or technical information (even if incorporated into other Products) provided to it by Company under this Agreement except in compliance with all applicable export laws and regulations (the “Export Laws”). Supplier shall not, directly or indirectly, export or re-export the following items to any country, without the appropriate export authorization, as specified in the applicable Export Laws: (a) software or technical data disclosed or provided to Supplier by Company or Company’s Affiliates; or (b) the direct product of such software or technical data. The obligations stated in this Article 41.1 will survive the expiration, cancellation or termination of this Agreement or any other related agreement.

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ARTICLE 42 - FORCE MAJEURE

42.1 Neither Party shall be held responsible for any delay or failure in performance of any part of this Agreement to the extent such delay or failure is caused by fire, flood, strike, civil, governmental or military authority, act of God, or other similar causes beyond its control and without the fault or negligence of the delayed or non-performing Party or its subcontractors. Supplier’s liability for loss of or damage to Company’s Product, Material or Tooling in Supplier’s possession or control shall not be modified by this Article 42.1. When a Party’s delay or nonperformance due to a cause referred to in this Article 42.1 continues or may be reasonably expected to continue for a period of at least thirty (30) Business Days, the other Party may terminate, at no charge except for the expressed liabilities set forth in Article 13, any affected Order under this Agreement and Company may purchase the Products subject to such terminated Order from a source other than Supplier. Any failure by Company to comply with its Purchase Commitment as a result of purchases of Products from a source other than Supplier pursuant to this Article 42.1 shall be subject to the applicable Attachment C. When a Party’s delay or nonperformance due to a cause referred to in this Article 42.1 continues or may be reasonably expected to continue for a period of at least ninety (90) Business Days, the other Party may terminate this Agreement, at no charge except for the expressed liabilities set forth in Article 13, the Agreement.

ARTICLE 43 - IDENTIFICATION

43.1 Neither Party shall, without the other Party’s prior written consent or request as set out in Article 50.2, make public use of any trade name, trademark, logo, or any other designation or drawing of such other Party or its Affiliates.

ARTICLE 44 – INDEMNITY

44.1 Supplier shall indemnify, defend and hold harmless Company and its Affiliates against claims and actions brought by or on behalf of third parties in respect of any Losses to such third parties that may arise or be asserted, based directly or indirectly, upon death or personal injury or damage of any kind to any person or property claimed to have resulted from any defect in Supplier’s or its subcontractor’s’ workmanship or defect in any item or Service furnished under this Agreement (excluding defects caused by or arising, directly or indirectly, out of any Specifications or other Company Proprietary Information supplied or written instructions given by, or on behalf of, the Company), or any defect in any of the items (except to the extent that pursuant to the provisions of the Agreement Supplier is not responsible for such defect) sold to, or Services supplied to, Company or any other entity hereunder, or due to failure to comply with the Specifications established hereunder. For purposes hereof, the Parties agree that Losses includes economic loss, including the cost of rework or recalls.

44.2 Company shall indemnify, defend and hold harmless Supplier and its Affiliates against all claims and actions brought by or on behalf of third parties (other than Affiliates of Supplier) in respect of any Losses to such third parties that may arise or be asserted, based directly or indirectly, upon death or personal injury or damage of any kind to any person or property claimed to have resulted from the gross negligence or willful acts of Company or where Supplier has complied with the Specifications and/or with the Company Proprietary Information supplied and Company’s manufacturing processes and written instructions given by, or on behalf of, the Company in manufacturing the Product, except to the extent that any such Losses are attributable to the gross negligence or willful act(s) of Supplier or its Affiliates, and their respective officers, employees or agents.

44.3 The foregoing indemnities are in addition to any specific indemnity set forth in any of the provisions of this Agreement.

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ARTICLE 45 – INFRINGEMENT INDEMNITY

45.1 Supplier shall indemnify, defend and save harmless Company, its Affiliates and their customers, agents, officers, directors, and employees (all referred to in this Article 45.1 as “Company”) from and against any Losses that result from any claims (referred to in this Article 45.1 as “Infringement Claims”) brought against Company by or on behalf of a third party,, arising from or in connection with the violation of a third party’s proprietary rights, including trade-secret, proprietary-information, trademark, copyright or patent rights, in connection with the performance by Supplier of its obligations under this Agreement, except for such claims for which Company shall indemnify Supplier set out in Article 45.2. Supplier shall be solely in control of defending or settling, at its own expense, any demand, action, or suit on any such Infringement Claim. Company shall cooperate in good faith and assist Supplier, at Supplier’s expense, to defend any such Infringement Claim, and Company shall make no statement or take any action which might hamper or undermine Supplier’s defense or settlement thereof. If Supplier fails to assume control of or defend any Infringement Claim as provided herein within a reasonable time, Company shall be entitled to assume such control. In such event, Supplier shall be bound by the results obtained by Company with respect to such Infringement Claim.

45.2 Supplier’s obligation to indemnify under this Article 45, does not extend to Infringement Claims that arise: (i) from the compliance by Supplier with written Specifications furnished or supplied or designated by Company; (ii) from the combination by Company of a Product with other equipment, products or apparatus not furnished by Supplier; (iii) from the material modification of Product by Company made after delivery by Supplier; or (iv) from the compliance by Supplier with any process or method of manufacture, assembly or testing at the express written request of Company.

ARTICLE 46– INSURANCE

46.1    (a) Supplier shall maintain and, unless the Parties otherwise agree, cause Supplier’s subcontractors to maintain the following minimum insurance limits and coverages during the term of this Agreement:

(i) Worker’s compensation insurance as prescribed by the law of the State or nation in which work is performed by Supplier or Supplier’s subcontractors under this Agreement; and employer’s liability insurance with limits of at least $500,000 for each occurrence;

(ii) Automobile liability insurance, if the use of motor vehicles is required in connection with the performance of Supplier’s obligations under this Agreement, with limits of at least $1,000,000 combined single limit for bodily injury and property damage for each occurrence;

(iii) Commercial general liability (CGL) ISO 1988 or later occurrence form of insurance including contractual liability, products/completed operations with limits of at least $1,000,000 combined single limit for bodily injury and property damage liability for each occurrence;

(iv) Excess/umbrella liability insurance with limits of at least $10,000,000 per occurrence and in the aggregate, following form to primary employer’s liability, automobile liability and commercial general liability insurance policies;

(v) All-risk property insurance including business interruption in an amount equal to one hundred percent (100%) of the replacement cost value of any building and/or equipment involved under this Agreement. Company shall be named as a loss payee as their interests may appear under this Agreement; and

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(vi) Where applicable, transit insurance including inland and ocean cargo with limits equal to one hundred percent (100%) of the replacement cost value of the property being shipped.

(b) All such insurance should be primary and non-contributory and is required to respond and pay prior to any other insurance or self-insurance available. Any other coverage available to Supplier shall apply on an excess basis. Supplier and its insurer(s) and anyone claiming by, through, under or on Supplier’s behalf shall have no claim, right of action or right of subrogation against Company and its customers based upon any loss or liability insured against under the foregoing insurance.

(c) Supplier shall, and shall cause its subcontractors to, furnish prior to the start of work by Supplier and/or Supplier’s subcontractors under this Agreement, Certificates of Insurance or adequate proof of the foregoing insurance including, if specifically requested by Company, copies of the endorsements and insurance policies. Company shall be notified at least thirty (30) Business Days prior to cancellation of or change in any such policy. Insurance companies providing such coverage shall be rated by A.M. Best with at least an A-rating.

46.2 Supplier shall allow Company’s representatives and representatives of Company’s insurance carrier to inspect Supplier’s plant(s) at which work is performed by Supplier under this Agreement at all reasonable times for fire, flood and other hazards to Company’s property or to any other property for which Company is or may be responsible or that Company must rely upon for the performance of this Agreement.

ARTICLE 47 - INVOICING

47.1 Except as provided in Article 47.4, Orders will be invoiced based on Price in effect at the time of the scheduled delivery under such Order and shall be paid in accordance with Article 8. Supplier herein expressly agrees and represents that it will neither (i) withhold deliveries beyond the scheduled delivery date to benefit from any upcoming price increase, or (ii) advance delivery before the scheduled delivery date to deprive Company of an upcoming price decrease, except to the extent Company may in writing request such delayed or advanced delivery.

47.2 Unless otherwise specified in an Order, for each delivery or shipment of Products or Commercially Purchased Items, Supplier shall: (a) render an original invoice to the ordering party pursuant to the terms hereof, showing Agreement and Order number and all other information required to be placed on packing memoranda pursuant to Article 19.1, including serial numbers; and (b) mail invoices to the address shown on the Order. Unless otherwise specified in an Order, if prepayment of transportation charges is authorized, Supplier shall include the transportation charges from the delivery point to the destination as a separate item on the invoice, stating the name of the carrier used.

47.3 Supplier’s invoices for every international shipment of Product or Commercially Purchased Items will also include the following information for each item shipped: (a) a complete noun description in English (unless otherwise specified in the Order) consistent with the harmonized tariff schedule, (b) a statement as to the country of origin of the Product or Commercially Purchased Item, (c) Andrew’s Part Number for the Product or Commercially Purchased Item, (d) the price paid or payable by Company for the Product or Commercially Purchase Item shipped, (e) related assists, (f) an itemization of all charges for services related to the international shipment of the Product or Commercially Purchased Item and whether these charges are included in the price paid or payable, (g) Supplier’s identification number, or in the absence of such number, the full address of Supplier, (h) the terms of sale, and (j) if required by the Law of the destination country, a list of all serial numbers for Products shipped.

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47.4 Unless otherwise specified in an Order, Supplier’s invoices for Services shall be rendered upon completion of the Services as defined in the applicable Statement of Work or Order and shall be payable in accordance with the terms set forth in Article 8 when the Services as defined in the applicable Statement of Work or Order have been performed to the reasonable satisfaction of Company.

ARTICLE 48 - LIMITATION OF LIABILITY

48.1 EXCEPT AS MAY BE PROVIDED IN ANY EXPRESS REMEDY PROVISIONS IN THIS AGREEMENT, INCLUDING ANY INDEMNITY LIQUIDATED DAMAGE PROVISIONS, NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS OR LOST REVENUES OF THE OTHER PARTY) OF THE OTHER PARTY, ITS SUCCESSORS, ASSIGNS OR THEIR RESPECTIVE AFFILIATES, AS A RESULT OF OR ARISING FROM THIS AGREEMENT, REGARDLESS OF WHETHER SUCH LIABILITY ARISES IN TORT, CONTRACT, BREACH OF WARRANTY, INDEMNIFICATION OR OTHERWISE.

48.2 Notwithstanding Article 48.1, if a Party (the terminating Party) purports to terminate this Agreement for any reason other than pursuant to Articles 32, 35 or 42 or any other express right of termination set out in this Agreement, or otherwise purports to or does repudiate this Agreement, then the limitation of liability provided for in Article 48.1 shall not apply in respect of any claim made by the other Party against the terminating Party. For certainty, Article 48.1 does not in any way limit any amounts which are due and payable by one Party to the other Party pursuant to the terms and conditions of this Agreement, including, without limitation, Attachments C.

48.3 Each Party shall use commercially reasonable efforts to notify the other Party in accordance with Article 27 upon becoming aware of any claim under this Agreement and agrees to take commercially reasonable steps to mitigate any Losses that may arise from such claims.

ARTICLE 49 – MANUFACTURING RIGHTS/DISPOSITION OF UNIQUE EQUIPMENT

49.1 If at any time during the Term of this Agreement, Supplier is unable or unwilling to (a) deliver the Product requested by Company in full compliance with Company’s Specifications and/or (b) meet, in all material respects, the delivery requirements of Company and at prices which conform to the terms of this Agreement and/or (c) address Company’s business need (market or otherwise driven) to establish localized manufacturing in certain countries or regions of the world or, (d) upon expiration or termination of this Agreement, Supplier agrees to sell to Company at Company’s request any special tooling or equipment, including test equipment, which has been purchased by Supplier from Company solely for the purpose of manufacturing Products (provided that Supplier’s ability to sell such tooling and equipment to Company is not contractually limited or restricted), and which is used by Supplier solely for the manufacture of those Products that Supplier has been unable or unwilling to deliver as described above in this Article 51.1. Supplier agrees to sell to Company at Company’s request any other special tooling or equipment, including test equipment, which Supplier owns and is used uniquely by Supplier for the manufacture of Products for Company, providing that Supplier does not reasonably anticipate that it shall need such tooling or equipment for the manufacture of products for any other customer within the subsequent six (6) months. Supplier also agrees to sell to Company at Company’s request, Material that is uniquely required to either manufacture the Product or to have the requested Product manufactured elsewhere. Prices charged by Supplier to Company for such tooling, equipment or Material shall be [*]. Such tooling, equipment (including test equipment) or Material shall be removed on a mutually agreeable basis without a significant delay from Supplier’s facility in a manner which will minimize interruptions to Supplier’s obligations and commitments to Company and other customers of Supplier.

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49.2 Supplier hereby agrees to maintain, in working condition for the Term of this Agreement, any such tooling or test equipment purchased from Company that Supplier has continued to use, performing all routine and other maintenance as may be required in order to maintain the tooling and test equipment at the same level of functionality as when Supplier purchased such tooling and test equipment from Company. During the Term of this Agreement, Supplier shall not sell such tooling and test equipment to any third party without the prior written consent of Company and Company shall always have the right of first refusal to repurchase the tooling and test equipment at [*]. Company shall not incur any additional expenses or costs as the result of the sale of any equipment initiated by Supplier.

49.3 In the event that Company terminates this Agreement prior to end of the Term for any reason other than for the fault of Supplier as provided in Articles 32 and 36 or any other Article in this Agreement, Company agrees to purchase from Supplier at Supplier’s request any special tooling or equipment, including test equipment, that Supplier owns and is unique to the manufacture of Products, provided such items are in good working order, reasonable wear and tear excepted. Prices charged by Supplier to Company for such tooling or equipment shall be [*]. Such tooling or equipment (including test equipment) shall be removed on a mutually agreeable basis without a significant delay from Supplier’s facility in a manner which will minimize interruptions to Supplier’s obligations and commitments to Company and other customers of Supplier.

ARTICLE 50 – MARKING

50.1 All Products or Commercially Purchased Items furnished under this Agreement shall be marked for identification purposes in accordance with the Product and packaging Specifications as set forth by Company’s ordering location or elsewhere in this Agreement and shall indicate the following: (a) Product/serial number; (b) month and year of manufacture; and (c) country of origin. Notwithstanding any Specification of any customer of Company referred to in this Agreement, the name of such customer of Company or any other entity (other than Company) shall not be affixed to any Product or Commercially Purchased Item without the written approval of Company.

50.2 Upon Company’s written request, trademarks, trade names, insignia, symbols, decorative designs or packaging designs designated by Company, or evidences of Company’s inspection (each, “Insignia”) shall be properly affixed by Supplier to the Product furnished or its packaging. Such Insignia shall not be affixed, used or otherwise displayed on the Product furnished or in connection therewith without written approval by Company. The manner in which such Insignia will be affixed must be approved by Company in accordance with standards established by Company. Company shall retain all right, title and interest in any and all packaging designs, finished artwork and separations furnished to Supplier. This clause does not reduce or modify Supplier’s obligations under Article 34 and Article 43.

ARTICLE 51 – OFFSET CREDITS

51.1 Orders issued pursuant to this Agreement are placed with the expectation of current and/or anticipated future offset and localization obligations of Company or Ordering Companies or their designated assignees to the government of the country in which Company’s (or the relevant Ordering Company’s) customer resides and that requires the provision of offset and localization. Supplier agrees to provide reasonable assistance to Company or Ordering Companies or their designated assignees in any reasonable efforts to secure offset credit from the government of the country in which Company’s (or the relevant Ordering Company’s) customer resides in an amount equal to the value of the Orders placed under this Agreement.

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ARTICLE 52 - OFFSETTING

52.1 Any claim of Supplier under this Agreement or any Order is subject to setoff or recoupment for any present or future claims that Company, and of its Affiliates and any Ordering Entity may have against Supplier.

ARTICLE 53 - ORDERING COMPANIES AND APPROVED PURCHASERS

53.1 Company may designate in writing from time to time any of its Affiliates as an “Ordering Company” under this Agreement. Notwithstanding anything to the contrary contained in this Agreement, Company may revoke the designation of any entity as an Ordering Company at any time.

53.2 Each Ordering Company shall be eligible to order Products, Commercially Purchased Items and Services on the same applicable terms and conditions, including the same prices, as set forth in this Agreement; provided that (i) such Ordering Company shall have executed and delivered to Supplier an acknowledgement in the form of Attachment N, (ii) such Ordering Company shall have executed and delivered to Supplier such further agreements, documents or instruments as Supplier may request, acting reasonably, and (iii) Supplier and such Ordering Company shall have entered into such additional agreements, instruments and other writings as may be necessary under any applicable Laws. Any reference to Company in this Agreement shall, where applicable, be deemed to refer to any Ordering Company in respect of which the conditions in this Article 53.2 have been fulfilled.

53.3 Supplier agrees to permit Company to designate in writing any person as an “Approved Purchaser” to purchase Products, Commercially Purchased Items and Services from Supplier from time to time pursuant to terms and conditions to be negotiated by the Approved Purchaser and Supplier. In the event that such terms and conditions are not negotiated, Supplier’s standard terms and conditions for the sale of products and services shall apply. Any purchase order issued by an Approved Purchaser to Supplier shall be issued outside of, and will not be subject to, any terms and conditions of this Agreement, and shall not be accepted by Supplier unless and until the Approved Purchaser shall have assured Supplier in writing that its purchases are for the benefit of or transfer to Company, an Affiliate of Company or a customer of one of them. Such purchases by Approved Purchasers from Supplier shall be at the prices determined in accordance with this Agreement. Supplier shall look only to the Approved Purchaser for performance of its respective obligations under such purchase orders between Supplier and the Approved Purchaser. Company may revoke the designation of any entity as an Approved Purchaser at any time.

With respect to those items purchased by Approved Purchasers, Company (or any Affiliate of Company) shall be entitled to all rights under this Agreement (including, without limitation, indemnity, epidemic failure and warranty protection), as if Andrew had purchased such Products directly from Supplier hereunder. All quantities of the items purchased by Approved Purchasers at the prices set forth in this Agreement shall accrue against any Company commitment to purchase Products that is or Company and Supplier may agree becomes a part of this Agreement.

53.4 Supplier shall look solely to the Ordering Entity or Approved Purchaser submitting an Order hereunder for payment for all Products, Commercially Purchased Items or Services procured pursuant to such Order and as to any disputed matter related thereto.

ARTICLE 54 – COMPLIANCE WITH LAWS

54.1 Each Party and its agents shall, and shall cause its contractors and subcontractors to, comply in performance of its obligations under this Agreement at their own expense with all applicable Laws.

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ARTICLE 55 – PACKING, LABELING AND SERIALIZATION

55.1 Supplier shall place Company’s specified bar code labels on all delivery and shipping packages and containers for Products and Commercially Purchased Items delivered or shipped under this Agreement.

55.2 Products and Commercially Purchased Items purchased, repaired, replaced, or refurbished under this Agreement shall be packaged in accordance with the applicable Product Plan or as otherwise mutually agreed.

55.3 For the purpose of tracking Warranty and repair availability on all Products provided by Supplier, Supplier shall establish and maintain a computerized tracking system acceptable to Company, acting reasonably. Within sixty (60) days of the date of this Agreement, the Parties shall agree on a Specification for such system. Such Specification may be modified from time to time by Company through the issuance of an Engineering Change Order in accordance with Article 59.3.

ARTICLE 56 - PROCESS CERTIFICATION

56.1 Company has the right, subject to the terms of Article 30, to review, inspect, and evaluate Supplier’s Material and supplies, Supplier’s facilities at which Supplier manufactures Products or Company under this Agreement, including Material management systems and supply line management processes and procedures and Supplier’s sources for Material and supplies to the extent related to Supplier’s performance of its obligations under this Agreement. Subject to the terms of Article 30, Company may request that Supplier extend the foregoing right to any customer of Company designated by it, or any designated customer of such a Company customer, provided that any such extension shall be at Supplier’s discretion, acting reasonably. Company has the right to specify the types of Material used in the manufacture and/or repair of the Product and/or suppliers of Material at any time during the Term of this Agreement. If such selection of Material impacts the previously agreed to Product prices, such subsequent Product prices shall be negotiated in good faith and mutually agreed to by the Parties. All changes to Material, supplies, sites of manufacture and repair, and vendors must be approved in writing by Company. In regard to Supplier’s manufacturing and repair process for the Products, Company reserves the right, subject to the terms of Article 30, to perform periodic quality audits, surveys, evaluations, and approvals, including, but not limited to, analysis of each manufacturing, assembly, and/or test position for acceptability of procedures, equipment calibration, test software including change control, and operator performance, as well as evaluation of quality control/quality assurance and data collection and analysis procedures, to the extent related to Supplier’s performance of its obligations under this Agreement.

56.2 Supplier shall conduct appropriate incoming inspection of Material used in the manufacture and repair of Products in accordance with Company specifications and shall maintain a supplier control, approval, and corrective action process. Such standard practices shall be subject to audit and approval by Company and Company may require Supplier to implement recommended changes in order to facilitate Supplier’s manufacture of conforming Product. Such practices may be modified from time to time to address specific conditions as requested by Company.

56.3 Subject to compliance with Article 30, Supplier agrees to provide Company reasonable access, so as not to interrupt Supplier’s production processes, to applicable test equipment at Supplier’s facilities at which Products are manufactured under this Agreement in order for Company to (a) do test program development or (b) do final prove-in or acceptance of any test programs.

ARTICLE 57 – PRODUCT CONFORMANCE

57.1 Supplier shall establish and maintain agreements with product safety certification bodies or agencies and/or their assigned representatives as required to support on-going product safety compliances for Products manufactured for Company under this Agreement. The product safety

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certification of Products is the responsibility of Company, unless otherwise specifically agreed by the Parties. Compliance documentation required to support on-going compliance inspections at Supplier’s manufacturing location(s) will be provided and maintained by Company. Costs associated with such inspection agreements and for the periodic on-going inspections are the responsibility of the Company. Supplier shall have in place a quality process or program that specifically focuses on maintaining the on-going product safety compliance of Company’s certified Products.

57.2 Variations or issues found during product compliance audits by external agencies, bodies or their assigned representatives are to be immediately forwarded to the organization noted as the applicant on the certification documentation or other Company personnel as specifically directed. Supplier shall include such variations or issues as found in these inspections in its quality system action register or tracking system.

57.3 Supplier agrees to conform to any additional Specifications that Company may require in order for Company to meet special and unique requirements set by Company’s customers. In such an event, any additional cost incurred by Supplier to conform to such additional Specifications shall be treated in accordance with Article 7.

ARTICLE 58 – PRODUCT DOCUMENTATION

58.1 Company may furnish, or instruct Supplier to acquire from Company’s designated documentation vendor at Company’s prices and expense Product documentation, and any changes thereto, as described in the Specifications. Costs for such Product documentation shall be reflected in the Product price provided the Product documentation is included in the Product BOM. Otherwise, the costs for such Product documentation shall be paid separately by Company to Supplier.

ARTICLE 59 - PRODUCT/SPECIFICATION/PROCESS CHANGES

59.1 Supplier shall not make any changes to the Products, Specifications or BOM (including engineering changes which affect the Product configurations) or create enhancements to the Products providing additional features, functions or performance capabilities (such changes and enhancements referred to collectively in this Article 59.1 as “Change(s)”), without Company’s prior written consent. Supplier shall promptly provide Company with written notice of any such proposed Changes by Supplier. Such notice shall include a summary of the likely impacts of the Change, including likely impacts on pricing, delivery and on the fit, form or function of the Product. Company shall attempt to notify Supplier, within ten (10) days of receipt of Supplier’s Change request, of Company’s documented approval or disapproval. If Company agrees to Supplier’s proposed Change, all Product affected by the Change and shipped after the effective date of the Change shall conform to the Change. Any such Change created by Supplier, in whole or in part, shall remain the exclusive property of Company, if not otherwise agreed by the Parties. For certainty, ownership of any intellectual property arising in connection with any Change will be determined in accordance with the applicable terms of this Agreement.

59.2 Supplier shall not make any process changes that affect the form, fit or function of the Product, or adversely affect the quality, reliability, or cost of the Product, or relocate the manufacture or repair of Product to another Supplier location without prior written consent of Company (“Process Changes”), which consent shall not be unreasonably withheld. If Company, in its sole discretion, does not agree to the Process Change and Supplier elects to proceed with the Process Change, Supplier shall be in material breach of this Agreement. In such an event, in addition to all other rights and remedies at law or equity or otherwise, Company shall have the right to terminate any or all Orders for Product affected by such Process Change. Company may purchase the terminated Product from a source other than Supplier by invoking all of its rights under this Agreement, including, but not limited to, Article 49. Any failure by Company to comply with its Purchase Commitment as a result of purchases of Products from a source other than Supplier pursuant to this Article 59.2 shall be subject to any applicable Attachment C.

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59.3 Company may at any time during the manufacture or repair of Product by Supplier require modifications of or deviations to the Specifications (each, an “Engineering Change Order”); provided, however, that Supplier shall have, after receipt of such Engineering Change Order and before being required to supply Product in conformance with such Engineering Change Order, a reasonable period of time to implement such Engineering Change Order. Upon receipt of an Engineering Change Order from Company, Supplier shall provide within two (2) days to Company the date by which the Engineering Change Order can be implemented and any Material liability for which Company is responsible for pursuant to Article 13 of this Agreement. Any price revision of Product as a result of such Engineering Change Order will be subject to good faith negotiations among the Parties. Notwithstanding any thing in this Agreement, including this Article 59, to the contrary, Supplier shall make no charges or seek any price revision for effecting any Engineering Change Order noticed to Supplier during the first quarter following the Effective Date. During such first quarter, the Parties shall evaluate the number of and costs related thereto experienced by Supplier. The Parties shall, acting reasonably, mutually agree on how to treat Engineering Change Order activity for the second quarter and going forward based on the amount of Engineering Change Orders and resulting costs.

59.4 Supplier shall not make any software or hardware related changes to Supplier’s information systems that would impede previously established software or hardware interface(s) with Company’s or Company’s customers’ information systems, without prior written approval of Company, which approval shall not be unreasonably withheld.

59.5 Subject to Article 30, Company shall have the right to perform an on-site assessment, upon Company’s or Supplier’s notification to the other party of such Process Changes or Change(s) identified in Articles 59.1 and 59.2. Supplier shall be solely responsible for any liability associated with any such Process Changes or Changes made by Supplier without the written consent of Company.

59.6 At no charge to Company, Supplier agrees to establish a traceability process to Product level for all of its facilities at which it manufactures Products for Company under this Agreement. This process shall include a procedure that defines the requirements for preserving the identity and origin of Products and provides the capability to isolate and recall suspect Products from use and trace the cause of failure to specific lots or units of Products. Further, such process shall include the identification of specific Printed Circuit Board Assemblies to the finished Products in which they have been incorporated. Company may request Supplier to provide additional information or to implement an integrated traceability system, subject to charges, which shall be mutually agreed before Supplier commences to provide such information. In this regard, Supplier agrees that upon request of Company Supplier will provide a quote for modification of its processes to include identification of filter housings, by lot code, to the final Products in which they have been incorporated.

ARTICLE 60 – REGISTRATION AND REGISTRATION STANDARDS

60.1 When Products furnished under this Agreement are subject to any in-country certification and filing procedures required for countries in which the Products are to be sold, Supplier shall adhere to Specifications and test instructions for such Products to ensure compliance governing labeling and requirements of Company’s customers. Company may periodically perform on-going compliance re-testing as defined by Company. Supplier will establish with Company a quality control program to assure that Products shipped by Supplier under this Agreement comply with the manufacturing Specifications and test instructions.

60.1 Nothing in this Article shall be deemed to diminish or otherwise limit Supplier’s obligations under Article 23 or any other Article of this Agreement.

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ARTICLE 61- RELEASES VOID

61.1 Neither party shall require (a) waivers or releases of any personal rights or (b) execution of documents which conflict with the terms of this Agreement from employees, representatives or customers of the other in connection with visits to its premises and both Parties agree that no such releases, waivers or documents shall be pleaded by them or third persons in any action or proceeding relating to this Agreement.

ARTICLE 62 – RULES OF CONSTRUCTION REGARDING TIME

62.1 In this Agreement:

(a) time periods within which a payment is to be made or any other action is to be taken hereunder shall be calculated excluding the day on which the period commences and including the day on which the period ends; and

(b) whenever any payment to be made or action to be taken hereunder is required to be made or taken on a day other than a Business Day, such payment shall be made or action taken on the next following Business Day.

ARTICLE 63 - SURVIVAL OF OBLIGATIONS/SEVERABILITY

63.1 The obligations of the Parties under this Agreement, which by their nature would continue beyond the termination, cancellation or expiration of this Agreement, shall survive termination, cancellation or expiration of this Agreement.

63.2 If any part, term, condition or provision in this Agreement shall be held to be invalid or unenforceable, the remaining portions of this Agreement shall remain in effect. In the event such invalid or unenforceable provision is an essential and material element of this Agreement, the Parties shall promptly negotiate a replacement provision.

ARTICLE 64 – TAXES, DUTIES AND INSURANCE CONTRIBUTIONS

64.1 Except as otherwise provided in this Agreement, and unless otherwise agreed to by the Parties, all duties (excluding any duties or fees relating to the shipment of Products or Commercially Purchased Items), taxes, and all social insurance contributions arising out of or in connection with Supplier’s performance of this Agreement will be paid by Supplier. The Parties agree that the prices or rates stated herein include all such charges and that such prices or rates will not be changed hereafter as a result of Supplier’s failure to include therein any applicable duties, taxes or insurance contributions. Supplier shall indemnify and hold Company and its Affiliates harmless from its failure to make such payment or contributions.

64.2 Company shall be responsible for all sales, value added or other similar types of transfer taxes (referred to herein in this Article 64.2 collectively as “Transfer Taxes”) with respect to the prices paid for Products, Commercially Purchased Items or amounts paid for Services under this Agreement, and Company agrees to reimburse Supplier for any such Transfer Taxes paid by Supplier, provided that Supplier shall provide Company with evidence of payment thereof. Supplier will not charge an otherwise applicable Transfer Tax if the Product, Commercially Purchased Item or Services pricing is exempt from Transfer Tax and the Company furnishes to Supplier a valid exemption certificate. In particular regard to value added taxes or other similar taxes on turnover and related charges, Supplier will charge and Company will pay any particular VAT over and above the stated prices for Products, Commercially Purchased Items and Services. If Supplier is required by Law to charge VAT, Supplier will ensure its invoices are in the proper form to enable Company to claim input VAT deductions. If Supplier does not need to charge VAT, but Company is required by Law to account for such VAT (for example, where a “reverse charge” procedure applies), Company accepts all responsibility and liability for accounting for the VAT

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properly. Taxes payable by Company shall be billed as separate items on Supplier’s invoices and shall not be included in Supplier’s prices or otherwise compensated pursuant to any other provisions of this Agreement.

64.3 Subject to the provisions of Articles 7 and 66.2, Supplier shall be responsible for all other Taxes. Notwithstanding any other provision of this Agreement, Supplier shall be solely liable for Taxes based on Supplier’s net or gross income or Taxes resulting from Article 54.1. Supplier shall indemnify and hold the Company and its Affiliates harmless for Supplier’s failure to timely pay or withhold Taxes resulting from Supplier’s performance under this Agreement.

