S-4

As filed with the Securities and Exchange Commission on November 23, 2005

Registration Statement No. 333-          

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

L-3 COMMUNICATIONS CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware				3663				13-3937436
(State or Other Jurisdiction of Incorporation or Organization)				(Primary Standard Industrial Classification Code Number)				(I.R.S. Employer Identification Number)

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

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

SEE TABLE OF ADDITIONAL REGISTRANTS

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

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

Copies to:

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

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

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

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

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

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered				Amount to be Registered				Proposed Maximum Offering Price Per Unit				Proposed Maximum Aggregate Offering Price(1)				Amount of Registration Fee
6 3/8% Series B Senior Subordinated Notes due 2015				$1,000,000,000					100	%		$	1,000,000,000			$	117,700.00
Guarantees of 6 3/8% Series B Senior Subordinated Notes due 2015				(2)				(2)				(2)				None(2)

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

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

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

TABLE OF ADDITIONAL REGISTRANTS

Exact Name of Registrant as Specified in Its Charter

State Or Other Jurisdiction Of Incorporation Or Organization

IRS Employer Identification Number

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

Apcom, Inc.

Maryland

52-1291447

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

Broadcast Sports Inc.

Delaware

52-1977327

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

D.P. Associates Inc.

Virginia

54-1389520

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

Electrodynamics, Inc.

Arizona

36-3140903

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

Henschel Inc.

Delaware

23-2554418

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

Hygienetics Environmental Services, Inc.

Delaware

13-3992505

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

Intelligence Data Systems, Inc.

Virginia

54-1867272

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

International Systems, LLC

California

33-0700074

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

Interstate Electronics Corporation

California

95-1912832

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

KDI Precision Products, Inc.

Delaware

31-0740721

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

L-3 Communications Advanced Laser Systems Technology, Inc.

Florida

59-2808669

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

L-3 Communications Aeromet, Inc.

Oregon

73-1291165

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

L-3 Communications AIS GP Corporation

Delaware

13-4137187

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

L-3 Communications Avionics Systems, Inc.

Delaware

38-1865601

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

L-3 Communications Avysis Corporation

Texas

74-2616165

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

L-3 Communications Aydin Corporation

Delaware

23-1686808

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

L-3 Communications CE Holdings, Inc.

Delaware

54-1098648

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

L-3 Communications Cincinnati Electronics Corporation

Ohio

31-0826926

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

L-3 Communications CSI, Inc.

California

77-0365380

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

L-3 Communications EO/IR, Inc.

Florida

59-3316817

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

L-3 Communications Electron Technologies, Inc.

Delaware

91-2046609

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

Exact Name of Registrant as Specified in Its Charter

State Or Other Jurisdiction Of Incorporation Or Organization

IRS Employer Identification Number

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

L-3 Communications ESSCO, Inc.

Delaware

04-2281486

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

L-3 Communications Flight Capital LLC

Delaware

75-3089735

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

L-3 Communications Flight International Aviation LLC

Delaware

02-0654591

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

L-3 Communications Government Services, Inc.

Virginia

54-1349668

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

L-3 Communications ILEX Systems, Inc.

Delaware

13-3992952

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

L-3 Communications InfraredVision Technology Corporation

California

77-0534649

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

L-3 Communications Integrated Systems L.P.

Delaware

03-0391841

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

L-3 Communications Investments Inc.

Delaware

51-0260723

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

L-3 Communications Klein Associates, Inc.

Delaware

02-0277515

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

L-3 Communications MAS (US) Corporation

Delaware

55-0765280

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

L-3 Communications Mobile-Vision, Inc.

New Jersey

22-2893537

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

L-3 Communications Security and Detection Systems, Inc.

Delaware

04-3054475

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

L-3 Communications Sonoma EO, Inc.

California

68-0439616

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

L-3 Communications Titan Corporation

Delaware

95-2588754

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

L-3 Communicatons Vector International Aviation LLC

Delaware

42-1569647

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

L-3 Communications Vertex Aerospace LLC

Delaware

64-0941176

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

L-3 Communications Westwood Corporation

Nevada

87-0430944

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

Lincom Wireless, Inc.

Delaware

95-4832760

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

MCTI Acquisition Corporation

Maryland

13-4109777

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

Microdyne Communications Technologies Incorporated

Maryland

59-3500774

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

Exact Name of Registrant as Specified in Its Charter

State Or Other Jurisdiction Of Incorporation Or Organization

IRS Employer Identification Number

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

Microdyne Corporation

Maryland

52-0856493

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

Microdyne Outsourcing Incorporated

Maryland

33-0797639

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

MPRI, Inc.

Delaware

54-1439937

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

Pac Ord Inc.

Delaware

23-2523436

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

Power Paragon, Inc.

Delaware

33-0638510

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

ProCom Services, Inc.

California

33-0427938

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

Shellco, Inc.

Delaware

33-0931737

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

SPD Electrical Systems, Inc.

Delaware

23-2457758

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

SPD Switchgear, Inc.

Delaware

23-2510039

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

SYColeman Corporation

Florida

59-2039476

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

Titan Facilities, Inc.

Virginia

54-0918681

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

Titan Scan Technologies Corporation

Delaware

33-0937905

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

Troll Technology Corporation

California

95-4552257

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

Wescam Air Ops Inc.

Delaware

52-2304424

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

Wescam Air Ops LLC

Delaware

52-2295476

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

Wescam Holdings (US) Inc.

Delaware

51-0376332

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

Wescam LLC

Delaware

91-2077866

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

Wolf Coach, Inc.

Massachusetts

04-2482502

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

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated November 23, 2005.

PROSPECTUS

$1,000,000,000

L-3 Communications Corporation

Offer to Exchange All Outstanding 6 3/8% Senior Subordinated Notes due 2015 for an equal amount of 6 3/8% Series B Senior Subordinated Notes due 2015, which have been registered under the Securities Act of 1933.

The Exchange Offer

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

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

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

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

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

The Exchange Notes

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

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

Resales of Exchange Notes

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

If you are a broker-dealer and you receive exchange notes for your own account, you must acknowledge that you will deliver a prospectus in connection with any resale of such exchange notes. By making such acknowledgment, you will not be deemed to admit that you are an "underwriter" under the Securities Act of 1933. Broker-dealers may use this prospectus in connection with any resale of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired by the broker-dealer as a result of market-making activities or trading activities. We have agreed that, for a period of 210 days after the expiration of the exchange offer or until any broker-dealer has sold all registered notes held by it, we will make this prospectus available to such broker-dealer for use in connection with any such resale. A broker-dealer may not participate in the exchange offer with respect to outstanding notes acquired other than as a result of market-making activities or trading activities. See "Plan of Distribution."

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

You should consider carefully the risk factors beginning on page 16 of this prospectus before participating in the exchange offer.

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

The date of this prospectus is                     , 2005

TABLE OF CONTENTS

				Page
Prospectus Summary					1
Risk Factors					16
Forward-Looking Statements					29
Use of Proceeds					31
Capitalization					32
Unaudited Pro Forma Combined Condensed Financial Statements					33
Selected Financial Data					41
Management's Discussion and Analysis of Results of Operations and Financial Condition					43
Business					80
Certain Relationships and Related Transactions					102
Management					103
Ownership of Capital Stock					112
Description of Other Indebtedness					114
The Exchange Offer					128
Description of the Notes					138
United States Federal Tax Consequences of the Exchange Offer					178
Plan of Distribution					179
Legal Matters					179
Experts					180
Index to Financial Statements					F-1

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the informational requirements of the Securities Exchange Act of 1934 and, in accordance therewith, file reports and other information with the SEC. Such reports and other information can be inspected and copied at the Public Reference Section of the SEC located at 100 F Street, N.E., Washington D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the SEC at prescribed rates. Such material may also be accessed electronically by means of the SEC's home page on the Internet (http://www.sec.gov). Information about the operation of the Public Reference Section of the SEC may be obtained by calling the SEC at 1-800-SEC-0330.

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

ABOUT THIS PROSPECTUS

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

[THIS PAGE INTENTIONALLY LEFT BLANK]

PROSPECTUS SUMMARY

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

L-3

We are a leading supplier of a broad range of products and services used in a substantial number of aerospace and defense platforms. We also are a major supplier of systems, subsystems and products on many platforms, including those for secure communication networks and communications products, mobile satellite communications, information security systems, shipboard communications, naval power systems, missiles and munitions, telemetry and instrumentation and airport security systems. We also are a prime system contractor for aircraft modernization and operations & maintenance (O&M), Command, Control and Communications (C³), Intelligence, Surveillance and Reconnaissance (ISR) collection systems and services, training and simulation, intelligence services and government support services. Our customers include the U.S. Department of Defense (DoD) and its prime contractors, the U.S. Department of Homeland Security (DHS), U.S. Government intelligence agencies, major aerospace and defense contractors, allied foreign government ministries of defense, commercial customers and certain other U.S. federal, state and local government agencies.

On July 29, 2005, we acquired all of the outstanding shares of The Titan Corporation (Titan) for $23.10 per share in cash, or approximately $2,754.3 million, including the assumption of approximately $626.0 million of Titan's debt, net of cash acquired of $25.3 million (the "Titan acquisition"). Concurrent with the Titan acquisition, we repaid or redeemed all of Titan's outstanding debt. The Titan acquisition was financed using: (1) approximately $355.5 million of cash on hand, (2) $750.0 million of term loan borrowings under L-3 Communications' senior credit facility, (3) net proceeds from the issuance by L-3 Holdings of $700.0 million of 3% Convertible Contingent Debt Securities (CODES) and (4) net proceeds from the issuance by L-3 Communications of $1,000.0 million of senior subordinated notes (which are being offered for exchange pursuant to this prospectus). These transactions are collectively referred to as the "Acquisition Financing."

For the year ended December 31, 2004, we generated sales of $6,897.0 million, of which approximately 73.4% were direct and indirect sales to the DoD. U.S. customers accounted for approximately 86.9% of our sales and foreign customers, including commercial export sales, accounted for approximately 13.1% of our sales. For the year ended December 31, 2004, our net cash from operating activities was $620.7 million and operating income was $748.6 million. For the year ended December 31, 2004, Titan generated sales of $2,046.5 million, substantially all of which were directly and indirectly to the DoD. For the year ended December 31, 2004, Titan's net cash used for operating activities was $0.7 million and operating income was $70.9 million. On a pro forma basis after giving effect to the Titan acquisition and the Acquisition Financing (as described above) and certain other business acquisitions completed between January 1, 2004 and September 30, 2005 and their related financings (referred to herein as the Other Business Acquisitions), we would have had sales of $9,374.8 million and operating income of $877.2 million for the year ended December 31, 2004.

For the nine months ended September 30, 2005, we had sales of $6,544.5 million, net cash from operating activities of $579.6 million and operating income of $690.6 million. On a pro forma basis after giving effect to the Titan acquisition, Acquisition Financing and Other Business Acquisitions, we would have had sales of $7,955.7 million and operating income of $715.2 million for the nine months ended September 30, 2005.

We have four reportable segments. During the third quarter of 2005 we renamed three of our four reportable segments as follows: (i) Secure Communications & ISR changed to Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C³ISR), (ii) Training, Simulation & Government Services changed to Government Services, and (iii) Aircraft

1

Modernization, O&M and Products changed to Aircraft Modernization and Maintenance (AM&M). The Specialized Products reportable segment name remained the same.

In addition, during the third quarter of 2005 we revised the aggregation of our operating segments within our four reportable segments in connection with the Titan acquisition to provide a more clearly defined presentation of our businesses, focused on customers, markets, products and services and independent research and development. Consequently, we have restated our reportable segments by reclassifying into the Specialized Products reportable segment the following: (i) our aviation products operating segments, which were previously included within the Aircraft Modernization and Maintenance reportable segment and (ii) our Link Training and Microdyne Outsourcing operating segments, which were previously included within the Government Services reportable segment. Prior period reportable segment data included within this prospectus have been restated to conform to the current period presentation.

Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C³ISR) Reportable Segment.

Our businesses in this reportable segment provide products and services for the global ISR market, specializing in signals intelligence (SIGINT) and communications intelligence (COMINT) systems. These products and services provide to the warfighter in real-time the unique ability to collect and analyze unknown electronic signals from command centers, communication nodes and air defense systems for real-time situation awareness and response. The businesses in this reportable segment also provide C³ systems and secure, high data rate communications systems and equipment for military and other U.S. Government and foreign government intelligence, reconnaissance and surveillance applications. We believe that our products and services are critical elements for a substantial number of major communication, command and control, intelligence gathering and space systems. Our products and services are used to connect a variety of airborne, space, ground and sea-based communication systems and are used in the transmission, processing, recording, monitoring and dissemination functions of these communication systems. Additionally, the businesses in the C³ISR Reportable Segment also provide intelligence, logistics and other support services to the DoD and U.S. Government intelligence agencies. Major products and services for this reportable segment include:

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

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

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

	•	secure terminal and communication network equipment and encryption management;

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

	•	intelligence solutions support to the DoD, including the U.S. Armed Services combatant commands and the U.S. Government intelligence agencies, including those within the U.S. Armed Services; and

	•	technical and management services, which provides support of intelligence, logistics, C3 and combatant commands.

Government Services Reportable Segment.

Our businesses in this reportable segment provide a full range of communications systems support and engineering services, information technology services, teaching and training services,

2

marksmanship training systems and services, and intelligence support and analysis services. We sell these services primarily to the DoD, U.S. Government intelligence agencies and allied foreign governments. Major services for this reportable segment include:

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

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

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

	•	human intelligence support and other services, including linguist services and related management, to support contingency operations and current intelligence-gathering requirements;

	•	aviation and maritime services in support of maritime and expeditionary warfare; and

	•	conventional high-end enterprise information technology (IT) support, systems and other services to U.S. federal agencies and the DoD.

Aircraft Modernization and Maintenance (AM&M) Reportable Segment.

Our businesses in this reportable segment provide specialized aircraft modernization and upgrades, maintenance and logistics support services. We sell these services primarily to the DoD and the Canadian Department of National Defense. Major products and services for this reportable segment include:

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

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

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

Specialized Products Reportable Segment.

Our businesses in this reportable segment provide a broad range of products, including components, subsystems and systems, to military and commercial customers in several diverse niche markets. Major products for this reportable segment include:

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

	•	naval ship modernization, modification, repair and overhaul;

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

3

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

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

	•	imaging products and precision stabilized electro-optic/infrared (EO/IR) sensors for ISR systems, including high magnification lowlight, daylight and forward looking infrared sensors, laser range finders, illuminators and designators, and digital and wireless communication systems;

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

	•	high performance antennas and ground based radomes;

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

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

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

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

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

Our Strategy

We intend to grow our sales, improve our profitability and cash flows and build on our position as a leading supplier of systems, subsystems, products and services to the DoD and other U.S. Government agencies, major aerospace and defense prime contractors and allied foreign governments. Our strategy to achieve our objectives includes:

Expanding Supplier Relationships.    As an independent supplier, we anticipate that our growth will partially be driven by expanding our share of existing programs and by participating in new programs. We intend to identify opportunities where we are able to use our existing customer relationships and leverage the capabilities of our various businesses to expand the scope of our products and services and to obtain new customers. We also expect to benefit from continued outsourcing of subsystems and products by prime contractors, which positions us to be a supplier to multiple bidders on prime contract bids. We also intend to grow sales by combining certain of our products into subsystems that we can offer to our customers.

Supporting Customer Requirements.    We intend to continue to align our research and development expenditures and business development efforts to address our customers' requirements and provide them with state-of-the-art products, services and solutions. In addition, we also intend to grow our sales by entering into "teaming" arrangements with select prime system contractors and platform providers.

Improving Operating Margins.    We intend to continue to improve our operating performance by continuing to reduce overhead expenses, consolidating certain of our businesses and business processes and increasing the productivity of our businesses. However, because Titan's business is largely performed under lower margin (and lower risk) cost-reimbursable type and time-and-material type contracts, we expect that the Titan acquisition will reduce our consolidated operating margins.

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

4

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

Capitalizing on Strategic Acquisition Opportunities.    In addition to expanding our existing product base through new product development efforts and bid and proposal efforts, we intend to continue to acquire select businesses that will add new products, services or customers in areas that complement our present businesses and technologies.

We are incorporated in Delaware, and the address of our principal executive offices is 600 Third Avenue, New York, New York 10016. Our telephone number is (212) 697-1111. Our internet address is www.L-3com.com. L-3com.com is an interactive textual reference only, meaning that the information contained on the website is not part of this prospectus and is not incorporated in this prospectus by reference.

5

Summary of Terms of the Exchange Offer

On July 29, 2005, we completed the private offering of the outstanding notes. References to the "notes" in this prospectus are references to both the outstanding notes and the exchange notes. This prospectus is part of a registration statement covering the exchange of the outstanding notes for the exchange notes.

We and the guarantors entered into a registration rights agreement with the initial purchasers in the private offering in which we and the guarantors agreed to deliver to you this prospectus as part of the exchange offer and we agreed to use our commercially reasonable efforts to have the registration statement, of which this prospectus forms a part, declared effective on or prior to February 24, 2006 and to complete the exchange offer on or prior to 30 business days after the date of effectiveness. You are entitled to exchange in the exchange offer your outstanding notes for exchange notes which are identical in all material respects to the outstanding notes except:

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

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

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

The Exchange Offer		We are offering to exchange up to $1,000,000,000 aggregate principal amount of our 6 3/8% Series B Senior Subordinated Notes due 2015, which we refer to in this prospectus as the exchange notes, for up to $1,000,000,000 aggregate principal amount of our 6 3/8% Senior Subordinated Notes due 2015, which we refer to in this prospectus as the outstanding notes. Outstanding notes may be exchanged only in minimum denominations of $100,000 and in integral multiples of $1,000 in excess thereof.

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

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

6

		Any holder of outstanding notes who:

		•	is an affiliate of L-3 Communications;

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

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

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

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

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

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

7

		transmittal. By signing, or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:

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

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

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

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

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

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

Effect on Holders of Outstanding     Notes		As a result of the making of, and upon acceptance for exchange of all validly tendered outstanding notes pursuant to the terms of the exchange offer, we will have fulfilled a

8

		covenant contained in the registration rights agreement and, accordingly, there will be no increase in the interest rate on the outstanding notes under the circumstances described in the registration rights agreement. If you are a holder of outstanding notes and you do not tender your outstanding notes in the exchange offer, you will continue to hold such outstanding notes and you will be entitled to all the rights and limitations applicable to the outstanding notes in the indenture, except for any rights under the registration rights agreement that by their terms terminate upon the consummation of the exchange offer.

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

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

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

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

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

9

Summary of Terms of the Exchange Notes

Issuer		L-3 Communications Corporation

Securities Offered		$1,000,000,000 in aggregate principal amount of 6 3/8% Series B Senior Subordinated Notes due 2015

Maturity		October 15, 2015

Interest Payment Dates		April 15 and October 15, beginning October 15, 2005.

Interest Rate		6 3/8% per year

Ranking		The outstanding notes are, and the exchange notes will be, unsecured senior subordinated obligations of L-3 Communications. They rank behind all of our and the guarantors' current and future indebtedness (other than trade payables), except indebtedness that expressly provides that it is on parity with or subordinated in right of payment to these notes and the guarantees. As of September 30, 2005, these notes and the guarantees were:

		•	subordinated to approximately $750.0 million of senior debt (excluding $113.3 million of outstanding letters of credit); and

		•	ranked equally with $2,900.0 million of other senior subordinated debt.

		As of September 30, 2005, L-3 Communications had the ability to borrow up to an additional $886.7 million (after reductions for outstanding letters of credit of $113.3 million) under its senior credit facility, all of which if borrowed or drawn upon would be senior debt. See "Description of the Notes—Subordination."

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

		The guarantees of the outstanding notes are, and the guarantees of the exchange notes will be, subordinated in right of payment to all existing and future senior debt of the guarantors. The guarantees of the outstanding notes are, and the guarantees of the exchange notes will be, pari passu with other senior subordinated indebtedness of the guarantors, which includes (1) the 7 5/8% Senior Subordinated Notes due 2012, the 6 1/8% Senior Subordinated Notes due 2013, the 6 1/8% Senior Subordinated Notes due 2014 and the 5 7/8% Senior Subordinated Notes due 2015, in each case, issued by L-3 Communications and guaranteed by the guarantors, and

10

		(2) the CODES issued by L-3 Holdings concurrently with the issuance of the outstanding notes, which are guaranteed by L-3 Communications and the other guarantors. Information relating to the guarantors is included in the notes to the audited and unaudited financial statements of L-3 included elsewhere in this prospectus.

		As of September 30, 2005, we had $4,650.0 million in aggregate principal amount of indebtedness outstanding, of which approximately $750.0 million was senior debt. In addition, as of September 30, 2005, we had the ability to borrow up to an additional $886.7 million (after reductions for outstanding letters of credit of $113.3 million) under our senior credit facility, which if borrowed or drawn upon would be senior debt and would be guaranteed on a senior basis by the guarantors.

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

Sinking Fund		None

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

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

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

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

11

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

		•	borrow money;

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

		•	make investments;

		•	use assets as security in other transactions;

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

		•	enter into transactions with affiliates.

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

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

12

Summary Historical and Unaudited Pro Forma Financial Data of L-3

We derived the summary historical and unaudited pro forma financial data presented below from our consolidated financial statements. The statement of operations and other data presented below for the years ended December 31, 2004, 2003 and 2002 and the balance sheet data presented below at December 31, 2004 and 2003 are derived from our audited consolidated financial statements included elsewhere in this prospectus. We derived the balance sheet data presented below at December 31, 2002 from our audited financial statements not included elsewhere in this prospectus. We derived the statement of operations and other data presented below for the nine months ended September 30, 2005 and 2004 and the balance sheet data presented below at September 30, 2005 from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. We derived the balance sheet data presented below at September 30, 2004 from our unaudited condensed consolidated financial statements not included elsewhere in this prospectus. Our unaudited condensed consolidated financial statements for the nine months ended September 30, 2005 and 2004 include, in our opinion, all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the results for the period. The results of interim periods may not be indicative of our results for the full year. Our results of operations are impacted significantly by our acquisitions, which are described herein.

The unaudited pro forma statement of operations data for the year ended December 31, 2004 and the nine months ended September 30, 2005 give effect to the following transactions as if they had occurred on January 1, 2004: (1) the Titan acquisition and the Acquisition Financing; and (2) the Other Business Acquisitions. The unaudited pro forma financial data are not necessarily indicative of the actual financial position or results of operations that would have occurred had the Titan acquisition and the Other Business Acquisitions been completed on January 1, 2004, or the results of operations that we may obtain in the future.

You should read the following data in conjunction with: (1) "Unaudited Pro Forma Combined Condensed Financial Statements" included elsewhere in this prospectus, and (2) each of L-3's and Titan's audited and unaudited consolidated financial statements and related notes and "Management's Discussion and Analysis of Results of Operations and Financial Condition" included elsewhere in this prospectus.

13

				Pro Forma								Historical
				Nine Months Ended September 30, 2005				Year Ended December 31, 2004				Nine Months Ended September 30,								Year Ended December 31,
												2005				2004				2004				2003				2002
				(unaudited)				(unaudited)				(unaudited)				(unaudited)
												(in millions)
Statement of Operations Data:
Sales				$	7,955.7			$	9,374.8			$	6,544.5			$	4,985.8			$	6,897.0			$	5,061.6			$	4,011.2
Operating income					715.2				877.2				690.6				529.1				748.6				581.0				454.0
Other expense (income), net					(5.9	)			1.0				(6.4	)			1.7				(7.3	)			(0.2	)			(5.0	)
Interest expense					218.5				320.0				136.5				106.8				145.3				132.7				122.5
Minority interests in net income of consolidated subsidiaries					7.9				8.9				7.9				7.1				8.9				3.5				6.2
Loss on retirement of debt					—				5.0				—				—				5.0				11.2				16.2
Provision for income taxes					202.2				200.2				195.5				150.9				214.8				156.2				111.6
Income from continuing operations before cumulative effect of a change in accounting principle					292.5				342.1				357.1				262.6				381.9				277.6				202.5
Cumulative effect of a change in accounting principle, net of income tax benefit of $6.4(1)					—				—				—				—				—				—				(24.4	)
Income from continuing operations				$	292.5			$	342.1			$	357.1			$	262.6			$	381.9			$	277.6			$	178.1
Balance Sheet Data (at period end):
Working capital					n/a				n/a			$	1,600.2			$	1,311.5			$	1,632.5			$	1,013.5			$	929.4
Total assets					n/a				n/a				11,585.8				7,003.2				7,780.8				6,505.3				5,242.3
Long-term debt					n/a				n/a				4,633.6				2,157.5				2,189.8				2,457.3				1,847.8
Minority interests					n/a				n/a				80.7				79.1				77.5				76.2				73.2
Shareholders' equity					n/a				n/a				4,309.3				3,204.5				3,799.8				2,574.5				2,202.2
Other Data:
Net cash from operating activities					n/a				n/a			$	579.6			$	408.0			$	620.7			$	456.1			$	318.5
Net cash used in investing activities					n/a				n/a				(3,445.9	)			(183.9	)			(555.4	)			(1,088.1	)			(1,810.5	)
Net cash from financing activities					n/a				n/a				2,439.2				8.4				453.3				632.0				1,265.9
Depreciation					n/a				n/a				81.0				68.3				91.5				77.3				66.2
Amortization of intangibles and other assets					n/a				n/a				28.0				21.2				27.4				18.1				9.7
Amortization of deferred debt issue costs (included in interest expense)					n/a				n/a				5.2				5.5				7.2				8.0				7.4
Capital expenditures					n/a				n/a				71.2				53.5				80.5				82.9				62.1

(1)

We adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill, (SFAS 142) effective January 1, 2002. In connection with the adoption of SFAS 142, we recorded an impairment charge of $24.4 million during the year ended December 31, 2002, net of a $6.4 million tax benefit for the goodwill of certain space and broadband commercial communications businesses included in the Specialized Products reportable segment.

14

Ratio of Earnings to Fixed Charges

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

Nine Months Ended September 30,				Year Ended December 31,
2005				2004				2003				2002				2001				2000
4.4x(1)				4.5x(1)					3.8x				3.2x				2.8x				2.3x

(1)

On a pro forma basis after giving effect to the Titan acquisition, the Acquisition Financing and the Other Business Acquisitions, our ratio of earnings to fixed charges for the nine months ended September 30, 2005 and the year ended December 31, 2004 would have been 2.9x and 2.5x, respectively. The pro forma ratio of earnings to fixed charges is less than our historical ratio of earnings to fixed charges primarily due to charges for costs related to (a) the proposed merger between Titan and Lockheed Martin Corporation in 2004, (b) the settlement by Titan of SEC and Department of Justice (DoJ) investigations under the Foreign Corrupt Practices Act (FCPA), (c) the internal review by Titan of alleged FCPA violations, (d) the settlement by Titan of securities law class actions and derivative suits arising out of Titan's alleged violations of the FCPA and (e) our acquisition of Titan. These charges incurred by Titan amounted to $60.3 million for the year ended December 31, 2004 and $80.5 million for the nine months ended September 30, 2005. Also, for the year ended December 31, 2004, Titan recorded asset impairment charges totaling $15.5 million.

15

RISK FACTORS

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

Risks Related to the Exchange Offer

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

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

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

Risks Related to L-3

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

We have incurred substantial indebtedness to finance our business acquisitions, including indebtedness incurred in connection with the Titan acquisition. At September 30, 2005, we had approximately $4,650.0 million in aggregate principal amount of outstanding debt, excluding outstanding letters of credit (which aggregated approximately $113.3 million) under our senior credit facility. In addition, we had available additional borrowings under our senior credit facility, after reductions for outstanding letters of credit, of approximately $886.7 million at September 30, 2005. In the future we may borrow more money, subject to limitations imposed on us by our debt agreements.

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

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

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

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

16

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

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

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

Additionally, on December 31, 2004, we had $3,825.4 million of contractual obligations (including outstanding indebtedness) and Titan had $1,003.7 million of contractual obligations (including outstanding indebtedness).

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

We seek to acquire companies that complement our existing businesses. We may not be able to continue to identify acquisition candidates on commercially reasonable terms or at all. If we make additional acquisitions, we may not realize the benefits anticipated from these acquisitions, including cost synergies and improving margins. Furthermore, we may not be able to obtain additional financing for acquisitions, since such additional financing could be restricted by the terms of our debt agreements.

The process of integrating the operations of acquired businesses, including Titan and other recent business acquisitions, into our existing operations may result in unforeseen difficulties and may require significant financial and managerial resources that would otherwise be available for the ongoing development or expansion of our existing operations. Possible future acquisitions could result in the incurrence of additional debt and related interest expense and contingent liabilities, each of which could result in an increase to our already significant level of outstanding debt. We consider and execute strategic acquisitions on an ongoing basis and may be evaluating acquisitions or engaged in acquisition negotiations at any given time. We regularly evaluate potential acquisitions and joint venture transactions, and, except as disclosed herein, we have not entered into any agreements with respect to any material transactions.

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

Our sales are predominantly derived from contracts (revenue arrangements) with agencies of, and prime contractors to, the U.S. Government. Approximately 80.3%, or $5,538.9 million, of our sales for the year ended December 31, 2004 were made directly or indirectly to U.S. Government agencies, including the DoD. On a pro forma basis after giving effect to the Titan acquisition but not giving pro forma effect to the Other Business Acquisitions, approximately 84.1%, or approximately $7,524.0 million, of our $8,943.5 million of pro forma sales for the year ended December 31, 2004, would have been directly or indirectly to U.S. Government agencies, including the DoD. For the year ended December 31, 2004, our largest contract represented 4.6% of our sales and sales from our five largest programs amounted to $1,189.4 million, or 17.2% of our sales. On a pro forma basis after giving effect to the Titan acquisition, our largest contract would have represented 3.5% of our sales. The loss of all or a substantial portion of our sales to the U.S. Government would have a material adverse effect on our results of operations and cash flows.

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

The majority of our contracts (revenue arrangements) require us to design, develop, manufacture, modify, upgrade, test and integrate complex aerospace and electronic equipment, and to provide related engineering and technical services according to the buyer's specifications. These sales are transacted using written revenue arrangements, or contracts, for which the determination of the sales

17

price is generally either fixed-price, cost-reimbursable or time and material. These contracts (revenue arrangements) are covered by the American Institute of Certified Public Accountants Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts (SOP 81-1) and Accounting Research Bulletin No. 45, Long-term Construction-Type Contracts (ARB 45). In addition, our cost-reimbursable type contracts are also specifically within the scope of Accounting Research Bulletin No. 43, Chapter 11, Section A, Government Contracts, Cost-Plus-Fixed Fee Contracts (ARB 43). Additionally, certain fixed-price, cost-reimbursable and time-and-material type contracts require us to perform services that are not related to production or construction of tangible assets and are recognized in accordance with SAB 104, Revenue Recognition. For the year ended December 31, 2004, approximately 60.6% of our sales were generated from fixed-price type contracts, approximately 26.9% of our sales were generated from cost-reimbursable type contracts and approximately 12.5% of our sales were generated from time-and-material type contracts. On a pro forma basis after giving effect to the Titan acquisition, but not giving pro forma effect to the Other Business Acquisitions, for the year ended December 31, 2004, approximately 50.2% of our sales would have been generated from fixed-price type contracts, approximately 31.7% of our sales would have been generated from cost-reimbursable type contracts and approximately 18.1% of our sales would have been generated from time-and-material type contracts. Substantially all of our cost-reimbursable and time and material type contracts are with the U.S. Government, primarily with the DoD. Substantially all of our sales to commercial customers are transacted under fixed-price sales arrangements, and are included in our fixed-price type contract sales.

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

On a cost-reimbursable type contract (revenue arrangement), we are paid our allowable incurred costs plus a profit which can be fixed or variable depending on the contract's fee arrangement up to predetermined funding levels determined by our customers. On a time-and-materials type contract (revenue arrangement), we are paid on the basis of direct labor hours expended at specified fixed-price hourly rates (that include wages, overhead, general and administrative expenses and profit) and materials at cost. Therefore, on cost-reimbursable type and time-and-material type contracts we do not bear the risks of unexpected cost overruns, provided that we do not incur costs that exceed the predetermined funded amounts.

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

Our government contracts entail certain risks.

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

The DoD budget has increased for each fiscal year from fiscal year 1997 to fiscal year 2005, and, based on the Bush Administration's current Future Year Defense Plan (FYDP), the DoD budget would continue to increase through fiscal 2009. However, the future DoD budgets after fiscal year

18

2005 could be negatively impacted by several factors, including, but not limited to, the U.S. Government's budget deficits and spending priorities and the costs of sustaining the U.S. military operations in Iraq and Afghanistan, which could cause the DoD budget to remain unchanged or to decline. A significant decline in U.S. military expenditures in the future could result in a material decrease to our sales, earnings and cash flow. The loss or significant reduction in government funding of a large program in which we participate could also result in a material decrease to our future sales, earnings and cash flows and thus limit our ability to satisfy our financial obligations, including those relating to the notes. U.S. Government contracts are also conditioned upon the continuing approval by Congress of the amount of necessary spending. Congress usually appropriates funds for a given program each fiscal year even though contract periods of performance may exceed one year. Consequently, at the beginning of a major program, the contract is usually partially funded, and additional monies are normally committed to the contract only if appropriations are made by Congress for future fiscal years.

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

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

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

	•	terminate existing contracts;

	•	reduce the value of existing contracts;

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

	•	control and potentially prohibit the export of our products.

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

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

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

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

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

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

19

	•	design complexity and rapid technological obsolescence; and

	•	the constant need for design improvement.

In addition to these U.S. Government contract risks, we are required to obtain licenses from U.S. Government agencies to export many of our products and systems. Additionally, we are not permitted to export some of our products. Failure to receive required licenses would eliminate our ability to sell our products outside the United States. Furthermore, in connection with a plea agreement with the DoJ regarding Titan's alleged violations of the FCPA, Titan is currently unable to obtain new export licenses for items regulated by the U.S. Department of State and Titan may not be able to obtain new export licenses or amendments to existing ones or to utilize licensing exemptions in the foreseeable future. See "—Risks Related to the Titan Acquisition."

	•	Current governmental investigations.

We are from time to time subject to governmental investigations relating to our operations. We are currently cooperating with the U.S. Government on several investigations, including but not limited to, an investigation regarding the Combat Survivor/Evader Locator (CSEL) program (which is discussed below). Under U.S. Government procurement regulations, an indictment by a federal grand jury could result in us being suspended for a period of time from eligibility for awards of new government contracts. A conviction could result in debarment from contracting with the federal government for a specified term.

Our Interstate Electronics Corporation subsidiary (IEC) is under criminal investigation by the United States Army Criminal Investigation Command. The investigation relates to IEC's role on the CSEL program, on which IEC is a subcontractor to The Boeing Company (Boeing). IEC provides the global positioning system (GPS) modules to Boeing for the CSEL program. The GPS module includes a complex printed wiring board (PWB) that IEC purchased from two suppliers. The investigation appears to be focused on alleged manufacturing deficiencies in the PWBs and IEC's actions when it became aware of the potential manufacturing problems of the suppliers. We have conducted an internal investigation of this matter using outside counsel and currently believe that no criminal activity occurred. We are cooperating fully with the investigation and have voluntarily recalled all the PWBs and are repairing them as they are received. The outcome of our current (or future) governmental investigations cannot, however, be predicted, and any indictment, conviction or material fine or settlement arising out of these investigations could have a material adverse effect on our business, financial condition, results of operations and future prospects.

We are subject to the risks of current and future legal proceedings.

At any given time, we are a defendant in various material legal proceedings and litigations arising in the ordinary course of business, including litigation, claims and assessments that have been asserted against acquired businesses, which we have assumed. Although we maintain insurance policies, we can make no assurance that this insurance will be adequate to protect us from all material judgments and expenses related to potential future claims or that these levels of insurance will be available in the future at economical prices or at all. A significant judgment against us arising out of any of our current or future legal proceedings and litigation, could have a material adverse effect on our business, financial condition and future prospects. A discussion of the material litigation to which we are currently a party is discussed elsewhere herein.

Several of our business operations involve rapidly evolving products and technological change.

The rapid change of technology is a key feature of most of the markets in which our products and systems oriented businesses operate. To succeed in the future, we will need to continue to design, develop, manufacture, assemble, test, market and support new products and enhancements on a timely and cost-effective basis. Historically, our technology has been developed through customer-funded and internally funded research and development and through certain business acquisitions. We may not be able to continue to maintain comparable levels of research and development or successfully complete such acquisitions. In the past we have allocated substantial funds to capital expenditures, programs

20

and other investments. This practice will continue to be required in the future. Even so, we may not be able to successfully identify new opportunities and may not have the needed financial resources to develop new products in a timely or cost-effective manner. At the same time, products and technologies developed by others may render our products and systems obsolete or non-competitive.

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

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

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

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

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

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

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

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

	•	sell assets;

	•	incur more indebtedness;

	•	repay certain indebtedness;

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

	•	make certain investments or business acquisitions;

	•	repurchase or redeem capital stock;

	•	engage in business mergers or consolidations; and

	•	engage in certain transactions with subsidiaries and affiliates.

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

21

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

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

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

Because of the subordination provisions relating to the notes, if we were unable to repay any of these borrowings when due, we would be required to pay senior indebtedness, including the senior credit facility, in full before making payments on account of the notes. If the indebtedness under the existing debt agreements were to be accelerated, our assets may not be sufficient to repay such indebtedness, including the notes offered hereby, in full.

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

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

Environmental laws and regulation may subject us to significant liability.

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

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

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

We currently have a backlog of orders, primarily under contracts with the U.S. Government. Our total funded backlog was $7,113.4 million at September 30, 2005. The U.S. Government may unilaterally modify or terminate its contracts. Accordingly, most of our backlog could be modified or terminated by the U.S. Government, which would negatively impact our results of operations and cash flows.

Risks Related to the Titan Acquisition

If Titan does not comply with its plea agreement and consent to entry of judgment with the U.S. Government relating to the Foreign Corrupt Practices Act, it could be exposed to further liability.

During the first quarter of 2004, Titan learned of allegations that improper payments under the FCPA had been made, or items of value had been provided, involving international consultants for Titan or its subsidiaries to foreign officials. The allegations, which were identified as part of internal reviews conducted by Titan and Lockheed Martin in connection with their failed merger, were reported at that time to the U.S. Government. Titan's board of directors established a committee of the board to oversee Titan's internal review of these matters. In connection with the internal review, the SEC commenced an investigation into whether payments involving Titan's international consultants were made in violation of applicable law, particularly the FCPA. In addition, the DoJ initiated a criminal inquiry into this matter, and also initiated an investigation into whether these same alleged practices violated provisions of the United States Tax Code.

22

On March 1, 2005, Titan announced that it had entered into a consent to entry of a final judgment with the SEC without admitting or denying the SEC's allegations, and reached a plea agreement with the DoJ, under which Titan pled guilty to three FCPA counts related to its overseas operations. These counts consist of violations of the anti-bribery and the books and records provisions of the FCPA and aiding and assisting in the preparation of a false tax return.

In connection with the FCPA settlement, Titan made total payments of $28.5 million, including a DoJ-recommended fine of $13 million and payments to the SEC of $15.5 million. A federal judge also imposed a three-year term of supervised probation. As part of these agreements, Titan agreed to: (1) implement a best-practices compliance program designed to detect and deter future violations of the FCPA; and (2) retain an independent consultant to review its policies and procedures with respect to FCPA compliance and to adopt the consultant's recommendations. If Titan fails to comply with its sentence or the consent to entry of a final judgment, it could be subject to additional criminal and civil fines or penalties and limitations on its ability to enter into or perform under U.S. Government contracts, which would have a material adverse effect on our business, financial condition and results of operations.

Titan has made voluntary disclosures to the U.S. Department of State (DoS) of suspected violations of law discovered in the course of Titan's internal FCPA investigation. The voluntary disclosures have not yet been resolved and may result in the assessment of fines or penalties against Titan or L-3. Further, as a result of Titan's plea agreement, Titan is currently unable to obtain new export licenses for items regulated by the DoS. Titan has been working with the DoS to obtain relief from this licensing ineligibility rule, but there is no assurance that Titan will be able to obtain new export licenses or amendments to existing ones or to utilize licensing exemptions in the foreseeable future. In addition, Titan's privilege to export products or services under existing export licenses may also be suspended. If Titan were prevented from obtaining new licenses and/or exporting products or services under existing licenses for a significant period of time, this could breach its obligations under certain contracts and could cause Titan to suffer adverse consequences, including termination of contracts and/or claims for damages. Titan does not know when, or if, it will be able to obtain relief from the licensing ineligibility rule, or for any further export license suspensions. Certain of Titan's revenues are generated by contracts with international customers which require export licenses. For the year ended December 31, 2004, Titan had revenues of approximately $27 million that required it to have export licenses.

On March 2, 2005, the Navy, acting on behalf of the DoD, and Titan executed an administrative settlement agreement that would allow Titan to continue to receive U.S. Government contracts. The agreement imposes certain duties and limitations on Titan and provides that the Navy will monitor for three years Titan's compliance with, among other things, the FCPA and federal procurement laws and regulations. Under the agreement, the Navy agreed not to undertake any administrative action to propose Titan for debarment, but reserved the right to undertake appropriate administrative action, in its discretion, in the event of the indictment or conviction of any then-current (as of the date of execution of the agreement) officer or director of Titan or any of its wholly-owned subsidiaries arising out of continuing investigations into the underlying matters that were the subject of the Titan plea agreement or the final judgment entered by the SEC. The DoJ is continuing its investigation of individuals involved in these matters. The Navy agreement defines "Titan" to include, among other things, Titan's "affiliates." There is no assurance that, upon completion of the merger, L-3 will not be construed as Titan's affiliate under the agreement.

Titan has an ongoing obligation under its by-laws and under indemnity agreements with current and former employees to advance their costs of defense relating to the FCPA investigations and related class action and derivative litigation, subject to each individual undertaking to repay the costs of defense if it is ultimately determined that any such individual is not entitled to be indemnified by Titan.

23

Titan and several of its employees are under investigation by the U.S. Government, which could result in severe penalties.

In October 2002, Titan received a grand jury subpoena from the Antitrust Division of the DoJ requesting the production of documents relating to information technology services performed for the Air Force at Hanscom Air Force Base in Massachusetts and at Wright-Patterson Air Force Base in Ohio. Also, a senior Titan employee has provided handwriting exemplars in connection with this matter. Three Titan employees have previously testified before the grand jury in exchange for receiving immunity.

The investigation is on-going, and we are unable to predict their outcome at this time. Any penalties imposed by the U.S. Government in these matters could have a material adverse effect on our financial positions, results of operations, or cash flows and prospects.

Titan is a party to multiple lawsuits which, if decided adversely, could have a negative impact on our financial results.

Titan is named as a defendant in a number of lawsuits and may be subject to further litigation in the future.

These lawsuits include the following:

	•	As a result of the SEC and DoJ investigations of Titan's violations of the FCPA, various actions, including securities class actions and derivative suits, have been brought against Titan and certain of its officers and directors in federal and state court. All of the parties to these actions executed stipulations of settlement on or about July 22, 2005 after completion of confirmatory discovery, including the review by plaintiffs' counsel of certain Titan and L-3 documents and the taking of several depositions. The settlement of the securities class action suit remains subject to court approval. If the settlement is not approved by the court, Titan, certain of its former officers and directors, and L-3 would have to defend the underlying lawsuits.

	•	A number of class actions have been filed against Titan and certain of its officers and directors in connection with SureBeam, a former subsidiary of Titan, which was spun-off in an initial public offering and which subsequently filed for bankruptcy. These actions have been consolidated and are currently pending in a federal court in California. The bankruptcy trustee of SureBeam has also brought an action in a California state court against certain directors and officers of Titan who at one time also served as directors or officers of SureBeam. The basis of all of these lawsuits is that Titan and other defendants are liable for allegedly misleading and inaccurate statements about SureBeam. Although the parties to these actions have expressed an interest in settlement, and we have agreed to settle the bankruptcy trustee claim for $5.0 million, the outcome of the class action lawsuit is uncertain.

	•	Two lawsuits have been filed against Titan and others alleging that certain employees of Titan who were acting as translators for the U.S. military in certain prison facilities in Iraq engaged in torture, assault and other acts of mental and physical abuse in violation of state, federal and international law. We cannot predict the outcome of these actions at this time.

Although Titan maintains insurance policies, we cannot assure you that this insurance will be adequate to protect it from all material expenses related to claims. We are unable to predict the precise nature of the relief that may be sought or granted in any lawsuits involving Titan or the effect that pending or future Titan cases may have on our business, operations, profitability or financial condition.

In addition, Titan may be subject to additional criminal investigations conducted by the U.S. Government. If the U.S. Government were to find that Titan failed to comply with applicable laws and regulations, it may be subject to criminal sanctions or civil remedies, including fines, injunctions, prohibitions on exporting, seizures or debarments from government contracts. The cost of compliance or the consequences of non-compliance, including debarments, could have a material adverse effect on our business and results of operations.

24

Titan depends on U.S. Government contracts for most of its revenues and the loss of U.S. Government contracts or a decline in funding of existing or future government contracts could adversely affect our revenues and cash flows and our ability to fund our growth.

Virtually all of Titan's revenue is from the sale of services and products to the U.S. Government. Titan's U.S. Government contracts are only funded on an annual basis, and the U.S. Government may cancel these contracts at any time without penalty or may change its requirements, programs or contract budget or decline to exercise option periods, any of which could reduce our revenues and cash flows from U.S. Government contracts. Titan's revenues and cash flow from U.S. Government contracts could also be reduced by declines in U.S. defense, homeland security and other federal agency budgets. As noted, related to the FCPA settlement, Titan and the Navy entered into an administrative settlement that will allow Titan to continue to receive U.S. Government contracts. The agreement in relevant part provides for Navy monitoring of Titan compliance activities for three years.

On a pro forma basis after giving effect to the Titan acquisition and the Other Business Acquisitions, for the nine months ended September 30, 2005, Titan's linguist contract with the U.S. Army Intelligence and Security Command (InSCom) represented 4.1%, or $325.4 million, of our pro forma sales. InSCom is currently expected to procure the linguist services under a new program, Interpreter and Translator Management Services (ITMS), from multiple sources instead of under a sole source contract, which would increase competition. We cannot be certain that we will be able to win the re-compete for this business that is expected to be awarded in January 2006.

A substantial majority of Titan's total sales are for products and services under contracts with various agencies and procurement offices of the DoD or with prime contractors to the DoD, including the linguist contract with the U.S. Army and its contract with the U.S. Special Operations Command. Although these various parts of the DoD are subject to common budgetary pressures and other factors, Titan's various customers exercise independent purchasing decisions. Because of such concentration of Titan's contracts, if a significant number of our DoD contracts and subcontracts are simultaneously delayed or cancelled for budgetary performance or other reasons it would have a material adverse effect on our revenues and cash flows.

At June 30, 2005, Titan's total funded backlog was approximately $945.9 million. In addition to contract cancellations and declines in agency budgets, our backlog and future financial results, including as they relate to Titan, may be adversely affected by:

	•	curtailment of the U.S. Government's use of technology or other services and products providers, including curtailment due to government budget reductions and related fiscal matters;

	•	developments in Iraq, Afghanistan or other geopolitical developments that affect demand for products and services;

	•	our ability to hire and retain personnel to meet increasing demand for our services including our ability to meet demands for linguist services; and

	•	technological developments that impact purchasing decisions or our competitive position.

These or other factors could cause U.S. defense and other federal agencies to reduce their purchases under contracts, to exercise their right to terminate contracts or not to exercise options to renew contracts or limit our ability to obtain new contract awards. Any of these actions or any of the other actions described above could significantly reduce our revenues, operating income and cash flows.

Titan may face significant liability for violations of environmental law.

In December 2001, the current occupants of a property formerly owned by Titan commenced an environmental action against Titan and others in New Jersey state court. Plaintiffs contend that Titan is liable for the damages caused by hazardous waste materials originating from adjacent land to the extent that Titan purportedly provided indemnification to plaintiffs when it sold the property to them in 1986. Discovery is in progress, and we cannot predict the outcome of this litigation at this time. However, an adverse finding could have a significant impact on our results of operations and cash flows.

25

There may be other unknown risks inherent in the Titan acquisition.

Although we have conducted due diligence with respect to Titan, we may not be aware of all of the risks associated with the Titan acquisition. For example, we may not be aware of all of the existing litigation or governmental investigations involving Titan and its current and former employees. Any discovery of adverse information concerning Titan could have a material adverse effect on our business, financial condition and results of operations.

We may be unable to successfully integrate Titan's operations into L-3. In addition, the integration of Titan into L-3's operations may result in organizational conflicts of interests.

The process of integrating the operations of Titan into L-3 could cause an interruption of, or loss of momentum in, the activities of our or Titan's business or the loss of key personnel. In addition, although we expect to be able to achieve certain synergies and eliminate certain duplicative costs, and realize other benefits related to the integration of Titan's business, we cannot give any assurance that we will be able to achieve such synergies, elimination of duplicative costs or other benefits. The diversion of management's attention and any delays or difficulties encountered with the integration of Titan's operations or our inability to achieve the expected synergies and costs savings could have an adverse effect on our business, results of operations and financial condition.

Our acquisition and integration of Titan could result in actual or perceived organizational conflicts of interests, or OCIs, which are restricted or prohibited by the Federal Acquisition Regulations. Under the Federal Acquisition Regulations, an OCI arises when an organization is in a position where: there is an actual or perceived activity that renders it unable, or potentially unable, to render impartial advice to the government; the organization's objectivity in performing work for the government is, or might be, impaired; or the organization has an unfair competitive advantage by virtue of its access to confidential information. Although we intend to implement steps to mitigate or eliminate any OCIs that may arise as a result of the Titan acquisition, we cannot be sure that those steps will be successful. If we are unable to successfully mitigate or eliminate those risks or the government does not agree to the implementation of these intended steps, we may be unable to continue to perform work under existing contracts or compete for certain new contracts, which in either case could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to the Notes

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

We are offering the exchange notes to the holders of the outstanding notes. The outstanding notes were offered and sold in July 2005 to a small number of institutional investors and are eligible for trading in the Private Offerings, Resale and Trading through Automatic Linkages (PORTAL) Market.

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

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

26

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

The notes are contractually subordinated in right of payment to our existing and future senior indebtedness. At September 30, 2005, we had $750.0 million of senior debt, and had the ability to borrow up to an additional $886.7 million (after reductions for outstanding letters of credit of $113.3 million) under our senior credit facility, all of which, if borrowed or drawn upon, would be senior debt.

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

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

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

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

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

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

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

	•	insolvent or rendered insolvent because of the guarantees;

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

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

If a court voided a guaranty by one or more of our subsidiaries as the result of a fraudulent conveyance, or held it unenforceable for any other reason, holders of the notes would cease to have a

27

claim against the subsidiary based on the guaranty and would solely be creditors of L-3 Communications and any guarantor whose guarantee was not similarly held unenforceable.

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

Many, but not all, of our direct and indirect subsidiaries will guarantee the notes. In the event of a bankruptcy, liquidation or reorganization of any of the non-guarantor subsidiaries, holders of their indebtedness and their trade creditors will generally be entitled to payment of their claims from the assets of those non-guarantor subsidiaries before any assets of the non-guarantor subsidiaries are made available for distribution to us. Assuming the exchange of the outstanding notes for the exchange notes was completed on September 30, 2005, the exchange notes would have been effectively junior to $353.0 million of indebtedness and other liabilities (including trade payables) of these non-guarantor subsidiaries. The non-guarantor subsidiaries generated 12.1% of our sales for the nine months ended September 30, 2005 and held 10.8% of our consolidated assets at September 30, 2005.

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

The guarantees are subordinated to all existing and future senior debt of the guarantors, which shall consist of all of the indebtedness and other liabilities of the guarantors designated as senior, including guarantees of borrowings under the senior credit facility. The guarantees issued in connection with the offering of the outstanding notes and the exchange of the exchange notes will be pari passu with the guarantees of the senior subordinated notes sold by L-3 Communications in June 2002, May 2003, December 2003 and November 2004, and with the guarantee by L-3 Communications and the other guarantors of the convertible notes issued by L-3 Holdings concurrently with the offering of the outstanding notes. At September 30, 2005, we had approximately $750.0 million of senior debt outstanding under our senior credit facility, and any future amounts outstanding under that facility would be guaranteed by our subsidiaries on a senior basis. At September 30, 2005, L-3 Communications had availability of an additional $886.7 million (after reduction for outstanding letters of credit of $113.3 million) under its senior credit facility, all of which, if borrowed or drawn upon, would be senior debt. Any right of L-3 Communications to receive the assets of any of its subsidiaries upon their liquidation or reorganization (and the consequent right of the holders of the notes to participate in those assets) will be subject to the claims of that subsidiary's creditors, including trade creditors. To the extent that L-3 Communications is recognized as a creditor of that subsidiary, L-3 Communications may have such claim, but it would still be subordinate to any security interests in the assets of that subsidiary and any indebtedness and other liabilities of that subsidiary senior to that held by L-3 Communications.

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

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

28

FORWARD-LOOKING STATEMENTS

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

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

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

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

	•	the extensive legal and regulatory requirements surrounding our contracts with the U.S. Government and the results of any investigation of our contracts undertaken by the U.S. Government;

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

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

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

	•	our ability to continue to retain and train our existing employees and to recruit and hire new qualified and skilled employees, as well as our ability to retain and hire employees with U.S. Government security clearances that are required to perform work on classified contracts for the U.S. Government;

	•	actual future interest rates, volatility and other assumptions used in the determination of pension, benefits and stock options amounts;

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

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

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

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

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

	•	the rapid change of technology and high level of competition in the defense industry and the commercial industries in which our businesses participate;

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

29

	•	the outcomes of litigations material to us to which we currently are, or to which we may become in the future, a party;

	•	the outcomes of current or future governmental investigations of our businesses, including acquired businesses;

	•	costs or difficulties related to the integration of the businesses of us and Titan may be greater than expected;

	•	anticipated cost savings from the Titan acquisition may not be fully realized or realized within the expected time frame;

	•	operating results following the Titan acquisition may be lower than expected;

	•	ultimate resolution of contingent matters, claims and investigations relating to Titan, including the impact on the final purchase price allocations;

	•	Titan's compliance with its plea agreement and consent to entry of judgment with the U.S. Government relating to the Foreign Corrupt Practices Act;

	•	competitive pressure among companies in our industry may increase significantly;

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

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

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

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

30

USE OF PROCEEDS

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

We received net proceeds of approximately $973.4 million from the offering of the outstanding notes, after deducting the discounts, commissions and estimated expenses payable by us.

The net proceeds from the offering of the outstanding notes and the concurrent convertible notes offering by L-3 Holdings were used to pay a portion of the aggregate consideration required for the Titan acquisition.

31

CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization at September 30, 2005.

You should read this table in conjunction with our financial statements and the related notes, "Selected Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Other Indebtedness" included elsewhere herein.

The financial data at September 30, 2005 in the following table are derived from our unaudited financial statements for the three and nine month periods ended September 30, 2005.

				At September 30, 2005
				(in millions)
Cash and cash equivalents				$	226.3
Long-term debt:
Senior credit facility:(1)
Revolving credit facility				$	—
Term loan facility					750.0
7 5/8% Senior Subordinated Notes due 2012					750.0
6 1/8% Senior Subordinated Notes due 2013					400.0
6 1/8% Senior Subordinated Notes due 2014					400.0
5 7/8% Senior Subordinated Notes due 2015					650.0
6 3/8% Senior Subordinated Notes due 2015					1,000.0
3% Convertible Contingent Debt Securities (CODES) due 2035					700.0
Principal amount of long-term debt					4,650.0
Unamortized discounts					(16.4	)
Carrying amount of long-term debt				$	4,633.6
Minority interests					80.7
Shareholders' equity:
Common stock					2,980.0
Retained earnings					1,408.7
Unearned compensation					(8.5	)
Accumulated other comprehensive loss					(70.9	)
Total shareholders' equity					4,309.3
Total capitalization				$	9,023.6

(1)	At September 30, 2005, we had the ability to borrow (subject to compliance with covenants) up to an additional $886.7 million (after reducing for outstanding letters of credit of $113.3 million) under our senior credit facility.

32

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

The following unaudited pro forma combined condensed financial statements have been derived from our and Titan's audited historical consolidated financial statements, and our unaudited historical condensed consolidated financial statements, each of which are included elsewhere herein, Titan's unaudited results of operations for the period from January 1, 2005 to July 29, 2005, and the unaudited consolidated financial statements from certain other business acquisitions not included herein.

The following unaudited pro forma combined condensed statements of operations data for the year ended December 31, 2004 and the nine months ended September 30, 2005 (pro forma statement of operations) give effect to the following transactions as if they had occurred on January 1, 2004: (1) the Titan acquisition and the Acquisition Financing, which was comprised of approximately $355.5 million of cash on hand (net of approximately $25.3 million which was acquired from Titan), $750.0 million of term loan borrowings under L-3 Communications' senior credit facility, the net proceeds from the issuance by L-3 Holdings of $700.0 million of CODES and the issuance by L-3 Communications of $1,000.0 million of 6 3/8% senior subordinated notes, and (2) the acquisitions by L-3 of Cincinnati Electronics, Inc., the Canadian Navigation Systems and Space Sensors System business of Northrop Grumman, the Marine Controls division of CAE, the Propulsion Systems business unit of General Dynamics, and Mobile-Vision, Inc., and their related financings, which were completed between January 1, 2004 and September 30, 2005. Although these recent L-3 business acquisitions are not significant, individually or in the aggregate, to L-3's results of operations or financial position, we have included them in these pro forma statements of operations because their pre-acquisition results of operations are included when determining L-3's compliance with the financial covenants under L-3 Communications' senior credit facility. As discussed in the notes to the unaudited pro forma combined condensed financial statements, the results of operations of certain business acquisitions have been excluded. L-3 Communications is a wholly-owned subsidiary of L-3 Holdings. L-3 Holdings and its subsidiaries, including L-3 Communications, are referred to in this "Unaudited Pro Forma Combined Condensed Financial Statements" section as "L-3". We have not included our unaudited pro forma combined condensed balance sheet because Titan's balance sheet data is included in L-3's actual, unaudited consolidated balance sheet for September 30, 2005, which is included elsewhere herein.

The pro forma adjustments are based on preliminary purchase price allocations for the business acquisitions. Actual allocations will be based on the final appraisals and other analyses of fair values of acquired contracts in process, inventories, identifiable intangible assets, goodwill, property, plant and equipment, deferred income taxes and litigation liabilities. L-3 will finalize the allocations after all of the data required to complete the final appraisals and analysis of fair values of the acquired assets and assumed liabilities is compiled and analyzed. Differences between the preliminary and final purchase price allocations are not expected to have a material impact on L-3's results of operations. However, as discussed in Note 4 to the unaudited condensed consolidated financial statements of L-3 included in its quarterly report on Form 10-Q for the period ended September 30, 2005, which is included herein, the differences between the preliminary and final purchase price allocations on our financial position could be material. The unaudited pro forma combined condensed statement of operations do not reflect any cost savings that we believe could have resulted had the Titan and the other business acquisitions listed above occurred on January 1, 2004.

The unaudited pro forma combined condensed financial information should be read in conjunction with (1) the audited consolidated financial statements of L-3 for the year ended December 31, 2004, which is included elsewhere herein, (2) the unaudited condensed consolidated financial statements of L-3 for the period ended September 30, 2005, which is included elsewhere herein, (3) the audited consolidated financial statements of Titan for the year ended December 31, 2004, which is included elsewhere herein, and (4) the unaudited condensed consolidated financial statements of Titan for the period ended June 30, 2005, which is included elsewhere herein.

The unaudited pro forma combined condensed financial information may not be indicative of the results of operations of L-3 that actually would have occurred had the Titan and the other business acquisitions listed above been completed on January 1, 2004, or the results of operations of L-3 that may be obtained in the future.

33

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2005
(in millions, except per share data)

				L-3 As Reported				Titan Historical(1)				Pro Forma Adjustments				L-3 & Titan Pro Forma				Other Acquisitions(6)(7)				Pro Forma Adjustments				Pro Forma
Sales				$	6,544.5			$	1,371.9			$	—			$	7,916.4			$	39.3			$	—			$	7,955.7
Costs and expenses					5,853.9				1,342.8	(2)			9.1	(3)			7,205.8				34.7				—	(3)			7,240.5
Operating income (loss)					690.6				29.1				(9.1	)			710.6				4.6				—				715.2
Other (income) expense, net					(6.4	)			(2.1	)			2.6	(4)			(5.9	)			—				—				(5.9	)
Interest expense					136.5				23.8				57.0	(4)			217.3				—				1.2	(8)			218.5
Minority interest					7.9				—				—				7.9				—				—				7.9
Income (loss) from continuing operations before income taxes					552.6				7.4				(68.7	)			491.3				4.6				(1.2	)			494.7
Provision (benefit) for income taxes					195.5				29.0				(23.6	)(5)			200.9				0.8				0.5	(9)			202.2
Income (loss) from continuing operations				$	357.1			$	(21.6	)		$	(45.1	)		$	290.4			$	3.8			$	(1.7	)		$	292.5
L-3 Holdings' earnings per share:
Basic				$	3.02				n/a				n/a			$	2.45				n/a				n/a			$	2.47
Diluted				$	2.95				n/a				n/a			$	2.40				n/a				n/a			$	2.42
L-3 Holdings' weighted average shares outstanding:
Basic					118.3				n/a				n/a				118.3				n/a				n/a				118.3
Diluted					120.9				n/a				n/a				120.9				n/a				n/a				120.9

See notes to Unaudited Pro Forma Combined Condensed Financial Statements

34

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2004
(in millions, except per share data)

				L-3 As Reported				Titan As Reported(1)				Pro Forma Adjustments				L-3 & Titan Pro Forma				Other Acquisitions(6)(10)				Pro Forma Adjustments				Pro Forma
Sales				$	6,897.0			$	2,046.5			$	—			$	8,943.5			$	431.3			$	—			$	9,374.8
Costs and expenses					6,148.4				1,975.6	(2)			12.6	(3)			8,136.6				361.0				—	(3)			8,497.6
Operating income (loss)					748.6				70.9				(12.6	)			806.9				70.3				—				877.2
Other (income) expense, net					(7.3	)			2.5				4.0	(4)			(0.8	)			1.8				—				1.0
Interest expense					145.3				37.7				101.0	(4)			284.0				5.1				30.9	(8)			320.0
Minority interest					8.9				—				—				8.9				—				—				8.9
Loss on retirement of debt					5.0				—				—				5.0				—				—				5.0
Income (loss) from continuing operations before income taxes					596.7				30.7				(117.6	)			509.8				63.4				(30.9	)			542.3
Provision (benefit) for income taxes					214.8				16.9				(42.4	)(5)			189.3				12.1				(1.2	)(9)			200.2
Income (loss) from continuing operations				$	381.9			$	13.8			$	(75.2	)		$	320.5			$	51.3			$	(29.7	)		$	342.1
L-3 Holdings' earnings per share:
Basic				$	3.54			$	0.16				n/a			$	2.97				n/a				n/a			$	3.17
Diluted				$	3.33	(11)		$	0.16				n/a			$	2.81	(11)			n/a				n/a			$	2.99	(11)
L-3 Holdings' weighted average shares outstanding:
Basic					107.8				83.9				n/a				107.8				n/a				n/a				107.8
Diluted					117.4				87.0				n/a				117.4				n/a				n/a				117.4

See notes to Unaudited Pro Forma Combined Condensed Financial Statements

35

NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS

1.

On July 29, 2005, L-3 acquired all of the outstanding common stock of Titan for $23.10 per share in cash, or approximately $2,754.3 million, including the assumption of approximately $626.0 million of Titan's outstanding debt (all of which was repaid or redeemed concurrent with the Titan acquisition), net of cash acquired of $25.3 million. The acquisition was financed with a combination of approximately $355.5 million of cash on hand, $750.0 million of term loan borrowings under L-3 Communications' senior credit facility, net proceeds from the issuance by L-3 Holdings of $700.0 million of CODES and the net proceeds from the issuance by L-3 Communications of $1,000.0 million of 6 3/8% senior subordinated notes. Titan's 2005 historical stand-alone results presented in the pro forma combined condensed statement of operations for the nine months ended September 30, 2005 represent Titan's unaudited historical results of operations from January 1, 2005 to July 29, 2005. The results of operations for Titan from the date of acquisition are included in the L-3 "as reported" amounts.

2.

Costs and expenses for Titan include charges for costs related to the proposed merger agreement between Titan and Lockheed Martin Corporation (which was terminated on June 26, 2004), the settlement of SEC and Department of Justice investigations of Titan under the FCPA, and the Titan internal review of the FCPA violations, shareholder settlements related to the securities law class actions and derivative suits arising out of Titan's alleged violations of the FCPA and the acquisition of Titan by L-3. These charges, which were recorded by Titan prior to its acquisition by L-3, amounted to $80.5 million for the nine months ended September 30, 2005 and $60.3 million for the year ended December 31, 2004. Costs and expenses for the year ended December 31, 2004 also include asset impairment charges totaling $15.5 million.

3.