64.4 In order for Company to qualify for tax benefits on Products exported from the United States by Company, Supplier shall, upon request by Company, provide Company with documentation, within forty-five (45) days of such request, that identifies and substantiates the FMV of the Product content which is manufactured by Supplier or purchased by Supplier from manufacturers outside of the United States. If Company shall have requested the aforementioned documentation, Supplier shall provide Company with timely notice if Supplier has knowledge of any information that would cause the FMV of the Product content manufactured by Supplier or purchased by Supplier from manufacturers outside of the United States to either change by ten percent (10%) or exceed fifty percent (50%) of the selling price charged to Company for each Product being reported.

ARTICLE 65 – TEST SCOPE/CALIBRATION OF EQUIPMENT

65.1 Unless otherwise agreed to by the Parties, Supplier shall manage the execution of the test process as specified by Company for each Product purchased pursuant to this Agreement, which includes Supplier testing the Product, providing test capacity planning, and performing preventative maintenance on the required test equipment. Supplier shall consider upside volume percentages, preventative maintenance time, the addition of New Products and Successor Products, and holding appropriate spare parts when developing its test capacity plan. Supplier will provide standard equipment (i.e., network analyzers) to support Company’s manufacturing requirements at no separate charge to Company. To the extent that Company may request that Supplier obtain and maintain more equipment than necessary for such support, the Parties shall mutually agree upon the timing and responsibility for the costs of deploying such equipment before such equipment is purchased and deployed. The Company will consign unique test equipment to Supplier to support Company’s manufacturing requirements in accordance with Article 66. Prior to fabricating or procuring any test equipment that is unique to the manufacture of Products, Supplier agrees to review such plans with Company and obtain Company’s written approval to proceed. Supplier agrees that all test equipment used in the production of Products shall be subject to the terms set forth in Article 36 and Article 49.

65.2 Supplier shall perform each and every test in conformance to the process and for the quantities identified in the applicable Specification unless mutually agreed to by the Parties otherwise. All Products delivered to Company and/or its customers under this Agreement shall have passed all applicable tests in such Specification. Company shall have the right to require Supplier to upgrade its standard test equipment at no charge to Company in order to conform to requirements of the Specification.

65.3 Company shall review all fixtures and programs to assure their quality and reliability. Supplier shall notify Company prior to implementing any change that would impact the test Specification.

65.4 Supplier shall (i) make periodic inspection/calibration of all test and other equipment used in the manufacture, test and repair of Products, including Company Consigned Equipment, (ii) maintain adequate equipment inspection/calibration reports and Product test documents, and (iii) make such documents available to Company upon reasonable request.

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ARTICLE 66 – TITLE TO MATERIAL AND SPECIAL TOOLING AND EQUIPMENT CONSIGNED BY COMPANY

66.1 Supplier acknowledges and agrees that unless otherwise agreed, Company has and shall have at all times all right, title and interest in Material or Commercially Purchased Items furnished at no charge, directly or indirectly, to Supplier by Company under this Agreement (“Company Consigned Material”). Supplier shall, within five (5) Business Days of receipt of any Company Consigned Material, notify Company of any claims for quantity variation or quality problems in the Company Consigned Material furnished to Supplier. Supplier assumes responsibility for any loss or damage to such Company Consigned Material and shall be liable for the full actual value of the Company Consigned Material with the exception of loss due to normal waste, shrinkage, breakage or other spoilage, reduction in moisture content, etc. Supplier shall store the Company Consigned Material safely, indoors in protected areas approved by Company at Supplier’s facility. Wherever practicable, the Company Consigned Material shall be kept segregated in an area marked “PROPERTY OF ANDREW” (such other entity as Company may direct). If Supplier removes all or any part of the Company Consigned Material from one building to another, Supplier shall continue to be responsible for loss and damage and Supplier shall give Company at least thirty (30) Business Days advance notice of the removal except when the removal is required during Supplier’s manufacturing process or to protect the Company Consigned Material from damage or loss.

66.2 Supplier acknowledges and agrees that Company has and shall have at all times during the Term of this Agreement all right, title and interest in the special tooling, fixtures, molds, dies, jigs, production machinery, assembly machinery, testing equipment, and related items (collectively, Company Consigned Tool(s)”) owned and furnished at no cost by Company to Supplier, or tools that Company has fully paid Supplier to develop, or tools that are co-developed at Company’s expense for use under this Agreement, any Order or subsequent Agreements, if any. Any Company Consigned Tools supplied by Company to Supplier must be in good working order and comply with all applicable country-specific safety requirements, codes and standards at the time such equipment is delivered. Supplier shall at no charge to Company:

(a) Be responsible for the safekeeping of the Company Consigned Tools, assume all risks of loss or damage to such tools and be liable for the replacement value of such tools except for reasonable wear and tear;

(b) Maintain and use such tools in accordance with all applicable country-specific safety requirements, codes or standards, Supplier agrees to indemnify and hold harmless Company and Company’s customers from and against any and all Losses (including but not limited to claims resulting from injuries or death to persons or damage to property) in any way arising out of or resulting from the maintenance, ownership, possession, operation, use, condition, storage, or movement of such tools or any accident in connection therewith;

(c) Permanently mark or if impracticable to do so, affix labeling stating that such tools are the property of Company or such Affiliate of Company as Company my direct.;

(d) Store such Tools, when not in use, on racks or in sections of Supplier’s plant(s) located at Supplier’s factory of manufacture, marked “PROPERTY OF ANDREW” (or such other Affiliate of Company as Company may direct). If Supplier removes all or any part of such tools from one building to another, Supplier shall continue to be responsible for loss and damage and Supplier shall give Company at least ten (10) Business Days advance notice of the removal except when the removal is required during Supplier’s manufacturing process or to protect the tools from damage or loss. Supplier shall send to Company on a mutually agreed to basis, an updated tools inventory list, including equipment upgrades;

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(e) Deliver the tools to Company upon demand, properly packaged and crated for transport, Ex Works (Incoterms 2000) Supplier’s plant at a mutually agreeable charge for removal, packing, or crating; and

(f) Repair or replace parts of the tools as needed from time to time, due to normal wear and tear, without charge to Company. This includes, among other things, adjusting, replacing punches or die sections, replacing cables and connectors and other consumable items, sharpening, and keeping the tools in good working condition; provided, however, Company shall be responsible for the cost of such cables and/or connectors, [*]. All repair and replacement parts shall be deemed Company Consigned Tools and shall be subject to the terms of this Agreement. At any time when Supplier proposes replacing a entire tool because (a) tool life has been expended or the tool is worn beyond economical repair, or (b) design changes by Company necessitate modification or complete replacement, Supplier shall first obtain Company’s written approval to replace the tool at Company’s expense, and the resulting replacement tool shall be subject to the terms of this Agreement

66.3 Upon reasonable prior notice and subject to the terms of Article 30, Company may inspect, inventorize and authenticate the account of the Company Consigned Material and/or Company Consigned Tools during Supplier’s normal business hours. Supplier shall provide Company access to the premises, subject to Article 30 wherein all such items are located.

66.4 Supplier shall use the Company Consigned Material, the Company and the Company Consigned Tools only in the manufacture or repair of Products furnished to Company, or otherwise in performing under this Agreement.

66.5 Supplier shall not allow any security interest, lien, tax lien or other encumbrance (collectively, “Encumbrances”) to be placed on any Company Consigned Material or Company Consigned Tools. Supplier shall give Company immediate written notice should any third party attempt to place or place an Encumbrance on items. Supplier shall indemnify and hold Company and its Affiliates harmless from any such Encumbrance. Supplier shall, at Company’s request, promptly execute a “protective notice” UCC-1 form for Company Consigned Material and Company Consigned Tools located in the United States, or such other documents reasonably necessary in non-US jurisdictions to enable Company to protect its interest in such consigned items. The Parties agree that this Agreement shall constitute the security agreement required by the UCC of the appropriate state in which the Encumbrance is filed, or the equivalent type of agreement in non-US jurisdictions.

66.6 The obligations assumed by Supplier with respect to the Company Consigned Material and Company Consigned Tools are for the protection of Company’s property. If Supplier defaults in carrying out Supplier’s obligations with respect to the Company Consigned Material or the Company Consigned Tools under this Agreement or an Order, then, at no cost to Company and upon twenty-four (24) hours notice to Supplier, Company may withdraw all or any part of the Company Consigned Material and/or Company Consigned Tools. Supplier shall, at Company’s option, return to Company or hold for Company’s disposition, free of restrictions, any or all of the Company Consigned Material (including any Scrap produced as a by-product) and/or any or all of the Company Consigned Tools and related drawings in Supplier’s possession at (a) the completion of the Order, (b) expiration, cancellation or termination of this Agreement, or (c) the withdrawal of the Andrew Consigned Material, as provided above.

66.7 Supplier’s obligations under this clause shall survive the expiration, cancellation or termination of this Agreement or any Order.

ARTICLE 67– WAIVER

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67.1 Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the other Party.

ARTICLE 68 - ENTIRE AGREEMENT/MODIFICATIONS/COUNTERPARTS

68.1    (a) This Agreement, together with the Attachments, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all previous communications, and agreements whether verbal or written. There are no conditions, covenants, agreements, or other provisions, express or implied, collateral, statutory or otherwise, relating to the subject matter hereof except as provided herein or in the Attachments. Orders under this Agreement shall only include Order-specific terms, conditions, and Specifications, as applicable.

(b) In the event of a contradiction between the terms of this Agreement and the terms and conditions of an Attachment, the terms of the Attachment shall prevail to the extent of such inconsistency.

68.2 This Agreement and any Orders under this Agreement shall not be amended, modified or rescinded, except by an instrument in writing signed by authorized representatives of both Parties.

68.3 This Agreement may be executed in counterparts, each of which shall constitute an original and all of which taken together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.

ANDREW CORPORATION	ANDREW TELECOMMUNICATION                 PRODUCTS S.R.L.
By:                 /S/    JAMES F. PETELLE	By:             /S/    LORENZO MIGLIOLI
Name:                      James F. Petelle	Name:                  Lorenzo Miglioli
Title:                         Vice President	Title:                         Chairman

ELCOTEQ NETWORK S.A.

By:             /S/     BRUNO CATHOMEN              

Name:                   Bruno Cathomen           

Title:              Vice President BA CNE      

By:                   /S/     HARRI OJALA                  

Name:                         Harri Ojala               

Title:                   President YA Europe       

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Attachment A

DEFINITIONS

For the purposes of this Agreement and the related Attachments, unless the context otherwise requires, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

“Affiliate” means, in relation to any person, any other person that directly or indirectly controls, that is directly or indirectly controlled by, or that is under the direct or indirect common control of, such a person; provided, however, that (i) where one person controls another person, any other person controlled by the first such person shall be deemed to be an Affiliate of the second person, and (ii) any corporation in respect of which any person owns beneficially, directly or indirectly, not less than 50% of such corporation’s voting securities, shall be deemed to be an Affiliate of such person. For purposes hereof, “control” means, in respect of any person, the power of authority to direct, or cause the direction of, directly or indirectly, the management, policies or actions of any other person, whether through the ownership of equity securities or voting securities or by contract or otherwise;

“Agreement” means this Manufacturing Supply Agreement together with all Attachments attached hereto, as amended and supplemented from time to time;

“Andrew Part Number” means Company’s part number designation, if any, for a Product, Commercially Purchased Item or Part;

“Annualized Volume” has the meaning set out in Article 7.3;

“Approved Purchaser” has the meaning set out in Article 53.4;

“Approved Vendor List” or “AVL” means Company’s approved vendor list;

“Attachments” means any attachment agreed to by the Parties and attached to and made part of this Agreement;

“Attachments C” means the Attachments C1…Cn;

“Attachments G” means the Attachments G1…Gn:

“Audit” has the meaning set out in Article 31.3;

“Bill of Material” or “BOM” means a bill of material;

“Blanket Purchase Order” means a blanket purchase order issued by Company (or an Ordering Company) and accepted by Supplier under this Agreement;

“Build to Stock” has the meaning set out in Attachment I;

“Business Days” means a day other than a Saturday, Sunday or a statutory holiday in the state of New York;

“CAP” or “Corrective Action Plan” means a plan of corrective action to be taken;

“CAR” or “Corrective Action Request” means a corrective action request made under this Agreement;

“Changes” has the meaning set out in Article 59.1;

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“Claim” means any claim, action, demand or proceeding;

“Code” means Object Code and Source Code, collectively;

“COGS” means cost of goods sold;

“Commercially Purchased Items” has the meaning set out in Article 4.2;

“Company” has the meaning set out in the recital to this Agreement;

“Company Background Information” means any Information, exclusive of Company IP, owned by Company and any Information not owned by Company that Company has the right to license to Supplier that is necessary to the performance of Supplier’s responsibilities under this Agreement;

“Company Chosen Subcontractors” has the meaning set out in Article 29.1;

“Company Consigned Material” has the meaning set out in Article 66.1;

“Company Consigned Tools” has the meaning set out in Article 66.2;

“Company IP” means any Developed IP originated or developed (i) solely by, or jointly between, Supplier and any of Supplier’s Associates or (ii) jointly between Company and Supplier or any of Supplier’s Associates, and which arise in connection with activities performed by Supplier under this Agreement which are (a) funded by Company through specific project funding, non-recurring engineering charges, increased Prices, deferral of reductions in Prices and/or any other form of compensation, or (b) are specifically related to the Products;

“Company Material” has the meaning set out in Article 13.1;

“Company Owned Inventory” means inventory that is owned by the Company, including raw materials, finished goods and work-in-process;

“Company Proprietary Information” means Information, including but not limited to, technology, processes, Specifications or other proprietary property, including trade secrets, know-how, mask work rights, patent applications and any other non-public information in any form or medium developed or acquired by Company, its Affiliates or its licensors other than Supplier, but for greater certainty, does not include Supplier Proprietary Information;

“Confidential Information” has the meaning set out in Article 34.1;

“Developed IP” means any and all Information, inventions, discoveries, improvements, technical information, computer or other apparatus programs, specifications, drawings, records, documentation, works of authorship or other creative works, ideas, manufacturing processes or tooling, knowledge or data, written or otherwise expressed in a material form;

“Documentation” means all documents, whether in human and/or machine-readable form;

“EDI” means the electronic transfer, from computer to computer, of commercial and administrative data using a commonly acknowledged standard for the structuring messages.

“Effective Date” has the meaning set out in the recital to this Agreement;

“Electronic Commerce” has the meaning set out in Article 19.1;

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“Emergency Backup Manufacturing Plan” has the meaning set out in Article 16.1;

“Emergency Backup Manufacturing Proposal” has the meaning set out in Article 17.1;

“EMAS” has the meaning set out in Article 39.1;

“EMS” has the meaning set out in Article 39.1;

“Encumbrance” has the meaning set out in Article 66.5;

“Engineering Change Order” has the meaning set out in Article 59.3;

“Epidemic Condition” has the meaning set out in Article 22.14;

“ESD” means electrostatic discharge;

“EST” has the meaning set out in Article 22.8;

“Excess Buffer Stock” has the meaning set out in Article 13.4;

“Excess Inventory” has the meaning set out in Article 13;

“Export Laws” has the meaning set out in Article 411;

“FIFO” has the meaning set out in Article 14.1;

“fiscal year” means Company’s fiscal year;

“Flexible Delivery Arrangements” has the meaning set out in Article 10.1;

“FMV” means fair market value;

“Forecast” has the meaning set out in Article 16.2 and shall include any other forecast delivered by Company (or an Ordering Company) to Supplier in respect of Products or Commercially Purchased Items;

“Information” means all documented and undocumented information (excluding patents and patent applications), whether in human and/or machine readable form, including without limitation, Code, Documentation, technical information, technical memoranda, technical reports, data and drawings of whatever kind in whatever medium, specifications, tangible and intangible know-how, processes, formulae, methodologies, production, operating and quality control manuals, blueprints, instructions, directories, schematics, sketches, photographs, graphs, dies, molds, tools, tooling, samples, price lists, part lists and descriptions, and any and all notes, analysis, compilations, studies, summaries, and other material containing or based, in whole or in part, on any information included in the foregoing;

“Infringement Claims” has the meaning set out in Article 45.1;

“Initial Term” has the meaning set out in Article 2.1;

“Insignia” has the meaning set out in Article 50.2;

“Laws” means all applicable local, federal, regional and international laws, ordinances, regulations and codes, standards, directives and international conventions and agreements to the extent that any of the foregoing have the force of law by being directly enforceable by a governmental authority, by a court or other proper tribunal;.

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“Manufacturer Per Unit Pricing Formula” means the pricing formula set out in Attachment D;

“Manufacturer Per Unit Pricing Formula Rates” means the manufacturer per unit pricing formula rates set out in each Attachment G;

“Material” means, collectively, all raw components, parts, and materials (including labels, product inserts, packaging and other labeling for the Products) required to manufacture the Products in accordance with the Specifications and, as used herein, Material includes any of Supplier-Controlled Material, Supplier-Controlled Custom Material and Company Material;

“Material Mark-Up Rates” means the material mark-up rates set out in Article 7.3;

“New Product” means a product introduced by Company during the Term of this Agreement that is not a Filter Product, or, for certainty, a Successor Product to a Filter Product or a New Product;

“NTF” means no trouble found;

“Object Code” means code in machine-readable form generated by compilation, assembly or other translation of Source Code and contained in a medium which permits it to be loaded into and operated on by a processor;

“Obsolete Inventory” has the meaning set out in Article 13.4(d);

“ODS” has the meaning set out in Article 54.1;

“ODS Content” has the meaning set out in Article 54.2;

“ODS Service” has the meaning set out in Article 54.4;

“Order” means a discrete order issued by Company (or an Ordering Company, as applicable) and accepted by Supplier under this Agreement, or a Blanket Purchase Order;

“Orderable Item” means a Product or a Commercially Purchased Item;

“Order Change” has the meaning set out in Article 10.4;

“Ordering Company” has the meaning set out in Article 53.1;

“Original Delivery Date” has the meaning set out in Article 10.4;

“Oversight Committee” has the meaning set out in Article 31;

“Parts” has the meaning set out in Article 24.4;

“Performance Metrics” has the meaning set out in Article 12.1;

“PES” or “Premium Expedited Services” means the cost that is over and above the normal costs associated with expediting the delivery of Material that Supplier would incur due to highly unusual, unique or extraordinary circumstances brought on solely by Company’s request to procure the delivery of Material to support Product delivery requirements outside any agreed to Flexible Delivery Terms;

“Potential Opportunity” has the meaning set out in Article 7.16;

“Price” has the meaning set out in Article 7.1;

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“Process Changes” has the meaning set out in Article 59.2;

“Product” or “Products” has the meaning set out in Article 4.1;

“Product Plan” has the meaning set out in Article 22.4;

“Profit” means earnings before interest, amortization and taxes;

“Profit Rates” means the profit rates set out in Article 7.3;

“Purchase Commitment” means the Purchase Commitment set out in Attachments C;

“PPV” or “Purchase Price Variance” means the price for Material that is over and above the normal price charged by the Material vendor to Supplier due to highly unusual, unique or extraordinary circumstances brought on solely by Company’s request to procure the delivery of Material to support Product delivery requirements outside any agreed to Flexible Delivery Terms;

“quarter” means a three month period commencing on the first day of October, January, April and July;

“Quarterly Performance Review Process” has the meaning set out in Article 26.1;

“Quarterly Repricing” has the meaning set out in Article 7.1(c);

“Release” means any written or electronic communication from Company (or an Ordering Company, as applicable) to Supplier, requesting the shipment by Supplier of any Orderable Item ordered pursuant to a Blanket Purchase Order;

“Renewal Term” has the meaning set out in Article 2.1;

“RMA” means a return materials authorization;

“Scrap” has the meaning set out in Article 25.1;

“Services” or “Service” has the meaning set out in Article 5.1;

“SG&A” means salary, general and administrative;

“SG&A Rates” means the SG&A Rates set out in Article 7.3;

“Source Code” means code in any programming language contained in any format, including human and machine-readable formats, such code including all comments and procedural code plus all related development documents such as, but not limited to, flow charts, schematics, statements of principles of operations or any other specifications;

“Source Inspection” has the meaning set out in Article 22.5;

“Specifications” means the technical and processing specifications for the development or manufacture or repair of the relevant Product provided by the Company to Supplier, including all drawings, models, specifications, documentation, data, product information, engineering standards, technical and test instructions and test programs, procedures or requirements, functional information and related data, data files, quality standards, AVL, BOMs, software, design information, technical manuals, packaging requirements, testing requirements and know-how, as amended and in effect from time to time;

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“Successor Product” means a product which is introduced by Company during the Term of this Agreement that provides the same fundamental functionality or purpose as a Product existing as of the Effective Date;

“Supplier” has the meaning set out in the recital to this Agreement;

“Supplier Associates” has the meaning set out in Article 36.1;

“Supplier Background Information” means any Information, existing prior to the Effective Date, owned by Supplier or that Supplier has the right to license to Company;

“Supplier-Controlled Custom Material” has the meaning set out in Article 13.1;

“Supplier-Controlled Material” has the meaning set out in Article 13.1;

“Supplier-Controlled Commercially Purchased Items” has the meaning set out in Article 13.1;

“Supplier IP” has the meaning set out in Article 36.3;

“Supplier Product IP” has the meaning set out in Article 36.3;

“Supplier Proprietary Information” means Information, including but not limited to, technology, processes or other proprietary property, including trade secrets, know-how, mask work rights, patent applications, pricing information, cost information, performance metrics relating to the manufacture of Products or relating to the operation of Supplier’s facilities and any other non-public information in any form or medium developed or acquired by Supplier, its Affiliates or its licensors other than Company, but for greater certainty, does not include the following: (i) Company Proprietary Information; and (ii) the Specifications;

“Term” has the meaning set out in Article 2.1;

“Termination Assistance” has the meaning set out in Article 2.2;

“Transition Assistance” has the meaning set out in Article 2.3;

“Transition Team” has the meaning set out in Article 21.1;

“VAT” means value added tax;

“Warranty” means the warranty provided by Supplier to Company for pursuant to Article 23.1(a);

“Warranty Period” has the meaning set out in Article 23.1;

“XML” means the application profile known as “Extensible Markup Language”.

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ATTACHMENT B

Product part number	Description
E15T01P37	ANCG GSM Combiner
E15U01P44	ANCD DCS Combiner
E15V30P05	3G UMTS ANRU
E15V30P15	E-GSM 900 Antenna Network ANYG
E15V40P15	S-8000 850 Mhz
E15V40P18	S-8000 GSM 850 H2D & Diplexer
E15V40P44	DDM-2 2100 UMTS
E15V40P50	DDM-3 2100 UMTS ROHS
E15V40P30	H4D 850 SubBand without VSWR
E15R01P74	TMA EGSM
E15S02P34	DTMA DCS 1800 INLINE
E15S08P07	DTMAF UMTS INLINE W/Bypass
E15S08P14	DTMA RETF
E15V20P23	FDUAMCO GSM 850
E15V20P25	FDUAMCO PCS 1900
E15V20P28	DIAMCO E-GSM 900
E15V20P31	FDUAMCO PCSM
E15V20P34	PGSM 900 Mhz BCOM
E15V90P06	Filter Module FM 1900-3H
E15V90P07	Filter Module FM 1900-3V
E15V90P16	Filter Module DB NO BC 3H

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ATTACHMENT C1

PURCHASE COMMITMENT FOR EUROPE

This Attachment C1 sets out Company’s obligations to purchase Products from Supplier under this Agreement that are subject to Prices calculated in accordance with Attachment G1.

Provided that in all cases Supplier is not in material breach of its obligations under this Agreement:

1. During the period commencing on the Effective Date and ending upon the termination of the Initial Term (the “Purchase Commitment Term”), and subject to the exceptions set out in Paragraph 2 below, Company agrees that Supplier’s revenue from sales of Products under this Agreement shall, annually, equal or exceed [*] (the “Purchase Commitment”). For the avoidance of doubt, (i) the Purchase Commitment Term shall not be extended by any renewal of this Agreement, including any automatic renewal of this Agreement occurring pursuant to Article 1.1, and (ii) revenues from all purchases of Products under this Agreement, including purchases by Company, Ordering Companies and Approved Purchasers, shall count against the Purchase Commitment.

2. Supplier acknowledges that, notwithstanding the Purchase Commitment, Products may be purchased from a source other than Supplier in the circumstances set out below (any such purchase being herein referred to as an “Alternate Purchase”):

(a) Any of the circumstances specified in Articles 12.2 and 59.2;

(b) The cancellation of any Order in respect of such Product by Company pursuant to Article 11.5 or Article 22.13 provided that the circumstances giving rise to Company’s right to cancel such Order result, or are reasonably likely to result, in a failure by Company to comply with its contractual obligations to any Company customer, and such customer has not waived compliance with the relevant obligations;

(c) Supplier elects, in writing, not to manufacture for or deliver to Company such Product pursuant to this Agreement;

(d) Supplier is unable to manufacture for or deliver to Company such Product as a result of any of the conditions listed in Article 42 and such inability continues or may reasonably be expected to continue for at least thirty (30) days; or

(e) Any of the circumstances specified in any other provision of this Agreement, including any Attachment hereto, or other applicable agreement of the Parties.

Any and all amounts paid for such Alternate Purchases by Company, Ordering Companies and Approved Purchasers shall count against the Purchase Commitment.

3. Supplier’s sole remedy in the event that Company fails in any year to meet the Purchase Commitment is to [*].

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ATTACHMENT C2

PURCHASE COMMITMENT FOR North America

This Attachment C2 sets out Company’s obligations to purchase Products from Supplier under this Agreement that are subject to Prices calculated in accordance with Attachment G2.

Provided that in all cases Supplier is not in material breach of its obligations under this Agreement:

1. During the period commencing on the Effective Date and ending upon the termination of the Initial Term (the “Purchase Commitment Term”), and subject to the exceptions set out in Paragraph 2 below, Company agrees that (i) during the first year of the Purchase Commitment Term, Supplier shall be given the right to manufacture all of Company’s needs for Niagra Systems Products and for Filter Products currently manufactured at Company’s Amesbury, Massachusetts, and Nogales, Mexico facilities, and (ii) during the second and third years of the Purchase Commitment, Supplier’s revenue from sales of Products under this Agreement subject to Attachment G2 shall, annually, equal or exceed [*] (the “Purchase Commitment”). The commitment for the first year of the Purchase Commitment is subject to the completion of the transfer of manufacturing of the affected Products to Supplier, which such transfer the Parties will use all commercially reasonable efforts to complete on or before December 30, 2006. For the avoidance of doubt, (i) the Purchase Commitment Term shall not be extended by any renewal of this Agreement, including any automatic renewal of this Agreement occurring pursuant to Article 1.1, and (ii) revenues from all purchases of Products under this Agreement, including purchases by Company, Ordering Companies and Approved Purchasers, shall count against the Purchase Commitment.

2. Supplier acknowledges that, notwithstanding the Purchase Commitment, Products may be purchased from a source other than Supplier in the circumstances set out below (any such purchase being herein referred to as an “Alternate Purchase”):

(a) Until the manufacturing referred to in this Attachment C2 has been completed pursuant;

(b) Any minor level of manufacturing of Products that presently occurs or may subsequently occur at any Company location. For the avoidance of doubt, the level of manufacturing currently occurring at Company’s facility in Warren, New Jersey, United States, or occurring in connection with new Product introductions shall be considered “minor”;

(c) Any of the circumstances specified in Articles 12.2 and 59.2;

(d) The cancellation of any Order in respect of such Product by Company pursuant to Article 11.5 or Article 22.13 provided that the circumstances giving rise to Company’s right to cancel such Order result, or are reasonably likely to result, in a failure by Company to comply with its contractual obligations to any Company customer, and such customer has not waived compliance with the relevant obligations;

(e) Supplier elects, in writing, not to manufacture for or deliver to Company such Product pursuant to this Agreement;

(f) Supplier is unable to manufacture for or deliver to Company such Product as a result of any of the conditions listed in Article 42 and such inability continues or may reasonably be expected to continue for at least thirty (30) days; or

(g) Any of the circumstances specified in any other provision of this Agreement, including any Attachment hereto, or other applicable agreement of the Parties.

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Any and all amounts paid for such Alternate Purchases by Company, Ordering Companies and Approved Purchasers shall count against the Purchase Commitment.

3. Supplier’s sole remedy in the event that Company fails in any year to meet the Purchase Commitment is to [*]..

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ATTACHMENT D

MANUFACTURER PER UNIT PRICING FORMULA

Overview: Per unit pricing shall be determined and reported using the formula and structure shown below. The meaning of the terms and the costs included in each category are as defined in this Attachment.

The structure:

The formula:

Price = [*]

Where COGS = Cost Of Goods Sold and is calculated as follows:

COGS = (Raw Material x (1 + Material Markup Rate)) + Domestic Consumption Charge + Taxes on Purchases of Raw Material + S (Activity Unit Hours x Activity Hourly Rate) + Other

RFQ PRICING MODEL

Supplier Name:		_______________
Building Location		(Please complete this document for each location product could be built)
Product Part No.
Annual Volume (based on current going-rate)		0
Raw Material:	$	—
Material Markup	$	—	0.00	% of Raw Materials
Domestic Consumption Charge (if applicable)	$	—	0.00	% of Raw Materials
Duties/Tariffs/Taxes on Raw Materials (if applicable)	$	—	0.00	% of Raw Materials
Value Added Direct Labor & Overhead:			Unit Hours	Hourly rate
Manual Assembly Operations	$	—
Automated Assembly Operations	$	—
Test	$	—
	$
	$
Other	$
Total Test and Assembly Cost	$	—
	$	—
Total Cost Of Goods Sold (COGS)	$	—
SG&A	$	—	0.00	% of COGS
Profit	$	—	0.00	% of Initial Price
Initial Price
Duties/Tariffs/Taxes on Sale of Finished Goods			0.00	% of Initial Price
Total Product Price (per unit)

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ATTACHMENT E

PERFORMANCE METRICS

The Parties agree to set metrics targets based on historical performance and, as appropriate, adjust targets quarterly. Company shall provide Supplier with guidance and understanding of each category and term used in the Performance Index and Rating Templates set out below.

ANDREW CONTRACT MANUFACTURER KEY PERFORMANCE INDEX

CONTRACT MANUFACTURER :	CONTACT :
	ANDREW OPERATIONS CONTACT :
MONTH :	YEAR :	2006

RATING/SCORE		A	B	C	D	E	F	WEIGHT	SCORE
		100	95	85	75	60	0	%
1	QUALITY - YIELD, RETURNS & SCAR							20%
2	DELIVERY - OTD AND OTI							20%
3	COST REDUCTION							20%
4	INVENTORY TURNS							10%
5	FMA AND REPAIR INTERVAL							10%
6	NPI, EC AND DFX TECHNICAL SUPPORT							10%
7	COMMUNICATION AND RESPONSE							10%
							TOTAL SCORE

REMARKS : IF TOTAL SCORE IS LESS THAN 75, CORRECTIVE ACTION IS REQUIRED FROM CM.

Where:

“SCAR” means “Supplier Corrective Action Report”

“OCT” means “On Time Delivery”

“OTI” means “On Time Invoice”

“FMA” means “Failure Mode Analysis”

“NPI” means “New Product Introduction”

“EC” means “Engineering Change”

“DFX” means” Design for X”

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ANDREW CONTRACT MANUFACTURER KEY PERFORMANCE INDEX

RATING STANDARD AND RESULTS

1	QUALITY - YIELD, RETURNS AND SCAR		RATING
	A :	QUALITY SCORE = 100	¨
	B :	100 >QUALITY SCORE >= 95	¨
	C :	95 >QUALITY SCORE >= 85	¨
	D :	85 > QUALITY SCORE >= 75	¨
	E :	75 > QUALITY SCORE>= 60	¨
	F :	Quality score < 60	¨
2	DELIVERY - OTD AND OTI		RATING
	A :	OTD RATE = 100%	¨
	B :	100% > OTD RATE >= 95% AND OTI RATE >= 95%	¨
	C :	100% > OTD RATE >= 95% AND 95% > OTI RATE >= 90%	¨
	D :	95% > OTD RATE >= 90% AND OTI RATE >= 95%	¨
	E :	95% > OTD RATE >= 90% AND 95% > OTI RATE >= 90% OR OTRQ vs CDQ RATE >= 95%	¨
	F :	OTD RATE < 90% OR OTI RATE < 90%	¨
3	COST REDUCTION		RATING
	A :	QUARTERLY COST REDUCTION >= 5%	¨
	B :	5%> QUARTERLY COST REDUCTION >= 4%	¨
	C :	4%> QUARTERLY COST REDUCTION >= 3%	¨
	D :	3%> QUARTERLY COST REDUCTION >= 2%	¨
	E :	2%> QUARTERLY REDUCTION >= 1%	¨
	F :	QUARTERLY COST REDUCTION < 1%	¨
4	INVENTORY TURNS		RATING
	A :	INVENTORY TURNS >= 10	¨
	B :	10 > INVENTORY TURNS >= 7	¨
	C :	6 > INVENTORY TURNS >= 5	¨
	D :	4 > INVENTORY TURNS >= 3	¨
	E :	3 > INVENTORY TURNS >= 2	¨
	F :	INVENTORY TURNS < 2	¨
5	FMA AND REPAIR INTERVAL		RATING
	A :	REPAIR&FMA RATE = 100%	¨
	B :	100% > REPAIR&FMA RATE >= 95%	¨
	C :	95% > REPAIR&FMA RATE >= 85%	¨
	D :	85% > REPAIR&FMA RATE >= 75%	¨
	E :	75% > REPAIR&FMA RATE >= 60%	¨
	F :	REPAIR&FMA RATE < 60%	¨
6	NPI, EC AND DFX TECHNICAL SUPPORT		RATING
	A :	TS INDEX = 0	¨
	B :	4 >= TS INDEX >= 1	¨
	C :	7 >= TS INDEX >= 5	¨
	D :	10 >= TS INDEX >= 8	¨
	E :	13 >= TS INDEX >= 11	¨
	F :	TS INDEX >= 14	¨
7	COMMUNICATION AND RESPONSE		RATING
	A :	CRE INDEX = 0	¨
	B :	3 >= CRE INDEX >= 1	¨
	C :	8 >= CRE INDEX >= 4	¨
	D :	14 >= CRE INDEX >= 9	¨
	E :	20 >= CRE INDEX >= 15	¨
	F :	CRE INDEX > 20	¨

RATING TEMPLATES by CATEGORY:

1. QUALITY (YIELD, RETURN RATE, SCAR)

CUSTOMER PRODUCT DELIVERY
Q'ty COMPOSITE
YIELD COMPOSITE
YIELD TARGET RETURN
Q'ty RETURN
RATE (%) RETURN RATE
TARGET COMMENT

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SCAR	Q'ty	RATE	SCORE OBTAINED
Critical
Major
Minor
		SCAR score

2. ON TIME DELIVERY

Andrew PO# Customer Part
Number PO Qty PO issue
Date Require
Delivery
Date Actual PO
Close Date Committed
Delivery
Qty On Time
Ready Qty OTD
Index OTI
Index OTRQ vs
CDQ
Index Shipments' detail
(Andrew)

3. COST REDUCTION

Product Description Last Quarter
Price Current Quarter
Price Current vs Last
Price difference Qty Shipped Remaining
Forecast Qty Cost
Reduction TTL Cost

4. INVENTORY TURNS

Product Description Current
Material
Cost Current
Month
Delivery M-1
Delivery M-2
Delivery FG INV
Last Day
Current
Month FG INV
Last Day
M-2 Current
Month
Delivered
Material($) M-1
Delivered
Material($) M-2
Delivered
Material($) FG INV
Last Day
Current
Month($) FG INV
Last Day
M-2($) TTL 3
Month
Delivered
Material($)

5. FMA and REPAIR INTERVAL

Customer Product Name Return Qty FMA Closed
within target Repair Closed
within target FMA Index Repair Index Repair & FMA
Index Comments

6. TECHNICAL SUPPORT – Qualitative Criteria

7. COMMUNICATIONS RESPONSE – Qualitative Criteria

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ATTACHMENT F

COST SAVINGS SUBMITTAL FORM

Supplier Name:		Case Number:
Supplier Address:		Submitted To:		Date Submitted:
Supplier Contact Name:		Coordinator:		Assigned to:
Improvement Program: (Program Type - Check all that apply)
¨ Cost Reduction	¨ Process Improvement	¨ Inventory Reduction	¨ Revenue Generation
¨ Material Cost	¨ Business
¨ Labor Cost	¨ Manufacturing
¨ Yield Improvement	¨ Logistics
¨ Reliability Improvement
Program Effect (Annualized Value)			Project Expenses:
Cost Savings ($US Annual)			Total
Cost Savings (3 yr. Average)			Labor	Materials
			Capital	Other
Description:
Proposal:
Saving Calculation or Financial Considerations: (Net $)
Accomplishment:

Measurement Period:	Total
Savings ($M):	Total

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ATTACHMENT G1

MANUFACTURER PER UNIT PRICING FORMULA RATES

AND SERVICE FEES FOR EUROPE

This Attachment G1 sets out pricing formula rates for Products sold by Supplier under this Agreement for delivery from a location within the European region, including, expressly, Romania, and/or for Services performed in such region.

Manufacturer Per Unit Pricing Formula Rates (1)

Facility	Europe
Material Mark-Up (% of BOM)	[*]
Manual Rate (€/hr) (2)(3)(4)(5)(6)	[*]
Auto Rate (€/hr) (2)(3)(4)(5)(6)(7)	[*]
Test Rate (€/hr) (2)(3)(4)(5)(6)(7)	[*]
SGA (% of COGS)	[*]
Profit (% of Price)	[*]

WHERE:

(a) The Material Mark-Up Rate is expressed as a percentage of the BOM, excluding SG&A and Profit;

(b) Manual Rate, Auto Rate and Test Rate each refer to the loaded labor at cost, excluding SG&A and Profit;

(c) SG&A Rate is expressed as a percentage of COGS, excluding Profit; and

(d) Profit is expressed as a percentage of sales, pre income tax.

NOTES:

(1) The rates set forth herein are only applicable to Products whose BOM value does not exceed [*]. The Parties shall mutually agree on rates for any Products as to which the BOM value equals or exceed such amount.

(2) The hourly rates initially set forth above are fixed for the first three (3) years of this Agreement, subject to the Notes below.

(3) These hourly rates are subject to reduction in the second year of this Agreement, as set forth below:

2nd Year MPLH*	Manual Rate	Auto Rate	Test Rate
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]

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* Where “MPLH” refers to Supplier’s actual manual production labor hours expended in production of Products subject to this Attachment G1.

In the event that the MPLH expended by Supplier during the 2nd year is less than [*], the formula for calculating rates for the 1st year shall be used to determine the actual rates to be applied in the 2nd year.

(4) These hourly rates are subject to reduction in the third year of this Agreement, as set forth below:

3rd Year MPLH*	Manual Rate	Auto Rate	Test Rate
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]

* Where “MPHL” refers to Supplier’s actual manual production labor hours expended in production of Products subject to this Attachment G1.

In the event, that the MPLH expended by Supplier during the 3^rd year is less than [*], the formula for calculating rates for the 2nd year shall be used to determine the actual rates to be applied in the 3^rd year.

(5) These hourly rates are subject to increase for any year of this Agreement in which Supplier’s revenues from sales of Products subject to this Attachment G1 are less than [*]. The applicable rates in such event shall be mutually agreed by the Parties.

6) Not later than ten (10) days following the start of the year, the hourly rates for each of years two and three shall be established based on Company’s Forecast for the whole of the year (converted to a forecast of MPLH for such year) and such rates shall apply during the whole of such year.

Within thirty (30) days after the close of each of the second and third years (each a “calculation year”), the Parties will calculate the actual amount of MPLH expended by Supplier in the calculation year. Based on such calculation, the Parties shall calculate hourly rates that should have applied throughout the calculation year. The Parties will then re-calculate the Prices that should have applied throughout the calculation year and determine the total amount that Company should have paid to Supplier in such year. If Company should have paid more or less than Company did pay, Supplier shall pay to Company promptly any excess calculated, or Company shall pay to Supplier any deficiency calculated, as the case may be, within the period determined in accordance with Article 8 of this Agreement for the payment of invoice.

(7) Such labor rates are subject to adjustment in the event that a Company Chosen Subcontractor raises its labor rates to Supplier prior to the time that Supplier has qualified such Company Chosen Subcontractor in accordance with its standard qualification procedures, or nine (9) months following the Effective Date, whichever first occurs. The Parties shall mutually agree as to the impact of any such increase in labor rates.

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Service Fees

The initial rates for Services set out in the box below, if any, have been mutually agreed between the Parties. Prior to any other Services being performed, the Parties shall agree upon the rates that will apply for such Services. Rates shall be established using the same principles that underlie the Manufacturer Per Unit Pricing Formula Rates for hourly work set out in the schedule of rates above.

DESCRIPTION OF SERVICES TO BE
PROVIDED RATES DELIVERABLE

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ATTACHMENT G2

MANUFACTURER PER UNIT PRICING FORMULA RATES

AND SERVICE FEES FOR NORTH AMERICA

This Attachment G2 sets out pricing formula rates for Products sold by Supplier under this Agreement for delivery from a location within the North America region, including, expressly, Mexico, and/or for Services performed in such region. For the avoidance of doubt, this Attachment G2 does not apply to any Product the Price for which is subject to Attachment G1 or any other Attachment G.

Manufacturer Per Unit Pricing Formula Rates (1)

Facility	North America
Material Mark-Up (% of BOM) (1)	[*]
Manual Rate ($/hr) (2)(3)(4)(5)(6)	[*]
Auto Rate ($/hr) (2)(3)(4)(5)(6)(7)	[*]
Test Rate ($/hr) (2)(3)(4)(5)(6)(7)	[*]
SGA (% of COGS)(1)	[*]
Profit (% of Price)(1)	[*]

WHERE:

(a) The Material Mark-Up Rate is expressed as a percentage of the BOM, excluding SG&A and Profit;

(b) Manual Rate, Auto Rate and Test Rate each refer to the loaded labor at cost, excluding SG&A and Profit;

(c) SG&A Rate is expressed as a percentage of COGS, excluding Profit; and

(d) Profit is expressed as a percentage of sales, pre income tax.

NOTES:

(1) The Material Mark-up, SGA and Profit rates set forth herein are only applicable to Products whose BOM value does not exceed [*]. For Products with BOM values that exceed [*], the Parties have agreed to reduce certain pricing factors

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according to the table below:

BOM Value	Material Mark-up (% of BOM)	Mark-Up Cap	SG&A (% of COGS)	Profit (% of Price)
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]
[*]	[*]	[*]	[*]	[*]

The Parties agree that the Material Mark-Up percentage set forth in the table above for Products whose BOM value exceeds [*] is intended to cover the cost of supply chain management and related warehousing, and the actual costs incurred for inbound freight and attrition. Company and Supplier will review actual freight and attrition costs for each Product whose BOM value exceeds [*] at the end of each quarter to set overall pricing per Article 6, including the price for freight and attrition, for the subsequent quarter. In the event that the actual cost of freight and attrition determined at the end of the quarter exceeds that which was established at the beginning of the quarter, Company agrees to reimburse Supplier for the difference, subject to the cap discussed below. For avoidance of doubt, the cost of supply chain management and related warehousing for Products whose BOM values exceedi [*] shall be set at [*], and added to the actual cost of freight and attrition to calculate whether the percentage Material Mark-Up set for each quarter covers the cost of freight and attrition. For the beginning of the first quarter of the Term, freight and attrition costs shall be deemed to have been established for each Product at the amount derived by multiplying the Product’s BOM value by the applicable Material Mark-up percentage and subtracting [*]. For example, the amount established for the first quarter for freight and attrition for a Product whose BOM value is [*] is [*]. Notwithstanding the foregoing, in no event shall Company’s liability in any quarter for Supplier’s supply chain management, related warehousing, freight and attrition costs applicable to any Product, including any reimbursements provided for herein, exceed the applicable Mark-Up Cap set forth in the table above.

(2) The hourly rates initially set forth above are fixed for the first year of the Agreement, subject to the Notes below.

(3) These hourly rates are subject to reduction in the second year of this Agreement, as set forth below:

2nd Year Revenue*	Manual Rate	Auto Rate	Test Rate
[*]	[*]	[*]	[*]

* Where “Revenue” refers to Suppliers revenue for the sales of Products subject to this Attachment G2.

In the event the revenue received by Supplier during the 2^nd year is less than [*], the formula for calculating rates for the 1^st year shall be used to determine the actual rates to be applied in the 2^nd year.

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(4) These hourly rates are subject to reduction in the third year of this Agreement, as set forth below:

3rd Year Revenue*	Manual Rate	Auto Rate	Test Rate
[*]	[*]	[*]	[*]

* Where “Revenue” refers to Suppliers revenue for the sales of Products subject to this Attachment G2.

In the event the revenue received by Supplier during the 3rd year is less than [*], the formula for calculating rates for the 2nd^t year shall be used to determine the actual rates to be applied in the 2^nd year.

(5) These hourly rates are subject to increase in the second and third years of this Agreement if Supplier’s revenues from sales of Products under this Agreement are less than [*]. The applicable rates in such event shall be mutually agreed by the Parties.

(6) Not later than ten (10) days following the start of the year, the hourly rates for each of years two and three shall be established based on Company’s Forecast for the whole of the year (converted to a forecast of revenue to Supplier) and such rates shall apply during the whole of such year.

Within thirty (30) days after the close of each of the second and third years (the “calculation year”), the Parties will calculate the actual amount of revenue to which Supplier is entitled on account of actual product purchased by Company in the calculation year. Based on such calculation, the Parties shall calculate hourly rates that should have applied throughout the calculation year. The Parties will then re-calculate the Prices that should have applied throughout the calculation year and determine the total amount that Company should have paid to Supplier in such year. If Company should have paid more or less than Company did pay, Supplier shall pay to Company promptly any excess calculated, or Company shall pay to Supplier any deficiency calculated, as the case may be, within the period determined in accordance with Article 8 of this Agreement for the payment of invoice.

Service Fees

The initial rates for Services set out in the box below, if any, have been mutually agreed between the Parties. Prior to any other Services being performed, the Parties shall agree upon the rates that will apply for such Services. Rates shall be established using the same principles that underlie the Manufacturer

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Per Unit Pricing Formula Rates for hourly work set out in the schedule of rates above.

DESCRIPTION OF SERVICES TO BE PROVIDED RATES DELIVERABLE

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ATTACHMENT H

EXAMPLE PRODUCT PLAN

THE APPLICABLE PRODUCT PLAN WILL BE DISCUSSED AND MODIFIED

BY THE PARTIES AS NEEDED

PRODUCT PLAN Product Description:

Company Contact:

Supplier Contact:

Note: the information below is provided as an example. The specific requirements and reporting

frequencies should be specified for each particular Product Plan.

Article Section in Supply Agreement	Specific Requirements	Reporting Frequency
22.2 ISO and Telecommunication Requirements	A copy of the Registrar Audit Report, including findings, and subsequent corrective action responses.	Quarterly update and as any certification change occurs.
22.3 Quality Audits	Responses to Corrective Action Requests.	Within 20 days from completion of each audit.
22.5 Source Inspection	Conditions for Transfer of Source Inspection Costs to Supplier and back to Company: If the Product inspection performance results do not meet the Company’s inspection requirements after five (5) lots per Product number or Product family including the First Article lot then the costs of Company’s source inspection shall be paid by Supplier. Once the Product inspection performance results meet Company’s inspection requirements for five (5) consecutive lots, then the costs associated with Company’s source inspection shall no longer be paid by Supplier. Responses to Corrective Action Requests.	Within 30 days.
22.6 First Article Inspection	Data, samples.	Upon completion.
22.8 Product and Manufacturing Quality	Test process yield data for each test station for each product. Pareto of defects by test station by product. and Repair data, “ Test and Repair” at the serial number level of applicable product Root cause analysis and CAP for problems by incidence. FMAs by incidence	Weekly .
	A chart of Defects Per Million Opportunities (DPMO) by Product. A chart of Defects Per Million Opportunities (DPMO) by component and vendor.	Monthly

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	Vendor Corrective Action Summaries. Vendor Scorecards Product Scrap Reports. Report of Corrective Actions assigned by the Company to Supplier
22.8 Product and Manufacturing Quality	IPC/EIA J-STD-001.	No report necessary.
22.9 Supplier and Subcontractor ESD Requirements	1. Supplier’s internal audit results. 2. ANSI/ESD - S20.20	Annually.
22.10 Supplier and Subcontractor MSD Requirements	Per applicable Supplier process instructions for moisture sensitive devices. Moisture sensitive devices (MSD) per IPC/JEDEC J-STD-033 requirements	Annually.
22.11 Nonconforming Product and corrective action procedures	Corrective action report shall include: The initial action taken to contain the problem. An explanation of the root cause of the problem. The proposed corrective action or solution to the problem. The actual or planned implementation date of the corrective action. The plans for verifying that the corrective action was effective. Include the actual or planned date of the verification of effectiveness.	Within 20 days of nonconformance notification.
22.13 Failure Mode Analysis	Corrective action report shall include: The initial action taken to contain the problem. An explanation of the root cause of the problem. The proposed corrective action or solution to the problem. The actual or planned implementation date of the corrective action. The plans for verifying that the corrective action was effective. Include the actual or planned date of the verification of effectiveness.	Within 5 days from the request.
22.14 Epidemic Failure Condition and Corrective Action Requirements	Corrective Action Plan shall include: The initial action taken to contain the problem. An explanation of the root cause of the problem. The proposed corrective action or solution to the problem. The actual or planned implementation date of the corrective action. The plans for verifying that the corrective action was effective. Include the actual or planned date of the verification of effectiveness.	Within 5 days of the reported occurrence.
22.14 Epidemic Failure Condition OOB Level	Epidemic failure requirement >          OOB failures

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22.15 Annual Quality Improvement Goals and Requirements	Customer return rates and on time delivery performance. Verification Test and Workmanship results. In-circuit, functional and final system test yields.	Quarterly.
39.1 Banned substances for packaging & products	Specification B71SQM01-1	With each Product introduction or change
55.2 Environmentally Hazardous materials	Specification B71SQM01-1
55.1 Shipping & Receiving Specifications
55.2 Packaging Container Specifications
55.3 Warranty: data	Provide data fields: Item serial number, Order number, Manufacture ship date, Parent serial number, Product line, Product identification, Circuit pack code or microcode, Circuit pack series or issue of microcode, Origination location.	Upon shipment.
55.4 Export packaging & Marking specifications
57 Product Conformance	To be determined.	To be determined.
Product-specific documentation	Inspection Methods of Instruction, Test Design Requirements.	No report necessary.

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ATTACHMENT I

FLEXIBLE DELIVERY ARRANGEMENTS

A Forecast shall be sent by Company to Supplier each week on a specific day. Supplier shall plan material requirements and production capacity based on such forecasts in order to support changes in the Company forecast. Supplier will use commercially reasonable efforts to deliver in accordance with the agreed Flexibility Requirements.

FLEXIBILITY REQUIREMENTS for Product Class A :

Week 1-2: +10% , -10%

Week 3-4 +20% , -20%

Week 5-8: +30% , -30%

Week 9-12: +50% , -50%

Week 13-16: +100% , -100%

Week >16: +unlimited , -100%

FLEXIBILITY REQUIREMENTS for Product Class B:

Week 1: fixed

Week 2-4 +20%, -20%

Week 5-8 +30%, -30%

Week 9-12: +40% , -50%

Week 13-16: +50% , -50%

Week 17-20: +100%, -100%

Week >20: +unlimited , -100%

Product classes (e.g., Class A and Class B . . . Class “N”) shall be defined based on product volume, end-customer flexibility requirements, etc…

Rules for defining FLEXIBILITY REQUIREMENTS:

R1: The Absolute Maximum Quantity can be maximally equal to the Physical Maximum Capacity.

R2: The Absolute Maximum / Minimum is determined by the Base Quantity and the Maximum /

Minimum Flexibility when reaching a new Flexibility Zone.

R3: The new Absolute Maximum / Minimum can not be higher / lower than the Absolute

Maximum / Minimum of the zone before.

R4: Customer agrees to allow Supplier to finish all WIP (Work in Process) located at Supplier manufacturing facilities and/or sub-contractors to completion and ship completed products to FGI (Finished Goods Inventory) where products will be subject to the inventory buy back terms within this Agreement.

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When defining a FLEXIBILITY CORRIDOR the following terms shall apply:

Flexibility Zone	Area with the same flexibility
Maximum Flexibility	Percentage maximum per Flexibility Zone
Minimum Flexibility	Percentage minimum per Flexibility Zone
Base Quantity	Absolute quantity, when Flexibility Zone is entered the first time
Absolute Maximum	Absolute maximum quantity for each Flexibility Zone
Absolute Minimum	Absolute minimum quantity for each Flexibility Zone
Absolute Weekly Increase	Absolute quantity increase from week to week
Absolute Weekly Decrease	Absolute quantity decrease from week to week
Physical Maximum Capacity	Maximum applicable capacity of SUPPLIER

FLEXIBILITY REQUIREMENTS Example:

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ATTACHMENT J

RETURN AND REPAIR SERVICES

TO BE DETERMINED

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ATTACHMENT K

MATERIAL AUTHORIZATION LETTER

DATE

Name of Supplier

Attn.                             

ADDRESS:                             

Re: Authorization for Supplier to Purchase Material at Andrew’s negotiated or contracted prices

Dear             ,

The purpose of this Material Authorization Letter is to set forth the understanding by and between              (“Supplier”) and Andrew Corporation (“Andrew”) regarding the purchase by Supplier of Material at Andrew’s negotiated or contracted prices. Andrew, at its sole option, will seek authorization of certain Material vendors to permit Supplier, a supplier of Andrew, to purchase Material at the prices set forth in Andrew’s Material purchase agreements with its Material vendors. Terms and conditions, stated in such Material purchase agreements, applicable to Andrew, will not be applicable to Supplier. As a condition precedent to Andrew using reasonable commercial efforts to seek such Material vendor authorizations, Supplier and Andrew, in consideration of the promises and benefits outlined below, agree as follows:

Supplier shall use Materials purchased at the Andrew prices only for the production or repair of Product sold to Andrew under this Agreement.

Savings incurred by Supplier due to the benefit of volume purchase discounts applicable to Materials purchased under the Andrew Material purchase agreements will be passed on to Andrew via the Andrew business group placing the purchase order with Supplier.

3.        Andrew shall have no liability whatsoever to either Supplier or Material Vendor for the authorization given or the transactions contemplated herein between Supplier and Material Vendor.

Supplier shall hold in confidence any and all information related to the Andrew Material purchase agreement, including, but not limited to, business information, specifications, technical information, forecasts, prices; and Supplier hereby agrees to use such information only for the purpose of fulfilling its obligations with Andrew. Supplier will use commercial reasonable effort to share such information only with employees and authorized representatives with a need to know and will instruct such individuals regarding their obligation to maintain such information as confidential and as the sole property of Andrew.

Andrew will notify Supplier in writing of Material vendors consenting to extend Andrew’s Material prices (and other terms) to Supplier and will forward appropriate applicable price appendices (and other terms as applicable). Supplier acknowledges and agrees that Andrew may withdraw its authorization (which will facilitate Supplier’s purchase described herein) under any or all of the Andrew Material purchase agreements at any time.

Supplier agrees to provide access to Andrew, or its authorized representatives, to Supplier’s books and records for the purpose of verifying compliance with this letter agreement.

WHEREFORE, duly authorized representatives of Supplier hereby execute this letter agreement indicating

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approval and understanding of the terms set forth above; this letter agreement shall be effective as of                     .

	Accepted by:
ANDREW CORPORATION	SUPPLIER
Signature	Signature
Name	Name
Title	Title
Date	Date

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ATTACHMENT L

INTENTIONALLY OMITTED

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ATTACHMENT M

NEW PRODUCT INTRODUCTION (NPI) PROCESS

1.0        New Product Introduction Support by Supplier

1.1        Supplier acknowledges that the execution of an effective New Product Introduction (“NPI”) process is a critical competitive requirement for Company. As part of Company’s NPI process, the Parties will develop and mutually agree upon a documented Program Plan outlining Program Goals for each new Product that Company intends for Supplier to manufacture pursuant to this Agreement. As such, the Parties shall make commercially reasonable efforts to meet the Program Goals documented in the Program Plan. Each party’s progress toward meeting the Program Goals shall be measured by the other party and managed by the responsible party.

1.2        For the purposes of this Attachment, “Program Plan” means Company’s documented plan outlining the Program Goals for a new Product that Company intends to have Supplier manufacture pursuant to the terms of the Agreement. For the purposes of this Attachment, “Program Goals” may mean but are not necessarily limited to Company’s time to volume goals, volume cost goals, quality goals, time to market goals and target costs as identified in the Program Plan.

1.3        Supplier shall provide NPI managers, material planner buyers and/or engineers to assist in the introduction of Company’s new Products. Part of their responsibility will be to provide Supplier’s DFx input to Company and manage the Engineering and NPI Manufacturing Services for Supplier outlined in Sections 2.0 and 4.0 of this Attachment. At Company’s request, upon mutual agreement of the Parties, Supplier shall co-locate for a mutually agreeable period of time the appropriate Supplier technical and business personnel with Company’s design teams to assist in the timely and smooth transfer of new Products from design into Supplier’s manufacturing process. The costs associated with the foregoing shall typically be charged by Supplier to Company as a separately billable non-recurring engineering charge, for which Company shall issue Supplier a purchase order in accordance with Article 10 of this Agreement. No effort by Supplier hereunder shall be expended until the Parties have mutually agreed as to such costs and billing.

2.0        Engineering Services

2.1        For any new Products that Company intends to have Supplier manufacture pursuant to the terms of this Agreement, Supplier agrees to provide the following Services to assist in the timely and smooth introduction of new Products into Supplier’s manufacturing process (“Engineering Services”). The costs associated with the following Engineering Services shall typically be charged by Supplier to Company as a separately billable non-recurring engineering charge for which Company shall issue Supplier a purchase order in accordance with Article 10 of this Agreement. No effort by Supplier hereunder shall be expended until the Parties have mutually agreed as to such costs and billing.

(a) DFx reviews. Supplier shall provide detailed and complete reports within a mutually agreeable timeframe, with a targeted delivery date of three (3) Business Days after each design or stock list review or Prototype or Pilot build to Company and generate any appropriate NPI Engineering Change Requests. For the purposes of this Attachment, “DFx” means, but is not limited to, design for manufacturing, design for assembly, design for environment, design for test, design for ease of transition of manufacturing location, and design for the supply chain. The intention of DFx feedback is to identify opportunities

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to improve manufacturability, quality, and/or to reduce cost and Product introduction interval. DF Reviews will be provided at no charge to Company.

(b) Stock list reviews triggered by receipt of a Material stock list from Company. Supplier’s report shall outline Material costs, lead times, availability, quality rating, and risk assessment for the Material identified on the stock list. Any recommendations for Material substitutions and alternative Material vendors would be provided by Supplier at that time through appropriate NPI Engineering Change Requests. Stock list reviews will be provided at no charge to Company

(c) Packaging and Labeling. Supplier shall be responsible for developing and acquiring any new packaging and labeling required for all new Products that Supplier would manufacture pursuant to the terms of this Agreement.

(d) Nonrecurring Engineering. Unless otherwise agreed to under a separate development agreement, Company shall be responsible for the non-recurring expenses necessary to develop any assembly or test processes or in-circuit or functional test software, stencils, fixtures, tooling, etc. that are required to support the manufacture of any new Products by Supplier pursuant to the terms of this Agreement. The costs and the Parties’ responsibilities associated with the actual fixtures, tooling, and test sets are set forth in Section 3.0 of this Attachment.

2.2        In addition to the Engineering Services outlined in Section 2.1 and in accordance with Article 4 of the Agreement, Supplier agrees to provide the following Services to Company on an as requested basis. The fees associated with these Services will be agreed to by the Parties prior to the start of the work by Supplier and will not be recovered by Supplier in the Price of the Product but will be paid by Company to Supplier when the mutually agreed upon milestones have been met.

(a) Specific component reliability qualification;

(b) Compliance testing;

(c) Environmental stress testing; and

(d) Other Services as may be agreed to by the Parties.

(e) Failure analysis

3.0        Fixtures, Tooling and Test Sets

3.1        Unless otherwise agreed to in writing between the Parties, Supplier shall be responsible for funding any costs associated with providing the necessary stencils, fixtures, tooling, and test sets required to support the manufacture of a new Product by Supplier and, to the extent such costs are uniquely required to support such manufacture, they shall be recovered as provided in this Agreement. All charges intended to be invoiced to Company must be authorized in advance through approved budgetary quotes. Final billing, at actual incurred costs, must be within the budgetary authorization, unless the overrun was approved in advance by the Company.

3.2        Subject to prior approval as provided in Section 3.1 above, Company agrees to reimburse Supplier at Supplier’s actual incurred cost for any stencils, fixtures, tooling, and test sets that were used while Supplier was providing NPI Manufacturing Services to Company but cannot be utilized, through no fault of Supplier, during production.

3.3        Supplier agrees that all stencils, fixtures, tooling, and test sets used in the production of Products by Supplier shall be subject to the terms set forth in Article 36 and Article 49 of the Agreement.

4.0        NPI Manufacturing Services

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4.1        Supplier shall provide, at Company’s request, NPI Manufacturing Services to Company as part of the NPI process. For the purposes of this Attachment, “NPI Manufacturing Services” means manufacturing Services performed by Supplier in the period prior to the commencement of pre-production or volume manufacture of a Product by Supplier. These Services are in addition to the Engineering Services described in Section 2.0 of this Attachment. The scope of Supplier’s NPI Manufacturing Services to Company may include, without limitation, the following:

(a) Material stock list procurement and inventory stocking;

(b) Manufacture of Product Prototype and Pilot build units;

(c) Manufacturing Readiness Review (provided at no charge to Company); and

(d) Clear to build Material analysis (provided at no charge to Company).

For purposes of this Attachment, “Prototypes” are either: (a) assemblies intended for laboratory evaluation of performance or software development, or (b) assemblies intended to evaluate form, fit, and function and must meet Company’s Product Specifications, unless specific relaxations have been agreed to by the Parties. “Pilot Builds” are assemblies intended to determine what, if any, changes might be required to the design, assembly and test processes or the Specifications before the Product is ready for volume production.