The adjustment to costs and expenses relating to the Titan acquisition in the pro forma statement of operations consists of the amortization of identifiable intangible assets, partially offset by the elimination of intangible asset amortization expense included in the historical financial statements of Titan. The total preliminary estimates of identifiable intangible assets relating to the Titan acquisition that are subject to amortization will be amortized over their useful lives as the economic benefits from them are realized over an estimated useful life of 20 years. The adjustment to costs and expenses relating to the business acquisitions discussed below in Note 6 in the pro forma statement of operations consists of the amortization of identifiable intangible assets, primarily customer relationships acquired, offset by the elimination of intangible asset amortization expense included in the historical financial statements. The adjustments to L-3's pro forma costs and expenses to give effect to the Titan acquisition are presented below:

				Nine Months Ended September 30, 2005				Year Ended December 31, 2004
				(in millions)
Amortization expense for estimated identifiable intangible assets				$	10.5			$	15.0
Less: Titan's historical identifiable intangible assets amortization expense					(1.4	)			(2.4	)
Pro forma costs and expenses adjustment				$	9.1			$	12.6

36

NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS   —   continued

4.	The adjustments to L-3's pro forma interest expense to give effect to the Acquisition Financing are presented below:

				Nine Months Ended September 30, 2005				Year Ended December 31, 2004
				(in millions)
Interest on $1,000.0 6 3/8% Senior Subordinated Notes issued by L-3 Communications				$	37.2			$	63.8
Interest on $700.0 of 3.00% CODES issued by L-3 Holdings					12.3				21.0
Interest on $750.0 of borrowings under the term loan facility					21.7				37.2
Interest on $195.5 of borrowings under the revolving facility					5.6				9.7
Amortization of deferred debt issue costs and discounts					4.0				7.0
Less: Titan's historical interest expense					(23.8	)			(37.7	)
Pro forma interest expense adjustment				$	57.0			$	101.0

The adjustments for borrowings under the revolving facility and term loans are based on a current interest rate of 4.96%. For each 1/8% change in the applicable interest rates on our borrowings under the revolving facility and term loan facility, pro forma interest expense would change by $0.7 million for the nine months ended September 30, 2005 and $1.2 million for the year ended December 31, 2004.

	Additionally, L-3's historical interest income has been adjusted to eliminate the estimated interest income earned on investments in cash and cash equivalents that was assumed to be used to finance the Titan acquisition amounting to $2.6 million for the nine months ended September 30, 2005 and $4.0 million for the year ended December 31, 2004.

5.

The pro forma adjustments were tax-effected, as appropriate, using an estimated statutory (federal and state) tax rate of 39.1%. The pro forma adjustments also include an estimated increase of 60 basis points (0.6%) to L-3's historical effective income tax rate for anticipated reductions to L-3's existing income tax benefits for research and experimentation (R&E) tax credits that are expected to occur because of the proposed Titan acquisition. The pro forma adjustments to reduce L-3's R&E tax credits and increase its effective tax rate would have increased L-3's provision for income taxes by $3.3 million for the nine months ended September 30, 2005 and $3.6 million for the year ended December 31, 2004.

6.

The pro forma statement of operations also includes the pre-acquisition results of operations for the following selected recent business acquisitions completed by L-3 between January 1, 2004 and September 30, 2005, because these results are included when determining our compliance with the financial covenants under L-3's senior credit facility. These business acquisitions had an aggregate purchase price, excluding acquisition costs, of $679.8 million, and were financed with a combination of (1) the net proceeds of $639.0 million from L-3 Communications' November 2004 offering of $650.0 million of 5.875% senior subordinated notes and (2) revolver borrowings under L-3 Communications' senior credit facility of $40.8 million. The following sets forth the acquisitions that are included in our pro forma statement of operations:

	•	all of the outstanding stock of Cincinnati Electronics, Inc. for $176.3 million in cash, plus acquisition costs;

	•	all of the outstanding stock of the Canadian Navigation Systems and Space Sensors System business of Northrop Grumman for $69.9 million in cash, plus acquisition costs. Following the acquisition the business was renamed L-3 Electronics Systems;

37

NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS   —   continued

	•	substantially all of the operations of the Marine Controls Division of CAE for $196.8 million in cash, plus acquisition costs. The purchase price is subject to adjustment based on closing date net assets on February 5, 2005. The business was renamed L-3 Communications MAPPS Inc. ("MAPPS");

	•	the Propulsion Systems business unit of General Dynamics Corporation for $196.8 million in cash, plus acquisition costs. The business was renamed L-3 Communications – Combat Propulsion Systems; and

	•	all of the outstanding common stock of Mobile-Vision, Inc. for $40.0 million in cash, plus acquisition costs. The purchase price is subject to adjustment based on closing date net working capital on April 12, 2005.

7.

The unaudited pro forma statement of operations includes the following unaudited historical financial data for the MAPPS, Combat Propulsion Systems and Mobile-Vision business acquisitions for the nine months ended September 30, 2005. The Cincinnati Electronics and L-3 Electronics Systems business acquisitions are included in L-3's historical statement of operations for the nine months ended September 30, 2005.

				MAPPS(a)				Combat Propulsion Systems(a)				Mobile-Vision(a)				Total
				(in millions)
Sales				$	10.9			$	20.6			$	7.8			$	39.3
Costs and expenses					11.1				18.9				4.7				34.7
Operating income (loss)					(0.2	)			1.7				3.1				4.6
Other (income) expense, net					—				—				—				—
Interest expense					—				—				—				—
Income (loss) from continuing operations before income taxes					(0.2	)			1.7				3.1				4.6
Provision for income taxes					—				0.5				0.3				0.8
Income (loss) from continuing operations				$	(0.2	)		$	1.2			$	2.8			$	3.8

(a)	Represents unaudited historical results of operations from January 1, 2005 to the business acquisition date.

The business acquisitions completed between January 1, 2004 and September 30, 2005 that are not included in the pro forma statement of operations for the nine months ended September 30, 2005 had sales of $36.9 million and a net loss of $5.3 million on a pro forma basis. These business acquisitions are not included in the pro forma statement of operations because they are not significant, individually, or in the aggregate, to L-3's results of operations or financial position and because their pre-acquisition results are not included when determining our compliance with the financial covenants under L-3's senior credit facility.

38

NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS   —   continued

8.	The adjustments to L-3's pro forma interest expense to give effect to the financing of the business acquisitions discussed above in Note 6 are based on a current interest rate on the revolving credit borrowings and the completion, on January 1, 2004, of the 5.875% senior subordinated notes due 2015 offering and are presented below:

				Nine Months Ended September 30, 2005				Year Ended December 31, 2004
				(in millions)
Interest on $40.8 of revolving credit borrowings under the senior credit facility				$	1.2			$	2.0
Interest on $650.0 of 5.875% senior subordinated notes					—				33.0
Amortization of deferred debt issue costs					—				1.0
Less: other business acquisitions historical interest expense					—				(5.1	)
Pro forma interest expense adjustment				$	1.2			$	30.9

9.

The historical results of MAPPS did not include a provision for income taxes because the business was a division of CAE and the income taxes on the income was accounted for by CAE rather than MAPPS. The historical results of Mobile-Vision did not include a provision for federal income taxes because it was an S Corporation and the federal income taxes on Mobile-Vision's income were paid by its individual stockholders. As such, the pro forma adjustments include an income tax provision or benefit for the periods below to record the income tax amount for the historical results of operations for MAPPS and Mobile-Vision.

				Nine Months Ended September 30, 2005				Year Ended December 31, 2004
				(in millions)
Income tax provision				$	1.0			$	10.8

10.	The unaudited pro forma statement of operations includes the following unaudited historical financial data for the Cincinnati Electronics, L-3 Electron Systems, MAPPS, Combat Propulsion Systems and Mobile-Vision business acquisitions for the year ended December 31, 2004:

				Cincinnati Electronics(a)				Electronics Systems(b)				MAPPS(b)				Combat Propulsion Systems(b)				Mobile-Vision(b)				Total
				(in millions)
Sales				$	60.6			$	95.8			$	105.5			$	144.4			$	25.0			$	431.3
Costs and expenses					48.5				85.0				86.3				125.0				16.2				361.0
Operating income					12.1				10.8				19.2				19.4				8.8				70.3
Other (income) expense, net					1.6				0.9				(0.4	)			—				(0.3	)			1.8
Interest expense					4.7				0.4				—				—				—				5.1
Income from continuing operations before income taxes					5.8				9.5				19.6				19.4				9.1				63.4
Provision for income taxes					2.3				3.6				—				5.8				0.4				12.1
Income from continuing operations				$	3.5			$	5.9			$	19.6			$	13.6			$	8.7			$	51.3

(a)	Represents unaudited historical results of operations from January 1, 2004 to the business acquisition date.

(b)	Represents unaudited historical results of operations for the year ended December 31, 2004.

	The business acquisitions completed between January 1, 2004 and September 30, 2005 that are not included in the pro forma statement of operations for the year ended December 31, 2004 had sales of $273.8 million and a net loss of $15.7 million on a pro forma basis. The net loss was

39

NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS   —   continued

principally due to loss provisions for certain contracts in process of the Electron Dynamics Devices business, which is expected to be substantially completed by December 2005. L-3 acquired the Electron Dynamics Devices business from the Boeing Company on February 28, 2005. These business acquisitions are not included in the pro forma statement of operations because they are not significant, individually, or in the aggregate, to L-3's results of operations or financial position, and because their pre-acquisition results are not included when determining our compliance with the financial covenants under L-3's senior credit facility.

11.

L-3 Holdings' diluted weighted average shares outstanding and diluted earnings per share give effect to the assumed conversion of the 7,800,797 shares issued upon the conversion of L-3 Holdings' $420 million of 4% Senior Subordinated Convertible Contingent Debt Securities (CODES) due 2011. The assumed conversion results in the addition of after-tax interest expense savings to reported income from continuing operations amounting to $9.1 million for the year ended December 31, 2004 for the purpose of calculating diluted earnings per share. During 2004, substantially all of the holders of the CODES due 2011 exercised their conversion rights and converted such CODES due 2011 into L-3 Holdings common stock. The remaining $0.2 million of CODES due 2011 which were not converted were redeemed for cash. There was no impact to L-3 Holdings diluted earnings per share from applying EITF 04-8 to L-3 Holdings' 3% Convertible Contingent Debt Securities because their conversion value was less than their maturity value.

40

SELECTED FINANCIAL DATA

We derived the selected financial data presented below at December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004 from our audited consolidated financial statements included elsewhere herein. We derived the selected financial data presented below for the years ended December 31, 2001 and 2000 and at December 31, 2002, 2001 and 2000 from our audited consolidated financial statements not included elsewhere herein. We derived the selected financial data presented below at September 30, 2005 and for the nine months ended September 30, 2005 and 2004 from our unaudited condensed consolidated financial statements included elsewhere herein. We derived the selected financial data presented below at September 30, 2004 from our unaudited condensed consolidated financial statements not included elsewhere herein. You should read the selected financial data together with our "Management's Discussion and Analysis of Results of Operations and Financial Condition" and our audited consolidated financial statements included elsewhere herein. The results of operations are impacted significantly by our acquisitions, some of which are described elsewhere herein.

				Nine Months Ended September 30,								Year Ended December 31,
				2005				2004				2004				2003				2002(1)				2001(1)				2000(1)
				(unaudited)								(in millions, except per share data)
Statement of Operations Data:
Sales				$	6,544.5			$	4,985.8			$	6,897.0			$	5,061.6			$	4,011.2			$	2,347.4			$	1,910.1
Operating income					690.6				529.1				748.6				581.0				454.0				275.3				222.7
Other expense (income), net					(6.4	)			1.7				(7.3	)			(0.2	)			(5.0	)			(1.8	)			(4.4	)
Interest expense					136.5				106.8				145.3				132.7				122.5				86.4				93.0
Minority interests in net income of consolidated subsidiaries					7.9				7.1				8.9				3.5				6.2				4.4				—
Loss on retirement of debt					—				—				5.0				11.2				16.2				—				—
Provision for income taxes					195.5				150.9				214.8				156.2				111.6				70.8				51.4
Income before cumulative effect of a change in accounting principle					357.1				262.6				381.9				277.6				202.5				115.5				82.7
Cumulative effect of a change in accounting principle					—				—				—				—				(24.4	)			—				—
Net income				$	357.1			$	262.6			$	381.9			$	277.6			$	178.1			$	115.5			$	82.7
L-3 Holdings' basic earnings per common share:
Income before cumulative effect of a change in accounting principle				$	3.02			$	2.48			$	3.54			$	2.89			$	2.33			$	1.54			$	1.24
Cumulative effect of a change in accounting principle					—				—				—				—				(0.28	)			—				—
Net income				$	3.02			$	2.48			$	3.54			$	2.89			$	2.05			$	1.54			$	1.24
L-3 Holdings' diluted earnings per common share:(3)
Income before cumulative effect of a change in accounting principle				$	2.95			$	2.32			$	3.33			$	2.62			$	2.13			$	1.47			$	1.18
Cumulative effect of a change in accounting principle					—				—				—				—				(0.23	)			—				—
Net income				$	2.95			$	2.32			$	3.33			$	2.62			$	1.90			$	1.47			$	1.18
L-3 Holdings' weighted average common shares outstanding:
Basic					118.3				105.9				107.8				96.0				86.9				74.9				66.7
Diluted					120.9				116.9				117.4				113.9				105.2				85.4				69.9
Cash dividends declared per share on L-3 Holdings' common stock				$	0.38			$	0.30			$	0.40				—				—				—				—
Balance Sheet Data (at period end):
Working capital				$	1,600.2			$	1,311.5			$	1,632.5			$	1,013.5			$	929.4			$	717.8			$	360.9
Total assets					11,585.8				7,003.2				7,780.8				6,505.3				5,242.3				3,339.2				2,463.5
Total debt					4,633.6				2,157.5				2,189.8				2,457.3				1,847.8				1,315.3				1,095.0
Minority interests					80.7				79.1				77.5				76.2				73.2				69.9				—
Shareholders' equity					4,309.3				3,204.5				3,799.8				2,574.5				2,202.2				1,213.9				692.6

(1)	In accordance with SFAS 142, effective January 1, 2002, we ceased amortizing goodwill.

(2)	Reported diluted EPS amounts for the nine months ended September 30, 2004 and for the years ended prior to January 1, 2004 have been restated in accordance with EITF 04-8, The Effect of Contingently Convertible Debt on Diluted Earnings Per Share. The impact of applying EITF 04-8 to our 4% Senior Subordinated Convertible Contingent Debt Securities

41

(CODES) due 2011 resulted in: (1) an increase to diluted weighted average common shares outstanding of 7.8 million shares for the nine months ended September 30, 2004 and for 2003 and 2002, (2) a non-cash reduction of $0.09 to diluted EPS for the nine months ended September 30, 2004 and for 2003, (3) a non-cash reduction of $0.05 to diluted EPS before cumulative effect of a change in accounting principle for 2002, and (4) a non-cash reduction of $0.03 to diluted EPS for 2002. The CODES were not included in diluted weighted average common shares outstanding for 2001 because their impact on diluted EPS was anti-dilutive. Diluted weighted average common shares outstanding and diluted EPS for 2000, were not affected by EITF 04-8 because we issued the CODES in 2001.

42

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

Overview

We are a leading supplier of a broad range of products and services used in a substantial number of aerospace and defense platforms. We also are a major supplier of systems, subsystems and products on many platforms, including those for secure communication networks and communication products, mobile satellite communications, information security systems, shipboard communications, naval power systems, missiles and munitions, telemetry and instrumentation and airport security systems. We also are a prime system contractor for aircraft modernization and O&M, C³ISR collection systems and services, training and simulation, intelligence services and government support services. The substantial majority of our sales are generated using written revenue arrangements, or contracts. Most of these contracts require us to design, develop, manufacture, modify, upgrade, test and integrate complex aerospace and electronic equipment, and to provide related engineering and technical services according to the buyer's specifications. Our primary customer is the DoD. Our other customers include the U.S. Department of Homeland Security (DHS), U.S. Government intelligence agencies, major aerospace and defense contractors, allied foreign government ministries of defense, commercial customers and certain other U.S. federal, state and local government agencies.

We have four reportable segments. During the three months ended September 30, 2005 we renamed three of our four reportable segments as follows: (i) Secure Communications & ISR changed to Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C³ISR), (ii) Training, Simulation & Government Services changed to Government Services, and (iii) Aircraft Modernization, O&M and Products changed to Aircraft Modernization and Maintenance (AM&M). The Specialized Products reportable segment name remained the same.

In addition, during the three months ended September 30, 2005 we revised the aggregation of our operating segments within our four reportable segments in connection with the Titan acquisition to provide a more clearly defined presentation of our businesses, focused on customers, markets, products and services and independent research and development. Consequently, we have restated our reportable segments by reclassifying into the Specialized Products reportable segment the following: (i) our aviation products operating segments, which were previously included within the Aircraft Modernization and Maintenance reportable segment and (ii) our Link Training and Microdyne Outsourcing operating segments, which were previously included within the Government Services reportable segment. Prior period reportable segment data have been restated to conform to the current period presentation.

The C³ISR reportable segment provides products and services for the global ISR market, C³ Systems and secure, high data rate communication systems and equipment primarily for intelligence, reconnaissance and surveillance applications. We believe that these products and services are critical elements for a substantial number of major command, control, communication, intelligence gathering and space systems. These products and services are used to connect a variety of airborne, space, ground and sea-based communication systems and are used in the transmission, processing, recording, monitoring and dissemination functions of these communication systems. The Government Services reportable segment provides communications systems support and engineering services, information technology services, teaching and training services, marksmanship training systems and services, and intelligence support and analysis services. The Aircraft Modernization and Maintenance reportable segment provides specialized aircraft modernization and upgrades, maintenance and logistics support services. The Specialized Products reportable segment provides a broad range of products, including naval warfare products, aviation products, telemetry and navigation products, sensors and imaging products, premium fuzing products, security systems, simulation devices, microwave components and information products.

On July 29, 2005, we acquired Titan for $23.10 per share in cash, or approximately $2,754.3 million, including the assumption of $626.0 million of Titan's debt, net of cash acquired of $25.3 million. Concurrent with the Titan acquisition, we repaid or redeemed all of Titan's outstanding debt.

43

The Titan acquisition was financed with a combination of cash on hand, borrowings under our senior credit facility and net proceeds from the issuance of convertible contingent debt securities by L-3 Holdings and senior subordinated notes by L-3 Communications. See "—Liquidity and Capital Resources— Statement of Cash Flows—Financing Activities" below.

Following the acquisition, Titan's legacy business sectors (excluding Titan's products businesses) were consolidated into five new L-3 operating segments arranged to focus on Titan's unique and complimentary businesses. These five operating segments are included in L-3's reportable segments as follows:

•	Intelligence Solutions, which provides support to the DoD and intelligence agencies, is included in the C3ISR reportable segment;

•	Technical & Management Services, which provides support of intelligence, logistics, Command, Control and Communications (C3), and combatant commands, is included in the C3ISR reportable segment;

•	Aviation & Maritime Services, which provides support for maritime and expeditionary warfare, is included in the Government Services reportable segment;

•	Enterprise Solutions, which provides conventional high-end information technology (IT) support to U.S. federal agencies and the DoD, is included in the Government Services reportable segment; and

•	Linguist Operations and Technical Support, which provides linguist services, including translation, interpretation and analysis support, to the DoD, is included in the Government Services reportable segment.

Titan's remaining legacy businesses, which are products focused, were consolidated into L-3's Specialized Products reportable segment.

Total sales for Titan for the year ended December 31, 2004 were $2,046.5 million. We expect that the Titan business will reduce our consolidated operating margin because the Titan business is largely performed under lower margin (and lower risk) cost-reimbursable type and time-and-material type contracts. The table below presents customer-type and contract-type sales mix as a percentage of total sales for the year ended December 31, 2004 for L-3, Titan and pro forma for the combined company, excluding the other 2005 acquired businesses. See Note 4 to L-3's unaudited condensed consolidated financial statements. The pro forma combined sales by customer-type and contract-type percentages below are not necessarily indicative of the results that would have actually occurred had we completed the Titan acquisition on January 1, 2004.

				L-3				Titan				Pro Forma Combined
Customer-Type
U.S. Government					80.3	%			97.0	%			84.1	%
Commercial and foreign governments					19.7	%			3.0	%			15.9	%
					100.0	%			100.0	%			100.0	%
Contract-Type:
Fixed-price					60.6	%			15.1	%			50.2	%
Cost-reimbursable					26.9	%			47.9	%			31.7	%
Time-and-material					12.5	%			37.0	%			18.1	%
					100.0	%			100.0	%			100.0	%

In recent years, domestic and geo-political developments have significantly affected the markets for defense systems, products and services. There has been a fundamental and philosophical shift in focus from a "threat-based" model to one that emphasizes the capabilities needed to defeat a full spectrum of adversaries, which has transformed the U.S. defense posture to a capabilities-based orientation. This approach involves creating the ability for (1) a more flexible response, with greater

44

force agility and stronger space capabilities, and (2) improved missile defense systems, network communications and information systems, and security systems. This transformation also includes an increased emphasis on homeland defense. The Afghanistan and Iraq wars have confirmed several of the conclusions reached in the U.S. quadrennial Defense Review completed in 2001 and have also resulted in increased DoD spending, primarily for war operations.

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

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

Most of our contracts (revenue arrangements) with the U.S. Government are subject to U.S. Defense Contract Audit Agency audits and various cost controls, and include standard provisions for termination for the convenience of the U.S. Government. Multiyear U.S. Government contracts and related orders are subject to cancellation if funds for contract performance for any subsequent year become unavailable. Foreign government contracts generally include comparable provisions relating to termination for the convenience of the relevant foreign government.

Business Acquisitions

A significant component of our growth strategy has been to enhance our existing product and services base through selective business acquisitions that will add new products and services in areas that complement our present technologies. We intend to continue acquiring select businesses that (1) exhibit significant market positions in their business areas, (2) offer products and services that complement and/or extend our product and services offerings and expand our customer base, and (3) display positive sales, earnings and cash flow prospects.

45

The table below summarizes substantially all of the acquisitions that we have completed during 2002, 2003 and 2004 and the nine-month period ended September 30, 2005, referred to herein as business acquisitions. During the year ended December 31, 2004 and the nine months ended September 30, 2005, we used cash of $473.4 million and $3,380.6 million, respectively, for business acquisitions. See "Statement of Cash Flows—Investing Activities."

Business Acquisitions				Date Acquired				Purchase Price(1)
								(in millions)
2002
Aircraft Integration Systems (AIS) business of Raytheon Company				March 8, 2002				$	1,148.7	(2)
Detection Systems				June 14, 2002					110.3
ComCept, Inc.				July 31, 2002					37.1	(3)
Technology, Management and Analysis Corporation (TMA)				September 23, 2002					52.7
Electron Devices and Displays-Navigation Systems – San Diego businesses of Northrop Grumman(4)				October 25, 2002					135.7
International Microwave Corporation (IMC)				November 8, 2002					41.1
Wescam Inc.				November 21, 2002					124.3
Telos Corporation, Wolf Coach, Inc., Westwood Corporation and Ship Analytics, Inc.				Various					71.6	(5)(6)
2003
Avionics Systems business of Goodrich Corporation(7)				March 28, 2003					188.7
Military Aviation Services business of Bombardier, Inc. (MAS)				October 31, 2003					89.6	(8)
Vertex Aerospace LLC (Vertex)				December 1, 2003					664.8	(9)
Aeromet, Inc., Klein Associates Inc. and certain defense and aerospace assets of IPICOM, Inc.				Various					75.4
2004
Beamhit LLC				May 13, 2004					40.9	(10)(11)
Brashear, LP				June 14, 2004					36.3
Commercial Infrared business of Raytheon Company(12)				November 9, 2004					44.3
Cincinnati Electronics, Inc.				December 9, 2004					176.3
Canadian Navigation Systems and Space Sensors System business of Northrop Grumman(13)				December 30, 2004					69.9	(10)
AVISYS, Inc., General Electric Driver Development business, Bay Metals, D.P. Associates, certain video security product lines of Sarnoff Corporation and BAI Aerosystems				Various					77.6	(14)
2005
Marine Controls division of CAE (MAPPS)(15)				February 3, 2005					196.8	(10)
Propulsion Systems business unit of General Dynamics(16)				February 25, 2005					196.8
Electron Dynamics Devices business of the Boeing Company(17)				February 28, 2005					90.0	(10)
The Titan Corporation				July 29, 2005					2,759.3	(19)
InfraredVision Technology Corporation, Mobile-Vision, Inc., Sonoma Design Group, Inc., Advanced Laser Systems Technology, Inc. and Joseph Sheairs Associates, Inc.				Various					109.5	(18)

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

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

46

(3)

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

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

(5)	Excludes additional purchase price, not to exceed $1.4 million, which is contingent upon the financial performance of Wolf Coach for the year ending December 31, 2005.

(6)	Excludes additional purchase price, not to exceed $4.5 million, which is contingent upon the financial performance of Ship Analytics for the year ending December 31, 2005.

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

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

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

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

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

(12)	Following the acquisition, we changed the name of the Commercial Infrared business to L-3 Communications Infrared Products (LIP).

(13)	Following the acquisition, we changed the name of the Canadian Navigation Systems and Space Sensors System business to L-3 Communications Electronics Systems (LES).

(14)	Excludes additional purchase price, expected not to exceed $31.0 million, which is contingent upon the financial performance of certain of these acquired businesses for the years ending December 31, 2005 and 2006.

(15)	Following the acquisition, we changed the name of the Marine Controls business to L-3 Communications MAPPS Inc.

(16)	Following the acquisition, we changed the name of the Propulsion Systems business to L-3 Communications – Combat Propulsion Systems.

(17)	Following the acquisition, we changed the name of the Electron Dynamics Devices business to L-3 Communications Electron Technologies, Inc.

(18)	Excludes additional purchase price, not to exceed $53.3 million, which is contingent primarily upon the financial performance of InfraredVision Technology Corporation, Mobile-Vision, Inc., Sonoma Design Group, Inc. and Advanced Laser Systems Technology, Inc. for fiscal years ending on various dates in 2005 through 2008.

(19)	Excludes additional purchase price, not to exceed $28.4 million relating to a previous business acquisition made by Titan (International Systems L.L.C.), prior to its acquisition by L-3. The additional purchase price is contingent primarily upon the financial performance of International Systems for the years ending December 31, 2005 through 2011.

Additionally, during 2002, 2003, 2004 and the first nine months of 2005, we purchased other businesses, which individually and in the aggregate were not material to our consolidated results of operations, financial position or cash flows during the year acquired.

All of our business acquisitions are included in our consolidated results of operations from their dates of acquisition. We regularly evaluate potential business acquisitions and joint venture transactions. On October 31, 2005, we acquired all of the common stock of EOTech, Inc. for approximately $49.0 million. We financed this acquisition using cash on hand. We have not entered into any other agreements with respect to any other business acquisition transactions through the date of this filing, which would be considered material to L-3's results of operations, cash flows, or financial position.

Critical Accounting Policies

Our significant accounting policies are described in Note 2 to the consolidated financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs and expenses during the reporting period. The most significant of these estimates and assumptions relate to (i) contract revenues and costs, (ii) market values for inventories reported at lower of cost or market, (iii) pension and postretirement benefit obligations, (iv) preliminary purchase price allocations for the acquired assets and assumed liabilities of acquired businesses, (v) recoverability and valuation of recorded amounts of long-lived assets, identifiable intangible assets and goodwill, (vi) income taxes, including the valuations of deferred tax assets, (vii) litigation reserves, and (viii) environmental obligations. Actual amounts will differ from these estimates. We believe that our critical accounting estimates have the following attributes: (1) we are required to make assumptions about matters that are uncertain

47

and inherently risky at the time of the estimate; (2) use of reasonably different assumptions could have changed our estimates, particularly with respect to estimates of contract revenues and costs, and (3) changes in the estimate could have a material effect on our financial condition or results of operations. We believe the following critical accounting policies contain the more significant judgments and estimates used in the preparation of our financial statements.

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

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

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

48

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

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

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

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

The values assigned to acquired identifiable intangible assets for customer relationships and technology are determined, as of the date of acquisition, based on estimates and judgments regarding expectations for the estimated future after-tax cash flows from those assets over their lives, including the probability of expected future contract renewals and sales, less a cost-of-capital charge, all of which is discounted to present value. If actual future after-tax cash flows differ significantly from their estimates, we may be required to record an impairment charge to write down the identifiable intangible assets to their realizable values. The value assigned to goodwill equals the amount of the purchase price of the business acquired in excess of the sum of the amounts assigned to identifiable acquired assets, both tangible and intangible, less liabilities assumed. At December 31, 2004, we had goodwill of $4,054.8 million and identifiable intangible assets of $185.8 million. At September 30, 2005, we had goodwill of $6,915.2 million and identifiable intangible assets of $417.7 million.

We review goodwill and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and also review goodwill annually in accordance with SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142). SFAS No. 142 requires that goodwill be tested, at a minimum, annually for each reporting unit using a two-step process. A reporting unit is an operating segment, as defined in paragraph 10 of SFAS No. 131, Disclosures About Segments of an Enterprise and Related Information, or a component of an operating segment. A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and is

49

reviewed. Two or more components of an operating segment may be aggregated and deemed a single reporting unit if the components have similar economic characteristics. The first step is to identify any potential impairment by comparing the carrying value of the reporting unit to its fair value. If a potential impairment is identified, the second step is to compare the implied fair value of goodwill with the carrying value of the goodwill to measure the impairment loss. The fair value of a reporting unit is estimated using a discounted cash flow valuation approach, and is dependent on estimates for future sales, operating income, depreciation and amortization, income tax payments, working capital changes, and capital expenditures, as well as, expected growth rates for cash flows and long-term interest rates, all of which are impacted by economic conditions related to the industries in which we operate as well as conditions in the U.S. capital markets. A decline in estimated fair value of a reporting unit could result in an impairment charge to goodwill, which could have a material adverse effect on our business, financial condition and results of operations.

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

Valuation of Deferred Income Tax Assets and Liabilities.    At December 31, 2004, we had net deferred tax assets of $119.1 million, including $3.8 million for loss carryforwards and $18.5 million for tax credit carryforwards which are subject to various limitations and will expire if unused within their respective carryforward periods. Deferred income taxes are determined separately for each of our tax-paying entities in each tax jurisdiction. The future realization of our deferred income tax assets ultimately depends on our ability to generate sufficient taxable income of the appropriate character (for example, ordinary income or capital gains) within the carryback and carryforward periods available under the tax law, and to a lesser extent, our ability to execute successful tax planning strategies. Based on our estimates of the amounts and timing of future taxable income and tax planning strategies, we believe that L-3 will be able to realize its deferred tax assets. A change in the ability of our operations to continue to generate future taxable income, or our ability to implement desired tax planning strategies, could affect our ability to realize the future tax deductions underlying our net deferred tax assets, and require us to provide a valuation allowance against our net deferred tax assets. The recognition of a valuation allowance would result in a reduction to net income and if significant, could have a material impact on our effective tax rate, results of operations and financial position in any given period.

Results of Operations

The following information should be read in conjunction with our consolidated financial statements and our unaudited condensed consolidated financial statements. Our results of operations for the periods presented are impacted significantly by our business acquisitions. See Note 3 to L-3's audited consolidated financial statements and Note 4 to L-3's unaudited condensed consolidated financial statements, each included elsewhere herein, for a discussion of L-3's business acquisitions.

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

50

Three Months Ended September 30, 2005 Compared with Three Months Ended September 30, 2004

The tables below provide two presentations of sales, operating income and operating margin data for L-3 for the three months ended September 30, 2005 (2005 Third Quarter) and September 30, 2004 (2004 Third Quarter). The first table presents the selected data segregated between L-3's U.S. Government contractor businesses and L-3's commercial businesses. The second table presents the selected data by reportable segment. See Note 15 to L-3's unaudited condensed consolidated financial statements included elsewhere herein.

				Three Months Ended September 30,
				2005				2004
				(dollars in millions)
Statement of Operations Presentation
Sales:
Contracts, primarily U.S. Government				$	2,290.7			$	1,586.1
Commercial, primarily products					215.7				198.1
Consolidated				$	2,506.4			$	1,784.2
Operating income:
Contracts, primarily U.S. Government				$	245.0			$	184.1
Commercial, primarily products					21.5				15.3
Consolidated				$	266.5			$	199.4
Operating margin(1):
Contracts, primarily U.S. Government					10.7	%			11.6	%
Commercial, primarily products					9.9	%			7.7	%
Consolidated					10.6	%			11.2	%
Reportable Segment Presentation
Sales(2):
C3ISR				$	603.3			$	442.4
Government Services					553.6				279.2	(3)
Aircraft Modernization and Maintenance					549.0				470.1	(3)
Specialized Products					800.5				592.5	(3)
Consolidated				$	2,506.4			$	1,784.2
Operating income:
C3ISR				$	69.6			$	53.6
Government Services					47.4				28.3	(3)
Aircraft Modernization and Maintenance					56.4				59.7	(3)
Specialized Products					93.1				57.8	(3)
Consolidated				$	266.5			$	199.4
Operating margin(1):
C3ISR					11.5	%			12.1	%
Government Services					8.6	%			10.1	%
Aircraft Modernization and Maintenance					10.3	%			12.7	%
Specialized Products					11.6	%			9.7	%
Consolidated					10.6	%			11.2	%

(1)	Operating margin is calculated by dividing operating income into sales.

(2)	Sales are after intersegment eliminations. See Note 15 to L-3's unaudited condensed consolidated financial statements.

(3)

During the 2005 Third Quarter, L-3 reclassified to the Specialized Products reportable segment (i) its Link Training Services and Microdyne Outsourcing operating segments, previously included in the Government Services reportable segment, and (ii) the ACSS, Aviation Recorders, Avionics Systems, Display Systems and Electrodynamics operating segments, previously included in its Aircraft Modernization and Maintenance reportable segment. As a result of these reclassifications, for the three months ended September 30, 2004, $50.3 million of sales and $5.4 million of operating income was reclassified from L-3's Government Services reportable segment to its Specialized Products reportable segment, and $103.4 million of sales and $20.2 million of operating income was reclassified from L-3's Aircraft Modernization and Maintenance reportable segment to its Specialized Products reportable segment.

Consolidated sales increased by $722.2 million, or 40.5%, to $2,506.4 million for the 2005 Third Quarter from $1,784.2 million for the 2004 Third Quarter. The increase in consolidated sales from acquired businesses was $624.7 million, or 35.0%, including $443.7 million due to the acquisition of

51

Titan. Consolidated organic sales growth was 5.5%, or $97.5 million. Organic sales growth for our defense businesses was 6.4%, or $101.8 million, driven by continued strong demand for aircraft modernization and maintenance, government services, simulation devices, secure networked communications and acoustic undersea anti-submarine warfare products. Organic sales for our commercial businesses declined by 2.2%, or $4.3 million, primarily due to volume decreases for commercial aviation products, which were partially offset by increases for security products. We define "organic sales growth" as the increase or decrease in sales for the current period compared to the prior period, excluding the increase in sales attributable to acquired businesses to the extent the acquired businesses were not included in our results of operations for the prior period. Sales for our "defense businesses" include our U.S. Government contractor businesses, all of which are presented under "Contracts, primarily U.S. Government" (Government Businesses) and sales for our "commercial businesses" are presented under "Commercial, primarily products" (Commercial Businesses).

Sales from our Government Businesses increased by $704.6 million, or 44.4%, to $2,290.7 million for the 2005 Third Quarter from $1,586.1 million for the 2004 Third Quarter. The increase in sales from acquired businesses was $602.8 million, or 38.0%, including $443.7 million due to the acquisition of Titan. In addition to Titan, the acquired businesses also included Combat Propulsion Systems, Electron Technologies, Inc., MAPPS and Sonoma Design Group, Inc., which were acquired in 2005, and BAI Aerosystems, Cincinnati Electronics, D.P. Associates, Inc., Electronics Systems, and Sarnoff Video Security Systems, which were acquired in 2004. Sales from our Commercial Businesses increased by $17.6 million, or 8.9%, to $215.7 million for the 2005 Third Quarter from $198.1 million for the 2004 Third Quarter. The increase in sales from acquired businesses was $21.9 million, or 11.1%. The acquired businesses included Infrared Vision Technology Corporation, Mobile-Vision, Inc., and Advanced Laser Systems Technology, Inc., which were acquired in 2005 and Infrared Products, which was acquired in 2004.

Consolidated costs and expenses increased by $655.1 million, or 41.3%, to $2,239.9 million for the 2005 Third Quarter from $1,584.8 million for the 2004 Third Quarter. Costs and expenses for our Government Businesses increased by $643.7 million, or 45.9%, to $2,045.7 million for the 2005 Third Quarter from $1,402.0 million for the 2004 Third Quarter. Costs and expenses for our Commercial Businesses increased by $11.4 million, or 6.2%, to $194.2 million for the 2005 Third Quarter from $182.8 million for 2004 Third Quarter.

The increase to costs and expenses for our Government Businesses due to acquired businesses was $527.2 million. The remaining increase is primarily attributable to organic sales growth of our defense businesses. As described in Note 5 to our unaudited condensed consolidated financial statements, cost of sales for L-3's U.S. Government contractor businesses include selling, general and administrative (SG&A), independent research and development (IRAD) and bid and proposal (B&P) costs. These costs increased by $41.3 million to $198.6 million for the 2005 Third Quarter from $157.3 million for the 2004 Third Quarter, primarily attributable to acquired businesses.

Cost of sales for our Commercial Businesses increased by $10.3 million to $138.0 million for the 2005 Third Quarter from $127.7 million for the 2004 Third Quarter. The increase in cost of sales was primarily due to increased costs attributable to changes in products sales mix for airport security systems and the Infrared Products acquired business. SG&A expenses increased by $2.8 million to $39.9 million for the 2005 Third Quarter from $37.1 million for the 2004 Third Quarter, and declined as a percentage of sales to 18.5% from 18.7% due primarily to higher sales volume. Research and development (R&D) expenses decreased by $1.7 million, to $16.3 million for the 2005 Third Quarter from $18.0 million for the 2004 Third Quarter, primarily due to lower R&D expenses for our Smartdeck^TM products, partially offset by R&D at our Infrared Products business, which we acquired on November 9, 2004.

Consolidated operating income increased by $67.1 million, or 33.6%, to $266.5 million for the 2005 Third Quarter from $199.4 million for the 2004 Third Quarter. Consolidated operating margin decreased to 10.6% for the 2005 Third Quarter from 11.2% for the 2004 Third Quarter. The changes in the operating margins for our segments are discussed below. Operating income for our Government

52

Businesses increased by $60.9 million, or 33.1%, to $245.0 million for the 2005 Third Quarter from $184.1 million for the 2004 Third Quarter. Operating margin for our Government Businesses decreased by 90 basis points to 10.7% for the 2005 Third Quarter from 11.6% for the 2004 Third Quarter. The decrease was primarily due to the Titan acquired businesses. Operating income for our Commercial Businesses increased by $6.2 million, or 40.5%, to $21.5 million for the 2005 Third Quarter from $15.3 million for the 2004 Third Quarter. Operating margin for our Commercial Businesses increased by 220 basis points to 9.9% for the 2005 Third Quarter from 7.7% for the 2004 Third Quarter, primarily due to higher margins from acquired businesses, which had higher margins than our other commercial businesses; and changes in product sales mix for commercial aviation products.

Interest expense increased by $25.0 million to $59.9 million for the 2005 Third Quarter from $34.9 million for the 2004 Third Quarter, primarily due to interest incurred on debt issued to finance the Titan acquisition. The annual incremental increase to interest expense as a result of the financings that we completed on July 29, 2005 related to the Titan acquisition, assuming that the term loan borrowings under our senior credit facility are not repaid and assuming a variable interest rate of 5.5%, is expected to be approximately $133.5 million per annum, or approximately $33.4 million per quarter.

Other (income) expense for the 2005 Third Quarter was $0.9 million of income, primarily due to $3.6 million of interest income on our cash and cash equivalents largely offset by a $3.0 million pre-tax charge to write-down the carrying value of an equity investment. Other (income) expense for the 2004 Third Quarter was $1.7 million of income and was primarily comprised of interest income.

Minority interests in net income of consolidated subsidiaries decreased by $2.2 million to $2.6 million for the 2005 Third Quarter from $4.8 million for the 2004 Third Quarter due to lower net income for Army Fleet Support LLC.

The income tax provision was based on an effective income tax rate of 34.0% for the 2005 Third Quarter compared to an effective income tax rate of 36.5% for the 2004 Third Quarter. The lower effective income tax rate was primarily due to the result of a favorable disposition of certain tax contingencies, which were partially offset by an increase to our effective tax rate as a result of the acquisition of Titan.

Basic earnings per share (EPS) increased by $0.17 to $1.13 for the 2005 Third Quarter from $0.96 for the 2004 Third Quarter. Diluted EPS increased by $0.22, or 24.7%, to $1.11 for the 2005 Third Quarter from $0.89 for the 2004 Third Quarter. Diluted weighted-average common shares outstanding increased by 3.7% to 122.1 million for the 2005 Third Quarter from 117.8 million for the 2004 Third Quarter. In accordance with the Emerging Issues Task Force (EITF) Issue No. 04-8, The Effect of Contingently Convertible Debt on Diluted Earnings Per Share, diluted EPS and weighted-average diluted common shares outstanding for the 2004 Third Quarter have been restated, resulting in a non-cash reduction to diluted EPS of $0.04.

C³ISR

Sales within our C³ISR segment increased by $160.9 million, or 36.4%, to $603.3 million for the 2005 Third Quarter from $442.4 million for the 2004 Third Quarter. The increase in sales from acquired businesses was $157.0 million, including $154.9 million as a result of the Titan acquired businesses. Organic sales growth was $3.9 million, or 0.9%, driven by demand for secure network communications. Volume for secure terminal equipment increased slightly. Sales for the C³ISR segment were lower than expected in the 2005 third quarter primarily because of delays in the receipt and induction of customer furnished aircraft that will be upgraded with airborne mission and ISR systems, and such sales are expected to occur in the 2005 fourth quarter.

Operating income increased by $16.0 million to $69.6 million for the 2005 Third Quarter from $53.6 million for the 2004 Third Quarter. Operating margin decreased by 60 basis points to 11.5% for the 2005 Third Quarter from 12.1% for the 2004 Third Quarter, primarily due to lower margins from the Titan acquired businesses and unit sales prices on a follow-on contract for secure terminal equipment, which are lower than those on the previous contract.

53

Government Services

Sales within our Government Services segment increased by $274.4 million, or 98.3%, to $553.6 million for the 2005 Third Quarter from $279.2 million for the 2004 Third Quarter. The increase in sales from acquired businesses was $245.9 million, including $233.6 million as a result of the Titan acquired businesses. The acquired businesses also included D.P. Associates Inc., which was acquired in 2004. Organic sales growth was $28.5 million, or 10.2%, driven primarily by increased volume in international training services and logistics and communication systems and software engineering services for the U.S. Army.

Operating income increased by $19.1 million to $47.4 million for the 2005 Third Quarter from $28.3 million for the 2004 Third Quarter. Operating margin decreased by 150 basis points to 8.6% for the 2005 Third Quarter from 10.1% for the 2004 Third Quarter, mostly due to lower margins from the acquired Titan businesses.

Aircraft Modernization and Maintenance

Sales within our Aircraft Modernization and Maintenance segment increased by $78.9 million, or 16.8%, to $549.0 million for the 2005 Third Quarter from $470.1 million for the 2004 Third Quarter. Organic sales growth was $57.4 million, or 12.2%, driven by higher sales for aircraft base operations, support and maintenance and support services for the recent competitively awarded Canadian Maritime Helicopter Program (MHP). The increase in sales from the L-3 Electronics Systems acquired business, which was acquired on December 30, 2004, was $21.5 million.

Operating income decreased by $3.3 million to $56.4 million for the 2005 Third Quarter from $59.7 million for the 2004 Third Quarter. Operating margin decreased by 240 basis points to 10.3% for the 2005 Third Quarter from 12.7% for the 2004 Third Quarter. Higher sales volume of lower margin aircraft base operations and support and maintenance, which are primarily performed under cost-reimbursable type and time-and-material type contracts, decreased operating margin by 40 basis points. The remaining decrease in operating margin was primarily due to the initial recognition of incentive fees on a new contract in the 2004 Third Quarter for which performance commenced in December of 2003, because the realization of such fees became determinable in the 2004 Third Quarter.

Specialized Products

Sales within our Specialized Products segment increased by $208.0 million, or 35.1%, to $800.5 million for the 2005 Third Quarter from $592.5 million for the 2004 Third Quarter. The increase in sales from acquired businesses was $200.3 million, including $55.1 million as a result of the Titan acquired businesses. The acquired businesses also included CAE's Marine Controls division, Boeing Electron Dynamic Devices, Inc., and General Dynamics' Propulsion Systems business unit, all of which were acquired in 2005, and the Raytheon Commercial Infrared business and Cincinnati Electronics, Inc., both of which were acquired in 2004. Organic sales growth was $7.7 million, or 1.3%, primarily due to higher sales volume for acoustic undersea anti-submarine warfare products, simulation devices and airport security systems. These increases were partially offset by volume declines for commercial aviation products.

Operating income increased by $35.3 million to $93.1 million for the 2005 Third Quarter from $57.8 million for the 2004 Third Quarter. Operating margin increased by 190 basis points to 11.6% for the 2005 Third Quarter from 9.7% for the 2004 Third Quarter. Operating margins decreased by 40 basis points due to the Titan acquired businesses. This decrease was offset by an increase in operating margin of 80 basis points because of lower reliability costs related to repairs of certain airborne dipping sonars used for acoustic undersea warfare applications and continued cost improvements for naval power equipment. The remaining increase was primarily due to acquired businesses, excluding the Titan businesses.

Nine Months Ended September 30, 2005 Compared with Nine Months Ended September 30, 2004

The tables below provide two presentations of sales, operating income and operating margin data for L-3 for the nine months ended September 30, 2005 (2005 Nine Month Period) and September 30,

54

2004 (2004 Nine Month Period). The first table presents the selected data segregated between L-3's U.S. Government contractor businesses and L-3's commercial businesses. The second table presents the selected data by reportable segment. See Note 15 to L-3's unaudited condensed consolidated financial statements included elsewhere herein.

				Nine Months Ended September 30,
				2005				2004
				(dollars in millions)
Statement of Operations Presentation
Sales:
Contracts, primarily U.S. Government				$	5,900.2			$	4,462.0
Commercial, primarily products					644.3				523.8
Consolidated				$	6,544.5			$	4,985.8
Operating income:
Contracts, primarily U.S. Government				$	639.4			$	484.2
Commercial, primarily products					51.2				44.9
Consolidated				$	690.6			$	529.1
Operating margin(1):
Contracts, primarily U.S. Government					10.8	%			10.9	%
Commercial, primarily products					7.9	%			8.6	%
Consolidated					10.6	%			10.6	%
Reportable Segment Presentation
Sales(2):
C3ISR				$	1,464.9			$	1,240.3
Government Services					1,141.3				765.4	(3)
Aircraft Modernization and Maintenance					1,704.9				1,368.7	(3)
Specialized Products					2,233.4				1,611.4	(3)
Consolidated				$	6,544.5			$	4,985.8
Operating income:
C3ISR				$	178.5			$	156.6
Government Services					103.1				85.1	(3)
Aircraft Modernization and Maintenance					169.7				141.3	(3)
Specialized Products					239.3				146.1	(3)
Consolidated				$	690.6			$	529.1
Operating margin(1):
C3ISR					12.2	%			12.6	%
Government Services					9.0	%			11.1	%
Aircraft Modernization and Maintenance					10.0	%			10.3	%
Specialized Products					10.7	%			9.1	%
Consolidated					10.6	%			10.6	%

(1)	Operating margin is calculated by dividing operating income into sales.

(2)	Sales are after intersegment eliminations. See Note 15 to L-3's unaudited condensed consolidated financial statements.

(3)

During the 2005 Third Quarter, L-3 reclassified to the Specialized Products reportable segment (i) its Link Training Services and Microdyne Outsourcing operating segments, previously included in the Government Services reportable segment, and (ii) the ACSS, Aviation Recorders, Avionics Systems, Display Systems and Electrodynamics operating segments, previously included in its Aircraft Modernization and Maintenance reportable segment. As a result of these reclassifications, for the nine months ended September 30, 2004, $146.0 million of sales and $15.9 million of operating income was reclassified from L-3's Government Services reportable segment to its Specialized Products reportable segment, and $278.7 million of sales and $42.5 million of operating income was reclassified from L-3's Aircraft Modernization and Maintenance reportable segment to its Specialized Products reportable segment.

Consolidated sales increased by $1,558.7 million, or 31.3%, to $6,544.5 million for the 2005 Nine Months Period from $4,985.8 million for the 2004 Nine Month Period. Consolidated organic sales growth was 12.0%, or $598.7 million. Organic sales growth for our defense businesses was 12.0%, or

55

$535.9 million, driven primarily by continued strong demand for secure networked communications and intelligence, surveillance and reconnaissance (ISR) systems and products, aircraft modernization and maintenance, government services, simulation devices, and naval power equipment products. Organic sales growth for our commercial businesses was 12.0%, or $62.8 million, primarily due to volume increases for security products and commercial aviation products. The increase in consolidated sales from acquired businesses was $960.0 million, or 19.3%, including $443.7 million due to the acquisition of Titan.

Sales from our Government Businesses increased by $1,438.2 million, or 32.2%, to $5,900.2 million for the 2005 Nine Month Period from $4,462.0 million for the 2004 Nine Month Period. The increase in sales from acquired businesses was $902.3 million, or 20.2%, including $443.7 million due to the acquisition of Titan. In addition to Titan, the acquired businesses also included Combat Propulsion Systems, Electron Technologies, Joseph Sheairs Associates, MAPPS, and SDG, Inc., which were acquired in 2005, and AVISYS, BAI Aerosystems, Bay Metals, Beamhit, Brashear, Cincinnati Electronics, D.P. Associates, Inc., Electronic Systems, the GEDD business and Sarnoff Video Security Systems, all of which were acquired in 2004. Sales from our Commercial Businesses increased by $120.5 million, or 23.0%, to $644.3 million for the 2005 Nine Month Period from $523.8 million for the 2004 Nine Month Period. The increase in sales from acquired businesses was $57.7 million, or 11.0%. The acquired businesses included ITC, Mobile-Vision and ALST, all of which were acquired in 2005 and Infrared Products, which was acquired in 2004.

Consolidated costs and expenses increased by $1,397.2 million, or 31.4%, to $5,853.9 million for the 2005 Nine Month Period from $4,456.7 million for the 2004 Nine Month Period. Costs and expenses for our Government Businesses increased by $1,283.0 million, or 32.3%, to $5,260.8 million for the 2005 Nine Month Period from $3,977.8 million for the 2004 Nine Month Period. Costs and expenses for our Commercial Businesses increased by $114.2 million, or 23.8%, to $593.1 million for the 2005 Nine Month Period from $478.9 million for the 2004 Nine Month Period.

The increase to costs and expenses for our Government Businesses due to acquired businesses was $789.5 million. The remaining increase is primarily attributable to organic sales growth. SG&A, IRAD and B&P costs included in cost of sales for our Government Businesses were $541.3 million for the 2005 Nine Month Period, compared to $436.7 million for the 2004 Nine Month Period. The increase of $104.6 million was primarily attributable to the acquired businesses and organic sales growth.

Cost of sales for our Commercial Businesses increased by $97.6 million to $418.5 million for the 2005 Nine Month Period from $320.9 million for the 2004 Nine Month Period. The increase in cost of sales was primarily due to increased costs attributable to higher sales volume for our security products and to the Infrared Products and Mobile-Vision acquired businesses. SG&A expenses increased by $17.3 million to $124.8 million for the 2005 Nine Month Period from $107.5 million for the 2004 Nine Month Period, and declined as a percentage of sales to 19.4% from 20.5% due primarily to higher sales volume. R&D expenses decreased by $0.7 million to $49.8 million for the 2005 Nine Month Period from $50.5 million for the 2004 Nine Month Period, primarily due to lower R&D expenses for our Smartdeck^TM product partially offset by R&D at our Infrared Products business, which we acquired on November 9, 2004.

Consolidated operating income increased by $161.5 million, or 30.5%, to $690.6 million for the 2005 Nine Month Period from $529.1 million for the 2004 Nine Month Period. Consolidated operating margin was unchanged at 10.6% for both the 2005 and 2004 Nine Month Periods. The changes in the operating margins for our segments are discussed below. Operating income for our Government Businesses increased by $155.2 million, or 32.1%, to $639.4 million for the 2005 Nine Month Period from $484.2 million for the 2004 Nine Month Period. Operating margin decreased by 10 basis points to 10.8% for the 2005 Nine Month Period from 10.9% for the 2004 Nine Month Period. Operating income for our Commercial Businesses increased by $6.3 million, or 14%, to $51.2 million for the 2005 Nine Month Period from $44.9 for the 2004 Nine Month Period. Operating margin decreased by 70 basis points to 7.9% for the 2005 Nine Month Period from 8.6% for the 2004 Nine Month Period, primarily due to lower margins on conventional airport security systems, partially offset by higher margins for commercial aviation products.

56

Interest expense increased by $29.7 million to $136.5 million for the 2005 Nine Month Period from $106.8 million for the 2004 Nine Month Period, primarily due to interest incurred on debt issued to finance the Titan acquisition.

Other (income) expense for the 2005 Nine Month Period was $6.4 million of income and was primarily comprised of interest income on our cash and cash equivalents, partially offset by a $3.0 million write-down of the carrying value of an equity investment. Other (income) expense for the 2004 Nine Month Period was $1.7 million of expense and was primarily comprised of an increase in the fair value of the embedded derivatives related to L-3's 2001 contingent convertible debt, which was converted into shares of L-3 Holdings' common stock in the fourth quarter of 2004, and losses on investments accounted for using the equity method.

Minority interests in net income of consolidated subsidiaries increased by $0.8 million to $7.9 million for the 2005 Nine Month Period from $7.1 million for the 2004 Nine Month Period, due to higher net income for Aviation Communications and Surveillance Systems LLC, partially offset by lower net income for Army Fleet Support LLC.

The income tax provision of 35.4% was based on an effective income tax rate of 36.5% for the 2005 Nine Month Period compared to an effective income tax rate of 36.5% for the 2004 Nine Month Period. The provision for the 2005 Nine Month Period was impacted by the favorable disposition of certain tax contingencies in the 2005 Third Quarter, partially offset by an increase to our effective tax rate as a result of the acquisition of Titan.

Basic EPS increased by $0.54 to $3.02 for the 2005 Nine Month Period from $2.48 for the 2004 Nine Month Period. Diluted EPS increased by $0.63, or 27.2%, to $2.95 for the 2005 Nine Month Period from $2.32 for the 2004 Nine Month Period. Diluted weighted-average common shares outstanding increased by 3.4% to 120.9 million for the 2005 Nine Month Period from 116.9 million for the 2004 Nine Month Period. In accordance with EITF Issue No. 04-8, diluted EPS and weighted-average diluted common shares outstanding for the 2004 Nine Month Period have been restated, resulting in a non-cash reduction to diluted EPS of $0.09.

C³ISR

Sales within our C³ISR segment increased by $224.6 million, or 18.1%, to $1,464.9 million for the 2005 Nine Month Period from $1,240.3 million for the 2004 Nine Month Period. The increase in sales from acquired businesses was $162.0 million, including $154.9 million as a result of the Titan acquired businesses. The acquired businesses also included BAI Aerosystems business, which was acquired in the fourth quarter of 2004. Organic sales growth was $62.6 million, or 5.0%, driven by an increase in secure network communications and upgrades of airborne mission and ISR systems for allied foreign governments, which was partially offset by volume declines for secure telephone equipment.

Operating income increased by $21.9 million to $178.5 million for the 2005 Nine Month Period from $156.6 million for the 2004 Nine Month Period. Operating margin decreased by 40 basis points to 12.2% for the 2005 Nine Month Period from 12.6% for the 2004 Nine Month Period, primarily due to lower margins on the acquired Titan businesses.

Government Services

Sales within our Government Services segment increased by $375.9 million, or 49.1%, to $1,141.3 million for the 2005 Nine Month Period from $765.4 million for the 2004 Nine Month Period. The increase in sales from acquired businesses was $280.1 million, including $233.6 million as a result of the Titan acquired businesses. The acquired businesses also included Joseph Sheairs Associates, which was acquired in 2005, and Beamhit LLC, D.P. Associates Inc., the GEDD business and Sarnoff Video Security Systems, which were acquired in 2004. Organic sales growth was $95.8 million, or 12.5%, driven primarily by increased volume in international training services and logistics, communication systems and software engineering services for the U.S. Army and increased support services for the U.S. Missile Defense Agency.

Operating income increased by $18.0 million to $103.1 million for the 2005 Nine Month Period from $85.1 million for the 2004 Nine Month Period. Operating margin decreased by 210 basis points

57

to 9.0% for the 2005 Nine Month Period from 11.1% for the 2004 Nine Month Period. Operating margins decreased by 160 basis points because of cost overruns on certain fixed price contracts, and lower absorption of indirect costs due primarily to timing of indirect cost recognition, which are expensed as incurred. The remaining decrease is primarily due to the Titan acquired businesses, which had lower margins than the other businesses in the segment.

Aircraft Modernization and Maintenance

Sales within our Aircraft Modernization and Maintenance segment increased by $336.2 million, or 24.6%, to $1,704.9 million for the 2005 Nine Month Period from $1,368.7 million for the 2004 Nine Month Period. Organic sales growth was $269.0 million, or 19.7%, driven by higher sales for aircraft base operations, support and maintenance, aircraft modernization and maintenance, and the recently awarded competitive Canadian Maritime Helicopter Program (MHP). The increase in sales from acquired businesses was $67.2 million. The acquired businesses include AVISYS, Inc. and Electronics Systems, both of which were acquired in 2004.

Operating income increased by $28.4 million to $169.7 million for the 2005 Nine Month Period from $141.3 million for the 2004 Nine Month Period. Operating margin decreased by 30 basis points to 10.0% for the 2005 Nine Month Period from 10.3% for the 2004 Nine Month Period, primarily due to higher sales volume of lower margin aircraft base operations and support and maintenance, which are primarily performed under cost-reimbursable type and time-and-material type contracts.

Specialized Products

Sales within our Specialized Products segment increased by $622.0 million, or 38.6%, to $2,233.4 million for the 2005 Nine Month Period from $1,611.4 million for the 2004 Nine Month Period. The increase in sales from acquired businesses was $450.7 million, including $55.1 million as a result of the Titan acquired businesses. The acquired businesses also included MAPPS, Boeing Electron Technologies, Combat Propulsion Systems, ITC, Mobile-Vision, SDG, Inc., and ALST, all of which were acquired in 2005, and Bay Metals, Brashear LP, Infrared Products and Cincinnati Electronics, Inc., all of which were acquired in 2004. Organic sales growth was $171.3 million, or 10.6%, primarily due to higher sales volume for acoustic undersea anti-submarine warfare products, simulation devices and airport security systems. Organic growth was also due to higher volume for commercial aviation products during the 2005 First Quarter, primarily due to Federal Aviation Administration (FAA) mandates for Terrain Awareness Warning Systems (TAWS), which became effective in March 2005.

Operating income increased by $93.2 million to $239.3 million for the 2005 Nine Month Period from $146.1 million for the 2004 Nine Month Period. Operating margin increased by 160 basis points to 10.7% for the 2005 Nine Month Period from 9.1% for the 2004 Nine Month Period. Operating margin decreased by 90 basis points due to lower margins on airport security systems, and 10 basis points from the Titan acquired businesses. These decreases were offset by an increase of 120 basis points due to higher volume and cost reductions for aviation products and power & control systems, and 70 basis points due to higher sales volume and contract profit improvements for simulation devices. The remaining increase is primarily due to acquired businesses, which have higher margins than the other businesses in the segment.

58

Years Ended December 31, 2004, 2003 and 2002

The tables below provide two presentations of sales, operating income and operating margin data for L-3 for the years ended December 31, 2004, 2003 and 2002. The first table presents the selected data segregated between L-3's U.S. Government contractor businesses and L-3's commercial businesses. The second table presents the selected data by reportable segment. See Note 18 to L-3's audited consolidated financial statements included elsewhere herein.

				Year Ended December 31,
				2004				2003				2002
				(in millions)
Statement of Operations Presentation
Sales:
Contracts, primarily U.S. Government(1)				$	6,155.6			$	4,401.7			$	3,581.3
Commercial, primarily products(1)					741.4				659.9				429.9
Consolidated				$	6,897.0			$	5,061.6			$	4,011.2
Operating income:
Contracts, primarily U.S. Government(1)				$	678.8			$	537.9			$	442.3
Commercial, primarily products(1)					69.8				43.1				11.7
Consolidated				$	748.6			$	581.0			$	454.0
Operating margin(2):
Contracts, primarily U.S. Government					11.0	%			12.2	%			12.3	%
Commercial, primarily products					9.4	%			6.5	%			2.7	%
Consolidated					10.9	%			11.5	%			11.3	%
Reportable Segment Presentation
Sales(3):
C3ISR				$	1,663.6			$	1,439.4			$	1,053.3
Government Services(4)					1,059.9				814.6				605.6
Aircraft Modernization and Maintenance(4)					1,912.9				732.4				461.6
Specialized Products(4)					2,260.6				2,075.2				1,890.7
Consolidated				$	6,897.0			$	5,061.6			$	4,011.2
Operating income:
C3ISR				$	218.0			$	172.9			$	103.5
Government Services(4)					124.1				100.7				75.3
Aircraft Modernization and Maintenance (4)					186.1				100.7				62.6
Specialized Products(4)					220.4				206.7				212.6
Consolidated				$	748.6			$	581.0			$	454.0
Operating margin(2):
C3ISR					13.1	%			12.0	%			9.8	%
Government Services(4)					11.7	%			12.4	%			12.4	%
Aircraft Modernization and Maintenance(4)					9.7	%			13.7	%			13.5	%
Specialized Products(4)					9.7	%			10.0	%			11.2	%
Consolidated					10.9	%			11.5	%			11.3	%

(1)

Effective January 1, 2004, we combined our explosives detection systems (EDS) business into L-3 Communications Security and Detection Systems, our IMC business into L-3 Communications Government Services, Inc. (GSI), the EMP business into our ESSCO business and the Apcom business into our Communications Systems-East business (2004 Business Realignments). As a result of the 2004 Business Realignments, reclassifications between "Contracts, primarily U.S. Government" and "Commercial, primarily products" have been made to the prior period sales and operating income amounts, however, since EDS was primarily a U.S. Government contracting business prior to 2003, the sales and operating income for EDS were not reclassified from 2002. Specifically, $96.5 million of 2003 sales, $9.1 million of 2002 sales, $26.3 million of 2003 operating income and $6.1 million of 2002 operating loss was reclassified from "Contracts, primarily U.S. Government" to "Commercial, primarily products". Additionally, $30.6 million of 2003 sales, $9.2 million of 2002 sales, $2.1 million of 2003 operating income and $7.4 million of 2002 operating loss was reclassified from "Commercial, primarily products," to "Contracts, primarily U.S. Government". The 2004 Business Realignments and related reclassifications did not result in any changes to our consolidated results of operations, financial position or cash flow.

59

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

(3)	Sales are after intersegment eliminations. See Note 18 to the consolidated financial statements.

(4)

During the third quarter of 2005, L-3 reclassified to the Specialized Products reportable segment (i) its Link Training Services and Microdyne Outsourcing operating segments, previously included in the Government Services reportable segment, and (ii) the ACSS, Aviation Recorders, Avionics Systems, Display Systems and Electrodynamics operating segments, previously included in its Aircraft Modernization and Maintenance reportable segment. As a result of these reclassifications, $199.7 million of 2004 sales, $194.7 million of 2003 sales, $203.0 million of 2002 sales, $25.1 million of 2004 operating income, $14.8 million of 2003 operating income and $21.5 million of 2002 operating income was reclassified from L-3's Government Services reportable segment to its Specialized Products reportable segment. Additionally, $376.9 million of 2004 sales, $287.2 million of 2003 sales, $215.9 million of 2002 sales, $63.5 million of 2004 operating income, $47.1 million of 2003 operating income and $43.1 million of 2002 operating income was reclassified from L-3's Aircraft Modernization and Maintenance reportable segment to its Specialized Products reportable segment.

Year Ended December 31, 2004 Compared with Year Ended December 31, 2003

Consolidated sales increased by $1,835.4 million, or 36.3%, to $6,897.0 million for 2004 from $5,061.6 million for 2003. Consolidated organic sales growth for 2004 was 15.1%, or $763.5 million. Organic sales growth for our defense businesses was 16.3%, or $721.6 million, driven by continued strong demand for our secure communications and ISR systems, aircraft modernization, aviation products, training and government services, training devices, sensors and imaging products and naval power equipment and services. Organic sales growth for our commercial and other non-military businesses was 6.6%, or $41.9 million, primarily due to increased volume for commercial aviation products and security products, partially offset by lower sales volume for explosives detection systems (EDS). The decrease in EDS sales was caused primarily by a later-than-expected receipt of an order from the U.S. Transportation and Security Administration. The increase in consolidated sales from acquired businesses was $1,071.9 million, or 21.2%.

Sales from our Government Businesses increased by $1,753.9 million, or 39.8%, to $6,155.6 million for 2004 from $4,401.7 million for 2003. The increase in sales from acquired businesses was $1,037.1 million, or 23.6%. The acquired businesses include Aeromet, Klein, MAS, Vertex, and certain defense and aerospace assets of IPICOM, Inc., all of which were acquired in 2003, and AVISYS, Bay Metals, Beamhit, Brashear, Cincinnati Electronics, D.P. Associates, Inc. and the GEDD business, all of which were acquired in 2004. Sales from our Commercial Businesses increased by $81.5 million, or 12.4%, to $741.4 million for 2004 from $659.9 million for 2003. The increase in sales from the Avionics Systems and Flight Systems Engineering acquired businesses, which were acquired in 2003, and Infrared Products, which was acquired in 2004, was $34.8 million.

Consolidated costs and expenses increased by $1,667.8 million, or 37.2%, to $6,148.4 million for 2004 from $4,480.6 million for 2003. Costs and expenses for our Government Businesses increased by $1,613.0 million, or 41.7%, to $5,476.8 million for 2004 from $3,863.8 million for 2003. The costs and expenses related to the increase in sales from acquired businesses was $973.1 million. The remaining increase is primarily attributed to costs and expenses associated with the organic sales growth of our defense businesses. SG&A, IRAD and B&P costs included in costs and expenses for L-3's Government Businesses were $582.8 million for 2004 and $499.9 million for 2003. The increase of $82.9 million was primarily attributable to the MAS, Vertex and Brashear acquired businesses and organic sales growth from our defense businesses. See Note 4 to our audited consolidated financial statements. Costs and expenses for our Commercial Businesses increased by $54.8 million, or 8.9%, to $671.6 million for 2004 from $616.8 million for 2003. Cost of sales increased by $41.9 million to $458.9 million for 2004 from $417.0 million for 2003. The increase in cost of sales was primarily due to increased costs attributable to the Avionics Systems acquired business and higher sales volume for our commercial aviation products. SG&A expenses increased by $0.9 million to $141.5 million for 2004 from $140.6 million for 2003, and declined as a percentage of sales to 19.1% from 21.3% due to cost and expense reductions and sales volume increases. R&D expenses increased by $12.0 million to $71.2 million for 2004 from $59.2 million for 2003, primarily due to development expenditures for Smartdeck^TM.

Consolidated operating income increased by $167.6 million, or 28.8%, to $748.6 million for 2004 from $581.0 million for 2003. Consolidated operating margin decreased to 10.9% from 11.5% for 2004 compared to 2003. The changes in the operating margins for our segments are discussed below.

60

Operating income for our Government Businesses increased by $140.9 million, or 26.2%, to $678.8 million for 2004 from $537.9 million for 2003. Operating margin declined by 120 basis points to 11.0% for 2004 from 12.2% for 2003. Operating margin decreased primarily due to expected lower operating margins from the Vertex Aerospace acquired business. The 2003 operating income also included a $4.5 million gain related to the settlement of a claim. Operating income for our Commercial Businesses increased by $26.7 million, or 61.9%, to $69.8 million for 2004 from $43.1 million for 2003. Operating margin increased by 290 basis points to 9.4% for 2004 from 6.5% for 2003, primarily because of cost reductions for microwave components, higher sales volume for commercial aviation products and cost and expense reductions at our PrimeWave Communications business. These increases were partially offset by development expenditures for Smartdeck^TM, certification costs for new commercial aviation products and fewer than expected sales of higher margin EDS systems.

Interest expense increased by $12.6 million to $145.3 million for 2004 from $132.7 million for 2003 because of higher levels of outstanding debt during 2004 compared to the levels of outstanding debt during 2003. Average outstanding debt during 2004 was $2,233.5 million compared to $2,059.5 million during 2003. Our outstanding debt increased as a result of the issuance of $650.0 million of 5 7/8% senior subordinated notes in November 2004, $400.0 million of 6 1/8% senior subordinated notes in December of 2003 and $400.0 million of 6 1/8% senior subordinated notes in May of 2003. The increase in our outstanding debt was partially offset by the early retirement of our $200.0 million of 8% senior subordinated notes in December 2004 and $180.0 million of 8½% senior subordinated notes in June of 2003 and the conversion into L-3 Holdings Common Stock of our $420.0 million of 4% senior subordinated convertible contingent debt securities (2001 CODES) in October 2004 and $300.0 million of 5¼% convertible senior subordinated notes in January of 2004.

Other expense (income), net, for 2004 was $7.3 million of income and includes $6.8 million of interest and investment income. Other expense (income), net for 2003 was $0.2 million of income. The increase from 2003 to 2004 was primarily due to higher interest and investment income.

Minority interest in net income of consolidated subsidiaries increased by $5.4 million to $8.9 million for 2004 from $3.5 million for 2003, primarily due to net income for the Army Fleet Support LLC, which is 80% owned by L-3.

The income tax provision for 2004 and 2003 is based on an effective income tax rate of 36.0%.

L-3 Holdings' basic EPS increased by $0.65 to $3.54 for 2004 from $2.89 for 2003. Diluted EPS increased by $0.71 to $3.33 for 2004 from $2.62 for 2003. Net income for 2004 includes an after-tax debt retirement charge of $3.2 million, or $0.03 per diluted share, relating to the retirement of $200.0 million of 8% senior subordinated notes. Net income for 2003 includes an after-tax debt retirement charge of $7.2 million, or $.06 per diluted share related to the retirement of $180.0 million of 8½% senior subordinated notes. Excluding these debt retirement charges from both periods, diluted EPS would have increased by $0.68 for 2004 compared to 2003.

C³ISR

Sales within our C³ISR segment increased by $224.2 million, or 15.6%, to $1,663.6 million for 2004 from $1,439.4 million for 2003. Organic sales growth was $190.3 million, or 13.2%, reflecting continued strong demand from the DoD and other U.S. Government agencies for our secure network communications, ISR systems and communications products. The increase in sales from acquired businesses was $33.9 million, or 2.4%, and was primarily attributable to Aeromet and certain defense and aerospace assets of IPICOM, Inc., which were acquired in 2003.

Operating income increased by $45.1 million to $218.0 million for 2004 from $172.9 million for 2003 because of higher sales volume for communications products and ISR systems and lower operating losses for the PrimeWave Communications business due to cost and expense reductions. Operating margin increased by 110 basis points to 13.1% for 2004 from 12.0% for 2003, primarily because of organic sales growth for ISR systems and communications products and cost reductions and lower operating losses in 2004 as compared to 2003 for the PrimeWave Communications business. These improvements to operating margin were partially offset by a loss related to the design,

61

development and testing activities on a production contract for transportable tactical satellite communications terminals, which reduced operating margin by 20 basis points.

Government Services

Sales within our Government Services segment increased by $245.3 million, or 30.1%, to $1,059.9 million for 2004 from $814.6 million for 2003. Organic sales growth was $222.3 million, or 27.3%, driven by increased volume for both training and government services. The increase in sales from acquired businesses was $23.0 million. The acquired businesses include Beamhit and the GEDD business, both of which were acquired during the second quarter of 2004 and D.P. Associates, Inc., which was acquired on October 8, 2004.

Operating income increased by $23.4 million to $124.1 million for 2004 from $100.7 million for 2003 because of higher sales volume for training and government services. Operating margin decreased by 70 basis points to 11.7% for 2004 from 12.4% for 2003 due to higher sales from cost-reimbursable type and time and material type contracts, which generally have lower margins than fixed-priced type contacts.

Aircraft Modernization and Maintenance

Sales within our Aircraft Modernization and Maintenance segment increased by $1,180.5 million, or 161.2%, to $1,912.9 million for 2004 from $732.4 million for 2003. The increase in sales from acquired businesses was $940.2 million. The acquired businesses include Vertex and MAS, which were acquired during 2003, and AVISYS, which was acquired in June 2004. Organic sales growth was $240.3 million, or 32.8%, driven by higher sales for aircraft modernization, operations and maintenance, which includes the U.S. Army Aviation and Missile Command (AMCOM) contract.

Operating income increased by $85.4 million to $186.1 million for 2004 from $100.7 million for 2003 because of higher sales volume, which was partially offset by lower operating margin. Operating margin declined by 400 basis points to 9.7% for 2004 from 13.7% for 2003. Margins from acquired businesses decreased operating margin by 320 basis points. The remaining decrease was primarily due to higher sales volume of lower margin aircraft modification and logistics support under cost-reimbursable-type contracts.

Specialized Products

Sales within our Specialized Products segment increased by $185.4 million, or 8.9%, to $2,260.6 million for 2004 from $2,075.2 million for 2003. The increase in sales from acquired businesses was $74.8 million. The acquired businesses include Avionics Systems, Flight Systems Engineering and Klein, which were acquired in 2003, and Bay Metals, Brashear and Infrared Products, which were acquired during 2004. Organic sales growth was $110.6 million, or 5.3%. The increase was driven by increased sales of $148.9 million primarily for commercial aviation products, simulation devices, imaging products, naval power equipment and services, maintenance of security systems and fuzing products. These increases were partially offset by volume declines of $38.3 million for EDS and undersea warfare products.

Operating income increased by $13.7 million to $220.4 million for 2004 from $206.7 million for 2003 because of higher sales volume, which was partially offset by lower operating margin, and due to operating income for the naval power equipment businesses in 2004, as compared to operating losses in 2003. Operating margin decreased by 30 basis points to 9.7% for 2004 from 10.0% for 2003. Operating margin decreased by 80 basis points primarily due to lower margins for security products, including lower sales of higher margin EDS. These decreases were partially offset by an increase of 50 basis points for the naval power equipment businesses.

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

Consolidated sales increased by $1,050.4 million, or 26.2%, to $5,061.6 million for 2003 from sales of $4,011.2 million for 2002. The increase in consolidated sales from acquisitions was $833.6 million, or

62

20.8%. Organic sales growth for our defense businesses was 15.4%, or $499.8 million, and was driven by continued strong demand for secure communications and intelligence, surveillance and reconnaissance (ISR) systems and products, aircraft modernization, simulation and training services, government services, and an increase in shipments of naval power equipment. Organic sales for our commercial businesses declined by 10.6%, or $45.4 million, due to the continued weakness in the aviation and communications markets. Sales of EDS decreased $237.6 million primarily because the initial installation of EDS at major U.S. airports by the U.S. Transportation Security Administration (TSA) was completed by the end of 2002. Consolidated organic sales growth, excluding the EDS business, from both periods was 12.4%. Consolidated organic sales growth for all of our businesses, including the decline for the EDS business, was $216.8 million, or 5.4%.

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

Sales from our Commercial Businesses increased by $230.0 million, or 53.5%, to $659.9 million for 2003 from $429.9 million for 2002. The increase in sales from acquired businesses was $173.9 million, or 40.5%. The acquired businesses include Detection Systems and Wolf Coach, which were acquired in 2002 and Avionics Systems, which was acquired during 2003. Excluding sales from acquired businesses, organic sales declined for our commercial businesses by $36.7 million, due primarily to lower revenues for aviation and communications products caused by weak demand in those commercial markets. Additionally, sales increased by $92.8 million as a result of the reclassification due to the 2004 Business Realignments.

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

Costs and expenses for our Government Businesses increased by $724.8 million to $3,863.8 million for 2003 from $3,139.0 million for 2002. Approximately 81% of the increase is attributable to our acquired businesses. The remaining increase is primarily attributed to organic sales growth from our defense businesses for ISR and secure communications systems and products, aircraft modernization, communications software and engineering support services, training services, navigation products and naval power equipment. These increases were partially offset by declines from our EDS business, fuzing products, training devices and display systems due to lower volume. SG&A, IRAD and B&P costs included in cost of sales for our Government Businesses were $499.9 million, or 11.4% of sales for 2003, compared to $432.8 million, or 12.1% of sales for 2002 (See Notes 2 and 4 to our consolidated financial statements).

Costs and expenses for our Commercial Businesses increased by $198.6 million to $616.8 million for 2003 from $418.2 million for 2002. The increase was primarily due to increased sales attributable to our acquired businesses, as well as a $3.9 million provision for bad debt and inventory for the PrimeWave Communications business. SG&A expenses increased by $28.6 million to $140.6 million or 21.3% of sales for 2003 from $112.0 million or 26.1% of sales for 2002. The increase was primarily attributable to acquired businesses and increased costs for security products due to maintenance costs

63

associated with detection systems placed in service. This increase was partially offset by lower SG&A expenses at the PrimeWave Communications business and our commercial communications products businesses due to cost and expense reductions. Research and development (R&D) expenses increased by $23.5 million to $59.2 million for 2003 from $35.7 million for 2002. The increase was primarily due to the Avionics Systems acquired business and development expenses for cargo security products, partially offset by lower R&D expenses incurred at the PrimeWave Communications business because of cost and expense reductions.

Consolidated operating income increased by $127.0 million to $581.0 million for 2003 from $454.0 million for 2002. The increase was primarily due to higher sales from all of our segments. Consolidated operating margin increased slightly by 20 basis points to 11.5% for 2003 from 11.3% for 2002. The changes in the operating margins for our segments are discussed below.

Operating income for our Government Businesses increased by $95.6 million to $537.9 million for 2003 from $442.3 million for 2002. Operating income was reduced by $22.9 million because of the reclassification due to the 2004 Business Realignments. Operating margin declined by 10 basis points to 12.2% for 2003 from 12.3% for 2002. The reclassification due to the 2004 Business Realignments reduced operating margin by 30 basis points. Operating margin increased by 20 basis points primarily due to sales growth and cost improvements for ISR and secure communications systems and products and naval power equipment.

Operating income for our Commercial Businesses increased by $31.4 million to $43.1 million for 2003 from $11.7 million for 2002. Operating income increased by $22.9 million because of the reclassification due to the 2004 Business Realignments. Operating margin improved by 380 basis points to 6.5% for 2003 from 2.7% for 2002. The reclassification due to the 2004 Business Realignments increased operating margin by 300 basis points. The remaining increase was due to lower losses from certain commercial businesses due to cost and expense reductions and higher margins from the Avionics Systems acquired business, partially offset by lower margins on commercial aviation products and microwave components due to lower sales volume and higher development expenses for cargo security products.

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

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

The 2003 period includes a charge of $11.2 million ($7.2 million after-tax, or $0.06 per diluted share) for the early retirement of $180 million of our 8½% Senior Subordinated Notes due 2008. See "—Liquidity and Capital Resources." The 2002 period includes a charge of $16.2 million ($9.9 million after-tax, or $0.09 per diluted share) for the early retirement of $225 million of our 10 3/8% Senior Subordinated Notes due 2007.

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

The income tax provision for 2003 is based on an effective income tax rate of 36.0%, compared with an effective income tax rate of 35.5% for 2002.

L-3 Holdings' basic earnings per share (EPS) before cumulative effect of a change in accounting principle increased by $0.56 to $2.89 for 2003 from $2.33 for 2002. Diluted EPS before cumulative effect of a change in accounting principle increased by $0.49 to $2.62 for 2003 from $2.13 for 2002. Net income for 2002 includes a charge, net of income taxes, of $24.4 million ($0.28 per basic share and

64

$0.23 per diluted share) for the cumulative effect of a change in accounting principle for goodwill impairment in connection with the adoption of SFAS No. 142. Including the effect of a change in accounting principle, basic EPS for 2002 was $2.05 and diluted EPS for 2002 was $1.90.

Diluted weighted-average common shares outstanding increased by 8.3% to 113.9 million for 2003 from 105.2 million for 2002. The increase principally reflects the additional shares outstanding from the sale of 14.0 million shares of L-3 Holdings common stock on June 28, 2002.

C³ISR

Sales within our C³ISR segment increased by $386.1 million, or 36.7%, to $1,439.4 million for 2003 from $1,053.3 million for 2002. Organic sales growth was $250.4 million, or 23.8%, due to continued strong demand and increased spending by the DoD and other U.S. Government agencies for our secure communications and ISR systems and products, which were partially offset by a decline in sales of $5.5 million for the PrimeWave Communications business. The increase in sales from acquired businesses was $135.7 million. The acquired businesses include IS and ComCept, which were acquired during 2002, and Aeromet and certain defense and aerospace assets of IPICOM, Inc., which were acquired during 2003.

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

Government Services

Sales within our Government Services segment increased by $209.0 million, or 34.5%, to $814.6 million for 2003 from $605.6 million for 2002. Organic sales growth was $90.0 million, or 14.9%, driven by training and government services, including communications software support and engineering support. The increase in sales from the Telos, TMA, IMC and Ship Analytics acquired businesses, which were all acquired in 2002, was $119.0 million.

Operating income increased by $25.4 million to $100.7 million for 2003 from $75.3 million for 2002 because of higher sales. Operating margin remained unchanged at 12.4% for 2003 and 2002.

Aircraft Modernization and Maintenance

Sales within our Aircraft Modernization and Maintenance segment increased by $270.8 million, or 58.7%, to $732.4 million for 2003 from $461.6 million for 2002. Organic sales growth was $144.8 million, or 31.4%, due to higher sales for aircraft modernization driven by DoD demand. The increase in sales from acquired businesses was $126.0 million. The acquired businesses include IS, which was acquired in 2002, and MAS and Vertex, which were acquired in 2003.

Operating income increased by $38.1 million to $100.7 million for 2003 from $62.6 million for 2002 because of higher aircraft modernization sales. Operating margin increased by 20 basis points to 13.7% for 2003 from 13.5% for 2002, primarily due to volume growth for aircraft modernization.

Specialized Products

Sales within our Specialized Products segment increased by $184.5 million, or 9.8%, to $2,075.2 million for 2003 from $1,890.7 million for 2002. Organic sales declined by 14.2%, or $268.4 million, or $30.8 million, or 1.6%, excluding the decline for EDS. EDS sales declined by $237.6 million (discussed below). Volume declined by $46.4 million for fuzing and acoustic undersea warfare products and training devices because of certain contracts approaching their scheduled completion and the timing of sales on 2003 orders. Volume declined by $22.3 million for telemetry products and microwave components due to the continued weakness in the commercial communications markets. Volume declined by $10.8 million for commercial aviation products caused by the continued weakness in the commercial aviation markets. These decreases were partially offset by an increase of $48.7 million

65

primarily for naval power equipment due to higher shipments arising from the resolution of the production and quality control issues at the SPD Electrical Systems business. The increase in sales from acquired businesses was $452.9 million. The acquired businesses include Detection Systems, Ruggedized Command & Control, Electron Devices, Wolf Coach, Westwood and Wescam, all of which were acquired in 2002, and Avionics Systems and Klein, which were acquired in 2003.

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

Operating income decreased by $5.9 million to $206.7 million for 2003 from $212.6 million for 2002. Operating margin decreased by 120 basis points to 10.0% for 2003 from 11.2% for 2002. Lower sales for EDS reduced operating margin by 50 basis points. Volume declines for commercial aviation, telemetry, fuzing and undersea warfare products lowered operating margin by 80 basis points. Lower margins from acquired businesses reduced operating margin by 30 basis points. The resolution of production quality problems for naval power equipment caused increased shipments and reduced rework costs, which increased operating margin by 40 basis points.

Liquidity and Capital Resources

Anticipated Sources of Cash Flow

Our primary source of liquidity is cash flow generated from operations. We also have availability under our senior credit facility, subject to certain conditions. As of September 30, 2005, we had available borrowings of $886.7 million under our senior credit facility (excluding $113.3 million of outstanding letters of credit). Based upon our current level of operations, we believe that our cash from operating activities, together with available borrowings under the senior credit facility, will be adequate to meet our anticipated requirements for working capital, capital expenditures, commitments, contingencies, research and development expenditures, contingent purchase prices, program and other discretionary investments, L-3 Holdings' dividends and interest payments for the foreseeable future. There can be no assurance, however, that our business will continue to generate cash flow at current levels, or that currently anticipated improvements will be achieved. If we are unable to generate sufficient cash flow from operations to service our debt, we may be required to sell assets, reduce capital expenditures, refinance all or a portion of our existing debt or obtain additional financing. Our ability to make scheduled principal payments or to pay interest on or to refinance our indebtedness depends on our future performance and financial results, which, to a certain extent, are subject to general conditions in or affecting the defense industry and to general economic, political, financial, competitive, legislative and regulatory factors beyond our control. There can be no assurance that sufficient funds will be available to enable us to service our indebtedness, to make necessary capital expenditures and to make discretionary investments.

Balance Sheet

Contracts in process increased by $847.7 million to $2,826.7 million at September 30, 2005 from $1,979.0 million at December 31, 2004. The increase included (i) $689.0 million related to business acquisitions and (ii) $158.7 million principally from:

•	increases of $80.7 million in unbilled contract receivables due to sales exceeding deliveries and billings for ISR systems and products, aircraft modernization and maintenance and international training services and logistics. These increases were partially offset by decreases for simulation devices and aircraft base operations and maintenance due to deliveries and billings exceeding sales;

•	increases of $46.4 million in billed receivables for aircraft base operations and maintenance, secure communication products and international training services. These increases were partially offset by collections for support services for the U.S. Missile Defense Agency;

66

•	increases of $4.5 million in inventoried contract costs, primarily for simulation devices, naval power and propulsion products and fuzing products. These increases were partially offset by a decrease for ISR systems and products and aircraft operations and maintenance due to deliveries during the period; and

•	increases of $27.1 million in inventories at lower of cost or market due to increases for airport security products and satellite communications products.

L-3's days sales outstanding (DSO) was 74.0 at September 30, 2005 compared with 71.8 at December 31, 2004. The increase in DSO was primarily due to the timing items discussed above. We calculate our DSO by dividing (i) our aggregate end of period billed receivables and net unbilled contract receivables, by (ii) our sales for the last twelve-month period adjusted, on a pro forma basis, to include sales from business acquisitions that we completed as of the end of the period (which amounted to $10,604.5 million for the twelve-month period ended September 30, 2005), multiplied by 365.

The increase in property, plant and equipment (PP&E) during the 2005 Nine Month Period was principally related to the Titan, Electron Technologies and Combat Propulsion Systems acquired businesses. The percentage of depreciation expense to average gross PP&E decreased slightly to 9.3% for the 2005 Nine Month Period from 9.5% for the 2004 Nine Month Period. We did not change any of the depreciation methods or assets estimated useful lives that L-3 uses to calculate its depreciation expense.

Goodwill increased by $2,860.4 million to $6,915.2 million at September 30, 2005 from $4,054.8 million at December 31, 2004. The increase was comprised of (i) $2,818.3 million for business acquisitions completed during the 2005 Nine Month Period, (ii) $21.7 million for additional purchase price payments for certain business acquisitions completed prior to January 1, 2005, related to final closing date net assets, and contingent purchase price adjustments or earnouts, which were resolved during the period, and (iii) net increases of $20.4 million primarily related to changes in estimates of fair value for acquired assets and liabilities assumed in connection with business acquisitions completed prior to January 1, 2005.

The increases in other current assets, accrued expenses, billings in excess of costs and estimated profits and other non-current liabilities were primarily due to balances from business acquisitions completed during the 2005 Nine Month Period. The increase in deferred debt issue costs was due to the debt issued to finance the Titan acquisition. See "Statement of Cash Flows—Financing Activities" below. The increase in other assets was primarily due to capitalized software development costs for new products, investments in equipment for training devices, as well as balances from business acquisitions. The increase in accounts payable was primarily due to balances from business acquisitions completed during the 2005 Nine Month Period, partially offset by a decrease in accounts payable due to the timing of payments for purchases from third-party vendors and subcontractors. The increase in accrued employment costs was primarily due to balances from business acquisitions completed during the 2005 Nine Month Period and to the timing of payments of salaries and wages to employees. Customer advances increased due to cash payments received for an aircraft modernization contract and an EDS contract with the Transportation Security Administration (TSA) and partially due to the business acquisitions completed during the 2005 Nine Month Period. The increase in other current liabilities was primarily due to balances from business acquisitions, as well as higher accrued interest balances due to the debt issued to finance the Titan acquisition. The increase in pension and postretirement benefit liabilities was primarily due to balances from business acquisitions, as well as pension expenses exceeding related cash contributions.

Pension Plans

L-3 maintains defined benefit pension plans covering employees at certain of its businesses. At December 31, 2004, our balance sheet included a pension benefits liability of $273.8 million, an increase of $40.4 million from $233.4 million at December 31, 2003. The increase is due to pension expense recognized exceeding our pension funding and an increase in the minimum liability of $23.1 million. At the end of 2004, L-3's projected benefit obligation, which includes accumulated benefits

67

plus the incremental benefits attributable to projected future salary increases for covered employees, was $1,131.6 million and exceeded the fair value of L-3's pension plan assets of $734.6 million by $397.0 million. At the end of 2003, L-3's projected benefit obligation was $902.1 million and exceeded the fair value of L-3's pension plan assets of $561.7 million by $340.4 million. The increase in the unfunded status of our pension plans of $56.6 million from $340.4 million at the end of 2003 to $397.0 million at the end of 2004 was principally due to the $62.2 million actuarial loss that we experienced in 2004. Our 2004 actuarial loss was primarily due to the reduction in the discount rate by 25 basis points to 6.00% at the end of 2004 from 6.25% at the end of 2003, which increased the present value of L-3's projected benefit obligations at the end of 2004 by $44.0 million. The difference between the unfunded status amount of $397.0 million at the end of 2004 and the pension liability recorded on our balance sheet of $273.8 million is attributable to the cumulative net unrecognized actuarial losses. In accordance with SFAS No. 87, Employer's Accounting for Pensions, the actuarial gains and losses that our pension plans experience are not recognized in pension expense in the year incurred, but rather deferred and amortized to pension expense in future periods over the estimated average remaining service periods of the covered employees. (See Note 16 to our consolidated financial statements.)

L-3 uses a November 30 measurement date to determine its end of year (December 31) pension benefit obligations and fair value of pension plan assets, and a fiscal year ending November 30 to determine its annual pension expense, including actual returns on plan assets. L-3's actual return on plan assets for 2004, based on the fiscal year ended November 30, 2004, was $56.8 million, or 10.1%, on the fair value of plan assets at the beginning of the fiscal year.

Our pension expense for 2004 was $74.8 million. We expect pension expense for 2005 to be between $90 million and $100 million. As discussed above, at the end of 2004 we reduced our discount rate from 6.25% to 6.00%, which will increase the interest cost component of pension expense for 2005. The higher interest cost in our estimated 2005 pension expense is expected to be substantially offset by the increase of $172.8 million in our pension plan assets during 2004, which will increase our expected return on plan assets by approximately $15.0 million, and decrease our estimated pension expense by the same amount. Our actual pension expense for 2005 will be based upon a number of factors, including the effect of any additional business acquisitions for which we assume liabilities for pension benefits, actual pension plan contributions and changes (if any) to our pension assumptions for 2005, including the discount rate, expected long-term return on plan assets and salary increases.

Our contributions for the full year 2004 were $60.9 million. During the 2005 Nine Month Period, we made approximately $52.4 million of pension contributions and we expect to contribute a total of approximately $90.0 million to our pension plans for the full fiscal year 2005. A substantial portion of our pension plan contributions for L-3's businesses that are U.S. Government contractors are recoverable as allowable indirect contract costs at amounts generally equal to the annual pension contributions.

Our projected benefit obligation and annual pension expense are significantly affected by the discount rate assumption we use. For example, an additional reduction to the discount rate of 25 basis points would have increased our projected benefit obligation at December 31, 2004 by approximately $43 million, and our estimated pension expense for 2005 by approximately $7 million. Conversely, an increase to the discount rate of 25 basis points would have decreased our projected benefit obligation at December 31, 2004 by approximately $44 million, and our estimated pension expense for 2005 by approximately $7 million.

Our shareholders' equity at December 31, 2004 reflects a non-cash charge of $5.3 million (net of tax) to record the increase in accumulated other comprehensive loss due to additional minimum pension liability recognized for the year ended December 31, 2004 in accordance with SFAS No. 87. This non-cash charge had no effect on our compliance with the financial covenants of our debt agreements and did not impact our results of operations for 2004.

68

Statement of Cash Flows

Nine Months Ended September 30, 2005 Compared with Nine Months Ended September 30, 2004

Cash decreased by $427.1 million to $226.3 million at September 30, 2005 from $653.4 million at December 31, 2004. The table below provides a summary of our cash flows for the periods indicated.

				Nine Months Ended September 30,
				2005				2004
				(in millions)
Net cash from operating activities				$	579.6			$	408.0
Net cash used in investing activities					(3,445.9	)			(183.9	)
Net cash from financing activities					2,439.2				8.4
Net (decrease) increase in cash				$	(427.1	)		$	232.5

Operating Activities

We generated $579.6 million of cash from operating activities during the 2005 Nine Month Period, an increase of $171.6 million from the $408.0 million generated during the 2004 Nine Month Period. Net income increased by $94.5 million. Non-cash expenses increased by $40.7 million to $260.0 million for the 2005 Nine Month Period from $219.3 million for the 2004 Nine Month Period, primarily for higher contributions to employee savings plans in L-3 Holdings' common stock of $8.9 million, higher depreciation expense of $12.6 million, higher amortization expense for identifiable intangible assets of $5.8 million, and higher deferred income tax expense of $11.3 million. During the 2005 Nine Month Period, cash used for changes in operating assets and liabilities decreased by $36.4 million to $37.5 million, from $73.9 million for the 2004 Nine Month Period. The use of cash for contracts in process was primarily driven by increases in billed and unbilled contract receivables for our defense businesses, as discussed above under "Liquidity and Capital Resources—Balance Sheet". The use of cash for other assets was primarily due to capitalized software development costs for new products and investments in equipment for simulation devices. The use of cash for accounts payable was due to the timing of payments for purchases from third-party vendors and subcontractors. The timing of payments to employees for salaries and wages was a source of cash because cost and expenses for salaries and wages exceeded the cash payments. The source of cash for customer advances was due to the receipt on certain foreign contracts and to orders received from the TSA for EDS. The source of cash from the change in pension and postretirement benefit liabilities was due to pension expenses exceeding related cash contributions. We made approximately $52.4 million of pension contributions during the 2005 Nine Month Period and we expect to contribute a total of approximately $90.0 million to our pension plans for all of 2005. The source of cash from other liabilities was primarily due to an increase in our workers compensation and deferred compensation obligations.

The source of cash from income taxes was due to our provision for income taxes exceeding our income tax payments, primarily because of income tax deductions for compensation expense arising from the exercise of employee stock options.

Investing Activities

During the 2005 Nine Month Period, we used $3,380.6 million of cash for business acquisitions. We paid $3,351.6 million in connection with our 2005 business acquisitions discussed above. We also paid $29.0 million primarily for the contractual purchase price adjustments relating to businesses acquired prior to 2005. During the 2004 Nine Month Period, we used $134.6 million of cash for business acquisitions, contractual purchase price adjustments relating to businesses acquired prior to 2004, and for the final contractual purchase price adjustment for the Vertex business acquisition.

On July 29, 2005, we acquired all of the outstanding shares of The Titan Corporation for $23.10 per share in cash. The purchase price was approximately $2,759.3 million, including the assumption of

69

approximately $626.0 million of Titan's debt, plus acquisition costs. The acquisition was financed using $355.5 million of cash on hand, $750.0 million of term loan borrowings under our senior credit facility, net proceeds from the issuances of $700.0 million of contingent convertible debt securities by L-3 Holdings and $1.0 billion of senior subordinated notes by L-3 Communications.

Financing Activities

Debt

Senior Credit Facility.    On July 29, 2005, in connection with the Titan acquisition discussed above, we amended and restated our senior credit facility. The amended and restated credit facility provides for a term loan facility in an aggregate amount equal to $750.0 million in addition to the existing $1.0 billion revolving credit facility, both maturing on March 9, 2010. The cash received from the term loan borrowings was used to pay a portion of the aggregate consideration required for the acquisition of Titan. The loans under the term loan facility and revolving credit facility bear interest in the manner, and at the rates set forth in the previous senior credit facility. In addition, the consolidated leverage ratio covenant in the previous credit facility was amended to require that our consolidated leverage ratio be less than or equal to (1) 4.5 to 1.0 for each fiscal quarter ending on or prior to December 31, 2005, (2) 4.25 to 1 for the fiscal quarter ending on March 31, 2006 and (3) 4.0 to 1.0 for each fiscal quarter ending on or after June 30, 2006. Available borrowings under the senior credit facility at September 30, 2005 were $886.7 million, after reductions for outstanding letters of credit of $113.3 million. There were no outstanding revolving credit borrowings under our senior credit facility at September 30, 2005.

Debt Issuances.    On July 29, 2005, L-3 Communications sold $1.0 billion of 6 3/8% Senior Subordinated Notes due October 15, 2015 (2005 Notes) at a discount of $9.1 million. Interest is payable semi-annually on April 15 and October 15 of each year, commencing October 15, 2005. The net cash proceeds from this offering amounted to $973.4 million after deducting the discounts and commissions and were used to pay a portion of the aggregate consideration required for the acquisition of Titan.

On July 29, 2005, L-3 Holdings sold $600.0 million of CODES due August 1, 2035. Interest is payable semi-annually on February 1 and August 1 of each year, commencing February 1, 2006. The net cash proceeds from this offering amounted to $585.0 million after deducting the commissions and were used to pay a portion of the aggregate consideration required for the acquisition of Titan. On August 4, 2005, L-3 Holdings sold an additional $100.0 million of CODES, pursuant to an over-allotment option exercised by the initial purchasers of the CODES.

The 2005 Notes are general unsecured obligations and are subordinated in right of payment to all existing and future senior debt of L-3. The CODES are general unsecured obligations of L-3 Holdings that rank pari passu with L-3 Holdings' other senior debt, if any, and are guaranteed on a senior subordinated basis by L-3 Communications and certain of its subsidiaries.

Debt Covenants.    The senior credit facility and indentures contain financial covenants and other restrictive covenants. We are in compliance with those covenants in all material respects. The borrowings under the senior credit facility are guaranteed by L-3 Holdings and by substantially all of the material wholly-owned domestic subsidiaries of L-3 Communications on a senior basis. The payments of principal and premium, if any, and interest on the senior subordinated notes are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally, by substantially all of L-3 Communications' restricted subsidiaries other than its foreign subsidiaries. The guarantees of the senior subordinated notes rank pari passu with one another and with the guarantees of the CODES and are junior to the guarantees of the senior credit facility. Including the amortization of net deferred gains, our previously outstanding interest rate swap agreements reduced interest expense by $0.8 million during the 2005 Third Quarter, compared to $3.1 million during the 2004 Third Quarter and by $2.8 million during the 2005 Nine Month Period, compared to $7.3 million during the 2004 Nine Month Period. See "Description of Other Indebtedness" for a description of our debt and related financial covenants.

70

Interest Rate Swap Agreements.    Depending on current and expectations for future interest rate levels, we may enter into interest rate swap agreements to convert certain of our fixed interest rate debt obligations to variable interest rates, or terminate any existing interest rate swap agreements. The variable interest rate paid by us is equal to (i) the variable rate basis, plus (ii) the variable rate spread. There are no interest rate swap agreements currently outstanding. See Note 8 to the unaudited condensed consolidated financial statements for a detailed table that presents the activity for our terminated interest rate swap agreements during 2005.

The CODES are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally, by the existing and future domestic subsidiaries of L-3 that guarantee any other indebtedness of L-3 or any of its domestic subsidiaries. The guarantees of the CODES rank pari passu with all of the guarantees of the senior subordinated notes and are junior to the guarantees of the senior credit facility.

Equity

During 2005, L-3 Holdings' Board of Directors authorized the following quarterly cash dividends:

Date Declared

Record Date

Cash Dividends Per Share

Date Paid

Total Dividends Paid (in millions)

February 10, 2005

February 22, 2005

$0.125

March 15, 2005

$14.5

April 26, 2005

May 17, 2005

$0.125

June 15, 2005

$14.8

July 12, 2005

August 17, 2005

$0.125

September 15, 2005

$15.0

On October 11, 2005, L-3 Holdings' Board of Directors declared a regular quarterly dividend of $0.125 per share. On December 15, 2005, we will pay this cash dividend to shareholders of record at the close of business on November 17, 2005.

Year Ended December 31, 2004 Compared with Years Ended December 31, 2003 and 2002

Our cash position was $653.4 million at December 31, 2004 and $134.9 million at December 31, 2003 and 2002. The table below provides a summary of our cash flows for the periods indicated.

				Year Ended December 31,
				2004				2003				2002
				(in millions)
Net cash from operating activities				$	620.7			$	456.1			$	318.5
Net cash used in investing activities					(555.5	)			(1,088.1	)			(1,810.5	)
Net cash from financing activities					453.3				632.0				1,265.9
Net increase (decrease) in cash				$	518.5			$	—			$	(226.1	)

Operating Activities

We generated $620.7 million of cash from operating activities during 2004, an increase of $164.6 million from the $456.1 million generated during 2003. Net income increased by $104.2 million. Non-cash expenses increased by $63.4 million to $316.1 million in 2004 from $252.7 million in 2003, primarily for depreciation and amortization, contributions to employee savings plans in L-3 Holdings common stock and deferred income taxes. Deferred income taxes increased by $28.7 million to $123.4 million for 2004 from $94.7 million for 2003, primarily because of larger estimated tax deductions arising from our recent business acquisitions. During 2004, we used cash for changes in operating assets and liabilities of $77.3 million, compared to $74.2 million for 2003. The use of cash for contracts in process was primarily driven by increases in unbilled contract receivables and billed receivables arising from the organic sales growth for our businesses. The use of cash for other current assets was

71

primarily due to deposits paid to vendors during 2004. The use of cash for other assets was primarily due to investments in equipment for training devices and airport security systems leased to customers and capitalized software development costs for new products. The source of cash for accounts payable was due to increased purchases of materials, components and services required for the increase in sales during the year and the timing of payments for such purchases. The increase in the number of employees and the timing of payments for salaries and wages was a source of cash because costs and expenses for salaries and wages exceeded the cash payments. The source of cash for billings in excess of costs and estimated profits was due to cash collections for milestone billings on certain contracts primarily for training devices. The source of cash related to customer advances was due to receipt on certain foreign contracts awarded during the 2004 fourth quarter. The use of cash for other current liabilities was due to the payment upon settlement of a foreign currency hedging forward contract and cash payments for costs incurred in excess of estimated contract values for certain contracts in a loss position. The source of cash from the change in pension and postretirement benefit liabilities was due to expenses exceeding related cash contributions. Pension plan contributions in 2004 amounted to $60.9 million, and exceeded our originally planned contributions for 2004 by more than $5 million.

During 2003, we generated $456.1 million of cash from operating activities, an increase of $137.6 million from $318.5 million generated during 2002. Net income increased by $99.5 million. Non-cash expenses increased by $14.9 million to $252.7 million in 2003 from $237.8 million in 2002, primarily for depreciation and amortization, contributions to employee savings plans in L-3 Holdings common stock and deferred income taxes. During 2003, we used cash for changes in operating assets and liabilities of $74.2 million, compared to $97.4 million in 2002.

Our cash flows from operating activities during 2003 reflect increases in unbilled receivables and other assets. The use of cash for accounts payable was due to the timing of payments. The use of cash for other current liabilities was to fund contracts in a loss position for which estimated costs exceeded the estimated contract value, and was partially offset by cash collections for milestone billings in excess of costs incurred primarily for training devices. The timing of payments to employees for salaries and wages was a source of cash. Pension plan contributions in 2003 amounted to $60.8 million. The source of cash from other liabilities was generated primarily from terminating interest rate swap agreements. During 2003, we terminated interest rate swap agreements and generated cash proceeds related to deferred gains on them of $19.9 million, of which $2.1 million was recorded in other current liabilities and $17.8 million was recorded in other liabilities. For 2002, we also terminated interest rate swap agreements and generated cash proceeds related to net deferred gains on them of $16.8 million.

Our cash flows from operating activities during 2002 reflect increases in billed and unbilled receivables, other current assets and other assets. The use of cash related to customer advances was due to liquidations on certain foreign contracts. The use of cash for other current liabilities was to fund contracts in a loss position for which estimated costs exceed the estimated contract value, and was partially offset by an increase in accrued warranty costs primarily for explosive detection systems delivered in 2002. The timing of payments to employees for salaries and wages, as well as the timing of interest payments, was a source of cash. The source of cash in other liabilities was primarily due to deferred gains on the termination of our swap agreements. Pension plan contributions in 2002 amounted to $47.4 million.

Our cash from operating activities includes interest payments on debt of $138.2 million for 2004, $119.9 million for 2003 and $109.3 million for 2002. Our interest expense also includes amortization of deferred debt issue costs and deferred gains on terminated interest rate swap agreements, which are non-cash items.

Our cash from operating activities includes income tax payments, net of refunds, of $37.0 million for 2004, $17.3 million for 2003 and $2.1 million for 2002. Our income tax payments were substantially less than our provisions for income taxes reported on our statements of operations primarily because of income tax deductions from our acquired businesses structured as asset purchases and income tax deductions for compensation expense arising from the exercise of employee stock options. The income tax deductions from the exercise of employee stock options are accounted for as a reduction to current income taxes payable and an increase to shareholders' equity (see Note 13 to our consolidated

72

financial statements). L-3 receives substantial income tax deductions from its business acquisitions that are structured as asset purchases for income tax purposes. The effect of these income tax deductions is that our cash payments for income taxes are less than our provision for income taxes reported on the statement of operations. This difference is presented in the deferred income tax provision on our statement of cash flows. The deferred income tax provision primarily results from deducting amortization of tax intangibles, including goodwill, from the business acquisitions structured as asset purchases on L-3's income tax returns over 15 years, in accordance with income tax rules and regulations, while no goodwill amortization is recorded for financial reporting purposes, in accordance with SFAS No. 142. We expect that the business acquisitions L-3 has completed through December 31, 2004 will continue to generate substantial annual deferred tax benefits through 2019. While these income tax deductions are reported as changes to deferred income tax liabilities and assets, they are not differences that are scheduled to reverse in future periods from normal operations. Rather, they will only reverse if L-3 sells its acquired businesses or incurs a goodwill impairment loss for them, because in either case, L-3's financial reporting amounts for goodwill would be greater than the income tax basis for goodwill. L-3 also receives significant income tax deductions and deferred tax benefits from its acquired businesses structured as asset purchases for income tax purposes from accelerated depreciation of plant and equipment.

Investing Activities

During 2004, we used $473.4 million of cash for business acquisitions. We paid $424.0 million in connection with our 2004 business acquisitions discussed above. We also paid $11.5 million for the final contractual purchase price adjustment for the Vertex acquired business. We also paid $37.9 million primarily for the remaining contractual purchase price for the IPICOM, Inc. assets, and for earnouts.

During 2003, we invested $1,014.4 million to acquire businesses, primarily for Vertex, Avionics Systems and MAS. During 2002, we invested $1,742.1 million to acquire businesses, primarily for Integrated Systems and Detection Systems. Cash used for business acquisitions included earnout payments on certain business acquisitions of $11.4 million for 2004, $8.5 million for 2003, and $1.8 million for 2002.

Financing Activities

Debt

Redemptions and Related Conversion of Convertible Debt into Common Stock.    On October 5, 2004, L-3 Holdings announced a full redemption of all the $420.0 million of its 2001 CODES due 2011, which expired on Thursday, October 21, 2004. On October 21, 2004, holders of $419.8 million of the principal amount of 2001 CODES exercised their conversion rights and converted such 2001 CODES into 7,800,797 shares of L-3 Holdings common stock. The remaining $0.2 million of the 2001 CODES were redeemed for cash on October 25, 2004, at a redemption price of 102.0% of the principal amount, plus accrued and unpaid interest (including contingent interest) to October 25, 2004. On December 22, 2003, L-3 Holdings announced a full redemption of $300.0 million of its 5.25% Convertible Senior Subordinated Notes due 2009 (Convertible Notes), which expired on January 9, 2004. Holders of $299.8 million of the Convertible Notes exercised their conversion rights and converted such notes into 7,357,327 shares of L-3 Holdings' common stock. The remaining $0.2 million of Convertible Notes were redeemed for cash.

Redemptions of Senior Subordinated Notes.    On November 12, 2004, L-3 Communications initiated a full redemption of all of the outstanding $200.0 million aggregate principal amount of 8% Senior Subordinated Notes due 2008. Such notes were redeemed by us at a redemption price of 102.667% of the principal amount thereof, plus accrued and unpaid interest. We completed this redemption on December 13, 2004. In connection with the early redemption of the $200.0 million of 8% Senior Subordinated Notes, we recorded a pre-tax debt retirement charge of $5.0 million.

On May 21, 2003, L-3 Communications initiated a full redemption of all the outstanding $180.0 million aggregate principal amount of 8½% Senior Subordinated Notes due 2008 (May 1998 Notes).

73

On June 20, 2003, we purchased and paid cash for all the outstanding May 1998 notes, including accrued interest. During 2003, we recorded a pre-tax charge of $11.2 million.

On June 6, 2002, L-3 Communications commenced a tender offer to purchase any and all of its $225.0 million aggregate principal amount of 10 3/8% Senior Subordinated Notes due 2007. The tender offer expired on July 3, 2002. On June 25, 2002, L-3 Communications sent a notice of redemption for all of its 10 3/8% Senior Subordinated Notes due 2007 that remained outstanding after the expiration of the tender offer. Upon sending the notice, the remaining notes became due and payable at the redemption price as of July 25, 2002. During 2002, we recorded a pre-tax charge of $16.2 million.

Debt Issuances.    The table below presents a summary of our issuances of debt obligations for 2002, 2003 and 2004. For additional details about the terms of our debt, see Note 8 to our consolidated financial statements and "Description of Other Indebtedness".

Description of Debt Issuances				Issue Date				Principal Amount				Discount				Commissions and Other Offering Expenses				Net Proceeds				Semi-Annual Interest Payment Dates
				(in millions)
L-3 Communications
5 7/8% Senior Subordinated Notes due January 15, 2015				November 12, 2004				$	650.0			$	—			$	11.0			$	639.0	(1)		January 15 and July 15
6 1/8% Senior Subordinated Notes due January 15, 2014				December 22, 2003					400.0				7.4				2.6				390.0	(2)		January 15 and July 15
6 1/8% Senior Subordinated Notes due July 15, 2013				May 21, 2003					400.0				1.8				7.2				391.0	(3)		January 15 and July 15
7 5/8% Senior Subordinated Notes due June 15, 2012				June 28, 2002					750.0				—				18.5				731.5	(4)		June 15 and December 15

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

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

(3)	The net proceeds from this offering were used to redeem the 8½% Senior Subordinated Notes due 2008 and to increase cash and cash equivalents.

(4)

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

Equity

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

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

In January 2004, L-3 Holdings announced that its Board of Directors had declared L-3's first quarterly cash dividend of $0.10 per share, payable on March 15, 2004. L-3 Holdings' Board of

74

Directors declared three additional quarterly dividends of $0.10 per share, all of which were paid in 2004. L-3 Holdings paid cash dividends of $43.4 million in aggregate to shareholders in 2004. The 2004 cash dividends were paid on March 15, June 15, September 15 and December 15.

Contractual Obligations

The table below presents L-3's contractual obligations at December 31, 2004.

								Year(s) Ending December 31,
Contractual Obligations:				Total				2005				2006 – 2007				2008 – 2009				2010 and thereafter
				(in millions)
Long-term debt(1)				$	2,200.0			$	—			$	—			$	—			$	2,200.0
Non-cancelable operating leases					579.5				115.7				142.1				104.1				217.6
Notes payable and capital lease obligations					13.9				0.7				0.7				0.5				12.0
Purchase obligations(2)					846.9				696.6				99.0				34.9				16.4
Other long-term liabilities(3)					167.7				103.0	(4)			42.7				1.8				20.2
Contractual commitments for earnout payments on business acquisitions(5)					37.4				1.4				36.0				—				—
Total				$	3,845.4			$	917.4			$	320.5			$	141.3			$	2,466.2

(1)	Long-term debt includes scheduled principal payments only. The contractual obligations table does not include approximately $1.0 billion of senior subordinated notes and $700.0 million of CODES incurred in connection with the Titan acquisition.

(2)	Represents open purchase orders at December 31, 2004 for amounts expected to be paid for goods or services that are legally binding on us.

(3)	Other long-term liabilities primarily consists of workers compensation, deferred compensation and litigation settlement accruals for the years ending December 31, 2006 and thereafter and also includes pension and postretirement benefit plan contributions that we expect to pay in 2005.

(4)

Our pension and postretirement benefit plan funding policy is generally to contribute in accordance with cost accounting standards that affect government contractors, subject to the Internal Revenue Code and regulations thereon. For 2005, we expect to contribute approximately $90.0 million to our pension plans and $13.0 million to our postretirement benefit plans. Due to the current uncertainty of the amounts used to compute our expected pension and postretirement benefit plan funding, we believe it is not practicable to reasonably estimate such future funding for periods in excess of 1 year.

(5)	Represents additional purchase payments for business acquisitions that are contingent upon the post-aquisition financial performance of the acquired business.

Off Balance Sheet Arrangements

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

We have a contract to provide and operate for the U.S. Air Force (USAF) a full-service training facility, including simulator systems adjacent to a USAF base in Oklahoma. We acted as the construction agent on behalf of the third-party owner-lessors for procurement and construction for the simulator systems, which were completed and delivered in August 2002. On December 31, 2002, we, as lessee, entered into an operating lease agreement for a term of 15 years for one of the simulator systems with the owner-lessor. At the end of the lease term, we may elect to purchase the simulator system at fair market value, which can be no less than $2.6 million and no greater than $6.4 million. If we do not elect to purchase the simulator system, then on the date of expiration, we shall pay to the

75

lessor, as additional rent, $2.6 million and return the simulator system to the lessor. The aggregate non-cancelable rental payments under this operating lease are $32.5 million, including the additional rent of $2.6 million. On February 27, 2003, we, as lessee, entered into an operating lease agreement for a term of 15 years for the remaining simulation systems with the owner-lessor. At the end of the lease term, we may elect to purchase the simulator systems at fair market value, which can be no less than $4.1 million and no greater than $14.5 million. If we do not elect to purchase the simulator systems, then on the date of expiration, we shall return the simulator systems to the lessor. The aggregate non-cancelable rental payments under this operating lease are $53.3 million.

Derivative Financial Instruments

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

Interest Rate Risk.    Our financial instruments that are sensitive to changes in interest rates include borrowings under the senior credit facilities and interest rate swap agreements, all of which are denominated in U.S. dollars. At September 30, 2005, we had outstanding borrowings of $750.0 million under our amended and restated senior credit facility. The interest rates on the senior subordinated notes are fixed-rate and are not affected by changes in interest rates. In June of 2005, we terminated our interest rate swap agreement which was outstanding at December 31, 2004. At September 30, 2005, we did not have any interest rate swap agreements in place.

Outstanding interest rate swap agreements reduced interest expense by $4.5 million during 2004, compared to $5.5 million during 2003. Interest expense was reduced by $4.2 million for 2004, compared to $3.1 million for 2003 for amortization of deferred gains on terminated interest rate swap agreements. For every basis point (0.01%) that the six-month USD LIBOR interest rate is greater than 4.58%, we will incur an additional $10,000 of interest expense above the fixed interest rate on $100.0 million of senior subordinated notes calculated on a per annum basis until maturity. Conversely, for every basis point that the six-month USD Libor interest rate is less than 4.58%, we will recognize interest income of $10,000 on $100.0 million of senior subordinated notes calculated on a per annum basis until maturity.

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

Foreign Currency Exchange Risk.    We conduct some of our operations outside the U.S. in functional currencies other than the U.S. dollar. Additionally, some of our U.S. and foreign operations have contracts with customers which are denominated in currencies other than the functional currencies of those operations. To mitigate the risk associated with certain of these contracts denominated in foreign currency we have entered into foreign currency forward contracts. At September 30, 2005, the notional value of foreign currency forward contracts was $230.9 million and the fair value of these contracts was $2.7 million, which represented an asset. We account for these contracts as cash flow hedges.

Equity Price Risk.    Our equity investments in common stocks, joint ventures and limited liability corporations are subject to equity price risk, including equity risk. The fair values of our investments are based on quoted market prices for investments which are readily marketable securities, and estimated fair value for nonreadily marketable securities, which is generally equal to historical cost unless such investment has experienced an other-than-temporary impairment. Both the carrying values and estimated fair values of such investments amounted to $28.0 million at September 30, 2005.

76

Backlog and Orders

We define funded backlog as the value of funded orders received from customers, less the amount of sales recognized on those funded orders. We define funded orders as the value of contract awards received from the U.S. Government, for which the U.S. Government has appropriated funds, plus the value of contract awards and orders received from customers other than the U.S. Government. The table below presents our funded backlog, percent of funded backlog at December 31, 2004 expected to be recorded as sales in 2005 and funded orders for each of our reportable segments.

				Funded Backlog at December 31,								Percentage of December 31, 2004 Funded Backlog Expected to be Recorded as Sales in 2005				Funded Orders
				2004				2003								2004				2003
Reportable Segment:
C3 ISR				$	1,284.4			$	1,075.3				85.5	%		$	1,868.9			$	1,544.1
Government Services					544.6				433.3				81.6				1,137.0				911.4
Aircraft Modernization and Maintenance					974.1				754.3				77.8				2,091.7				770.0
Specialized Products					1,954.8				1,630.4				70.4				2,466.1				2,251.9
Consolidated				$	4,757.9			$	3,893.3				77.3	%		$	7,563.7			$	5,477.4

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

Research and Development

The following table presents L-3's (i) company-sponsored (independent) research and development costs and (ii) customer-funded research and development costs, which are incurred on revenue arrangements to perform research and development services for customers. See Note 2 to the consolidated financial statements for a discussion of L-3's accounting policies for research and development costs.

				Year Ended December 31,
				2004				2003				2002
Company-Sponsored Research and Development Costs:
U.S. Government Contractor Businesses				$	149.4			$	129.4			$	124.2
Commercial Businesses					71.2				59.2				35.7
Total				$	220.6			$	188.6			$	159.9
Customer-Funded Research and Development Costs				$	689.2			$	573.1			$	480.9

Contingencies

For a description of our contingencies and outstanding legal proceedings, see note 15 to our audited consolidated financial statements for the year ended December 31, 2004 and notes 12 and 17 to our unaudited interim condensed consolidated financial statements for the period ended September 30, 2005.

77

Recently Issued Accounting Standards

In December of 2004, the FASB revised its FASB Statement No. 123, Accounting for Stock Based Compensation (SFAS 123) and renamed it FASB Statement No. 123, Share-Based Payment (SFAS 123R). SFAS 123R requires that compensation expense relating to share-based payment transactions be recognized in financial statements at estimated fair value. The scope of SFAS 123R includes a wide range of share-based compensation arrangements, including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. This standard replaces SFAS 123 and supercedes APB Opinion No. 25, Accounting for Stock Issued to Employees. We previously elected not to adopt the fair value based method of accounting for stock-based employee compensation as permitted by SFAS 123. The adoption of SFAS 123R will result in the recording of non-cash compensation expenses, which we do not currently recognize in our financial statements. In accordance with SFAS 123, we disclose pro forma net income and earnings per share adjusted for non-cash compensation expense arising from the estimated fair value of share-based payment transactions. For a further discussion of our accounting for stock-based employee compensation and disclosure of our pro forma historical net income and earnings per share, see Note 3 to our unaudited condensed consolidated financial statements. On April 15, 2005, the SEC issued Release No. 33-8568, Amendment to Rule 4-01a of Regulation S-X Regarding the Compliance Date for Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment. The SEC Release amends the effective date for compliance with SFAS 123R from July 1, 2005 to January 1, 2006.

In March of 2005, the SEC issued Staff Accounting Bulletin (SAB) No. 107, Share-Based Payment (SAB 107). SAB 107 provides guidance to assist registrants in the initial implementation of SFAS 123R. SAB 107 includes, but is not limited to, interpretive guidance related to share-based payment transactions with nonemployees, valuation methods and underlying expected volatility and expected term assumptions, the classification of compensation expenses and accounting for the income tax effects of share-based arrangements upon adopting the SFAS 123R. We are currently assessing the guidance provided in SAB 107 in connection with the implementation of SFAS 123R. We expect that the impact of adopting SFAS 123R may result in a non-cash reduction to our diluted EPS in 2006 of approximately between $0.17 and $0.20.

The U.S. enacted the American Jobs Creation Act of 2004 (the American Jobs Creation Act) in October 2004 which contains many provisions affecting corporate taxation. The American Jobs Creation Act phases out the extraterritorial income (ETI) exclusion benefit for export sales and phases in a new tax deduction for income from qualified domestic production activities (QPA) over a transition period beginning in 2005. In December 2004, the FASB issued FASB Staff Position 109-1 (FSP 109-1), which provides guidance that the QPA deduction should be treated as a special income tax deduction as described in SFAS 109. As such, QPA has no impact on our deferred tax assets or liabilities existing as of the enactment date. Rather, the QPA deduction will be reported in the period that the deductions are claimed on the our income tax returns. We have completed our evaluation of the net impact of the American Jobs Creation Act, and have determined that the benefit from phase-in of the QPA deduction will be substantially equivalent to the lost benefit from the phase-out of the ETI exclusion in 2005. We also determined that the other provisions included in the American Jobs Creation Act will not have a significant impact on our financial position, results of operations or cash flows.

In May of 2005, the FASB issued SFAS Statement No. 154, Accounting Changes and Error Corrections, which requires retrospective application of all voluntary changes in accounting principles to all periods presented, rather than using a cumulative catch-up adjustment as currently required for most accounting changes under APB Opinion 20. This Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and will be effective for accounting changes and error corrections made in fiscal years beginning after December 15, 2005.

In June of 2005, the FASB approved Emerging Issues Task Force (EITF) issued No. 05-06, Determining the Amortization Period for Leasehold Improvements (EITF 05-06). EITF 05-06 provides

78

guidance on determining the amortization period for leasehold improvements acquired in a business combination or acquired subsequent to lease inception. The guidance requires that leasehold improvements acquired in a business combination or purchased subsequent to the inception of a lease be amortized over the lesser of the useful life of the assets or a term that includes renewals that are reasonably assured at the date of the business combination or purchase. The guidance is effective for periods beginning after June 29, 2005. EITF 05-06 is not expected to have a material impact on our financial position, results of operation or cash flows.

Inflation

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

79

BUSINESS

Overview

We are a leading supplier of a broad range of products and services used in a substantial number of aerospace and defense platforms. We also are a major supplier of systems, subsystems and products on many platforms, including those for secure communication networks and communication products, mobile satellite communications, information security systems, shipboard communications, naval power systems, missiles and munitions, telemetry and instrumentation and airport security systems. We also are a prime system contractor for aircraft modernization and O&M, C³ISR collection systems and services, training and simulation, intelligence services and government support services. Our customers include the U.S. Department of Defense (DoD) and its prime contractors, the U.S. Department of Homeland Security (DHS), U.S. Government intelligence agencies, major aerospace and defense contractors, allied foreign government ministries of defense, commercial customers and certain other U.S. federal, state and local government agencies. For the year ended December 31, 2004, direct and indirect sales to the DoD provided 73.4% of our sales. For the year ended December 31, 2004, we generated (1) sales of $6,897.0 million, of which U.S. customers accounted for 86.9% and foreign customers, including commercial export sales, accounted for 13.1%, (2) net cash from operating activities of $620.7 million, and (3) operating income of $748.6 million. For the nine months ended September 30, 2005, we generated (1) sales of $6,544.5 million, (2) net cash from operating activities of $579.6 million, and (3) operating income of $690.6 million.

We have four reportable segments. During the 2005 third quarter we renamed three of our four reportable segments as follows: (i) Secure Communications & ISR changed to Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C³ISR), (ii) Training, Simulation & Government Services changed to Government Services, and (iii) Aircraft Modernization, O&M and Products changed to Aircraft Modernization and Maintenance (AM&M). The Specialized Products reportable segment name remained the same. Financial information for our reportable segments is included in "Management's Discussion and Analysis of Results of Operations and Financial Condition" and in Note 18 of our consolidated financial statements, each included elsewhere herein.

Business Strategy

We intend to grow our sales, improve our profitability and cash flows and build on our position as a leading supplier of systems, subsystems, products and services to the DoD and other U.S. Government agencies, major aerospace and defense prime contractors and allied foreign governments. Our strategy to achieve our objectives includes:

Expanding Supplier Relationships.    As an independent supplier, we anticipate that our growth will partially be driven by expanding our share of existing programs and by participating in new programs. We intend to identify opportunities where we are able to use our existing customer relationships and leverage the capabilities of our various businesses to expand the scope of our products and services and to obtain new customers. We also expect to benefit from continued outsourcing of subsystems and products by prime contractors, which positions us to be a supplier to multiple bidders on prime contract bids. We also intend to grow sales by combining certain of our products into subsystems that we can offer to our customers.

Supporting Customer Requirements.    We intend to continue to align our research and development expenditures and business development efforts to address our customers' requirements and provide them with state-of-the-art products, services and solutions. In addition, we also intend to grow our sales by entering into "teaming" arrangements with select prime system contractors and platform providers.

Improving Operating Margins.    We intend to continue to improve our operating performance by continuing to reduce overhead expenses, consolidating certain of our businesses and business processes and increasing the productivity of our businesses. However, because Titan's business is largely performed under lower margin (and lower risk) cost-reimbursable type and time-and-material type contracts, we expect that the Titan acquisition will reduce our consolidated operating margins.

80

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

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

Capitalizing on Strategic Acquisition Opportunities.    In addition to expanding our existing product base through new product development efforts and bid and proposal efforts, we intend to continue to acquire select businesses that will add new products, services or customers in areas that complement our present businesses and technologies.

Selected Recent Business Acquisitions

During the year ended December 31, 2004 we used cash of $473.4 million for business acquisitions. During the nine months ended September 30, 2005, in separate transactions, we acquired nine businesses for an aggregate purchase price of $3,352.4 million in cash, plus acquisition costs. See "Management's Discussion and Analysis of Results of Operations and Financial Condition—Business Acquisitions" for additional details about our 2004 and 2005 business acquisitions, including details of their purchase prices. The table below summarizes our business acquisitions in 2004 and 2005 that had a purchase price greater than $50.0 million.

Business

Date Acquired

Acquired From

Purchase Price ($ millions)

Business Description

Cincinnati Electronics, Inc.

December 9, 2004

CMC Electronics, Inc.

$

176.3

Designs, develops and manufactures infrared imaging sensors and subsystems, infrared missile warning systems and space launch electronic subsystems.

Canadian Navigation Systems and Space Sensors Systems

December 30, 2004

Northrop Grumman Corporation

$

69.9

Designs, develops and integrates electronic products and systems for aircraft and ground vehicles, specializing in navigation products, displays and systems support services.

Marine Controls division of CAE

February 3, 2005

CAE

$

196.8

Supplies integrated marine control systems and products for warships, submarines and high-end ocean going commercial vessels.

Propulsion Systems business unit of General Dynamics

February 25, 2005

General Dynamics Corporation

$

196.8

Engineers, designs and manufactures engines, transmissions, suspension and turret drive systems for combat vehicles.

81

Business

Date Acquired

Acquired From

Purchase Price ($ millions)

Business Description

Electron Dynamics Devices business of The Boeing Company

February 28, 2005

The Boeing Company

$

90.0

Designs and produces space-qualified microwave devices, traveling wave tubes, amplifiers and electric propulsion and radio frequency products utilized in communications satellites, manned space programs and key commercial and defense systems.

The Titan Corporation

July 29, 2005

Shareholders of The Titan Corporation

$

2,759.3

Provides information and communications systems solutions and services and offers services, systems and products for Command, Control, Communications, Intelligence, Surveillance and Reconnaissance, enterprise information technology and homeland security programs.

Products and Services

Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C³ISR) Reportable Segment

The businesses in this reportable segment provide products and services for the global ISR market, specializing in signals intelligence (SIGINT) and communications intelligence (COMINT) systems. These products and services provide to the warfighter in real-time the unique ability to collect and analyze unknown electronic signals from command centers, communication nodes and air defense systems for real-time situation awareness and response. The businesses in this reportable segment also provide C³ systems and secure, high data rate communications systems and equipment for military and other U.S. Government and foreign government intelligence, reconnaissance and surveillance applications. We believe that our products and services are critical elements for a substantial number of major communication, command and control, intelligence gathering and space systems. Our products and services are used to connect a variety of airborne, space, ground and sea-based communication systems and are used in the transmission, processing, recording, monitoring and dissemination functions of these communication systems. Additionally, the businesses in the C³ISR Reportable Segment also provide intelligence, logistics and other support services to the DoD and U.S. Government intelligence agencies. Major products and services for this reportable segment include:

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

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

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

82

•	secure terminal and communication network equipment and encryption management;

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

•	intelligence solutions support to the DoD, including the U.S. Armed Services combatant commands and the U.S. Government intelligence agencies, including those within the U.S. Armed Services; and

•	technical and management services, which provides support of intelligence, logistics, C3 and combatant commands.

The table below provides additional information for the systems, products and services, selected applications and selected platforms or end users of our C³ISR reportable segment at September 30, 2005.