4.2        Payment for the performance of said NPI Manufacturing Services shall be in accordance with Section 6.0 of this Attachment.

4.3        Company will provide Supplier with a written statement of requirements that details the Product Prototype or Pilot build quantities and dates, test requirements, etc. The Parties shall subsequently jointly develop a project plan that includes milestones and relevant due dates in support of said requirements. During the NPI process, Supplier shall provide to Company regular written progress reports on at least a weekly basis. All such reports shall include, but not necessarily be limited to, the following information:

(a) status of Supplier’s progress toward meeting the required Product Prototype or Pilot build quantities and dates;

(b) short description of problems or potential problems, if any, preventing Supplier from meeting the said quantities and build dates;

(c) recovery method proposed in order to meet the said quantities and build dates, if needed, and

(d) any other information related to the NPI Manufacturing Services as may be reasonably requested by Company.

4.4        Supplier will perform such NPI Manufacturing Services and deliver any requested deliverables to Company in accordance with the agreed upon schedule applicable to such deliverable. Additionally, Supplier agrees to:

(a) Deliver Prototype or Pilot build quantities from each build to Company within a mutually agreed upon timeframe.

(b) As required, respond to NPI related Engineering Change Orders issued by Company in accordance with Article 59 of this Agreement.

4.5        Upon Company’s request in writing, Supplier shall have the responsibility for procuring and storing all the necessary Material to support the agreed upon Product Prototype, or Pilot build schedules and quantities. Any Excess or Obsolete Material will be dealt with in accordance with Article 13 of this Agreement.

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4.6        Supplier shall schedule NPI Manufacturing Services in such a manner as to ensure that the Product Prototype or Pilot build activity will not adversely impact Supplier’s manufacturing capability to meet Company’s Product Orders.

4.7        Supplier shall produce NPI builds on the standard production line, or duplicate equipment, to allow efficient introduction of products into volume production.

5.0        Advanced Technology Development

5.1        Company and Supplier will develop means for Company to share its Product technology roadmaps and future manufacturing technology requirements and for Supplier to share its manufacturing technology development plans in order to address technology requirements to support Company’s future products. This exchange may result in identification of co-development projects whose cost and schedule will be mutually agreed by the Parties.

5.2        It is expected that the results of applicable Supplier-funded development programs will be made available to the Company for inclusion into Company’s DFx guidelines, as appropriate. DFx guidelines will be provided to the Company by the Supplier, as well as any updates, at no charge.

5.3        Supplier is expected to assist Company in keeping Company’s DFx guidelines up to date, both through review of Company designs and the DFx change management process. It is understood that Company’s DFX guidelines will be used for Products made by all of Company’s electronic manufacturing service providers.

6.0        Pricing

6.1        Unless otherwise agreed to by the Parties, prices for Product Prototypes, Models, and Pilot production quantities delivered to Company by Supplier shall be priced in accordance with the formula discussed below. This pricing formula will apply to the first two hundred (200) units manufactured of any new product. Any subsequent volumes will be priced according to Attachment G.

NPI pricing formula: [*]

7.0        NPI Process Alignment

7.1        The Parties agree that any conflict between the text of this Attachment M and the pictorial diagram attached to this Attachment as Page 5 shall be governed by such text.

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ATTACHMENT N

ORDERING COMPANY ACKNOWLEDGEMENT

ACKNOWLEDGEMENT AND AGREEMENT

TO:        ELCOTEQ CORPORATION (“Supplier”)

Reference is made to the Manufacturing Supply Agreement (the “Supply Agreement”) dated                          made between Supplier and Andrew Corporation (“Company”). Capitalized terms which are defined in the Supply Agreement and which are used and not otherwise defined herein have the respective meanings ascribed to them in the Supply Agreement.

WHEREAS the undersigned is has been designated by Company as an Ordering Company pursuant to Article 53.1 of the Agreement;

AND WHEREAS Article 53.2 of the Supply Agreement provides that an Ordering Company may be eligible to purchase Products, Commercially Purchased Items and Services from Supplier on the same terms and conditions, including the same prices, as set forth in the Supply Agreement, provided that the conditions in Article 53.2 of the Supply Agreement are met;

NOW THEREFORE the undersigned hereby:

(1)        covenants and agrees to be bound by the Supply Agreement, as the same may be amended from time to time, as if it were the purchaser of Products in the place and stead of Andrew;

(2)        acknowledges and agrees that Supplier may exercise against the undersigned all of its rights and remedies which it has against Company under the Supply Agreement; and

(3)        acknowledges and agrees that its designation as an Ordering Company may be revoked by Company at any time.

DATED this              day of                     ,         .

[NAME OF ORDERING COMPANY]

Name:

Title:

An authorized signing officer

Acknowledged and agreed this              day of                     ,         .

ANDREW CORPORATION

Name:

Title:

An authorized signing officer

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ATTACHMENT O

CATEGORIZATION OF MATERIAL

The Parties agree that all Material purchased by Supplier from vendors on the Approved Vendor List (AVL) on or before December 31, 2006, shall be considered initially as Company Material. The Parties further agree that the categorization of Material shall be reviewed and adjusted on a quarterly basis as described in Art. 13.2.

Commodity	Company Material	Supplier- Controlled Material	Supplier- Controlled Custom Material
Amplifier
Attenuator
Bead
Cable
Capacitor
Circuit Breaker
Coupler
Die Cast/CNC
Diode
Drop-In Isolator
Filter
Fuse
Gasket
Hardware
Inductor
Integrated Circuit
Label
Mixer
Oscillator
Power Converter
Printed Circuit Boards
Relay
Resistor
RF Interconnect
Sheet Metal
Solder Preform
Splitter Combiner
Switch
Termination
Thermal Pad
Transformer
Transistor
Turnery

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ATTACHMENT P

MINIMUM CANCELLATION PROVISIONS

Commodity Type	Lead-time	Cancellation Period (1) & (2)
Resistors	4 Weeks	2 Weeks
Electrolytic Capacitors	6 Weeks	3 Weeks
IC Logic Devices	10 Weeks	5 Weeks
Material Not Listed Above		50% of the Applicable Lead-Time

NOTES:  (1) This column is expressed in the amount of time (days, weeks, etc.), or the percentage of the vendor’s lead-time, following acceptance of Supplier’s order, during which Supplier may cancel its order without penalty or charge.

                (2) Liability for Material not cancelled during this period may in all events remain with Supplier, as described in Article 13 of the Agreement.

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ATTACHMENT Q

INITIAL OVERSIGHT COMMITTEE MEMBERS

SUPPLIER MEMBERS:

Doug Brenner – President, Elcoteq Americas

Harri Ojala – President, GA Europe

Bruno Cathomen - VP BA CNE Business Development

Mitch Schoch - VP Sales & Marketing, Elcoteq Americas

David Murphy - Global Account Manager

COMPANY MEMBERS:

Iris Artaki – Director Quality & Reliability, Andrew BSSG

Matt Douglas – VP Global Operations, Andrew BSSG

Farid Firouzbakht – VP & GM Filter Business Unit, Andrew BSSG

Fred Lietz – VP Purchasing, Andrew Corporate

Robert Suffern – VP & GM Power Amplifier Business Unit, Andrew BSSG

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ATTACHMENT R

RESPONSIBILITY MATRIX

The Parties agree that by the end of calendar year 2006 they will have discussed and agreed in detail on a Responsibility Matrix that will documenttheir detailed and common understanding of certain of their respective responsibilities under this Agreement. The Parties will use the appended template as a starting point for their discussions and adjust accordingly. Thereafter the Responsibility Matrix shall be reviewed and adjusted as agreed on a quarterly basis.

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Manufacturing Supply Agreement Page 2        

Sourcing Responsibility Mapping	xx August 2006
	Responsibility
Sourcing Task/Issue	Customer	Elcoteq
Commercial Issues that are agreed and set with supplier:
Supplier / manufacturer proposals
Supplier/Manufacturer approval
Agreement negotiation responsibility
General Purchasing Agreement
Logistics Agreement
Quality Agreement
General Agreement terms and conditions
Pricing
Price and price validity
Price development (reduction)
Delivery&Logistics
Delivery Term
Payment Term
Delivery Time/Lead Time
Cancellation Window
Rescheduling Window, # of reschedulings
Flexibility
Logistics model/set-up (e.g. PO, SMI, SMC)
Export control requirements
Penalities of late delivery (e.g. LD)
Quality
Supplier auditing
Quality requirements
Quality targets (DPPM, Yields)
Supplier quality reporting
Required Quality Targets and Supplier compliance
Corrective actions due to defective components, only to the extent
ELQ is responsible of such activity defined in Product Agreement
Epidemic Defect
Required Environmental Mgmt and Supplier compliance
Required Ethical Mgmt and Supplier compliance
Other contractual Issues that are agreed and set with supplier:
Component change management practice (ECO/PCN)
General, i.e. spesification (FFF)
RoHS compliance
Discontinuation of the production (EOL)
ELQ is only responsble for implementing the component EOL effect in
practise based on Andrew instructions. Andrew is responsible for updating
such component EOL status to compoinent database.
Component supplier liabilities
Warranty (duration and content)
Product Liability
IPR Indemnification
Other liabilities and responsibilties
As agreed in teh Manufacturing Supply Agreement between Andrew and Elcoteq SE

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EX-10.38

EXHIBIT 10.38

ASSET PURCHASE AGREEMENT

between

ANDREW CORPORATION,

as the Buyer,

and

EMS TECHNOLOGIES, INC.,

as the Seller,

Dated as of October 31, 2006

TABLE OF CONTENTS

ARTICLE I	DEFINITIONS	1
Section 1.1	Certain Defined Terms	1
Section 1.2	Table of Definitions	7
Section 1.3	Construction	8
ARTICLE II	PURCHASE AND SALE	9
Section 2.1	Purchase and Sale of Assets	9
Section 2.2	Excluded Assets	10
Section 2.3	Assumed Liabilities	11
Section 2.4	Excluded Liabilities	12
Section 2.5	Consideration	13
Section 2.6	Closing	13
Section 2.7	Transactions to be Effected at the Closing	13
Section 2.8	Risk of Loss	14
Section 2.9	Post-Closing Adjustment of Purchase Price	14
Section 2.10	Allocation	16
ARTICLE III	REPRESENTATIONS AND WARRANTIES OF THE SELLER	17
Section 3.1	Organization and Qualification	17
Section 3.2	Authority	17
Section 3.3	No Conflict; Required Filings and Consents	17
Section 3.4	Transferred Assets	18
Section 3.5	Financial Statements; No Undisclosed Liabilities	19
Section 3.6	Absence of Certain Changes or Events	20
Section 3.7	Compliance with Law; Permits	20
Section 3.8	Litigation	21
Section 3.9	Employee Plans	21
Section 3.10	Labor and Employment Matters	21
Section 3.11	Insurance	22
Section 3.12	Real Property	22
Section 3.13	Intellectual Property	22
Section 3.14	Taxes	24
Section 3.15	Environmental Matters	26
Section 3.16	Material Contracts	26
Section 3.17	Receivables	28
Section 3.18	Customers and Suppliers; Product Retrievals	28
Section 3.19	Inventory	29
Section 3.20	Tangible Personal Property	29
Section 3.21	Brokers	29
Section 3.22	EMS Brazil	29
Section 3.23	WARN Act	30

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ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF THE BUYER	30
Section 4.1	Organization and Qualification	30
Section 4.2	Authority	30
Section 4.3	No Conflict; Required Filings and Consents	31
Section 4.4	Financing	31
Section 4.5	Brokers	32
Section 4.6	Litigation	32
ARTICLE V	COVENANTS	32
Section 5.1	Conduct of Business Prior to the Closing	32
Section 5.2	Covenants Regarding Information	33
Section 5.3	Update of Disclosure Schedules; Knowledge of Breach	34
Section 5.4	Notification of Certain Matters	35
Section 5.5	Intercompany Arrangements	35
Section 5.6	Employee Benefits	35
Section 5.7	Confidentiality	38
Section 5.8	Consents; Further Assurances	38
Section 5.9	Corporate Name	40
Section 5.10	Refunds and Remittances	40
Section 5.11	No Solicitation	40
Section 5.12	Agreement Not to Compete	41
Section 5.13	Bulk Transfer Laws	41
Section 5.14	Public Announcements	41
Section 5.15	SelectaCell Payments	42
Section 5.16	Authority to Collect Receivables	42
Section 5.17	Product Warranties	42
Section 5.18	Product Authorizations	43
ARTICLE VI	TAX MATTERS	43
Section 6.1	Liability for Taxes	43
Section 6.2	Assistance and Cooperation	44
Section 6.3	Section 338(g) Election	45
ARTICLE VII	CONDITIONS TO CLOSING	45
Section 7.1	General Conditions	45
Section 7.2	Conditions to Obligations of the Seller	45
Section 7.3	Conditions to Obligations of the Buyer	46
ARTICLE VIII	INDEMNIFICATION	46
Section 8.1	Survival of Representations, Warranties and Covenants	46
Section 8.2	Indemnification by the Seller	47
Section 8.3	Indemnification by the Buyer	47
Section 8.4	Procedures	48

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Section 8.5	Limits on Indemnification	49
Section 8.6	Exclusivity	50
Section 8.7	Disclaimer of Implied Warranties	51
Section 8.8	Adjustment to Purchase Price	51
ARTICLE IX	TERMINATION	51
Section 9.1	Termination	51
Section 9.2	Effect of Termination	52
ARTICLE X	GENERAL PROVISIONS	52
Section 10.1	Fees and Expenses	52
Section 10.2	Amendment and Modification	52
Section 10.3	Waiver	52
Section 10.4	Notices	53
Section 10.5	Entire Agreement	53
Section 10.6	No Third-Party Beneficiaries	54
Section 10.7	Governing Law	54
Section 10.8	Dispute Resolution	54
Section 10.9	Disclosure Generally	54
Section 10.10	Personal Liability	54
Section 10.11	Assignment; Successors	55
Section 10.12	Enforcement	55
Section 10.13	No Presumption Against Drafting Party	55
Section 10.14	Severability	55
Section 10.15	Waiver of Jury Trial	55
Section 10.16	Counterparts	55
Section 10.17	Facsimile Signature	56
Section 10.18	Time of Essence	56
Section 10.19	Exchange Rate	56

iii

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT, dated as of October 31, 2006 (this “Agreement”), is between ANDREW CORPORATION, a Delaware corporation (the “Buyer”), and EMS TECHNOLOGIES, INC., a Georgia corporation (the “Seller”). Each of the Buyer and the Seller is referred to individually in this Agreement as a “Party” and collectively as the “Parties.”

RECITALS

A. The Seller, through its EMS Wireless division (including its Subsidiary EMS Brazil), is engaged in the business of designing, manufacturing and marketing a line of radio frequency products and services, including base-station antennas, repeaters and accessories and related maintenance and services used by service providers in cellular and PCS telecommunications networks, primarily in the United States and Brazil (the “Business”).

B. The Seller wishes to sell to the Buyer, and the Buyer wishes to purchase from the Seller, the Business, and in connection therewith the Buyer is willing to assume certain specified liabilities and obligations of the Seller relating thereto, all upon the terms and subject to the conditions set forth in this Agreement.

AGREEMENT

In consideration of the foregoing, the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Certain Defined Terms. For purposes of this Agreement:

“Action” means any claim, action, suit, arbitration or proceeding by or before any Governmental Authority.

“Affiliate”, with respect to any specified Person, means any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person.

“Ancillary Agreements” means the Bill of Sale, the Intellectual Property Assignments, the Assumption Agreement and the Transition Services Agreement.

“Assumption Agreement” means an instrument of assignment and assumption, in substantially the form set forth in Exhibit A, pursuant to which the Buyer shall assume all of the liabilities of the Seller as of the Closing Date that are included in the Assumed Liabilities.

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“Bill of Sale” means a bill of sale, in substantially the form set forth in Exhibit B, transferring to the Buyer all of the tangible personal property owned or held by the Seller as of the Closing Date that is included in the Transferred Assets.

“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in the city of Atlanta, Georgia or the city of Chicago, Illinois.

“Business Employees” means all individuals set forth on Annex 1.

“Buyer Material Adverse Effect” means any event, change, circumstance, effect or state of facts that is materially adverse to the ability of the Buyer to perform its obligations under this Agreement or to consummate the transactions contemplated by this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended through the date hereof.

“Control”, including the terms “Controlled by” and “under common Control with”, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, as general partner or managing member, by contract or otherwise.

“Employee Plans” means all “employee benefit plans” within the meaning of Section 3(3) of ERISA, all formal written plans and all other compensation and benefit plans, contracts, policies, programs and arrangements of the Seller (other than routine administrative procedures) in connection with the Business in effect as of the date of this Agreement, including all pension, profit sharing, savings and thrift, bonus, stock bonus, stock option or other cash or equity-based incentive or deferred compensation, severance pay and medical and life insurance plans in which any of the Business Employees or their dependents participate.

“EMS Brazil” means EMS Wireless do Brasil Ltda., enrolled with the National Legal Entities Registry (CNPJ) in Brazil under No. 03.945.567/0001-29.

“Encumbrance” means any charge, claim, mortgage, lien, option, pledge, security interest or other restriction of any kind.

“Environmental Laws” means any Laws of any Governmental Authority or applicable jurisdiction relating to protection and clean up of the air, the land, the water and the environment and activities or conditions related thereto including those relating to the generation, handling, disposal, transportation, or release of or exposure to Hazardous Material.

“Environmental Permits” means all Permits under any Environmental Law reasonably required in the operation or conduct of the Business as currently conducted.

“Final Working Capital” means the current assets of the Business less the current liabilities of the Business (in each case including EMS Brazil on a consolidated basis, including cash and cash equivalents of EMS Brazil) as of 11:59 p.m. Atlanta, Georgia time on the day

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immediately prior to the Closing Date, prepared in accordance with the guidelines on Exhibit C, and as reflected on the Working Capital Schedule.

“First Commercial Sale” means, with respect to the SelectaCell Products, the date any such product is first sold by the Buyer or an Affiliate of the Buyer to a non-affiliated third party.

“GAAP” means United States generally accepted accounting principles as in effect on the date of this Agreement.

“Governmental Authority” means any United States or non-United States national, federal, state or local governmental, regulatory or administrative authority, agency or commission or any judicial or arbitral body.

“Hazardous Material” means any pollutant, contaminant, waste, hazardous substance, hazardous waste, toxic substance, petroleum or petroleum-based substance or waste, asbestos or asbestos-containing materials, polychlorinated biphenyls, or any other material or substance which is defined in, regulated under or for which liability or standards of care are imposed by any Environmental Law.

“Intellectual Property” means all intellectual property rights arising under the Laws of the United States or any other jurisdiction with respect to the following: (a) trade names, trademarks and service marks (registered and unregistered), domain names, trade dress and similar rights and applications to register any of the foregoing (collectively, “Marks”); (b) patents and patent applications and rights in respect of utility models or industrial designs (collectively, “Patents”); (c) copyrights and registrations and applications therefor (collectively, “Copyrights”); (d) know-how, ideas, inventions, invention records or disclosures, discoveries, methods, processes, technical data, specifications, research and development information, technology, Software, data bases, test information and other proprietary or confidential information, including marketing strategies and customer lists that are the subject of reasonable efforts under the circumstances to maintain the confidentiality thereof and derive economic value from not being generally known (collectively, “Trade Secrets”).

“Intellectual Property Assignments” means instruments of assignment in substantially the form of Exhibit D, transferring to the Buyer all of the Owned Business Registered IP.

“Known,” with respect to the Seller or the Buyer, means the actual or constructive knowledge of the persons listed under the appropriate caption in Schedule 1.1(a) of the Disclosure Schedules, including the knowledge such persons would have following reasonable inquiry, as of the date the applicable representation or warranty is made or deemed made hereunder (or, with respect to a certificate delivered pursuant to this Agreement, as of the date of delivery of such certificate).

“Law” means any statute, law (including common law), ordinance, regulation, rule, code, injunction, judgment, decree or order of any Governmental Authority.

“LXE” means LXE Inc., a Georgia corporation.

3

“Material Adverse Effect” means any event, change, circumstance, effect or state of facts that is materially adverse to (a) the business, assets, condition (financial or otherwise) or results of operations of the Business or (b) the ability of the Seller timely to perform its obligations under the Transaction Documents or timely to consummate the transactions contemplated thereby; provided, however, that “Material Adverse Effect” shall not include the effect of any event, change, circumstance, effect, or state of facts arising out of or attributable to any of the following, either alone or in combination: (i) the base-station antenna and repeater business generally, (ii) general economic or political conditions in the United States or Brazil, (iii) the public announcement of this Agreement or of the consummation of the transactions contemplated by this Agreement or (iv) acts of war (whether or not declared), sabotage or terrorism, military actions or the escalation thereof or other force majeure events occurring after the date of this Agreement, in each case, occurring after the date hereof and, in the case of clauses (i), (ii) and (iv), that does not materially and adversely affect the Business in a manner that is substantially different from the impact to the other businesses in the industry.

“Net Sales” means the sum of (a) the net sales recognized with respect to the SelectaCell Products, by the Buyer or any Affiliate of the Buyer (or any successor to the ownership of the SelectaCell Products), to any non-Affiliate third party, for all the units of such SelectaCell Products so sold, and (b) any net licensing revenues recognized by the Buyer or any Affiliate of the Buyer (or any successor to the ownership of the technology associated with the SelectaCell Products) relating to the license of the Intellectual Property included within the SelectaCell Products in connection with the sale of SelectaCell Products or any OEM program relating to the SelectaCell Products, in each case, in accordance with United States generally accepted accounting principles, applied on a basis consistent with the Buyer’s past practice, as in effect at the time such net sales or net revenues are recognized; provided, however, that Net Sales shall not be affected by payments by the Buyer to the Seller pursuant to Section 5.15.

“Permitted Encumbrance” means, with respect to any Transferred Asset, (a) statutory liens for current Taxes not yet due or the validity or amount of which is being contested in good faith by appropriate proceedings, (b) mechanics’, carriers’, workers’, repairers’ and other similar liens arising or incurred in the ordinary course of business relating to obligations as to which there is no default on the part of the Seller for a period greater than 60 days, or the validity or amount of which is being contested in good faith by appropriate proceedings, or pledges, deposits or other liens securing the performance of bids, trade contracts, leases or statutory obligations (including workers’ compensation, unemployment insurance or other social security legislation), (c) zoning, entitlement, conservation restriction and other similar land use and environmental regulations by Governmental Authorities and (d) all exceptions, restrictions, easements, imperfections of title, charges, rights of way and other Encumbrances that do not, individually or in the aggregate, materially interfere with the present use of such Transferred Asset in the Business as presently conducted.

“Person” means an individual, corporation, partnership, limited liability company, limited liability partnership, syndicate, person, trust, association, organization or other entity, including any Governmental Authority, and including any successor, by merger or otherwise, of any of the foregoing.

4

“Products” means any and all products manufactured, marketed, distributed or sold by the Business prior to the Closing Date.

“Product Warranty Costs” means all costs and expenses reasonably incurred by the Buyer or any of its Affiliates from and after the Closing Date, including manufacturing overhead but excluding general and administrative overhead, to the extent arising out of or resulting from any warranty obligations existing with respect to the Products on the Closing Date, including any such reasonable costs and expenses relating to refunds, repairs, exchanges, adjustments or returns made by customers of the Business with respect to such Products pursuant to rights under such warranty obligations.

“Purchase Price” means $50,500,000.

“Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration of a Hazardous Material into the indoor or outdoor environment or into or out of any property, including the movement of Hazardous Material through or into the air, soil, surface water, groundwater or other environmental media.

“Restricted Activities” means any of the development, manufacture, distribution or sale of tower-mounted and other fixed terrestrial base station antennas and fixed terrestrial indoor and outdoor signal repeaters intended for use as part of, or in connection with the use of, any terrestrial cellular or PCS wireless telecommunications network, in each case, anywhere in North America, Central America or South America; provided, however, that, notwithstanding the foregoing, the Seller shall not be prohibited from developing, manufacturing, distributing or selling any product for end use by any government in military and defense applications.

“SelectaCell Patents” means those Patents included within the Transferred Assets identified in Exhibit E.

“SelectaCell Products” means the product of the Business known as the SelectaCell 1900 MHz indoor repeater and any other indoor repeater product that is (a) covered by one or more claims of the SelectaCell Patents and (b) derived from and has substantially the same functional specifications as the SelectaCell 1900 MHz indoor repeater.

“Seller’s Product Warranty Share” means seventy-five percent (75%) of all Product Warranty Costs incurred by the Buyer or any of its Affiliates with respect to any individual product model (as determined by SKU number) or component, or any particular design or manufacturing defect common to multiple product models or components (a “Significant Warranty Event”), during the two-year period immediately following the Closing Date; provided, however, that (a) the Seller shall not have any responsibility or liability for such Product Warranty Costs with respect to any Significant Warranty Event until the aggregate Product Warranty Costs with respect to such Significant Warrant Event exceed $300,000, in which case Seller’s Product Warranty Share shall be calculated from the first dollar of the Product Warranty Costs associated with such Significant Warranty Event, and (b) in no event shall the aggregate amount of Seller’s Product Warranty Share for all Significant Warranty Events exceed $1,200,000.

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“Software” means computer software programs and related documentation and materials, whether in source code, object code or human readable form; provided, however, that Software does not include software that is available generally through retail stores, distribution networks or is otherwise subject to “shrink-wrap” license or “click-through” agreements, including any software pre-installed in the ordinary course of business as a standard part of hardware, equipment or fixtures purchased by the Seller or EMS Brazil and used in the Business.

“Subsidiary” of any Person means any other Person of which an amount of the outstanding voting securities or other voting equity interests sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests) is owned, directly or indirectly, by such first Person.

“Target Working Capital Amount” means $16,657,014, which reflects the current assets and the current liabilities of the Business (in each case including EMS Brazil on a consolidated basis, but excluding cash and cash equivalents of EMS Brazil) as of 11:59 p.m. Atlanta, Georgia time on September 30, 2006, prepared in accordance with the guidelines on Exhibit C.

“Tax” (and, with correlative meaning, “Taxes”) means (a) any federal, state, local or foreign income, gross receipts, property, sales, use, license, excise, franchise, employment, payroll, withholding, alternative or add-on minimum, ad valorem, value added, transfer or excise tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, imposed by any Governmental Authority; and (b) any liability of the Seller or EMS Brazil for the payment of amounts described in clause (a) as a result of being a member of an affiliated, consolidated, combined or unitary group or as a result of any obligation of under any Tax sharing agreement or Tax indemnity agreement.

“Tax Return” means any return, declaration, report, statement, information statement and other document required to be filed with respect to Taxes.

“Transaction Documents” means this Agreement, the Ancillary Agreements and the documents delivered in connection herewith and therewith.

“Transition Services Agreement” means the agreement, in substantially the form set forth in Exhibit F, pursuant to which the Seller will provide certain services to the Buyer for the period of time set forth in such agreement.

“Working Capital Schedule” means a statement of the current assets and the current liabilities of the Business (in each case including EMS Brazil on a consolidated basis) as of 11:59 p.m. Atlanta, Georgia time on the day immediately prior to the Closing Date, prepared in accordance with the guidelines on Exhibit C.

6

Section 1.2 Table of Definitions. The following terms have the meanings set forth in the Sections referenced below:

Definition	Location
Adjusted Purchase Price	2.9(d)
Agreed Rate	2.9(e)
Agreement	Preamble
Allocation Schedule	2.10
Amendment to the Articles of Association	2.7(a)(iii)
Assumed Liabilities	2.3
Balance Sheet	3.5(a)
Business	Recitals
Business Intellectual Property	2.1(c)
Business Permits	2.1(g)
Buyer	Preamble
Buyer Indemnified Parties	8.2
Buyer Savings Plan	5.6(d)
Buyer Welfare Benefit Plans	5.6(e)(i)
Certidão Negativa perante o INSS	2.7(a)(iv)
Certificado de Regularidade perante o FGTS	2.7(A)(v)
Certidão Conjunta de Débitos Relativos a Tributos Federais e à Dívida Ativa da União	2.7(a)(vi)
Certidão Negative de Débitos da Receita Estadual	27(A)(vii)
Closing	2.6
Closing Date	2.6
Closing Date Amount	2.7(b)
COBRA Coverage	5.6(e)(i)
Confidentiality Agreement	5.7
Contracts	2.1(a)
Disclosure Schedules	Article III
EMS Brazil Balance Sheet	3.5(b)
EMS Brazil Contracts	3.16(a)
EMS Brazil Financial Statements	3.5(b)
EMS Brazil Receivables	3.17
EMS Brazil Unaudited Balance Sheet	3.5(b)
EMS Permits	3.7(c)
Excluded Assets	2.2
Excluded Liabilities	2.4
Financial Statements	3.5(a)
Fundamental Representations	8.1
HSR Act	3.36b)
Indemnified Party	8.4(a)
Indemnifying Party	8.4(a)
Independent Accounting Firm	2.9(c)
Inventory	2.1(f)
Landlord Estoppels	5.8(e)
Leased Real Property	3.12
Losses	8.2
Material Contracts	3.16(a)
Names	5.9
Notice of Disagreement	2.9(b)

7

Owned Business Patents	3.13(a)
Owned Business Registered Copyrights	3.13(a)
Owned Business Registered IP	3.13(a)
Owned Business Registered Marks	3.13(a)
Party	Preamble
Permits	3.7(b)
Pre-Closing Tax Period	6.1(b)
Post-Closing Tax Period	6.1(b)
Product Authorizations	3.3(b)
Product Warranties Notice of Disagreement	5.17(a)
Product Warranty Costs Schedule	5.17(a)
Quotas	2.1(j)
Real Property	2.1(b)
Receivables	2.1(d)
Representatives	5.2(a)
Required Consents	5.8(a)
Royalty Payment	5.15(a)
Royalty Period	5.15(a)
Seller	Preamble
Seller Indemnified Parties	8.3
Tangible Personal Property	2.1(e)
Target Amount	5.15(a)
Target SelectaCell Payment	5.15(a)
Termination Date	9.1(d)
Third Party Claim	8.4(a)
Transfer Taxes	6.1(a)
Transferred Assets	2.1
Transferred Employees	5.6(a)
WARN Act	3.23

Section 1.3 Construction.

(a) Unless the context of this Agreement otherwise clearly requires, (i) references to the plural include the singular, and references to the singular include the plural, (ii) references to one gender include the other gender, (iii) the words “include,” “includes” and “including” do not limit the preceding terms or words and shall be deemed to be followed by the words “without limitation”, (iv) the terms “hereof”, “herein”, “hereunder”, “hereto” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement, (v) the terms “day” and “days” mean and refer to calendar day(s), and (vi) the terms “year” and “years” mean and refer to calendar year(s).

(b) Unless otherwise set forth in this Agreement, references in this Agreement to any document, instrument or agreement (including this Agreement) (i) includes and incorporates all exhibits, schedules and other attachments thereto, (ii) includes all documents, instruments or agreements issued or executed in replacement thereof and (iii) means such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified or supplemented from time to time in accordance with its terms and in effect at any

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given time. All Article, Section, Exhibit and Schedule references herein are to Articles, Sections, Exhibits and Schedules of this Agreement, unless otherwise specified.

ARTICLE II

PURCHASE AND SALE

Section 2.1 Purchase and Sale of Assets. Upon the terms and subject to the conditions of this Agreement, at the Closing, the Seller shall sell, assign, transfer, convey and deliver to the Buyer all of the Seller’s right, title and interest as of the Closing Date in, to and under the Transferred Assets, and the Buyer shall purchase, acquire, accept and pay for the Transferred Assets and assume the Assumed Liabilities. “Transferred Assets” shall mean all of the Seller’s right, title and interest in, to and under all of the business, the assets, properties, rights and goodwill (wherever located), real or personal, whether tangible or intangible, that are owned by or leased or licensed to the Seller and used, held for use or intended to be used primarily in the Business (other than the Excluded Assets), as of the Closing Date, including the assets, properties and rights referred to below:

(a) all contracts and agreements, oral or written, to which the Seller is a party or by which the Seller is bound that are used, held for use or intended to be used primarily in the Business, or that arise primarily out of the operation or conduct of the Business or to which the Transferred Assets are subject including all contracts and agreements listed in Schedule 3.16 of the Disclosure Schedules (collectively, the “Contracts”);

(b) all real property, leaseholds and other interests in real property leased by the Seller and used, held for use or intended to be used primarily in the Business, together with the Seller’s right, title and interest in, to and under all structures, facilities or improvements located thereon, all fixtures, systems, equipment and other items of personal property attached or appurtenant thereto and all easements, licenses, rights and appurtenances relating to the foregoing (the “Real Property”);

(c) all Intellectual Property owned by or licensed to the Seller and used, held for use or intended to be used primarily in the Business (including any confidentiality agreements to protect the Seller’s interest therein) (the “Business Intellectual Property”);

(d) all accounts receivable, notes receivable and other receivables due to the Seller in connection with the Business (the “Receivables”), together with any unpaid interest or fees accrued thereon or other amounts due with respect thereto;

(e) all machinery, equipment, furniture, furnishings, parts, spare parts, vehicles and other tangible personal property or interests therein owned or leased by the Seller and used, held for use or intended to be used primarily in the Business (the “Tangible Personal Property”);

(f) all raw materials, work-in-progress, finished goods, supplies, packaging materials and other inventories (including in transit, on consignment or in the possession of any third party) owned by the Seller (including any of the foregoing in possession of third parties) and used, held for use or intended to be used primarily in the Business (the “Inventory”);

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(g) all Permits of the Seller used, held for use or intended to be used primarily in the Business (the “Business Permits”);

(h) all files, invoices, customers’ and suppliers’ lists, other distribution lists, billing records, sales and promotional literature, manuals and customer and supplier correspondence of the Seller relating primarily to the Business;

(i) all credits, prepaid expenses, deferred charges (other than deferred Taxes), advance payments, prepaid items and security deposits that are used, held for use or intended to be used primarily in, or arising primarily out of or relating primarily to, the Business;

(j) 1,936,560 quotas in EMS Brazil (including the quota currently held by LXE) representing 100% of its capital, free and clear of any Encumbrances (the “Quotas”);

(k) all rights to causes of action, lawsuits, judgments, claims, credits and demands of any nature in favor of the Seller to the extent relating to the Business or the Transferred Assets, including all rights under all guarantees, warranties, indemnities and similar rights in favor of the Seller;

(l) all goodwill generated by or associated with the Business; and

(m) all rights in and to products sold in the operation or conduct of the Business.

Section 2.2 Excluded Assets. Notwithstanding anything contained in Section 2.1 to the contrary, the Seller is not selling, and the Buyer is not purchasing, any of the following assets of the Seller (except to the extent that such assets are assets directly owned by EMS Brazil), all of which shall be retained by the Seller (collectively, the “Excluded Assets”):

(a) all of the Seller’s cash and cash equivalents as of 11:59 p.m. Atlanta, Georgia time on the day immediately prior to the Closing Date;

(b) the Seller’s corporate books and records of internal corporate proceedings, Tax Returns, taxpayer and other identification numbers;

(c) all rights in the following names and marks and any variation or derivation thereof: “EMS,” “EMS Technologies” and “EMS Wireless”;

(d) all of the Seller’s bank accounts;

(e) all (i) accounting records (including records relating to Taxes) and internal reports relating to the business activities of the Seller that are not Transferred Assets, and (ii) work papers and books and records relating to the Business that the Seller is required by Law to retain; provided, however, that the Seller shall provide copies of such accounting records, internal reports, work papers and books and records to the extent that they would reasonably be expected to relate primarily to the operation and conduct of the Business following the Closing;

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(f) any interest in or right to any refund of any Taxes for which the Seller is liable pursuant to this Agreement, except to the extent such refund is treated as a current asset in the calculation of Final Working Capital;

(g) any insurance policies and rights, claims or causes of action thereunder;

(h) except as specifically provided in Section 5.6, any assets relating to any Employee Plan;

(i) all rights, claims and causes of action to the extent relating to any Excluded Asset or any Excluded Liability;

(j) the assets of the Seller listed in Exhibit G; and

(k) all rights of the Seller under the Transaction Documents.

Section 2.3 Assumed Liabilities. In connection with the purchase and sale of the Transferred Assets pursuant to this Agreement, as of the Closing, the Buyer shall assume and pay, discharge, perform or otherwise satisfy the following liabilities and obligations of the Seller relating to the Business (the “Assumed Liabilities”):

(a) all liabilities (other than liabilities for Taxes) of the Business reflected or reserved against in the Balance Sheet;

(b) all liabilities (other than liabilities for Taxes) accruing, arising out of or relating to the conduct or operation of the Business incurred subsequent to the date of the Balance Sheet in the ordinary course of business consistent with past practice that would have been required by GAAP to be reflected or reserved against in the Balance Sheet had such liabilities existed as of the date of the Balance Sheet; provided, however, that in no event shall the Assumed Liabilities include indebtedness for borrowed money or guarantees thereof;

(c) all liabilities accruing, arising out of or relating to the conduct or operation of the Business by the Buyer or the ownership or use of the Transferred Assets by the Buyer from and after the Closing Date;

(d) all liabilities for Taxes accrued as current liabilities in the calculation of Final Working Capital (but only to the extent of the amount so accrued) and for Taxes allocated to the Buyer pursuant to Article VI;

(e) all liabilities and obligations of the Seller under the Contracts and the Business Permits to the extent such liabilities and obligations are not required to be performed prior to the Closing Date; provided, however, that if such liability or obligation relates to an obligation of the Seller to make a cash payment under a Contract relating to the period prior to the Closing Date, then the Buyer shall assume such liability or obligation only to the extent it is included in the calculation of Final Working Capital;

(f) all rights of return and warranty obligations of the Seller or EMS Brazil associated with the Products (other than Seller’s Product Warranty Share); and

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(g) all liabilities assumed by the Buyer pursuant to Section 5.6.

Section 2.4 Excluded Liabilities. Notwithstanding any other provision of this Agreement to the contrary, the Buyer is not assuming and the Seller shall pay, perform or otherwise satisfy, all liabilities, obligations or commitments other than the Assumed Liabilities specifically listed in Section 2.3 (the “Excluded Liabilities”) (in the case of liabilities, obligations or commitments of EMS Brazil, solely for purposes of Article VIII), including the following:

(a) all liabilities for Taxes of the Seller except those allocated to the Buyer pursuant to Section 2.3(d);

(b) any liability that is not assumed by the Buyer pursuant to Section 5.6, including any liability with respect to any retention plans implemented by the Seller or by EMS Brazil prior to the Closing;

(c) any indebtedness for borrowed money or guarantees thereof of the Seller or EMS Brazil outstanding as of the Closing Date;

(d) any liability or obligation relating to an Excluded Asset;

(e) any Losses to the extent arising out of or resulting from any actual, material breach by the Seller or EMS Brazil under any Contract prior to the Closing (other than any right of return or warranty obligation of the Seller or EMS Brazil associated with the Products, which shall be assumed by the Buyer to the extent provided in Section 2.3(f));

(f) any liability, obligation or commitment of the Seller or EMS Brazil, whether express or implied, liquidated, absolute, accrued, contingent or otherwise, or known or unknown, arising primarily out of the operation or conduct by the Seller or EMS Brazil of any business other than the Business;

(g) any Losses to the extent arising out of or resulting from (i) any Action pending or threatened against the Seller or EMS Brazil as of the Closing Date, (ii) any actual, material violation by the Seller or EMS Brazil of any Applicable Law prior to the Closing, or (iii) any action, omission or event prior to the Closing relating to any of the matters described on Schedule 3.7 (for the avoidance of doubt, any rights of return and warranty obligations relating to such matters shall be Excluded Liabilities notwithstanding Section 2.3(f) or any other provision hereof);

(h) any liability of the Seller or EMS Brazil pursuant to any Environmental Law arising from or relating to any action, event, circumstance or condition occurring or existing on or prior to the Closing Date;

(i) any liability, obligation or commitment of the Seller or EMS Brazil to any of their respective Affiliates; and

(j) all liabilities for the Taxes of EMS Brazil (or any predecessor thereof) for any taxable period ending prior to the Closing Date except those allocated to the Buyer pursuant to Section 2.3(d).

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Section 2.5 Consideration.

(a) In full consideration for the sale, assignment, transfer, conveyance and delivery of the Transferred Assets to the Buyer, at the Closing, the Buyer shall (a) pay to the Seller an amount equal to the Purchase Price and (b) assume the Assumed Liabilities. The Purchase Price shall be payable in accordance with Section 2.7 and shall be subject to adjustment as provided in Section 2.9.

(b) Notwithstanding anything to the contrary, the Purchase Price will be reduced by the amount of any withholding income tax that, in the Buyer’s reasonable discretion, may be imposed by the Brazilian Taxing Authority on capital gain, if any, realized by the Seller as a result of the sale of the Quotas.

Section 2.6 Closing. The sale and purchase of the Transferred Assets and the assumption of the Assumed Liabilities contemplated by this Agreement shall take place at a closing (the “Closing”) to be held at the offices of King & Spalding LLP, 1180 Peachtree Street, Atlanta, GA 30309, at 10:00 A.M. Atlanta time on the second Business Day following the satisfaction or, to the extent permitted by applicable Law, waiver by the Party entitled to the benefit thereof of all conditions to the obligations of the Parties set forth in Article VII (other than such conditions as may, by their terms, only be satisfied at the Closing or on the Closing Date but subject to the satisfaction of such conditions), or at such other place or at such other time or on such other date as the Seller and the Buyer mutually may agree in writing. The day on which the Closing takes place is referred to as the “Closing Date.”

Section 2.7 Transactions to be Effected at the Closing. At the Closing:

(a) The Seller shall deliver to the Buyer

(i) an appropriately executed Bill of Sale;

(ii) an appropriately executed Intellectual Property Assignments;

(iii) an amendment to the articles of association of EMS Brazil (“Amendment to the Articles of Association”), duly executed by the Seller and by LXE in the form of Exhibit H, reflecting (A) transfer of the Quotas from the Seller and LXE to the Buyer, and (B) modification of the corporate name of the company so as to exclude the expression “EMS”;

(iv) a valid negative certificate issued by the Social Security National Institute attesting that EMS Brazil has no outstanding debts (“Certidão Negativa perante o INSS (CND INSS)”);

(v) a valid Certificate issued by the Federal Unemployment Fund attesting that EMS Brazil is in good standing with such Fund (“Certificado de Regularidade perante o FGTS”);

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(vi) a valid Certificate issued by the Federal Government attesting that EMS Brazil has no pending debts with the Federal Government (“Certidão Conjunta de Débitos Relativos a Tributos Federais e à Dívida Ativa da União”);

(vii) a valid Certificate issued by the State Government of Paraná stating that EMS Brazil has no pending debts with the State Government of Paraná (“Certidão Negative de Débitos da Receita Estadual”);

(viii) duly signed resignations (from the applicable board of directors and officers), effective immediately after the Closing, of all applicable directors and officers of EMS Brazil; and

(ix) the consents referred to in Section 7.3(a) and such other appropriately executed deeds (in recordable form), bills of sale, assignments, instruments of transfer and other documents as the Buyer or its counsel may reasonably request to effect the transfer of the Transferred Assets, and to demonstrate satisfaction of the conditions and compliance with the covenants set forth in this Agreement; and

(b) The Buyer shall deliver to the Seller (i) payment, by wire transfer to a bank account designated in writing by the Seller (such designation to be made at least two business days prior to the Closing Date), in immediately available funds in U.S. dollars in an amount (the “Closing Date Amount”) equal to (A) the Purchase Price plus or minus (B) an estimate, prepared by the Seller (and reasonably satisfactory to the Buyer) and delivered to the Buyer at least two Business Days prior to the Closing Date, of any adjustment to the Purchase Price under Section 2.9 based on the most recent date practicable, (ii) an appropriately executed Assumption Agreement and (iii) such other documents as the Seller or its counsel may reasonably request to demonstrate satisfaction of the conditions and compliance with the covenants set forth in this Agreement; and

(c) The Buyer and the Seller shall execute and deliver the Ancillary Agreements (other than the Bill of Sale and the Assumption Agreement).

Section 2.8 Risk of Loss. Until the Closing, any loss of or damage to the Transferred Assets from fire, casualty or any other occurrence shall be the sole responsibility of the Seller.

Section 2.9 Post-Closing Adjustment of Purchase Price.

(a) During the 60 days after the Closing Date, the Buyer shall prepare the Working Capital Schedule. The Buyer shall consult with the Seller and the parties shall cooperate with one another in the preparation of the Working Capital Schedule. Within 60 days after the Closing Date, the Buyer shall deliver to the Seller the Working Capital Schedule certified by an officer of the Buyer that it has been prepared in accordance with the requirements of Section 2.9.

(b) During the 20 Business Day period following the Seller’s receipt of the Working Capital Schedule, the Buyer shall cooperate with the Seller and its Representatives to provide them with any information used in preparing the Working Capital Schedule reasonably requested by the Seller and its Representatives and reasonably available to the Buyer. The

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Working Capital Schedule shall become final and binding on the 20^th Business Day following delivery thereof, unless prior to the end of such period, the Seller delivers to the Buyer written notice of its disagreement (a “Notice of Disagreement”) specifying the nature and amount of any disputed item. The Seller shall be deemed to have agreed with all items and amounts in the Working Capital Schedule not specifically referenced in the Notice of Disagreement, and such items and amounts shall not be subject to review in accordance with Section 2.9(c). Any Notice of Disagreement may reference only disagreements based on mathematical errors or based on amounts reflected on the Working Capital Schedule not being calculated in accordance with this Section 2.9.

(c) During the ten-Business Day period following delivery of a Notice of Disagreement by the Seller to the Buyer, if any, the Parties in good faith shall seek to resolve in writing any differences that they may have with respect to the matters specified therein. During such ten-Business Day period, the Seller shall cooperate with the Buyer and its Representatives to provide them with any information used in preparing the Notice of Disagreement reasonably requested by the Buyer or its Representatives and reasonably available to the Seller. Any disputed items resolved in writing between the Buyer and the Seller within such ten Business Day period shall be final and binding with respect to such items, and if the Seller and the Buyer agree in writing on the resolution of each disputed item specified by the Seller in the Notice of Disagreement and the amount of the Final Working Capital, the amount so determined shall be final and binding on the Parties for all purposes hereunder. If the Seller and the Buyer have not resolved all such differences by the end of such ten Business Day period, the Seller and the Buyer shall submit, in writing, to an independent public accounting firm (the “Independent Accounting Firm”), their briefs detailing their views as to the correct nature and amount of each item remaining in dispute and the amount of the Final Working Capital, and the Independent Accounting Firm shall make a written determination as to each such disputed item and the amount of the Final Working Capital, which determination shall be final and binding on the Parties for all purposes hereunder. The determination of the Independent Accounting Firm shall be accompanied by a certificate of the Independent Accounting Firm that it reached such determination in accordance with the provisions of this Section 2.9. The Independent Accounting Firm shall be Deloitte & Touche or, if such firm is unable or unwilling to act, such other independent public accounting firm as shall be agreed in writing by the Seller and the Buyer. The Seller and the Buyer shall use their commercially reasonable efforts to cause the Independent Accounting Firm to render a written decision resolving the matters submitted to it within 20 Business Days following the submission thereof. The Independent Accounting Firm shall be authorized to resolve only those items remaining in dispute between the Parties in accordance with the provisions of this Section 2.9 within the range of the difference between the Buyer’s position with respect thereto and the Seller’s position with respect thereto. The Seller and the Buyer agree that judgment may be entered upon the written determination of the Independent Accounting Firm in any court referred to in Section 10.8. The costs of any dispute resolution pursuant to this Section 2.9(c), including the fees and expenses of the Independent Accounting Firm and of any enforcement of the determination thereof, shall be borne by the Parties in inverse proportion as they may prevail on the matters resolved by the Independent Accounting Firm, which proportionate allocation shall be calculated on an aggregate basis based on the relative dollar values of the amounts in dispute and shall be determined by the Independent Accounting Firm at the time the determination of such firm is rendered on the merits of the matters submitted. The fees and disbursements of the Representatives of each Party

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incurred in connection with their preparation or review of the Working Capital Schedule and preparation or review of any Notice of Disagreement, as applicable, shall be borne by such Party.

(d) The Purchase Price shall be adjusted (the “Adjusted Purchase Price”), upwards or downwards, as follows:

(i) if the Final Working Capital as finally determined pursuant to this Section 2.9 is greater than the Target Working Capital Amount, the Purchase Price shall be adjusted upwards in an amount equal to the difference between the Final Working Capital and the Target Working Capital Amount; and

(ii) if the Target Working Capital Amount is greater than the Final Working Capital as finally determined pursuant to this Section 2.9, the Purchase Price shall be adjusted downwards in an amount equal to the difference between the Target Working Capital Amount and the Final Working Capital.

(e) If the Adjusted Purchase Price is more than the Closing Date Amount, then the Buyer shall pay to the Seller, and if the Adjusted Purchase Price is less than the Closing Date Amount, the Seller shall pay to the Buyer, within five Business Days after the Final Working Capital becomes final, the amount of such difference by wire transfer in immediately available funds in U.S. dollars. Amounts to be paid pursuant to this Section 2.9(e) shall bear interest from the Closing Date to the date of such payment at an annual rate equal to the three-month LIBOR rate in effect as of the third Business Day prior to the date the payment is made (the “Agreed Rate”). Payments in respect of this Section 2.9(e) shall be made within three Business Days of final determination of the Final Working Capital pursuant to the provisions of this Section 2.9 by wire transfer of United States dollars in immediately available funds to such account or accounts as may be designated in writing by the Party entitled to such payment at least two Business Days prior to such payment date.

Section 2.10 Allocation. Within 30 days after the determination of the Final Working Capital, the Buyer shall deliver to the Seller a schedule (the “Allocation Schedule”) allocating the Purchase Price (and any other items treated as consideration for the Transferred Assets, except the Quotas, for Tax purposes) among the Transferred Assets and the covenant of the Seller set forth in Section 5.12; provided, however, that the portion of the Purchase Price related to the Quotas will be agreed by the Buyer and the Seller prior to the Closing and reflected in the Amendment to the Articles of Association executed on the Closing Date. The remaining portion of the consideration will be allocated to the remainder of the Transferred Assets in accordance with this Section 2.10. The Allocation Schedule shall be reasonable and shall be prepared in accordance with Section 1060 of the Code and the Treasury Regulations thereunder. Such allocation shall be deemed final unless the Seller has notified the Buyer of any disagreement with the Allocation Schedule within 20 Business Days after submission thereof by the Buyer. In the event of such disagreement, the Parties hereto shall use reasonable efforts to reach agreement on a reasonable allocation of consideration among the Transferred Assets. In the event that the Parties hereto do not agree to a Purchase Price allocation in accordance with this Section 2.10, the Independent Accounting Firm shall make a determination as to each disputed item which shall be binding upon the Parties. The Buyer and the Seller each agrees to file Internal Revenue Service Form 8594, and all federal, state, local and foreign Tax Returns, in accordance with the

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Allocation Schedule as finally determined by the Parties or the Independent Accounting Firm, as the case may be. The Buyer and Seller each agrees to provide the other promptly with any other information required to complete Form 8594.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF THE SELLER

Except as set forth in the Disclosure Schedules attached to this Agreement (collectively, the “Disclosure Schedules”), the Seller hereby represents and warrants to the Buyer, as of the date of this Agreement and as of the Closing Date, as follows:

Section 3.1 Organization and Qualification.

(a) The Seller is a corporation duly organized, validly existing and in good standing under the Laws of the State of Georgia and has full corporate power and authority to own, lease and operate the Transferred Assets and to carry on the Business as it is now being conducted. The Seller is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the ownership or operation of the Transferred Assets or the conduct or operation of the Business makes such qualification or licensing necessary, except, in each case, for any such failures that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The certificate of incorporation and bylaws of the Seller, as amended, that are filed with the Securities and Exchange Commission are true and complete in all material respects.

(b) EMS Brazil is an entity duly organized and validly existing under the Laws of Brazil and has the power and authority to own, lease and operate its assets and to carry on its business as it is now being conducted.

Section 3.2 Authority. The Seller has full corporate power and authority to execute and deliver each of the Transaction Documents, to perform its obligations thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by the Seller of the Transaction Documents and the consummation by the Seller of the transactions contemplated thereby have been duly and validly authorized by all necessary corporate action. This Agreement has been, and upon their execution each of the Ancillary Agreements to which the Seller will be a party will have been, duly executed and delivered by the Seller. This Agreement constitutes, and upon their execution each of the Ancillary Agreements will constitute, the legal, valid and binding obligations of the Seller, enforceable against the Seller in accordance with their respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at Law).

Section 3.3 No Conflict; Required Filings and Consents.

(a) The execution, delivery and performance by the Seller of this Agreement do not and the execution, delivery and performance of each of the Ancillary Agreements, and the consummation of the transactions contemplated hereby and thereby, will not:

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(i) conflict with or violate the certificate of incorporation or bylaws of the Seller or similar organizational documents of EMS Brazil;

(ii) conflict with or violate in any material respect any material Law applicable to the Seller or EMS Brazil, the Business or any of the Transferred Assets or by which the Seller or EMS Brazil, the Business or any of the Transferred Assets may be bound or affected; or

(iii) except as set forth in Schedule 3.3(a), conflict with, result in any breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) under, require any approval, consent or authorization of any Person pursuant to, or give to others any rights of termination, acceleration or cancellation of, any Material Contract;

except, in the case of clause (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) Neither the Seller nor EMS Brazil is required to file, seek or obtain any notice, authorization, approval, order, permit or consent of or with any Governmental Authority in connection with the execution, delivery and performance by the Seller or EMS Brazil of each of the Transaction Documents to which the Seller or EMS Brazil will be a party or the consummation of the transactions contemplated thereby or in order to prevent the termination of any right, privilege, license or qualification of the Business, except for (i) any filings required to be made under the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (ii) any filings required to be made to the Brazilian Antitrust Authority which may be necessary or advisable to obtain consent for the transactions contemplated by the Transaction Documents, (iii) any notice, authorization, approval, order, permit or consent of any Governmental Authority required for the Buyer to manufacture, market, distribute, sell, service or repair the Products (the “Product Authorizations”), (iv) where failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (v) as may be necessary as a result of any facts or circumstances relating to the Buyer or any of its Affiliates (as opposed to any other third party).

Section 3.4 Transferred Assets.

(a) Upon consummation of the transactions contemplated by this Agreement, at the Closing the Seller will have assigned, transferred and conveyed to the Buyer good, valid and marketable title to all of the Transferred Assets, free and clear of all Encumbrances (other than Permitted Encumbrances), subject to Section 2.5.

(b) Except as set forth in Schedule 3.4 of the Disclosure Schedules, the transfer to the Buyer of the Transferred Assets pursuant to this Agreement, together with the Buyer’s rights under the Transaction Documents, comprise all the assets required to operate the Business in substantially the same manner as such operations are being conducted on the date hereof. Except as set forth in Schedule 3.4 of the Disclosure Schedules, the Seller and its

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Affiliates (other than EMS Brazil) do not provide any corporate support or other services to the Business.

Section 3.5 Financial Statements; No Undisclosed Liabilities.

(a) True and complete copies of the unaudited consolidated balance sheet of the Business (including EMS Brazil on a consolidated basis) as at September 30, 2006 (the “Balance Sheet”), and the related unaudited consolidated statements of results of operations and cash flows of the Business (including EMS Brazil on a consolidated basis) for the nine-month period ending September 30, 2006, together with all related notes and schedules thereto (collectively referred to as the “Financial Statements”) are attached as Schedule 3.5(a) of the Disclosure Schedules. The Financial Statements (i) have been prepared based on the books and records of the Seller and EMS Brazil pertaining to the Business; (ii) have been prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated; and (iii) fairly present, in all material respects, the consolidated financial position, results of operations and cash flows of the Business (including EMS Brazil on a consolidated basis) as at the respective dates thereof and for the respective periods indicated therein, except as otherwise noted therein and subject to normal and recurring year-end audit adjustments and the absence of notes, in each case, that will not, individually or in the aggregate, be material.

(b) True and complete copies of (i) the unaudited consolidated balance sheet of EMS Brazil as of December 31, 2005 (the “EMS Brazil Balance Sheet”), and the related unaudited consolidated statements of results of operations and cash flows of EMS Brazil for the fiscal year ended December 31, 2005, together with all related notes and schedules thereto, and (ii) the unaudited consolidated balance sheet of EMS Brazil as of September 30, 2006 (the “EMS Brazil Unaudited Balance Sheet”), and the related unaudited consolidated results of operations and cash flows for the nine-month period ended September 30, 2006, are attached as Schedule 3.5(b) of the Disclosure Schedules (collectively referred to as the “EMS Brazil Financial Statements”). The EMS Brazil Financial Statements (x) have been prepared based on the books and records of EMS Brazil; (y) have been prepared on a consistent basis throughout the periods indicated; and (z) fairly present, in all material respects, the consolidated financial position, results of operations and cash flows of EMS Brazil as at the respective dates thereof and for the respective periods indicated therein, except as otherwise noted therein and subject to normal and recurring year-end audit adjustments and the absence of notes, in each case, that will not, individually or in the aggregate, be material.

(c) Insofar as is Known to the Seller, there are no debts, liabilities, obligations, or commitments, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, of the Business of a nature required to be reflected on a balance sheet prepared in accordance with GAAP, other than any such debts, liabilities, obligations and commitments (i) reflected or reserved against on the Financial Statements and on the EMS Brazil Financial Statements, (ii) incurred since the date of the Balance Sheet in the ordinary course of business consistent with past practice, or (iii) that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(d) There are no debts, liabilities, obligations or commitments, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, of

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EMS Brazil, other than any such debts, liabilities, obligations and commitments (i) reflected or reserved against on the EMS Brazil Unaudited Balance Sheet or (ii) incurred since the date of the EMS Brazil Unaudited Balance Sheet in the ordinary course of business consistent with past practice.

Section 3.6 Absence of Certain Changes or Events. Since the date of the Balance Sheet: (a) the Seller and EMS Brazil have conducted the Business, in all material respects, in the ordinary course of business and consistent with past practice; (b) there has not occurred any Material Adverse Effect; (c) there has been no physical damage, destruction or loss in respect of the Transferred Assets that would, after taking into account any recoveries under the Seller or EMS Brazil’s insurance policies that would be payable to the Buyer in connection therewith, reasonably be expected to have a Material Adverse Effect; and (d) the Seller and EMS Brazil have not taken any action that, if taken after the date of this Agreement, would constitute a breach of any of the covenants set forth in Section 5.1.

Section 3.7 Compliance with Law; Permits.

(a) Except as set forth on Schedule 3.7, the Seller and EMS Brazil are and have been in compliance with all Laws applicable to them in connection with the conduct or operation of the Business and the ownership or use of the Transferred Assets, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Seller nor EMS Brazil has received any written communication during the past three years that alleges that the Business is not in compliance in any material respect with any Applicable Law.

(b) The Seller or EMS Brazil is in possession of all permits, licenses, franchises, approvals, certificates, consents, waivers, concessions, exemptions, orders, registrations, notices or other authorizations of any Governmental Authority necessary for it to own, lease and operate the Transferred Assets and to carry on the Business as currently conducted (the “Permits”), except where the failure to have, or the suspension or cancellation of, any of the Permits would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Seller or EMS Brazil is in compliance with the Permits and no suspension or cancellation of any of the Permits is pending or, insofar as is Known to the Seller or EMS Brazil, threatened, except, in each case, where the failure to so comply, or the suspension or cancellation of, any of the Permits would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Seller nor EMS Brazil has received any written notice of any Actions relating to the revocation or modification of any such Permits and none of such Permits will be subject to suspension, modification, revocation or nonrenewal as a result of the execution and delivery of the Transaction Documents or the consummation of the transactions contemplated thereby.

(c) EMS Brazil is in possession of all permits, licenses, franchises, approvals, certificates, consents, waivers, concessions, exemptions, orders, registrations, notices or other authorizations of any Governmental Authority necessary for it to own, lease and operate its assets and to carry on its business as currently conducted (the “EMS Permits”), except where the failure to have, or the suspension or cancellations of, any of the EMS Permits would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, EMS

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Brazil is in compliance with the EMS Permits and no suspension or cancellation of any of the EMS Permits is pending or, insofar as is Known to Seller or EMS Brazil, threatened, except, in each case, where the failure to so comply, or the suspension or cancellation of, any of the EMS Permits would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Seller nor EMS Brazil has received any written notice of any Actions relating to the revocation or modification of any such EMS Permits and none of such EMS Permits will be subject to suspension, modification, revocation or nonrenewal as a result of the execution and delivery of the Transaction Documents or the consummation of the transactions contemplated thereby.

Section 3.8 Litigation. As of the date hereof, there is no Action by or against the Seller or EMS Brazil in connection with the Business pending, or insofar as is Known to the Seller or EMS Brazil, threatened in writing (a) pursuing any criminal sanctions or penalties, (b) seeking equitable or injunctive relief, (c) that relates to or involves more than $50,000, or (d) that would otherwise, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or would affect the legality, validity or enforceability of any of the Transaction Documents or the consummation of the transactions contemplated thereby. Neither the Seller nor EMS Brazil is a party or subject to, in violation of, or in default under any material Judgment applicable to the conduct of the Business or any Transferred Asset or Assumed Liability. As of the date hereof, there is not any Action by the Seller or EMS Brazil pending, or which the Seller or EMS Brazil intends to initiate, against any other Person arising out of the conduct of the Business. Insofar as is Known to the Seller or EMS Brazil, there is no pending or threatened investigation of or affecting the conduct of the Business or any Transferred Asset or Assumed Liability

Section 3.9 Employee Plans. Schedule 3.9 of the Disclosure Schedules sets forth all material Employee Plans. The Seller has made available to the Buyer a true and complete copy of the following documents: (a) each writing constituting an Employee Plan, (b) the current summary description of each Employee Plan and any material modifications thereto, (c) the most recent determination letter from the IRS, if any, with respect to any Employee Plan qualified under Section 401(a) of the Code and (d) the most recent annual report on IRS Form 5500, if any, filed by the Seller for each Employee Plan. Seller represents and warrants that Annex 1 includes the name of each employee whose duties, as of the date of this Agreement, relate primarily to the operations of the Business.