Systems/Products/Services				Selected Applications				Selected Platforms/End Users
ISR Systems
•Prime mission systems integration, sensor development and operations and support				•Signal processing, airborne SIGINT applications, antenna technology, real-time process control and software development				• U.S. Air Force (USAF) and allied foreign militaries ISR aircraft platforms
•Fleet management of special mission aircraft, including avionics and mission system upgrades and logistics support				•Measurement collection and signal intelligence, special missions				•DoD and special customers within the U.S. Government
Networked Communications
•Airborne, space and surface data link terminals, ground stations, and transportable tactical SATCOM (satellite communications) systems				•High performance, wideband secure communication links for relaying of intelligence and reconnaissance information				•Manned aircraft, Unmanned Aerial Vehicles (UAVs), naval ships, ground vehicles and satellites
•Multi-band Manpack Receivers				•Portable, ruggedized terminals used for receiving reconnaissance video and sensor data from multiple airborne platforms				•U.S. Special Operations Command (USSOCOM), USAF and other DoD customers
•Satellite command and control sustainment and support				•Software integration, test and maintenance support, satellite control network and engineering support for satellite launch systems				•USAF Space Command (AFSC), USAF Satellite Control Network and launch ranges
C3ISR Support Services
•Full spectrum systems acquisition support and comprehensive operational support services				•Requirements definition, program management, planning and analysis, systems engineering and integration, intelligence analysis and managing and network engineering				•U.S. Army, USAF, U.S. Navy (USN) and DHS
•ISR operations and support				•Data link support and services, special applications, classified projects, spares and repairs.				•USAF and U.S. Army ISR aircraft platforms

83

Systems/Products/Services				Selected Applications				Selected Platforms/End Users
•Information management and IT systems support and software design, development and systems integration				•Intelligence and operations support, C3ISR systems, network centric operations and information operations				•DoD and U.S. Government intelligence agencies
Communications Products
•Secure communication terminals and equipment, and secure network encryption products				•Secure and non-secure voice, data and video communication for office, battlefield and secure internet protocol (IP) network applications				•DoD and U.S. Government intelligence agencies
•Ground-based satellite communication terminals and payloads				•Interoperable, transportable ground terminals				•DoD and U.S. Government intelligence agencies
•Satellite communication and tracking systems				•On-board satellite external communications, video systems, solid state recorders and ground support equipment				•International Space Station, Space Shuttle and various satellites
•Shipboard communications systems				•Internal and external communications (radio rooms)				•USN, U.S. Coast Guard and allied foreign navies

Government Services Reportable Segment

The businesses in this reportable segment provide a full range of communications systems support, engineering services, information technology services, teaching and training services, marksmanship training systems and services, and intelligence support and analysis services. We sell these services primarily to the DoD, U.S. Government intelligence agencies and allied foreign governments. Major services for this reportable segment include:

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

	•	high-end engineering and information systems support services used for command, control, communications and ISR architectures, as well as for air warfare modeling and simulation tools for applications used by the DoD, DHS and U.S. Government intelligence agencies, including missile and space systems, UAVs and manned military aircraft;

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

	•	human intelligence support and other services, including linguist services and related management, to support contingency operations and current intelligence-gathering requirements;

	•	aviation and maritime services in support of maritime and expeditionary warfare; and

	•	conventional high-end enterprise information technology (IT) support, systems and other services to U.S. federal agencies and the DoD.

84

The table below provides additional information for the products and services, selected applications and selected platforms or end users of our Government Services reportable segment at September 30, 2005.

Products/Services				Selected Applications				Selected Platforms/End Users
Training and Operations
•Training systems, courseware and doctrine development				•Training, leadership development and education services for U.S. and allied foreign armed forces, counterintelligence and law enforcement personnel				•U.S. Army, U.S. Marine Corps, U.S. Department of State, U.S. Department of Justice and allied foreign governments
•Crisis Incident Management System				•Emergency operations support associated with natural disasters, industrial accidents and acts of terrorism				•Federal, state and local government agencies for homeland defense
•Weapons Training				•Laser marksmanship training systems and advanced integrated technologies for security products and services				•DoD and law enforcement agencies
Government Services
•Surveillance systems and products, including installation and logistics support				•Automated security systems for bases and force protection, and remote surveillance for U.S. borders				•DHS and USAF
•Communication systems and software engineering services				•Value-added, critical software support for C3ISR systems, electronic warfare and fire support systems				•U.S. Army Communications – Electronics Command (CECOM)
•Acquisition management and staff augmentation				•Rapid fielding support for combatants and physical location management				•U.S. Army
•Information technology (IT) services				•IT infrastructure modernization and operations				•U.S. Government intelligence agencies
•World wide linguist and analyst services				•Counterintelligence, threat protection and counter terrorism				•U.S. Army
•Systems engineering, operations analysis, research and technical analysis				•Systems engineering and operational analysis of most aircraft and vessels in the USN fleet, C4 systems acquisitions, logistics and administrative support, as well as systems life cycle support				•USN and U.S. Marine Corps (USMC)
•Network and enterprise administration and management				•Systems engineering, assurance and risk management, network and systems administration, management, software development and life cycle support and systems integration				•U.S. Army, U.S. Joint Chiefs of Staff, USAF, USSOCOM and National Aeronautics and Space Administration (NASA)

Aircraft Modernization and Maintenance (AM&M) Reportable Segment

The businesses in this reportable segment provide specialized aircraft modernization and upgrades, maintenance and logistics support services. We sell these services primarily to the DoD and the Canadian Department of National Defense (DND). Major products and services for this reportable segment include:

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

85

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

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

The table below provides additional information for the systems, products and services, selected applications and selected platforms or end users of our Aircraft Modernization and Maintenance reportable segment at September 30, 2005.

Systems/Products/Services				Selected Applications				Selected Platforms/End Users
Aircraft Modernization
•Modernization and life extension maintenance upgrades and support				•Aircraft structural modifications and inspections, installation of mission equipment, navigation and avionics products				•USSOCOM, USN, USAF, Canadian DND, various military, fixed and rotary wing aircraft and Head of State (HOS) aircraft
Operations & Maintenance Services
•Logistics support, maintenance and refurbishment				•Aircraft maintenance repair and overhaul, flight operations support for training, cargo and special mission aircraft				•U.S. Army, USAF, USN, USSOCOM, Canadian DND and other allied foreign militaries
•Contract Field Teams (CFT)				•Deployment of highly mobile, quick response field teams to customer locations to supplement the customer's resources for various ground vehicles and aircraft				•U.S. Army, USAF, USN and USMC
•Contractor operated and managed base supply (COMBS)				•Inventory management activities relating to flight support and maintenance, including procurement and field distribution				•Military training and cargo aircraft

Specialized Products Reportable Segment

The businesses in this reportable segment provide a broad range of products, including components, subsystems and systems, to military and commercial customers in several diverse niche markets. Major products for this reportable segment include:

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

	•	naval ship modernization, modification, repair and overhaul;

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

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

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

	•	imaging products and precision stabilized electro-optic/infrared (EO/IR) sensors for ISR systems, including high magnification lowlight, daylight and forward looking infrared sensors, laser range finders, illuminators and designators, and digital and wireless communication systems;

86

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

	•	high performance antennas and ground based radomes;

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

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

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

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

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

The table below provides additional information for the products, selected applications and selected platforms or end users of our Specialized Products reportable segment at September 30, 2005.

Products				Selected Applications				Selected Platforms/End Users
Naval Products
•Airborne dipping sonars, submarine and surface ship towed arrays				• Submarine and surface ship detection and localization				•USN and allied foreign navies
•Naval power delivery, conversion and switching products				•Switching, distribution and protection, as well as frequency and voltage conversion				•Naval submarines, surface ships and aircraft carriers
•Shipboard electronics racks, rugged computers, rugged displays and communication terminals				•Ruggedized displays, computers and electronic systems				•Naval vessels and other DoD applications
Security
•Explosives detection systems and airport security systems				•Rapid scanning of passenger checked baggage and carry-on luggage, scanning of large cargo containers				•DHS, including the TSA, and domestic and foreign airports, state and local governments
Training Devices and Motion Simulators
•Military aircraft flight simulators, reconfigurable training devices, distributed mission training (DMT) suites				•Advance simulation technologies and training for pilots, navigators, flight engineers, gunners and operators				•Fixed and rotary winged aircraft and ground vehicles for USAF, USN, U.S. Army, Canadian DND and allied foreign militaries
Simulation Services
•Maintenance and logistics support for training devices				•Simulation based training for fixed and rotary wing aircraft				•USAF, USN, U.S. Army and allied foreign government ministries of defense
•Battlefield and weapon simulation				•Missile system modeling and simulation and design and manufacture custom ballistic missile targets				•U.S. Missile Defense Agency (MDA)

87

Products				Selected Applications				Selected Platforms/End Users
•System support and concept operations (CONOPS)				•C3ISR (Command, Control, Communications and ISR), modeling and simulation				•DoD, MDA, U.S. Government intelligence agencies, NASA
Navigation & Sensors
•GPS (Global Positioning Systems) receivers				•Location tracking				•Guided projectiles and precision munitions
•Navigation systems and positioning navigation units				•Satellite launch and orbiting navigation and navigation for ground vehicles and fire control systems				•USAF, U.S. Army, USMC and NASA
•Ultra-wide frequency and advanced radar antennas and radomes				•Surveillance and radar detection				•Military fixed and rotary winged aircraft, SATCOM
•Targeted stabilized camera systems with integrated sensors and wireless communication systems				•Intelligence, Data Collection, Surveillance and Reconnaissance				•DoD, intelligence and security agencies, law enforcement, manned and unmanned platforms
•Telemetry and instrumentation systems				•Real-time data acquisition, measurement, processing, simulation, distribution, display and storage for flight testing				•Aircraft, missiles and satellites
•Airborne and ground based high energy laser beam directors and high tracking rate telescopes				•Directed energy systems, space surveillance, satellite laser ranging and laser communications				•USAF and NASA
Aviation Products
•Solid state crash protected cockpit voice and flight data recorders				•Aircraft voice and flight data recorders that continuously record voice and sounds from cockpit and aircraft intercommunications.				•Commercial transport, business, regional and military aircraft
•TCAS (Traffic Alert and Collision Avoidance System) and terrain awareness warning systems (TAWS)				•Reduce the potential for midair aircraft collisions and crashes into terrain by providing visual and audible warnings and maneuvering instructions to pilots				•Commercial transport, business, regional and military aircraft
•Advanced cockpit avionics				•Pilot safety, navigation and situation awareness products				•Commercial transport, business, regional and military aircraft.
•Cockpit and mission displays				•High performance, ruggedized flat panel and cathode ray tube displays and processors				•Various military aircraft
Premium Fuzing Products
•Fuzing Products				•Munitions and electronic and electro-mechanical safety and arming devices (ESADs)				•Various DoD and allied foreign military customers
Microwave Components
•Passive components, switches and wireless assemblies				•Radio transmission, switching and conditioning, antenna and base station testing and monitoring				•DoD, wireless communications service providers and original equipment manufacturers

88

Products				Selected Applications				Selected Platforms/End Users
•Satellite and wireless components (channel amplifiers, transceivers, converters, filters and multiplexers)				•Satellite transponder control, channel and frequency separation				•SATCOM and wireless communications equipment
•Traveling wave tubes, power modules, klystrons and digital broadcast				•Microwave vacuum electron devices and power modules				•DoD and allied foreign military manned/unmanned platforms, various missile programs and commercial broadcast

Major Customers

For the year ended December 31, 2004, direct and indirect sales to the DoD provided approximately 73.4% of our total sales. Approximately 61.0% of our sales to the DoD were direct to the customer, and approximately 39.0% of our sales to the DoD were indirect through prime system contractors and subcontractors of the DoD. Additionally, our sales to the DoD were distributed among the U.S. Armed Services, and as a percentage of total 2004 sales, 24.9% was to the U.S. Air Force, 19.0% to the U.S. Army, 15.6% to the U.S. Navy, 0.6% to the U.S. Marines and 13.3% to other defense-wide customers. All U.S. Government customers, including the DoD and federal, state and local agencies, accounted for 80.3% of our total sales for 2004. For the year ended December 31, 2004, allied foreign governments provided 8.4% of our total sales, and commercial customers provided 11.3% of our total sales. For additional information regarding domestic and foreign sales, see Note 18 to our audited consolidated financial statements included elsewhere herein.

Our U.S. Government sales are predominantly derived from contracts with agencies of, and prime contractors to, the U.S. Government. Various U.S. Government agencies and contracting entities exercise independent and individual purchasing decisions, subject to annual appropriations by the U.S. Congress. For the year ended December 31, 2004, our largest contract represented 4.6% of our sales and our five largest contracts represented 17.2% of our sales.

Research and Development

We conduct research and development activities that consist of projects involving basic research, applied research, development, and systems and other concept studies. We employ scientific, engineering and other personnel to improve our existing product-lines and develop new products and technologies. As of December 31, 2004, we employed approximately 21,900 engineers, a substantial portion of whom hold advanced degrees, and work on company sponsored research and development efforts, customer funded research and development contracts and production and services contracts. For an analysis of L-3's research and development costs, see "Management's Discussion and Analysis of Results of Operations and Financial Condition—Research and Development."

Competition

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

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

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

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

	•	historical technical and schedule performance; and

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

In some instances, we are the incumbent supplier or have been the sole provider for many years for certain programs. We refer to such contracts as "sole-source" contracts. In such cases, there may

89

be other suppliers who have the capability to compete for the programs involved, but they can only enter or reenter the market if the customer chooses to reopen the particular program to competition. Sole-source contracts are generally recompeted every three to five years. Sole-source contracts accounted for 65.5% and competitive contracts accounted for 34.5% of our total sales for the year ended December 31, 2004. The majority of our sales are derived from contracts with the U.S. Government and its prime contractors, which are principally awarded on the basis of negotiations or competitive bids.

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

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

Patents and Licenses

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

Raw Materials

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

Contracts

A significant portion of our sales are derived from strategic, long-term programs and from sole-source contracts as discussed above. Our customer satisfaction and performance record is

90

evidenced by our receipt of performance-based award fees exceeding 90% of the available award fees on average during the year ended December 31, 2004. We believe that our customers will award long-term, sole-source contracts to the most capable supplier in terms of quality, responsiveness, design, engineering and program management competency and cost. However, as discussed above, we are increasingly competing against large prime system contractors for major subsystems business. As a consequence of our competitive position, for the year ended December 31, 2004, we won contract awards at a rate in excess of 53% on new competitive contracts that we bid on, and at a rate in excess of 95% on the contracts we rebid for which we were the incumbent supplier.

Generally, our contracts are either fixed-price, cost-reimbursable or time-and-material. On a fixed-price type contract, we agree to perform the contractual statement of work for a predetermined contract price. Although a fixed-price type contract generally permits us to retain profits if the total actual contract costs are less than the estimated contract costs, we bear the risk that increased or unexpected costs may reduce our profit or cause us to sustain losses on the contract. Conversely, on a cost-reimbursable type contract we are paid our allowable incurred costs plus a profit, which can be fixed or variable, depending on the contract's fee arrangement, up to predetermined funding levels determined by our customers. In a time-and-materials type contract we are paid on the basis of direct labor hours expended at specified fixed-price hourly rates (that include wages, overhead, general and administrative expenses and profit) and materials at cost. Therefore, on cost-reimbursable type and time-and-material type contracts we do not bear the risks of unexpected cost overruns, provided that we do not incur costs that exceed the predetermined funded amounts. Generally, a fixed-price type contract offers higher profit margins than a cost-reimbursable type or time-and-material type contracts, which is commensurate with the greater levels of risk assumed on a fixed-price type contract. Our operating profit margins on fixed-price type contracts generally range between 10% and 15%, while on cost-reimbursable type contracts they generally range between 7% and 10%, and on time-and-material type contracts they generally range between 8% and 12%.

We have a diverse business mix with limited reliance on any single program, a balance of cost-reimbursable, time-and-material and fixed-price type contracts, a significant sole-source follow-on business and an attractive customer profile. The table below presents a summary of the percentage of our sales based on the contract-type of the revenue arrangements which generated our sales.

				Year Ended December 31,
Contract-Type				2004				2003				2002
Fixed-price					60.6	%			63.1	%			65.8	%
Cost-reimbursable					26.9	%			29.8	%			25.2	%
Time-and-material(1)					12.5	%			7.1	%			9.0	%
Total Sales					100.0	%			100.0	%			100.0	%

(1)	Our sales from time-and-material type contracts also include sales on "task order" contracts.

Substantially all of our cost-reimbursable type and time-and-material type contracts are with U.S. Government customers. Substantially all of our sales to commercial customers are transacted under fixed-price sales arrangements, and are included in our fixed-price contract sales. For additional information on contract sales mix for Titan and pro forma for L-3 and Titan combined, see "Management's Discussion and Analysis of Results of Operations and Financial Condition— Overview."

Regulatory Environment

Most of our revenue arrangements with agencies of the U.S. Government, including the DoD, are subject to unique procurement and administrative rules. These rules are based on both laws and regulations, including the U.S. Federal Acquisition Regulation (FAR), that (1) impose various profit and cost controls, (2) regulate the allocations of costs, both direct and indirect, to contracts and (3) provide for the non-reimbursement of unallowable costs. Unallowable costs include lobbying expenses, interest expenses and certain costs related to business acquisitions, including, for example, the

91

incremental depreciation and amortization expenses arising from fair value increases to the historical carrying values of acquired assets. Our contract administration and cost accounting policies and practices are also subject to oversight by government inspectors, technical specialists and auditors.

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

U.S. Government contracts are, by their terms, subject to unilateral termination by the U.S. Government either for its convenience or default by the contractor if the contractor fails to perform the contracts' scope of work. Upon termination, other than for a contractor's default, the contractor will normally be entitled to reimbursement for allowable costs and an allowance for profit. Foreign defense contracts generally contain comparable provisions permitting termination at the convenience of the government.

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

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

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

Environmental Matters

Our operations are subject to various environmental laws and regulations relating to the discharge, storage, treatment, handling, disposal and remediation of certain materials, substances and wastes used in our operations. We continually assess our obligations and compliance with respect to these requirements.

We have also assessed the risk of environmental contamination for our various manufacturing facilities, including our acquired businesses and, where appropriate, have obtained indemnification, either from the sellers of those acquired businesses or through pollution liability insurance. We believe that our current operations are in substantial compliance with all existing applicable environmental laws and permits. We believe our current expenditures will allow us to continue to be in compliance with applicable environmental laws and regulations. While it is difficult to determine the timing and ultimate cost to be incurred in order to comply with these laws, based upon available internal and external assessments, with respect to those environmental loss contingencies of which we are aware,

92

we believe that after considering amounts accrued, there are no environmental loss contingencies that, individually or in the aggregate, would be material to our consolidated results of operations, financial position or cash flows.

Despite our current level of compliance, new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new clean-up requirements may require us to incur costs in the future that could have a negative effect on our financial condition, results of operations or cash flows.

Pension Plans

In connection with our 1997 acquisition of the ten business units from Lockheed Martin and the formation of L-3, we assumed certain defined benefit pension plan liabilities for present and former employees and retirees of certain businesses which were transferred from Lockheed Martin to us. Prior to this acquisition, Lockheed Martin received a letter from the Pension Benefit Guaranty Corporation (the "PBGC") that requested information regarding the transfer of such pension plans and indicated that the PBGC believed certain of such pension plans were underfunded using the PBGC's actuarial assumptions. The PBGC assumptions result in a larger liability for accrued benefits than the assumptions used for financial reporting under Statement of Financial Accounting Standards No. 87. The PBGC underfunding is related to the Communication Systems — West and Aviation Recorders pension plans (the "Subject Plans").

With respect to the Subject Plans, Lockheed Martin entered into an agreement (the "Lockheed Martin Commitment") with L-3 Communications and the PBGC dated as of April 30, 1997. The material terms and conditions of the Lockheed Martin Commitment include a commitment by Lockheed Martin to the PBGC to, under certain circumstances, assume sponsorship of the Subject Plans or provide another form of financial support for the Subject Plans. The Lockheed Martin Commitment will continue with respect to any Subject Plan until such time as such Subject Plan is no longer underfunded on a PBGC basis for two consecutive years or, at any time after May 31, 2002, if we achieve investment grade credit ratings on all of our outstanding debt.

Upon the occurrence of certain events, Lockheed Martin, at its option, has the right to decide whether to cause us to transfer sponsorship of any or all of the Subject Plans to Lockheed Martin, even if the PBGC has not sought to terminate the Subject Plans. If Lockheed Martin did assume sponsorship of these plans, it would be primarily liable for the costs associated with funding the Subject Plans or any costs associated with the termination of the Subject Plans, but we would be required to reimburse Lockheed Martin for these costs. To date, there has been no impact on pension expense and funding requirements resulting from this arrangement. In the event Lockheed Martin assumes sponsorship of the Subject Plans we would be required to reimburse Lockheed Martin for all amounts that it contributes to, or costs it incurs with respect to, the Subject Plans. For the year ended December 31, 2004, we contributed $0.5 million to the Subject Plans. For subsequent years, our funding requirements will depend upon prevailing interest rates, return on pension plan assets and underlying actuarial assumptions. At December 31, 2004, the aggregate projected benefit obligation was $230.3 million and the aggregate plan assets were $157.9 million for the Subject Plans.

We have performed our obligations under the letter agreement with Lockheed Martin and the Lockheed Martin Commitment and have not received any communications from the PBGC concerning actions that the PBGC contemplates taking in respect of the Subject Plans.

Employees

As of December 31, 2004, we employed approximately 44,200 full-time and part-time employees, 87.7% of whom are located in the United States. Of these employees, approximately 19.8% are covered by 70 separate collective bargaining agreements with various labor unions. Our ability to retain and train our employees is critical to the continued success of our businesses. We have a continuing need for engineers, skilled and professional personnel to grow our businesses, obtain additional orders for our products and services and to satisfy contractual obligations under certain of our existing revenue arrangements. We believe that relations with our employees are positive.

93

Properties

The table below provides information about the significant facilities and properties of each of our reportable segments at December 31, 2004.

Location				Owned				Leased
				(thousands of square feet)
L-3 Corporate Offices, New York, NY					—				52.9
Washington Operations, Arlington, VA					—				13.3
C3ISR:
Camden, NJ					—				575.0
Mason, OH					228.0				—
Greenville, TX					—				3,089.4
Salt Lake City, UT					—				703.3
Government Services:
Huntsville, AL					—				101.6
Colorado Springs, CO					—				75.3
Alexandria, VA					—				99.7
Arlington, VA					—				91.7
Chantilly, VA					—				103.9
Aircraft Modernization and Maintenance
Selma, AL					—				174.0
Lexington, KY					—				1,005.3
South Madison, MS					—				164.0
Waco, TX					801.4				221.1
Edmonton, Canada					—				366.3
Enfield, Canada					96.0				—
Mirabel, Canada					397.2				81.2
Toronto, Canada					258.5				—
Specialized Products:
Phoenix, AZ					—				90.3
Anaheim, CA					—				474.2
Menlo Park, CA					—				98.3
San Carlos, CA					191.6				—
San Diego, CA					196.0				209.2
Sylmar, CA					—				253.0
Largo, FL					46.4				—
Ocala, FL					111.7				—
Sarasota, FL					—				143.7
St. Petersburg, FL					—				129.8
Alpharetta, GA					93.0				—
Rolling Meadows, IL					45.0				6.7
Auburn, MA					—				97.2
Grand Rapids, MI					110.0				—
Salem, NH					55.8				—
Budd Lake, NJ					—				114.0
Hauppauge, NY					—				150.0
Kirkwood, NY					—				428.0
Cincinnati, OH					222.6				—
Tulsa, OK					—				133.3
Lancaster, PA					—				144.7
Philadelphia, PA					—				165.0
Pittsburgh, PA					—				151.0
Williamsport, PA					208.6				—
Arlington, TX					82.0				182.6
Grand Prairie, TX					—				125.0
Burlington, Canada					—				124.0
Leer, Germany					32.2				33.2

94

At December 31, 2004, in the aggregate, we owned approximately 3.3 million square feet and leased approximately 12.8 million square feet of manufacturing facilities and properties.

Legal Proceedings

From time to time we are involved in legal proceedings arising in the ordinary course of our business or assumed in connection with business acquisitions. In particular, at the time of the Titan acquisition, Titan had a number of pending legal matters and governmental investigations as further discussed in Note 12 to L-3's unaudited condensed consolidated financial statements included elsewhere herein. We believe that we are adequately reserved for these liabilities and that there is no litigation that will have a material adverse effect on our consolidated results of operations, financial condition or cash flows. However, we are a party to a number of material litigations, including the matters described below, for which an adverse determination could have a material adverse effect on our consolidated financial position, results of operations or cash flows.

U.S. Government Procurement Regulations and Investigations.

A substantial majority of our revenues are generated from providing products and services under legally binding agreements, or contracts, with U.S. Government customers. The U.S. Government contracts are subject to extensive legal and regulatory requirements, and, from time to time, agencies of the U.S. Government investigate whether such contracts were and are being conducted in accordance with these requirements. We are currently cooperating with the U.S. Government on several investigations, including but not limited to, the investigation regarding L-3's Combat Survivor/Evader Locator (CSEL) program discussed below. We do not anticipate that any of these investigations will have a material adverse effect on its consolidated financial position, results of operations or cash flows. However, under U.S. Government procurement regulations, an indictment of us by a federal grand jury could result in us being suspended for a period of time from eligibility for awards of new government contracts. A conviction could result in debarment from contracting with the federal government for a specified term. In addition, all of our U.S. Government contracts are subject to audit and various pricing and cost controls, and include standard provisions for termination for the convenience of the U.S. Government or for default and are subject to cancellation if funds for contracts become unavailable. Foreign government contracts generally include comparable provisions relating to termination for the convenience of the relevant foreign government or default.

Our Interstate Electronics Corporation subsidiary (IEC) is under criminal investigation by the United States Army Criminal Investigation Command. The investigation relates to IEC's role on the CSEL program, on which IEC is a subcontractor to The Boeing Company (Boeing). IEC provides the global positioning system (GPS) modules to Boeing for the CSEL program. The GPS module includes a complex printed wiring board (PWB) that IEC purchased from two suppliers. The investigation appears to be focused on alleged manufacturing deficiencies in the PWBs and IEC's actions when it became aware of the suppliers potential manufacturing problems. We have conducted an internal investigation of this matter using outside counsel and currently believe that no criminal activity occurred. We are cooperating fully with the investigation and have voluntarily recalled all the PWBs and are repairing them as they are received.

Litigation Matters

L-3 Integrated Systems and its predecessors have been involved in a litigation with Kalitta Air arising from a contract to convert Boeing 747 aircraft from passenger configuration to cargo freighters. The lawsuit was brought in the northern district of California on January 31, 1997. The aircraft were modified using Supplemental Type Certificates (STCs) issued in 1988 by the Federal Aviation Administration (FAA) to Hayes International, Inc. (Hayes/Pemco) as a subcontractor to GATX/Airlog Company (GATX). Between 1988 and 1990, Hayes/Pemco modified five aircraft as a subcontractor to GATX using the STCs. Between 1990 and 1994, Chrysler Technologies Airborne Systems, Inc. (CTAS), a predecessor to L-3 Integrated Systems, performed as a subcontractor to GATX and modified an additional five aircraft using the STCs. Two of the aircraft modified by CTAS were owned by American International Airways, the predecessor to Kalitta Air. In 1996, the FAA

95

determined that the engineering data provided by Hayes/Pemco supporting the STCs was inadequate and issued an Airworthiness Directive that effectively grounded the ten modified aircraft. The Kalitta Air aircraft have not been in revenue service since that date. The matter was tried in January 2001 against GATX and CTAS with the jury finding fault on the part of GATX but rendering a unanimous defense verdict in favor of CTAS. Certain co-defendants had settled prior to trial. The U.S. Ninth Circuit Court of Appeals subsequently reversed and remanded the trial court's summary judgment rulings in favor of CTAS regarding a negligence claim by Kalitta Air, which asserts that CTAS as an expert in aircraft modification should have known that the STCs were deficient, and excluding certain evidence at trial. In preparation for retrial, Kalitta Air submitted to us an expert report on damages that calculated Kalitta Air's damages at either $232 million or $602 million, depending on different factual assumptions. We retained experts whose reports indicate that, even in the event of an adverse jury finding on the liability issues at trial, Kalitta Air has already recovered amounts from the other parties to the initial suit that the Company believes more than fully compensated Kalitta Air for any damages it incurred. CTAS' insurance carrier has accepted defense of the matter with a reservation of its right to dispute its obligations under the applicable insurance policy in the event of an adverse jury finding. The retrial began on January 18, 2005 and ended on March 2, 2005 with a deadlocked jury and mistrial. At trial, Kalitta Air claimed damages of $235 million. Although no date has been set for any further proceedings, a second retrial may be necessary in this matter. By order dated July 22, 2005, the Trial Court granted our motion for judgment as a matter of law as to negligence dismissing that claim, denied our motion for judgment as a matter of law as to negligent misrepresentation, and certified the decision for interlocutory appeal to the Ninth Circuit Court of Appeals. The Ninth Circuit has accepted the appeals on all proceedings at the District Court and such proceedings will be stayed pending resolution of the appeals. We believe that we have meritorious defenses and intend to continue to vigorously defend this matter. However, litigation is inherently uncertain and it is possible that an adverse decision could be rendered, which could have a material adverse effect on our consolidated financial position, results of operations or cash flows.

On November 18, 2002, we initiated a proceeding against OSI Systems, Inc. (OSI) in the United States District Court sitting in the Southern District of New York seeking, among other things, a declaratory judgment that we had fulfilled all of our obligations under a letter of intent with OSI (the "OSI Letter of Intent"). Under the OSI Letter of Intent, we were to negotiate definitive agreements with OSI for the sale of certain businesses we acquired from PerkinElmer, Inc. on June 14, 2002. On February 7, 2003, OSI filed an answer and counterclaims alleging, among other things, that we defrauded OSI, breached obligations of fiduciary duty to OSI and breached our obligations under the OSI Letter of Intent. OSI has provided an expert report that calculated OSI's damages in the case of approximately $49 million, not including punitive damages and interest. Under the OSI Letter of Intent, we proposed selling to OSI the conventional detection business and the ARGUS business that the Company acquired from PerkinElmer, Inc. Negotiations with OSI lasted for almost one year and ultimately broke down over issues regarding, among other things, intellectual property, product-line definitions, allocation of employees and due diligence. A trial has been set for February 2006. We believe that the claims asserted by OSI in its suit are without merit and intend to defend against the OSI claims vigorously. However, litigation is inherently uncertain and it is possible that an adverse decision could be rendered, which could have a material adverse effect on our consolidated financial position, results of operations and cash flows.

On July 1, 2004, lawsuits were filed on behalf of the estates of 31 Russian children in state courts of Washington, Arizona, California, Florida, New York and New Jersey against Honeywell. Honeywell TCAS, the Company, ACSS, Thales USA and Thales France. The suits are based on facts arising out of the crash over southern Germany of a Bashkirian Airways Tupelov TU 154M aircraft and a DHL Boeing 757 cargo aircraft. On-board the Tupelov aircraft were 12 crew members and 57 passengers, including 45 children. The Boeing aircraft carried a crew of three. Both aircraft were equipped with Honeywell/ACSS Model 2000, Change 7 Traffic Collision and Avoidance Systems. Sensing the other aircraft, the on-board DHL TCAS instructed the DHL pilot to climb, and the Tupelov on-board TCAS instructed the Tupelov pilot to descend. However, the Swiss air traffic controller ordered the Tupelov pilot to climb. The Tupelov pilot disregarded the on-board TCAS and put the Tupelov

96

aircraft into climb striking the DHL aircraft in midair at approximately 35,000 feet. All crew and passengers of both planes were lost. Investigations by the NTSB after the crash revealed that both TCAS units were performing as designed. The suits allege negligence and strict product liability based upon the design of the units and the training provided to resolve conflicting commands and seek compensatory damages. Our insurers have accepted defense of the matter and retained counsel. The matters were consolidated in the Federal Court of New Jersey, which has dismissed the actions on the basis of forum non conveniens.

On April 4, 2005, Lockheed Martin Corporation (Lockheed) filed a lawsuit against L-3 Integrated Systems in the Federal District Court for the Northern District of Georgia alleging misappropriation of proprietary information and breach of a license agreement. The lawsuit arises out of L-3 Integrated Systems' pursuit of the Republic of Korea's P-3 Lot II Maritime Patrol Aircraft Program as a subcontractor to Korean Airspace Industries. Lockheed claims that in connection with this subcontracting effort, L-3 Integrated Systems will use certain Lockheed proprietary information in violation of both a prior settlement agreement between Lockheed and the U.S. Government, and a license agreement between Lockheed and L-3 Integrated Systems because L-3 Integrated Systems is acting as a subcontractor (as opposed to a prime contractor) to the Republic of Korea. Lockheed is seeking an injunction prohibiting L-3 Integrated Systems from using the proprietary P-3 data in violation of the existing agreements and unspecified money damages. We believe that the claims asserted by Lockheed in its suit are without merit and intend to defend against the Lockheed claims vigorously.

Titan Legal Matters

Foreign Corrupt Practices Act Investigation

During the first quarter of 2004, Titan learned of allegations that improper payments under the Foreign Corrupt Practices Act (FCPA) had been made, or items of value had been provided, involving international consultants for Titan or its subsidiaries to foreign officials. The allegations, which were identified as part of internal reviews conducted by Titan and Lockheed Martin Corporation (Lockheed) in connection with their failed merger, were reported at that time to the government. Titan's Board of Directors established a committee of the Board to oversee Titan's internal review of these matters. In connection with the internal review, the SEC commenced an investigation into whether payments involving Titan's international consultants were made in violation of applicable law, particularly the FCPA. In addition, the Department of Justice (DoJ) initiated a criminal inquiry into this matter, and also initiated an investigation into whether these same alleged practices violated provisions of the United States Internal Revenue Code of 1986, as amended.

On March 1, 2005, Titan announced that it had entered into a consent to entry of a final judgment with the SEC without admitting or denying the SEC's allegations, and reached a plea agreement with the DoJ, under which Titan pled guilty to three FCPA counts related to its overseas operations. These counts consist of violations of the anti-bribery and the books and records provisions of the FCPA and aiding and assisting in the preparation of a false tax return.

In connection with the FCPA settlement, Titan made total payments of $28.5 million, including a DoJ-recommended fine of $13.0 million and payments to the SEC of $15.5 million. A federal judge also imposed a three-year term of supervised probation. As part of these agreements, Titan agreed to: (1) implement a best-practices compliance program designed to detect and deter future violations of the FCPA; and (2) retain an independent consultant to review its policies and procedures with respect to FCPA compliance and to adopt the consultant's recommendations. If Titan fails to comply with its sentence or the consent to entry of a final judgment, it could be subject to additional criminal and civil fines or penalties and limitations on its ability to enter into or perform under U.S. government contracts, which would have a material adverse effect on our financial position, results of operations or cash flows.

Titan has made voluntary disclosures to the U.S. Department of State of suspected violations of law discovered in the course of Titan's internal FCPA investigation. The voluntary disclosures have not yet been resolved and may result in the assessment of fines or penalties against Titan. Further, as

97

a result of Titan's plea agreement, Titan is currently unable to obtain new export licenses for items regulated by the U.S. Department of State. Titan has been working with the U.S. Department of State to obtain relief from this licensing ineligibility rule, but there is no assurance that Titan will be able to obtain new export licenses or amendments to existing ones or to utilize licensing exemptions in the foreseeable future. In addition, Titan's privilege to export products or services under existing export licenses may also be suspended. If Titan were prevented from obtaining new licenses and/or exporting products or services under existing licenses for a significant period of time, this could breach its obligations under certain contracts and could cause Titan to suffer adverse consequences, including termination of contracts and/or claims for damages. Titan does not know when, or if, it will be able to obtain relief from the licensing ineligibility rule, or for any further export license suspensions. Certain of Titan's revenues are generated by contracts with international customers which require export licenses. For the year ended December 31, 2004, Titan had revenues of approximately $27.0 million that required it to have export licenses.

On March 2, 2005, the Navy, acting on behalf of the DoD, and Titan executed an administrative settlement agreement that would allow Titan to continue to receive U.S. government contracts. The agreement imposes certain duties and limitations on Titan and provides that the Navy will monitor for three years Titan's compliance with, among other things, the FCPA and federal procurement laws and regulations. Under the agreement, the Navy agreed not to undertake any administrative action to propose Titan for debarment, but reserved the right to undertake appropriate administrative action, in its discretion, in the event of the indictment or conviction of any then-current (as of the date of execution of the agreement) officer or director of Titan or any of its wholly-owned subsidiaries arising out of continuing investigations into the underlying matters that were the subject of the Titan plea agreement or the final judgment entered by the SEC. The Justice Department is continuing its investigation of individuals involved in these matters. The Navy agreement defines "Titan" to include, among other things, Titan's "affiliates." There is no assurance that we will not be construed as Titan's affiliate under the agreement. L-3 is working with the Navy to make appropriate modifications to the Navy agreement to reflect L-3's acquisition of Titan.

Titan has an ongoing obligation under its by-laws and under indemnity agreements with current and former employees to advance their costs of defense relating to the FCPA investigations and related class action and derivative litigation, subject to each individual undertaking to repay the costs of defense if it is ultimately determined that any such individual is not entitled to be indemnified by Titan.

Stockholder and Derivative Actions

Titan and its officers and directors are subject to several lawsuits arising out of the FCPA settlement and the failed merger with Lockheed Martin Corporation.

In re Titan Inc. Securities Litigation, No. 04-CV-0701-K(NLS), is a consolidated putative class action filed before the U.S. District Court for the Southern District of California (the Federal Securities Action). The complaint alleges, among other things, that Titan and its officers and directors violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Securities and Exchange Commission (SEC) Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act, by issuing a series of press releases, public statements and filings disclosing significant historical and future revenue growth, but omitting to mention certain allegedly improper payments involving international consultants in connection with Titan's international operations, thereby artificially inflating the trading price of Titan's common stock. On July 18, 2005, an amended complaint in the securities action was filed that, among other things, added the claims that were previously pled in the "Holder Actions" described in the next paragraph. The Federal Securities Action and the Holder Actions are referred to collectively as the "Securities Action."

Certain Titan officers are also parties to putative class action complaints filed in the Superior Court for the State of California in and for San Diego County (the Holder Actions). These cases include Paul Berger v. Gene W. Ray, et al., No. GIC 828346, and Robert Garfield v. Mark W. Sopp, et. al, No. GIC 828345. These actions purport to be brought on behalf of all holders of Titan common stock as of April 7, 2004. The Holder Actions allege, among other things, that the defendants

98

breached their fiduciary duties by acquiescing in or condoning Titan's alleged violations of the FCPA by failing to establish adequate procedures to prevent the alleged FCPA violations, and by failing, in bad faith, to voluntarily report the alleged FCPA violations to government officials.

Titan's directors and certain Titan officers, with Titan as a nominal defendant, are also party to Theodore Weisgerber v. Gene Ray, et al., No. 832018, which was filed in the Superior Court for the State of California, San Diego; Robert Ridgeway v. Gene Ray, et al., No. 542-N, which was filed in Delaware Court of Chancery, New Castle County; Bernd Bildstein v. Gene Ray, et al., No. 833701, which was filed in the Superior Court for the State of California, San Diego County; and Madnick v. Gene Ray, et al., No. 1215-N, which was filed in the Delaware Court of Chancery, New Castle County (the Derivative Actions). The Derivative Actions purport to be brought for the benefit of the nominal defendant, Titan, and allege that the defendants breached their fiduciary duties by failing to monitor and supervise management in a way that would have either prevented the alleged FCPA violations or would have detected the alleged FCPA violations. The Weisgerber complaint was subsequently amended to include allegations that the defendants breached their fiduciary duties by failing to monitor and supervise management in a way that would have prevented the alleged mistreatment of prisoners at the Abu Ghraib prison in Iraq, alleged billing errors relating to the work performed by foreign nationals, and the loss of contracts with the government. On June 3, 2005, an amended complaint was filed in the Ridgeway action which added, among other things, a claim alleging that Titan's directors breached their fiduciary duty in connection with their approval of the merger with L-3. L-3 was named as a defendant in the Ridgeway action for allegedly aiding and abetting this alleged breach of fiduciary duty.

On June 6, 2005, a putative class action, Gentsch v. Titan Corp. et al., No. GIC 848598, was filed in Superior Court for the State of California against Titan and its board of directors challenging the merger between Titan and L-3.

Concurrently with entering into the merger agreement relating to the Titan acquisition, two memoranda of understanding were executed. First, the defendants in the Securities Action, including Titan and certain of its directors and officers, entered into a memorandum of understanding (the Securities MOU) with plaintiffs in the Federal Securities and Holder actions. Pursuant to the Securities MOU, plaintiffs and their counsel will receive $61.5 million. Second, the defendants in the Derivative Actions, including Titan and certain of its directors and officers and L-3, entered into a separate memorandum of understanding (the Derivative MOU) with plaintiffs in the Derivative Actions. As a result of negotiations with the plaintiffs in the Derivative Actions, L-3 agreed, among other things, to increase the purchase price for Titan's common stock to $23.10 per share and reduced the termination fee potentially payable by Titan. Pursuant to the Derivative MOU, L-3 has agreed to pay any plaintiff attorneys' fees awarded by the Delaware Court of Chancery, up to $5.9 million.

After the completion of confirmatory discovery, including the review by plaintiffs' counsel of certain documents of Titan and the company and the taking of several depositions, the parties executed stipulations of settlement (i.e., the Securities Settlement and the Derivative Settlement) on July 22, 2005. The Derivative Settlement that was executed included the settlement of the Gentsch matter. The Securities Settlement was preliminarily approved on September 26, 2005 and a Final Settlement Hearing is scheduled for December 19, 2005. The Derivative Settlement was preliminarily approved on August 8, 2005 and received final approval on November 2, 2005.

SureBeam Related Litigation

In August 2002, Titan completed the spin-off of its former subsidiary, SureBeam Corporation. On January 19, 2004, SureBeam voluntarily filed for bankruptcy relief to be liquidated under Chapter 7 of the United States Bankruptcy Court. Various lawsuits have been filed against Titan and/or certain directors and executive officers of Titan in connection with SureBeam.

Titan, certain corporate officers of SureBeam, Dr. Gene Ray and Susan Golding, as SureBeam directors, and certain investment banks that served as lead underwriters for SureBeam's March 2001 initial public offering, have been named as defendants in several purported class action lawsuits filed by holders of common stock of SureBeam in the U.S. District Court. On October 6, 2003, these

99

lawsuits were consolidated into In re SureBeam Corporation Securities Litigation, No. 03-CV-001721-JM (POR) in the U.S. District Court for the Southern District of California. The consolidated action seeks an unspecified amount of damages and alleges that each of the defendants, including Titan, as a "control person" of SureBeam within the meaning of Section 15 of the Securities Act, should be held liable under Section 11 of the Securities Act because the prospectus for SureBeam's initial public offering was allegedly inaccurate and misleading, contained untrue statements of material facts, and omitted to state other facts necessary to make the statements made therein not misleading. The consolidated action further alleges that the defendants, including Titan, as a control person of SureBeam within the meaning of Section 20(a) of the Exchange Act, should be held liable under Section 10(b) of the Exchange Act for false and misleading statements made during the period from March 16, 2001 to August 27, 2003. On January 3, 2005, the court granted in part and denied in part motions to dismiss the operative complaint. An amended complaint was filed on March 1, 2005. Titan intends to defend the claims vigorously.

On September 17, 2004, the bankruptcy trustee in the SureBeam Corporation bankruptcy pending in the United States Bankruptcy Court for the Southern District of California brought an action in San Diego Superior Court, on behalf of the bankruptcy estate, against certain directors and current and former executive officers of Titan who served at one time as directors or officers of SureBeam. The bankruptcy trustee's complaint raises claims of breach of fiduciary duties, gross mismanagement, abuse of corporate control, waste of corporate assets, breach of the duty of loyalty, unjust enrichment, breach of fiduciary duties for insider trading and violation of the California Corporation Code. Because the defendants were named by reason of the fact that they were serving as directors or officers of SureBeam at the request of Titan, Titan is covering the costs of defense of these claims, subject to indemnification agreements and bylaw provisions. L-3 has agreed to settle the trustee claim for $5.0 million and is working to finalize the settlement.

Government Investigations

In October 2002, Titan received a grand jury subpoena from the Antitrust Division of the DoJ requesting the production of documents relating to information technology services performed for the Air Force at Hanscom Air Force Base in Massachusetts and Wright-Patterson Air Force Base in Ohio. Titan has been informed that other companies who have performed similar services have received subpoenas as well. A senior Titan employee has provided a handwriting exemplar in connection with this matter and three Titan employees have previously testified before the grand jury in exchange for receiving immunity. Titan is not aware of any illegal or inappropriate conduct and has been cooperating and will continue to cooperate fully with the investigation.

In March 2003, Titan received a subpoena from the Office of Inspector General for the National Aeronautics and Space Administration (NASA) seeking certain records relating to billing for labor services in connection with its contracts with NASA. Titan also received a subpoena from the Office of Inspector General for the General Services Administration (GSA) seeking similar records relating to billing for labor categories in connection with contracts with GSA. In response to these subpoenas, Titan has provided documents relating to billing for labor services in connection with government contracts. Titan has been informed by NASA that the NASA investigation is closed. Titan is not aware of any illegal or inappropriate conduct and has been cooperating and will continue to cooperate fully with the ongoing GSA investigation.

These investigations are ongoing, and we are unable to predict their outcome at this time. Any penalties imposed by the U.S. Government in these matters could have a material adverse effect on our financial position, results of operations or cash flows.

Other Legal Proceedings

Since June 9, 2004, two lawsuits have been filed alleging that Titan and other defendants either participated in, approved of, or condoned the mistreatment of prisoners by United States military officials in certain prison facilities in Iraq in violation of federal, state and international law. The first of these cases, Saleh v. Titan Corporation, No. 04-CV-1143 R, was filed in the United States District Court for the Southern District of California against The Titan Corporation, CACI International, Inc.

100

(CACI), and its affiliates, and three individuals (one formally employed by Titan and one by a Titan subcontractor). Plaintiffs in Saleh seek class certification. The second case, Ibrahim v. Titan Corporation, No. 04-CV-1248, was filed on July 27, 2004, on behalf of five individual plaintiffs against Titan, CACI and CACI affiliates, and contains allegations similar to those in Saleh. Class certification has not been requested in Ibrahim. We intend to defend these lawsuits vigorously.

On January 23, 2004, Titan, together with its wholly-owned subsidiary, Titan Wireless, Inc., and Titan Wireless's wholly-owned subsidiary, Titan Africa, Inc., were named as defendants in Gonzales Communications, Inc. v. Titan Wireless, Inc., Titan Africa, Inc., The Titan Corporation, Geolution International Inc., and Mundi Development, Inc., a lawsuit filed in the U.S. District Court for the Southern District of California, No. 04-CV-00147 WQH (JMA). The complaint relates to the purchase by Gonzales Communications of equipment and related services under an equipment purchase agreement entered into with Titan Wireless in June 2001. Gonzales Communications contends that the equipment and services delivered were unsatisfactory. In the complaint, Gonzales Communications seeks direct damages in the amount of $0.9 million plus interest, representing the amount Gonzales Communications alleges to have previously paid under the agreement, and consequential damages of approximately $16.3 million. To date, Titan and its subsidiaries have not received payment in full under the agreement for the equipment and services that were delivered to Gonzales Communications. Titan has filed a counterclaim against Gonzales Communications for in excess of $1.2 million. On July 11, 2005, the court granted in part and denied in part Titan's motion for summary judgment. We intend to defend our position vigorously.

On March 14, 2005, Makram Majid Chams, a former consultant of Titan filed a claim with the Preliminary Committee on Labor Disputes Settlement in Saudi Arabia. Mr. Chams alleges that Titan wrongfully terminated his consulting agreement and that he was defamed by Titan's publication in a local newspaper of a mandatory notice that he is no longer representing Titan. The plaintiff is seeking approximately $21.9 million in damages. We intend to defend our position vigorously.

In December 2001, the current occupants of a property formerly owned by Titan commenced an environmental action, Lefcourt Associates, Ltd. et al. v. The Thor Corporation, et al., against Titan and others in New Jersey state court. Plaintiffs contend that Titan is liable for the damages caused by hazardous waste materials originating from adjacent land to the extent that Titan purportedly provided indemnification to plaintiffs when it sold the property to them in 1986. Discovery is in progress, and we cannot predict the outcome of this litigation at this time.

101

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In connection with our incorporation, L-3 Holdings, Mr. Lanza and certain other parties entered into a Stockholders Agreement, which has terminated except for the terms relating to registration rights.

Pursuant to the Stockholders Agreement, at this time Mr. Lanza has the right, subject to certain conditions, to require L-3 Holdings to register his shares of its common stock under the Securities Act of 1933. Mr. Lanza has one demand registration right.

In addition, the Stockholders Agreement provides Mr. Lanza with piggyback registration rights. The Stockholders Agreement provides, among other things, that L-3 Holdings will pay expenses incurred in connection with:

•	the demand registration requested by Mr. Lanza and

•	any registration in which Mr. Lanza participates through piggyback registration rights granted under the agreement.

102

MANAGEMENT

Directors, Executive Officers and Key Employees

The following table provides information concerning the directors, executive officers and key employees of L-3 Communications as of October 31, 2005:

Name				Age				Position
Frank C. Lanza				73				Chairman, Chief Executive Officer and Director
Michael T. Strianese				49				Senior Vice President and Chief Financial Officer
Christopher C. Cambria				47				Senior Vice President, Secretary and General Counsel
Charles J. Schafer				58				Senior Vice President and President and Chief Operating Officer of the Products Group
Robert W. Drewes				63				Vice President and President and Chief Operating Officer of the L-3 Integrated Systems Group
James W. Dunn				61				Senior Vice President and President and Chief Operating Officer of the Sensors and Simulation Group
Jimmie V. Adams				69				Vice President — Washington D.C. Operations
David T. Butler III				49				Vice President — Mergers, Acquisitions and Corporate Strategy
Ralph G. D'Ambrosio				38				Vice President — Finance
Kenneth R. Goldstein				59				Vice President — Taxes
Robert W. RisCassi				69				Vice President
Stephen M. Souza				52				Vice President and Treasurer
Dr. Jill J. Wittels				56				Vice President — Business Development
Claude R. Canizares(1)				60				Director
Peter A. Cohen(2)				59				Director
Thomas A. Corcoran(1)(2)				61				Director
Robert B. Millard(2)				55				Director
John M. Shalikashvili(2)(3)				69				Director
Arthur L. Simon(1)(3)				73				Director
Alan H. Washkowitz(2)(3)				65				Director
John P. White(3)				68				Director

(1)	Member of the Audit Committee.

(2)	Member of the Compensation Committee.

(3)	Member of Nominating/Corporate Governance Committee.

Frank C. Lanza, Chairman and Chief Executive Officer and Director since April 1997. From April 1996, when Loral Corporation was acquired by Lockheed Martin Corporation, until April 1997, Mr. Lanza was Executive Vice President of Lockheed Martin, a member of Lockheed Martin's Executive Council and Board of Directors and President and Chief Operating Officer of Lockheed Martin's command, control, communications and intelligence (C³I) and Systems Integration Sector, which comprised many of the businesses Lockheed Martin acquired from Loral. Prior to the April 1996 acquisition of Loral, Mr. Lanza was President and Chief Operating Officer of Loral, a position he held since 1981. He joined Loral in 1972 as President of its largest division, Electronic Systems. His earlier experience was with DalmoVictor and Philco Western Development Laboratory.

Michael T. Strianese, Senior Vice President and Chief Financial Officer. Mr. Strianese became Chief Financial Officer on March 11, 2005. From July 2000 to March 11, 2005 he was our Senior Vice President — Finance. He joined us in April 1997 as Vice President — Finance and Controller and was our Controller until July 2000. From April 1996, when Loral was acquired by Lockheed Martin, until April 1997, Mr. Strianese was Vice President and Controller of Lockheed Martin's C³I and Systems

103

Integration Sector. From 1991 to the April 1996 acquisition of Loral, he was Director of Special Projects at Loral. Mr. Strianese is a Certified Public Accountant.

Christopher C. Cambria, Senior Vice President — Secretary and General Counsel. Mr. Cambria became a Senior Vice President in March 2001. He joined us in June 1997 as Vice President—General Counsel and Secretary. From 1994 until joining us, Mr. Cambria was an associate with Fried, Frank, Harris, Shriver & Jacobson. From 1986 until 1993, he was an associate with Cravath, Swaine & Moore. Mr. Cambria is a director of Core Software Technologies.

Charles J. Schafer, Senior Vice President and President and Chief Operating Officer of the Products Group. Mr. Schafer became a Senior Vice President in April 2002. Mr. Schafer was appointed President of the Products Group in September 1999. He joined us in August 1998 as Vice President—Business Operations. Prior to August 1998, he was President of Lockheed Martin's Tactical Defense Systems Division, a position he also held at Loral since September 1994. Prior to the April 1996 acquisition of Loral, Mr. Schafer held various executive positions with Loral, which he joined in 1984.

Robert W. Drewes, Vice President and President and Chief Operating Officer of the L3 Integrated Systems Group. Mr. Drewes became a Vice President in March 2002 upon our acquisition of the Integrated Systems business from Raytheon Company. Mr. Drewes became President of the Integrated Systems business in May 2001. Prior to joining Integrated Systems, Mr. Drewes was the Vice President of Productivity for Raytheon Company. Mr. Drewes joined Raytheon Company in November 1997 after completing 33 years of distinguished service in the U.S. Air Force with the rank of Major General. His last assignment was Commander of Defense Contract Management Command, an organization comprised of more than 16,000 employees stationed worldwide. Additionally, Mr. Drewes has more than eight years of experience working on various assignments in the Pentagon and was a military assistant in the Executive Office of the President of the United States during the Reagan Administration.

James W. Dunn, Senior Vice President and President and Chief Operating Officer of the Sensors and Simulation Group. Mr. Dunn became a Senior Vice President in January 2004. He joined us in June 2000 as President of our Link Simulation and Training division. Prior to joining us, from April 1996, when Loral Corporation was acquired by Lockheed Martin, until May 2000, Mr. Dunn served as president of several Lockheed Martin business units, including the Tactical Defense Systems Group, the Defense Systems Group, Fairchild Systems and the NESS Eagan, Akron and Archibald divisions. Prior to that, Mr. Dunn was with the Loral Corporation, which he joined in 1978, and held a series of management positions there during his 18-year tenure, including President of Loral Fairchild Systems, Senior Vice President of Engineering and Senior Vice President of Program Management.

Jimmie V. Adams, Vice President — Washington, D.C. Operations. General Jimmie V. Adams (U.S.A.F.-ret.) joined us in May 1997. From April 1996 until April 1997, he was Vice President of Lockheed Martin's Washington Operations for the C³I and Systems Integration Sector. Prior to the April 1996 acquisition of Loral, he had held the same position at Loral since 1993. Before joining Loral in 1993, he was Commander in Chief, Pacific Air Forces, Hickam Air Force Base, Hawaii, capping a 35-year career with the U.S. Air Force. He was also Deputy Chief of Staff for plans and operation for U.S. Air Force headquarters and Vice Commander of Headquarters Tactical Air Command and Vice Commander in Chief of the U.S. Air Forces Atlantic at Langley Air Force Base. He is a command pilot with more than 141 combat missions.

David T. Butler III, Vice President — Mergers, Acquisitions and Corporate Strategy. Mr. Butler became a Vice President in December 2000. He joined us in 1997 as our corporate Director of Planning and Strategic Development. Prior to joining us, he was the Controller for Lockheed Martin Fairchild Systems from 1996 to 1997. Prior to the acquisition of Loral, Mr. Butler was Controller of Loral Fairchild Systems from 1992 to 1996. From 1981 to 1992, Mr. Butler held a number of financial positions with Loral Electronic Systems.

Ralph G. D'Ambrosio, Vice President — Finance. Mr. D'Ambrosio became Vice President — Finance on March 11, 2005. He became a Vice President in July 2001 and Controller in August 2000.

104

He joined us in August 1997, and until July 2000 was our Assistant Controller. Prior to joining us, he was a senior manager at Coopers & Lybrand L.L.P., where he held a number of positions since 1989. Mr. D'Ambrosio is a Certified Public Accountant.

Kenneth R. Goldstein, Vice President — Taxes. Mr. Goldstein became a Vice President in October 2003. He joined us in 1997 as our corporate director of taxes. From April 1996, when Loral was acquired by Lockheed Martin, until April 1997, Mr. Goldstein was a director of taxes at Lockheed Martin Corporation. From 1981 to 1996, Mr. Goldstein was the director of taxes at Loral Corporation. Mr. Goldstein joined Loral Corporation in 1978 as a tax manager.

Robert W. RisCassi, Vice President. General Robert W. RisCassi (U.S. Army-ret.) joined us in April 1997. From April 1996 until April 1997, he was Vice President of Land Systems for Lockheed Martin's C³I and Systems Integration Sector. Prior to the April 1996 acquisition of Loral, he had held the same position for Loral since 1993. He joined Loral in 1993 after retiring as U.S. Army Commander in Chief, United Nations Command/Korea. His 35-year military career included posts as Army Vice Chief of Staff; Director, Joint Staff, Joint Chiefs of Staff; Deputy Chief of Staff for Operations and Plans; and Commander of the Combined Arms Center. General RisCassi is currently a director of Alliant Techsystems Inc.

Stephen M. Souza, Vice President and Treasurer. Mr. Souza joined us in August 2001. Prior to joining us he was the Treasurer of ASARCO Inc. from 1999 to August 2001 and Assistant Treasurer from 1992 to 1999.

Jill J. Wittels, Vice President — Business Development. Dr. Wittels joined us in March 2001. From July 1998 to February 2001 she was President and General Manager of BAE Systems' Information and Electronic Warfare Systems/Infrared and Imaging Systems division and its predecessor company. From January 1997 to July 1998, Dr. Wittels was Vice President—Business Development and Operations for IR Focalplane Products at Lockheed Martin. Dr. Wittels is on the Board of Overseers for the Department of Energy's Fermi National Accelerator Lab. Dr. Wittels is also a director of Innovative Micro Technology, Inc., eMagin Corporation and MVT Equity, LLC.

Claude R. Canizares, Director since May 2003. Member of the audit committee. Since 1974, Professor Canizares has been a faculty member of the Massachusetts Institute of Technology (MIT). He currently serves as the Associate Provost and Bruno Rossi Professor of Experimental Physics, overseeing the MIT Lincoln Laboratory. In addition, he is a principal investigator and Associate Director of NASA's Chandra X-ray Observatory. Professor Canizares is a member of the National Academy of Sciences, the International Academy of Astronautics and a fellow of the American Physical Society and the American Association for the Advancement of Science. He is also a member of the Board of Trustees of the Associated Universities, Inc.

Peter A. Cohen, Director since October 2005. Member of the compensation committee. Mr. Cohen is a founding and managing partner of Ramius Capital Group, LLC, a private investment management and merchant banking firm formed in 1994. Prior thereto, he formed Republic New York Securities, an investment management firm in 1991 and was employed by Shearson Lehman Brothers, an investment banking firm, from 1978 to 1991. At Shearson, Mr. Cohen held a number of executive positions, including President and Chief Operating Officer from 1981 through 1990, and Chairman and Chief Executive Officer from 1983 to 1990. He was also a director of Kroll, Inc. through June 2004 and is a director of Portfolio Recovery Associates, The Mount Sinai-NYU Medical Center & Health System, and Scientific Games Corporation.

Thomas A. Corcoran, Director since July 1997. Chairman of the audit committee and member of the compensation committee since April 27, 2004. Mr. Corcoran is president of Corcoran Enterprises, LLC, a private management consulting firm, and in this capacity, he works closely with The Carlyle Group, a Washington D.C. based private equity firm. From March 2001 to April 2004, Mr. Corcoran was the President and Chief Executive Officer of Gemini Air Cargo. Mr. Corcoran was the President and Chief Executive Officer of Allegheny Teledyne Incorporated from October 1999 to December 2000. From October 1998 to September 1999, he was President and Chief Operating Officer of the Space & Strategic Missiles Sector of Lockheed Martin Corporation. From March 1995 to September

105

1998 he was the President and Chief Operating Officer of the Electronic Systems Sector of Lockheed Martin Corporation. From 1993 to 1995, Mr. Corcoran was President of the Electronics Group of Martin Marietta Corporation. Prior to that he worked for General Electric for 26 years and from 1983 to 1993 he held various management positions with GE Aerospace and was a company officer from 1990 to 1993. Mr. Corcoran is a member of the Board of Trustees of Stevens Institute of Technology and the Boards of Directors of American Ireland Fund, REMEC Corporation, United Industrial Corporation and Gemini Air Cargo.

Robert B. Millard, Director since April 1997. Chairman of the compensation committee. Mr. Millard is a Managing Director of Lehman Brothers Inc., head of Lehman Brothers' Principal Trading & Investments Group and principal of the Merchant Banking Group. Mr. Millard joined Lehman Brothers Inc. in 1978 when Kuhn Loeb & Co. was acquired by Lehman Brothers and became a Managing Director of Lehman Brothers Inc. in 1983. Mr. Millard joined Kuhn Loeb & Co. in 1976. Mr. Millard is a director of GulfMark Offshore, Inc. and Weatherford International, Inc.

John M. Shalikashvili, Director since August 1998. Member of the compensation and nominating/corporate governance committees. General Shalikashvili (U.S. Army-ret.) is an independent consultant and a Visiting Professor at Stanford University. General Shalikashvili was the senior officer of the United States military and principal military advisor to the President of the United States, the Secretary of Defense and National Security Council by serving as the thirteenth Chairman of the Joint Chiefs of Staff, Department of Defense, for two terms from 1993 to 1997. Prior to his tenure as Chairman of the Joint Chiefs of Staff, he served as the Commander in Chief of all United States forces in Europe and as NATO's tenth Supreme Allied Commander, Europe (SACEUR). He has also served in a variety of command and staff positions in the continental United States, Alaska, Belgium, Germany, Italy, Korea, Turkey and Vietnam. General Shalikashvili is a director of The Boeing Company, United Defense Industries Inc., Frank Russell Trust Company and Plug Power, Inc.

Arthur L. Simon, Director since April 2000. Member of the audit and nominating/corporate governance committees. Mr. Simon is an independent consultant. Before his retirement, Mr. Simon was a partner at Coopers & Lybrand, L.L.P., Certified Public Accountants, from 1968 to 1994. He is a director of Loral Space & Communications Ltd.

Alan H. Washkowitz, Director since April 1997. Chairman of the nominating/corporate governance committee and member of the compensation committee. Mr. Washkowitz is a Managing Director of Lehman Merchant Banking Group, and is responsible for the oversight of Lehman Brothers Inc. Merchant Banking Portfolio Partnership L.P. Mr. Washkowitz joined Lehman Brothers Inc. in 1978 when Kuhn Loeb & Co. was acquired by Lehman Brothers. Mr. Washkowitz is a director of Peabody Energy Corporation.

John P. White, Director since October 2004. Member of the nominating/corporate governance committee. Dr. White is presently on the faculty of the John F. Kennedy School of Government of Harvard University and is the Managing Partner of Global Technology Partners, LLC. Dr. White has a long history of government service, serving as U.S. Deputy Secretary of Defense from 1995-1997; as Deputy Director of the Office of Management and Budget from 1978 to 1981, and as Assistant Secretary of Defense, Manpower, Reserve Affairs and Logistics from 1977 to 1978. Dr. White also served as a lieutenant in the United States Marine Corps from 1959 to 1961. Prior to his most recent government position, Dr. White was the Director of the Center For Business and Government at Harvard University and the Chairman of the Commission on Roles and Missions of the Armed Forces. Dr. White has extensive private sector experience, including service as Chairman and CEO of the Interactive Systems Corporation, a position he held from 1981 to 1988. Following Interactive Systems Corporation's sale to the Eastman Kodak Company in 1988, he was General Manager of the Integration and Systems Product Division and a Vice President of Kodak until 1992. Dr. White also spent nine years at the RAND Corporation, where he served as the Senior Vice President of National Security Research Programs and as a member of the Board of Trustees. He continues to serve as a Senior Fellow to the RAND Corporation. Dr. White is a current member of the Council on Foreign Relations. He also serves as a Director of IRG International, Inc., the Institute for Defense Analyses and the Concord Coalition and Center for Excellence in Government. He is a member of the Policy and Global Affairs Oversight Committee of the National Research Council.

106

L-3 Holdings' amended and restated certificate of incorporation provides for a classified board of directors divided into three classes. Frank C. Lanza, John M. Shalikashvili and John P. White constitute Class I Directors, whose terms will expire at the annual meeting of the stockholders to be held in 2008. Thomas A. Corcoran, Claude R. Canizares and Alan H. Washkowitz constitute Class II Directors, whose terms will expire at the annual meeting of the stockholders to be held in 2007. Peter A. Cohen, Robert B. Millard and Arthur L. Simon constitute Class III Directors, whose terms will expire at the annual meeting of the stockholders to be held in 2006. At each annual meeting, L-3 Holdings' stockholders will elect the successors to directors whose terms will then expire to serve from the time of election and qualification until the third annual meeting following election and until their successors have been elected and qualified, or until their resignation or removal, if any. Increases or decreases in the number of directorships will be distributed among the three classes so that, as nearly as possible, each class will consist of an equal number of directors.

Our executive officers and key employees serve at the discretion of our board of directors.