Section 3.10 Labor and Employment Matters. Neither the Seller nor EMS Brazil is a party to any labor or collective bargaining contract that pertains to any Business Employees. Insofar as is Known to the Seller or EMS Brazil, (a) there are no organizing activities or collective bargaining arrangements that could affect the Business pending or under discussion with any labor organization or Business Employees and (b) there are no lockouts, strikes, slowdowns or work stoppages pending or threatened by or with respect to any Business Employees. Neither the Seller nor EMS Brazil is engaged in any unfair labor practice in connection with the conduct of the Business. There are no pending, or, insofar as is Known to Seller or EMS Brazil, threatened, charges in connection with the conduct of the Business against the Seller, EMS Brazil or any current or former employee of the Business before the Equal Employment Opportunity Commission or any state or local agency responsible for the prevention of unlawful employment practices. Neither the Seller nor EMS Brazil has not

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received any written notice during the past three years of the intent of any Governmental Authority responsible for the enforcement of labor or employment laws to conduct an investigation of or affecting the Business and, insofar as is Known to Seller or EMS Brazil, no such investigation is in progress.

Section 3.11 Insurance. The Business and the Transferred Assets are covered by insurance coverage with reputable insurers in such amounts and covering such risks as are in accordance with normal industry practice for similar businesses (taking into account the cost and availability of such insurance). No notice of cancellation or termination has been received with respect to any such policy as of the date hereof, the premium with respect to such policies have been paid and all such insurance policies are in full force and effect and will remain in full force and effect up to and including the time of the Closing (other than those that have been retired or expired in the ordinary course).

Section 3.12 Real Property. Schedule 3.12 of the Disclosure Schedules lists the street address of each parcel of Real Property leased by the Seller or by EMS Brazil and used, held for use or intended to be used in the conduct of the Business (the “Leased Real Property”) and the identity of the lessor of each such parcel of Leased Real Property. The Seller or EMS Brazil, as the case may be, has a valid leasehold estate in all Leased Real Property, free and clear of all Encumbrances other than Permitted Encumbrances. Neither the Seller nor EMS Brazil has received written notice from any Governmental Authority that any of the Leased Real Property is not in material compliance with all applicable Laws, except for such failures to comply, if any, which have been remedied. All leases in respect of the Leased Real Property are in full force and effect, neither the Seller nor EMS Brazil has received any written notice of a breach or default thereunder, and insofar as is Known to the Seller or EMS Brazil, no event has occurred that, with notice or lapse of time or both, would constitute a breach or default thereunder. Insofar as is Known to the Seller or EMS Brazil, there is no pending or written threat of condemnation or similar proceeding affecting the Leased Real Property or any portion thereof. The Seller has made available to the Buyer true and complete copies of the leases in effect at the date hereof relating to the Leased Real Property. There has not been any sublease or assignment entered into by the Seller or by EMS Brazil in respect of the leases relating to the Leased Real Property. Neither the Seller nor EMS Brazil own any Real Property used, held for use or intended to be used primarily in the conduct of the Business. EMS Brazil does not own any United States real property interest as defined in Section 897 of the Code and the regulations promulgated thereunder.

Section 3.13 Intellectual Property.

(a) Schedule 3.13(a)(i) of the Disclosure Schedules sets forth an accurate and complete list of all registered Marks and applications for registration of Marks owned by the Seller or by EMS Brazil and included in the Business Intellectual Property (collectively, the “Owned Business Registered Marks”), Schedule 3.13(a)(ii) of the Disclosure Schedules sets forth an accurate and complete list of all Patents owned by the Seller or by EMS Brazil and included in the Business Intellectual Property (collectively, the “Owned Business Patents”) and Schedule 3.13(a)(iii) of the Disclosure Schedules sets forth an accurate and complete list of all registered Copyrights and all pending applications for registration of Copyrights owned by the Seller or EMS Brazil and included in the Business Intellectual Property (collectively, the

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“Owned Business Registered Copyrights” and, together with the Owned Business Patents and Owned Business Registered Marks, the “Owned Business Registered IP”). Schedule 3.13(a)(iv) of the Disclosure Schedules sets forth all Software owned by or licensed to and used by the Seller or EMS Brazil which is material to the conduct of the Business as currently conducted.

(b) Schedules 3.13(a)(i)–3.13(a)(iii) of the Disclosure Schedules set forth a list of all jurisdictions in which each item of listed Owned Business Registered IP is registered or registrations have been applied for and all registration and application numbers thereof. Except as set forth in Schedules 3.13(a)(i)-3.13(a)(iii) of the Disclosure Schedules, no Owned Business Registered IP has been or is now involved in any interference, reissue, reexamination, opposition or cancellation proceeding, and insofar as is Known to the Seller or EMS Brazil, no such action is or has been threatened with respect to any of the Owned Business Registered IP. Insofar as is Known to the Seller or EMS Brazil, the Owned Business Registered IP is valid and subsisting, and no written claim challenging the validity or enforceability of any of the Owned Business Registered IP has been received by the Seller or EMS Brazil. All filing, examination, issuance, post registration and maintenance fees, annuities and the like associated with or required with respect to any of the Owned Business Registered IP have been paid.

(c) Schedule 3.13(c) of the Disclosure Schedule sets forth an accurate and complete list of all material licenses, sublicenses, options or other Contracts relating in whole or in part to the Business Intellectual Property (including any license or other Contract under which the Seller is licensee or licensor of any Business Intellectual Property). The Seller or EMS Brazil is either the sole and exclusive owner of, or has the right to use, execute, reproduce, display, perform, modify, enhance, distribute, prepare derivative works of and sublicense, without payment to any other Person, to the extent the Seller or EMS Brazil has and exercises such rights in the conduct of the Business as currently conducted, all the Business Intellectual Property. Neither the Seller nor EMS Brazil has received any written communication from any Person asserting any ownership interest in any Business Intellectual Property owned by the Seller or EMS Brazil. The consummation of the transactions contemplated by the Transaction Documents will not result in any material loss or impairment of, or payment of any material additional amounts with respect to, the Buyer’s right to own, use or hold for use any of the Business Intellectual Property.

(d) The Business Intellectual Property constitutes all of the Intellectual Property used, held for use or intended to be used by the Seller or EMS Brazil in the Business other than: (i) Intellectual Property assets that, individually or in the aggregate, are not material to the Business, (ii) Intellectual Property identified in Schedule 3.13(d) of the Disclosure Schedules, (iii) Intellectual Property that is used to provide the services provided under the Ancillary Agreements, (iv) Excluded Assets, (v) goodwill and (vi) Copyrights (other than Copyrights in Software) that are not registered copyrighted materials and that are not used primarily in the Business.

(e) The Seller and EMS Brazil have taken reasonable steps to maintain the confidentiality of all material Trade Secrets of the Business. Each employee, consultant and contractor who participated in the creation of any Business Intellectual Property owned by the Seller or EMS Brazil is under binding legal obligations owed to the Seller or EMS Brazil, restricting such person’s right to disclose proprietary information of the Seller or EMS Brazil,

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EMS Brazil and their Affiliates. Each employee, consultant and contractor is under binding legal obligations owed to the Seller or EMS Brazil to assign to the Seller or EMS Brazil any tangible or intangible property interest in any such Business Intellectual Property created by such Person.

(f) All tangible materials embodying Business Intellectual Property are either owned by the Seller or EMS Brazil or have been licensed to the Seller or EMS Brazil by the third party from which the Seller or EMS Brazil obtained such materials. None of the Business Intellectual Property is subject to any outstanding order, judgment, or stipulation restricting the use thereof by the Seller or EMS Brazil. There is no Action pending or, insofar as is Known to the Seller or EMS Brazil, threatened with respect to the Business Intellectual Property.

(g) Insofar as is Known to the Seller or EMS Brazil, none of the products or services distributed, sold or offered by the Business, nor any technology, Software or materials used in the conduct of the Business, in any material respect, infringes upon, misappropriates or violates any Intellectual Property of any third party or constitutes unfair competition or trade practices under the Laws of any jurisdiction, and neither the Seller nor EMS Brazil has received any written notice asserting or suggesting that any such infringement, misappropriation, violation, or unfair competition or trade practices has occurred. Insofar as is Known to the Seller or EMS Brazil, no third party is misappropriating or infringing any material Business Intellectual Property in a manner that would reasonably be expected to have a Material Adverse Effect. The Seller or EMS Brazil has the sole and exclusive right to bring actions for infringement, misappropriation or violation of the Business Intellectual Property owned by the Seller or EMS Brazil.

Section 3.14 Taxes. Except as set forth in Schedule 3.14 of the Disclosure Schedules:

(a) The Seller has filed all material Tax Returns required to have been filed by it (giving regard to permitted extensions of time to file) that relate to the Business or the Transferred Assets. EMS Brazil has filed all Tax Returns required to be filed by it. All such Tax Returns filed by EMS Brazil are complete and accurate and disclose all Taxes paid by EMS Brazil, and have been examined by the appropriate taxing authority, or the period for assessment of Taxes in respect of which each such Tax Return was required to be filed (taking into account all applicable extensions and waivers) has expired.

(b) All Taxes due and owing by the Seller that relate to the Business or the Transferred Assets have been timely paid, and all Taxes owed by EMS Brazil have been timely paid.

(c) With respect to any period for which material Tax returns have not yet been filed or for which material Taxes are not yet due or payable, such Taxes have been adequately provided for on the Balance Sheet, on the books and records of the Seller, on the EMS Brazil Unaudited Balance Sheet, or on the books and records of EMS Brazil, as applicable.

(d) No extension or waiver of any statute of limitations for the assessment or collection of any Taxes has been granted by any taxing authority in respect of Taxes that relate to the Business or the Transferred Assets (including EMS Brazil) and which extension or waiver is still in effect with respect to the Seller or EMS Brazil.

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(e) No federal, state, local or non-U.S. Tax audits or administrative or judicial Tax proceedings have been conducted within the last three years in connection with the Business or the Transferred Assets and the Seller has no notice of the pendency of any such audit, examination or proceedings.

(f) No audits or administrative or judicial Tax proceedings have been conducted within the last three years in connection with the Taxes of EMS Brazil, and EMS Brazil has no notice of the pendency of any such audit, examination or proceeding.

(g) There is no action, suit, investigation, audit, claim or assessment pending or proposed or threatened with respect to the Taxes of EMS Brazil.

(h) All monies required to be withheld by the Seller or EMS Brazil or by EMS Brazil (including from Business Employees for income Taxes and social security and other payroll Taxes) have been collected or withheld, and either paid to the relevant taxing authorities, set aside in accounts for such purpose, or accrued, reserved against and entered upon the books of the Business or EMS Brazil, as applicable.

(i) EMS Brazil (i) is not a party to any tax sharing, allocation, indemnity or similar agreement or arrangement (whether or not written) pursuant to which it will have any obligation to make any payments from and after the Closing Date, and (ii) is not subject to any rulings, request for rulings, closing agreements or similar arrangement which could affect liability for Taxes from and after the Closing Date.

(j) EMS Brazil has never been a member of any consolidated, combined, affiliated or unitary group of corporations for Tax purposes.

(k) Since December 31, 2005, (i) there has not been any material change by EMS Brazil in accounting or Tax reporting principles, methods or policies, and (ii) EMS Brazil has not made or rescinded any material election with respect to Taxes or settled or compromised any material claim with respect to Taxes.

(l) Except as set forth in Section 2.5(b), no transaction contemplated by this Agreement is subject to withholding under any applicable Tax law.

(m) The Seller will not realize any capital gain as a result of receiving the portion of the Purchase Price allocated to the Quotas.

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Section 3.15 Environmental Matters.

(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the Seller and EMS Brazil are in compliance with all applicable Environmental Laws and have obtained and are in compliance with all Environmental Permits in connection with the conduct or operation of the Business and the ownership or use of the Transferred Assets, as applicable, and (ii) there are no written claims pursuant to any Environmental Law pending or, insofar as is Known to the Seller or EMS Brazil, threatened, against the Seller or against EMS Brazil in connection with the conduct or operation of the Business or the ownership or use of the Transferred Assets, as applicable, and (iii) there has been no Release of Hazardous Material by the Seller or by EMS Brazil or, insofar as is Known to the Seller or EMS Brazil, by any other Person, on, at or from any of the Leased Property, which, in each case, could reasonably be expected to result in material obligations, liabilities or costs under Environmental Laws.

(b) Neither the Seller nor EMS Brazil has received any written notice that it is, or may be, a liable party in connection with any property where any Hazardous Material generated by or as a result of the operations of the Transferred Assets has been sent for treatment or disposal.

(c) The representations and warranties contained in this Section 3.15 are the only representations and warranties being made with respect to compliance with or liability under Environmental Laws or with respect to any environmental, health or safety matter, including natural resources, related to the Business, the Transferred Assets or the Seller or EMS Brazil’s ownership or operation thereof.

Section 3.16 Material Contracts.

(a) Schedule 3.16 of the Disclosure Schedules lists each of the following written Contracts and each of the following contracts and agreements, oral or written, to which EMS Brazil is a party or by which EMS Brazil is bound (“EMS Brazil Contracts”) (such Contracts and EMS Brazil Contracts as described in this Section 3.16(a) being “Material Contracts”):

(i) all Contracts that provide for payment or receipt by the Seller or EMS Brazil in connection with the Business of more than $100,000 per year, including any such Contracts with customers or clients;

(ii) all Contracts relating to indebtedness for borrowed money;

(iii) all Contracts that limit or purport to limit the ability of the Business to compete in any line of business or with any Person or in any geographic area or during any period of time;

(iv) all employment Contracts;

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(v) all Contracts with (A) any shareholder or Affiliate of the Seller or EMS Brazil or (B) any current or former officer, director or employee of the Seller or EMS Brazil or any of their Affiliates (other than employment Contracts covered by clause (iv) above);

(vi) all Contracts with any Person under which (A) the Seller or EMS Brazil is lessee of, or holds or uses, any machinery, equipment, vehicle or other tangible personal property owned by any Person or (B) the Seller or EMS Brazil is a lessor or sublessor of, or makes available for use by any Person, any tangible personal property owned or leased by the Seller or EMS Brazil, in any such case which has an aggregate future liability or receivable, as the case may be, in excess of $50,000 per year and is not terminable by the Seller or EMS Brazil by notice of not more than 60 days without payment or penalty;

(vii) (A) all continuing Contracts for the future purchase of materials, supplies or equipment, including Contracts with minimum purchase requirements (and other than purchase orders for inventory in the ordinary course of the Business consistent with past practice), (B) all management, service, consulting or other similar Contracts and (C) all advertising agreements or arrangements, in any such case that has an aggregate future liability to any Person in excess of $50,000 per year and is not terminable by the Seller or EMS Brazil by notice of not more than 60 days without payment or penalty;

(viii) all Contracts (including any so-called take-or-pay or keepwell agreements) under which (A) any Person has directly or indirectly guaranteed indebtedness, liabilities, obligations or commitments of the Seller or EMS Brazil or (B) the Seller or EMS Brazil has directly or indirectly guaranteed indebtedness, or other liabilities, obligations or commitments of any other Person (in each case other than endorsements for the purpose of collection in the ordinary course of the Business);

(ix) all Contracts under which the Seller or EMS Brazil has, directly or indirectly, made any advance, loan, extension of credit or capital contribution to, or other investment in, any Person (other than the Seller and other than extensions of trade credit in the ordinary course of the Business);

(x) all Contracts for the sale of any Transferred Asset (other than Inventory sales in the ordinary course of the Business) or the grant of any preferential rights to purchase any Transferred Asset;

(xi) all Contracts providing for the services of any dealer, distributor, sales representative, franchisee or similar representative involving the payment or receipt over the life of such Contract in excess of $100,000 per year by the Seller or EMS Brazil;

(xii) all joint venture, partnership or similar Contracts;

(xiii) all leases, subleases, if any, or similar contracts with any Person under which the Seller or EMS Brazil is a lessor or sublessor of, or makes available for use to any Person, (A) any Leased Real Property or (B) any portion of any premises otherwise occupied by the Seller;

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(xiv) all Contracts granting a Lien upon any Real Property or any other Transferred Asset;

(xv) all powers of attorney (other than a power of attorney given in the ordinary course of the Business and consistent with past practice with respect to routine Tax matters);

(xvi) all Contracts with, or licenses or permits by or from, any Governmental Authority; and

(xvii) any other Contract that is material to the Business, taken as a whole.

(b) Each Material Contract (i) is valid and binding on the Seller or EMS Brazil and, insofar as is Known to the Seller or EMS Brazil, the counterparties thereto, and is in full force and effect, and (ii) upon consummation of the transactions contemplated by this Agreement, except to the extent that any consents set forth in Schedule 3.3(a) of the Disclosure Schedules are not obtained, shall continue in full force and effect without penalty or other adverse consequence. Neither the Seller nor EMS Brazil is in breach of, or default under, any Material Contract to which it is a party, except for such breaches or defaults that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Neither the Seller nor EMS Brazil has received any written notice of the intention of any party to terminate any of the Material Contracts.

(c) As of the Closing Date, the aggregate amount of unfulfilled purchase commitments under all blanket purchase orders of the Business that cannot be cancelled without liability will not exceed $4,000,000.

Section 3.17 Receivables. Schedule 3.17 of the Disclosure Schedules sets forth an accurate and complete breakdown and aging of all Receivables, and all accounts receivable, notes receivable and other receivables due to EMS Brazil (“EMS Brazil Receivables”), as of the date of this Agreement. All Receivables and EMS Brazil Receivables listed or required to be listed in such Schedule 3.17 represent valid obligations of customers of the Seller or EMS Brazil arising from bona fide transactions entered into in the ordinary course of business.

Section 3.18 Customers and Suppliers; Product Retrievals. Schedule 3.18 of the Disclosure Schedules sets forth a true and complete list of the names of the ten largest customers (in terms of sales by the Business) to whom the Business has sold products during the year ended December 31, 2005 and the ten largest suppliers or service providers (in terms of products or services purchased by the Business) from whom the Business has purchased supplies or services during the year ended December 31, 2005. Except as set forth in Schedule 3.18 of the Disclosure Schedules, (a) neither the Seller nor EMS Brazil has received any written statement from any customer or supplier whose name appears (or is required to appear) on such list that such customer or supplier will not continue as a customer or supplier of the Business after the Closing, (b) insofar as is Known to the Seller (with no obligation of the Seller or EMS Brazil to make any inquiry of any customer or supplier), no customer or supplier whose name appears (or is required to appear) on such list intends in the six months after October 1, 2006 to reduce the

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volume of business transactions by such Person with the Business by more than 20% as compared to the volume of Business transactions by such Person with the Business, as applicable, in the six month period preceding October 1, 2006, and (c) there have been no product retrievals, product recalls or market withdrawals (in each case, whether voluntary, required by Law or otherwise) of products designed, manufactured, marketed, distributed or sold by the Business as a result of possible design defects, manufacturing defects or otherwise, including failure to satisfy product specifications, with respect to such products, and to the actual knowledge of the persons listed under “Seller” in Schedule 1.1(a), there are no facts or circumstances that would reasonably be expected to result in such actions.

Section 3.19 Inventory. All Inventory of the Business, whether reflected in the Financial Statements or otherwise, is of good and merchantable quality, is usable in the ordinary course of the Business and is free from defects in materials, workmanship and design, except for obsolete or surplus materials and materials of below standard quality which have been written down in the Financial Statements to realizable market value or for which adequate reserves have been provided therein; provided, however, that the Seller makes no representation or warranty with respect to the marketability or salability of such Inventory. For purposes of the preceding sentence, a defect in design means a failure to meet any key specification required for such Inventory to be used for its intended purpose. Neither the Business nor the Seller in connection with the Business nor EMS Brazil is under any material liability or obligation with respect to the return of Inventory or merchandise in the possession of wholesalers, retailers or other customers, other than such liabilities or obligations that are incurred in the ordinary course of business and consistent with past practice.

Section 3.20 Tangible Personal Property. Schedule 3.20 of the Disclosure Schedules sets forth a true and complete list of each item of Tangible Personal Property with a cost in excess of $10,000, indicating, in each case, a brief description, the cost thereof and the year acquired. Each item of Tangible Personal Property listed (or required to be listed) on Schedule 3.20 is in good working order (ordinary wear and tear excepted), is free from any material defect and has been maintained in all material respects in accordance with the past practice of the Business and generally accepted industry practice, and no repairs, replacements or regularly scheduled maintenance relating to any such item have been deferred. All leased Tangible Personal Property of the Business is in all material respects in the condition required of such property by the terms of the lease applicable thereto.

Section 3.21 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of the Seller or EMS Brazil.

Section 3.22 EMS Brazil.

(a) The issued and outstanding equity securities of EMS Brazil consist of the Quotas, which represent all of the issued and outstanding equity securities of EMS Brazil. As of the date hereof, the Quotas are the only equity securities of EMS Brazil issued and outstanding and no other equity securities of EMS Brazil are held by the Seller. All of the Quotas were duly authorized for issuance and are validly issued, fully paid and non-assessable. There are no existing options, warrants, calls, rights, commitments or other agreements of any character to

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which EMS Brazil is a party requiring, and there are no securities of EMS Brazil outstanding which upon conversion or exchange would require, the issuance, sale or transfer of any additional quotas or other equity securities of EMS Brazil or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase quotas or other equity securities of EMS Brazil. Neither EMS Brazil nor Seller is a party to any voting trust or other voting agreement with respect to any of the Quotas or to any agreement relating to the issuance, sale, redemption, transfer or other disposition of the equity securities of EMS Brazil.

(b) EMS Brazil does not own, directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any Person.

(c) The Seller and LXE are the record and beneficial owners of the Quotas, free and clear of all Encumbrances. Each of the Seller and LXE has the authority and capacity to sell, transfer, assign and deliver the Quotas each owns as provided in this Agreement, and such delivery will convey to the Buyer good and marketable title to such Quotas, free and clear of any and all Encumbrances, charges, demands or adverse claims or other restrictions on the exercise of any of the attributes of ownership.

Section 3.23 WARN Act. No notice is required by the Seller under the Worker Adjustment Retraining and Notification Act of 1988 (the “WARN Act”), or any similar state or non-U.S. statute, otherwise to comply with any such statute with respect to any “plant closing” or “mass layoff” (as defined in the WARN Act) or group termination or similar event affecting Business Employees and occurring on or prior to the Closing Date (assuming the Buyer complies with its obligations under Section 5.6).

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer hereby represents and warrants to the Seller, as of the date of this Agreement and as of the Closing Date, as follows:

Section 4.1 Organization and Qualification. The Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware and has full corporate power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted. The Buyer is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except, in each case, for any such failures that would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect.

Section 4.2 Authority. The Buyer has full corporate power and authority to execute and deliver each of the Transaction Documents to which it will be a party, to perform its obligations thereunder and to consummate the transactions contemplated thereby. The execution and delivery by the Buyer of each of the Transaction Documents to which it will be a party and the consummation by the Buyer of the transactions contemplated thereby have been duly and

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validly authorized by all necessary corporate action. This Agreement has been, and upon their execution each of the Ancillary Agreements to which the Buyer will be a party will have been, duly and validly executed and delivered by the Buyer. This Agreement constitutes, and upon their execution each of the Ancillary Agreements to which the Buyer will be a party will constitute, the legal, valid and binding obligations of the Buyer, enforceable against the Buyer in accordance with their respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law).

Section 4.3 No Conflict; Required Filings and Consents.

(a) The execution, delivery and performance by the Buyer of this Agreement do not and the execution, delivery and performance of each of the Ancillary Agreements to which the Buyer will be a party, and the consummation of the transactions contemplated thereby will not:

(i) conflict with or violate the certificate of incorporation or bylaws of the Buyer;

(ii) conflict with or violate any Law applicable to the Buyer or by which any property or asset of the Buyer is bound or affected; or

(iii) conflict with, result in any breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) under, require any consent, approval or authorization of any Person pursuant to, or give to others any rights of termination, acceleration or cancellation of, any material contract or agreement to which the Buyer is a party;

except, in the case of clause (ii) or (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect.

(b) The Buyer is not required to file, seek or obtain any notice, authorization, approval, order, permit or consent of or with any Governmental Authority in connection with the execution, delivery and performance by the Buyer of each of the Transaction Documents to which it will be party or the consummation of the transactions contemplated thereby or in order to prevent the termination of any right, privilege, license or qualification of the Buyer, except for (i) any filings required to be made to the Brazilian Antitrust Authority which may be necessary or advisable to obtain consent for the transaction contemplated in the Transaction Documents, (ii) any Product Authorizations, (iii) where failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect or (iv) as may be necessary solely as a result of any facts or circumstances relating to the Seller or any of its Affiliates.

Section 4.4 Financing. The Buyer has funds available, which taken together with available borrowing capacity under its existing revolving credit agreements, are sufficient to permit the Buyer to consummate the transactions contemplated by this Agreement and the

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Ancillary Agreements. Notwithstanding anything to the contrary contained herein, the Parties acknowledge and agree that it shall not be a condition to the obligations of the Buyer to consummate the transactions contemplated hereby that the Buyer have sufficient funds for payment of the Purchase Price.

Section 4.5 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of the Buyer.

Section 4.6 Litigation. There is no claim, action, suit, proceeding or governmental investigation pending or, insofar as is Known to the Buyer, threatened against the Buyer, by or before any Governmental Authority or by any third party which challenges the validity of this Agreement or which would be reasonably likely to adversely affect or restrict the Buyer’s ability to consummate the transactions contemplated by this Agreement.

ARTICLE V

COVENANTS

Section 5.1 Conduct of Business Prior to the Closing. The Seller agrees that, during the period from the date of this Agreement to the Closing, except as otherwise contemplated by this Agreement or Exhibit I, or as consented to by the Buyer (which consent shall not be unreasonably withheld or delayed), the Seller shall, and shall cause EMS Brazil to:

(a) use commercially reasonable efforts to conduct the Business substantially in the ordinary course and consistent with past practice;

(b) use commercially reasonable efforts to maintain and preserve the Business and the Transferred Assets in all material respects;

(c) not sell, lease, or otherwise dispose of any material assets of the Business, except Inventory and EMS Brazil Inventory in the ordinary course of the Business and consistent with past practice;

(d) not take any actions that would, or that would reasonably be expected to, cause any of the conditions set forth in Article VII not to be satisfied;

(e) not incur or permit the incurrence of any material Encumbrances (other than Permitted Encumbrances) on any of the Transferred Assets or any assets of EMS Brazil;

(f) not grant to any Business Employee any increase in compensation or benefits, except in the ordinary course of the Business and consistent with past practice or as may be required under Contracts as in effect on the date hereof;

(g) not cancel any material indebtedness (individually or in the aggregate) or waive any claims or rights of substantial value to the Business;

(h) not make any change in any method of accounting or accounting practice or policy applicable to the Business other than those required by GAAP;

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(i) not acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets (other than Inventory in the ordinary course of the Business and consistent with past practice) that are material, individually or in the aggregate, to the Business;

(j) not make or incur any capital expenditure with respect to the Business that, individually, is in excess of $75,000 or make or incur any such expenditures which, in the aggregate, are in excess of $150,000;

(k) not enter into any lease of real property or Contract that would be a Material Contract with respect to the Business, except any renewals of existing leases in the ordinary course of the Business and consistent with past practice;

(l) not modify, amend, terminate or permit the lapse of any lease of, or reciprocal easement agreement, operating agreement or other material Contract relating to leased Real Property of the Business, or any other Material Contract (except modifications or amendments associated with renewals of existing leases and other Material Contracts in the ordinary course of the Business and consistent with past practice with respect to which the Buyer shall have the right to participate);

(m) not prepare or file any Tax Return with respect to the Business inconsistent with past practice or, on any such Tax Return, take a position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;

(n) not take any action prior to the Closing other than in the ordinary course of the Business that could give rise to any Tax liability or reduce any Tax asset of the Buyer or give rise to any loss of the Buyer or its Affiliates under this Agreement;

(o) in the case of EMS Brazil, not declare or pay any dividend, or make any distribution to its quotaholders; provided, however, that the Seller may withdraw any cash balances of EMS Brazil prior to 11:59 p.m. Atlanta, Georgia time on the day immediately prior to the Closing Date; and

(p) not authorize, or commit or agree to take, any of the actions referred to in clauses (c) through (o) above.

Section 5.2 Covenants Regarding Information.

(a) From the date hereof until the Closing Date, upon reasonable notice, the Seller shall, and shall cause EMS Brazil to, afford the Buyer and its officers, employees, agents, accountants, advisors, bankers and other representatives (collectively, “Representatives”) reasonable access to the properties, offices, plants and other facilities, books and records of the Seller and EMS Brazil relating primarily to the Business, and shall furnish the Buyer with such financial, operating and other data and information to the extent relating primarily to the Business as the Buyer may reasonably request; provided, however, that any such access or furnishing of information shall be conducted at the Buyer’s expense, during normal business

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hours, under the supervision of the Seller’s personnel and in such a manner as not unreasonably to interfere with the normal operations of the Seller, EMS Brazil and the Business. Notwithstanding anything to the contrary in this Agreement, the Seller shall not be required to disclose any information to the Buyer or its Representatives if such disclosure would, in the Seller’s reasonable discretion after consultation with counsel, (i) jeopardize any attorney-client or other legal privilege, (ii) contravene any applicable Laws, fiduciary duty or binding agreement entered into prior to the date hereof or (iii) relate to any consolidated, combined or unitary Tax Return filed by the Seller or any Affiliate thereof or any of their respective predecessor entities; provided, however, that the Seller shall disclose to the Buyer the general nature of any such information that is excluded from disclosure and the reason therefor.

(b) In order to facilitate the resolution of any claims made against or incurred by the Seller (as it relates to the Business), for a period of seven years after the Closing or, if shorter, the applicable period specified in the Buyer’s document retention policy, the Buyer shall (i) retain the books and records relating to the Business relating to periods prior to the Closing and (ii) afford the Representatives of the Seller reasonable access (including the right to make, at the Seller’s expense, photocopies), during normal business hours, to such books and records; provided, however, that the Buyer shall notify the Seller in writing at least 30 days in advance of destroying any such books and records prior to the seventh anniversary of the Closing Date in order to provide the Seller the opportunity to copy such books and records in accordance with this Section 5.2(b).

(c) In order to facilitate the resolution of any claims made against or incurred by the Buyer or EMS Brazil, for a period of seven years after the Closing or, if shorter, the applicable period specified in the Seller’s document retention policy, the Seller shall (i) retain the books and records relating to the Business relating to periods prior to the Closing which shall not otherwise have been delivered to the Buyer and (ii) upon reasonable notice, afford the Representatives of the Buyer reasonable access (including the right to make, at the Buyer’s expense, photocopies), during normal business hours, to such books and records to the extent relating primarily to the Business; provided, however, that the Seller shall notify the Buyer in writing at least 30 days in advance of destroying any such books and records prior to the seventh anniversary of the Closing Date in order to provide the Buyer the opportunity to copy such books and records in accordance with this Section 5.2(c).