The Board of Directors and Certain Governance Matters

Our board of directors directs the management of our business and affairs, as provided by Delaware law, and conducts its business through meetings of the board of directors and three standing committees: the audit, nominating/corporate governance and compensation committees. In addition, from time to time, special committees may be established under the direction of the board of directors when necessary to address specific issues. Each executive officer serves at the discretion of the board of directors.

Compensation of Directors

The directors who are also our employees or employees of our subsidiaries or affiliates do not receive compensation for their services as directors. The non-employee directors receive annual compensation of $50,000 for service on the board of directors, of which $40,000 is paid in cash on a quarterly basis, and $10,000 is paid in shares of L-3 Holdings' common stock. The chairman of the audit committee receives additional cash annual compensation of $7,500. The chairman of the compensation and the nominating/corporate governance committees each receive additional cash annual compensation of $5,000. The non-employee directors will be compensated $1,500 per board meeting attended, $2,000 per audit committee meeting attended, $1,500 per compensation or nominating/corporate governance committee meeting attended and $1,000 per telephonic audit, compensation or nominating/corporate governance committee meeting in which they participate. In addition, nonemployee directors each receive annual stock options to purchase 2,500 shares of L-3 Holdings' common stock, which vest in three equal annual installments. The nonemployee directors are entitled to reimbursement for their reasonable out-of-pocket expenses in connection with their travel to and attendance at meetings of the board of directors or committees thereof.

Non-employee directors may defer up to 100 percent of the cash portion of their annual cash compensation (including meeting fees) otherwise payable to the director. Subject to certain limitations, a participating director's deferred compensation will be distributed in a lump sum on, or distributed in annual installments commencing on, the 30th day following the date he or she ceases to be a director. Deferral elections are irrevocable during any calendar year and must be made before the beginning of the calendar year in which his/her compensation is earned. Interest is accrued on deferred amounts. Depending on a director's investment election, deferred amounts earn interest at a rate based on the 90-day U.S. Government Treasury Bill or the performance of L-3 Holdings' common stock.

107

Executive Compensation and Other Matters

Summary Compensation Table

The following table provides summary information concerning compensation paid or accrued by us to or on behalf of our Chief Executive Officer and each of our four other most highly compensated executive officers who served in such capacities at December 31, 2004, collectively referred to herein as the named executive officers, for services rendered to us during each of the last three years.

																Long-Term Compensation Awards
Name and Principal Position				Year				Annual Compensation(1)								Securities Underlying Stock Options (#)				All Other Compensation ($)(2)
								Salary ($)				Bonus ($)
Frank C. Lanza					2004				925,000				1,100,000				—				9,146
(Chairman and Chief Executive					2003				875,000				975,000				75,000				6,180
Officer)					2002				825,000				850,000				400,000				11,125
Michael T. Strianese					2004				395,000				525,000				40,000				22,559
(Senior Vice President and Chief					2003				365,000				435,000				75,000				19,726
Financial Officer)					2002				331,250				375,000				—				19,690
Christopher C. Cambria					2004				395,000				525,000				40,000				13,001
(Senior Vice President, Secretary					2003				235,000				435,000				75,000				12,383
and General Counsel)					2002				235,000				375,000				—				12,038
Charles J. Schafer					2004				345,000				465,000				30,000				34,472
(Senior Vice President and					2003				308,750				400,000				50,000				24,018
President and Chief Operating					2002				268,750				350,000				—				24,449
Officer of the Products Group)
Robert W. Drewes					2004				410,463				625,000				20,000				184,194
(Vice President and President and					2003				370,720				420,000				—				182,565
Chief Operating Officer of the L-3					2002				277,308				300,000				30,000				23,890
Integrated Systems Group)

(1)	In each of the prior three years, the aggregate amount of incremental cost to us of perquisites received, if any, for each of the named executive officers (after reimbursements, if any, by the executive officers) has not exceeded the $50,000 prescribed threshold as defined under Item 402 of Reg S-K.

(2)

Amounts for the year ended December 31, 2004 include: (a) our matching contributions of $8,200 under our savings plan for Messrs. Strianese and Cambria, $10,600 for Mr. Schafer and $10,762 for Mr. Drewes; (b) the value of supplemental life insurance programs in the amounts of $9,146 for Mr. Lanza, $14,359 for Mr. Strianese, $4,801 for Mr. Cambria, $23,872 for Mr. Schafer and $20,432 for Mr. Drewes; and (c) a retention bonus of $153,000 for Mr. Drewes.

Option Grants in Fiscal Year 2004

The following table shows the options to purchase L-3 Holdings' common stock granted in fiscal year 2004 to the named executive officers.

Name				Options Granted (#)(1)				% Total Options Granted				Per Share Exercise Price ($)				Expiration Date				Grant Date Value ($)(2)
Frank C. Lanza					—				0.00	%			—				—				—
Michael T. Strianese					40,000				2.40	%			68.16				11/10/14				859,333
Christopher C. Cambria					40,000				2.40	%			68.16				11/10/14				859,333
Charles J. Schafer					30,000				1.80	%			68.16				11/10/14				644,500
Robert W. Drewes					20,000				1.20	%			59.73				4/20/14				365,067
					130,000																2,728,233

108

(1)	Each of the options shown in this table entitles the holder to purchase our common stock and vests one-third on each of the first, second and third anniversaries of the grant date.

(2)

Based on a weighted average value of $20.99 per option. The valuation calculations are solely for the purposes of compliance with the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended, and are not intended to forecast possible future appreciation, if any, of the price of our common stock. Grant date values are based on the Black-Scholes option pricing model adapted for use in valuing executive stock options. The actual value, if any, an executive may realize will depend on the excess of the stock price over the exercise price on the date the option is exercised. In addition, all stock option valuation models, including the Black-Scholes model, require a prediction about the future movement of the stock price. The real value of the options in this table depends upon the actual changes in the market price of our common stock during the applicable period. Accordingly, there is no assurance the value realized by an executive will be at or near the value estimated by the Black-Scholes model. The grant date values were determined based in part upon the following assumptions: (a) a weighted average expected volatility of 35.6% based on daily average stock prices of our company stock for the period from May 19, 1998 to the end of the quarterly period in which the options were granted; (b) a weighted average risk-free rate of return of 3.1%; (c) our common stock dividend yield of 0.7%; and (d) an expected weighted average option life of 4.2 years.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

The following table provides information on options to purchase L-3 Holdings' common stock that were exercised during fiscal year 2004 by our named executive officers; the total numbers of exercisable and non-exercisable options to purchase L-3 Holdings' common stock owned by our named executive officers at December 31, 2004; and the aggregate dollar value of such options that were in-the-money at December 31, 2004.

				Shares Acquired on Exercise (#)				Value Realized ($)				Number of Securities Underlying Unexercised Options at Fiscal Year-End (#)								Value of Unexercised In-The-Money Options at Fiscal Year-end ($)(1)
Name												Exercisable				Unexercisable(2)				Exercisable				Unexercisable(2)
Frank C. Lanza					—				—				1,820,239				183,333				112,892,356				3,971,327
Michael T. Strianese					30,000				1,097,425				106,000				90,000				4,186,160				2,085,200
Christopher C. Cambria					20,000				1,096,850				105,900				90,000				4,218,211				2,085,200
Charles J. Schafer					20,000				940,075				47,667				63,333				1,667,241				1,407,054
Robert W. Drewes					—				—				20,000				30,000				484,800				512,600

(1)	In accordance with SEC rules, the values of the in-the-money options were calculated by subtracting the exercise prices of the options from the December 31, 2004 closing stock price of L-3 Holdings' common stock of $73.24.

(2)	These options are unexercisable because they have not yet vested under their terms.

109

Pension Plan

PENSION PLAN TABLE

The following table shows the estimated annual pension benefits payable, over the participant's lifetime, under the L-3 Communications Corporation Pension Plan and Supplemental Executive Retirement Plan (SERP) to a covered participant upon retirement at normal retirement age (65), based on the final average compensation (salary and bonus) and years of credited service with us. The benefits listed in the table below are not subject to deductions for Social Security or any other offset amounts.

				Years of Credited Service
Final Average Compensation at Retirement				5				10				15				20				25				30				35
$   500,000				$	43,171			$	86,341			$	129,512			$	172,682			$	215,853			$	259,024			$	302,194
600,000					51,921				103,841				155,762				207,682				259,603				311,524				363,444
700,000					60,671				121,341				182,012				242,682				303,353				364,024				424,694
800,000					69,421				138,841				208,262				277,682				347,103				416,524				485,944
900,000					78,171				156,341				234,512				312,682				390,853				469,024				547,194
1,000,000					86,921				173,841				260,762				347,682				434,603				521,524				608,444
1,100,000					95,671				191,341				287,012				382,682				478,353				574,024				669,694
1,200,000					104,421				208,841				313,262				417,682				522,103				626,524				730,944
1,300,000					113,171				226,341				339,512				452,682				565,853				679,024				792,194
1,400,000					121,921				243,841				365,762				487,682				609,603				731,524				853,444
1,500,000					130,671				261,341				392,012				522,682				653,353				784,024				914,694
1,600,000					139,421				278,841				418,262				557,682				697,103				836,524				975,944
1,700,000					148,171				296,341				444,512				592,682				740,853				889,024				1,037,194
1,800,000					156,921				313,841				470,762				627,682				784,603				941,524				1,098,444
1,900,000					165,671				331,341				497,012				662,682				828,353				994,024				1,159,694
2,000,000					174,421				348,841				523,262				697,682				872,103				1,046,524				1,220,944
2,100,000					183,171				366,341				549,512				732,682				915,853				1,099,024				1,282,194
2,200,000					191,921				383,841				575,762				767,682				959,603				1,151,524				1,343,444
2,300,000					200,671				401,341				602,012				802,682				1,003,353				1,204,024				1,404,694
2,400,000					209,421				418,841				628,262				837,682				1,047,103				1,256,524				1,465,944
2,500,000					218,171				436,341				654,512				872,682				1,090,853				1,309,024				1,527,194

As of December 31, 2004, the current annual compensation and current years of credited service (including for Mr. Strianese, years of credited service as an employee of Loral and Lockheed Martin) for each of the following persons were: Mr. Lanza, $1,900,000 and eight years; Mr. Strianese, $830,000 and 15 years; Mr. Cambria, $830,000 and eight years; and Mr. Schafer, $745,000 and six years.

110

The following table shows the estimated annual pension benefits payable, over the participant's lifetime, under the L-3 Integrated Systems Retirement Plan and SERP to a covered participant upon retirement at normal retirement age (65), based on the final average compensation (salary and bonus) and years of credited service with us. The benefits listed in the table below include deductions for Social Security amounts.

				Years of Credited Service
Final Average Compensation at Retirement				5				10				15				20				25				30				35
$   500,000				$	42,672			$	85,343			$	128,015			$	170,686			$	199,134			$	227,581			$	256,029
600,000					51,672				103,343				155,015				206,686				241,134				275,581				310,029
700,000					60,672				121,343				182,015				242,686				283,134				323,581				364,029
800,000					69,672				139,343				209,015				278,686				325,134				371,581				418,029
900,000					78,672				157,343				236,015				314,686				367,134				419,581				472,029
1,000,000					87,672				175,343				263,015				350,686				409,134				467,581				526,029

As of December 31, 2004, the current annual compensation and current years of credited service (including years of credited service as an employee of Raytheon Company) was $830,463 and six years for Mr. Drewes.

Compensation Committee Interlocks and Insider Participation

None of the individuals who served on our compensation committee during the 2004 fiscal year has served us or any of our subsidiaries as an officer or employee. In addition, none of our executive officers serves as a member of the board of directors or compensation committee of any entity which has one or more executive officers serving as a member of our board of directors or compensation committee.

Employment Agreements

We entered into an employment agreement (the "Employment Agreement") effective on April 30, 1997 with Mr. Lanza, our Chairman and Chief Executive Officer. The Employment Agreement provided for an initial term of five years, which would automatically renew for one-year periods thereafter, unless he gave notice of his intent to terminate at least 90 days prior to the expiration of the term. Mr. Lanza's employment agreement was renewed in April 2005.

Upon a termination without cause or resignation for good reason, we will be obligated, through the end of the term, to (i) continue to pay the base salary and (ii) continue to provide life insurance and medical and hospitalization benefits comparable to those provided to other senior executives; provided, however, that any such coverage shall terminate to the extent that Mr. Lanza is offered or obtains comparable benefits coverage from any other employer. The Employment Agreement provides for confidentiality during employment and at all times thereafter. There is also a noncompetition and non-solicitation covenant which was effective during the employment term and for one year thereafter; provided, however, that if the employment terminated following the expiration of the initial term, the noncompetition covenant would only be effective during the period, if any, that we paid the severance described above.

111

OWNERSHIP OF CAPITAL STOCK

Security Ownership of Certain Beneficial Owners

All outstanding capital stock of L-3 Communications is owned by L-3 Holdings. As of October 28, 2005, there were 120,135,222 shares of L-3 Holdings' common stock outstanding. We know of no person who, as of October 28, 2005, beneficially owned more than five percent of the common stock, except as set forth below.

Name of Beneficial Owner				Amount and Nature of Beneficial Ownership				Percent of Class
Citigroup Inc.(1) 153 East 53rd Street New York, New York 10043.					12,446,039				10.36	%

(1)	Based on a Schedule 13G/A filed with the SEC, dated February 7, 2005, in which Citigroup Inc. reported that it had shared voting and dispositive power over 12,446,039 shares of common stock.

Security Ownership of Management

The following table shows the amount of L-3 Holdings' common stock beneficially owned (unless otherwise indicated) by L-3 Holdings' executive officers, L-3 Holdings' directors, and by all of L-3 Holdings' current executive officers and directors as a group. Except as otherwise indicated, all information listed below is as of October 28, 2005.

Name of Beneficial Owner				Shares of Common Stock Beneficially Owned (1)(2)				Percentage of Shares of Common Stock Outstanding (3)
Directors and Executive Officers
Frank C. Lanza					5,229,914				4.3	%
Michael T. Strianese					145,502				—
Christopher C. Cambria					159,475				—
Charles J. Schafer					75,559				—
Robert W. Drewes					1,964				—
Claude R. Canizares(4)					1,484				—
Peter A. Cohen					—				—
Thomas A. Corcoran(4)					19,513				—
Robert B. Millard(4)(5)					143,424				—
John M. Shalikashvili(4)					15,851				—
Arthur L. Simon(4)					22,221				—
Alan H. Washkowitz(4)(6)					232,922				—
John P. White					146				—
Directors and Executive Officers as a Group (15 persons)(7)					6,112,703				5.0	%

(1)

The shares of L-3 Holdings' common stock beneficially owned include the number of shares (i) issuable under employee stock options and exercisable within 60 days of October 28, 2005 and (ii) allocated to the accounts of executive officers under our savings plans. Of the number of shares shown above, (i) the following represent shares that may be acquired upon exercise of employee stock options for the accounts of: Mr. Lanza, 1,978,572 shares; Mr. Strianese, 144,334 shares; Mr. Cambria, 158,301 shares; and Mr. Schafer, 74,333 shares and (ii) the following represent shares allocated under our saving plans to the accounts of: Mr. Strianese, 1,168 shares; Mr. Cambria, 1,174 shares; Mr. Schafer, 1,226 shares; and Mr. Drewes, 1,964 shares.

112

(2)	The number of shares shown includes shares that are individually or jointly owned, as well as shares over which the individual has either sole or shared investment or voting authority.

(3)

Share ownership does not exceed one percent of the class unless otherwise indicated. Under Rule 13d-3, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person's actual ownership or voting power with respect to the number of shares of common stock actually outstanding at October 28, 2005.

(4)	Includes 18,501 shares issuable and exercisable under director stock options within 60 days of October 28, 2005 in the case of Mr. Corcoran, 15,501 shares in the case of General Shalikashvili and Mr. Simon, 12,501 shares in the case of Messrs. Millard and Washkowitz and 834 shares in the case of Professor Canizares.

(5)	Includes 98,728 shares owned by a charitable foundation of which Mr. Millard and his wife are the sole trustees, and as to which Mr. Millard disclaims beneficial ownership.

(6)	Includes 111,324 shares in trust, for the benefit of Mr. Washkowitz's children, for which Mr. Washkowitz and his wife are co-trustees and as to which Mr. Washkowitz disclaims beneficial ownership.

(7)	Includes 2,492,878 shares issuable under employee stock options and exercisable under employee stock options within 60 days of October 28, 2005, and 7,413 shares allocated to the accounts of executive officers under our savings plans.

113

DESCRIPTION OF OTHER INDEBTEDNESS

Senior Credit Facility of L-3 Communications

On March 9, 2005, L-3 Communications entered into a five-year senior revolving credit facility with a syndicate of banks led by Bank of America, N.A., as administrative agent, and Lehman Commercial Paper Inc., as syndication agent. In connection with the Titan acquisition, we entered into an amendment and restatement of the existing senior credit facility on July 29, 2005 (the "senior credit facility"). The senior credit facility provides for a $750.0 million term loan facility and a $1.0 billion revolving credit facility, both of which mature on March 9, 2010. As of September 30, 2005, we had approximately $886.7 million of available borrowings under the senior credit facility (after reductions for outstanding letters of credit of approximately $113.3 million).

Rates

Borrowings under the senior credit facility bear interest, at L-3 Communications' option, at either: (i) a "base rate" equal to the higher of 0.50% per annum above the latest federal funds rate and the Bank of America prime rate plus a spread ranging from 0.75% to 0.00% per annum depending on L-3 Communications' debt rating at the time of determination or (ii) the London Inter Bank Offering Rate (LIBOR) plus a spread ranging from 1.75% to 0.625% per annum depending on L-3 Communications' debt rating at the time of determination. The debt rating is based on the ratings as determined by Standard & Poor's Ratings Services, Moody's Investors Service, Inc. and Fitch Ratings of our non-credit-enhanced, senior unsecured long-term debt.

L-3 Communications pays commitment fees calculated on the daily amounts of the available unused commitments under the senior credit facility at a rate ranging from 0.375% to 0.125% per annum, depending on L-3 Communications' debt rating in effect at the time of determination. L-3 Communications pays letter of credit fees calculated at a rate ranging from 1.3125% to 0.46875% per annum for performance and commercial letters of credit and 1.75% to 0.625% for financial letters of credit, in each case depending on L-3 Communications' debt rating at the time of determination.

Covenants

The senior credit facility contains financial and other restrictive covenants that limit, among other things, our ability to borrow additional funds, incur liens, make investments, merge or consolidate, dispose of assets, or pay dividends. As of September 30, 2005, we were in compliance with those covenants in all material respects. The senior credit facility contains covenants that require that (1) our "Consolidated Leverage Ratio" (as defined below) be less than or equal to (A) 4.5 to 1.0 for each fiscal quarter ending on or prior to December 31, 2005, (B) 4.25 to 1.0 for the fiscal quarter ending on March 31, 2006 and (C) 4.0 to 1.0 for each fiscal quarter ending on or after June 30, 2006, (2) our "Consolidated Senior Leverage Ratio" (as defined below) be less than or equal to 3.0 to 1.0 and (3) our "Consolidated Interest Coverage Ratio" (as defined below) be greater than or equal to 3.0 to 1.0. Calculations of the Consolidated Leverage Ratio, Consolidated Senior Leverage Ratio and Consolidated Interest Coverage Ratio are to take into account acquisitions on a pro forma basis as if they had occurred at the beginning of the applicable period.

The "Consolidated Leverage Ratio" is defined as the ratio of Consolidated Funded Indebtedness, minus the lesser of actual unrestricted domestic cash balances in excess of $25.0 million and $250.0 million, to Consolidated EBITDA. Consolidated Funded Indebtedness is equal to the sum of (1) outstanding indebtedness for borrowed money or for preferred stock accounted for as indebtedness (which is referred to under the senior credit facility as "disqualified preferred stock"), (2) the deferred purchase price of property or services, (3) capitalized lease obligations and (4) outstanding indebtedness of L-3 Holdings guaranteed by L-3 Communications or its subsidiaries. Consolidated EBITDA is equal to consolidated net income of L-3 Communications (excluding (A) impairment losses incurred on goodwill and other intangible assets or on debt and equity investments, (B) gains or losses incurred on the retirement of debt, (C) extraordinary gains and losses, (D) gains and losses in connection with asset dispositions, and (E) non-cash gains or losses on discontinued operations) for the applicable period, plus consolidated interest expense (including consolidated interest expense of L-3 Holdings for indebtedness guaranteed by L-3 Communications and its subsidiaries), income taxes, depreciation and amortization expense and non-cash stock-based compensation expenses.

114

The "Consolidated Senior Leverage Ratio" is defined as the ratio of Consolidated Funded Indebtedness, minus subordinated debt of L-3 Communications and indebtedness of L-3 Holdings that is guaranteed by L-3 Communications on a subordinated basis, to Consolidated EBITDA.

The "Consolidated Interest Coverage Ratio" is defined as the ratio of Consolidated EBITDA to cash interest expense of L-3 Communications and its subsidiaries plus cash interest expense of L-3 Holdings with respect to indebtedness guaranteed by L-3 Communications or any of its subsidiaries.

The senior credit facility limits the ability of L-3 Communications to pay dividends to and make investments in L-3 Holdings. However, the senior credit facility permits L-3 Communications to:

•

fund payments of interest on indebtedness of L-3 Holdings and to fund payments of dividends on disqualified preferred stock issued by L-3 Holdings, so long as (1) any such indebtedness or disqualified preferred stock is guaranteed by L-3 Communications and (2) the proceeds received by L-3 Holdings from the issuance of such indebtedness or disqualified preferred stock have been invested by L-3 Holdings in L-3 Communications;

•

fund payments and prepayments of principal of indebtedness of L-3 Holdings and to fund optional and mandatory redemptions of disqualified preferred stock issued by L-3 Holdings, so long as (1) any such indebtedness or disqualified preferred stock is guaranteed by L-3 Communications and (2) the amount of such fundings does not exceed the aggregate amount of investments made by L-3 Holdings in L-3 Communications with the proceeds from any issuance of indebtedness or disqualified preferred stock by L-3 Holdings after March 9, 2005 that is guaranteed by L-3 Communications;

•	pay regularly scheduled dividends on disqualified preferred stock issued by L-3 Communications;

•	redeem disqualified preferred stock issued by L-3 Communications so long as the amount of such redemptions does not exceed the aggregate proceeds received by L-3 Communications from the issuance of disqualified preferred stock after March 9, 2005; and

•

pay other dividends on and make other redemptions of its equity interests (including for the benefit of L-3 Holdings) and make other investments in L-3 Holdings, so long as no default or event of default has occurred and is continuing, up to an aggregate amount of $1.0 billion increased (or decreased) quarterly by an amount equal to 50% of the consolidated net income (or deficit) of L-3 Communications for the quarter, plus (1) 100% of the proceeds from any issuance of capital stock (other than disqualified preferred stock) by L-3 Holdings after March 9, 2005 if those proceeds were invested in L-3 Communications, plus (2) 100% of the proceeds from any issuance of indebtedness or disqualified preferred stock by L-3 Holdings after March 9, 2005 if those proceeds were invested in L-3 Communications and the indebtedness or disqualified preferred stock is not guaranteed by L-3 Communications, plus (3) 100% of the proceeds of any issuances of capital stock (other than disqualified preferred stock) by L-3 Communications after March 9, 2005, minus (4) the aggregate amount of subordinated debt of L-3 Communications prepaid after March 9, 2005 (other than in connection with a refinancing) in excess of the aggregate proceeds received from the issuance of subordinated debt by L-3 Communications after March 9, 2005 (other than in connection with a refinancing).

Subordination and Guarantees

The borrowings under the senior credit facility are guaranteed by L-3 Holdings and by substantially all of the material wholly-owned domestic subsidiaries of L-3 Communications on a senior basis. In the event that the long-term debt rating of L-3 Communications is reduced below BBB–, or the equivalent, by two of the three rating agencies, Standard & Poor's Ratings Services, Moody's Investors Service, Inc. or Fitch Ratings, L-3 Holdings will be required, within 45 business days, to pledge 100% of the capital stock of L-3 Communications, and L-3 Communications and each subsidiary guarantor will be required to pledge 100% of the capital stock of each of their material wholly-owned domestic subsidiaries and 65% of their material wholly-owned foreign subsidiaries, in favor of the lenders under the senior credit facility.

115

Events of Default

Under the senior credit facility, each of the following items constitutes an event of default:

•	L-3 Communications fails to pay principal or amounts drawn under letters of credit when due;

•	L-3 Communications fails to pay interest within five days after that amount becomes due;

•	any representation or warranty made is incorrect in any material respect;

•	L-3 Communications does not comply with its financial and other covenants (and, for some of the other covenants, the default continues for 30 days);

•	L-3 Communications or any of its subsidiaries defaults under any indebtedness, guarantee obligation or interest rate hedging agreement in the aggregate amount of at least $40.0 million for more than 10 days (unless such default is a payment default or results in acceleration) and that default is a payment default or would enable the holder of the obligation to accelerate the obligation;

•	certain events of bankruptcy, insolvency or reorganization occur with respect to L-3 Communications or any of its subsidiaries;

•	certain events occur with respect to any employee benefit plan of L-3 Communications or its affiliates covered by ERISA that would have a material adverse effect;

•	we fail to pay judgments aggregating in excess of $40.0 million, which judgments are not paid, covered by insurance, discharged or stayed for a period of 60 days;

•	any of the pledge agreements ceases to be in full force and effect or L-3 Communications or any party to any pledge agreement so asserts, or the lien under any of the pledge agreements ceases to be an enforceable first priority lien (subject to a grace period in certain cases);

•	the guarantees of the senior credit facility are held to be enforceable or invalid or cease to be in full force and effect, or any guarantor denies its obligations under its guarantee; and

•	a change of control.

If an event of default occurs involving certain events of bankruptcy, insolvency or reorganization of L-3 Communications, the commitments under the senior credit facility will automatically terminate and the loans, including accrued interest, and all other amounts owed under the agreements will become immediately due and payable. If any other event of default occurs, then lenders holding the majority in aggregate principal amount of the loans under the senior credit facility may declare the commitments under the facility to be terminated and the loans, including accrued interest, and all other amounts owed under the facility to be immediately due and payable. Upon any acceleration, L-3 Communications must cash collateralize any undrawn letters of credit under the senior credit facility.

Convertible Contingent Debt Securities (CODES) due 2035

In connection with the Titan acquisition, L-3 Holdings issued $600.0 million in aggregate principal amount of Convertible Contingent Debt Securities^SM (CODES^SM) due 2035 (the "CODES"). The CODES are subject to the terms and conditions of an Indenture entered into among L-3 Holdings, L-3 Communications, as a guarantor, the other guarantors named therein and The Bank of New York, as trustee (the "2005 Indenture"). The following is a summary of the material provisions in the 2005 Indenture. All terms defined in the 2005 Indenture and not otherwise defined herein are used below with the meanings set forth in the 2005 Indenture.

General

The CODES will mature on August 1, 2035 and bear interest at a 3.00% per annum, subject to certain adjustments, payable semi-annually on February 1 and August 1 of each year. Beginning with the six-month interest period commencing February 1, 2011, holders of CODES will be entitled to contingent interest not to exceed a per annum rate of 0.25% during any six month period if the trading price of the CODES for the five trading days ending on the second trading day immediately

116

preceding the relevant six month period equals 120% or more of the principal amount of the CODES. The CODES are unsecured senior obligations of L-3 Holdings and pari passu in right of payment to all existing and future senior debt of L-3 Holdings. The CODES are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally by all of L-3 Holdings' existing and future domestic subsidiaries of L-3 Holdings that guarantee any other indebtedness of L-3 Holdings or any of its domestic subsidiaries, including L-3 Communications. These guarantees are pari passu with the guarantees of the 2002 Notes, May 2003 Notes, the December 2003 Notes, the November 2004 Notes and the notes offered hereby. Holders of the CODES may convert the CODES into shares of L-3 Holdings' common stock at a conversion price of $102.31 per share (equal to a conversion rate of 9.7741 shares per $1,000 principal amount of CODES), subject to adjustment, under any of the following circumstances:

•	prior to August 1, 2033, on any date during any fiscal quarter (and only during such fiscal quarter) if the closing sale price of our common stock was more than 120% of the then current conversion price for at least 20 trading days in the period of the 30 consecutive trading days ending on the last trading day of the previous fiscal quarter;

•	on or after August 1, 2033, at all times on or after any date on which the closing sale price of our common stock is more than 120% of the then current conversion price of the CODES;

•	with respect to any CODES called for redemption;

•	if we distribute to all holders of our common stock rights or warrants (other than pursuant to a rights plan) entitling them to purchase, for a period of 45 calendar days or less, shares of our common stock at a price less than the average closing sale price for the ten trading days preceding the declaration date for such distribution;

•	if we distribute to all holders of our common stock, cash or other assets, debt securities or rights to purchase our securities (other than pursuant to a rights plan), which distribution has a per share value exceeding 10% of the closing sale price of our common stock on the trading day preceding the declaration date for such distribution;

•	upon the occurrence of specified corporate transactions described; and

•	during the five consecutive business-day period following any five consecutive trading-day period in which the average trading price for the CODES was less than 98% of the average of the closing sale price of our common stock during such five trading-day period multiplied by the then current conversion rate.

Upon a conversion, a holder will receive an amount in cash equal to the lesser of (i) the principal amount of the CODES converted and (ii) the conversion value (as defined) of the principal amount of CODES converted. If the conversion value exceeds the principal amount of the CODES converted, we will also deliver, at our election, cash or common stock or a combination of cash and common stock in an amount equal to the excess of the conversion value over the principal amount of the CODES converted.

Optional Redemption

The CODES are subject to redemption at any time, at the option of L-3 Holdings, in whole or in part, on or after February 1, 2011 at a redemption price equal to 100% of the principal amount of the CODES being redeemed (plus accrued and unpaid interest, including contingent interest and additional interest, if any).

Holders of the CODES may require L-3 Holdings to repurchase all or a portion of the CODES on February 1, 2011, February 1, 2016, February 1, 2021, February 1, 2026 and February 1, 2031 at a repurchase price equal to 100% of the principal amount of the CODES (plus accrued and unpaid interest, including contingent interest, if any).

Fundamental Change

Upon the occurrence of a fundamental change, each holder of the CODES may require L-3 Holdings to repurchase all or a portion of such holder's CODES at a purchase price equal to 100% of

117

the principal amount (plus accrued and unpaid interest, including contingent interest, if any). Generally, a fundamental change means the occurrence of any of the following:

•	the consummation of any transaction in which a person other than the principals and their related parties becomes the beneficial owner of more than 50% of the voting stock of L-3 Holdings;

•	the first day on which a majority of the members of the Board of Directors of L-3 Holdings are not continuing directors;

•	the adoption of a plan relating to our liquidation or dissolution;

•	the disposition of all or substantially all of our assets and the assets of our subsidiaries, taken as a whole, to any other than the principals or their related parties; or

•	the termination of trading of our common stock.

Subordination

The CODES are unsecured senior obligations of L-3 Holdings and pari passu to all existing and future senior debt of L-3 Holdings. The guarantees of L-3 Holdings' subsidiaries under the CODES, including the guarantee by L-3 Communications, are general unsecured obligations of the guarantors and are subordinated to the senior debt and to the guarantees of senior debt of those guarantors. These guarantees under the CODES rank pari passu with all senior subordinated indebtedness of those guarantors.

Antilayering Provision

The 2005 Indenture provides that guarantors of the CODES will not incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt of a guarantor and senior in any respect in right of payment to any of the subsidiary guarantees of the CODES.

Events of Default

Events of Default under the 2005 Indenture include the following:

•	we fail to pay any interest (including contingent interest and additional interest, if any) on the convertible notes when due and such failure continues for a period of 30 calendar days (whether or not prohibited by the subordination provisions of the indenture);

•	we fail to pay principal of the convertible notes when due at maturity, or we fail to pay the redemption price or repurchase price, in respect of any convertible notes when due (whether or not prohibited by the subordination provisions of the indenture);

•	we fail to deliver our common stock (including any additional shares), or cash in lieu thereof, or a combination of the foregoing, upon the conversion of any convertible notes and such failure continues for ten days following the scheduled settlement date for such conversion;

•	we fail to provide notice of the actual effective date of a fundamental change on a timely basis as required in the indenture and such failure continues for ten business days;

•	we fail for 60 days after notice to comply with any of our other agreements in the indenture;

•

we default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by us or any of our subsidiaries (other than excluded subsidiaries) or the payment of which is guaranteed by us or any of our subsidiaries (other than excluded subsidiaries) whether such indebtedness or guarantee now exists, or is created after the issue date, which default results in the acceleration of such indebtedness prior to its express maturity and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other such indebtedness the maturity of which has been so accelerated, aggregates $50.0 million or more;

118

•	failure by us or our subsidiaries (other than excluded subsidiaries) to pay final judgments aggregating in excess of $50.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

•	except as permitted by the indenture, any guarantee of the convertible notes shall be held in any judicial proceeding to be unenforceable or invalid; or

•	certain events involving our bankruptcy, insolvency or reorganization or the bankruptcy, insolvency or reorganization of any of our "significant subsidiaries" (which term shall have the meaning specified in Rule 1-02(w) of Regulation S-X) or group of subsidiaries, taken as a whole, would constitute a significant subsidiary.

Upon the occurrence of an Event of Default, with certain exceptions, the Trustee or the holders of at least 25% in principal amount of the then outstanding CODES may accelerate the maturity of all the CODES as provided in the 2005 Indenture.

7 5/8% Senior Subordinated Notes due 2012

L-3 Communications has outstanding $750.0 million in aggregate principal amount of 7 5/8% Senior Subordinated Notes due 2012 (the "2002 Notes"). The 2002 Notes are subject to the terms and conditions of an Indenture dated as of June 28, 2002, among L-3 Communications, the guarantors named therein and in supplements thereto and The Bank of New York as trustee (the "2002 Indenture"). The following summary of the material provisions of the 2002 Indenture does not purport to be complete, and is subject to and qualified in its entirety by reference to, all of the provisions of the 2002 Indenture and those terms made a part of the 2002 Indenture by the Trust Indenture Act of 1939, as amended. All terms defined in the 2002 Indenture and not otherwise defined herein are used below with the meanings set forth in the 2002 Indenture.

General

The 2002 Notes will mature on June 15, 2012 and bear interest at 7 5/8% per annum, payable semi-annually on December 15 and June 15 of each year. The 2002 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications and rank pari passu with the May 2003 Notes, the December 2003 Notes and the November 2004 Notes. The 2002 Notes also rank pari passu in right of payment with (1) the outstanding notes and the exchange notes and (2) our guarantee of the CODES offered in connection with the Titan acquisition.

The 2002 Notes are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally by certain of L-3 Communications' restricted subsidiaries (other than its foreign subsidiaries). These guarantees are pari passu with the guarantees of the May 2003 Notes, the December 2003 Notes and the November 2004 Notes. These guarantees also rank pari passu in right of payment with (1) the guarantees of the outstanding notes and the exchange notes and (2) the obligations of the guarantors under the CODES offered in connection with the Titan acquisition.

Optional Redemption

The 2002 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, on or after June 15, 2007 at redemption prices (plus accrued and unpaid interest) starting at 103.813% of principal (plus accrued and unpaid interest) during the 12-month period beginning June 15, 2007 and declining annually to 100% of principal (plus accrued and unpaid interest) on June 15, 2010 and thereafter.

Change of Control

Upon the occurrence of a change of control, each holder of the 2002 Notes may require L-3 Communications to repurchase all or a portion of such holder's 2002 Notes at a purchase price equal to 101% of the principal amount (plus accrued and unpaid interest and additional amounts, if any). Generally, a change of control means the occurrence of any of the following:

119

•	the disposition of all or substantially all of L-3 Communications' assets to any person;

•	the adoption of a plan relating to the liquidation or dissolution of L-3 Communications;

•	the consummation of any transaction in which a person other than the principals and their related parties becomes the beneficial owner of more than 50% of the voting stock of L-3 Communications; or

•	the first day on which a majority of the members of the Board of Directors of L-3 Communications are not continuing directors.

Subordination

The 2002 Notes are general unsecured obligations of L-3 Communications and are subordinate to all existing and future senior debt of L-3 Communications. The 2002 Notes rank senior in right of payment to all subordinated indebtedness of L-3 Communications. The guarantees of L-3 Communications' subsidiaries under the 2002 Notes are general unsecured obligations of the guarantors and are subordinated to the senior debt and to the guarantees of senior debt of those guarantors. These guarantees under the 2002 Notes rank senior in right of payment to all subordinated Indebtedness of those guarantors.

Antilayering Provision

The 2002 Indenture provides that (i) L-3 Communications will not incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt and senior in any respect in right of payment to the 2002 Notes, and (ii) no guarantor of the 2002 Notes will incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt of a guarantor and senior in any respect in right of payment to any of the subsidiary guarantees of the 2002 Notes.

Certain Covenants

The 2002 Indenture contains a number of covenants restricting the operations of L-3 Communications, limiting the ability of L-3 Communications to incur additional Indebtedness, pay dividends or make distributions, sell assets, issue subsidiary stock, restrict distributions from subsidiaries, create certain liens, enter into certain consolidations or mergers and enter into certain transactions with affiliates.

In the event that the 2002 Notes are assigned a rating of Baa3 or better by Moody's and BBB- or better by S&P and no event of default has occurred and is continuing, certain covenants in the 2002 Indenture will be suspended. If the ratings should subsequently decline to below Baa3 or BBB-, the suspended covenants will be reinstituted.

Events of Default

Events of Default under the 2002 Indenture include the following:

•	a default for 30 days in the payment when due of interest on, or additional amounts with respect to the 2002 Notes;

•	default in payment when due of the principal of or premium, if any, on the 2002 Notes;

•	failure by L-3 Communications to comply with certain provision of the 2002 Indenture (subject, in some but not all cases, to notice and cure periods);

•	default under indebtedness for money borrowed by L-3 Communications or any of its restricted subsidiaries in excess of $25.0 million, which default results in the acceleration of such indebtedness prior to its express maturity;

•	failure by L-3 Communications or any restricted subsidiary that would be a significant subsidiary to pay final judgments aggregating in excess of $25.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

120

•	except as permitted by the 2002 Indenture, any guarantee under the 2002 Notes shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any guarantor, or any person acting on behalf of any guarantor under the 2002 Notes, shall deny or disaffirm its obligations under its guarantee; or

•	certain events of bankruptcy or insolvency with respect to L-3 Communications or any of its significant subsidiaries or any group of subsidiaries that, taken as a whole, would constitute a significant subsidiary.

Upon the occurrence of an Event of Default, with certain exceptions, the Trustee or the holders of at least 25% in principal amount of the then outstanding 2002 Notes may accelerate the maturity of all the 2002 Notes as provided in the 2002 Indenture.

6 1/8% Senior Subordinated Notes due 2013

L-3 Communications has outstanding $400.0 million in aggregate principal amount of 6 1/8% Senior Subordinated Notes due 2013 (the "May 2003 Notes"). The May 2003 Notes are subject to the terms and conditions of an Indenture dated as of May 21, 2003, among L-3 Communications, the guarantors named therein and in supplements thereto and The Bank of New York as trustee (the "May 2003 Indenture"). The following summary of the material provisions of the May 2003 Indenture does not purport to be complete, and is subject to and qualified in its entirety by reference to, all of the provisions of the May 2003 Indenture and those terms made a part of the May 2003 Indenture by the Trust Indenture Act of 1939, as amended. All terms defined in the May 2003 Indenture and not otherwise defined herein are used below with the meanings set forth in the May 2003 Indenture.

General

The May 2003 Notes will mature on July 15, 2013 and bear interest at 6 1/8% per annum, payable semi-annually on July 15 and January 15 of each year. The May 2003 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications and rank pari passu with the 2002 Notes, the December 2003 Notes and the November 2004 Notes. The May 2003 Notes also rank pari passu in right of payment with (1) the outstanding notes and the exchange notes and (2) our guarantee of the CODES offered in connection with the Titan acquisition.

The May 2003 Notes are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally by certain of L-3 Communications' restricted subsidiaries (other than its foreign subsidiaries). These guarantees are pari passu with the guarantees of the 2002 Notes, the December 2003 Notes and the November 2004 Notes. These guarantees also rank pari passu in right of payment with (1) the guarantees of the outstanding notes and the exchange notes and (2) the obligations of the guarantors under the CODES offered in connection with the Titan acquisition.

Optional Redemption

The May 2003 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, on or after July 15, 2008 at redemption prices (plus accrued and unpaid interest) starting at 103.063% of principal (plus accrued and unpaid interest) during the 12-month period beginning July 15, 2008 and declining annually to 100% of principal (plus accrued and unpaid interest) on July 15, 2011 and thereafter.

Before July 15, 2006, L-3 Communications may on any one or more occasions redeem up to an aggregate of 35% of the May 2003 Notes originally issued at a redemption price of 106.125% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of certain equity offerings by L-3 Communications or the net cash proceeds of certain equity offerings by L-3 Holdings that are contributed to L-3 Communications as common equity capital; provided that at least 65% of the May 2003 Notes originally issued remain outstanding immediately after the occurrence of each such redemption; and provided, further, that any such redemption must occur within 120 days of the date of the closing of such equity offering.

Change of Control

Upon the occurrence of a change of control, each holder of the May 2003 Notes may require L-3 Communications to repurchase all or a portion of such holder's May 2003 Notes at a purchase price

121

equal to 101% of the principal amount (plus accrued and unpaid interest and liquidated damages, if any). Generally, a change of control means the occurrence of any of the following:

•	the disposition of all or substantially all of L-3 Communications' assets to any person;

•	the adoption of a plan relating to the liquidation or dissolution of L-3 Communications;

•	the consummation of any transaction in which a person other than the principals and their related parties becomes the beneficial owner of more than 50% of the voting stock of L-3 Communications; or

•	the first day on which a majority of the members of the Board of Directors of L-3 Communications are not continuing directors.

Subordination

The May 2003 Notes are general unsecured obligations of L-3 Communications and are subordinate to all existing and future senior debt of L-3 Communications. The May 2003 Notes rank senior in right of payment to all subordinated indebtedness of L-3 Communications. The guarantees of L-3 Communications' subsidiaries under the May 2003 Notes are general unsecured obligations of the guarantors and are subordinated to the senior debt and to the guarantees of senior debt of those guarantors. These guarantees under the May 2003 Notes rank senior in right of payment to all subordinated Indebtedness of those guarantors.

Antilayering Provision

The May 2003 Indenture provides that (i) L-3 Communications will not incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt and senior in any respect in right of payment to the May 2003 Notes, and (ii) no guarantor of the May 2003 Notes will incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt of a guarantor and senior in any respect in right of payment to any of the subsidiary guarantees of the May 2003 Notes.

Certain Covenants

The May 2003 Indenture contains a number of covenants restricting the operations of L-3 Communications, limiting the ability of L-3 Communications to incur additional Indebtedness, pay dividends or make distributions, sell assets, issue subsidiary stock, restrict distributions from subsidiaries, create certain liens, enter into certain consolidations or mergers and enter into certain transactions with affiliates.

In the event that the May 2003 Notes are assigned a rating of Baa3 or better by Moody's and BBB- or better by S&P and no event of default has occurred and is continuing, certain covenants in the 2003 Indenture will be suspended. If the ratings should subsequently decline to below Baa3 or BBB-, the suspended covenants will be reinstituted.

Events of Default

Events of Default under the May 2003 Indenture include the following:

•	a default for 30 days in the payment when due of interest on, or liquidated damages with respect to the May 2003 Notes;

•	default in payment when due of the principal of or premium, if any, on the May 2003 Notes;

•	failure by L-3 Communications to comply with certain provision of the 2003 Indenture (subject, in some but not all cases, to notice and cure periods);

•	default under indebtedness for money borrowed by L-3 Communications or any of its restricted subsidiaries in excess of $25.0 million, which default results in the acceleration of such indebtedness prior to its express maturity;

122

•	failure by L-3 Communications or any restricted subsidiary that would be a significant subsidiary to pay final judgments aggregating in excess of $25.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

•	except as permitted by the May 2003 Indenture, any guarantee under the May 2003 Notes shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any guarantor, or any person acting on behalf of any guarantor under the May 2003 Notes, shall deny or disaffirm its obligations under its guarantee; or

•	certain events of bankruptcy or insolvency with respect to L-3 Communications or any of its significant subsidiaries or any group of subsidiaries that, taken as a whole, would constitute a significant subsidiary.

Upon the occurrence of an Event of Default, with certain exceptions, the Trustee or the holders of at least 25% in principal amount of the then outstanding May 2003 Notes may accelerate the maturity of all the May 2003 Notes as provided in the May 2003 Indenture.

6 1/8% Senior Subordinated Notes due 2014

L-3 Communications has outstanding $400.0 million in aggregate principal amount of 6 1/8% Senior Subordinated Notes due 2014 (the "December 2003 Notes"). The December 2003 Notes are subject to the terms and conditions of an Indenture dated as of December 22, 2003, among L-3 Communications, the guarantors named therein and in supplements thereto and The Bank of New York as trustee (the "December 2003 Indenture"). The following summary of the material provisions of the December 2003 Indenture does not purport to be complete, and is subject to and qualified in its entirety by reference to, all of the provisions of the December 2003 Indenture and those terms made a part of the December 2003 Indenture by the Trust Indenture Act of 1939, as amended. All terms defined in the December 2003 Indenture and not otherwise defined herein are used below with the meanings set forth in the December 2003 Indenture.

General

The December 2003 Notes will mature on January 15, 2014 and bear interest at 6 1/8% per annum, payable semi-annually on July 15 and January 15 of each year. The December 2003 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications and rank pari passu with the 2002 Notes, the May 2003 Notes and the November 2004 Notes. The December 2003 Notes also rank pari passu in right of payment with (1) the outstanding notes and the exchange notes and (2) our guarantee of the CODES offered in connection with the Titan acquisition.

The December 2003 Notes are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally by certain of L-3 Communications' restricted subsidiaries (other than its foreign subsidiaries). These guarantees are pari passu with the guarantees of the 2002 Notes, the May 2003 Notes and the November 2004 Notes. These guarantees also rank pari passu in right of payment with (1) the guarantees of the outstanding notes and the exchange notes and (2) the obligations of the guarantors under the CODES offered in connection with the Titan acquisition.

Optional Redemption

The December 2003 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, on or after January 15, 2009 at redemption prices (plus accrued and unpaid interest) starting at 103.063% of principal (plus accrued and unpaid interest) during the 12-month period beginning January 15, 2009 and declining annually to 100% of principal (plus accrued and unpaid interest) on January 15, 2012 and thereafter.

Before January 15, 2007, L-3 Communications may on any one or more occasions redeem up to an aggregate of 35% of the December 2003 Notes originally issued at a redemption price of 106.125% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net

123

cash proceeds of certain equity offerings by L-3 Communications or the net cash proceeds of certain equity offerings by L-3 Holdings that are contributed to L-3 Communications as common equity capital; provided that at least 65% of the December 2003 Notes originally issued remain outstanding immediately after the occurrence of each such redemption; and provided, further, that any such redemption must occur within 120 days of the date of the closing of such equity offering.

Change of Control

Upon the occurrence of a change of control, each holder of the December 2003 Notes may require L-3 Communications to repurchase all or a portion of such holder's December 2003 Notes at a purchase price equal to 101% of the principal amount (plus accrued and unpaid interest and additional amounts, if any). Generally, a change of control means the occurrence of any of the following:

•	the disposition of all or substantially all of L-3 Communications' assets to any person;

•	the adoption of a plan relating to the liquidation or dissolution of L-3 Communications;

•	the consummation of any transaction in which a person other than the principals and their related parties becomes the beneficial owner of more than 50% of the voting stock of L-3 Communications; or

•	the first day on which a majority of the members of the Board of Directors of L-3 Communications are not continuing directors.

Subordination

The December 2003 Notes are general unsecured obligations of L-3 Communications and are subordinate to all existing and future senior debt of L-3 Communications. The December 2003 Notes rank senior in right of payment to all subordinated indebtedness of L-3 Communications. The guarantees of L-3 Communications' subsidiaries under the December 2003 Notes are general unsecured obligations of the guarantors and are subordinated to the senior debt and to the guarantees of senior debt of those guarantors. These guarantees under the December 2003 Notes rank senior in right of payment to all subordinated Indebtedness of those guarantors.

Antilayering Provision

The December 2003 Indenture provides that (i) L-3 Communications will not incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt and senior in any respect in right of payment to the December 2003 Notes, and (ii) no guarantor of the December 2003 Notes will incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt of a guarantor and senior in any respect in right of payment to any of the subsidiary guarantees of the December 2003 Notes.

Certain Covenants

The December 2003 Indenture contains a number of covenants restricting the operations of L-3 Communications, limiting the ability of L-3 Communications to incur additional Indebtedness, pay dividends or make distributions, sell assets, issue subsidiary stock, restrict distributions from subsidiaries, create certain liens, enter into certain consolidations or mergers and enter into certain transactions with affiliates.

In the event that the December 2003 Notes are assigned a rating of Baa3 or better by Moody's and BBB- or better by S&P and no event of default has occurred and is continuing, certain covenants in the 2002 Indenture will be suspended. If the ratings should subsequently decline to below Baa3 or BBB-, the suspended covenants will be reinstituted.

Events of Default

Events of Default under the December 2003 Indenture include the following:

•	a default for 30 days in the payment when due of interest on, or additional amounts with respect to the December 2003 Notes;

124

•	default in payment when due of the principal of or premium, if any, on the December 2003 Notes;

•	failure by L-3 Communications to comply with certain provision of the 2002 Indenture (subject, in some but not all cases, to notice and cure periods);

•	default under indebtedness for money borrowed by L-3 Communications or any of its restricted subsidiaries in excess of $25.0 million, which default results in the acceleration of such indebtedness prior to its express maturity;

•	failure by L-3 Communications or any restricted subsidiary that would be a significant subsidiary to pay final judgments aggregating in excess of $25.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

•	except as permitted by the December 2003 Indenture, any guarantee under the December 2003 Notes shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any guarantor, or any person acting on behalf of any guarantor under the December 2003 Notes, shall deny or disaffirm its obligations under its guarantee; or

•	certain events of bankruptcy or insolvency with respect to L-3 Communications or any of its significant subsidiaries or any group of subsidiaries that, taken as a whole, would constitute a significant subsidiary.

Upon the occurrence of an Event of Default, with certain exceptions, the Trustee or the holders of at least 25% in principal amount of the then outstanding December 2003 Notes may accelerate the maturity of all the December 2003 Notes as provided in the December 2003 Indenture.

5 7/8% Senior Subordinated Notes due 2015

L-3 Communications has outstanding $650.0 million in aggregate principal amount of 5 7/8% Senior Subordinated Notes due 2015 (the "November 2004 Notes"). The November 2004 Notes are subject to the terms and conditions of an Indenture dated as of November 12, 2004, among L-3 Communications, the guarantors named therein and in supplements thereto and The Bank of New York, as trustee (the "November 2004 Indenture"). The following summary of the material provisions of the November 2004 Indenture does not purport to be complete, and is subject to and qualified in its entirety by reference to, all of the provisions of the November 2004 Indenture and those terms made a part of the November 2004 Indenture by the Trust Indenture Act of 1939, as amended. All terms defined in the November 2004 Indenture and not otherwise defined herein are used below with the meanings set forth in the November 2004 Indenture.

General

The November 2004 Notes will mature on January 15, 2014 and bear interest at 5 7/8% per annum, payable semi-annually on July 15 and January 15 of each year. The November 2004 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications and rank pari passu with the 2002 Notes, the May 2003 Notes and the December 2003 Notes. The November 2004 Notes also rank pari passu in right of payment with (1) the outstanding notes and the exchange notes and (2) our guarantee of the CODES offered in connection with the Titan acquisition.

The November 2004 Notes are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally by certain of L-3 Communications' restricted subsidiaries other than its foreign subsidiaries. These guarantees are pari passu with the guarantees of the 2002 Notes, the May 2003 Notes and the December 2003 Notes. These guarantees also rank pari passu in right of payment with (1) the guarantees of the outstanding notes and the exchange notes and (2) the obligations of the guarantors under the CODES offered in connection with the Titan acquisition.

Optional Redemption

The November 2004 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, on or after January 15, 2010 at redemption prices (plus accrued

125

and unpaid interest) starting at 102.938% of principal (plus accrued and unpaid interest) during the 12-month period beginning January 15, 2010 and declining annually to 100% of principal (plus accrued and unpaid interest) on January 15, 2013 and thereafter.

Before January 15, 2008, L-3 Communications may on any one or more occasions redeem up to an aggregate of 35% of the November 2004 Notes originally issued at a redemption price of 105.875% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of certain equity offerings by L-3 Communications or the net cash proceeds of certain equity offerings by L-3 Holdings that are contributed to L-3 Communications as common equity capital; provided that at least 65% of the November 2004 Notes originally issued remain outstanding immediately after the occurrence of each such redemption; and provided, further, that any such redemption must occur within 120 days of the date of the closing of such equity offering.

Change of Control

Upon the occurrence of a change of control, each holder of the November 2004 Notes may require L-3 Communications to repurchase all or a portion of such holder's November 2004 Notes at a purchase price equal to 101% of the principal amount (plus accrued and unpaid interest and additional amounts, if any). Generally, a change of control means the occurrence of any of the following:

•	the disposition of all or substantially all of L-3 Communications' assets to any person;

•	the adoption of a plan relating to the liquidation or dissolution of L-3 Communications;

•	the consummation of any transaction in which a person other than the principals and their related parties becomes the beneficial owner of more than 50% of the voting stock of L-3 Communications; or

•	the first day on which a majority of the members of the Board of Directors of L-3 Communications are not continuing directors.

Subordination

The November 2004 Notes are general unsecured obligations of L-3 Communications and are subordinate to all existing and future senior debt of L-3 Communications. The November 2004 Notes rank senior in right of payment to all subordinated indebtedness of L-3 Communications. The guarantees of L-3 Communications' subsidiaries under the November 2004 Notes are general unsecured obligations of the guarantors and are subordinated to the senior debt and to the guarantees of senior debt of those guarantors. These guarantees under the November 2004 Notes rank senior in right of payment to all subordinated Indebtedness of those guarantors.

Antilayering Provision

The November 2004 Indenture provides that (i) L-3 Communications will not incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt and senior in any respect in right of payment to the November 2004 Notes, and (ii) no guarantor of the November 2004 Notes will incur, create, issue, assume, guarantee or otherwise become liable for any indebtedness that is subordinate or junior in right of payment to any senior debt of a guarantor and senior in any respect in right of payment to any of the subsidiary guarantees of the November 2004 Notes.

Certain Covenants

The November 2004 Indenture contains a number of covenants restricting the operations of L-3 Communications, limiting the ability of L-3 Communications to incur additional Indebtedness, pay dividends or make distributions, sell assets, issue subsidiary stock, restrict distributions from subsidiaries, create certain liens, enter into certain consolidations or mergers and enter into certain transactions with affiliates.

In the event that the November 2004 Notes are assigned a rating of Baa3 or better by Moody's and BBB- or better by S&P and no event of default has occurred and is continuing, certain covenants in the November 2004 Indenture will be suspended. If the ratings should subsequently decline to below Baa3 or BBB-, the suspended covenants will be reinstituted.

126

Events of Default

Events of Default under the November 2004 Indenture include the following:

•	a default for 30 days in the payment when due of interest on, or additional amounts with respect to the November 2004 Notes;

•	default in payment when due of the principal of or premium, if any, on the November 2004 Notes;

•	failure by L-3 Communications to comply with certain provisions of the November 2004 Indenture (subject, in some but not all cases, to notice and cure periods);

•	default under indebtedness for money borrowed by L-3 Communications or any of its restricted subsidiaries in excess of $25.0 million, which default results in the acceleration of such indebtedness prior to its express maturity;

•	failure by L-3 Communications or any restricted subsidiary that would be a significant subsidiary to pay final judgments aggregating in excess of $25.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

•	except as permitted by the November 2004 Indenture, any guarantee under the November 2004 Notes shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any guarantor, or any person acting on behalf of any guarantor under the November 2004 Notes, shall deny or disaffirm its obligations under its guarantee; or

•	certain events of bankruptcy or insolvency with respect to L-3 Communications or any of its significant subsidiaries or any group of significant subsidiaries that, taken as a whole, would constitute a significant subsidiary.

Upon the occurrence of an Event of Default, with certain exceptions, the Trustee or the holders of at least 25% in principal amount of the then outstanding November 2004 Notes may accelerate the maturity of all the November 2004 Notes as provided in the November 2004 Indenture.

127

THE EXCHANGE OFFER

General

L-3 hereby offers, upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal (which together constitute the exchange offer), to exchange up to $1.0 billion aggregate principal amount of our 6 3/8% Senior Subordinated Notes due 2015, which we refer to in this prospectus as the outstanding notes, for a like aggregate principal amount of our 6 3/8% Series B Senior Subordinated Notes due 2015, which we refer to in this prospectus as the exchange notes, properly tendered on or prior to the expiration date and not withdrawn as permitted pursuant to the procedures described below. The exchange offer is being made with respect to all of the outstanding notes.

As of the date of this prospectus, $1.0 billion aggregate principal amount of the outstanding notes is outstanding. This prospectus, together with the letter of transmittal, is first being sent on or about                      , 2005, to all holders of outstanding notes known to L-3. L-3's obligation to accept outstanding notes for exchange pursuant to the exchange offer is subject to certain conditions set forth under "Certain Conditions to the Exchange Offer" below. L-3 currently expects that each of the conditions will be satisfied and that no waivers will be necessary.

Purpose and Effect of the Exchange Offer

We have entered into a registration rights agreement with the initial purchasers of the outstanding notes in which we agreed, under some circumstances, to file a registration statement relating to an offer to exchange the outstanding notes for exchange notes. We also agreed to use all commercially reasonable efforts to cause the exchange offer registration statement to become effective under the Securities Act as promptly as practicable, but in no event later than 210 days after the closing date and to keep the exchange offer open for a period of not less than 20 business days. The exchange notes will have terms substantially identical to the outstanding notes, except that the exchange notes will not contain terms with respect to transfer restrictions, registration rights and additional interest for failure to observe certain obligations in the registration rights agreement. The outstanding notes were issued on July 29, 2005.

Under certain circumstances set forth in the registration rights agreement, we will use all commercially reasonable efforts to cause the SEC to declare effective a shelf registration statement with respect to the resale of the outstanding notes and keep the statement, effective for up to two years after the closing date.

If we fail to comply with certain obligations under the registration rights agreement, we will be required to pay additional interest to holders of the outstanding notes.

Each holder of outstanding notes that wishes to exchange outstanding notes for transferable exchange notes in the exchange offer will be required to make the following representations:

•	the holder will have no arrangements or understanding with any person to participate in the distribution of the outstanding notes or the exchange notes within the meaning of the Securities Act;

•	the holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of L-3 or if it is an affiliate, that it will comply with applicable registration and prospectus delivery requirements of the Securities Act to the extent applicable;

•	if the holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the exchange notes; and

•	if the holder is a broker-dealer, that it will receive exchange notes for its own account in exchange for outstanding notes that were acquired as a result of market-making activities or other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. See "Plan of Distribution."

128

Resale of Exchange Notes

Based on interpretations of the SEC staff set forth in no action letters issued to unrelated third parties, we believe that exchange notes issued under the exchange offer in exchange for outstanding notes may be offered for resale, resold and otherwise transferred by any exchange note holder without compliance with the registration and prospectus delivery provisions of the Securities Act, if:

•	the holder is not an "affiliate" of ours within the meaning of Rule 405 under the Securities Act;

•	the exchange notes are acquired in the ordinary course of the holder's business; and

•	the holder does not intend to participate in the distribution of the exchange notes.

Any holder who tenders in the exchange offer with the intention of participating in any manner in a distribution of the exchange notes:

•	cannot rely on the position of the staff of the SEC enunciated in Exxon Capital Holdings Corporation or similar interpretive letters; and

•	must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

This prospectus may be used for an offer to resell, for the resale or for other retransfer of exchange notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the outstanding notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where the outstanding notes were acquired by the broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. Please read the section captioned "Plan of Distribution" for more details regarding the transfer of exchange notes.

Terms of the Exchange Offer

Upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, we will accept for exchange any outstanding notes properly tendered and not withdrawn prior to the expiration date. We will issue $100,000 principal amount of exchange notes in exchange for each $100,000 principal amount of outstanding notes surrendered under the exchange offer. Outstanding notes may be tendered only in minimum denominations of $100,000 and in integral multiples of $1,000 in excess thereof.

The form and terms of the exchange notes will be substantially identical to the form and terms of the outstanding notes except the exchange notes will be registered under the Securities Act, will not bear legends restricting their transfer and will not provide for any additional amounts upon our failure to fulfill our obligations under the registration rights agreement to file, and cause to be effective, a registration statement. The exchange notes will evidence the same debt as the outstanding notes. The exchange notes will be issued under and entitled to the benefits of the same indenture that authorized the issuance of the outstanding notes.

The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered for exchange.

As of the date of this prospectus, $1.0 billion aggregate principal amount of the outstanding notes are outstanding. This prospectus and a letter of transmittal are being sent to all registered holders of outstanding notes. There will be no fixed record date for determining registered holders of outstanding notes entitled to participate in the exchange offer.

We intend to conduct the exchange offer in accordance with the provisions of the exchange offer and registration rights agreement, the applicable requirements of the Securities Act and the Securities Exchange Act of 1934 and the rules and regulations of the SEC. Outstanding notes that are not

129

tendered for exchange in the exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits the holders have under the indenture relating to the outstanding notes, except for any rights under the exchange offer and registration rights agreement that by their terms terminate upon the consummation of the exchange offer.

We will be deemed to have accepted for exchange properly tendered outstanding notes when we have given oral or written notice of the acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the exchange notes from us and delivering exchange notes to the holders. Under the terms of the exchange offer and registration rights agreement, we reserve the right to amend or terminate the exchange offer, and not to accept for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions specified below under the caption "—Certain Conditions to the Exchange Offer."

Holders who tender outstanding notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. It is important that you read the section labeled "—Fees and Expenses" below for more details regarding fees and expenses incurred in the exchange offer.

Expiration Date; Extensions; Amendments

The exchange offer will expire at 5:00 p.m., New York City time on                                         , 2005, unless in our sole discretion we extend it.

In order to extend the exchange offer, we will notify the exchange agent orally or in writing of any extension. We will notify the registered holders of outstanding notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.

We reserve the right, in our sole discretion:

•	to delay accepting for exchange any outstanding notes;

•	to extend the exchange offer or to terminate the exchange offer and to refuse to accept outstanding notes not previously accepted if any of the conditions set forth below under "—Certain Conditions to the Exchange Offer" have not been satisfied, by giving oral or written notice of the delay, extension or termination to the exchange agent; or

•	under the terms of the exchange offer and registration rights agreement, to amend the terms of the exchange offer in any manner.

Any delay in acceptance, extension, termination, or amendment will be followed as promptly as practicable by oral or written notice to the registered holders of outstanding notes. If we amend the exchange offer in a manner that we determine constitutes a material change, we will promptly disclose the amendment in a manner reasonably calculated to inform the holder of outstanding notes of the amendment.

Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, we will have no obligation to publish, advertise, or otherwise communicate any public announcement, other than by making a timely release to a financial news service.

Certain Conditions to the Exchange Offer

Despite any other term of the exchange offer, we will not be required to accept for exchange, or exchange any exchange notes for, any outstanding notes, and we may terminate the exchange offer as provided in this prospectus before accepting any outstanding notes for exchange if in our reasonable judgment:

130

•	the exchange notes to be received will not be tradable by the holder. without restriction under the Securities Act, the Securities Exchange Act and without material restrictions under the blue sky or securities laws of substantially all of the states of the United States;

•	the exchange offer, or the making of any exchange by a holder of outstanding notes, would violate applicable law or any applicable interpretation of the staff of the SEC: or

•	any action or proceeding has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer that, in our judgment, would reasonably be expected to impair our ability to proceed with the exchange offer.

In addition, we will not be obligated to accept for exchange the outstanding notes of any holder that has not made to us:

•	the representations described under "—Purpose and Effect of the Exchange Offer," "—Procedures for Tendering" and "Plan of Distribution"; and

•	such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available to it an appropriate form for registration of the exchange notes under the Securities Act.

We expressly reserve the right, at any time or at various times, to extend the period of time during which the exchange offer is open. Consequently, we may delay acceptance of any outstanding notes by giving oral or written notice of the extension to their holders. During any such extensions, all notes previously tendered will remain subject to the exchange offer, and we may accept them for exchange. We will return any outstanding notes that we do not accept for exchange for any reason without expense to their tendering holder as promptly as practicable after the expiration or termination of the exchange offer.

We expressly reserve the right to amend or terminate the exchange offer, and to reject for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions of the exchange offer specified above. We will give oral or written notice of any extension, amendment, nonacceptance, or termination to the holders of the outstanding notes as promptly as practicable.

These conditions are for our sole benefit and we may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times in our sole discretion. If we fail at any time to exercise any of the foregoing rights, this failure will not constitute a waiver of this right. Each right will be deemed an ongoing right that we may assert at any time or at various times.