Section 5.3 Update of Disclosure Schedules; Knowledge of Breach. The Seller shall promptly (within 10 Business Days) supplement or amend the Disclosure Schedules with respect to any matter hereafter arising or discovered which if existing or Known to the Seller at the date of this Agreement would have been required to be set forth or described in such Disclosure Schedules and also with respect to events or conditions arising after the date hereof and prior to Closing; provided, however, that any such supplemental or amended Disclosure Schedules shall have no effect for the purposes of determining the satisfaction of the conditions in Article VII or for the purposes of determining whether any person is entitled to indemnification pursuant to Article VIII; provided, further, notwithstanding the foregoing clause, with respect to matters hereafter arising, such supplemental or amended Disclosure Schedules shall be taken into account for purposes of determining whether any person is entitled to indemnification pursuant to Article VIII if (a) the Closing occurs even though, as a result of the matters set forth in such supplemental or amended Disclosure Schedules, the Buyer was not required to consummate the

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transactions contemplated by this Agreement because the conditions in Article VII were not satisfied (provided that the Seller acknowledges in writing to the Buyer prior to the Closing Date that the Buyer was not required to consummate such transactions because such conditions were not satisfied), or (b) the matter giving rise to any such supplement or amended Disclosure Schedule was related to an action that the Seller was not prohibited from taking under Section 5.1 of this Agreement.

Section 5.4 Notification of Certain Matters. Until the Closing, each Party shall promptly notify the other Party in writing of any fact, change, condition, circumstance or occurrence or nonoccurrence of any event Known to such Party that will or is reasonably likely to result in any of the conditions set forth in Article VII of this Agreement becoming incapable of being satisfied.

Section 5.5 Intercompany Arrangements. All intercompany and intracompany accounts or contracts between the Business, on the one hand, and the Seller or EMS Brazil and its Affiliates, on the other hand, shall be cancelled without any consideration or further liability to any Party and without the need for any further documentation, immediately prior to the Closing.

Section 5.6 Employee Benefits.

(a) Continuity of Employment for all Business Employees. Effective as of the Closing Date, the Buyer shall offer employment to each Business Employee (or shall maintain the employment relationship between EMS Brazil and each Business Employee of EMS Brazil), in the same geographic location, and (other than those Business Employees set forth on Exhibit J) with base pay initially at least equal to his or her base rate of pay as in effect with respect to such employee immediately prior to the Closing Date. Business Employees who timely accept such offers of employment from the Buyer (in a manner reasonably specified by the Buyer) are referred to herein as “Transferred Employees.” Such employment by the Buyer shall commence effective as of the Closing Date, and shall be deemed for all purposes to have occurred with no interruption or break in service.

(b) Service Credit. The Transferred Employees shall receive credit for all periods of employment and/or service with the Seller and its Affiliates (including service with predecessor employers, where such credit was provided by the Seller or its Affiliates) prior to the Closing Date for purposes of eligibility, vesting and benefit accrual under the Buyer’s relevant plans and policies.

(c) Employee Benefits — General. Except as otherwise provided in Section 5.6(e), the Buyer shall provide the Transferred Employees with employee benefits that are substantially comparable in the aggregate to those provided to such individuals immediately prior to the Closing Date, subject only to a curtailment that the Buyer imposes on all of its employees (i.e., including the Business Employees) on a proportionate and across-the-board basis. The Seller shall bear the expense of and responsibility for all liabilities arising from claims by the Transferred Employees for benefits attributable to periods through the Closing Date under the Employee Plans maintained by the Seller, and the Buyer shall bear the expense of and responsibility for all liabilities arising from claims by the Transferred Employees for benefits

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attributable to periods after the Closing under the benefit plans maintained by the Buyer, including any claims under such plans relating to severance from employment on or after the Closing (including any such severance that relates to or results from any failure of the Buyer to comply with the provisions of this Section 5.6). Except as may be specifically required by this Agreement or by applicable Law, the Buyer shall not be obligated to continue to provide any particular employee benefits to any Transferred Employee.

(d) Defined Contribution Plans. The Buyer agrees to have in effect as of the Closing a defined contribution plan or plans with a salary reduction arrangement that covers Transferred Employees, the terms of which meet the requirements of Sections 401(a) and 401(k) of the Code (such plan or plans, the “Buyer Savings Plan”). Each Transferred Employee who satisfies the eligibility requirements of the Buyer Savings Plan as of the Closing Date shall be eligible to contribute to the Buyer Savings Plan commencing on the day after the Closing Date, or as soon as practicable thereafter. The Transferred Employees shall be permitted to roll over their account balances (excluding loan balances) from the Seller’s Retirement Program accrued through the Closing Date into their new accounts under the Buyer Savings Plan as soon as practicable after the Closing Date, but in no event later than ninety (90) days after the Closing Date or in contravention of ERISA or the Code.

(e) Welfare Benefit Plans.

(i) Effective as of the Closing, the Seller shall offer medical, dental, vision and health care flexible spending account continuation coverage under Sections 601 et seq. of ERISA (“COBRA Coverage”) and any state continuation coverage requirements to each Transferred Employee and each of his or her eligible beneficiaries for whom a “qualifying event” under COBRA occurs as of such Closing. For the period beginning as of the Closing and ending on December 31, 2006 (provided that if the Closing occurs after November 30, 2006, such period shall end 60 days after the Closing), the monthly cost of such COBRA Coverage to each Transferred Employee and each of his or her eligible beneficiaries who timely elects coverage shall equal the employee-paid portion of the monthly cost of such coverage for the Transferred Employee and any such beneficiaries immediately prior to the Closing. The Buyer shall assume and promptly reimburse the Seller for the balance of the cost of such COBRA Coverage during such period (net of any insurance proceeds or reimbursements received by the Seller with respect to such coverage). Effective as of January 1, 2007 (or 61 days after the Closing if the Closing occurs after November 30, 2006), the Buyer shall offer each Transferred Employee and each of his or her eligible dependents participation in the medical, dental, vision and health care flexible spending account plans of the Buyer. Effective for the period beginning as of the Closing and ending on December 31, 2006 (or 60 days after the Closing if the Closing occurs after November 30, 2006), the Seller shall continue the life, long-term disability and accidental death and dismemberment insurance coverage currently provided by Reliant Standard and the short-term disability coverage provided by the Seller with respect to each of the Transferred Employees and each of his or her eligible beneficiaries. For such period, the monthly cost of such coverage to each Transferred Employee and each of his or her eligible beneficiaries shall equal the employee-paid portion (if any) of the monthly cost of such coverage for the Transferred Employee and any such beneficiaries immediately prior to the Closing. The Buyer shall assume and promptly reimburse the Seller for the balance of the cost of such coverage during such period (net of any insurance proceeds or reimbursements received by the Seller with respect to

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such coverage). Effective as of January 1, 2007 (or 61 days after the Closing if the Closing occurs after November 30, 2006), the Buyer shall offer each of the Transferred Employees and each of his or her eligible dependents participation in the life, long-term disability, short-term disability insurance and accidental death and dismemberment insurance plans of the Buyer. With respect to all other welfare benefit plans, including short-term disability and severance benefits (all of such welfare plans, including the Buyer’s medical, dental, vision, health care flexible spending account, life insurance, long-term disability insurance and accidental death and dismemberment insurance plans described above in this paragraph, the “Buyer Welfare Benefit Plans”), the Buyer shall offer such other welfare benefit plans to the Transferred Employees as soon as practicable after the Closing Date, but in no event more than 30 days after the Closing Date.

(ii) Effective as of January 1, 2007 (or 61 days after the Closing if the Closing occurs after November 30, 2006), the Buyer shall assume all responsibilities and obligations for COBRA Coverage and any state continuation coverage requirements with respect to the Transferred Employees and their beneficiaries for whom a “qualifying event” under COBRA occurs after December 31, 2006 (or 60 days after the Closing if the Closing occurs after November 30, 2006). The Seller agrees that it shall retain responsibility for COBRA Obligations to all Business Employees and their qualified beneficiaries (i) who do not become Transferred Employees or (ii) for whom a “qualifying event” under COBRA occurs prior to January 1, 2007 (or 61 days after the Closing if the Closing occurs after November 30, 2006.

(f) Vacation Benefits. From and after the Closing Date, the Buyer shall recognize, and permit the Transferred Employees to use, all of the Transferred Employees’ accrued and unused vacation days to the extent reflected as a liability on the Working Capital Schedule (the Seller shall provide such information to the Buyer in connection with the Closing). The Buyer shall recognize service by each Transferred Employee with the Seller and its Affiliates for purposes of determining entitlement to vacation under the applicable vacation policy of the Buyer.

(g) Employee Information. The Seller shall deliver to the Buyer, within 20 days after the date hereof and again on the Closing Date, a list of each Business Employee, such Employee’s base salary and bonus opportunities, the Employee’s date of hire, the Employee Plans in which such Employee is eligible to participate, and the primary geographic location of his or her employment with the Seller, as of the date hereof, broken down into the following categories: (i) active, (ii) inactive on leave of absence with reemployment rights and (iii) on short-term disability under the Seller’s short-term disability policy.

(h) WARN Act. The Buyer agrees to provide any required notice under the WARN Act and any similar state or non-U.S. statute, and otherwise to comply with any such statute with respect to any “plant closing” or “mass layoff” (as defined in the WARN Act) or group termination or similar event affecting Business Employees and occurring after the Closing Date. The Seller agrees to provide any required notice under the WARN Act, and any similar state or non-U.S. statute, and otherwise to comply with any such statute with respect to any “plant closing” or “mass layoff” (as defined in the WARN Act) or group termination or similar event affecting Business Employees and occurring on or prior to the Closing Date.

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(i) No Third-Party Beneficiaries. Nothing herein express or implied by this Agreement shall confer upon any Business Employee, or legal representative thereof, any rights or remedies, including any right to employment or benefits for any specified period, of any nature or kind whatsoever, under or by reason of this Agreement.

Section 5.7 Confidentiality. Each of the Buyer and the Seller shall hold, and shall cause its Affiliates and Representatives to hold, in confidence all documents and information furnished to it by or on behalf of the other in connection with the transactions contemplated hereby pursuant to the terms of the confidentiality agreement dated August 29, 2006 between the Buyer and the Seller (the “Confidentiality Agreement”), which shall continue in full force and effect until the Closing Date, at which time such Confidentiality Agreement and the obligations of the Parties under this Section 5.7 shall terminate. If for any reason this Agreement is terminated prior to the Closing Date, the Confidentiality Agreement shall nonetheless continue in full force and effect in accordance with its terms.

Section 5.8 Consents; Further Assurances.

(a) During the period prior to the Closing Date, the Seller shall use its commercially reasonable efforts to, and the Buyer shall cooperate with the Seller or EMS Brazil, in attempting to secure any consents, waivers and approvals of any third party (other than any Governmental Body) required to be obtained to consummate the transactions contemplated by this Agreement (collectively, the “Required Consents”); provided, however, that notwithstanding anything to the contrary in this Agreement, such efforts by the Seller shall not include any requirement of the Seller or any of its Affiliates to pay money to any third party, commence or participate in any litigation, offer or grant any accommodation or undertake any obligation or liability (in each case financial or otherwise) to any third party (including payments to any Governmental Body in excess of normal filing fees), unless, in the case of any cost or expense incurred by the Seller or any of its Affiliates, the Buyer agrees to reimburse the Seller or such Affiliate for such cost or expense; provided, further, that prior to the Closing neither the Buyer nor its officers, employees or authorized representatives may contact any customer, supplier, lessor or other third party (other than any Governmental Body) in connection with any Required Consents without the Seller’s prior written consent (which consent shall not be unreasonably withheld). Except as otherwise expressly provided in this Section 5.8(a), the Seller shall not have any liability whatsoever to the Buyer arising solely out of or relating solely to the failure to obtain any Required Consents. No representation, warranty or covenant of the Seller contained herein shall be breached or deemed breached, and no condition shall be deemed not satisfied other than Sections 7.3(c) or 7.3(e), based solely on (i) the failure to obtain any such Required Consents, or (ii) any lawsuit, action, claim, proceeding or investigation commenced or threatened by or on behalf of any Person arising out of or relating to the failure to obtain any such Required Consents.

(b) If any Required Consent is not obtained prior to Closing and as a result thereof the Buyer shall be prevented by such third party from receiving the rights and benefits with respect to such Transferred Asset intended to be transferred hereunder, or if any attempted assignment would adversely affect the rights of the Seller thereunder so that the Buyer would not in fact receive all such rights or the Seller would forfeit or otherwise lose the benefit of material rights that the Seller is entitled to retain, the Seller and the Buyer shall cooperate in any lawful

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and commercially reasonable arrangement, as the Seller and the Buyer shall agree, under which the Buyer would, to the extent practicable, obtain the economic claims, rights and benefits under such asset and, to the extent the Buyer obtains such claims, rights and benefits, assume the economic burdens and obligations with respect thereto in accordance with this Agreement, including by subcontracting, sublicensing or subleasing to the Buyer. The Seller shall promptly pay to the Buyer when received all monies received by the Seller under such Transferred Asset or any claim or right or any benefit arising thereunder and, to the extent the Buyer obtains such claims, rights and benefits, the Buyer shall indemnify and promptly pay the Seller for all liabilities of the Seller associated with such Transferred Asset.

(c) Each of the Parties shall use all commercially reasonable efforts to take, or cause to be taken, all appropriate action to do, or cause to be done, all things necessary, proper or advisable under applicable Law or otherwise to consummate and make effective the transactions contemplated by the Transaction Documents as promptly as practicable, including to (i) obtain from Governmental Authorities and other Persons all consents, approvals, authorizations, qualifications and orders as are necessary for the consummation of the transactions contemplated by the Transaction Documents, including the Product Authorizations, and (ii) promptly make all necessary filings, and thereafter make any other required submissions, with respect to this Agreement required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (to the extent necessary) or any other applicable Law.

(d) Each of the Parties shall promptly notify the other Party of any written communication it or any of its Affiliates receives from any Governmental Authority relating to the matters that are the subject of this Agreement and permit the other Party to review in advance any proposed written communication by such Party to any Governmental Authority. Neither Party shall agree to participate in any meeting with any Governmental Authority in respect of any filings, investigation or other inquiry unless it consults with the other Party in advance and, to the extent permitted by such Governmental Authority, gives the other Party the opportunity to attend and participate at such meeting. Subject to the Confidentiality Agreement, the Parties will coordinate and cooperate fully with each other in exchanging such information and providing such assistance as the other Party may reasonably request in connection with the foregoing and in seeking early termination of any applicable waiting periods. Subject to the Confidentiality Agreement, the Parties will provide each other with copies of all non-confidential correspondence, filings or written communications between them or any of their Representatives, on the one hand, and any Governmental Authority or members of its staff, on the other hand, with respect to this Agreement and the transactions contemplated hereby.

(e) During the period prior to the Closing Date, the Seller shall use its reasonable best efforts to obtain an estoppel agreement from each of the landlords identified on Exhibit K in form and substance reasonably satisfactory to the Buyer (the “Landlord Estoppels”); provided, however, that notwithstanding anything to the contrary in this Agreement, such efforts by the Seller shall not include any requirements of the Seller or any of its Affiliates to pay money to any third party (including any landlord). The Seller shall not have any liability whatsoever to the Buyer arising solely out of or relating solely to the failure of the Seller to obtain any of the Landlord Estoppels. No representation, warranty or covenant of the Seller contained herein shall be breached or deemed breached, and no condition shall be deemed not satisfied, based solely on (i) the failure to obtain any of the Landlord Estoppels, or (ii) any lawsuit, action, claim,

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proceeding or investigation commenced or threatened by or on behalf of any Person arising out of or relating to the failure to obtain any of the Landlord Consents.

Section 5.9 Corporate Name. The Buyer acknowledges that, from and after the Closing Date, the Seller shall have the absolute and exclusive proprietary right to all names, marks, trade names and trademarks (collectively “Names”) incorporating “EMS” by itself or in combination with any other Name, and that none of the rights thereto or goodwill represented thereby or pertaining thereto are being transferred hereby or in connection herewith. The Buyer agrees that from and after the Closing Date it will not, nor will it permit any of its Affiliates (including EMS Brazil) to, use any name, phrase or logo incorporating “EMS” in or on any of its literature, sales materials or products or otherwise in connection with the sale of any products or services; provided, however, that the Buyer may continue to use any printed literature, sales materials, purchase orders and sales, maintenance or license agreements, and sell any products, that are included in the Inventory on the Closing Date and that bear a name, phrase or logo incorporating “EMS” (as limited by any existing agreements the Seller may have with third parties) until the supplies thereof existing on the Closing Date have been exhausted, but in any event for not longer than 30 days from the Closing Date. With respect to the printed purchase orders and sales, maintenance or license agreements referred to in the preceding sentence, from and after the Closing Date the Buyer shall sticker or otherwise mark such documents as necessary in order to indicate clearly that neither the Seller nor any of its Affiliates is a party to such documents. From and after the expiration of such 30 day period, the Buyer shall cease to use any such literature and sales materials, delete or cover (as by stickering) any such name, phrase or logo from any item included in the Inventory that bears such name, phrase or logo and take such other actions as may be necessary or advisable to clearly and prominently indicate that neither the Buyer nor any of its Affiliates is affiliated with the Seller or any of its Affiliates.

Section 5.10 Refunds and Remittances. After the Closing, (a) if the Seller or any of its Affiliates receive any refund or other amount that is a Transferred Asset or is otherwise properly due and owing to the Buyer in accordance with the terms of this Agreement, the Seller promptly shall remit, or shall cause to be remitted, such amount to the Buyer and (b) if the Buyer or any of its Affiliates receive any refund or other amount that is an Excluded Asset or is otherwise properly due and owing to the Seller or any of its Affiliates in accordance with the terms of this Agreement, the Buyer promptly shall remit, or shall cause to be remitted, such amount to Seller.

Section 5.11 No Solicitation.

(a) The Buyer will not, for a period of three years following the Closing Date, without the prior written consent of the Seller, either alone or in conjunction with any other Person, directly or indirectly, or through its present or future Controlled Affiliates, hire any person who is an employee of the Seller or any of its Controlled Affiliates, solicit for hire (other than a solicitation by general advertisement) any such person or solicit any such person to terminate his or her employment with the Seller or such Controlled Affiliate, except as expressly permitted or required by Section 5.6 of this Agreement. The Seller will not, for a period of three years following the Closing Date, without the prior written consent of the Buyer, either alone or in conjunction with any other Person, directly or indirectly, or through its present or future Controlled Affiliates, hire any person who is an employee of the Business, or solicit for hire

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(other than a solicitation by general advertisement) any such person or solicit any such person to terminate his or her employment with the Buyer or any of its Controlled Affiliates.

(b) The Parties agree that any remedy at law for any breach by either of them of this Section 5.11 would be inadequate, and that the Buyer or the Seller, as the case may be, would be entitled to injunctive relief in such a case. If it is ever held that this restriction on the Parties is too onerous and is not necessary for the protection of either of them, the Parties agree that any court of competent jurisdiction may impose such lesser restrictions which such court may consider to be necessary or appropriate properly to protect the Buyer or the Seller or EMS Brazil, as the case may be.

Section 5.12 Agreement Not to Compete.

(a) The Seller understands that the Buyer shall be entitled to protect and preserve the going concern value of the Business to the extent permitted by Law and that the Buyer would not have entered into this Agreement absent the provisions of this Section 5.12 and, therefore, for a period of three years from the Closing, the Seller shall not, and shall cause each of its Affiliates (which, for purposes of this Section 5.12(a), shall mean only any other Person that directly or indirectly through one or more intermediaries, is Controlled by the Seller) not to, directly or indirectly, engage in any Restricted Activities.

(b) Section 5.12(a) shall be deemed not breached (i) solely as a result of the ownership by the Seller or any of its Affiliates of less than an aggregate of 5% of any class of stock of a Person engaged, directly or indirectly, in Restricted Activities, or (ii) as a result of the Seller or any of its Affiliates acquiring directly or indirectly any diversified business having less than thirty-five (35%) of its annual revenues (based on such business’s latest annual financial statements) attributable to Restricted Activities; provided, however, that the Seller is affirmatively taking actions to divest such business and completes such divestiture within twelve (12) months following the closing of such acquisition.

(c) Notwithstanding any other provision of this Agreement, it is understood and agreed that the remedy of indemnity payments pursuant to Article VIII and other remedies at law would be inadequate in the case of any breach of the covenants contained in Section 5.12(a). The Buyer shall be entitled to equitable relief, including the remedy of specific performance, with respect to any breach or attempted breach of such covenants.

Section 5.13 Bulk Transfer Laws. The Buyer hereby waives compliance by the Seller with the provisions of any so-called “bulk transfer laws” of any jurisdiction in connection with the sale of the Transferred Assets to the Buyer.

Section 5.14 Public Announcements. On and after the date hereof and through the Closing Date, the Parties shall consult with each other before issuing any press release or otherwise making any public statements with respect to this Agreement or the transactions contemplated hereby, and no Party shall issue any press release or make any public statement prior to obtaining the other Party’s written approval, which approval shall not be unreasonably withheld, except that no such approval shall be necessary to the extent disclosure may be required by applicable Law or any listing agreement of either Party, in which case the Party

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required to make the release or announcement shall, to the extent practicable, allow the other Parties reasonable time to comment on such release or announcement in advance of such issuance.

Section 5.15 SelectaCell Payments.

(a) In consideration for the Seller’s sale and assignment of the Transferred Assets and the other terms and conditions to be observed and performed by the Seller as set forth in this Agreement, the Buyer will pay to the Seller a royalty payment (a “Royalty Payment”) equal to three percent (3%) of Net Sales of SelectaCell Products for a period commencing on the First Commercial Sale of a SelectaCell Product and ending on December 31, 2010 (the “Royalty Period”); provided, however, that (i) the Buyer shall not have any obligation hereunder to make such a Royalty Payment except to the extent that the Net Sales of Products during the Royalty Period equals or exceeds $40,000,000 (the “Target Amount”) (and only with respect to such excess); and (ii) if Net Sales of Products during the Royalty Period equal or exceed the Target Amount, in addition to any Royalty Payments, the Buyer shall pay to the Seller an amount equal to $2,000,000 (the “Target SelectaCell Payment”) upon the aggregate amount of the Net Sales of SelectaCell Products equaling or exceeding the Target Amount.

(b) The Initial SelectaCell Payment will be paid by the Buyer to the Seller within 30 days of the Buyer achieving the Target Amount during the Royalty Period. Thereafter, Royalty Payments will be paid by the Buyer to the Seller within thirty days of the close of each calendar quarter during the term of the Royalty Period. If the Buyer fails to make the Initial SelectaCell Payment or any Royalty Payment when due, such payments will accrue interest at the Agreed Rate. The Buyer will keep or cause to be kept accurate written records of the Net Sales of all SelectaCell Products sold for so long as it is required to make any payments pursuant to this Section 5.15, and shall supply the Seller with a written summary thereof at the time of making the Initial SelectaCell Payment or any Royalty Payments. The Seller will have the right to have an independent certified public accounting firm, reasonably acceptable to the Buyer, inspect the Buyer’s records relating to SelectaCell Products and the Initial SelectaCell Payment or any Royalty Payments payable with respect thereto for a period of two years after the calendar year to which they pertain, during normal business hours and upon not less than 10 days’ advance notice to the Buyer.

Section 5.16 Authority to Collect Receivables. From and after the Closing, the Buyer shall have the right and authority to collect for its own account all Receivables and other related items that are included in the Transferred Assets and to endorse with the name of the Seller any checks or drafts received with respect to any Receivables or such other related items. The Seller shall promptly deliver to the Buyer any cash or other property received directly or indirectly by it with respect to the Receivables and such other related items.

Section 5.17 Product Warranties.

(a) Within 60 days after each of the first and the second anniversaries of the Closing Date, the Buyer shall deliver to the Seller a statement of the Product Warranty Costs for the one-year period immediately preceding such anniversary and the Buyer’s calculation of Seller’s Product Warranty Share, if any (the “Product Warranty Costs Schedule”) for such

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period. The Buyer shall provide the Seller with any information used in preparing the Product Warranty Costs Schedule as the Seller may reasonably request. The Product Warranty Costs Schedule shall become final and binding on the 20^th Business Day following delivery thereof, unless prior to the end of such period, the Seller delivers to the Buyer written notice of its disagreement (the “Product Warranties Notice of Disagreement”) specifying the nature and amount of any disputed item.

(b) If the Seller delivers a Product Warranties Notice of Disagreement to the Buyer pursuant to Section 5.17(a), then the Parties shall resolve such disagreement in accordance with the procedures set forth in Section 2.9(c), except “Product Warranties Notice of Disagreement” shall be substituted for the phrase “Notice of Disagreement” and “Seller’s Product Warranty Share” shall be substituted for the phrase “Final Working Capital”.

(c) If the amount of Seller’s Product Warranty Share as finally determined pursuant to this Section 5.17 is greater than zero, then the Seller shall pay to the Buyer, within five Business Days after the amount of Seller’s Product Warranty Share becomes final and binding upon the Parties, the amount of Seller’s Product Warranty Share by wire transfer in immediately available funds in U.S. dollars.

(d) From the Closing Date until the second anniversary of the Closing Date, the Buyer shall furnish to the Seller in writing, within 20 days following the end of each quarter, such quarterly financial and operating data and information as may reasonably be requested by the Seller relating to any Product Warranty Costs for each individual Significant Warranty Event.

Section 5.18 Product Authorizations. Within 30 days after the end of each calendar month beginning in the month after the Closing Date, the Seller shall pay to the Buyer an amount equal to (a) $5,000, multiplied by (b) the number of days in such calendar month that the Product Authorizations described in Schedule 3.7 have not been obtained; provided, however, that the Seller shall have no obligation under this Section 5.18 if the Buyer determines not to manufacture, market, distribute or sell the products that are the subject of such Product Authorizations for any reason other than the failure to obtain such Product Authorizations; provided, further, that the obligation of the Seller under this Section 5.18 shall not exceed $900,000.

ARTICLE VI

TAX MATTERS

Section 6.1 Liability for Taxes.

(a) Each of the Buyer and the Seller shall bear and be responsible for fifty percent (50%) of any payments of, or reimbursement to Buyer for, any sales Tax, use Tax, real property transfer or gains Tax, asset transfer Tax, documentary stamp Tax or similar Tax, and any recording and filing fees that are or may be imposed by any government or political subdivision thereof, attributable to the sale or transfer of the Transferred Assets pursuant to this Agreement (collectively “Transfer Taxes”), notwithstanding the Party upon which such Taxes or fees are actually imposed.

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(b) All real property Taxes, personal property Taxes and similar ad valorem obligations levied with respect to the Transferred Assets for a taxable period which includes (but does not end on) the Closing Date shall be apportioned between the Seller, on one hand, and the Buyer, on the other, based on the number of days of such taxable period included in the portion of such taxable period before the Closing Date (the “Pre-Closing Tax Period”) and the number of days of such taxable period on and after the Closing Date (the “Post-Closing Tax Period”). The Seller shall be liable for the proportionate amount of such Taxes that is attributable to the Pre-Closing Tax Period (except to the extent that the liability for such Taxes was accrued as a current liability in the calculation of Final Net Working Capital) and the Buyer shall be liable for the proportionate amount of such Taxes that is attributable to the Post-Closing Tax Period (except to the extent that payment or accrual for such Taxes was accrued as a current asset in the calculation of Final Net Working Capital). The Seller or the Buyer, as the case may be, shall provide reimbursement for any Tax paid by one Party all or a portion of which is the responsibility of the other Party in accordance with the terms of this Section 6.1(b). Upon receipt of any bill or payment of any amount with respect to any such Taxes for which it is entitled to reimbursement under this Section 6.1(b), each of the Seller and the Buyer shall present a statement to the other setting forth the amount of reimbursement to which each is entitled under this Section 6.1(b) together with such supporting evidence as is reasonably necessary to calculate the proration amount. The proration amount shall be paid by the Party owing it to the other within 10 business days after delivery of such statement.

Section 6.2 Assistance and Cooperation. After the Closing Date, each of the Seller and the Buyer shall (and cause their respective Affiliates to):

(a) assist the other Party in preparing any Tax Returns relating to the Business and the Transferred Assets;

(b) cooperate fully in preparing for any audits of, or disputes with taxing authorities regarding, any Tax Returns that are required to be filed by or with respect to the Business or the Transferred Assets or with respect to EMS Brazil;

(c) make available to the other and to any taxing authority as reasonably requested all information, records and documents relating to Taxes imposed with respect to the Business, the Transferred Assets or the Assumed Liabilities or EMS Brazil;

(d) provide timely notice to the other in writing of any pending or threatened Tax audits or assessments relating to Taxes for which the other may have a liability under this Agreement;

(e) furnish the other with copies of all correspondence received from any taxing authority in connection with any Tax audit or information request with respect to any such Tax;

(f) timely sign and deliver such certificates or forms as may be necessary or appropriate to establish an exemption from (or otherwise reduce), or file Tax Returns or other reports with respect to, Taxes described in Section 6.1(a) (relating to Transfer Taxes); and

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(g) timely provide to the other Party powers of attorney or similar authorizations necessary to carry out the purposes of this Article VI.

Section 6.3 Section 338(g) Election. The Seller acknowledges that the Buyer may make an election under Section 338(g) of the Code and corresponding or similar elections under state, local or foreign tax law with respect to EMS Brazil. The Buyer shall provide the Seller with notice of any such election as required by the Treasury Regulations under Section 338 of the Code.

ARTICLE VII

CONDITIONS TO CLOSING

Section 7.1 General Conditions. The respective obligations of the Buyer and the Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any of which may, to the extent permitted by applicable Law, be waived in writing by either Party in its sole discretion (provided, that such waiver shall only be effective as to the obligations of such Party):

(a) No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) that is then in effect and that enjoins, restrains, makes illegal or otherwise prohibits the consummation of the transactions contemplated by this Agreement.

(b) All material consents of, or registrations, declarations or filings with, any Governmental Authority legally required for the consummation of the transactions contemplated by this Agreement shall have been obtained or filed.

Section 7.2 Conditions to Obligations of the Seller. The obligations of the Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any of which may be waived in writing by the Seller in its sole discretion:

(a) The representations and warranties of the Buyer contained in the Transaction Documents shall be true and correct both when made and as of the Closing Date, or in the case of representations and warranties that are made as of a specified date, such representations and warranties shall be true and correct as of such specified date, except where the failure to be so true and correct would not, individually or in the aggregate, be materially adverse to the ability of the Buyer to perform its obligations under this Agreement or to consummate the transactions contemplated hereby. The Buyer shall have performed in all material respects all obligations and agreements and complied in all material respects with all covenants and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing. The Seller shall have received from the Buyer a certificate to the effect set forth in the preceding sentences, signed by a duly authorized officer thereof.

(b) The Seller shall have received an executed counterpart of each of the Ancillary Agreements (other than the Transition Services Agreement), signed by each Party other than the Seller.

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Section 7.3 Conditions to Obligations of the Buyer. The obligations of the Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any of which may be waived in writing by the Buyer in its sole discretion:

(a) The representations and warranties of the Seller contained in the Transaction Documents qualified by materiality or by Material Adverse Effect shall be true and correct, and those not so qualified shall be true and correct in all material respects, both when made and as of the Closing Date, or in the case of representations and warranties that are made as of a specified date, such representations and warranties qualified by materiality or by Material Adverse Effect shall be true and correct, and those not so qualified shall be true and correct in all material respects, as of such specified date. The Seller shall have performed in all material respects all obligations and agreements and complied in all material respects with all covenants and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing. The Buyer shall have received from the Seller a certificate to the effect set forth in the preceding sentences, signed by a duly authorized officer thereof.

(b) The Buyer shall have received (i) an executed counterpart of each of the Ancillary Agreements, signed by each Party other than the Buyer and (ii) each of the items listed in Section 2.7(iii) through (viii) hereof.