In addition, we will not accept for exchange any outstanding notes tendered, and will not issue exchange notes in exchange for any outstanding notes, if at the time any stop order will be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act.

Procedures for Tendering

Only a holder of outstanding notes may tender the outstanding notes in the exchange offer. To tender in the exchange offer, a holder must:

•	complete, sign and date the accompanying letter of transmittal, or a facsimile of the letter of transmittal; have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires; and mail or deliver the letter of transmittal or facsimile to the exchange agent prior to the expiration date; or

•	comply with DTC's Automated Tender Offer Program procedures described below.

In addition, either:

•	the exchange agent must receive the outstanding notes along with the accompanying letter of transmittal; or

131

•	the exchange agent must receive, prior to the expiration date, a timely confirmation of book-entry transfer of the outstanding notes into the exchange agent's account at DTC according to the procedures for book-entry transfer described below or a properly transmitted agent's message; or

•	the holder must comply with the guaranteed delivery procedures described below.

To be tendered effectively, the exchange agent must receive any physical delivery of a letter of transmittal and other required documents at the address set forth below under "—Exchange Agent" prior to the expiration date.

The tender by a holder that is not withdrawn prior to the expiration date will constitute an agreement between the holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal.

The method of delivery of outstanding notes, the letter of transmittal and all other required documents to the exchange agent is at the holder's election and risk. Rather than mail these items, we recommend that holders use an overnight or hand delivery service. In all cases, holders should allow sufficient time to assure delivery to the exchange agent before the expiration date. Holders should not send the letter of transmittal or outstanding notes to us. Holders may request their respective brokers, dealers, commercial banks, trust companies or other nominees to effect the above transactions for them.

Any beneficial owner whose outstanding notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the owners behalf. If the beneficial owner wishes to tender on its own behalf, it must, prior to completing and executing the accompanying letter of transmittal and delivering its outstanding notes either:

•	make appropriate arrangements to register ownership of the outstanding notes in such owner's name; or

•	obtain a properly completed bond power from the registered holder of outstanding notes.

The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date.

Signatures on a letter of transmittal or a notice of withdrawal described below must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or another "eligible institution" within the meaning of Rule 17Ad-15 under the Exchange Act, unless the outstanding notes are tendered:

•	by a registered holder who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the accompanying letter of transmittal; or

•	for the account of an eligible institution.

If the accompanying letter of transmittal is signed by a person other than the registered holder of any outstanding notes listed on the outstanding notes, the outstanding notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder's name appears on the outstanding notes and an eligible institution must guarantee the signature on the bond power.

If the accompanying letter of transmittal or any outstanding notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, these persons should so indicate when signing. Unless waived by us, they should also submit evidence satisfactory to us of their authority to deliver the accompanying letter of transmittal.

The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC's system may use DTC's Automated Tender Offer Program to tender. Participants in the

132

program may. instead of physically completing and signing the accompanying letter of transmittal and delivering it to the exchange agent, transmit their acceptance of the exchange offer electronically. They may do so by causing DTC to transfer the outstanding notes to the exchange agent in accordance with its procedures for transfer. DTC will then send an agent's message to the exchange agent. The term "agent's message" means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, to the effect that:

•	DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that is tendering outstanding notes that are the subject of the book-entry confirmation;

•	the participant has received and agrees to be bound by the terms of the accompanying letter of transmittal, or, in the case of an agent's message relating to guaranteed delivery, that the participant has received and agrees to be bound by the applicable notice of guaranteed delivery; and

•	the agreement may be enforced against that participant.

We will determine in our sole discretion all outstanding questions as to the validity, form, eligibility, including time or receipt, acceptance of tendered outstanding notes and withdrawal of tendered outstanding notes. Our determination will be final and binding. We reserve the absolute right to reject any outstanding notes not properly tendered or any outstanding notes the acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular outstanding notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the accompanying letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of outstanding notes must be cured within such time as we will determine. Although we intend to notify holders of defects or irregularities with respect to tenders of outstanding notes, neither we, the exchange agent, nor any other person will incur any liability for failure to give the notification. Tenders of outstanding notes will not be deemed made until any defects or irregularities have been cured or waived. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the exchange agent without cost to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.

In all cases, we will issue exchange notes for outstanding notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives:

•	outstanding notes or a timely book-entry confirmation of the outstanding notes into the exchange agent's account at DTC; and

•	a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent's message.

By signing the accompanying letter of transmittal or authorizing the transmission of the agent's message, each tendering holder of outstanding notes will represent or be deemed to have represented to us that, among other things:

•	any exchange notes that the holder receives will be acquired in the ordinary course of its business;

•	the holder has no arrangement or understanding with any person or entity to participate in the distribution of the exchange notes;

•	if the holder is not a broker-dealer, that it is not engaged in and does not intend to engage in the distribution of the exchange notes;

•	if the holder is a broker-dealer that will receive exchange notes for its own account in exchange for outstanding notes that were acquired as a result of market-making activities or other trading activities. that it will deliver a prospectus, as required by law, in connection with any resale of any exchange notes. See "Plan of Distribution"; and

133

•	the holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of ours or, if the holder is an affiliate, it will comply with any applicable registration and prospectus delivery requirements of the Securities Act.

Book-Entry Transfer

The exchange agent will make a request to establish an account with respect to the outstanding notes at DTC for purposes of the exchange offer promptly after the date of this prospectus. Any financial institution participating in DTC's system may make book-entry delivery of outstanding notes by causing DTC to transfer the outstanding notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfer. Holders of outstanding notes who are unable to deliver confirmation of the book-entry tender of their outstanding notes into the exchange agent's account at DTC or all other documents required by the letter of transmittal to the exchange agent on or prior to the expiration date must tender their outstanding notes according to the guaranteed delivery procedures described below.

Guaranteed Delivery Procedures

Holders wishing to tender their outstanding notes but whose outstanding notes are not immediately available or who cannot deliver their outstanding notes, the accompanying letter of transmittal or any other available required documents to the exchange agent or comply with the applicable procedures under DTC's Automated Tender Offer Program prior to the expiration date may tender if:

•	the tender is made through an eligible institution;

•	prior to the expiration date, the exchange agent receives from the eligible institution either a properly completed and duly executed notice of guaranteed delivery, by facsimile transmission, mail or hand delivery, or a properly transmitted agent's message and notice of guaranteed delivery:

	•	setting forth the name and address of the holder, the registered number(s) of the outstanding notes and the principal amount of outstanding notes tendered:

	•	stating that the tender is being made thereby; and

	•	guaranteeing that, within three New York Stock Exchange trading days after the expiration date, the accompanying letter of transmittal, or facsimile thereof, together with the outstanding notes or a book-entry confirmation, and any other documents required by the accompanying letter of transmittal will be deposited by the eligible institution with the exchange agent; and

•	the exchange agent receives the properly completed and executed letter of transmittal, or facsimile thereof, as well as all tendered outstanding notes in proper form for transfer or a book-entry confirmation. and all other documents required by the accompanying letter of transmittal, within three New York Stock Exchange trading days after the expiration date.

Upon request to the exchange agent, a notice of guaranteed delivery will be sent to holders who wish to tender their outstanding notes according to the guaranteed delivery procedures set forth above.

Withdrawal of Tenders

Except as otherwise provided in this prospectus, holders of outstanding notes may withdraw their tenders at any time prior to the expiration date.

134

For a withdrawal to be effective:

•	the exchange agent must receive a written notice of withdrawal, which notice may be by telegram, telex, facsimile transmission or letter of withdrawal at one of the addresses set forth below under "—Exchange Agent", or

•	holders must comply with the appropriate procedures of DTC's Automated Tender Offer Program system.

Any notice of withdrawal must:

•	specify the name of the person who tendered the outstanding notes to be withdrawn;

•	identify the outstanding notes to be withdrawn, including the principal amount of the outstanding notes; and

•	where certificates for outstanding notes have been transmitted, specify the name in which the outstanding notes were registered, if different from that of the withdrawing holder.

If certificates for outstanding notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of the certificates, the withdrawing holder must also submit:

•	the serial numbers of the particular certificates to be withdrawn; and

•	a signed notice of withdrawal with signatures guaranteed by an eligible institution unless the holder is an eligible institution.

If outstanding notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn outstanding notes and otherwise comply with the procedures of that facility. We will determine all questions as to the validity, form and eligibility, including time of receipt, of the notices, and our determination will be final and binding on all parties. We will deem any outstanding notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer. Any outstanding notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without cost to the holder, or, in the case of outstanding notes tendered by book-entry transfer into the exchange agent's account at DTC according to the procedures described above, the outstanding notes will be credited to an account maintained with DTC for outstanding notes, as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn, outstanding notes may be retendered by following one of the procedures described under "—Procedures for Tendering" above at any time on or prior to the expiration date.

Exchange Agent

The Bank of New York has been appointed as exchange agent for the exchange offer. You should direct questions and requests for assistance, requests for additional copies of this prospectus or for the letter of transmittal and requests for the notice of guaranteed delivery to the exchange agent as follows:

135

By Mail:				By Facsimile:				By Hand or Overnight Delivery:
The Bank of New York Reorganization Unit 101 Barclay Street − 7 East New York, NY 10286 Attention:				The Bank of New York Reorganization Unit 101 Barclay Street − 7 East New York, NY 10286 Attention:                                  Phone:                                  Confirm Receipt of Facsimile by telephone:				The Bank of New York Reorganization Unit 101 Barclay Street Lobby Level − Corp. Trust Window New York 10286 Attention:

Delivery of the letter of transmittal to an address other than as set forth above or transmission via facsimile other than as set forth above does not constitute a valid delivery of the letter of transmittal.

Fees and Expenses

We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitations by telephone or in person by our officers and regular employees and those of our affiliates.

We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptance of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses.

We will pay the cash expenses to be incurred in connection with the exchange offer. The expenses are estimated in the aggregate to be approximately $350,000. They include:

•	SEC registration fees;

•	fees and expenses of the exchange agent and trustee;

•	accounting and legal fees and printing costs; and

•	related fees and expenses.

Transfer Taxes

We will pay all transfer taxes, if any, applicable to the exchange of outstanding notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:

•	certificates representing outstanding notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of outstanding notes tendered;

•	tendered outstanding notes are registered in the name of any person other than the person signing the letter of transmittal; or

•	a transfer tax is imposed for any reason other than the exchange of outstanding notes under the exchange offer.

If satisfactory evidence of payment of the taxes is not submitted with the letter of transmittal, the amount of the transfer taxes will be billed to that tendering holder.

Holders who tender their outstanding notes for exchange will not be required to pay any transfer taxes. However, holders who instruct us to register exchange notes in the name of, or request that outstanding notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be required to pay any applicable transfer tax.

136

Consequences of Failure to Exchange

Holders of outstanding notes who do not exchange their outstanding notes for exchange notes under the exchange offer will remain subject to the restrictions on transfer of the outstanding notes:

•	as set forth in the legend printed on the notes as a consequence of the issuance of the outstanding notes under the exemption from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws; and

•	otherwise as set forth in the offering memorandum distributed in connection with the private offering of the outstanding notes.

In general, you may not offer or sell the outstanding notes unless they are registered under the Securities Act, or if the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act. Based on interpretations of the SEC staff, exchange notes issued under the exchange offer may be offered for resale, resold or otherwise transferred by their holders (other than any holder that is our "affiliate" within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that the holders acquired the exchange notes in the ordinary course of the holders' business and the holders have no arrangement or understanding with respect to the distribution of the exchange notes to be acquired in the exchange offer. Any holder who tenders in the exchange offer for the purpose of participating in a distribution of the exchange notes:

•	cannot rely on the applicable interpretations of the SEC; and

•	must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

Other

Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take.

We may in the future seek to acquire untendered outstanding notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any outstanding notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered outstanding notes.

137

DESCRIPTION OF THE NOTES

The outstanding notes were issued and the exchange notes offered hereby will be issued under an indenture (the "Indenture") among the Company, as issuer, the Guarantors and The Bank of New York, as trustee (the "Trustee"). The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Notes are subject to all such terms, and holders of the Notes are referred to the Indenture and the Trust Indenture Act for a statement thereof.

The following summary of the material provisions of the Indenture describes the material terms of the Indenture but does not purport to be complete and is subject to, and qualified in its entirety by reference to, the provisions of the Indenture, including the definitions of certain terms contained therein and those terms made part of the Indenture by reference to the Trust Indenture Act. For definitions of certain capitalized terms used in the following summary, see "—Certain Definitions."

For purposes of this summary, the term "Company" refers only to L-3 Communications Corporation and not to any of its Subsidiaries.

Brief Description of the Notes and the Subsidiary Guarantees

The Notes:

•	are general unsecured obligations of the Company;

•	rank pari passu in right of payment with the 2002 Notes, the May 2003 Notes, the December 2003 Notes and the November 2004 Notes;

•	rank pari passu in right of payment with the obligations of the Company under its guarantee of Holdings' Convertible Notes;

•	are subordinated in right of payment to all current and future Senior Debt of the Company; and

•	are senior in right of payment to any future Indebtedness of the Company that expressly provides that it is subordinated to the Notes.

The Subsidiary Guarantees:

•	are general unsecured obligations of the Guarantors;

•	rank pari passu in right of payment with the guarantees of the 2002 Notes, the May 2003 Notes, the December 2003 Notes and the November 2004 Notes;

•	rank pari passu in right of payment with the obligations of the Guarantors under their guarantee of Holdings' Convertible Notes;

•	are subordinated in right of payment to all current and future Senior Debt of the Guarantors; and

•	are senior in right of payment to any future Indebtedness of the Guarantors that expressly provides that it is subordinated to the Subsidiary Guarantees.

At September 30, 2005, the Company had approximately $750.0 million of Senior Debt outstanding (excluding letters of credit, which aggregated $113.3 million). The Indenture permits the incurrence of additional Senior Debt in the future. See "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock."

The Subsidiary Guarantees

The Indenture provides that the Company's payment obligations under the Notes are jointly and severally guaranteed (the "Subsidiary Guarantees") by all of the Company's present and future Restricted Subsidiaries, (other than Foreign Subsidiaries), that Guarantee any Indebtedness of the

138

Company or any other Restricted Subsidiary. The obligations of each Guarantor under its Subsidiary Guarantee will be limited as necessary to prevent that Subsidiary Guarantee from constituting a fraudulent conveyance under applicable law. See "Risk Factors—The guarantees may be unenforceable due to fraudulent conveyance statutes and, accordingly, you could have no claim against the guarantors." The Subsidiary Guarantee of each Guarantor will be subordinated to the prior payment in full of all Senior Debt of such Guarantor, which would include the guarantees of amounts borrowed under the Senior Credit Facility.

Upon the release of a Guarantee by a Restricted Subsidiary under all then outstanding Indebtedness of the Company and any Restricted Subsidiary, the Subsidiary Guarantee of such Restricted Subsidiary under the Indenture will be released and discharged at such time. In the event that any such Restricted Subsidiary thereafter Guarantees any Indebtedness of the Company or any Restricted Subsidiary, then such Restricted Subsidiary will Guarantee the Notes on the terms and conditions set forth in the Indenture.

As of the date of this prospectus, not all of the Company's subsidiaries are "Restricted Subsidiaries." Aviation Communications & Surveillance Systems, LLC, Honeywell TCAS Inc., L-3 Communication Army Fleet Support, LLC and L-3 Communications MAPPS Investments, LLC are currently Unrestricted Subsidiaries. In addition, under the circumstances described below under the subheading "—Certain Covenants—Restricted Payments", the Company is permitted to designate certain of the Company's subsidiaries as "Unrestricted Subsidiaries." Unrestricted Subsidiaries are not subject to many of the restrictive covenants in the Indenture. Unrestricted Subsidiaries do not guarantee these Notes.

Principal, Maturity and Interest

The exchange notes will be limited in aggregate principal amount to $1.0 billion. The Company may issue additional Notes from time to time after the offering of exchange notes. Any offering of additional Notes is subject to the covenant described below under the caption "—Certain Covenants – Incurrence of Indebtedness and Issuance of Preferred Stock." The Notes and any additional Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.

The Notes will mature on October 15, 2015. Interest on the Notes will accrue at the rate of 6 3/8% per annum and will be payable semi-annually in arrears on April 15 and October 15, commencing on October 15, 2005, to Holders of record on the immediately preceding April 1 and October 1, respectively.

Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Methods of Receiving Payments on the Notes

Principal, premium and Additional Interest, if any, and interest on the Notes will be payable at the office or agency of the Company maintained for such purpose within the City and State of New York or, at the option of the Company, payment of interest and Additional Interest, if any, may be made by check mailed to the Holders of the Notes at their respective addresses set forth in the register of Holders of Notes; provided that all payments of principal, premium, interest and Additional Interest with respect to Notes the Holders of which have given wire transfer instructions to the Company will be required to be made by wire transfer of immediately available funds to the accounts specified by the Holders thereof if such Holders shall be registered Holders of at least $250,000 in principal amount of Notes. Until otherwise designated by the Company, the Company's office or agency in New York will be the office of the Trustee maintained for such purpose. The exchange notes will be issued in minimum denominations of $100,000 and in integral multiples of $1,000 in excess thereof.

139

Optional Redemption

The Notes will not be redeemable at the Company's option prior to October 15, 2010. Thereafter, the Notes will be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Additional Interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on October 15 of the years indicated below:

Year				Percentage
2010					103.188	%
2011					102.125	%
2012					101.063	%
2013 and thereafter					100.000	%

Notwithstanding the foregoing, before October 15, 2008, the Company may on any one or more occasions redeem up to an aggregate of 35% of the Notes originally issued at a redemption price of 106.375% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date, with the net cash proceeds of one or more Equity Offerings by the Company or the net cash proceeds of one or more Equity Offerings by Holdings that are contributed to the Company as common equity capital; provided that at least 65% of the Notes originally issued remain outstanding immediately after the occurrence of each such redemption; and provided, further, that any such redemption must occur within 120 days of the date of the closing of such Equity Offering.

Subordination

The payment of principal of, premium and Additional Interest, if any, and interest on the Notes will be subordinated in right of payment, as set forth in the Indenture, to the prior payment in full in cash of all Senior Debt, whether outstanding on the Issue Date or thereafter incurred.

Upon any distribution to creditors of the Company:

(1)	in a liquidation or dissolution of the Company;

(2)	in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property;

(3)	in an assignment for the benefit of creditors; or

(4)	in any marshalling of the Company's assets and liabilities,

the holders of Senior Debt will be entitled to receive payment in full in cash of all Obligations due in respect of such Senior Debt (including interest after the commencement of any such proceeding at the rate specified in the applicable Senior Debt, whether or not an allowable claim in any such proceeding) before the Holders of Notes will be entitled to receive any payment with respect to the Notes, and until all Obligations with respect to Senior Debt are paid in full in cash, any distribution to which the Holders of Notes would be entitled shall be made to the holders of Senior Debt (except, in each case, that Holders of Notes may receive Permitted Junior Securities and payments made from the trust described under "—Legal Defeasance and Covenant Defeasance").

The Company also may not make any payment upon or in respect of the Notes (except in Permitted Junior Securities or from the trust described under "—Legal Defeasance and Covenant Defeasance") if:

(1)	a default in the payment of the principal of, premium, if any, or interest on Designated Senior Debt occurs and is continuing; or

140

(2)

any other default occurs and is continuing with respect to Designated Senior Debt that permits holders of the Designated Senior Debt as to which such default relates to accelerate its maturity (or that would permit such holders to accelerate with the giving of notice or the passage of time or both) and the Trustee receives a notice of such default (a "Payment Blockage Notice") from the Company or the holders of any Designated Senior Debt.

Payments on the Notes may and shall be resumed:

(1)	in the case of a payment default, upon the date on which such default is cured or waived; and

(2)	in case of a nonpayment default, the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of any Designated Senior Debt has been accelerated.

No new period of payment blockage may be commenced unless and until:

(1)	360 days have elapsed since the effectiveness of the immediately prior Payment Blockage Notice; and

(2)	all scheduled payments of principal, premium and Additional Interest, if any, and interest on the Notes that have come due have been paid in full in cash.

No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 days.

The Indenture further requires that the Company promptly notify holders of Senior Debt if payment of the Notes is accelerated because of an Event of Default.

As a result of the subordination provisions described above, in the event of a liquidation or insolvency, Holders of Notes may recover less ratably than creditors of the Company who are holders of Senior Debt. As of September 30, 2005, the Company had approximately $750.0 million of Senior Debt outstanding (excluding letters of credit, which aggregated $113.3 million). The Indenture permits the incurrence of additional Senior Debt in the future. See "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock."

Mandatory Redemption

Except as set forth below under "—Repurchase at the Option of Holders", the Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

Repurchase at the Option of Holders

Change of Control

Upon the occurrence of a Change of Control, each Holder of Notes will have the right to require the Company to repurchase all or any part (equal to $100,000 or an integral multiple of $1,000 in excess thereof) of such Holder's Notes pursuant to the offer described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase (the "Change of Control Payment"). Within ten days following any Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the "Change of Control Payment Date"), pursuant to the procedures required by the Indenture and described in such notice. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control.

141

On the Change of Control Payment Date, the Company will, to the extent lawful:

(1)	accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;

(2)	deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(3)	deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company.

The Paying Agent will promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $100,000 or an integral multiple of $1,000 in excess thereof.

The Indenture provides that, prior to mailing a Change of Control Offer, but in any event within 90 days following a Change of Control, the Company will either repay all outstanding Senior Debt or offer to repay all Senior Debt and terminate all commitments thereunder of each lender who has accepted such offer or obtain the requisite consents, if any, under all agreements governing outstanding Senior Debt to permit the repurchase of Notes required by this covenant. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

The Change of Control provisions described above will be applicable whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the Holders of the Notes to require that the Company repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction.

The Senior Credit Facility prohibits the Company, in certain circumstances, from purchasing any Notes, and also provides that certain change of control events with respect to the Company constitute a default thereunder. Any future credit agreements or other agreements relating to Senior Debt to which the Company becomes a party may contain similar restrictions and provisions. In the event a Change of Control occurs at a time when the Company is prohibited from purchasing Notes, the Company could seek the consent of its lenders to the purchase of Notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing Notes. In such case, the Company's failure to purchase tendered Notes would constitute an Event of Default under the Indenture and under the documentation governing certain of our other Indebtedness, which would, in turn, constitute a default under the Senior Credit Facility. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the Holders of Notes. See "Risk Factors—Our ability to repurchase notes with cash upon a change of control may be limited."

Finally, the Company's ability to pay cash to the holders of Notes upon a purchase may be limited by the Company's then-existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required purchases. Even if sufficient funds were otherwise available, the terms of the Senior Credit Facility would prohibit, subject to certain exceptions, the Company's prepayment of Notes prior to their scheduled maturity. Consequently, if the Company is not able to prepay indebtedness outstanding under the Senior Credit Facility and any other Senior Debt containing similar restrictions or obtain requisite consents, the Company will be unable to fulfill its repurchase obligations if holders of Notes exercise their purchase rights following a Change of Control, thereby resulting in a default under the Indenture and under the documentation governing certain of our other Indebtedness, which would, in turn, constitute a default under our Senior Credit Facility. Furthermore, the Change of Control provisions of the Indenture and under the documentation governing certain of our other Indebtedness may in certain circumstances make more difficult or discourage a takeover of the Company.

142

The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

The definition of Change of Control contains, with respect to the disposition of assets, the phrase "all or substantially all," which varies according to the facts and circumstances of the subject transaction and is subject to judicial interpretation. Accordingly, in certain circumstances there may be a degree of uncertainty in ascertaining whether a particular transaction would involve a disposition of "all or substantially all" of the assets of the Company and its Restricted Subsidiaries, and therefore it may be unclear as to whether a Change of Control has occurred and whether the holders have the right to require the Company to purchase the Notes. In the event that the Company were to determine that a Change of Control did not occur because not "all or substantially all" of the assets of the Company and its Restricted Subsidiaries had been sold and the holders of the Notes disagreed with such determination, the holders and/or the Trustee would need to seek a judicial determination of the issue.

Asset Sales

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(1)

the Company or the Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (evidenced by an Officers' Certificate delivered to the Trustee which will include a resolution of the Board of Directors with respect to such fair market value in the event such Asset Sale involves aggregate consideration in excess of $50.0 million) of the assets or Equity Interests issued or sold or otherwise disposed of; and

(2)	at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary, as the case may be, consists of cash, Cash Equivalents and/or Marketable Securities;

	provided, however, that:

	(a)	the amount of any Senior Debt of the Company or such Restricted Subsidiary that is assumed by the transferee in any such transaction; and

	(b)	any consideration received by the Company or such Restricted Subsidiary, as the case may be, that consists of (1) all or substantially all of the assets of one or more Similar Businesses, (2) other long-term assets that are used or useful in one or more Similar Businesses and (3) Permitted Securities shall be deemed to be cash for purposes of this provision.

Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company may apply such Net Proceeds, at its option:

(1)	to repay Indebtedness under a Credit Facility;

(2)	to the acquisition of Permitted Securities;

(3)	to the acquisition of all or substantially all of the assets of one or more Similar Businesses;

(4)	to the making of a capital expenditure; or

(5)	to the acquisition of other long-term assets in a Similar Business.

Pending the final application of any such Net Proceeds, the Company may temporarily reduce Indebtedness under a Credit Facility or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture.

Any Net Proceeds from Asset Sales that are not applied or invested as provided in the first sentence of this paragraph will be deemed to constitute "Excess Proceeds." When the aggregate

143

amount of Excess Proceeds exceeds $25.0 million, the Company will be required to make an offer to all Holders of the Notes (an "Asset Sale Offer") and any other Indebtedness that ranks pari passu with the Notes (including, without limitation, the 2002 Notes, the May 2003 Notes, the December 2003 Notes and the November 2004 Notes) that, by its terms, requires the Company to offer to repurchase such Indebtedness with such Excess Proceeds to purchase the maximum principal amount of Notes and pari passu Indebtedness that may be purchased out of such Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of purchase, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes or pari passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any Excess Proceeds for general corporate purposes. If the aggregate principal amount of Notes or pari passu Indebtedness surrendered by Holders thereof exceeds the amount of Excess Proceeds in an Asset Sale Offer, the Company shall repurchase such Indebtedness on a pro rata basis and the Trustee shall select the Notes to be purchased on a pro rata basis. Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.

The Senior Credit Facility will substantially limit the Company's ability to purchase subordinated Indebtedness, including the Notes. Any future credit agreements relating to Senior Debt may contain similar restrictions. See "Description of Other Indebtedness—Senior Credit Facility of L-3 Communications."

Selection and Notice

If less than all of the Notes are to be redeemed at any time, selection of Notes for redemption will be made by the Trustee as follows:

(1)	in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed; or

(2)	if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate.

No Notes of $100,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. Notices of redemption may not be conditional.

If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption.

Certain Covenants

Changes in Covenants when Notes Rated Investment Grade

If on any date following the date of the Indenture:

(1)

the Notes are rated Baa3 or better by Moody's and BBB- or better by S&P (or, if either such entity ceases to rate the notes for reasons outside of the control of the Company, the equivalent investment grade credit rating from any other "nationally recognized statistical rating organization" within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by Company as a replacement agency); and

(2)	no Default or Event of Default shall have occurred and be continuing,

then, beginning on that day and subject to the provisions of the following paragraph, the provisions and covenants specifically listed under the following captions in this prospectus will no longer be in effect:

144

	(a)	"—Repurchase at the Option of Holders—Asset Sales;"

	(b)	"—Restricted Payments;"

	(c)	"—Incurrence of Indebtedness and Issuance of Preferred Stock;"

	(d)	"—Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries;"

	(e)	"—Transactions with Affiliates;"

	(f)	clauses (4)(a) and (b) of the covenant listed under "—Merger, Consolidation or Sale of Assets;"

	(g)	"—Payments for Consent;" and

	(h)	clauses (3)(a) and (b) of the covenant listed under "—Future Subsidiary Guarantees."

Restricted Payments

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1)

declare or pay any dividend or make any other payment or distribution on account of the Company's or any of its Restricted Subsidiaries' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company) or to the direct or indirect holders of the Company's or any of its Restricted Subsidiaries' Equity Interests in their capacity as such (other than (A) dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);

(2)	purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any direct or indirect parent of the Company;

(3)	make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes except a payment of interest or principal at Stated Maturity; or

(4)	make any Restricted Investment (all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as "Restricted Payments"),

unless, at the time of and after giving effect to such Restricted Payment:

(1)	no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and

(2)

the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock"; and

(3)	such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries since April 30, 1997 (excluding Restricted Payments permitted by clauses (2) through (8) of the next succeeding paragraph or of the kind contemplated by such clauses that were made prior to the date of the Indenture), is less than the sum of:

145

	(a)	50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from July 1, 1997 to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus

	(b)	100% of the aggregate net cash proceeds received by the Company since April 30, 1997 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of Disqualified Stock or debt securities of the Company that have been converted into such Equity Interests (other than Equity Interests (or Disqualified Stock or convertible debt securities) sold to a Subsidiary of the Company and other than Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock); plus

	(c)	to the extent that any Restricted Investment that was made after April 30, 1997 is sold for cash or otherwise liquidated or repaid for cash, the amount of cash received in connection therewith (or from the sale of Marketable Securities received in connection therewith); plus

	(d)	to the extent not already included in such Consolidated Net Income of the Company for such period and without duplication;

	(A)	100% of the aggregate amount of cash received as a dividend from an Unrestricted Subsidiary;

	(B)	100% of the cash received upon the sale of Marketable Securities received as a dividend from an Unrestricted Subsidiary; and

	(C)	100% of the net assets of any Unrestricted Subsidiary on the date that it becomes a Restricted Subsidiary.

As of September 30, 2005, the amount that would have been available to the Company for Restricted Payments pursuant to this paragraph (3) would have been approximately $2.5 billion. Our Senior Credit Facility, however, currently limits the restricted payments we can make to approximately $1.2 billion.

The foregoing provisions will not prohibit:

(1)	the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture;

(2)

the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness or Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, other Equity Interests of the Company (other than any Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (3) (b) of the preceding paragraph;

(3)	the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness (other than intercompany Indebtedness) in exchange for, or with the net cash proceeds from an incurrence of, Permitted Refinancing Indebtedness;

(4)

the repurchase, retirement or other acquisition or retirement for value of common Equity Interests of the Company or Holdings held by any future, present or former employee, director or consultant of the Company or any Subsidiary or Holdings issued pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement; provided, however, that the aggregate amount of Restricted Payments made under this clause (4) does not exceed $15.0 million in any calendar year and provided further that cancellation of Indebtedness owing to the Company from members of management of the Company or any of its Restricted Subsidiaries in connection with a

146

	repurchase of Equity Interests of the Company will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of the Indenture;

(5)	repurchases of Equity Interests deemed to occur upon exercise of stock options upon surrender of Equity Interests to pay the exercise price of such options;

(6)

payments to Holdings (A) in amounts equal to the amounts required for Holdings to pay franchise taxes and other fees required to maintain its legal existence and provide for other operating costs of up to $5.0 million per fiscal year and (B) in amounts equal to amounts required for Holdings to pay federal, state and local income taxes to the extent such income taxes are actually due and owing; provided that the aggregate amount paid under this clause (B) does not exceed the amount that the Company would be required to pay in respect of the income of the Company and its Subsidiaries if the Company were a stand alone entity that was not owned by Holdings;

(7)	dividends paid to Holdings in amounts equal to amounts required for Holdings to pay interest and/or principal on Indebtedness that has been guaranteed by, or is otherwise considered Indebtedness of, the Company; and

(8)	other Restricted Payments in an aggregate amount since May 22, 1998 not to exceed $100.0 million.

The Board of Directors of the Company may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would not cause a Default. For purposes of making such determination, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated will be deemed to be Restricted Payments at the time of such designation and will reduce the amount available for Restricted Payments under the first paragraph of this covenant. All such outstanding Investments will be deemed to constitute Investments in an amount equal to the fair market value of such Investments at the time of such designation. Such designation will only be permitted if such Restricted Payment would be permitted at such time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any non-cash Restricted Payment shall be determined by the Board of Directors whose resolution with respect thereto shall be delivered to the Trustee.

Incurrence of Indebtedness and Issuance of Preferred Stock

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and that the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.

The foregoing limitation will not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

(1)	the incurrence by the Company of additional Indebtedness under Credit Facilities (and the guarantee thereof by the Guarantors) in an aggregate principal amount outstanding

147

pursuant to this clause (1) at any one time (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (1), not to exceed $2,000.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied to repay any such Indebtedness pursuant to the covenant described above under the caption "—Asset Sales";

(2)	the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;

(3)	the incurrence by the Company and the Guarantors of $1.0 billion in aggregate principal amount of each of the outstanding notes and the Exchange Notes and the Subsidiary Guarantees thereof;

(4)

the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (4), not to exceed 5% of the Consolidated Tangible Assets of the Company at any time outstanding;

(5)

the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Restricted Subsidiary prior to such acquisition by the Company or one of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or one of its Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (5) does not exceed $250.0 million;

(6)	the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness that was permitted by the Indenture to be incurred (other than intercompany Indebtedness or Indebtedness incurred pursuant to clause (1) above);

(7)

Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

(8)

Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that:

	(a)	such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (a)); and

	(b)	the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such

148

	noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;

(9)	the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:

	(a)	if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes; and

	(b)	(1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or one of its Restricted Subsidiaries and (2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or one of its Restricted Subsidiaries shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be;

(10)	the incurrence by the Company or any Restricted Subsidiary of Hedging Obligations that are incurred for the purpose of:

	(a)	fixing, hedging or capping interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the Indenture to be outstanding; or

	(b)	protecting the Company and its Restricted Subsidiaries against changes in currency exchange rates;

(11)	the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this covenant;

(12)

the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (12), and the issuance of preferred stock by Unrestricted Subsidiaries;

(13)	obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiaries in the ordinary course of business;

(14)	the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (14), not to exceed $200.0 million; and

(15)

the incurrence by Foreign Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (15), not to exceed the greater of (a) 5% of such Foreign Subsidiaries' Consolidated Tangible Assets or (b) $250.0 million.

For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, classify, or later reclassify, such item of Indebtedness in any manner that complies with this covenant. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this covenant.

Liens

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien (other than

149

Permitted Liens) securing Indebtedness on any asset now owned or hereafter acquired, or any income or profits therefrom or assign or convey any right to receive income therefrom, unless all payments due under the Indenture and the Notes are secured on an equal and ratable basis with the Obligations so secured until such time as such Obligations are no longer secured by a Lien.

Antilayering Provision

The Indenture provides that (A) the Company will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Debt and senior in any respect in right of payment to the Notes, and (B) no Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Debt of a Guarantor and senior in any respect in right of payment to any of the Subsidiary Guarantees. For purposes of the foregoing, no Indebtedness will be deemed to be subordinated or junior in right of payment to any other Indebtedness solely by virtue of being unsecured.

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to:

(1)	(A) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits, or (B) pay any indebtedness owed to the Company or any of its Restricted Subsidiaries;

(2)	make loans or advances to the Company or any of its Restricted Subsidiaries; or

(3)	transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries.

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

(1)	the provisions of security agreements that restrict the transfer of assets that are subject to a Lien created by such security agreements;

(2)	the provisions of agreements governing Indebtedness incurred pursuant to clause (5) of the second paragraph of the covenant described above under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock";

(3)	the Senior Credit Facility, the Indenture, the Notes, the Exchange Notes, the 2002 Indenture, the 2002 Notes, the May 2003 Indenture, the May 2003 Notes, the December 2003 Indenture, the December 2003 Notes, the November 2004 Indenture and the November 2004 Notes;

(4)	applicable law;

(5)

any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred;

(6)	by reason of customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices;

(7)	purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (3) of the preceding paragraph;

150

(8)	Permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

(9)	contracts for the sale of assets, including, without limitation, customary restrictions with respect to a Subsidiary pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(10)	agreements relating to secured Indebtedness otherwise permitted to be incurred pursuant to the covenants described under "Incurrence of Indebtedness and Issuance of Preferred Stock" and "Liens" that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(11)	restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(12)	customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;

(13)	any encumbrance or restriction with respect to a Foreign Subsidiary pursuant to any agreement relating to Indebtedness Incurred by such Foreign Subsidiary; provided that such Indebtedness was permitted by the terms of the Indenture to be incurred; or

(14)

any encumbrances or restrictions of the type referred to in clauses (1), (2) and (3) of the first paragraph under this covenant imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (13) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Company, no more restrictive, taken as a whole, than those contained in such contract, instrument or obligation prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

Merger, Consolidation or Sale of Assets

The Indenture provides that the Company may not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to another Person unless:

(1)	the Company is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia;

(2)

the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of the Company under the Registration Rights Agreement, the Notes and the Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;

(3)	immediately after such transaction no Default or Event of Default exists; and

(4)

except in the case of a merger of the Company with or into a Wholly Owned Restricted Subsidiary of the Company, the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made, after giving pro forma effect to such transaction as if such transaction had occurred at the beginning of the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such transaction either:

151

	(a)	would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock"; or

	(b)	would have a pro forma Fixed Charge Coverage Ratio that is greater than the actual Fixed Charge Coverage Ratio for the same four-quarter period without giving pro forma effect to such transaction.

Notwithstanding the foregoing clause (4):

(1)	any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to the Company; and

(2)	the Company may merge with an Affiliate that has no significant assets or liabilities and was incorporated solely for the purpose of reincorporating the Company in another State of the United States so long as the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby.

Transactions with Affiliates

The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless:

(1)	such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and

(2)	the Company delivers to the Trustee:

	(a)	with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $20.0 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (1) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and

	(b)	with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $50.0 million, an opinion as to the fairness to the Holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

The foregoing provisions will not prohibit:

(1)	any employment or indemnity agreement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(2)	any transaction with a Lehman Investor;

(3)	any transaction between or among the Company and/or its Restricted Subsidiaries;

(4)	transactions between the Company or any of its Restricted Subsidiaries, on the one hand, and a Permitted Joint Venture, on the other hand, on terms that are not materially less favorable to the Company or the applicable Restricted Subsidiary of the Company than those that could have been obtained from an unaffiliated third party; provided that:

	(a)	in the case of any such transaction or series of related transactions pursuant to this clause (4) involving aggregate consideration in excess of $10.0 million but less than $50.0 million, such transaction or series of transactions (or the agreement pursuant to which the transactions were executed) was approved by the Company's Chief Executive Officer or Chief Financial Officer; and

152

	(b)	in the case of any such transaction or series of related transactions pursuant to this clause (4) involving aggregate consideration equal to or in excess of $50.0 million, such transaction or series of related transactions (or the agreement pursuant to which the transactions were executed) was approved by a majority of the disinterested members of the Board of Directors;

(5)	any transaction pursuant to and in accordance with the provisions of the Transaction Documents as the same are in effect on the Issue Date; and

(6)	any Restricted Payment that is permitted by the provisions of the Indenture described above under the caption "—Restricted Payments."

Payments for Consent

The Indenture provides that neither the Company nor any of its Subsidiaries will, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder of any Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid or is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Reports

Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Indenture requires the Company to file with the Commission (and provide the Trustee and Holders with copies thereof, without cost to each Holder, within 15 days after it files them with the Commission):

(1)	within 90 days after the end of each fiscal year, annual reports on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form);

(2)	within 45 days after the end of each of the first three fiscal quarters of each fiscal year, reports on Form 10-Q (or any successor or comparable form);

(3)	promptly from time to time after the occurrence of an event required to be therein reported, such other reports on Form 8-K (or any successor or comparable form); and

(4)	any other information, documents and other reports which the Company would be required to file with the Commission if it were subject to Section 13 or 15(d) of the Exchange Act;

provided, however, the Company shall not be so obligated to file such reports with the Commission if the Commission does not permit such filing, in which event the Company will make available such information to prospective purchasers of Notes, in addition to providing such information to the Trustee and the Holders, in each case within 15 days after the time the Company would be required to file such information with the Commission, if it were subject to Sections 13 or 15(d) of the Exchange Act.

Future Subsidiary Guarantees

The Company's payment obligations under the Notes are jointly and severally guaranteed by all of the Company's existing and future Restricted Subsidiaries (other than Foreign Subsidiaries) that Guarantee any Indebtedness of the Company or any other Restricted Subsidiary. The Indenture provides that if the Company or any of its Subsidiaries shall acquire or create a Subsidiary (other than a Foreign Subsidiary or an Unrestricted Subsidiary) after the Issue Date, and such Subsidiary guarantees any other Indebtedness of the Company or any of its Restricted Subsidiaries, then such Subsidiary shall execute a Subsidiary Guarantee and deliver an opinion of counsel, in accordance with the terms of the Indenture. The Subsidiary Guarantee of each Guarantor ranks pari passu with the guarantees of the 2002 Notes, the May 2003 Notes, the December 2003 Notes, the November 2004

153

Notes and the Convertible Notes and is subordinated to the prior payment in full of all Senior Debt of such Guarantor, which would include the guarantees of amounts borrowed under the Senior Credit Facility. The obligations of each Guarantor under its Subsidiary Guarantee are limited so as not to constitute a fraudulent conveyance under applicable law.

The Indenture provides that no Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person (except the Company or another Guarantor) unless:

(1)

subject to the provisions of the following paragraph, the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of such Guarantor pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee, under the Notes and the Indenture;

(2)	immediately after giving effect to such transaction, no Default or Event of Default exists; and

(3)	the Company:

	(a)	would be permitted by virtue of the Company's pro forma Fixed Charge Coverage Ratio, immediately after giving effect to such transaction, to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the covenant described above under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock"; or

	(b)	would have a pro forma Fixed Charge Coverage Ratio that is greater than the actual Fixed Charge Coverage Ratio for the same four-quarter period without giving pro forma effect to such transaction.

Notwithstanding the foregoing clause (3):

(1)	any Guarantor may consolidate with, merge into or transfer all or part of its properties and assets to the Company or to another Guarantor; and

(2)	any Guarantor may merge with an Affiliate that has no significant assets or liabilities and was incorporated solely for the purpose of reincorporating such Guarantor in another State of the United States so long as the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby.

The Indenture provides that in the event of a sale or other disposition of all of the assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the capital stock of any Guarantor, then such Guarantor (in the event of a sale or other disposition, by way of such a merger, consolidation or otherwise, of all of the capital stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all of the assets of such Guarantor) will be released and relieved of any obligations under its Subsidiary Guarantee; provided that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the Indenture (it being understood that only such portion of the Net Proceeds as is required to be applied on or before the date of such sale or other disposition in accordance with the terms of the Indenture needs to be applied in accordance therewith at such time). See "—Repurchase at the Option of Holders—Asset Sales."

The foregoing notwithstanding, a Subsidiary Guarantor will be automatically and unconditionally released and discharged from all of its obligations under the Indenture and its Subsidiary Guarantee if (a) such Subsidiary is released from its Guarantees of, and all pledges and security interests granted in connection with, all other Indebtedness of the Company or any of their Restricted Subsidiaries or (b) the Company designates such Subsidiary as an Unrestricted Subsidiary and such designation complies with the other applicable provisions of the Indenture.

154

Events of Default and Remedies

The Indenture provides that each of the following constitutes an Event of Default:

(1)	default for 30 days in the payment when due of interest or Additional Interest, if any, on the Notes (whether or not prohibited by the subordination provisions of the Indenture);

(2)	default in payment when due of the principal of or premium, if any, on the Notes (whether or not prohibited by the subordination provisions of the Indenture);

(3)	failure by the Company to comply with the provisions described under the captions "—Repurchase at the Option of Holders—Change of Control", "—Repurchase at the Option of Holders—Asset Sales" or "—Merger, Consolidation or Sale of Assets";

(4)	failure by the Company for 60 days after notice to comply with any of its other agreements in the Indenture or the Notes;

(5)

default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the Issue Date, which default results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness the maturity of which has been so accelerated, aggregates $50.0 million or more;

(6)	failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $50.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

(7)	certain events of bankruptcy or insolvency with respect to the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; and

(8)	except as permitted by the Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid.

If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately; provided, however, that so long as any Designated Senior Debt is outstanding, such declaration shall not become effective until the earlier of:

(1)	the day which is five Business Days after receipt by the Representatives of Designated Senior Debt of such notice of acceleration; or

(2)	the date of acceleration of any Designated Senior Debt.

Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Company or any Significant Subsidiary or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable without further action or notice. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest.

The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes.

The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

155

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator or stockholder of the Company or any Subsidiary of the Company, as such, shall have any liability for any obligations of the Company or any Subsidiary of the Company under the Notes, the Subsidiary Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the Commission that such a waiver is against public policy.

Legal Defeasance and Covenant Defeasance

The Company may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding Notes ("Legal Defeasance") except for:

(1)	the rights of Holders of outstanding Notes to receive payments in respect of the principal of, premium and Additional Interest, if any, and interest on such Notes when such payments are due from the trust referred to below;

(2)	the Company's obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(3)	the rights, powers, trusts, duties and immunities of the Trustee, and the Company's obligations in connection therewith; and

(4)	the Legal Defeasance provisions of the Indenture.

In addition, the Company may, at its option and at any time, elect to have the obligations of the Company released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default and Remedies" will no longer constitute an Event of Default with respect to the Notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1)

the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium and Additional Interest, if any, and interest on the outstanding Notes on the stated maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;

(2)	in the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that:

	(a)	the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or

	(b)	since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

156

(3)

in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4)	no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit;

(5)	such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound;

(6)	the Company must have delivered to the Trustee an opinion of counsel to the effect that after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally;

(7)	the Company must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and

(8)	the Company must deliver to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions precedent provided for relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Transfer and Exchange

A Holder may transfer or exchange Notes in accordance with the Indenture. The registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company is not required to transfer or exchange any Note selected for redemption. Also, the Company is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.

The registered Holder of a Note will be treated as the owner of it for all purposes.

Amendment, Supplement and Waiver

Except as provided in the next two succeeding paragraphs, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including consents obtained in connection with a tender offer or exchange offer for Notes).

Without the consent of each Holder affected, an amendment or waiver may not (with respect to any Notes held by a non-consenting Holder):

(1)	reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

157

(2)	reduce the principal of or change the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes (other than provisions relating to the covenants described above under the caption "—Repurchase at the Option of Holders");

(3)	reduce the rate of or change the time for payment of interest on any Note;

(4)	waive a Default or Event of Default in the payment of principal of or premium and Additional Interest, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration);

(5)	make any Note payable in money other than that stated in the Notes;

(6)	make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of or premium and Additional Interest, if any, or interest on the Notes;

(7)	waive a redemption payment with respect to any Note (other than a payment required by one of the covenants described above under the caption "—Repurchase at the Option of Holders"); or

(8)	make any change in the foregoing amendment and waiver provisions.

In addition, any amendment to the provisions of Article 10 of the Indenture (which relates to subordination) will require the consent of the Holders of at least 75% in aggregate principal amount of the Notes then outstanding if such amendment would adversely affect the rights of Holders of Notes.

Notwithstanding the foregoing, without the consent of any Holder of Notes, the Company and the Trustee may amend or supplement the Indenture or the Notes:

(1)	to cure any ambiguity, defect or inconsistency;

(2)	to provide for uncertificated Notes in addition to or in place of certificated Notes;

(3)	to provide for the assumption of the Company's obligations to Holders of Notes in the case of a merger or consolidation;

(4)	to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the legal rights under the Indenture of any such Holder;

(5)	to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act; or

(6)	to conform the text of the Indenture or the Notes to any provision of this "Description of the Notes" to the extent that such provision in this "Description of the Notes" was intended to be a verbatim recitation of the Indenture, the Subsidiary Guarantees or the Notes.

Concerning the Trustee

The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Company, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee is permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue or resign.

The Holders of a majority in principal amount of the then outstanding Notes have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur (which shall not be cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of such person's affairs. Subject to such

158

provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of Notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

Additional Information

Anyone who receives this prospectus may obtain a copy of the Indenture and Registration Rights Agreement without charge by writing to L-3 Communications Corporation, 600 Third Avenue, New York, New York 10016, Attention: Vice President—Finance.

Book-Entry, Delivery and Form

The Exchange Notes will be represented by one or more global notes in registered, global form without interest coupons (collectively, the "Global Exchange Note"). The Global Exchange Note initially will be deposited upon issuance with the Trustee as custodian for The Depository Trust Company ("DTC"), in New York, New York, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant as described below.

Except as set forth below, the Global Exchange Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Exchange Notes may not be exchanged for Exchange Notes in certificated form except in the limited circumstances described below. See "—Exchange of Book-Entry Notes for Certificated Notes." In addition, transfer of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants (including, if applicable, those of Euroclear and Clearstream), which may change from time to time.

The Notes may be presented for registration of transfer and exchange at the offices of the registrar.

Depository Procedures

DTC has advised the Company that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of Participants. The Participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or Indirect Participants. The ownership interest and transfer of ownership interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.

DTC has also advised the Company that pursuant to procedures established by it:

(1)	upon deposit of the Global Exchange Note, DTC will credit the accounts of Participants with portions of the principal amount of Global Exchange Note; and

(2)	ownership of such interests in the Global Exchange Note will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to Participants) or by Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Exchange Note).

Investors in the Global Exchange Note may hold their interests therein directly through DTC, if they are Participants in such system, or indirectly through organizations (including Euroclear and Clearstream) that are Participants in such system. All interests in a Global Exchange Note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held by Euroclear or Clearstream may also be subject to the procedures and requirements of such system.

159

The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interest in a Global Exchange Note to such persons may be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants and certain banks, the ability of a person having a beneficial interest in a Global Exchange Note to pledge such interest to persons or entities that do not participate in DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of physical certificate evidencing such interests. For certain other restrictions on the transferability of the Notes see, "—Exchange of Book-Entry Notes for Certificated Notes."

Except as described below, owners of interests in the Global Exchange Notes will not have Notes registered in their names, will not receive physical delivery of Exchange Notes in certificated form and will not be considered the registered owners or Holders thereof under the Indenture for any purpose.

Payments in respect of the principal and premium and Additional Interest, if any, and interest on a Global Exchange Note registered in the name of DTC or its nominee will be payable by the Trustee to DTC or its nominee in its capacity as the registered Holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the persons in whose names the Exchange Notes, including the Global Exchange Notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, neither the Company, the Trustee nor any agent of the Company or the Trustee has or will have any responsibility or liability for:

(1)	any aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interests in the Global Exchange Notes, or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global Exchange Notes; or

(2)	any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.

DTC has advised the Company that its current practices, upon receipt of any payment in respect of securities such as the Exchange Notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date, in amounts proportionate to their respective holdings in principal amount of beneficial interests in the relevant security such as the Global Exchange Notes as shown on the records of DTC. Payments by Participants and the Indirect Participants to the beneficial owners of Notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the Trustee or the Company. Neither the Company nor the Trustee will be liable for any delay by DTC or its Participants in identifying the beneficial owners of the Exchange Notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee as the registered owner of the Exchange Notes for all purposes.

Except for trades involving only Euroclear and Clearstream participants, interests in the Global Exchange Notes will trade in DTC's Same-Day Funds Settlement System and secondary market trading activity in such interests will, therefore, settle in immediately available funds, subject in all cases to the rules and procedures of DTC and its participants.

Transfers between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds. Transfers between participants in Euroclear and Clearstream will be effected in the ordinary way in accordance with their respective rules and operating procedures.

Subject to compliance with the transfer restrictions applicable to the Exchange Notes described herein, crossmarket transfers between Participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC's rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depository; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and

160

within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depository to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Exchange Note in DTC, and making or receiving payment in accordance with normal procedures for same-day fund settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the Depositaries for Euroclear or Clearstream.

Because of time zone differences, the securities accounts of a Euroclear or Clearstream participant purchasing an interest in a Global Exchange Note from a Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear or Clearstream) immediately following the settlement date of DTC. Cash received in Euroclear or Clearstream as a result of sales of interests in a Global Exchange Note by or through a Euroclear or Clearstream participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC's settlement date.

DTC has advised the Company that it will take any action permitted to be taken by a Holder of Exchange Notes only at the direction of one or more Participants to whose account DTC interests in the Global Exchange Notes are credited and only in respect of such portion of the aggregate principal amount of the Notes as to which such Participant or Participants has or have given direction. However, if there is an Event of Default under the Notes, DTC reserves the right to exchange Global Exchange Notes for legended Exchange Notes in certificated form, and to distribute such Exchange Notes to its Participants.

The information in this section concerning DTC, Euroclear and Clearstream and their book-entry systems has been obtained from sources that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof.

Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Global Exchange Note among participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the initial purchasers or the Trustee will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Exchange of Book-Entry Notes for Certificated Notes

A Global Exchange Note is exchangeable for definitive Exchange Notes in registered certificated form if:

(1)	DTC (A) notifies the Company that it is unwilling or unable to continue as depository for the Global Exchange Note and the Company thereupon fails to appoint a successor depository or (B) has ceased to be a clearing agency registered under the Exchange Act; or

(2)	the Company, at its option, notifies the Trustee in writing that it elects to cause issuance of the Exchange Notes in certificated form.

In addition, beneficial interests in a Global Exchange Note may be exchanged for certificated Exchange Notes upon request but only upon at least 20 days prior written notice given to the Trustee by or on behalf of DTC in accordance with customary procedures. In all cases, certificated Exchange Notes delivered in exchange for any Global Exchange Note or beneficial interest therein will be registered in names, and issued in any approved denominations, requested by or on behalf of DTC (in accordance with its customary procedures).

Certificated Notes

Subject to certain conditions, any person having a beneficial interest in the Global Exchange Note may, upon request to the Trustee, exchange such beneficial interest for Exchange Notes in the form of

161

certificated Exchange Notes. Upon any such issuance, the Trustee is required to register such certificated Exchange Notes in the name of, and cause the same to be delivered to, such person or persons (or the nominee of any thereof). In addition, if (i) the Company notifies the Trustee in writing that DTC is no longer willing or able to act as a depository and the Company is unable to locate a qualified successor within 90 days or (ii) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Exchange Notes in the form of certificated Exchange Notes under the Indenture, then, upon surrender by the Global Exchange Note Holder of its Global Note, Notes in such form will be issued to each person that the Global Exchange Note Holder and DTC identify as being the beneficial owner of the related Exchange Notes.

Neither the Company nor the Trustee will be liable for any delay by the Global Exchange Note Holder or DTC in identifying the beneficial owners of Exchange Notes and the Company and the Trustee may conclusively rely on, and will be protected in relying on, instructions from the Global Exchange Note Holder or DTC for all purposes.

Same Day Settlement and Payment

The Indenture requires that payments in respect of the Exchange Notes represented by the Global Exchange Note (including principal, premium, if any, interest and Additional Interest, if any) be made by wire transfer of immediately available funds to the accounts specified by the Global Exchange Note Holder. With respect to certificated Exchange Notes, the Company will make all payments of principal, premium, if any, interest and Additional Interest, if any, by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder's registered address. The Company expects that secondary trading in the certificated Exchange Notes will also be settled in immediately available funds.

Registration Rights; Additional Interest

The Company, the Guarantors and the initial purchasers entered into the Registration Rights Agreement on July 29, 2005. Pursuant to the Registration Rights Agreement, the Company and the Guarantors agreed to file with the Commission the Exchange Offer Registration Statement on the appropriate form under the Securities Act with respect to the Exchange Notes. Upon the effectiveness of the Exchange Offer Registration Statement, the Company will offer to the Holders of Transfer Restricted Securities pursuant to the Exchange Offer who are able to make certain representations the opportunity to exchange their Transfer Restricted Securities for Exchange Notes. If:

(1)	the Company and the Guarantors are not required to file the Exchange Offer Registration Statement or permitted to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy; or

(2)	any Holder of Transfer Restricted Securities notifies the Company prior to the 20th day following consummation of the Exchange Offer that:

	(a)	it is prohibited by law or Commission policy from participating in the Exchange Offer; or

	(b)	it may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales; or

	(c)	it is a broker-dealer and owns Notes acquired directly from the Company or an affiliate of the Company,

the Company and the Guarantors will file with the Commission a Shelf Registration Statement to cover resales of the Notes by the Holders thereof who satisfy certain conditions relating to the provision of information in connection with the Shelf Registration Statement. The Company and the Guarantors will use commercially reasonable efforts to cause the applicable registration statement to be declared effective as promptly as possible by the Commission.

162

For purposes of the foregoing, "Transfer Restricted Securities" means each outstanding note until:

(1)	the date on which such outstanding note has been exchanged by a person other than a broker-dealer for an Exchange Note in the Exchange Offer;

(2)	following the exchange by a broker-dealer in the Exchange Offer of an outstanding note for an Exchange Note, the date on which such Exchange Note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement;

(3)	the date on which such outstanding note has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement; or

(4)	the date on which such outstanding note is distributed to the public pursuant to Rule 144 under the Act.

The Registration Rights Agreement provides that:

(1)	the Company and the Guarantors will file an Exchange Offer Registration Statement with the Commission on or prior to 120 days after the Issue Date;

(2)	the Company and the Guarantors will use all commercially reasonable efforts to have the Exchange Offer Registration Statement declared effective by the Commission on or prior to 210 days after the Issue Date;

(3)

unless the Exchange Offer would not be permitted by applicable law or Commission policy, the Company and the Guarantors will commence the Exchange Offer and use all commercially reasonable efforts to issue on or prior to 30 business days after the date on which the Exchange Offer Registration Statement was declared effective by the Commission, Exchange Notes in exchange for all Notes tendered prior thereto in the Exchange Offer; and

(4)

if obligated to file the Shelf Registration Statement, the Company and the Guarantors will use commercially reasonable efforts to file the Shelf Registration Statement with the Commission on or prior to 30 days after such filing obligation arises and to use all commercially reasonable efforts to cause the Shelf Registration Statement to be declared effective by the Commission on or prior to 90 days after such obligation arises.

	If:

	(a)	the Company and the Guarantors fail to file any of the Registration Statements required by the Registration Rights Agreement on or before the date specified above for such filing;

	(b)	any of such Registration Statements is not declared effective by the Commission on or prior to the date specified for such effectiveness (the "Effectiveness Target Date");

	(c)	the Company and the Guarantors fail to consummate the Exchange Offer within 30 business days of the Effectiveness Target Date with respect to the Exchange Offer Registration Statement; or

	(d)	the Shelf Registration Statement or the Exchange Offer Registration Statement is declared effective but thereafter ceases, subject to certain exceptions, to be effective or usable in connection with resales of Transfer Restricted Securities during the periods specified in the Registration Rights Agreement (each such event referred to in clauses (a) through (d) above a "Registration Default"),

then the Company and the Guarantors will pay Additional Interest to each Holder of outstanding notes, with respect to the first 90-day period immediately following the occurrence of the first Registration Default in an amount equal to $.05 per week per $1,000 principal amount of outstanding notes held by such Holder.

The amount of the Additional Interest will increase by an additional $.05 per week per $1,000 principal amount of outstanding notes with respect to each subsequent 90-day period until all

163

Registration Defaults have been cured, up to a maximum amount of Additional Interest of $.50 per week per $1,000 principal amount of outstanding notes.

All accrued Additional Interest will be paid by the Company and the Guarantors on each Damages Payment Date to the Global Note Holder by wire transfer of immediately available funds or by federal funds check and to Holders of certificated outstanding notes by wire transfer to the accounts specified by them or by mailing checks to their registered addresses if no such accounts have been specified.

Following the cure of all Registration Defaults, the accrual of Additional Interest will cease.

Holders of outstanding notes will be required to make certain representations to the Company and the Guarantors (as described in the Registration Rights Agreement) in order to participate in the Exchange Offer and will be required to deliver information to be used in connection with the Shelf Registration Statement and to provide comments on the Shelf Registration Statement within the time periods set forth in the Registration Rights Agreement in order to have their outstanding notes included in the Shelf Registration Statement and benefit from the provisions regarding Additional Interest set forth above.

Certain Definitions

Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

"2002 Indenture" means the indenture, dated as of June 28, 2002, among The Bank of New York, as trustee, the Company and the guarantors thereto, with respect to the 2002 Notes.

"2002 Notes" means the $750,000,000 in aggregate principal amount of the Company's 7 5/8% Senior Subordinated Notes due 2012, issued pursuant to the 2002 Indenture on June 28, 2002.

"Acquired Debt" means, with respect to any specified Person:

(1)	Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Restricted Subsidiary of such specified Person; and

(2)	Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

"Additional Interest" means all additional interest then owing pursuant to Section 5 of the Registration Rights Agreement.

"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the voting securities of a Person shall be deemed to be control.

"Asset Sale" means:

(1)

the sale, lease, conveyance or other disposition of any assets or rights (including, without limitation, by way of a sale and leaseback) other than sales of inventory in the ordinary course of business (provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the Indenture described above under the caption "—Change of Control" and/or the provisions described above under the caption "—Merger, Consolidation or Sale of Assets" and not by the provisions of the Asset Sale covenant); and

164

(2)	the issue or sale by the Company or any of its Subsidiaries of Equity Interests of any of the Company's Restricted Subsidiaries,

in the case of either clause (1) or (2), whether in a single transaction or a series of related transactions (A) that have a fair market value in excess of $20.0 million or (B) for net proceeds in excess of $20.0 million.

Notwithstanding the foregoing:

(1)	a transfer of assets by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;

(2)	an issuance of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;

(3)	a Restricted Payment that is permitted by the covenant described above under the caption "—Certain Covenants—Restricted Payments"; and

(4)	a disposition of Cash Equivalents in the ordinary course of business will not be deemed to be an Asset Sale.

"Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended).

"Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP.

"Capital Stock" means:

(1)	in the case of a corporation, corporate stock;

(2)	in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3)	in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4)	any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

"Cash Equivalents" means:

(1)	United States dollars;

(2)	securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than one year from the date of acquisition;

(3)

certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any domestic financial institution to the Senior Credit Facility or with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thompson Bank Watch Rating of "B" or better;

(4)	repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5)	commercial paper having the highest rating obtainable from Moody's or S&P and in each case maturing within six months after the date of acquisition;

165

(6)	investment funds investing 95% of their assets in securities of the types described in clauses (1)-(5) above; and

(7)	readily marketable direct obligations issued by any State of the United States of America or any political subdivision thereof having maturities of not more than one year from the date of acquisition and having one of the two highest rating categories obtainable from either Moody's or S&P.

"Change of Control" means the occurrence of any of the following:

(1)

the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange Act) other than the Principals or their Related Parties (as defined below);

(2)	the adoption of a plan relating to the liquidation or dissolution of the Company;

(3)

the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than the Principals and their Related Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Voting Stock of the Company (measured by voting power rather than number of shares); or

(4)	the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors.

"Consolidated Cash Flow" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus:

(1)	an amount equal to any extraordinary loss plus any net loss realized in connection with an Asset Sale (to the extent such losses were deducted in computing such Consolidated Net Income); plus

(2)	provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was included in computing such Consolidated Net Income; plus

(3)

consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments (if any) pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income; plus

(4)

depreciation, amortization (including amortization of goodwill, debt issuance costs and other intangibles but excluding amortization of other prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; minus

(5)	non-cash items (excluding any items that were accrued in the ordinary course of business) increasing such Consolidated Net Income for such period, in each case, on a consolidated basis and determined in accordance with GAAP.

"Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that:

166

(1)	the Net Income of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or a Restricted Subsidiary thereof;

(2)

the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders;

(3)	the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded;

(4)	the cumulative effect of a change in accounting principles shall be excluded;

(5)	the Net Income of any Unrestricted Subsidiary shall be excluded, whether or not distributed to the Company or one of its Restricted Subsidiaries; and

(6)	the Net Income of any Restricted Subsidiary shall be calculated after deducting preferred stock dividends payable by such Restricted Subsidiary to Persons other than the Company and its other Restricted Subsidiaries.

"Consolidated Tangible Assets" means, with respect to any person, the total consolidated assets of such person and its Restricted Subsidiaries, less the total intangible assets of such person and its Restricted Subsidiaries, as shown on the most recent internal consolidated balance sheet of such person and such Restricted Subsidiaries calculated on a consolidated basis in accordance with GAAP.

"Continuing Directors" means, as of any date of determination, any member of the Board of Directors of the Company who:

(1)	was a member of such Board of Directors on the date of the Indenture; or

(2)	was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election.

"Convertible Notes Indenture" means the indenture entered into with respect to the Convertible Notes among The Bank of New York, as trustee, Holdings, the Company, as a guarantor, and the other guarantors named therein.

"Convertible Notes" means the $700,000,000 in aggregate principal amount of Holdings' Convertible Contingent Debt Securities due 2035, issued pursuant to the Convertible Notes Indenture in connection with the Titan acquisition.

"Credit Facilities" means, with respect to the Company, one or more debt facilities (including, without limitation, the Senior Credit Facility) or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time (and whether or not with the original lender or lenders and whether provided under the original Credit Facilities or other credit, agreement, indenture or otherwise).

"December 2003 Indenture" means the indenture, dated as of December 22, 2003, between The Bank of New York, as trustee, the Company and the guarantors party thereto, with respect to the December 2003 Notes.

"December 2003 Notes" means the $400,000,000 in aggregate principal amount of the Company's 6 1/8% Senior Subordinated Notes due 2014, issued pursuant to the December 2003 Indenture on December 22, 2003.