(c) There shall be not be pending or threatened any Action (i) challenging or seeking to restrain or prohibit the transactions contemplated by the Transaction Documents, (ii) seeking to prohibit or limit the ownership or operation by the Buyer or any of its Subsidiaries of any material assets of the Buyer (including the Business) or any of its Subsidiaries, or to compel the Buyer or any of its Subsidiaries to dispose of or hold separate any material assets of the Buyer (including the Business) or any of its Subsidiaries, in each case as a result of the transactions contemplated by the Transaction Documents, (iii) seeking to impose limitations on the ability of the Buyer or any of its Subsidiaries to acquire or hold, or exercise full rights of ownership of, the Transferred Assets or (iv) seeking to prohibit the Buyer or any of its Subsidiaries from effectively controlling any material respect the Business.

(d) The Buyer shall have received from the Seller a certificate of non-foreign status pursuant to Section 1445 of the Code.

(e) Each of the consents identified on Exhibit K shall have been obtained, in form and substance reasonably acceptable to the Buyer.

(f) Each Product Authorization (other than any such authorization described in Schedule 3.7) shall have been obtained.

ARTICLE VIII

INDEMNIFICATION

Section 8.1 Survival of Representations, Warranties and Covenants. The representations, warranties, covenants and agreements of the Seller and the Buyer contained in this Agreement shall survive the Closing for purposes of this Article VIII as follows: (i) the representations and warranties contained in Sections 3.1 (Organization and Qualification), 3.2

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(Authority), 3.3 (No Conflict; Required Filings and Consents), 3.4(a) (Transferred Assets), 3.5(d) (Financial Statements; No Undisclosed Liabilities), 3.22 (Capitalization), 3.21 (Brokers), 4.1 (Organization and Qualification), 4.2 (Authority), 4.3 (No Conflict; Required Filings and Consents) and 4.5 (Brokers) (collectively, the “Fundamental Representations”) and the covenants and agreements contained herein shall survive indefinitely; (ii) the representations and warranties contained in Section 3.14 (Taxes) shall survive until ninety (90) days after the expiration of all applicable statutes of limitation; (iii) the representations and warranties contained in Section 3.13 (Intellectual Property) shall survive for three years following the Closing; and (iv) all other representations and warranties contained herein shall survive for eighteen months following the Closing.

Section 8.2 Indemnification by the Seller. If the Closing occurs, the Seller shall save, defend, indemnify and hold harmless the Buyer and its Affiliates and the respective directors, stockholders, Representatives, successors and assigns of each of the foregoing (collectively, the “Buyer Indemnified Parties”) from and against any and all losses, damages, liabilities, deficiencies, claims, interest, awards, judgments, penalties, costs and expenses (including reasonable attorneys’ fees, costs and other out-of-pocket expenses incurred in investigating, preparing or defending the foregoing) (hereinafter collectively, “Losses”) to the extent arising out of or resulting from:

(a) any breach of any representation or warranty made by the Seller contained in this Agreement;

(b) any breach of any covenant or agreement by the Seller contained in this Agreement;

(c) any Excluded Liability;

(d) any failure of the Target Working Capital Amount to be determined in accordance with the guidelines in Exhibit C; and

(e) the failure to comply with the provisions of the so-called “bulk transfer laws” of any jurisdiction, if applicable.

Section 8.3 Indemnification by the Buyer. The Buyer shall save, defend, indemnify and hold harmless the Seller and its Affiliates and the respective directors, stockholders, Representatives, successors and assigns of each of the foregoing (collectively, the “Seller Indemnified Parties”) from and against any and all Losses to the extent arising out of or resulting from:

(a) any breach of any representation or warranty made by the Buyer contained in this Agreement;

(b) any breach of any covenant or agreement by the Buyer contained in this Agreement; and

(c) any Assumed Liability.

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Section 8.4 Procedures.

(a) In order for a Buyer Indemnified Party or Seller Indemnified Party (the “Indemnified Party”) to be entitled to any indemnification provided for under this Agreement in respect of, arising out of or involving a Loss or a claim or demand made by any Person against the Indemnified Party (a “Third Party Claim”), such Indemnified Party shall deliver notice thereof to the party against whom indemnity is sought (the “Indemnifying Party”) promptly after receipt by such Indemnified Party of written notice of the Third Party Claim, describing in reasonable detail the facts giving rise to any claim for indemnification hereunder and the amount or method of computation of the amount of such claim (if known). Thereafter, the Indemnifying Party shall promptly provide such other information with respect thereto as the Indemnifying Party may reasonably request. The failure to provide such notice, however, shall not release the Indemnifying Party from any of its obligations under this Article VIII except to the extent that the Indemnifying Party is prejudiced by such failure.

(b) The Indemnifying Party shall have the right, upon written notice to the Indemnified Party assuming full responsibility for any Losses relating to the claim (subject to the limitations in Section 8.5) within 30 days of receipt of notice from the Indemnified Party of the commencement of such Third Party Claim, to assume the defense thereof at the expense of the Indemnifying Party with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party. If the Indemnifying Party assumes the defense of such Third Party Claim, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party; provided, however, that if the named parties in any such Third Party Claim include both the Indemnified Party and the Indemnifying Party and representation of both Parties by the same counsel determined by qualified counsel to be inappropriate because one or more legal defenses available to such Indemnified Party is different from or additional to those available to the Indemnifying Party and is reasonably expected to create a conflict of interest between them, then such Indemnified Party may employ separate counsel to represent or defend it in any such Third Party Claim, and the Indemnifying Party shall be responsible for the fees and disbursements of such counsel. If the Indemnifying Party assumes the defense of any Third Party Claim, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses (on a mutually convenient basis), pertinent records, materials and information, in each case in the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably requested by the Indemnifying Party. Whether or not the Indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party shall not admit any liability with respect to, or settle, compromise or discharge, or offer to settle, compromise or discharge, such Third Party Claim without the Indemnifying Party’s prior written consent (which consent shall not be unreasonably withheld). If the Indemnifying Party assumes the defense of a Third Party Claim, no compromise or settlement of such Third Party Claim may be effected by the Indemnifying Party without the Indemnified Party’s prior written consent unless (A) there is no finding or admission of any violation of applicable Law or any violation of the rights of any Person; (B) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party; and (C) the Indemnified Party shall have no liability with respect to such compromise or settlement. Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third Party Claim (and shall be liable for the fees and expenses of counsel

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incurred by the Indemnified Party in defending such Third Party Claim) if the Third Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnified Party.

(c) In the event any Indemnified Party should have a claim against any Indemnifying Party hereunder that does not involve a Third Party Claim being asserted against or sought to be collected from such Indemnified Party, the Indemnified Party shall deliver notice of such claim promptly to the Indemnifying Party, describing in reasonable detail the facts giving rise to any claim for indemnification hereunder and the amount or method of computation of the amount of such claim (if known). Thereafter, the Indemnifying Party shall promptly provide such other information with respect thereto as the Indemnifying Party may reasonably request. The failure to provide such notice, however, shall not release the Indemnifying Party from any of its obligations under this Article VIII except to the extent that the Indemnifying Party is prejudiced by such failure.

(d) For purposes of determining the amount of any Excluded Liability described in Section 2.4(j) in any case in which a Tax is assessed with respect to a taxable period that includes the Closing Date (but does not begin on that day) the Taxes, if any, attributable to the taxable period of EMS Brazil beginning before and ending on or after the Closing Date shall be apportioned (i) to the Seller, for the amount of such Taxes that is attributable to the Pre-Closing Tax Period, and (ii) to the Buyer, for the amount of such Taxes that is attributable to the Post-Closing Tax Period. Any allocation of income or deductions required to determine any Taxes attributable to the Pre-Closing Tax Period and the Post-Closing Tax Period shall be made (i) in the case of income Taxes or Taxes based on or related to income or receipts or any sales or use Tax, by means of a closing of books and records of EMS Brazil as of the day preceding the Closing Date, provided that exemptions, allowances or deductions that are calculated on an annual basis (including, but not limited to, depreciation and amortization deductions) shall be allocated between the Pre-Closing Tax Period and the Post-Closing Tax Period in proportion to the number of days in each such period, and (ii) in the case of other Taxes, on a per diem basis.

Section 8.5 Limits on Indemnification.

(a) No claim may be asserted against either Party pursuant to Section 8.2(a) or 8.3(a) (other than with respect to any Fundamental Representation), unless written notice of such claim is received by such Party in accordance with Section 8.4 on or prior to the date on which the representation or warranty on which such claim is based ceases to survive as set forth in Section 8.1, in which case such representation or warranty shall survive as to such claim until such claim has been finally resolved. No claim may be asserted against either Party under Sections 8.2(b) or 8.3(b) unless written notice of such claim is received by such Party, describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim on or prior to the date that is 12 months following the date by which such covenant or agreement is required to be performed, in which case such covenant or agreement shall survive as to such claim until such claim has been finally resolved.

(b) Notwithstanding anything to the contrary contained in this Agreement: (i) the Seller shall not be liable to any Buyer Indemnified Party for any claim for indemnification under Section 8.2(a) unless and until the aggregate amount of indemnifiable Losses that may be

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recovered from the Seller equals or exceeds $450,000, in which case the Seller shall be liable only for the Losses in excess of such amount; (ii) the maximum aggregate amount of indemnifiable Losses which may be recovered by the Buyer Indemnified Parties under Section 8.2(a) (including, subject to clause (v) below, any Losses relating to any punitive, incidental, consequential, special or indirect damages, including business interruption, loss of future revenue, profits or income, or loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement) shall be an amount equal to $11,440,000; (iii) the Seller shall not be obligated to indemnify any Buyer Indemnified Party with respect to any Loss to the extent that a specific accrual or reserve for the amount of such Loss was reflected on the Balance Sheet; (iv) the Seller shall not be obligated to indemnify any Buyer Indemnified Party with respect to any Loss to the extent that a specific accrual or reserve for the amount of such Loss was included in the calculation of Final Working Capital (as finally determined pursuant to Section 2.9); and (v) the maximum aggregate amount of indemnifiable Losses relating to any punitive, incidental, consequential, special or indirect damages, including business interruption, loss of future revenue, profits or income, or loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement shall be an amount equal to $5,720,000; provided, however, that clauses (i)-(iii) and (v) of this Section 8.5(b) shall not apply to any claim for indemnification to the extent arising out of or resulting from any Excluded Liability or to the extent arising out of a breach of the representation and warranty in Section 3.16(c) or any Fundamental Representation.

(c) For all purposes of this Article VIII, “Losses” shall be net of any insurance or other recoveries received by the Indemnified Party or its Affiliates (net of any out-of-pocket costs and expenses incurred by the Indemnified Party in obtaining such recoveries) in connection with the facts giving rise to the right of indemnification.

(d) The Buyer and the Seller shall cooperate with each other with respect to resolving any claim or liability with respect to which one Party is obligated to indemnify the other Party, including by making commercially reasonable efforts to mitigate or resolve any such claim or liability. In the event that the Buyer or the Seller shall fail to make such commercially reasonably efforts to mitigate or resolve any claim or liability, then notwithstanding anything else to the contrary contained herein, the other Party shall not be required to indemnify any Person for any loss, liability, claim, damage or expense that would reasonably be expected to have been avoided if the Buyer or the Seller, as the case may be, had made such efforts.

Section 8.6 Exclusivity. Except as specifically set forth in any of the Transaction Documents, effective as of the Closing, in the absence of fraud or willful misconduct on the part of the Seller in connection with the negotiation, execution or delivery of this Agreement or the consummation of the transactions contemplated hereby (to the extent determined by a final judgment by a court of competent jurisdiction), the Buyer, on behalf of itself and the other Buyer Indemnified Parties, waives any rights and claims any Buyer Indemnified Party may have against the Seller, whether in law or equity, relating to the Business, the Transferred Assets, the Assumed Liabilities and/or the transactions contemplated hereby. The rights and claims waived by the Buyer Indemnified Parties include claims for contribution or other rights of recovery arising out of or relating to any Environmental Laws, claims for breach of contract, breach of representation or warranty, breach of implied covenants, negligent misrepresentation and all other claims for breach of duty. After the Closing, subject to the foregoing and except as

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specifically set forth in any Transaction Document, this Article VIII will provide the exclusive remedy against the Seller for any breach of any representation, warranty, covenant or other claim arising out of or relating to this Agreement and/or the transactions contemplated hereby.

Section 8.7 Disclaimer of Implied Warranties. It is the explicit intent and understanding of each Party that neither Party or any of such Party’s Affiliates or Representatives is making any representation or warranty whatsoever (including any implied warranty of merchantability or fitness), oral or written, express or implied, as to the accuracy or completeness of any information regarding the Business, the Transferred Assets or the Assumed Liabilities, except as expressly set forth in any of the Transaction Documents, and neither Party is relying on any statement, representation or warranty, oral or written, express or implied, made by the other Party or such other Party’s Affiliates or Representatives, except for the representations and warranties expressly set forth in any of the Transaction Documents.

Section 8.8 Adjustment to Purchase Price. Each of the Buyer and the Seller agrees to report any indemnification payment pursuant to this Article VIII as an adjustment to the Purchase Price for federal income tax purposes.

ARTICLE IX

TERMINATION

Section 9.1 Termination. This Agreement may be terminated at any time prior to the Closing:

(a) by mutual written consent of the Buyer and the Seller;

(b) (i) by the Seller, if the Buyer breaches or fails to perform in any material respect any of its representations, warranties or covenants contained in any of the Transaction Documents and such breach or failure to perform (A) would give rise to the failure of a condition set forth in Section 7.2, (B) cannot be or has not been cured within 30 days following delivery of written notice of such breach or failure to perform and (C) has not been waived by the Seller or (ii) by the Buyer, if the Seller breaches or fails to perform in any material respect any of its representations, warranties or covenants contained in any of the Transaction Documents and such breach or failure to perform (x) would give rise to the failure of a condition set forth in Section 7.3, (y) cannot be or has not been cured within 30 days following delivery of written notice of such breach or failure to perform and (z) has not been waived by the Buyer;

(c) (i) by the Seller, if any of the conditions set forth in Section 7.1 or Section 7.2 shall have become incapable of fulfillment prior to November 30, 2006 or (ii) by the Buyer, if any of the conditions set forth in Section 7.1 or Section 7.3 shall have become incapable of fulfillment prior to November 30, 2006; provided, however, that the right to terminate this Agreement pursuant to this Section 9.1(c) shall not be available if the failure of the Party so requesting termination to fulfill any obligation under this Agreement shall have been the cause of the failure of such condition to be satisfied on or prior to such date;

(d) by either the Seller or the Buyer if the Closing shall not have occurred by November 30, 2006 (the “Termination Date”); provided, however, that the right to terminate this Agreement under this Section 9.1(d) shall not be available if the failure of the Party so requesting

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termination to fulfill any obligation under this Agreement shall have been the cause of the failure of the Closing to occur on or prior to such date; or

(e) by either the Seller or the Buyer in the event that any Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and nonappealable; provided, however, that the Party so requesting termination shall have complied with Section 5.8(c).

The Party seeking to terminate this Agreement pursuant to this Section 9.1 (other than Section 9.1(a)) shall give prompt written notice of such termination to the other Party.

Section 9.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 9.1, this Agreement shall forthwith become void and there shall be no liability on the part of either Party except (a) for the provisions of Sections 3.21 and 4.5 relating to broker’s fees and finder’s fees, Section 5.7 relating to confidentiality, Section 5.14 relating to public announcements, Section 10.1 relating to fees and expenses, Section 10.4 relating to notices, Section 10.6 relating to third-party beneficiaries, Section 10.7 relating to governing Law, Section 10.8 relating to submission to jurisdiction and this Section 9.2 and (b) that nothing herein shall relieve either Party from liability for any breach of this Agreement or any agreement made as of the date hereof or subsequent thereto pursuant to this Agreement.

ARTICLE X

GENERAL PROVISIONS

Section 10.1 Fees and Expenses. Except as otherwise provided in this Agreement, all fees and expenses incurred in connection with or related to the Transaction Documents and the transactions contemplated thereby shall be paid by the Party incurring such fees or expenses, whether or not such transactions are consummated. In the event of termination of this Agreement, the obligation of each Party to pay its own expenses will be subject to any rights of such Party arising from a breach of this Agreement by the other.

Section 10.2 Amendment and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing signed on behalf of each Party and otherwise as expressly set forth in this Agreement.

Section 10.3 Waiver. No failure or delay of either Party in exercising any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Parties are cumulative and are not exclusive of any rights or remedies which they would otherwise have under this Agreement. Any agreement on the part of either Party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such Party.

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Section 10.4 Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile, upon written confirmation of receipt by facsimile, e-mail or otherwise, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices under this Agreement shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:

(a) if to the Seller, to:

EMS Technologies, Inc.

660 Engineering Drive

Norcross, Georgia 30092

Attention: General Counsel

Facsimile: (770) 447-4397

with a copy (which shall not constitute notice) to:

King & Spalding LLP

1180 Peachtree Street

Atlanta, Georgia 30309

Attention: Raymond E. Baltz, Jr.

Facsimile: (404) 572-5100

(b) if to the Buyer, to:

Andrew Corporation

3 Westbrook Corporate Center

Westchester, Illinois 60154

Attention: Justin Choi

Facsimile: (708) 492-3732

with a copy (which shall not constitute notice) to:

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Attention: Irving L. Rotter

Facsimile: (212) 839-5599

Section 10.5 Entire Agreement. This Agreement (including the Exhibits and Schedules), the Ancillary Agreements and the Confidentiality Agreement constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and

53

understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings among the Parties with respect to the subject matter of this Agreement. Neither this Agreement nor any Ancillary Agreement shall be deemed to contain or imply any restriction, covenant, representation, warranty, agreement or undertaking of any Party with respect to the transactions contemplated by this Agreement or by the Ancillary Agreements other than those expressly set forth in the Transaction Documents, and none shall be deemed to exist or be inferred with respect to the subject matter of this Agreement or the Ancillary Agreements.

Section 10.6 No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the Parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement, except as provided in Article VIII.

Section 10.7 Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated by this Agreement shall be governed by, and construed in accordance with, the internal Laws of the State of New York, without regard to the Laws of any other jurisdiction that might be applied because of the conflicts of Laws principles of the State of New York.

Section 10.8 Dispute Resolution. Any and all disputes between the Parties with respect to any claim or matter arising out of this Agreement that the Parties are unable to resolve after the exercise of reasonable efforts to resolve them informally, shall be resolved by binding arbitration proceedings and such dispute shall be resolved and settled by arbitration before a single arbitrator pursuant to the Federal Arbitration Act (9 U. S. C. Section 1 et seq.) in accordance with the Commercial Arbitration Rules of the American Arbitration Association and following the laws of the State of New York. The decision of the arbitrator shall be final and binding upon the Parties and judgment upon the award may be entered in any court having jurisdiction thereof in the State of New York. The Parties agree that the arbitrator shall not be authorized to award punitive damages. The arbitration shall take place in the city of New York, New York and the expenses of the arbitration shall be paid by the losing Party. The Parties acknowledge that this provision concerning arbitration and in particular the place of arbitration is a vital part of this Agreement upon which the Parties have relied in entering into this Agreement.

Section 10.9 Disclosure Generally. Notwithstanding anything to the contrary contained in the Disclosure Schedules or in this Agreement, the information and disclosures contained in any Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other Disclosure Schedule as though fully set forth in such Disclosure Schedule for which applicability of such information and disclosure is readily apparent on its face. The fact that any item of information is disclosed in any Disclosure Schedule shall not be construed to mean that such information is required to be disclosed by this Agreement. Such information and the dollar thresholds set forth in this Agreement shall not be used as a basis for interpreting the terms “material” or “Material Adverse Effect” or other similar terms in this Agreement.

Section 10.10 Personal Liability. This Agreement shall not create or be deemed to create or permit any personal liability or obligation on the part of any direct or indirect stockholder of

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the Seller or the Buyer or any officer, director, employee, Representative or investor of either the Buyer or the Seller.

Section 10.11 Assignment; Successors. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of Law or otherwise, by any Party without the prior written consent of the other Parties, and any such assignment without such prior written consent shall be null and void; provided, however, that the Buyer may, at any time prior to the Closing, assign to any Affiliate of the Buyer the Buyer’s right to purchase the Quotas without the consent of the Seller; provided, further, that any such assignment of such right by the Buyer shall not relieve the Buyer of any of its obligations hereunder, including with respect to the Quotas.

Section 10.12 Enforcement. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, each of the Parties shall be entitled to specific performance of the terms of this Agreement, including an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any federal court sitting in the City of New York, New York, this being in addition to any other remedy to which they are entitled at law or in equity. Each of the Parties further hereby waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any Law to post security as a prerequisite to obtaining equitable relief.

Section 10.13 No Presumption Against Drafting Party. Each of the Buyer and the Seller acknowledges that each Party has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of Law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting Party has no application and is expressly waived.

Section 10.14 Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

Section 10.15 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.

Section 10.16 Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become

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effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.

Section 10.17 Facsimile Signature. This Agreement may be executed by facsimile signature and a facsimile signature shall constitute an original for all purposes.

Section 10.18 Time of Essence. Time is of the essence with regard to all dates and time periods set forth or referred to in this Agreement.

Section 10.19 Exchange Rate. Any amounts under this Agreement that need to be converted from U.S. Dollars into Brazilian Reais, or vice-versa, shall be converted by the exchange rate PTAX 800 for purchase published by the Central Bank of Brazil on the second Business Day prior to the relevant date of conversion.

[The remainder of this page is intentionally left blank.]

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IN WITNESS WHEREOF, the Seller and the Buyer have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

ANDREW CORPORATION
By:	/s/ John DeSana
Name:	John DeSana
Title:	Executive Vice President &
	Group President
EMS TECHNOLOGIES, INC.
By:	/s/ Paul B. Dormorski
Name:	Paul B. Dormorski
Title:	CEO/President, EMS Technologies

EX-10.42

EXHIBIT 10.42

FIRST AMENDMENT

TO

ANDREW CORPORATION

MANAGEMENT INCENTIVE PROGRAM

WHEREAS, Andrew Corporation (the “Company”) maintains the Andrew Corporation Management Incentive Program (the “Program”); and

WHEREAS, it is now deemed desirable to amend the Program to increase the number of shares authorized for issuance under the Program;

NOW, THEREFORE, by virtue and in exercise of the amending authority reserved to the Board of Directors pursuant to Section 8 of the Program, the Program is hereby amended by deleting the first sentence of Section 4.1 of the Program and substituting the following therefor:

“Subject to Section 4.2, the shares of Common Stock that may be issued or transferred under the Program shall not exceed 8,000,000.”

*         *         *

I, James F. Petelle, as Vice President and Secretary of Andrew Corporation, hereby certify that the foregoing amendment is consistent with resolutions adopted by the Board of Directors on November 14, 2002 and approved by the Company’s stockholders on February 11, 2003 and that such resolutions have not been changed or rescinded since such date.

Dated this 12 day of May, 2003.

James F. Petelle

Vice President and Secretary

EX-10.43

EXHIBIT 10.43

SECOND AMENDMENT

TO

ANDREW CORPORATION

MANAGEMENT INCENTIVE PROGRAM

WHEREAS, Andrew Corporation (the “Company”) maintains the Andrew Corporation Management Incentive Program (the “Program”); and

WHEREAS, it is now deemed desirable to amend the Program to clarify that certain acquisitions will not be deemed to be a Change in Control under the Program and to conform the definition to that used in the Company’s other plans;

NOW, THEREFORE, by virtue and in exercise of the amending authority reserved to the Board of Directors pursuant to Section 8 of the Program, the Program is hereby amended by deleting the definition of “Change-in-Control” contained in Section 2 of the Program and substituting the following therefor:

“ ‘Change-in-Control’: Any of the following events: (i) the merger or consolidation of the Company with any other corporation following which the holders of the Company’s common stock immediately prior thereto hold less than 60% of the outstanding common stock of the surviving or resulting entity; (ii) the sale of all or substantially all of the assets of the Company to any person or entity other than a wholly-owned subsidiary; (iii) any person or group of persons acting in concert, or any entity, becomes the beneficial owner, directly or indirectly, of more than 20% of the Company’s outstanding common stock, other than an acquisition of more than 20%, in one or more transactions, of the Company’s outstanding common stock by (a) a passive institutional investor where such investor is eligible pursuant to Rule l3d-1(b) of the Exchange Act to, and does, file a report of ownership on Schedule 13G with the Securities and Exchange Commission, (b) a trustee or other fiduciary of an employee benefit plan maintained by the Company, or (c) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Company; (iv) those individuals who, as of the close of the most recent annual meeting of the Company’s stockholders, are members of the Board of Directors (the ‘Existing Directors’) cease for any reason to constitute more than 50% of the Board of Directors. For purposes of the foregoing, a new director will be considered an Existing Director if the election, or nomination for election by the Company’s stockholders, of such new director was approved by a vote of a majority of the Existing Directors. No individual shall be considered an Existing Director if such individual initially assumed office as a result of either an actual or threatened election contest subject to Rule 14a-l1 under the Exchange Act or other actual or threatened solicitation of proxies by or on behalf of anyone other than the Board of Directors, including by reason of any agreement intended to avoid or settle any election proxy contest; or (v) the stockholders of the Company adopt a plan of liquidation.”

*         *         *

I, James F. Petelle, as Vice President and Secretary of Andrew Corporation, hereby certify that the foregoing amendment is consistent with resolutions adopted by the Board of Directors on May 14, 2004 and that such resolutions have not been changed or rescinded since such date.

Dated this 14 day of May, 2004.

James F. Petelle

Vice President and Secretary

EX-12

EXHIBIT 12

Ratio of Earnings to Fixed Charges and Preferred Stock

(Dollars in thousands)

	As of the Year Ended September 30
	2006		2005		2004		2003		2002
Income from Continuing Operations Before Income Taxes	$	69,108	$	63,179	$	42,302	$	20,633	$	13,070
Minority Interest (Income) Expense		—		—		43		12		(316	)
Loss from Equity Investments		—		—		—		—		134
Fixed Charges		27,069		23,241		22,115		16,812		8,824
Adjusted Earnings		96,177		86,420		64,460		37,457		21,712
Fixed Charges
Interest Expense		15,345		14,912		14,868		5,675		5,079
Rent Expense (1)		11,724		8,097		6,540		4,678		3,745
Preferred Stock Dividends		—		232		707		6,459		—
Fixed Charges	$	27,069	$	23,241	$	22,115	$	16,812	$	8,824
Ratio of Earnings to Fixed Charges		2.6		2.7		1.9		1.2		1.5

1. One-third of total rent expense is estimated by Andrew to be a conservative estimate of the interest component of rent expense.

EX-21

EXHIBIT 21

ANDREW CORPORATION AND SUBSIDIARIES

List of Significant Subsidiaries

Significant subsidiaries of the registrant, all of which are wholly-owned, are as follows:

Name of Subsidiary	Jurisdiction of Incorporation/Registration
Andrew Australia Pty Ltd	Australia
Andrew do Brazil, Ltda.	Brazil
Andrew Canada Inc.	Canada
Andrew Broadband Telecommunications (Yantai) Co. Ltd.	China
Andrew Telecommunications (China) Co. Ltd.	China
Forem China (Shenzhen) Co. Ltd.	China
Andrew Telecommunications s.r.o.	Czech Republic
Andrew S.A.R.L.	France
Andrew GmbH	Germany
Andrew Wireless Systems GmbH	Germany
Andrew Hong Kong Ltd.	Hong Kong
Andrew Telecommunications India Pvt. Ltd.	India
Andrew Telecommunication Products Srl	Italy
Andrew Japan KK	Japan
Andrew Corporation S.A. de C.V.	Mexico
Andrew Limited	United Kingdom
Precision Antennas Ltd.	United Kingdom
Andrew Satcom Africa (Pty.) Ltd.	South Africa
Andrew Amplifiers Inc.	State of Delaware
Andrew International Holding Corporation	State of Delaware
Andrew Systems Inc.	State of Delaware
Allen Telecom LLC	State of Delaware
Andrew International Corporation	State of Illinois
Allen Telecom Sweden, AB	Sweden
Andrew AG	Switzerland
Andrew Corporation Taiwan	Taiwan

EX-23

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement No. 33-58750 on Form S-8 dated February 24, 1993; Registration Statement No. 33-58752 on Form S-8 dated February 24, 1993; Registration Statement No. 33-52487 on Form S-8 dated March 2, 1994 and Post-Effective Amendment No. 1 to Registration Statement No. 33-52487 on Form S-8 dated March 3, 1994; Registration Statement No. 333-12743 on Form S-4 dated September 26, 1996; Registration Statement No. 333-52575 on Form S-8 dated May 13, 1998; Registration Statement No. 333-52238 on Form S-8 dated December 20, 2000; Registration Statement No. 333-74470 on Form S-8 dated December 4, 2001; Registration Statement No. 333-98333 on Form S-3 dated August 19, 2002; Registration Statement No. 333-104177 on Form S-4 dated June 10, 2003; Registration Statement No. 333-107243 on Form S-8 dated July 22, 2003; Registration Statement No. 333-107550 on Form S-8 dated August 1, 2003 and Post-Effective Amendment No. 1 to Registration Statement No. 333-1075500 on Form S-8 dated October 24, 2003, Registration Statement No. 333-110014 on Form S-3 dated October 28, 2003 and Post-Effective Amendment No. 1 to Registration Statement No. 333-110014 dated January 22, 2004 and Post-Effective Amendment No. 2 to Registration Statement No. 333-110014 dated January 30, 2004; Registration Statement No. 333-114914 on Form S-3 dated April 27, 2004 and Post-Effective Amendment No. 1 to Registration Statement No. 333-114914 dated May 12, 2004 and Post-Effective Amendment No. 2 to Registration Statement No. 333-114914 dated May 17, 2004; Registration Statement No. 333-117001 on Form S-3 dated June 30, 2004 of our reports dated December 8, 2006, with respect to the consolidated financial statements and schedule of Andrew Corporation, Andrew Corporation management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Andrew Corporation included in this Annual Report (Form 10-K) for the year ended September 30, 2006.

/s/ Ernst & Young LLP

Chicago, Illinois

December 8, 2006

EX-31.1

EXHIBIT 31.1

Certification

I, Ralph E. Faison, certify that:

1. I have reviewed this annual report on Form 10-K of Andrew Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 13, 2006	/s/ Ralph E. Faison
	Ralph E. Faison
	President and Chief Executive Officer

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EX-31.2

EXHIBIT 31.2

Certification

I, Marty R. Kittrell, certify that:

1. I have reviewed this annual report on Form 10-K of Andrew Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 13, 2006	/s/ Marty R. Kittrell
	Marty R. Kittrell
	Executive Vice President and Chief Financial Officer

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EX-32

EXHIBIT 32

Certificate of Chief Executive and Chief Financial Officers

The following statement is being made to the Securities and Exchange Commission solely for purposes of Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), which carries with it certain criminal penalties in the event of a knowing or willful misrepresentation.

Securities and Exchange Commission

450 Fifth Street, NW

Washington, DC 20549

Re: Andrew Corporation

Ladies and Gentlemen:

In accordance with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002 (18 USC 1350), each of the undersigned hereby certifies that:

(i) this Current Report on Form 10-K fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(ii) the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of Andrew Corporation.

Dated as of this 13th day of December 2006.

/s/ Ralph E. Faison	/s/ Marty R. Kittrell
Ralph E. Faison	Marty R. Kittrell
President and Chief Executive Officer	Executive Vice President and Chief Financial Officer

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