167

"Default" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

"Designated Senior Debt" means:

(1)	any Indebtedness outstanding under the Senior Credit Facility; and

(2)	any other Senior Debt permitted under the Indenture the principal amount of which is $25.0 million or more and that has been designated by the Company as "Designated Senior Debt."

"Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the Holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature; provided, however, that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a Change of Control or an Asset Sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption "—Certain Covenants—Restricted Payments"; and provided further, that if such Capital Stock is issued to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company in order to satisfy applicable statutory or regulatory obligations.

"Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

"Equity Offering" means any public or private sale of equity securities (excluding Disqualified Stock) of the Company or Holdings, other than any private sales to an Affiliate of the Company or Holdings.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Existing Indebtedness" means any Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Senior Credit Facility and the Notes) in existence on the date of the Indenture, until such amounts are repaid.

"Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of:

(1)

the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments (if any) pursuant to Hedging Obligations, but excluding amortization of debt issuance costs);

(2)	the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period;

(3)	any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon); and

168

(4)	the product of:

	(a)	all dividend payments, whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividend payments on Equity Interests payable solely in Equity Interests of the Company, times

	(b)	a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal,

in each case, on a consolidated basis and in accordance with GAAP.

"Fixed Charge Coverage Ratio" means, with respect to any Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person and its Restricted Subsidiaries for such period. In the event that the Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any Indebtedness (other than revolving credit borrowings) or issues preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, Guarantee or redemption of Indebtedness, or such issuance or redemption of preferred stock, as if the same had occurred at the beginning of the applicable four-quarter reference period. In addition, for purposes of making the computation referred to above:

(1)

acquisitions that have been made by the Company or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated without giving effect to clause (3) of the proviso set forth in the definition of Consolidated Net Income;

(2)	the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded; and

(3)	the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the referent Person or any of its Restricted Subsidiaries following the Calculation Date.

"Foreign Subsidiary" means a Restricted Subsidiary of the Company that was not organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof or has not guaranteed or otherwise provided credit support for any Indebtedness of the Company.

"GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which were in effect on April 30, 1997.

"Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness.

"Guarantors" means each Subsidiary of the Company that executes a Subsidiary Guarantee in accordance with the provisions of the Indenture, and their respective successors and assigns.

169

"Hedging Obligations" means, with respect to any Person, the obligations of such Person under:

(1)	currency exchange or interest rate swap agreements, interest rate cap agreements and currency exchange or interest rate collar agreements; and

(2)	other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or interest rates.

"Holdings" means L-3 Communications Holdings, Inc., a Delaware corporation.

"Indebtedness" means, with respect to any Person, any indebtedness of such Person, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or banker's acceptances or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, as well as all indebtedness of others secured by a Lien on any asset of such Person (whether or not such indebtedness is assumed by such Person) and, to the extent not otherwise included, the Guarantee by such Person of any indebtedness of any other Person. The amount of any Indebtedness outstanding as of any date shall be:

(1)	the accreted value thereof, in the case of any Indebtedness that does not require current payments of interest; and

(2)	the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.

"Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel, moving and similar loans or advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Subsidiary not sold or disposed of in an amount determined as provided in the last paragraph of the covenant described above under the caption "—Restricted Payments."

"Issue Date" means July 29, 2005.

"Lehman Investor" means Lehman Brothers Holdings Inc. and any of its Affiliates.

"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

"Marketable Securities" means, with respect to any Asset Sale, any readily marketable equity securities that are:

(1)	traded on The New York Stock Exchange, the American Stock Exchange or the Nasdaq National Market; and

(2)	issued by a corporation having a total equity market capitalization of not less than $250.0 million;

170

provided that the excess of:

	(a)	the aggregate amount of securities of any one such corporation held by the Company and any Restricted Subsidiary; over

	(b)	ten times the average daily trading volume of such securities during the 20 immediately preceding trading days

shall be deemed not to be Marketable Securities; as determined on the date of the contract relating to such Asset Sale.

"May 2003 Indenture" means the indenture, dated as of May 21, 2003, among the Bank of New York, as trustee, the Company and the guarantors thereto with respect to the May 2003 Notes.

"May 2003 Notes" means the $400,000,000 in aggregate principal amount of the Company's 6 1/8% Senior Subordinated notes due 2013, issued pursuant to the May 2003 Indenture on May 21, 2003.

"Moody's" means Moody's Investors Services, Inc.

"Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:

(1)	any gain or loss, together with any related provision for taxes thereon, realized in connection with:

	(a)	any Asset Sale (including, without limitation, dispositions pursuant to sale and leaseback transactions); or

	(b)	the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and

(2)	any extraordinary gain or loss, together with any related provision for taxes on such extraordinary gain or loss; and

(3)	the cumulative effect of a change in accounting principles.

"Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP.

"Non-Recourse Debt" means Indebtedness:

(1)	as to which neither the Company nor any of its Restricted Subsidiaries:

	(a)	provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness);

	(b)	is directly or indirectly liable (as a guarantor or otherwise); or

	(c)	constitutes the lender;

(2)

no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness (other than Indebtedness incurred under Credit Facilities) of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and

171

(3)	as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.

"November 2004 Indenture" means the indenture, dated as of November 12, 2004, among the Bank of New York, as trustee, the Company and the guarantors thereto, with respect to the November 2004 Notes.

"November 2004 Notes" means the $650,000,000 in aggregate principal amount of the Company's 5 7/8% Senior Subordinated Notes due 2015, issued pursuant to the November 2004 Indenture on November 12, 2004.

"Obligations" means any principal, premium (if any), Additional Interest (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization, whether or not a claim for post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement obligations, damages, guarantees and other liabilities or amounts payable under the documentation governing any Indebtedness or in respect thereto.

"Permitted Investment" means:

(1)	any Investment in the Company or in a Restricted Subsidiary of the Company;

(2)	any Investment in cash or Cash Equivalents;

(3)	any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment:

	(a)	such Person becomes a Restricted Subsidiary of the Company; or

	(b)	such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company;

(4)	any Restricted Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption "—Repurchase at the Option of Holders—Asset Sales" or any disposition of assets not constituting an Asset sale;

(5)	any acquisition of assets solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company;

(6)	advances to employees not to exceed $2.5 million at any one time outstanding;

(7)	any Investment acquired in connection with or as a result of a workout or bankruptcy of a customer or supplier;

(8)	Hedging Obligations permitted to be incurred under the covenant described above under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock";

(9)	any Investment in a Similar Business that is not a Restricted Subsidiary; provided that the aggregate fair market value of all Investments outstanding pursuant to this clause (9) (valued on the date each such Investment was made and without giving effect to subsequent changes in value) may not at any one time exceed 10% of the Consolidated Tangible Assets of the Company; and

(10)

other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (10) that are at the time outstanding, not to exceed the greater of (a) 5% of the Consolidated Tangible Assets of the Company or (b) $100.0 million.

172

"Permitted Joint Venture" means any joint venture, partnership or other Person designated by the Board of Directors (until designation by the Board of Directors to the contrary); provided that:

(1)	at least 25% of the Capital Stock thereof with voting power under ordinary circumstances to elect directors (or Persons having similar or corresponding powers and responsibilities) is at the time owned (beneficially or directly) by the Company and/or by one or more Restricted Subsidiaries of the Company; and

(2)	such joint venture, partnership or other Person is engaged in a Similar Business. Any such designation or designation to the contrary shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing provisions.

"Permitted Junior Securities" means Equity Interests in the Company or debt securities that are subordinated to all Senior Debt (and any debt securities issued in exchange for Senior Debt) to substantially the same extent as, or to a greater extent than, the Notes and the Subsidiary Guarantees are subordinated to Senior Debt under the Indenture.

"Permitted Liens" means:

(1)	Liens securing Senior Debt of the Company or any Restricted Subsidiary that was permitted by the terms of the Indenture to be incurred;

(2)	Liens in favor of the Company or any Guarantor;

(3)	Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company;

(4)	Liens on property existing at the time of acquisition thereof by the Company or any Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such acquisition and do not extend to any other assets of the Company or any of its Restricted Subsidiaries;

(5)	Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

(6)	Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant entitled "— Incurrence of Indebtedness and Issuance of Preferred Stock" covering only the assets acquired with such Indebtedness;

(7)	Liens existing on the Issue Date;

(8)	Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;

(9)	Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed $50.0 million at any one time outstanding;

(10)	Liens on assets of Guarantors to secure Senior Debt of such Guarantors that were permitted by the Indenture to be incurred;

(11)	Liens securing Permitted Refinancing Indebtedness, provided that any such Lien does not extend to or cover any property, shares or debt other than the property, shares or debt securing the Indebtedness so refunded, refinanced or extended;

173

(12)	Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return of money bonds and other obligations of a like nature, in each case incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money);

(13)	Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods in the ordinary course of business;

(14)	Liens encumbering customary initial deposits and margin deposits, and other Liens incurred in the ordinary course of business that are within the general parameters customary in the industry, in each case securing Indebtedness under Hedging Obligations;

(15)	Liens encumbering deposits made in the ordinary course of business to secure nondelinquent obligations arising from statutory or regulatory, contractual or warranty requirements of the Company or its Subsidiaries for which a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made; and

(16)	Liens securing Indebtedness and related Hedging Obligations of Foreign Subsidiaries that are permitted by the terms of the Indenture to be incurred.

"Permitted Refinancing Indebtedness" means any Indebtedness of the Company or any of its Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries; provided that:

(1)	the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses and prepayment premiums incurred in connection therewith);

(2)	such Permitted Refinancing Indebtedness has a final maturity date no earlier than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

(3)

if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

(4)	such Indebtedness is incurred either by the Company or by the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

"Permitted Securities" means, with respect to any Asset Sale, Voting Stock of a Person primarily engaged in one or more Similar Businesses; provided that after giving effect to the Asset Sale such Person shall become a Restricted Subsidiary and, unless the Asset Sale relates to a Foreign Subsidiary, a Guarantor.

"Principals" means any Lehman Investor and Frank C. Lanza.

"Related Party" with respect to any Principal means:

(1)	any controlling stockholder, 50% (or more) owned Subsidiary, or spouse or immediate family member (in the case of an individual) of such Principal; or

(2)	any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding a more than 50% controlling interest of which consist of such Principal and/or such other Persons referred to in the immediately preceding clause (1).

174

"Representative" means the indenture trustee or other trustee, agent or representative for any Senior Debt.

"Restricted Investment" means an Investment other than a Permitted Investment.

"Restricted Subsidiary" means, with respect to any Person, each Subsidiary of such Person that is not an Unrestricted Subsidiary.

"Senior Credit Facility" means the amended and restated Credit Agreement, dated as of the Issue Date, as in effect on the date of the Indenture among the Company, the lenders party thereto, Banc of America, N.A., as administrative agent, and Lehman Commercial Paper Inc., as syndication agent and documentation agent, and any related notes, collateral documents, letters of credit and guarantees, including any appendices, exhibits or schedules to any of the foregoing (as the same may be in effect from time to time), in each case, as such agreements may be amended, modified, supplemented or restated from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid or extended from time to time (whether with the original agents and lenders or other agents and lenders or otherwise, and whether provided under the original credit agreement or other credit agreements, indentures or otherwise).

"Senior Debt" means:

(1)	all Indebtedness of the Company or any of its Restricted Subsidiaries outstanding under Credit Facilities and all Hedging Obligations with respect thereto;

(2)	any other Indebtedness permitted to be incurred by the Company or any of its Restricted Subsidiaries under the terms of the Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes; and

(3)	all Obligations with respect to the foregoing.

Notwithstanding anything to the contrary in the foregoing, Senior Debt will not include:

(1)	any liability for federal, state, local or other taxes owed or owing by the Company;

(2)	any Indebtedness of the Company to any of its Subsidiaries or other Affiliates;

(3)	any trade payables; or

(4)	any Indebtedness that is incurred in violation of the Indenture.

The 2002 Notes, the May 2003 Notes, the December 2003 Notes, the November 2004 Notes and the obligations of the Company under its guarantee of the Convertible Notes are pari passu with the Notes and do not constitute Senior Debt.

"Significant Subsidiary" means any Subsidiary which is a "significant subsidiary" within the meaning of Rule 405 under the Securities Act.

"Similar Business" means a business, a majority of whose revenues in the most recently ended calendar year were derived from:

(1)	the sale of defense products, electronics, communications systems, aerospace products, avionics products and/or communications products;

(2)	any services related thereto;

(3)	any business or activity that is reasonably similar thereto or a reasonable extension, development or expansion thereof or ancillary thereto; and

(4)	any combination of any of the foregoing.

"Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

175

"Subsidiary" means, with respect to any Person:

(1)

any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(2)	any partnership (A) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (B) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).

"S&P" means Standard and Poor's Corporation.

"Transaction Documents" means the Indenture, the Notes, the Purchase Agreement and the Registration Rights Agreement.

"Unrestricted Subsidiary" means any Subsidiary that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a board resolution, but only to the extent that such Subsidiary:

(1)	has no Indebtedness other than Non-Recourse Debt;

(2)	is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company;

(3)	is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation:

	(a)	to subscribe for additional Equity Interests; or

	(b)	to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results;

(4)	has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries; and

(5)	has at least one director on its board of directors that is not a director or executive officer of the Company or any of its Restricted Subsidiaries.

Any such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions and was permitted by the covenant described above under the caption "—Certain Covenants—Restricted Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock", the Company shall be in default of such covenant).

The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if:

(1)	such Indebtedness is permitted under the covenant described under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock," calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and

176

(2)	no Default or Event of Default would be in existence following such designation.

"Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

"Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

(1)	the sum of the products obtained by multiplying (A) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (B) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

(2)	the then outstanding principal amount of such Indebtedness.

"Wholly Owned" means, when used with respect to any Subsidiary or Restricted Subsidiary of a Person, a Subsidiary (or Restricted Subsidiary, as appropriate) of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries (or Wholly Owned Restricted Subsidiaries, as appropriate) of such Person and one or more Wholly Owned Subsidiaries (or Wholly Owned Restricted Subsidiaries, as appropriate) of such Person.

177

UNITED STATES FEDERAL TAX CONSEQUENCES OF THE EXCHANGE OFFER

Exchange of Notes

The exchange of outstanding notes for exchange notes in the exchange offer will not constitute a taxable event to holders for United States federal income tax purposes. Consequently, no gain or loss will be recognized by a holder upon receipt of an exchange note, the holding period of the exchange note will include the holding period of the outstanding note exchanged therefor and the basis of the exchange note will be the same as the basis of the outstanding note immediately before the exchange.

In any event, persons considering the exchange of outstanding notes for exchange notes should consult their own tax advisors concerning the United States federal income tax consequences in light of their particular situations as well as any consequences arising under the laws of any other taxing jurisdiction.

178

PLAN OF DISTRIBUTION

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where the outstanding notes were acquired as a result of market-making activities or other trading activities. To the extent any such broker-dealer participates in the exchange offer and so notifies L-3, or causes L-3 to be so notified in writing, L-3 has agreed that for a period of 210 days after the date of this prospectus, it will make this prospectus, as amended or supplemented, available to such broker-dealer for use in connection with any such resale, and will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal.

We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own accounts pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of these methods of resale, at market prices prevailing at the time of resale, at prices related to the prevailing market prices or negotiated prices. Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any broker-dealer or the purchasers of any exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of the exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any resale of exchange notes and any commissions or concessions received by these persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

We have agreed to pay all expenses incident to the exchange offer, including the expenses of one counsel for the holders of the outstanding notes, other than commissions or concessions of any brokers or dealers and will indemnify the holders of outstanding notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act.

By its acceptance of the exchange offer, any broker-dealer that receives exchange notes pursuant to the exchange offer hereby agrees to notify L-3 prior to using the prospectus in connection with the sale or transfer of exchange notes, and acknowledges and agrees that, upon receipt of notice from L-3 of the happening of any event which makes any statement in this prospectus untrue in any material respect or which requires the making of any changes in this prospectus in order to make the statements therein not misleading or which may impose upon L-3 disclosure obligations that may have a material adverse effect on L-3 (which notice L-3 agrees to deliver promptly to such broker-dealer) such broker-dealer will suspend use of this prospectus until L-3 has notified such broker-dealer that delivery of this prospectus may resume and has furnished copies of any amendment or supplement to this prospectus to such broker-dealer.

LEGAL MATTERS

The validity of the exchange notes offered by this prospectus will be passed upon for us by Simpson Thacher & Bartlett LLP, New York, New York.

179

EXPERTS

The consolidated financial statements of L-3 Holdings and L-3 Communications as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004 have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

The consolidated financial statements and schedule of The Titan Corporation as of December 31, 2004 and 2003, and for each of the years in the three-year period ended December 31, 2004 have been included herein and in the registration statement in reliance upon the report of KPMG LLP, an independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

180

INDEX TO FINANCIAL STATEMENTS

L-3 Communications Holdings, Inc. and L-3 Communications Corporation Consolidated Financial Statements

Unaudited Condensed Consolidated Financial Statements as of September 30, 2005 and December 31, 2004 and for the three and nine months ended September 30, 2005 and September 30, 2004
Condensed Consolidated Balance Sheets as of September 30, 2005 and December 31, 2004					F-3
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2005 and September 30, 2004					F-4
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2005 and September 30, 2004					F-6
Notes to Unaudited Condensed Consolidated Financial Statements					F-7
Consolidated Financial Statements as of December 31, 2004 and 2003 and for the years ended December 31, 2004, 2003 and 2002
Report of Independent Registered Public Accounting Firm					F-44
Consolidated Balance Sheets as of December 31, 2004 and December 31, 2003					F-46
Consolidated Statements of Operations for the years ended December 31, 2004, 2003 and 2002					F-47
Consolidated Statements of Shareholders' Equity for the years ended December 31, 2004, 2003 and 2002					F-48
Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002					F-49
Notes to Consolidated Financial Statements					F-50

The Titan Corporation Consolidated Financial Statements

Unaudited Consolidated Financial Statements as of June 30, 2005 and December 31, 2004
    and for the three and six months ended June 30, 2005 and June 30, 2004

Consolidated Statements of Operations for the three and six months ended June 30, 2005					F-101
Consolidated Balance Sheets as of June 30, 2005 and December 31, 2004					F-102
Consolidated Statements of Cash Flows for the six months ended June 30, 2005 and June 30, 2004					F-103
Consolidated Statements of Stockholders' Equity					F-104
Notes to Consolidated Financial Statements					F-105

Consolidated Financial Statements as of December 31, 2004 and 2003 and for the years
    ended December 31, 2004, 2003 and 2002

Reports of Independent Registered Public Accounting Firm					F-131
Consolidated Statements of Operations for the years ended December 31, 2004, 2003 and 2002					F-133
Consolidated Balance Sheets as of December 31, 2004 and December 31, 2003					F-134
Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002					F-135
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2004, 2003 and 2002					F-136
Notes to Consolidated Financial Statements					F-137
Schedule II – Valuation and Qualifying Accounts					F-190

F-1

L-3 COMMUNICATIONS HOLDINGS, INC. AND L-3 COMMUNICATIONS CORPORATION

Unaudited Condensed Consolidated Financial Statements as of September 30, 2005 and December 31, 2004 and for the Three and Nine Months Ended September 30, 2005 and 2004

F-2

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

				September 30, 2005				December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents				$	226,316			$	653,419
Contracts in process					2,826,736				1,979,027
Deferred income taxes					180,951				127,066
Other current assets					103,514				48,812
Total current assets					3,337,517				2,808,324
Property, plant and equipment, net					643,485				556,972
Goodwill					6,915,170				4,054,814
Identifiable intangible assets					417,683				185,804
Deferred debt issue costs					76,660				35,997
Other assets					195,327				138,854
Total assets				$	11,585,842			$	7,780,765
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade				$	356,174			$	281,456
Accrued employment costs					436,734				304,257
Accrued expenses					154,816				69,678
Billings in excess of costs and estimated profits.					201,503				138,308
Customer advances					136,752				107,334
Income taxes					100,372				84,394
Other current liabilities					350,964				190,413
Total current liabilities					1,737,315				1,175,840
Pension and postretirement benefits					462,417				409,089
Deferred income taxes					84,910				7,990
Other liabilities					277,631				120,743
Long-term debt					4,633,580				2,189,806
Total liabilities					7,195,853				3,903,468
Commitments and contingencies
Minority interests					80,701				77,536
Shareholders' equity:
L-3 Holdings' common stock $0.01 par value; authorized 300,000,000 shares, issued and outstanding 120,032,419 and 115,681,992 shares (L-3 Communications' common stock: $0.01 par value, 100 shares authorized, issued and outstanding)					2,980,000				2,780,458
Retained earnings					1,408,653				1,095,929
Unearned compensation					(8,480	)			(3,932	)
Accumulated other comprehensive loss					(70,885	)			(72,694	)
Total shareholders' equity					4,309,288				3,799,761
Total liabilities and shareholders' equity				$	11,585,842			$	7,780,765

See notes to unaudited condensed consolidated financial statements.

F-3

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

				Three Months Ended September 30,
				2005				2004
Sales:
Contracts, primarily U.S. Government				$	2,290,683			$	1,586,043
Commercial, primarily products					215,689				198,089
Total sales					2,506,372				1,784,132
Costs and expenses:
Contracts, primarily U.S. Government					2,045,668				1,401,971
Commercial, primarily products:
Cost of sales					138,030				127,687
Selling, general and administrative expenses					39,951				37,082
Research and development expenses					16,280				18,032
Total costs and expenses					2,239,929				1,584,772
Operating income					266,443				199,360
Other (income) expense, net					(930	)			(1,687	)
Interest expense					59,934				34,854
Minority interests in net income of consolidated subsidiaries					2,554				4,791
Income before income taxes					204,885				161,402
Provision for income taxes					69,630				58,912
Net income				$	135,255			$	102,490
L-3 Holdings' earnings per common share:
Basic				$	1.13			$	0.96
Diluted				$	1.11			$	0.89
L-3 Holdings' weighted average common shares outstanding:
Basic					119,693				107,005
Diluted					122,091				117,815

See notes to unaudited condensed consolidated financial statements.

F-4

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

				Nine Months Ended September 30,
				2005				2004
Sales:
Contracts, primarily U.S. Government				$	5,900,181			$	4,462,028
Commercial, primarily products					644,280				523,733
Total sales					6,544,461				4,985,761
Costs and expenses:
Contracts, primarily U.S. Government					5,260,795				3,977,820
Commercial, primarily products:
Cost of sales					418,436				320,863
Selling, general and administrative expenses					124,831				107,454
Research and development expenses					49,827				50,544
Total costs and expenses					5,853,889				4,456,681
Operating income					690,572				529,080
Other (income) expense, net					(6,474	)			1,728
Interest expense					136,546				106,779
Minority interests in net income of consolidated subsidiaries					7,945				7,078
Income before income taxes					552,555				413,495
Provision for income taxes					195,487				150,926
Net income				$	357,068			$	262,569
L-3 Holdings' earnings per common share:
Basic				$	3.02			$	2.48
Diluted				$	2.95			$	2.32
L-3 Holdings' weighted average common shares outstanding:
Basic					118,289				105,883
Diluted					120,914				116,918

See notes to unaudited condensed consolidated financial statements.

F-5

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

				Nine Months Ended September 30,
				2005				2004
Operating activities:
Net income				$	357,068			$	262,569
Depreciation					80,988				68,342
Amortization of intangibles and other assets					28,042				21,151
Amortization of deferred debt issue costs (included in interest expense)					5,150				5,454
Deferred income tax provision					87,812				76,516
Minority interests in net income of consolidated subsidiaries					7,945				7,078
Contributions to employee savings plans in L-3 Holdings' common stock					46,509				37,575
Other non-cash items					3,530				3,189
Subtotal					617,044				481,874
Changes in operating assets and liabilities, excluding acquired amounts:
Contracts in process					(158,703	)			(216,085	)
Other current assets					(3,735	)			(25,366	)
Other assets					(26,644	)			(8,162	)
Accounts payable, trade					(24,746	)			52,569
Accrued employment costs					15,908				62,042
Accrued expenses					5,355				(7,512	)
Billings in excess of costs and estimated profits					4,121				9,506
Customer advances					30,457				19,417
Income taxes					74,373				41,802
Other current liabilities					27,424				(9,046	)
Pension and postretirement benefits					14,775				9,169
Other liabilities					6,415				(1,048	)
All other operating activities, principally foreign currency translation					(2,482	)			(1,195	)
Subtotal					(37,482	)			(73,909	)
Net cash from operating activities					579,562				407,965
Investing activities:
Business acquisitions, net of cash acquired					(3,380,644	)			(134,566	)
Capital expenditures					(71,185	)			(53,482	)
Dispositions of property, plant and equipment					2,178				9,504
Other investing activities					3,731				(5,381	)
Net cash used in investing activities					(3,445,920	)			(183,925	)
Financing activities:
Borrowings under revolving credit facility					40,000				—
Repayment of borrowings under revolving credit facility					(40,000	)			—
Borrowings under term loan facility					750,000				—
Proceeds from sale of senior subordinated notes					990,900				—
Proceeds from sale of convertible contingent debt securities (CODES)					700,000				—
Redemption of senior subordinated notes					—				(187	)
Debt issue costs					(45,211	)			(1,906	)
Cash dividends paid on L-3 Holdings' common stock					(44,344	)			(31,850	)
Proceeds from employee stock purchase plan					31,483				22,296
Proceeds from exercise of stock options					68,163				36,354
Distributions paid to minority interests					(4,771	)			(4,183	)
Other financing activities					(6,965	)			(12,102	)
Net cash from financing activities					2,439,255				8,422
Net (decrease) increase in cash					(427,103	)			232,462
Cash and cash equivalents, beginning of the period					653,419				134,876
Cash and cash equivalents, end of the period				$	226,316			$	367,338

See notes to unaudited condensed consolidated financial statements.

F-6

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
    
(dollars in thousands, except per share data)

1.    Description of Business

L-3 Communications Holdings, Inc. conducts its operations and derives all of its operating income and cash flow from its wholly-owned subsidiary, L-3 Communications Corporation (L-3 Communications). L-3 Communications Holdings, Inc. (L-3 Holdings and, together with its subsidiaries, referred to herein as L-3 or the Company) is a leading supplier of a broad range of products and services used in a substantial number of aerospace and defense platforms. L-3 also is a major supplier of systems, subsystems and products on many platforms, including those for secure communication networks and communications products, mobile satellite communications, information security systems, shipboard communications, naval power systems, missiles and munitions, telemetry and instrumentation and airport security systems. The Company also is a prime system contractor for aircraft modernization and operations & maintenance (O&M), Command, Control and Communications (C³), Intelligence, Surveillance and Reconnaissance (ISR) collection systems and services, training and simulation, intelligence services, and government support services. The Company's customers include the U.S. Department of Defense (DoD) and its prime contractors, the U.S. Department of Homeland Security (DHS), U.S. Government intelligence agencies, major aerospace and defense contractors, allied foreign government ministries of defense, commercial customers and certain other U.S. federal, state and local government agencies.

The Company has four reportable segments. During the 2005 third quarter the Company renamed three of its four reportable segments as follows: (i) Secure Communications & ISR changed to Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C³ISR), (ii) Training, Simulation & Government Services changed to Government Services, and (iii) Aircraft Modernization, O&M and Products changed to Aircraft Modernization and Maintenance (AM&M). The Specialized Products reportable segment name remained the same.

During the 2005 third quarter, the Company revised the aggregation of its operating segments within its four reportable segments in connection with its acquisition of The Titan Corporation (Titan) (See Note 4), to provide a more clearly defined presentation of L-3's businesses, focused on customers, markets, products and services and independent research and development. Consequently, the Company has restated its reportable segments, by reclassifying into the Specialized Products reportable segment the following: (i) L-3's aviation products operating segments, which were previously included within the Aircraft Modernization and Maintenance reportable segment, and (ii) L-3's Link Training and Microdyne Outsourcing operating segments, which was previously included within the Government Services reportable segment. Prior period reportable segment data have been restated to conform to the current period presentation.

The C³ISR reportable segment provides products and services for the global ISR market, C³ Systems and secure, high data rate communication systems and equipment primarily for intelligence, reconnaissance and surveillance applications. The Company believes that these products and services are critical elements for a substantial number of major command, control, communication, intelligence gathering and space systems. These products and services are used to connect a variety of airborne, space, ground and sea-based communication systems and are used in the transmission, processing, recording, monitoring and dissemination functions of these communication systems. The Government Services reportable segment provides communications systems support and engineering services, information technology services, teaching and training services, marksmanship training systems and services, and intelligence support and analysis services. The Aircraft Modernization and Maintenance reportable segment provides specialized aircraft modernization and upgrades, maintenance and logistics support services. The Specialized Products reportable segment provides a broad range of

F-7

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

products, including naval warfare products, aviation products, telemetry and navigation products, sensors and imaging products, premium fuzing products, security systems, simulation devices, microwave components and information products.

On July 29, 2005, L-3 acquired Titan (See Note 4). Following the acquisition, Titan's legacy business sectors (excluding Titan's products businesses) were consolidated into five new L-3 operating segments arranged to focus on Titan's unique and complimentary businesses. These five operating segments are included in L-3's reportable segments as follows:

	•	Intelligence Solutions, which provides support to the DoD and intelligence agencies, is included in the C3ISR reportable segment;

	•	Technical & Management Services, which provides support of intelligence, logistics, Command, Control and Communications (C3), and combatant commands, is included in the C3ISR reportable segment;

	•	Aviation & Maritime Services, which provides support for maritime and expeditionary warfare, is included in the Government Services reportable segment;

	•	Enterprise Solutions, which provides conventional high-end information technology (IT) support to U.S. federal agencies and the DoD, is included in the Government Services reportable segment; and

	•	Linguist Operations and Technical Support, which provides linguist services, including translation, interpretation and analysis support to the DoD, is included in the Government Services reportable segment.

Titan's remaining legacy businesses, which are products focused, were consolidated into L-3's Specialized Products reportable segment.

2.    Basis of Presentation

These unaudited condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements of L-3 Holdings and L-3 Communications for the fiscal year ended December 31, 2004, which are included in their Annual Report on Form 10-K for the fiscal year ended December 31, 2004.

The unaudited condensed consolidated financial statements comprise the unaudited condensed consolidated financial statements of L-3 Holdings and L-3 Communications. L-3 Holdings' only asset is its investment in the common stock of L-3 Communications, its wholly-owned subsidiary, and its only obligations are the 3% Convertible Contingent Debt Securities (CODES) due 2035, which were issued on July 29, 2005, and its guarantee of borrowings under the senior credit facility of L-3 Communications. All issuances of and conversions into L-3 Holdings equity securities, including grants of stock options and restricted stock by L-3 Holdings to employees of L-3 Communications, have been reflected in the unaudited condensed consolidated financial statements of L-3 Communications. As a result, the unaudited condensed consolidated financial positions, results of operations and cash flows of L-3 Holdings and L-3 Communications are substantially the same. See Note 17 for additional information.

The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X.

F-8

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

Accordingly, they do not include all of the information and notes required by generally accepted accounting principles in the United States of America for a complete set of financial statements. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair presentation of the results for the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs and expenses during the reporting period. The most significant of these estimates and assumptions relate to contract revenues, costs and profits or losses, market values for inventories reported at lower of cost or market, pension and postretirement benefit obligations, recoverability and valuation of long-lived assets, including identifiable intangible assets and goodwill, preliminary purchase price allocations, income taxes, including the valuations of deferred tax assets, litigation liabilities and environmental obligations. Changes in estimates are reflected in the periods during which they become known. Actual amounts will differ from these estimates. For a more complete discussion of these estimates and assumptions, see the Annual Report of L-3 Holdings and L-3 Communications on Form 10-K for the fiscal year ended December 31, 2004.

The Company presents its sales and costs and expenses in two categories on the statements of operations: "Contracts, primarily U.S. Government" and "Commercial, primarily products."

Contracts, primarily U.S. Government.    Sales and costs and expenses for the Company's businesses that are primarily U.S. Government contractors are presented as "Contracts, primarily U.S. Government." The sales for the Company's U.S. Government contractor businesses are transacted using written revenue arrangements, or contracts, which primarily require the Company to design, develop, manufacture, modify, upgrade, test and integrate complex aerospace and electronic equipment, and to provide related engineering and technical services according to the buyer's specifications. Such buyers are predominantly the DoD and other agencies of the U.S. Government, allied foreign government ministries of defense and defense prime contractors. A majority of these contracts are covered by the American Institute of Certified Public Accountants Statement of Position 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts (SOP 81-1), Accounting Research Bulletin No. 43, Chapter 11, Section A, Government Contracts, Cost-Plus-Fixed Fee Contracts (ARB 43) and Accounting Research Bulletin No. 45, Long-Term Construction Type Contracts (ARB 45). Sales reported under "Contracts, primarily U.S. Government" also include certain sales from contracts with domestic and foreign commercial customers, which also are within the scope of SOP 81-1 and ARB 45, and certain fixed-price, cost-reimbursable and time-and-material type contracts that require the Company to perform services that are not related to the production of tangible assets, which are recognized in accordance with the Securities and Exchange Commission's Staff Accounting Bulletin No. 104, Revenue Recognition (SAB 104).

Commercial, primarily products.    Sales and costs and expenses for the Company's businesses whose customers are primarily commercial business enterprises are presented as "Commercial, primarily products." Most of these sales are recognized in accordance with SAB 104, and substantially all of the related revenue arrangements are not within the scope of SOP 81-1, ARB 43 or ARB 45. The Company's commercial businesses are substantially comprised of Aviation Communication &

F-9

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

Surveillance Systems (ACSS), Aviation Recorders, Avionics Systems, Infrared Products, Microwave Components and Security and Detection Systems.

3.    Stock-Based Compensation

The Company accounts for employee stock-based compensation under the recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. Compensation expense for employee stock-based compensation is recognized on the statement of operations based on the excess, if any, of the fair value of the L-3 Holdings' stock at the grant date of the award or other measurement date over the amount an employee must pay to acquire the stock. When the exercise price for stock-based compensation arrangements granted to employees equals or exceeds the fair value of the L-3 Holdings common stock at the date of grant, the Company does not recognize compensation expense. The Company elected not to adopt the fair value based method of accounting for stock-based employee compensation as permitted by the Financial Accounting Standards Board's (FASB) Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation (SFAS 123), as amended by SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of SFAS No. 123. Had the Company adopted the fair value based method provisions of SFAS 123 for all of its stock-based compensation, it would have recorded a non-cash expense for the vested portion of the estimated fair value of the stock-based compensation arrangements that the Company has granted to its employees. Stock-based employee compensation is a non-cash expense, because the Company settles its stock-based compensation obligations by issuing shares of common stock instead of settling such obligations with cash payments. All of the stock options granted to employees by the Company are non-qualified stock options under U.S. Income Tax regulations. See Note 16.

The table below presents the effect on net income and L-3 Holdings earnings per share (EPS), had the Company elected to recognize stock-based compensation expense in accordance with the fair value based method of accounting of SFAS 123.

				Three Months Ended September 30,
				2005				2004
Net income, reported				$	135,255			$	102,490
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects					811				590
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects					(6,445	)			(5,526	)
Net income, pro forma				$	129,621			$	97,554
L-3 Holdings Basic EPS:
As reported				$	1.13			$	0.96
Pro forma				$	1.08			$	0.91
L-3 Holdings Diluted EPS:
As reported				$	1.11			$	0.89
Pro forma				$	1.06			$	0.85

F-10

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

				Nine Months Ended September 30,
				2005				2004
Net income, reported				$	357,068			$	262,569
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects					2,147				1,725
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects					(19,684	)			(20,180	)
Net income, pro forma				$	339,531			$	244,114
L-3 Holdings Basic EPS:
As reported				$	3.02			$	2.48
Pro forma				$	2.87			$	2.31
L-3 Holdings Diluted EPS:
As reported				$	2.95			$	2.32
Pro forma				$	2.81			$	2.16

4.    Acquisitions

Acquisition of The Titan Corporation.On July 29, 2005, the Company acquired all of the outstanding shares of Titan for $23.10 per share in cash, or approximately $2,759,300, including the assumption of approximately $626,000 of Titan's debt, plus acquisition costs. Concurrent with the acquisition, the Company repaid or redeemed all of Titan's outstanding debt. The purchase price excludes additional purchase price, not to exceed $28,400 relating to a previous business acquisition made by Titan (International Systems L.L.C.), prior to its acquisition by L-3. The additional purchase price is contingent primarily upon the financial performance of International Systems for the years ending December 31, 2005 through 2011. The Titan acquisition was financed using approximately $357,400 of cash on hand (approximately $25,200 of which was acquired from Titan), $750,000 of term loan borrowings under L-3 Communications' senior credit facility and the net proceeds from the issuance by L-3 Holdings of $700,000 of 3% Convertible Contingent Debt Securities and the issuance by L-3 Communications of $1,000,000 of 6 3/8% Senior Subordinated Notes (See Note 8). Titan is included in the Company's results of operations from the date of its acquisition, July 29, 2005.

Titan is a leading provider of comprehensive national security solutions, including information and communications systems solutions and services to the DoD, intelligence agencies, the DHS and other United States federal government customers. Titan offers services, systems and products for C³ISR, enterprise information technology and homeland security programs. Titan's business mix is complementary to L-3's with its focus on C³ISR, advanced and transformational products and enterprise information technology for a number of government agencies, including the DoD, Federal Aviation Administration (FAA) and National Aeronautics and Space Administration (NASA), in addition to its systems integration work.

In addition, Titan has over 8,000 employees with U.S. Government clearances, including over 4,000 employees with top secret and above clearances and more than 2,400 employees with special clearances that focus on communications, networks, cryptology, signal intelligence, electronic warfare, data fusion, electromagnetic pulse science and analysis of weapons of mass destruction and simulation.

Titan's capabilities are expected to broaden and enhance L-3's participation in national intelligence and DHS infrastructure protection and analysis of weapons of mass destruction, expand L-3's operational analysis and simulation offering and enable L-3 to penetrate new customer areas.

F-11

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

The table below presents a summary of the preliminary estimate of fair value of the Titan assets acquired and liabilities assumed on the acquisition date.

Cash and cash equivalents				$	25,163
Contracts in progress					542,972
Current deferred income taxes					86,859
Other current assets					39,765
Goodwill					2,292,121
Identifiable intangible assets					225,000
Other assets					82,425
Total assets acquired					3,294,305
Current liabilities					345,611
Non-current deferred taxes					49,628
Other liabilities					119,473
Total liabilities assumed					514,712
Net assets acquired				$	2,779,593

The assets and liabilities recorded in connection with the purchase price allocation are based upon preliminary estimates of fair values. The Company expects to complete the Titan purchase price allocation during the first half of 2006. The Company does not expect differences between the preliminary and final purchase price allocations to be material to the Company's results of operations. However, the differences between the preliminary and final purchase price allocation for identifiable intangible assets, non-current deferred tax assets, liabilities for excess leased facilities and liabilities for litigation matters, which will be based on final estimates of fair value, assessments and analyses of facts and disposition plans, could be material to the Company's financial position.

Based upon the preliminary purchase price allocation for Titan, goodwill in the amount of approximately $1,192,121 was assigned to the C³ISR segment, approximately $800,000 to the Government Services segment and approximately $300,000 to the Specialized Products segment. Approximately $116,000 of the Titan goodwill is expected to be deductible for income tax purposes.

Other 2005 Business Acquisitions:   MAPPS, Combat Propulsion, ETI, ITC, Mobile-Vision, SDG, ALST and JSA.    During the nine months ended September 30, 2005, in separate transactions, the Company also acquired eight businesses, excluding Titan, for an aggregate purchase price of $593,062 in cash, plus acquisition costs. Based on preliminary purchase price allocations, the aggregate goodwill recognized for these business acquisitions was $531,437, of which $516,034 was preliminarily assigned to the Specialized Products reportable segment and $15,403 was preliminarily assigned to the Government Services reportable segment. Goodwill of $215,152 is expected to be deductible for income tax purposes. The 2005 business acquisitions, other than the acquisition of Titan, were financed with cash on hand. The purchase prices for the Marine Controls division of CAE, the Electron Dynamics Devices business of The Boeing Company, Mobile-Vision, Inc., Advanced Laser Systems Technology, Inc. and Joseph Sheairs Associates, Inc. are subject to adjustment based on the closing date net assets or net working capital of the respective business acquired. The Company completed the following business acquisitions during the nine months ended September 30, 2005:

•	Substantially all of the operations of the Marine Controls division of CAE on February 3, 2005, for $196,764 in cash. The business was renamed L-3 Communications MAPPS Inc. (Marine Automation and Power Plant Simulation, or MAPPS). L-3 MAPPS has operations in Canada, the United States, the United Kingdom, Norway, Italy, India and Malaysia and is a

F-12

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

	global supplier of integrated marine control systems and products for warships, submarines and high-end ocean going commercial vessels worldwide.

•

The Propulsion Systems business unit of General Dynamics Corporation on February 25, 2005 for $196,794 in cash, which includes an increase of $11,824 to the contractual purchase price based on final closing date net assets. The business was renamed L-3 Communications – Combat Propulsion Systems. The Combat Propulsion Systems business engineers, designs and manufactures engines, transmissions, and suspension and turret drive systems for combat vehicles, including both tracked and wheeled vehicles. The acquired business also has a production center for Abrams tank components.

•

The Electron Dynamics Devices business of The Boeing Company on February 28, 2005 for $90,000 in cash. The business was renamed L-3 Communications – Electron Technologies, Inc. (ETI). The ETI business designs and produces space-qualified passive microwave devices, traveling wave tubes, amplifiers and electric propulsion and radio frequency products utilized in communications satellites, manned space programs and key commercial and defense systems.

•

InfraredVision Technology Corporation (ITC), Mobile-Vision, Inc., Sonoma Design Group, Inc. (SDG), Advanced Laser Systems Technology, Inc. (ALST) and Joseph Sheairs Associates, Inc. (JSA) for an aggregate purchase price of $109,504 in cash, plus additional consideration, not to exceed $53,306, which is contingent primarily upon the financial performance of these acquired businesses for fiscal years ending on various dates in 2005 through 2008. Any such additional consideration will be accounted for as goodwill.

All of the business acquisitions are included in the Company's results of operations from their dates of acquisition. The assets and liabilities recorded in connection with the purchase price allocations for the acquisitions of Infrared Products, Cincinnati Electronics, L-3 Electronics Systems, D.P. Associates, Inc., and BAI Aerosystems, all of which were acquired during the second half of 2004, and MAPPS, Combat Propulsion Systems, ETI, ITC, Mobile-Vision, Inc., SDG, ALST, and JSA, all of which were acquired during 2005, are based upon preliminary estimates of fair values for contracts in process, inventories, estimated costs in excess of estimated contract value to complete contracts in process in a loss position, identifiable intangibles, goodwill, plant and equipment and deferred income taxes. Actual adjustments will be based on the final purchase prices, including the payment of contingent consideration, if any, and final appraisals and other analyses of fair values, which are in process. The Company expects to complete the purchase price allocations during 2005. The Company does not expect the differences between the preliminary and final purchase price allocations for these business acquisitions to have a material impact on its results of operations or financial position.

Aircraft Integration Systems Acquisition.    In connection with the Company's acquisition of Aircraft Integration Systems (AIS) in March of 2002, the purchase price submitted by Raytheon Company (Raytheon) to the Company amounted to approximately $1,163,000. The Company believes that, in accordance with the terms of the AIS asset purchase agreement concerning the closing date balance sheet, the purchase price for AIS submitted by Raytheon should be reduced by $100,000 to $1,063,000. In accordance with the asset purchase agreement, the Company and Raytheon have engaged a neutral accountant to arbitrate the final purchase price. The Company expects the matter to be resolved in January of 2006. Any amount paid or received by the Company will be recorded as goodwill.

Unaudited Pro Forma Statement of Operations Data.    Assuming the business acquisitions completed by the Company during the nine months ended September 30, 2005 had all occurred on

F-13

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

January 1, 2005, the unaudited pro forma sales, net income and diluted earnings per share would have been approximately $7,992,400, $296,500 and $2.45, respectively, for the nine months ended September 30, 2005. Assuming the business acquisitions completed by the Company during the period from January 1, 2004 to September 30, 2005 had all occurred on January 1, 2004, the unaudited pro forma sales, net income and diluted earnings per share would have been approximately $7,036,900, $202,400 and $1.80, respectively, for the nine months ended September 30, 2004. Costs and expenses related to the Titan acquired business include charges for costs related to the proposed merger agreement between Titan and Lockheed Martin Corporation (which was terminated on June 26, 2004), the settlement of SEC and Department of Justice investigations of Titan under the Foreign Corrupt Practices Act (FCPA), and the Titan internal review of the FCPA violations, shareholder settlements related to the securities law class actions and derivative suits arising out of Titan's alleged violations of the FCPA and the acquisition of Titan by L-3. These charges, which were recorded by Titan prior to the July 2005 acquisition, amounted to approximately $80,500 for the nine months ended September 30, 2005 and approximately $55,100 for the nine months ended September 30, 2004. Costs and expenses for the nine months ended September 30, 2004 also include asset impairment charges totaling approximately $15,500. The unaudited pro forma results are based on various assumptions and are not necessarily indicative of the results of operations that would have actually occurred had the Company completed its business acquisitions on January 1, 2004 or January 1, 2005.

5.    Contracts in Process

The components of contracts in process are presented in the table below.

				September 30, 2005				December 31, 2004
Billed receivables, less allowances of $28,533 and $16,541				$	1,095,481			$	781,931
Unbilled contract receivables					1,310,504				810,720
Less: unliquidated progress payments					(255,109	)			(179,276	)
Unbilled contract receivables, net					1,055,395				631,444
Inventoried contract costs, gross					522,586				432,741
Less: unliquidated progress payments					(62,427	)			(50,927	)
Inventoried contract costs, net					460,159				381,814
Inventories at lower of cost or market					215,701				183,838
Total contracts in process				$	2,826,736			$	1,979,027

Unbilled Contract Receivables.    Unbilled contract receivables represent accumulated incurred costs and earned profits on contracts (revenue arrangements), which have been recorded as sales, but have not yet been billed to customers. Unbilled contract receivables arise from the cost-to-cost percentage-of-completion (POC) method, which is used to record sales on certain fixed-price contracts as costs are incurred at amounts equal to the ratio of cumulative costs incurred to total estimated costs at completion, multiplied by total estimated contract revenue. Unbilled contract receivables from fixed price-type contracts are converted to billed receivables when amounts are invoiced to customers according to contractual billing terms, which generally occur when deliveries or other performance milestones are completed. Unbilled contract receivables also arise from cost reimbursable-type contracts and time & material-type contracts, for revenue amounts that have not been billed by the end of the accounting period due to the timing of preparation of invoices to customers.

Unliquidated Progress Payments.    Unliquidated progress payments arise from fixed price-type contracts with the U.S. Government that contain progress payment clauses, and represent progress payment invoices which have been collected in cash, but have not yet been liquidated. Progress

F-14

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

payment invoices are billed to the customer as contract costs are incurred at an amount generally equal to 75% to 80% of incurred costs. Unliquidated progress payments are liquidated as deliveries or other contract performance milestones are completed, at an amount equal to a percentage of the contract sales price for the items delivered or work performed, based on a contractual liquidation rate. Therefore, unliquidated progress payments are a contra asset account, and are classified against unbilled contract receivables if revenue for the underlying contract is recorded using the cost-to-cost POC method, and against inventoried contract costs if revenue is recorded using the units-of-delivery POC method.

Inventoried Contract Costs.    In accordance with SOP 81-1 and the AICPA Audit and Accounting Guide, Audits of Federal Government Contractors, the Company's inventoried contract costs include selling, general and administrative (SG&A) costs, independent research and development (IRAD) costs and bid and proposal (B&P) costs allocated to U.S. Government contracts (revenue arrangements) for which the U.S. Government is the end customer, because they are reimbursable indirect contract costs on revenue arrangements with the U.S. Government pursuant to U.S. Government procurement regulations. The Company accounts for its SG&A, IRAD and B&P costs allocated to U.S. Government contracts as product costs, instead of period expenses and charges them to costs of sales when sales related to those contracts (revenue arrangements) are recognized. Therefore, such allocated indirect costs are included in inventoried contract costs prior to the recognition of cost of sales for the related contracts (revenue arrangements).

The tables below present a summary of SG&A, IRAD and B&P costs included in inventoried contract costs and the changes to them, including amounts used to determine costs and expenses for "Contracts, primarily U.S. Government." The cost data in the tables below does not include the SG&A and research and development expenses for the Company's businesses that are primarily not U.S. Government contractors, which are separately presented on the statements of operations under costs and expenses for "Commercial, primarily products" and are expensed as incurred.

				Three Months Ended September 30,
				2005				2004
Amounts included in inventoried contract costs at beginning of period				$	49,886			$	43,308
Add: Amounts included in acquired inventoried contract costs					2,238				—
Contract costs incurred(1)					205,394				148,653
Less: Amounts charged to costs and expenses during the period					(198,565	)			(157,300	)
Amounts included in inventoried contract costs at end of period				$	58,953			$	34,661

				Nine Months Ended September 30,
				2005				2004
Amounts included in inventoried contract costs at beginning of period				$	43,664			$	38,024
Add: Amounts included in acquired inventoried contract costs					2,238				—
Contract costs incurred(2)					554,311				433,325
Less: Amounts charged to costs and expenses during the period					(541,260	)			(436,688	)
Amounts included in inventoried contract costs at end of period				$	58,953			$	34,661

(1)	Incurred costs include IRAD and B&P costs of $47,498 for the three months ended September 30, 2005 and $35,198 for the three months ended September 30, 2004.

(2)	Incurred costs include IRAD and B&P costs of $128,679 for the nine months ended September 30, 2005 and $107,962 for the nine months ended September 30, 2004.

F-15

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

Inventories at Lower of Cost or Market.    The table below presents the components of Inventories at Lower of Cost or Market.

				September 30, 2005				December 31, 2004
Raw materials, components and sub-assemblies				$	93,873			$	89,959
Work in process					64,052				51,302
Finished goods					57,776				42,577
Total				$	215,701			$	183,838

6.    Goodwill and Identifiable Intangible Assets

Goodwill.    The table below presents the changes in goodwill allocated to the Company's reportable segments during the nine months ended September 30, 2005. At December 31, 2004, the goodwill of $175,248 allocated to Cincinnati Electronics, Inc., which was acquired on December 9, 2004, was preliminarily assigned to the C³ISR reportable segment. During the first quarter of 2005, the Company completed its evaluation of the reportable segment classification for Cincinnati Electronics and assigned it to the Specialized Products reportable segment. Also, in connection with the Company's revised aggregation of its operating segments among its four reportable segments, the Company restated the balances at January 1, 2005 to conform to the current year presentation by reclassifying $484,594 of goodwill to the Specialized Products reportable segment. The Company reclassified $90,733 from the Government Services reportable segment for the Link Training and Microdyne Outsourcing operating segments and $393,861 from the Aircraft Modernization and Maintenance reportable segment for the ACSS, Avionics Systems, Aviation Recorders, Display Systems, and Electrodynamics operating segments.

				C3ISR				Government Services				Aircraft Modernization and Maintenance				Specialized Products				Consolidated Total
Balance at January 1, 2005				$	745,371			$	473,332			$	1,035,257			$	1,800,854			$	4,054,814
Business acquisitions, net of dispositions					1,198,306				818,973				16,823				826,254				2,860,356
Balance at September 30, 2005				$	1,943,677			$	1,292,305			$	1,052,080			$	2,627,108			$	6,915,170

During the nine months ended September 30, 2005, goodwill was increased by a total of $2,860,356, which was comprised of (i) $2,818,311 for business acquisitions, net of dispositions, completed during the nine months ended September 30, 2005 (see Note 4), (ii) $21,640 for additional purchase price payments for certain business acquisitions completed prior to January 1, 2005, related to final closing date net assets, and contingent purchase price adjustments or earnouts, which were resolved during the period, and (iii) net increases of $20,405 primarily related to changes in estimates of fair value for acquired assets and liabilities assumed in connection with business acquisitions completed prior to January 1, 2005.

Identifiable Intangible Assets.Information on the Company's identifiable intangible assets that are subject to amortization are presented in the tables below. The Company has no indefinite-lived identifiable intangible assets.

F-16

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

				September 30, 2005
				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Identifiable intangible assets that are subject to amortization:
Customer relationships				$	384,021			$	30,457			$	353,564
Technology					72,506				8,809				63,697
Non-compete agreements					2,000				1,578				422
Total				$	458,527			$	40,844			$	417,683

				December 31, 2004
				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Identifiable intangible assets that are subject to amortization:
Customer relationships				$	164,041			$	17,709			$	146,332
Technology					43,595				5,303				38,292
Non-compete agreements					2,000				820				1,180
Total				$	209,636			$	23,832			$	185,804

The Company recorded amortization expense for its identifiable intangible assets of $6,446 for the three months ended September 30, 2005 and $3,749 for the three months ended September 30, 2004. The Company recorded amortization expense for its identifiable intangible assets of $17,012 for the nine months ended September 30, 2005 and $11,256 for the nine months ended September 30, 2004. Based on gross carrying amounts at September 30, 2005, the Company's estimate of amortization expense for identifiable intangible assets for the years ending December 31, 2005 through 2009 are presented in the table below.

Year Ending December 31,				Estimated Amortization Expense
2005				$	23,527
2006					38,369
2007					36,116
2008					32,072
2009					29,497

F-17

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

7.    Other Current Liabilities and Other Liabilities

The components of other current liabilities are presented in the table below.

				September 30, 2005				December 31, 2004
Accrued product warranty costs				$	55,080			$	49,816
Estimated costs in excess of estimated contract value to complete contracts in process in a loss position					65,274				49,695
Accrued interest					55,200				29,871
Aggregate purchase price payable for acquired businesses					4,117				9,648
Deferred revenues					14,521				5,019
Current portion of net deferred gains from terminated interest rate swap agreements					3,284				3,284
Titan shareholders settlements from class action lawsuits (see Note 12)					66,400				—
Other					87,088				43,080
Total other current liabilities				$	350,964			$	190,413

The components of other liabilities are presented in the table below.

				September 30, 2005				December 31, 2004
Non-current portion of net deferred gains from terminated interest rate swap agreements				$	19,029			$	21,928
Accrued workers compensation					26,199				19,401
Fair value of interest rate swap agreements					—				2,036
Notes payable and capital lease obligations					11,071				13,911
Other (See Note 4)					221,332				63,467
Total other liabilities				$	277,631			$	120,743

The table below presents the changes in the Company's accrued product warranty costs.

				Nine Months Ended September 30,
				2005				2004
Balance at beginning of period				$	49,816			$	45,814
Business acquisitions during the period					7,252				342
Accruals for product warranties issued during the period					10,471				11,987
Accruals for product warranties existing before beginning of period(1)					1,761				2,355
Settlements made during the period					(14,220	)			(17,485	)
Balance at end of period				$	55,080			$	43,013

(1)	Represents changes to estimated product warranty costs related to sales recognized prior to the beginning of the period.

F-18

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

8.    Long-Term Debt

The components of long-term debt and a reconciliation to the carrying amount of long-term debt are presented in the table below.

				September 30, 2005				December 31, 2004
L-3 Communications:
Borrowings under Revolving Credit Facility				$	—			$	—
Borrowings under Term Loan Facility					750,000				—
7 5/8% Senior Subordinated Notes due 2012					750,000				750,000
6 1/8% Senior Subordinated Notes due 2013					400,000				400,000
6 1/8% Senior Subordinated Notes due 2014					400,000				400,000
5 7/8% Senior Subordinated Notes due 2015					650,000				650,000
6 3/8% Senior Subordinated Notes due 2015					1,000,000				—
					3,950,000				2,200,000
L-3 Holdings:
3% Convertible Contingent Debt Securities due 2035					700,000				—
Principal amount of long-term debt				$	4,650,000			$	2,200,000
Less: Unamortized discounts					(16,420	)			(8,158	)
Fair value of interest rate swap agreements					—				(2,036	)
Carrying amount of long-term debt				$	4,633,580			$	2,189,806

On July 29, 2005, in connection with the Titan acquisition, the Company amended and restated its senior credit facility. The amended and restated credit facility provides for a term loan facility in an aggregate amount equal to $750,000 in addition to the existing $1,000,000 revolving credit facility, both maturing on March 9, 2010. The cash received from the term loan borrowings was used to pay a portion of the aggregate consideration required for the acquisition of Titan. The loans under the term loan facility and revolving credit facility bear interest in the manner, and at the rates, set forth in the previous senior credit facility. In addition, the Consolidated Leverage Ratio covenant in the previous senior credit facility was amended to require that the Company's consolidated leverage ratio be less than or equal to: (1) 4.5 to 1.0 for each fiscal quarter ending on or prior to December 31, 2005, (2) 4.25 to 1.0 for the fiscal quarter ending on March 31, 2006 and (3) 4.0 to 1.0 for each fiscal quarter ending on or after June 30, 2006. For a more complete description of the Company's senior credit facility, see Note 8 to the Company's consolidated financial statements for the year ended December 31, 2004, included in its Annual Report on Form 10-K.

The Consolidated Leverage Ratio is defined as the ratio of Consolidated Funded Indebtedness, minus the lesser of (a) actual unrestricted domestic cash balances in excess of $25,000 and (b) $250,000, to Consolidated EBITDA. Consolidated Funded Indebtedness is equal to the sum of (1) outstanding indebtedness for borrowed money or for preferred stock accounted for as indebtedness, (2) the deferred purchase price of property or services, (3) capitalized lease obligations and (4) outstanding indebtedness of L-3 Holdings guaranteed by L-3 Communications or its subsidiaries. Consolidated EBITDA is equal to consolidated net income of L-3 Communications (excluding (A) impairment losses incurred on goodwill and other intangible assets or on debt and equity investments, (B) gains or losses incurred on the retirement of debt, (C) extraordinary gains and losses, (D) gains and losses in connection with asset dispositions, and (E) non-cash gains or losses on discontinued operations) for the applicable period, plus consolidated interest expense (including consolidated interest expense of L-3 Holdings for indebtedness guaranteed by L-3 Communications and its subsidiaries), income taxes, depreciation and amortization expense and non-cash stock-based compensation expenses.

F-19

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

Available borrowings under the Company's senior credit facility at September 30, 2005 were $886,690, after reductions for outstanding letters of credit of $113,310. There were no outstanding revolving credit borrowings under the senior credit facility at September 30, 2005.

On July 29, 2005, L-3 Communications sold $1,000,000 of 6 3/8% Senior Subordinated Notes due October 15, 2015 (2005 Notes) at a discount of $9,100. The discount was recorded as a reduction to the principal amount of the 2005 Notes and will be amortized as interest expense over the term of the 2005 Notes. The effective interest rate of the 2005 Notes is 6.47% per annum. Debt issue costs incurred in connection with the 2005 Notes amounted to $18,750, which will be amortized to interest expense over the term of the 2005 Notes. Interest is payable semi-annually on April 15 and October 15 of each year. The net cash proceeds from this offering amounted to $973,400 after deducting the discounts and commissions and were used to pay a portion of the aggregate consideration required for the acquisition of Titan. On or after October 15, 2010, the 2005 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, at redemption prices (plus accrued and unpaid interest) starting at 103.188% of the principal amount (plus accrued and unpaid interest) during the 12-month period beginning October 15, 2010 and declining annually to 100% of principal (plus accrued and unpaid interest) on October 15, 2013 and thereafter. Prior to October 15, 2008, L-3 Communications may redeem up to 35% of the 2005 Notes with the net cash proceeds of certain equity offerings at a redemption price of 106.375% of the principal amount (plus accrued and unpaid interest).

The 2005 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications. The 2005 Notes are jointly and severally guaranteed on a senior subordinated basis by existing and future domestic restricted subsidiaries that guarantee any other indebtedness of L-3 Communications or any of its domestic restricted subsidiaries.

On July 29, 2005, L-3 Holdings sold $600,000 of 3% Convertible Contingent Debt Securities (CODES) due August 1, 2035. Interest is payable semi-annually on February 1 and August 1 of each year, commencing February 1, 2006. Debt issue costs incurred in connection with the CODES amounted to $18.750, which will be amortized to interest expense over a five year term. The net cash proceeds from this offering amounted to $585,000 after deducting the commissions and were used to pay a portion of the aggregate consideration required for the acquisition of Titan. On August 4, 2005, L-3 Holdings sold an additional $100,000 of CODES, pursuant to an over-allotment option exercised by the initial purchasers of the CODES.

The CODES are convertible into cash and shares of L-3 Holdings' common stock based on an initial conversion rate of 9.7741 shares of L-3 Holdings common stock per $1,000 principal amount of the CODES (equivalent to an initial conversion price of $102.31 per share) only under the following circumstances: (1) prior to August 1, 2033, on any date during any fiscal quarter (and only during such fiscal quarter) beginning after September 30, 2005, if the closing sales price of the common stock of L-3 Holdings is more than 120% of the then current conversion price for at least 20 trading days in the 30 consecutive trading-day period ending on the last trading day of the previous fiscal quarter; (2) on or after August, 1, 2033, at all times on or after any date on which the closing sale price of the common stock of L-3 Holdings is more than 120% of the then current conversion price; (3) if we distribute to all holders of our common stock, rights or warrants (other than pursuant to a rights plan) entitling them to purchase, for a period of 45 calendar days or less, shares of L-3 Holdings' common stock at a price less than the average closing sales price for the ten trading days preceding the declaration date for such distribution; (4) if we distribute to all holders of our common stock, cash and

F-20

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

other assets, debt securities or rights to purchase L-3 Holdings' securities (other than pursuant to a rights plan), which distribution has a per share value exceeding 10% of the closing sale price of L-3 Holdings common stock on the trading day preceding the declaration date for such distribution; (5) during the five consecutive business-day period following any five consecutive trading-day period in which the average trading price of the CODES was less than 98% of the average of the closing sale price of L-3 Holdings common stock during such five trading day period multiplied by the then current conversion rate; (6) during a specified period if the CODES have been called for redemption; or (7) during a specified period if a "fundamental change" (as such term is defined in the indenture governing the CODES) occurs. The conversion rate is subject to adjustments in certain circumstances set forth in the indenture governing the CODES.

Upon conversion of the CODES, the settlement amount will be computed as follows: (1) if L-3 Holdings elects to satisfy the entire conversion obligation in cash, L-3 Holdings will deliver to the holder for each $1,000 principal amount of the CODES converted cash in an amount equal to the conversion value; or (2) if L-3 Holdings elects to satisfy the conversion obligation in a combination of cash and common stock, L-3 Holdings will deliver to the holder for each $1,000 principal amount of the CODES converted (x) cash in an amount equal to (i) the fixed dollar amount per $1,000 principal amount of the CODES of the conversion obligation to be satisfied in cash specified in the notice regarding L-3 Holdings' chosen method of settlement or, if lower, the conversion value, or (ii) the percentage of the conversion obligation to be satisfied in cash specified in the notice regarding L-3 Holdings chosen method of settlement multiplied by the conversion value, as the case may be (the "cash amount"); provided that in either case the cash amount shall in no event be less than the lesser of (a) the principal amount of the CODES converted and (b) the conversion value, as calculated below; and (y) a number of shares of common stock of L-3 Holdings for each of the 20 trading days in the conversion period equal to 1/20^th of (i) the conversion rate then in effect minus (ii) the quotient of the cash amount divided by the closing price of common stock of L-3 Holdings for that day (plus cash in lieu of fractional shares, if applicable.)

The CODES are senior unsecured obligations of L-3 Holdings and rank equal in right of payment with all existing and future senior indebtedness and senior to all future senior subordinated indebtedness of L-3 Holdings. The CODES are jointly and severally guaranteed on a senior subordinated basis by the existing and future domestic subsidiaries of L-3 Holdings that guarantee any other indebtedness of L-3 Holdings or any of its domestic subsidiaries.

At any time on or after February 1, 2011, the CODES are subject to redemption at the option of L-3 Holdings, in whole or in part, at a cash redemption price (plus accrued and unpaid interest, including contingent interest and additional interest, if any) equal to 100% of the principal amount of the CODES.

Holders of the CODES may require L-3 Holdings to repurchase the CODES, in whole or in part, on February 1, 2011, February 1, 2016, February 1, 2021, February 1, 2026 and February 1, 2031 at a cash repurchase price equal to 100% of the principal amount of the CODES (plus accrued and unpaid interest, including contingent interest and additional interest, if any). In addition, holders of the CODES may require L-3 Holdings to repurchase the CODES at a repurchase price equal to 100% of the principal amount of the CODES (plus accrued and unpaid interest, including contingent interest and additional interest, if any) if a "fundamental change" occurs prior to maturity of the CODES. The definition of a "fundamental change" is set forth in the indenture governing the CODES, which is incorporated by reference as an exhibit to this quarterly report.

F-21

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

Holders of the CODES have a right to receive contingent interest payments, which will be paid on the CODES during any six-month period commencing February 1, 2011 in which the trading price of the CODES for each of the five trading days ending on the second trading day preceding the first day of the applicable six-month interest period equals or exceeds 120% of the principal amount of the CODES. The contingent interest payable per $1,000 principal amount of CODES will equal 0.25% of the average trading price of $1,000 principal amount of CODES during the five trading days ending on the second trading day preceding the first day of the applicable six-month interest period. The contingent interest payment provision has been accounted for as an embedded derivative. The embedded derivative had an initial fair value of zero. The amount assigned to the embedded derivative will be adjusted periodically through other income (expense) for changes in its fair value.

In connection with the sale of the 2005 Notes and the CODES, the Company has agreed to file with the Securities and Exchange Commission (SEC) by November 26, 2005 (120 days after the closing of these offerings): (1) an exchange offer registration statement to exchange the 2005 Notes for substantially identical notes that are registered under the Securities Act and (2) a shelf registration statement with respect to the resale of the CODES and related guarantees and the common stock issuable upon conversion of the CODES. The Company has also agreed to cause each of these registration statements to be declared effective by the SEC by February 24, 2006 (210 days after the closing of these offerings). The Company will be required to pay additional interest if it fails to register the 2005 Notes and the CODES within the time periods specified above.

Depending on current and expectations for future interest rate levels, the Company may enter into interest rate swap agreements to convert certain of its fixed interest rate debt obligations to variable interest rates, or terminate any existing interest rate swap agreements. The variable interest rate paid by the Company under the swap agreements is equal to: (i) the variable rate basis, plus (ii) the variable rate spread. At September 30, 2005, the Company did not have any interest rate swap agreements in place.

F-22

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

The table below presents the Company's terminated interest rate swap agreements activity during 2005.

																				Cash Proceeds Received (Paid) at Termination(1)
Inception Date				Termination Date				Fixed Rate Debt Obligation				Notional Amount				Average Variable Rate Paid(2)				Interest Expense Reduction(3)				Deferred Gain (Loss)(4)				Total
March 2004				June 2005				$400,000 of 6 1/8% Senior Subordinated Notes due 2014				$	100,000				5.1	%		$	394			$	(454	)		$	(60	)

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

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

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

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

At September 30, 2005, the remaining aggregate amount of unamortized deferred gains was $22,313 of which $3,284 is included in other current liabilities and $19,029 is included in other liabilities.

9.    Comprehensive Income

Comprehensive income for the three and nine months ended September 30, 2005 and 2004 is presented in the tables below.

				Three Months Ended September 30,
				2005				2004
Net income				$	135,255			$	102,490
Other comprehensive income (loss):
Foreign currency translation adjustments, net of $1,654 tax expense in 2005 and $1,047 tax expense in 2004					2,576				1,631
Unrealized gains (losses) on hedging instruments, net of $2 tax expense in 2005 and $486 tax benefit in 2004					4				(756	)
Comprehensive income				$	137,835			$	103,365

F-23

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

				Nine Months Ended September 30,
				2005				2004
Net income				$	357,068			$	262,569
Other comprehensive income (loss):
Foreign currency translation adjustments, net of $725 tax benefit in 2005 and $195 tax expense in 2004					(1,129	)			328
Unrealized gains (losses) on hedging instruments, net of $1,884 tax expense in 2005 and $531 tax benefit in 2004					2,938				(825	)
Plus: Reclassification adjustment for losses realized in net income, net of $154 tax expense					—				246
Comprehensive income				$	358,877			$	262,318

The changes in the accumulated other comprehensive income (loss) balances for the nine months ended September 30, 2005 and for the year ended December 31, 2004 are presented in the table below.

				Foreign currency translation adjustments				Unrealized losses on securities				Unrealized gains (losses) on hedging instruments				Minimum pension liability adjustments				Accumulated other comprehensive income (loss)
September 30, 2005
Balance at January 1, 2005				$	4,066			$	—			$	(1,292	)		$	(75,468	)		$	(72,694	)
Period change					(1,129	)			—				2,938				—				1,809
Balance at September 30, 2005				$	2,937			$	—			$	1,646			$	(75,468	)		$	(70,885	)
December 31, 2004
Balance at January 1, 2004				$	(3,032	)		$	(246	)		$	619			$	(70,178	)		$	(72,837	)
Period change					7,098				246				(1,911	)			(5,290	)			143
Balance at December 31, 2004.				$	4,066			$	—			$	(1,292	)		$	(75,468	)		$	(72,694	)

F-24

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

10.    L-3 Holdings Earnings Per Share

A reconciliation of basic and diluted earnings per share (EPS) is presented in the table below.

				Three Months Ended September 30,								Nine Months Ended September 30,
				2005				2004				2005				2004
Basic:
Net income				$	135,255			$	102,490			$	357,068			$	262,569
Weighted average common shares outstanding					119,693				107,005				118,289				105,883
Basic earnings per share				$	1.13			$	0.96			$	3.02			$	2.48
Diluted:
Net income				$	135,255			$	102,490			$	357,068			$	262,569
After-tax interest expense savings on the assumed conversion of convertible debt					—				2,795				—				8,301
Net income, including assumed conversion of convertible debt				$	135,255			$	105,285			$	357,068			$	270,870
Common and potential common shares:
Weighted average common shares outstanding					119,693				107,005				118,289				105,883
Assumed exercise of stock options					7,854				9,766				7,941				9,327
Unvested restricted stock awards					264				81				238				137
Assumed purchase of common shares for treasury					(5,720	)			(6,842	)			(5,554	)			(6,448	)
Assumed conversion of convertible debt					—				7,805				—				8,019
Common and potential common shares					122,091				117,815				120,914				116,918
Diluted earnings per share				$	1.11			$	0.89			$	2.95			$	2.32

Non-cash Reductions to Diluted EPS From New Accounting Rule.    On September 30, 2004, the Emerging Issues Task Force (EITF) of the FASB reached a consensus on EITF Issue No. 04-8, The Effect of Contingently Convertible Debt on Diluted Earnings Per Share (EITF 04-8), which addresses when the diluted effect of contingently convertible debt instruments should be included in diluted EPS. EITF 04-8 requires that contingently convertible debt instruments be included in the computation of diluted EPS regardless of whether the market price trigger has been met. EITF 04-8 also requires that prior period diluted EPS amounts presented for comparative purposes be restated. The Company adopted the provisions of EITF 04-8 during the 2004 fourth quarter. The impact of applying EITF 04-8 to L-3 Holdings $420,000 Senior Subordinated Convertible Contingent Debt Securities (2001 CODES) resulted in non-cash reductions to the Company's previously reported diluted EPS of $0.04, from $0.93 to $0.89, for the three months ended September 30, 2004 and $0.09, from $2.41 to $2.32, for the nine months ended September 30, 2004. See Note 8 to the Company's audited consolidated financial statements included in the Annual Report of L-3 Holdings and L-3 Communications on Form 10-K for the year ended December 31, 2004 for a discussion of the conversion and redemption of the 2001 CODES, which occurred during October 2004. There was no

F-25

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

impact to diluted EPS from applying EITF 04-8 to L-3 Holdings' 3% Convertible Contingent Debt Securities because their conversion value was less than their maturity value.

11.    Cash Dividends on L-3 Holdings Common Stock

During 2005, L-3 Holdings' Board of Directors authorized the following quarterly cash dividends:

Date Declared				Record Date				Cash Dividends Per Common Share				Date Paid				Total Dividends Paid
February 10, 2005				February 22, 2005				$	0.125			March 15, 2005				$	14,537
April 26, 2005				May 17, 2005				$	0.125			June 15, 2005				$	14,844
July 12, 2005				August 17, 2005				$	0.125			September 15, 2005				$	14,964

On October 11, 2005, L-3 Holdings' Board of Directors declared a regular quarterly dividend of $0.125 per common share, payable on December 15, 2005 to shareholders of record at the close of business on November 17, 2005.

12.    Contingencies

Income taxes.    The Company is subject to ongoing tax examinations in various jurisdictions, which may result in challenges to tax positions taken by the Company and, accordingly, the Company may record adjustments to provisions based on the probable outcomes of such matters. However, the Company believes that the resolution of these matters, after considering amounts accrued, will not have a material effect on its financial position, results of operations or cash flows. During the 2005 third quarter a favorable disposition of certain of these tax contingencies resulted in a lower income tax provision, and, therefore, lowered the effective income tax rate from the Company's estimated annual effective income tax rate of 36.5% for the three and nine months ended September 30, 2005.

U.S. Government Procurement Regulations and Investigations.    A substantial majority of the Company's revenues are generated from providing products and services under legally binding agreements, or contracts, with U.S. Government customers. The U.S. Government contracts are subject to extensive legal and regulatory requirements, and, from time to time, agencies of the U.S. Government investigate whether such contracts were and are being conducted in accordance with these requirements. The Company is currently cooperating with the U.S. Government on several investigations, including but not limited to, the investigation regarding L-3's Combat Survivor/Evader Locator (CSEL) program discussed below. The Company does not anticipate that any of these investigations will have a material adverse effect on its consolidated financial position, results of operations or cash flows. However, under U.S. Government procurement regulations, an indictment of the Company by a federal grand jury could result in the Company being suspended for a period of time from eligibility for awards of new government contracts. A conviction could result in debarment from contracting with the federal government for a specified term. In addition, all of the Company's U.S. Government contracts are subject to audit and various pricing and cost controls, and include standard provisions for termination for the convenience of the U.S. Government or for default and are subject to cancellation if funds for contracts become unavailable. Foreign government contracts generally include comparable provisions relating to termination for the convenience of the relevant foreign government or default.

The Company's Interstate Electronics Corporation subsidiary (IEC) is under criminal investigation by the United States Army Criminal Investigation Command. The investigation relates to

F-26

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

IEC's role on the CSEL program, on which IEC is a subcontractor to The Boeing Company (Boeing). IEC provides the global positioning system (GPS) modules to Boeing for the CSEL program. The GPS module includes a complex printed wiring board (PWB) that IEC purchased from two suppliers. The investigation appears to be focused on alleged manufacturing deficiencies in the PWBs and IEC's actions when it became aware of the suppliers potential manufacturing problems. The Company has conducted an internal investigation of this matter using outside counsel and currently believes that no criminal activity occurred. The Company is cooperating fully with the investigation and has voluntarily recalled all the PWBs and is repairing them as they are received.

Litigation Matters.    Additionally, the Company has been subject to litigation, claims or assessments and various contingent liabilities incidental to its businesses or assumed in connection with certain business acquisitions. In particular, at the time of the Titan acquisition, Titan had a number of pending legal matters and government investigations as further discussed below. With respect to the investigative actions, items of litigation, claims or assessments of which it is aware, management of the Company believes that, after taking into account existing provisions relating to these matters, the ultimate resolution of such items will likely not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company. However, the Company is a party to a number of material litigations and investigations, including the CSEL investigation described above and the matters described below, including those relating to Titan, for which an adverse determination could have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

L-3 Integrated Systems and its predecessors have been involved in a litigation with Kalitta Air arising from a contract to convert Boeing 747 aircraft from passenger configuration to cargo freighters. The lawsuit was brought in the northern district of California on January 31, 1997. The aircraft were modified using Supplemental Type Certificates (STCs) issued in 1988 by the FAA to Hayes International, Inc. (Hayes/Pemco) as a subcontractor to GATX/Airlog Company (GATX). Between 1988 and 1990, Hayes/Pemco modified five aircraft as a subcontractor to GATX using the STCs. Between 1990 and 1994, Chrysler Technologies Airborne Systems, Inc. (CTAS), a predecessor to L-3 Integrated Systems, performed as a subcontractor to GATX and modified an additional five aircraft using the STCs. Two of the aircraft modified by CTAS were owned by American International Airways, the predecessor to Kalitta Air. In 1996, the FAA determined that the engineering data provided by Hayes/Pemco supporting the STCs was inadequate and issued an Airworthiness Directive that effectively grounded the ten modified aircraft. The Kalitta Air aircraft have not been in revenue service since that date. The matter was tried in January 2001 against GATX and CTAS with the jury finding fault on the part of GATX, but rendering a unanimous defense verdict in favor of CTAS. Certain co-defendants had settled prior to trial. The U.S. Ninth Circuit Court of Appeals subsequently reversed and remanded the trial court's summary judgment rulings in favor of CTAS regarding a negligence claim by Kalitta Air, which asserts that CTAS as an expert in aircraft modification should have known that the STCs were deficient, and excluding certain evidence at trial. In preparation for retrial, Kalitta Air submitted to us an expert report on damages that calculated Kalitta Air's damages at either $232,000 or $602,000, depending on different factual assumptions. The Company retained experts whose reports indicate that, even in the event of an adverse jury finding on the liability issues at trial, Kalitta Air has already recovered amounts from the other parties to the initial suit that the Company believes more than fully compensated Kalitta Air for any damages it incurred. CTAS' insurance carrier has accepted defense of the matter with a reservation of its right to dispute its obligations under the applicable insurance policy in the event of an adverse jury finding. The retrial began on January 18, 2005, and ended on March 2, 2005 with a deadlocked jury and mistrial. At trial,

F-27

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

Kalitta Air claimed damages of $235,000. Although no date has been set for any further proceedings, a second retrial may be necessary in this matter. By order dated July 22, 2005, the Trial Court granted the Company's motion for judgment as a matter of law as to negligence dismissing that claim, denied our motion for judgment as a matter of law as to negligent misrepresentation, and certified the decision for interlocutory appeal to the Ninth Circuit Court of Appeals. The Ninth Circuit has accepted the appeals on all proceedings at the District Court will be stayed pending resolution of the appeals. The Company believes that it has meritorious defenses and intends to continue to vigorously defend this matter. However, litigation is inherently uncertain and it is possible that an adverse decision could be rendered, which could have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

On November 18, 2002, the Company initiated a proceeding against OSI Systems, Inc. (OSI) in the United States District Court sitting in the Southern District of New York seeking, among other things, a declaratory judgment that the Company had fulfilled all of its obligations under a letter of intent with OSI (the OSI Letter of Intent). Under the OSI Letter of Intent, the Company was to negotiate definitive agreements with OSI for the sale of certain businesses the Company acquired from PerkinElmer, Inc. on June 14, 2002. On February 7, 2003, OSI filed an answer and counterclaims alleging, among other things, that the Company defrauded OSI, breached obligations of fiduciary duty to OSI and breached its obligations under the OSI Letter of Intent. OSI has provided an expert report that calculated OSI's damages in the case of approximately $49,000 not including punitive damages and interest. Under the OSI Letter of Intent, the Company proposed selling to OSI the conventional detection business and the ARGUS business that the Company acquired from PerkinElmer, Inc. Negotiations with OSI lasted for almost one year and ultimately broke down over issues regarding, among other things, intellectual property, product-line definitions, allocation of employees and due diligence. A trial has been set for February 2006. The Company believes that the claims asserted by OSI in its suit are without merit and intends to defend against the OSI claims vigorously. However, litigation is inherently uncertain and it is possible that an adverse decision could be rendered, which could have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company.

On July 1, 2004, lawsuits were filed on behalf of the estates of 31 Russian children in the state courts of Washington, Arizona, California, Florida, New York and New Jersey against Honeywell, Honeywell TCAS, the Company, ACSS, Thales USA and Thales France. The suits are based on facts arising out of the crash over southern Germany of Bashkirian Airways Tupelov TU 154M aircraft and a DHL Boeing757 cargo aircraft. On-board the Tupelov aircraft were 12 crew members and 57 passengers, including 45 children. The Boeing aircraft carried a crew of three. Both aircraft were equipped with Honeywell/ACSS Model 2000, Change 7 Traffic Collision and Avoidance Systems. Sensing the other aircraft, the on-board DHL TCAS instructed the DHL pilot to climb, and the Tupelov on-board TCAS instructed the Tupelov pilot to descend. However, the Swiss air traffic controller ordered the Tupelov pilot to climb. The Tupelov pilot disregarded the on-board TCAS and put the Tupelov aircraft into a climb striking the DHL aircraft in midair at approximately 35,000 feet. All crew and passengers of both planes were lost. Investigations by the NTSB after the crash revealed that both TCAS units were performing as designed. The suits allege negligence and strict product liability based upon the design of the units and the training provided to resolve conflicting commands and seek compensatory damages. The Company's insurers have accepted defense of the matter and retained counsel. The matters were consolidated in the Federal Court of New Jersey, which has dismissed the actions on the basis of forum non conveniens.

F-28

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

On April 4, 2005, Lockheed Martin Corporation (Lockheed) filed a lawsuit against L-3 Integrated Systems in the Federal District Court for the Northern District of Georgia alleging misappropriation of proprietary information and breach of a license agreement. The lawsuit arises out of L-3 Integrated Systems' pursuit of the Republic of Korea's P-3 Lot II Maritime Patrol Aircraft Program as a subcontractor to Korean Airspace Industries. Lockheed claims that in connection with this subcontracting effort, L-3 Integrated Systems will use certain Lockheed proprietary information in violation of both a prior settlement agreement between Lockheed and the U.S. Government, and a license agreement between Lockheed and L-3 Integrated Systems because L-3 Integrated Systems is acting as a subcontractor (as opposed to a prime contractor) to the Republic of Korea. Lockheed is seeking an injunction prohibiting L-3 Integrated Systems from using the proprietary P-3 data in violation of the existing agreements and unspecified money damages. The Company believes that the claims asserted by Lockheed in its suit are without merit and intends to defend against the Lockheed claims vigorously.

Legal Matters Pertaining to the Titan Acquired Businesses

Foreign Corrupt Practices Act Investigation

During the first quarter of 2004, Titan learned of allegations that improper payments under the Foreign Corrupt Practices Act (FCPA) had been made, or items of value had been provided, involving international consultants for Titan or its subsidiaries to foreign officials. The allegations, which were identified as part of internal reviews conducted by Titan and Lockheed in connection with their failed merger, were reported at that time to the government. Titan's Board of Directors established a committee of the Board to oversee Titan's internal review of these matters. In connection with the internal review, the SEC commenced an investigation into whether payments involving Titan's international consultants were made in violation of applicable law, particularly the FCPA. In addition, the Department of Justice (DoJ) initiated a criminal inquiry into this matter, and also initiated an investigation into whether these same alleged practices violated provisions of the United States Internal Revenue Code of 1986, as amended.

On March 1, 2005, Titan announced that it had entered into a consent to entry of a final judgment with the SEC without admitting or denying the SEC's allegations, and reached a plea agreement with the DoJ, under which Titan pled guilty to three FCPA counts related to its overseas operations. These counts consist of violations of the anti-bribery and the books and records provisions of the FCPA and aiding and assisting in the preparation of a false tax return.

In connection with the FCPA settlement, Titan made total payments of $28,500, including a DoJ-recommended fine of $13,000 and payments to the SEC of $15,500. A federal judge also imposed a three-year term of supervised probation. As part of these agreements, Titan agreed to: (1) implement a best-practices compliance program designed to detect and deter future violations of the FCPA; and (2) retain an independent consultant to review its policies and procedures with respect to FCPA compliance and to adopt the consultant's recommendations. If Titan fails to comply with its sentence or the consent to entry of a final judgment, it could be subject to additional criminal and civil fines or penalties and limitations on its ability to enter into or perform under U.S. government contracts, which would have a material adverse effect on the Company's financial position, results of operations or cash flows.

Titan has made voluntary disclosures to the U.S. Department of State of suspected violations of law discovered in the course of Titan's internal FCPA investigation. The voluntary disclosures have not yet been resolved and may result in the assessment of fines or penalties against Titan. Further, as

F-29

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

a result of Titan's plea agreement, Titan is currently unable to obtain new export licenses for items regulated by the U.S. Department of State. Titan has been working with the U.S. Department of State to obtain relief from this licensing ineligibility rule, but there is no assurance that Titan will be able to obtain new export licenses or amendments to existing ones or to utilize licensing exemptions in the foreseeable future. In addition, Titan's privilege to export products or services under existing export licenses may also be suspended. If Titan were prevented from obtaining new licenses and/or exporting products or services under existing licenses for a significant period of time, this could breach its obligations under certain contracts and could cause Titan to suffer adverse consequences, including termination of contracts and/or claims for damages. Titan does not know when, or if, it will be able to obtain relief from the licensing ineligibility rule, or for any further export license suspensions. Certain of Titan's revenues are generated by contracts with international customers which require export licenses. For the year ended December 31, 2004, Titan had revenues of approximately $27,000 that required it to have export licenses.

On March 2, 2005, the Navy, acting on behalf of the DoD, and Titan executed an administrative settlement agreement that would allow Titan to continue to receive U.S. government contracts. The agreement imposes certain duties and limitations on Titan and provides that the Navy will monitor for three years Titan's compliance with, among other things, the FCPA and federal procurement laws and regulations. Under the agreement, the Navy agreed not to undertake any administrative action to propose Titan for debarment, but reserved the right to undertake appropriate administrative action, in its discretion, in the event of the indictment or conviction of any then-current (as of the date of execution of the agreement) officer or director of Titan or any of its wholly-owned subsidiaries arising out of continuing investigations into the underlying matters that were the subject of the Titan plea agreement or the final judgment entered by the SEC. The Justice Department is continuing its investigation of individuals involved in these matters. The Navy agreement defines "Titan" to include, among other things, Titan's "affiliates." There is no assurance that the Company will not be construed as Titan's affiliate under the agreement. L-3 is working with the Navy to make appropriate modifications to the Navy agreement to reflect L-3's acquisition of Titan.

Titan has an ongoing obligation under its by-laws and under indemnity agreements with current and former employees to advance their costs of defense relating to the FCPA investigations and related class action and derivative litigation, subject to each individual undertaking to repay the costs of defense if it is ultimately determined that any such individual is not entitled to be indemnified by Titan.

Stockholder and Derivative Actions

Titan and its officers and directors are subject to several lawsuits arising out of the FCPA settlement and the failed merger with Lockheed Martin Corporation.

In re Titan Inc. Securities Litigation, No. 04-CV-0701-K(NLS), is a consolidated putative class action filed before the U.S. District Court for the Southern District of California (the Federal Securities Action). The complaint alleges, among other things, that Titan and its officers and directors violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Securities and Exchange Commission (SEC) Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act, by issuing a series of press releases, public statements and filings disclosing significant historical and future revenue growth, but omitting to mention certain allegedly improper payments involving international consultants in connection with Titan's international operations, thereby artificially inflating the trading price of Titan's common stock. On July 18, 2005, an amended complaint in the securities action was filed that, among other things, added the claims that were

F-30

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

previously pled in the "Holder Actions" described in the next paragraph. The Federal Securities Action and the Holder Actions are referred to collectively as the "Securities Action."

Certain Titan officers are also parties to putative class action complaints filed in the Superior Court for the State of California in and for San Diego County (the Holder Actions). These cases include Paul Berger v. Gene W. Ray, et al., No. GIC 828346, and Robert Garfield v. Mark W. Sopp, et. al, No. GIC 828345. These actions purport to be brought on behalf of all holders of Titan common stock as of April 7, 2004. The Holder Actions allege, among other things, that the defendants breached their fiduciary duties by acquiescing in or condoning Titan's alleged violations of the FCPA by failing to establish adequate procedures to prevent the alleged FCPA violations, and by failing, in bad faith, to voluntarily report the alleged FCPA violations to government officials.

Titan's directors and certain Titan officers, with Titan as a nominal defendant, are also party to Theodore Weisgerber v. Gene Ray, et al., No. 832018, which was filed in the Superior Court for the State of California, San Diego; Robert Ridgeway v. Gene Ray, et al., No. 542-N, which was filed in Delaware Court of Chancery, New Castle County; Bernd Bildstein v. Gene Ray, et al., No. 833701, which was filed in the Superior Court for the State of California, San Diego County; and Madnick v. Gene Ray, et al., No. 1215-N, which was filed in the Delaware Court of Chancery, New Castle County (the Derivative Actions). The Derivative Actions purport to be brought for the benefit of the nominal defendant, Titan, and allege that the defendants breached their fiduciary duties by failing to monitor and supervise management in a way that would have either prevented the alleged FCPA violations or would have detected the alleged FCPA violations. The Weisgerber complaint was subsequently amended to include allegations that the defendants breached their fiduciary duties by failing to monitor and supervise management in a way that would have prevented the alleged mistreatment of prisoners at the Abu Ghraib prison in Iraq, alleged billing errors relating to the work performed by foreign nationals, and the loss of contracts with the government. On June 3, 2005, an amended complaint was filed in the Ridgeway action which added, among other things, a claim alleging that Titan's directors breached their fiduciary duty in connection with their approval of the merger with the Company. The Company was named as a defendant in the Ridgeway action for allegedly aiding and abetting this alleged breach of fiduciary duty.

On June 6, 2005, a putative class action, Gentsch v. Titan Corp. et al., No. GIC 848598, was filed in Superior Court for the State of California against Titan and its board of directors challenging the merger between Titan and the Company.

Concurrently with entering into the merger agreement for the Titan acquisition, two memoranda of understanding were executed. First, the defendants in the Securities Action, including Titan and certain of its directors and officers, entered into a memorandum of understanding (the Securities MOU) with plaintiffs in the Federal Securities and Holder actions. Pursuant to the Securities MOU, plaintiffs and their counsel will receive $61,500. Second, the defendants in the Derivative Actions, including Titan and certain of its directors and officers and the Company, entered into a separate memorandum of understanding (the Derivative MOU) with plaintiffs in the Derivative Actions. As a result of negotiations with the plaintiffs in the Derivative Actions, the Company agreed, among other things, to increase the purchase price for Titan's common stock to $23.10 per share and reduced the termination fee potentially payable by Titan. Pursuant to the Derivative MOU, the Company has agreed to pay any plaintiff attorneys' fees awarded by the Delaware Court of Chancery up to $5,900. These liabilities, amounting to $67,400, were previously recognized by Titan as a current liability and assumed by L-3 as part of the Titan acquisition (see Note 4).

F-31

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

After the completion of confirmatory discovery, including the review by plaintiffs' counsel of certain documents of Titan and the Company and the taking of several depositions, the parties executed stipulations of settlement (i.e., the Securities Settlement and the Derivative Settlement) on July 22, 2005. The Derivative Settlement that was executed included the settlement of the Gentsch matter. The Securities Settlement was preliminarily approved on September 26, 2005 and a Final Settlement Hearing is scheduled for December 19, 2005. The Derivative Settlement was preliminarily approved on August 8, 2005 and received final approval on November 2, 2005.

SureBeam Related Litigation

In August 2002, Titan completed the spin-off of its former subsidiary, SureBeam Corporation. On January 19, 2004, SureBeam voluntarily filed for bankruptcy relief to be liquidated under Chapter 7 of the United States Bankruptcy Court. Various lawsuits have been filed against Titan and/or certain directors and executive officers of Titan in connection with SureBeam.

Titan, certain corporate officers of SureBeam, Dr. Gene Ray and Susan Golding, as SureBeam directors, and certain investment banks that served as lead underwriters for SureBeam's March 2001 initial public offering, have been named as defendants in several purported class action lawsuits filed by holders of common stock of SureBeam in the U.S. District Court. On October 6, 2003, these lawsuits were consolidated into In re SureBeam Corporation Securities Litigation, No. 03-CV-001721-JM (POR) in the U.S. District Court for the Southern District of California. The consolidated action seeks an unspecified amount of damages and alleges that each of the defendants, including Titan, as a "control person" of SureBeam within the meaning of Section 15 of the Securities Act, should be held liable under Section 11 of the Securities Act because the prospectus for SureBeam's initial public offering was allegedly inaccurate and misleading, contained untrue statements of material facts, and omitted to state other facts necessary to make the statements made therein not misleading. The consolidated action further alleges that the defendants, including Titan, as a control person of SureBeam within the meaning of Section 20(a) of the Exchange Act, should be held liable under Section 10(b) of the Exchange Act for false and misleading statements made during the period from March 16, 2001 to August 27, 2003. On January 3, 2005, the court granted in part and denied in part motions to dismiss the operative complaint. An amended complaint was filed on March 1, 2005. The Company intends to defend the claims vigorously.

On September 17, 2004, the bankruptcy trustee in the SureBeam Corporation bankruptcy pending in the United States Bankruptcy Court for the Southern District of California brought an action in San Diego Superior Court, on behalf of the bankruptcy estate, against certain directors and current and former executive officers of Titan who served at one time as directors or officers of SureBeam. The bankruptcy trustee's complaint raises claims of breach of fiduciary duties, gross mismanagement, abuse of corporate control, waste of corporate assets, breach of the duty of loyalty, unjust enrichment, breach of fiduciary duties for insider trading and violation of the California Corporation Code. Because the defendants were named by reason of the fact that they were serving as directors or officers of SureBeam at the request of Titan, Titan is covering the costs of defense of these claims, subject to indemnification agreements and bylaw provisions. The Company has agreed to settle the trustee claim for $5,000 and is working to finalize the settlement.

F-32

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

Government Investigations

In October 2002, Titan received a grand jury subpoena from the Antitrust Division of the DoJ requesting the production of documents relating to information technology services performed for the Air Force at Hanscom Air Force Base in Massachusetts and Wright-Patterson Air Force Base in Ohio. Titan has been informed that other companies who have performed similar services have received subpoenas as well. A senior Titan employee has provided a handwriting exemplar in connection with this matter and three Titan employees have previously testified before the grand jury in exchange for receiving immunity. Titan is not aware of any illegal or inappropriate conduct and has been cooperating and will continue to cooperate fully with the investigation.

In March 2003, Titan received a subpoena from the Office of Inspector General for the National Aeronautics and Space Administration (NASA) seeking certain records relating to billing for labor services in connection with its contracts with NASA. Titan also received a subpoena from the Office of Inspector General for the General Services Administration (GSA) seeking similar records relating to billing for labor categories in connection with contracts with GSA. In response to these subpoenas, Titan has provided documents relating to billing for labor services in connection with government contracts. Titan has been informed by NASA that the NASA investigation is closed. Titan is not aware of any illegal or inappropriate conduct and has been cooperating and will continue to cooperate fully with the ongoing GSA investigation.

These investigations are ongoing, and we are unable to predict their outcome at this time. Any penalties imposed by the U.S. Government in these matters could have a material adverse effect on the Company's financial position, results of operations or cash flows.

Other Legal Proceedings

Since June 9, 2004, two lawsuits have been filed alleging that Titan and other defendants either participated in, approved of, or condoned the mistreatment of prisoners by United States military officials in certain prison facilities in Iraq in violation of federal, state and international law. The first of these cases, Saleh v. Titan Corporation, No. 04-CV-1143 R, was filed in the United States District Court for the Southern District of California against The Titan Corporation, CACI International, Inc. (CACI), and its affiliates, and three individuals (one formally employed by Titan and one by a Titan subcontractor). Plaintiffs in Saleh seek class certification. The second case, Ibrahim v. Titan Corporation, No. 04-CV-1248, was filed on July 27, 2004, on behalf of five individual plaintiffs against Titan, CACI and CACI affiliates, and contains allegations similar to those in Saleh. Class certification has not been requested in Ibrahim. The Company intends to defend these lawsuits vigorously.

On January 23, 2004, Titan, together with its wholly-owned subsidiary, Titan Wireless, Inc., and Titan Wireless's wholly-owned subsidiary, Titan Africa, Inc., were named as defendants in Gonzales Communications, Inc. v. Titan Wireless, Inc., Titan Africa, Inc., The Titan Corporation, Geolution International Inc., and Mundi Development, Inc., a lawsuit filed in the U.S. District Court for the Southern District of California, No. 04-CV-00147 WQH (JMA). The complaint relates to the purchase by Gonzales Communications of equipment and related services under an equipment purchase agreement entered into with Titan Wireless in June 2001. Gonzales Communications contends that the equipment and services delivered were unsatisfactory. In the complaint, Gonzales Communications seeks direct damages in the amount of $900 plus interest, representing the amount Gonzales Communications alleges to have previously paid under the agreement, and consequential damages of approximately $16,300. To date, Titan and its subsidiaries have not received payment in full under the agreement for the equipment and services that were delivered to Gonzales Communications. Titan has

F-33

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

filed a counterclaim against Gonzales Communications for in excess of $1,200. On July 11, 2005, the court granted in part and denied in part Titan's motion for summary judgment. The Company intends to defend its position vigorously.

On March 14, 2005, Makram Majid Chams, a former consultant of Titan filed a claim with the Preliminary Committee on Labor Disputes Settlement in Saudi Arabia. Mr. Chams alleges that Titan wrongfully terminated his consulting agreement and that he was defamed by Titan's publication in a local newspaper of a mandatory notice that he is no longer representing Titan. The plaintiff is seeking approximately $21,900 in damages. The Company intends to defend its position vigorously.

In December 2001, the current occupants of a property formerly owned by Titan commenced an environmental action, Lefcourt Associates, Ltd. et al. v. The Thor Corporation, et al., against Titan and others in New Jersey state court. Plaintiffs contend that Titan is liable for the damages caused by hazardous waste materials originating from adjacent land to the extent that Titan purportedly provided indemnification to plaintiffs when it sold the property to them in 1986. Discovery is in progress, and we cannot predict the outcome of this litigation at this time.

13.    Pension and Postretirement Benefits

The following table summarizes the components of net periodic benefit cost for the Company's pension and postretirement benefit plans.

				Three Months Ended September 30,
				2005				2004				2005				2004
				Pension Plans								Postretirement Benefits
Components of net periodic benefit cost:
Service cost				$	19,467			$	14,009			$	1,140			$	759
Interest cost					22,277				15,143				1,683				1,718
Amortization of prior service cost					755				361				(561	)			(985	)
Expected return on plan assets					(26,057	)			(14,143	)			(192	)			(316	)
Recognized actuarial (gain) loss					2,586				2,390				(599	)			(186	)
Settlement loss (gain)					147				2,288				(62	)			—
Net periodic benefit cost				$	19,175			$	20,048			$	1,409			$	990

				Nine Months Ended September 30,
				2005				2004				2005				2004
				Pension Plans								Postretirement Benefits
Components of net periodic benefit cost:
Service cost				$	55,828			$	43,241			$	3,715			$	3,255
Interest cost					56,674				43,406				6,436				6,055
Amortization of prior service cost					1,958				872				(2,853	)			(2,148	)
Expected return on plan assets					(57,943	)			(40,316	)			(922	)			(854	)
Recognized actuarial (gain) loss					10,188				9,137				(250	)			192
Settlement loss					147				2,288				(62	)			—
Net periodic benefit cost				$	66,852			$	58,628			$	6,064			$	6,500

F-34

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS —(continued)
    
(dollars in thousands, except per share data)

The Company expects to contribute approximately $90,000 of cash to its pension plans in 2005, of which approximately $52,402 was contributed during the nine months ended September 30, 2005.

14.    Supplemental Cash Flow Information

				Nine Months Ended September 30,
				2005				2004
Interest paid				$	108,128			$	100,048
Income tax payments					35,254				34,598
Income tax refunds					1,712				3,232
Noncash transactions:
Conversion of 5¼% convertible senior subordinated notes to L-3 Holdings' common stock					—				298,183

F-35

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS—(continued)
    
(dollars in thousands, except per share data)

15.    Segment Information

As discussed in Note 1 above, during the 2005 third quarter, the Company restated the prior period reportable segment data to conform to the current period presentation, and renamed three of its four reportable segments. The Company's four reportable segments are: (1) C³ISR, (2) Government Services, (3) Aircraft Modernization and Maintenance and (4) Specialized Products, all of which are described in Note 1. The Company evaluates the performance of its operating segments and reportable segments based on their sales and operating income.

The tables below present sales, operating income, depreciation and amortization and total assets by reportable segment.

				Three Months Ended September 30,								Nine Months Ended September 30,
				2005				2004				2005				2004
Sales:
C3ISR				$	615,442			$	443,387			$	1,480,547			$	1,243,170
Government Services					560,595				284,677	(1)			1,177,869				781,300	(1)
Aircraft Modernization and Maintenance					549,156				470,262	(1)			1,705,455				1,369,200	(1)
Specialized Products					819,707				606,537	(1)			2,262,516				1,652,352	(1)
Elimination of intersegment sales					(38,528	)			(20,731	)			(81,926	)			(60,261	)
Consolidated total				$	2,506,372			$	1,784,132			$	6,544,461			$	4,985,761
Operating Income:
C3ISR				$	69,646			$	53,631			$	178,530			$	156,595
Government Services					47,364				28,276	(1)			103,048				85,082	(1)
Aircraft Modernization and Maintenance					56,369				59,687	(1)			169,669				141,317	(1)
Specialized Products					93,064				57,766	(1)			239,325				146,086	(1)
Consolidated total				$	266,443			$	199,360			$	690,572			$	529,080
Depreciation and Amortization:
C3ISR				$	9,004			$	8,644			$	24,570			$	24,589
Government Services					4,247				1,507				8,568				4,489
Aircraft Modernization and Maintenance					6,717				5,500				18,974				16,484
Specialized Products					21,219				15,053				56,918				43,931
Consolidated total				$	41,187			$	30,704			$	109,030			$	89,493

				September 30, 2005				December 31, 2004
Total Assets:
C3ISR				$	2,641,408			$	1,280,961	(2)
Government Services					1,987,878				844,323	(1)
Aircraft Modernization and Maintenance					1,741,671				1,682,637	(1)
Specialized Products					4,389,880				3,081,683	(1)(2)
Corporate					825,005				891,161
Consolidated total				$	11,585,842			$	7,780,765

(1)

During the 2005 third quarter, L-3 reclassified to the Specialized Products reportable segment (i) its Link Training Services and Microdyne Outsourcing operating segments, previously included in its Government Services reportable segment, and (ii) the ACSS, Avionics Systems, Aviation Recorders, Display Systems and Electrodynamics operating segments, previously included in its Aircraft Modernization and Maintenance reportable segment. As a result of these reclassifications for the three months ended September 30, 2004, $50,310 of sales and $5,428 of operating income was reclassified from L-3's Government Services reportable segment to its Specialized Products reportable segment, and $103,432 of sales and $20,159 of operating income was reclassified from its Aircraft Modernization and Maintenance

F-36

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS—(continued)
    
(dollars in thousands, except per share data)

reportable segment to its Specialized Products reportable segment. For the nine months ended September 30, 2005, $146,019 of sales and $15,856 of operating income was reclassified from L-3's Government Services reportable segment to its Specialized Products reportable segment and $278,673 of sales and $42,513 of operating income was reclassified from L-3's Aircraft Modernization and Maintenance reportable segment to its Specialized Products reportable segment. At December 31, 2004, $133,219 of total assets was reclassified from L-3's Government Services reportable segment to its Specialized Products reportable segment and $569,648 of total assets was reclassified from L-3's Aircraft Modernization and Maintenance reportable segment to its Specialized Products reportable segment.

(2)	During the first quarter of 2005, the Company completed its evaluation of the segment classification for Cincinnati Electronics and assigned it to the Specialized Products segment. At December 31, 2004, $224,465 of total assets were reclassified from the C3ISR reportable segment to the Specialized Products reportable segment.

16.    Recently Issued Accounting Standards

In December of 2004, the FASB revised its FASB Statement No. 123, Accounting for Stock Based Compensation (SFAS 123) and renamed it FASB Statement No. 123, Share-Based Payment (SFAS 123R). SFAS 123R requires that compensation expense relating to share-based payment transactions be recognized in financial statements at estimated fair value. The scope of SFAS 123R includes a wide range of share-based compensation arrangements, including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. This standard replaces SFAS 123 and supercedes APB Opinion No. 25, Accounting for Stock Issued to Employees. The Company previously elected not to adopt the fair value based method of accounting for stock-based employee compensation as permitted by SFAS 123. The adoption of SFAS 123R will result in the recording of non-cash compensation expenses, which is not currently recognized in the Company's financial statements. In accordance with SFAS 123, the Company discloses pro forma net income and earnings per share adjusted for non-cash compensation expenses arising from the estimated fair value of share-based payment transactions. See Note 3 above for a further discussion of the Company's accounting for stock-based employee compensation and disclosure of pro forma historical net income and earnings per share. On April 15, 2005, the SEC issued Release No. 33-8568, Amendment to Rule 4-01a of Regulation S-X Regarding the Compliance Date for Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment. The SEC Release amends the effective date for compliance with SFAS 123R for the Company from July 1, 2005 to January 1, 2006.

In March of 2005, the SEC issued Staff Accounting Bulletin (SAB) No. 107, Share-Based Payment (SAB 107). SAB 107 provides guidance to assist registrants in the initial implementation of SFAS 123R. SAB 107 includes, but is not limited to, interpretive guidance related to shared-based payment transactions with nonemployees, valuation methods and underlying expected volatility and expected term assumptions, the classification of compensation expenses and accounting for the income tax effects of share-based arrangements upon adopting the SFAS 123R. The Company is currently assessing the guidance provided in SAB 107 in connection with the implementation of SFAS 123R. The Company expects that the impact of adopting SFAS 123R may result in a non-cash reduction to the Company's diluted EPS in 2006 of approximately between $0.17 and $0.20.

The U.S. enacted the American Jobs Creation Act of 2004 (the American Jobs Creation Act) in October 2004 which contains many provisions affecting corporate taxation. The American Jobs Creation Act phases out the extraterritorial income (ETI) exclusion benefit for export sales and phases in a new tax deduction for income from qualified domestic production activities (QPA) over a transition period beginning in 2005. In December 2004, the FASB issued FASB Staff Position 109-1 (FSP 109-1), which provides guidance that the QPA deduction should be treated as a special income tax deduction as described in SFAS 109. As such, QPA has no impact on the Company's deferred tax assets or liabilities existing as of the enactment date. Rather, the QPA deduction will be reported in the period that the deductions are claimed on the Company's income tax returns. The Company has

F-37

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS—(continued)
    
(dollars in thousands, except per share data)

completed its evaluation of the net impact of the American Jobs Creation Act, and has determined that the benefit from the phase-in of the QPA deduction is substantially equivalent to the lost benefit from the phase-out of the ETI exclusion in 2005. The Company also determined that the other provisions included in the American Jobs Creation Act will not have a significant impact on the Company's financial position, results of operations or cash flows.

In May of 2005, the FASB issued SFAS Statement No. 154, Accounting Changes and Error Corrections (SFAS 154), which requires retrospective application of all voluntary changes in accounting principles to all periods presented, rather than using a cumulative catch-up adjustment as currently required for most accounting changes under APB Opinion 20. This Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and will be effective for accounting changes and error corrections made in fiscal years beginning after December 15, 2005. While the Company does not believe the adoption of SFAS 154 will have a significant impact on the Company's financial position, results of operations or cash flows, the impact of adopting SFAS 154 is dependent on events that could occur in future periods and, therefore, cannot be determined until, and if, an event occurs in the future period.

In June of 2005, the FASB approved EITF Issue No. 05-06, Determining the Amortization Period for Leasehold Improvements (EITF 05-06). EITF 05-06 provides guidance on determining the amortization period for leasehold improvements acquired in a business combination or acquired subsequent to lease inception. The guidance requires that leasehold improvements acquired in a business combination or purchased subsequent to the inception of a lease be amortized over the lesser of the useful life of the assets or a term that includes renewals that are reasonably assured at the date of the business combination or purchase. The guidance is effective for periods beginning after June 29, 2005. EITF 05-06 did not and is not expected to have a material impact on the Company's financial position, results of operations or cash flows.

17.    Unaudited Financial Information of L-3 Communications and its Subsidiaries

L-3 Communications is a wholly-owned subsidiary of L-3 Holdings. The debt of L-3 Communications, including the senior subordinated notes and borrowings under amounts drawn against the senior credit facility are guaranteed, on a joint and several, full and unconditional basis, by certain of its wholly-owned domestic subsidiaries (the Guarantor Subsidiaries). The foreign subsidiaries and certain domestic subsidiaries of L-3 Communications do not guarantee the debt of L-3 Communications (the Non-Guarantor Subsidiaries). None of the debt of L-3 Communications has been issued by its subsidiaries. There are no restrictions on the payment of dividends from the Guarantor Subsidiaries to L-3 Communications.

The following unaudited condensed combining financial information present the results of operations, financial position and cash flows of (i) L-3 Holdings, excluding L-3 Communications, (ii) L-3 Communications, excluding its consolidated subsidiaries (the Parent), (iii) the Guarantor Subsidiaries, (iv) the Non-Guarantor Subsidiaries and (v) the eliminations to arrive at the information for L-3 Communications on a consolidated basis.

F-38

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS—(continued)
    
(dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Balance Sheets:
At September 30, 2005:
Current assets:
Cash and cash equivalents				$	—			$	207,666			$	(86,945	)		$	105,595			$	—			$	226.316
Contracts in process					—				642,059				1,856,847				327,830				—				2,826,736
Other current assets					—				216,456				52,215				15,794				—				284,465
Total current assets					—				1,066,181				1,822,117				449,219				—				3,337,517
Goodwill					—				1,068,138				5,170,764				676,268				—				6,915,170
Other assets					—				385,540				820,721				126,894				—				1,333,155
Investment in and amounts due from consolidated subsidiaries					5,009,288				7,454,427				1,022,203				58,970				(13,544,888	)			—
Total assets				$	5,009,288			$	9,974,286			$	8,835,805			$	1,311,351			$	(13,544,888	)		$	11,585,842
Current liabilities				$	—			$	569,863			$	853,109			$	314,343			$	—			$	1,737,315
Other long-term liabilities					—				461,555				324,763				38,640				—				824,958
Long-term debt					700,000				4,633,580				—				—				(700,000	)			4,633,580
Minority interests					—				—				(9	)			80,710				—				80,701
Shareholders' equity					4,309,288				4,309,288				7,657,942				877,658				(12,844,888	)			4,309,288
Total liabilities and shareholders' equity				$	5,009,288			$	9,974,286			$	8,835,805			$	1,311,351			$	(13,544,888	)		$	11,585,842
At December 31, 2004:
Current assets:
Cash and cash equivalents				$	—			$	643,173			$	(45,220	)		$	55,466			$	—			$	653,419
Contracts in process					—				591,018				1,111,253				276,756				—				1,979,027
Other current assets					—				127,465				39,390				9,023				—				175,878
Total current assets					—				1,361,656				1,105,423				341,245				—				2,808,324
Goodwill					—				885,242				2,709,731				459,841				—				4,054,814
Other assets					—				307,929				492,264				117,434				—				917,627
Investment in and amounts due from consolidated subsidiaries					3,799,761				4,259,200				831,062				40,000				(8,930,023	)			—
Total assets				$	3,799,761			$	6,814,027			$	5,138,480			$	958,520			$	(8,930,023	)		$	7,780,765
Current liabilities				$	—			$	495,190			$	489,500			$	191,150			$	—			$	1,175,840
Other long-term liabilities					—				329,270				182,679				25,873				—				537,822
Long-term debt					—				2,189,806				—				—				—				2,189,806
Minority interests					—				—				—				77,536				—				77,536
Shareholders' equity					3,799,761				3,799,761				4,466,301				663,961				(8,930,023	)			3,799,761
Total liabilities and shareholders' equity				$	3,799,761			$	6,814,027			$	5,138,480			$	958,520			$	(8,930,023	)		$	7,780,765

F-39

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS—(continued)
    
(dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Statements of Operations:
For the nine months ended September 30, 2005:
Sales				$	—			$	1,778,049			$	3,987,534			$	794,724			$	(15,846	)		$	6,544,461
Costs and expenses					—				1,546,579				3,608,980				714,176				(15,846	)			5,853,889
Operating income					—				231,470				378,554				80,548				—				690,572
Other (income) expense, net					—				(14,894	)			(470	)			(1,260	)			10,150				(6,474	)
Interest expense					4,026				135,130				1,284				10,282				(14,176	)			136,546
Minority interests in net income of consolidated subsidiaries					—				—				—				7,945				—				7,945
Provision (benefit) for income taxes					(1,469	)			34,405				137,875				23,207				1,469				195,487
Equity in net income of consolidated subsidiaries					359,625				280,239				—				—				(639,864	)			—
Net income				$	357,068			$	357,068			$	239,865			$	40,374			$	(637,307	)		$	357,068
For the nine months ended September 30, 2004:
Sales				$	—			$	1,471,076			$	2,934,212			$	600,525			$	(20,052	)		$	4,985,761
Costs and expenses					—				1,290,523				2,660,095				526,115				(20,052	)			4,456,681
Operating income					—				180,553				274,117				74,410				—				529,080
Other (income) expense, net					—				(11,738	)			783				3,545				9,138				1,728
Interest expense					13,630				106,030				410				9,477				(22,768	)			106,779
Minority interests in net income of consolidated subsidiaries					—				—				—				7,078				—				7,078
Provision (benefit) for income taxes					(4,975	)			31,486				99,617				19,823				4,975				150,926
Equity in net income of consolidated subsidiaries					271,224				207,794				—				—				(479,018	)			—
Net income				$	262,569			$	262,569			$	173,307			$	34,487			$	(470,363	)		$	262,569

F-40

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS—(continued)
    
(dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Statements of Operations
For the three months ended September 30, 2005:
Sales				$	—			$	622,186			$	1,621,368			$	264,791			$	(1,973	)		$	2,506,372
Costs and expenses					—				531,030				1,475,072				235,800				(1,973	)			2,239,929
Operating income					—				91,156				146,296				28,991				—				266,443
Other (income) expense, net					—				(3,236	)			(647	)			(473	)			3,426				(930	)
Interest expense					4,026				59,580				189				3,591				(7,452	)			59,934
Minority interests in net income of consolidated subsidiaries					—				—				—				2,554				—				2,554
Provision (benefit) for income taxes					(1,469	)			6,740				54,258				8,632				1,469				69,630
Equity in net income of consolidated subsidiaries					137,812				107,183				—				—				(244,995	)			—
Net income				$	135,255			$	135,255			$	92,496			$	14,687			$	(242,438	)		$	135,255
For the three months ended September 30, 2004:
Sales				$	—			$	532,908			$	1,041,919			$	215,674			$	(6,369	)		$	1,784,132
Costs and expenses					—				469,148				940,637				181,356				(6,369	)			1,584,772
Operating income					—				63,760				101,282				34,318				—				199,360
Other (income) expense, net					—				(3,599	)			(25	)			(1,194	)			3,131				(1,687	)
Interest expense					4,590				34,629				153				3,203				(7,721	)			34,854
Minority interests in net income of consolidated subsidiaries					—				—				—				4,791				—				4,791
Provision (benefit) for income taxes					(1,675	)			11,947				36,921				10,044				1,675				58,912
Equity in net income of consolidated subsidiaries					105,405				81,707				—				—				(187,112	)			—
Net income				$	102,490			$	102,490			$	64,233			$	17,474			$	(184,197	)		$	102,490

F-41

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
    
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS—(continued)
    
(dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non-Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Statements of Cash Flows:
For the nine months ended September 30, 2005:
Operating activities:
Net cash from operating activities				$	—			$	253,546			$	224,706			$	101,310			$	—			$	579,562
Investing activities:
Acquisition of businesses, net of cash acquired					—				(206,825	)			(2,969,767	)			(204,052	)			—				(3,380,644	)
Other investing activities					(199,542	)			(3,192,362	)			(40,422	)			(6,311	)			3,373,361				(65,276	)
Net cash used in investing activities					(199,542	)			(3,399,187	)			(3,010,189	)			(210,363	)			3,373,361				(3,445,920	)
Financing activities:
Proceeds from sale of senior subordinated notes					700,000				990,900				—				—				—				1,690,900
Borrowings under term loan facility					—				750,000				—				—				—				750,000
Other financing activities					(500,458	)			969,234				2,743,758				159,182				(3,373,361	)			(1,645	)
Net cash from financing activities					199,542				2,710,134				2,743,758				159,182				(3,373,361	)			2,439,255
Net increase (decrease) in cash					—				(435,507	)			(41,725	)			50,129				—				(427,103	)
Cash and cash equivalents, beginning of period					—				643,173				(45,220	)			55,466				—				653,419
Cash and cash equivalents, end of period				$	—			$	207,666			$	(86,945	)		$	105,595			$	—			$	226,316
For the nine months ended September 30, 2004:
Operating activities:
Net cash from operating activities				$	—			$	113,509			$	239,724			$	54,732			$	—			$	407,965
Investing activities:
Acquisition of businesses, net of cash acquired					—				(57,483	)			(76,860	)			(223	)			—				(134,566	)
Other investing activities					(108,700	)			(93,546	)			(26,787	)			(6,109	)			185,783				(49,359	)
Net cash used in investing activities					(108,700	)			(151,029	)			(103,647	)			(6,332	)			185,783				(183,925	)
Financing activities:
Net cash from (used in) financing activities					108,700				239,993				(131,356	)			(23,132	)			(185,783	)			8,422
Net increase in cash					—				202,473				4,721				25,268				—				232,462
Cash and cash equivalents, beginning of period					—				155,375				(41,291	)			20,792				—				134,876
Cash and cash equivalents, end of period				$	—			$	357,848			$	(36,570	)		$	46,060			$	—			$	367,338

F-42

L-3 COMMUNICATIONS HOLDINGS, INC. AND L-3 COMMUNICATIONS CORPORATION

Consolidated Financial Statements as of December 31, 2004 and 2003
and for the Years Ended December 31, 2004, 2003 and 2002

F-43

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
    L-3 Communications Holdings, Inc. and L-3 Communications Corporation:

We have completed an integrated audit of the 2004 consolidated financial statements and of the internal control over financial reporting as of December 31, 2004 for each of L-3 Communications Holdings, Inc. ("L-3 Holdings") and L-3 Communications Corporation ("L-3 Communications") and subsidiaries' (collectively, the "Company") and audits of the December 31, 2003 and 2002 consolidated financial statements of L-3 Holdings and L-3 Communications in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.

Consolidated financial statements

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of L-3 Holdings and L-3 Communications and subsidiaries at December 31, 2004 and 2003, and the results of each of their operations and each of their cash flows for each of the three years in the period ended December 31, 2004 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinions.

As indicated in Note 12 to the consolidated financial statements, in 2004 the Company adopted the provisions of Emerging Issues Task Force Issue No. 04-8, The Effect of Contingently Convertible Debt on Diluted Earnings Per Share. As indicated in Note 5 to the consolidated financial statements, in 2002 the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.

Internal control over financial reporting

Also, in our opinion, management's assessments, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A of the Company's Annual Report on Form 10-K for the year ended December 31, 2004 (not presented herein), that L-3 Holdings and L-3 Communications maintained effective internal control over financial reporting as of December 31, 2004 based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), are fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, L-3 Holdings and L-3 Communications maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control – Integrated Framework issued by the COSO. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessments of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management's assessments and on the effectiveness of L-3 Holdings' and L-3 Communications' internal control over financial reporting based on our audits. We conducted our audits of internal control over financial reporting 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. An audit of internal control over financial reporting includes 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 consider necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

F-44

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 (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) 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 (iii) 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.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
New York, New York
March 15, 2005, except for Notes 1 and 18,
as to which the date is November 1, 2005

F-45

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

				December 31,
				2004				2003
ASSETS
Current assets:
Cash and cash equivalents				$	653,419			$	134,876
Contracts in process					1,979,027				1,615,348
Deferred income taxes					127,066				152,785
Other current assets					48,812				34,693
Total current assets					2,808,324				1,937,702
Property, plant and equipment, net					556,972				519,749
Goodwill					4,054,814				3,652,436
Identifiable intangible assets					185,804				162,156
Deferred income taxes					—				100,482
Deferred debt issue costs					35,997				48,572
Other assets					138,854				84,225
Total assets				$	7,780,765			$	6,505,322
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade				$	281,456			$	195,548
Accrued employment costs					304,257				239,690
Accrued expenses					69,678				72,880
Billings in excess of costs and estimated profits					138,308				71,235
Customer advances					107,334				58,078
Income taxes					84,394				70,159
Other current liabilities					190,413				216,622
Total current liabilities					1,175,840				924,212
Pension and postretirement benefits					409,089				371,452
Other liabilities					128,733				101,651
Long-term debt					2,189,806				2,457,300
Total liabilities					3,903,468				3,854,615
Commitments and contingencies
Minority interests					77,536				76,211
Shareholders' equity:
L-3 Holdings' common stock; $.01 par value; authorized 300,000,000 shares, issued and outstanding 115,681,992 and 97,077,495 shares (L-3 Communications' common stock; $.01 par value, 100 shares authorized, issued and outstanding)					2,780,458				1,893,488
Retained earnings					1,095,929				757,467
Unearned compensation					(3,932	)			(3,622	)
Accumulated other comprehensive loss					(72,694	)			(72,837	)
Total shareholders' equity					3,799,761				2,574,496
Total liabilities and shareholders' equity				$	7,780,765			$	6,505,322

See notes to consolidated financial statements.

F-46

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

				Year Ended December 31,
				2004				2003				2002
Sales:
Contracts, primarily U.S. Government				$	6,155,598			$	4,401,743			$	3,581,271
Commercial, primarily products					741,399				659,851				429,958
Total sales					6,896,997				5,061,594				4,011,229
Costs and expenses:
Contracts, primarily U.S. Government					5,476,742				3,863,805				3,139,013
Commercial, primarily products:
Cost of sales					458,893				416,980				270,584
Selling, general and administrative expenses					141,549				140,622				111,956
Research and development expenses					71,194				59,166				35,697
Total costs and expenses					6,148,378				4,480,573				3,557,250
Operating income					748,619				581,021				453,979
Other expense (income), net					(7,252	)			(215	)			(4,921	)
Interest expense					145,348				132,683				122,492
Minority interests in net income of consolidated subsidiaries					8,862				3,515				6,198
Loss on retirement of debt					4,973				11,225				16,187
Income before income taxes and cumulative effect of a change in accounting principle					596,688				433,813				314,023
Provision for income taxes					214,808				156,173				111,556
Income before cumulative effect of a change in accounting principle					381,880				277,640				202,467
Cumulative effect of a change in accounting principle, net of income tax benefit of $6,428 (Note 5)					—				—				(24,370	)
Net income				$	381,880			$	277,640			$	178,097
L-3 Holdings' earnings per common share:
Basic:
Income before cumulative effect of a change in accounting principle				$	3.54			$	2.89			$	2.33
Cumulative effect of a change in accounting principle					—				—				(0.28	)
Net income				$	3.54			$	2.89			$	2.05
Diluted:
Income before cumulative effect of a change in accounting principle				$	3.33			$	2.62			$	2.13
Cumulative effect of a change in accounting principle					—				—				(0.23	)
Net income				$	3.33			$	2.62			$	1.90
L-3 Holdings' weighted average common shares outstanding:
Basic					107,838				96,022				86,943
Diluted					117,372				113,869				105,216

See notes to consolidated financial statements.

F-47

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

For the Years Ended December 31, 2004, 2003 and 2002

(in thousands)

				L-3 Holdings' Common Stock								Additional Paid-in Capital				Retained Earnings				Unearned Compensation				Accumulated Other Comprehensive Income (Loss)				Total
				Shares Issued				Par Value
Balance at December 31, 2001					78,497			$	785			$	938,252			$	301,730			$	(3,205	)		$	(23,670	)		$	1,213,892
Comprehensive income:
Net income																	178,097												178,097
Minimum pension liability, net of $29,859 tax benefit																									(45,580	)			(45,580	)
Foreign currency translation adjustment, net of $1,626 tax benefit																									65				65
Unrealized losses on hedging instruments reclassified to net income from other comprehensive loss, net of $198 tax expense																									323				323
Unrealized losses on hedging instruments, net of $275 tax benefit																									(437	)			(437	)
																													132,468
Shares issued:
Sale of common stock					14,000				140				766,640																766,780
Employee savings plans					529				5				28,133																28,138
Business acquisition consideration					229				2				10,605																10,607
Exercise of stock options					970				10				30,665																30,675
Employee stock purchase plan					352				4				17,474																17,478
Grant of restricted stock													2,231								(2,231	)							—
Amortization of unearned compensation																					2,134								2,134
Other													30																30
Balance at December 31, 2002					94,577				946				1,794,030				479,827				(3,302	)			(69,299	)			2,202,202
Comprehensive income:
Net income																	277,640												277,640
Minimum pension liability, net of $2,313 tax benefit																									(4,189	)			(4,189	)
Foreign currency translation adjustment, net of $141 tax benefit																									(245	)			(245	)
Unrealized gains on hedging instruments, net of $571 tax expense																									896				896
																													274,102
Shares issued:
Employee savings plans					912				9				39,485																39,494
Business acquisition consideration					110				1				4,968																4,969
Exercise of stock options					835				8				22,722																22,730
Employee stock purchase plan					603				6				26,378																26,384
Conversion of 5¼% Convertible Senior Subordinated Notes					40				1				1,629																1,630
Grant of restricted stock													3,295								(3,295	)							—
Amortization of unearned compensation																					2,975								2,975
Other													10																10
Balance at December 31, 2003					97,077				971				1,892,517				757,467				(3,622	)			(72,837	)			2,574,496
Comprehensive income:
Net income																	381,880												381,880
Minimum pension liability, net of $3,773 tax benefit																									(5,290	)			(5,290	)
Foreign currency translation adjustment, net of $4,541 tax expense																									7,098				7,098
Unrealized losses on hedging instruments, net of $1,222 tax benefit																									(1,911	)			(1,911	)
Unrealized loss on securities, reclassified to net income from other comprehensive loss, net of $154 tax expense																									246				246
																													382,023
Cash dividends paid on common stock																	(43,418	)											(43,418	)
Shares issued:
Employee savings plans					871				9				53,828																53,837
Business acquisition consideration					110				1				6,981																6,982
Exercise of stock options					1,532				15				68,818																68,833
Employee stock purchase plan					705				7				32,924																32,931
Conversion of 5¼% Convertible Senior Subordinated Notes					7,317				73				292,246																292,319
Conversion of 4% Senior Subordinated Convertible Contingent Debt Securities (CODES)					7,801				78				430,353																430,431
Grant of restricted stock													3,635								(3,635	)							—
Amortization of unearned compensation																					3,325								3,325
Other					269				3				(2,001	)															(1,998	)
Balance at December 31, 2004					115,682			$	1,157			$	2,779,301			$	1,095,929			$	(3,932	)		$	(72,694	)		$	3,799,761

See notes to consolidated financial statements.

F-48

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

				Year Ended December 31,
				2004				2003				2002
Operating activities:
Net income				$	381,880			$	277,640			$	178,097
Cumulative effect of a change in accounting principle					—				—				24,370
Loss on retirement of debt					4,973				11,225				16,187
Depreciation					91,541				77,340				66,230
Amortization of intangibles and other assets					27,408				18,083				9,630
Amortization of deferred debt issue costs (included in interest expense)					7,195				7,977				7,392
Deferred income tax provision					123,409				94,747				79,092
Minority interests in net income of consolidated subsidiaries					8,862				3,515				6,198
Contributions to employee savings plans in L–3 Holdings' common stock					53,837				39,494				28,138
Other non-cash items					(1,128	)			279				515
Subtotal					697,977				530,300				415,849
Changes in operating assets and liabilities, excluding acquired amounts:
Contracts in process					(245,430	)			(120,397	)			(75,031	)
Other current assets					(15,298	)			(1,731	)			(15,257	)
Other assets					(32,953	)			(15,861	)			(16,641	)
Accounts payable					62,168				(19,503	)			(21,904	)
Accrued employment costs					54,805				20,558				30,100
Accrued expenses					(3,361	)			5,646				(2,581	)
Billings in excess of costs and estimated profits					14,071				18,325				(24,744	)
Customer advances					33,728				(4,773	)			(11,272	)
Income taxes					53,865				44,081				30,852
Other current liabilities					(20,452	)			(36,206	)			(9,263	)
Pension and postretirement benefits					9,455				5,088				(1,670	)
Other liabilities					7,214				19,008				20,517
All other operating activities, principally foreign currency translation					4,882				11,528				(495	)
Subtotal					(77,306	)			(74,237	)			(97,389	)
Net cash from operating activities					620,671				456,063				318,460
Investing activities:
Business acquisitions, net of cash acquired					(473,433	)			(1,014,439	)			(1,742,133	)
Proceeds from sale of businesses					—				8,795				—
Capital expenditures					(80,507	)			(82,874	)			(62,058	)
Dispositions of property, plant and equipment					11,968				3,854				3,548
Other investing activities					(13,471	)			(3,393	)			(9,885	)
Net cash used in investing activities					(555,443	)			(1,088,057	)			(1,810,528	)
Financing activities:
Borrowings under revolving credit facilities					—				295,000				566,000
Repayment of borrowings under revolving credit facilities					—				(295,000	)			(566,000	)
Borrowings under bridge loan facility					—				—				500,000
Repayment of borrowings under bridge loan facility					—				—				(500,000	)
Proceeds from sale of senior subordinated notes					650,000				790,788				750,000
Redemption of senior subordinated notes					(205,751	)			(187,650	)			(237,468	)
Proceeds from sale of L–3 Holdings' common stock, net					—				—				766,780
Debt issuance costs					(12,619	)			(9,591	)			(19,759	)
Cash dividends paid on common stock					(43,418	)			—				—
Proceeds from exercise of stock options					52,176				14,273				17,372
Proceeds from employee stock purchase plan					32,931				26,384				17,478
Distributions paid to minority interests					(7,537	)			(1,975	)			(2,854	)
Other financing activities					(12,467	)			(215	)			(25,647	)
Net cash from financing activities					453,315				632,014				1,265,902
Net increase (decrease) in cash					518,543				20				(226,166	)
Cash and cash equivalents, beginning of the period					134,876				134,856				361,022
Cash and cash equivalents, end of the period				$	653,419			$	134,876			$	134,856

See notes to consolidated financial statements.

F-49

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

1.    Description of Business

L-3 Communications Holdings, Inc. conducts its operations and derives all of its operating income and cash flow from its wholly-owned subsidiary, L-3 Communications Corporation (L-3 Communications). L-3 Communications Holdings, Inc. (L-3 Holdings and, together with its subsidiaries, referred to herein as L-3 or the Company) is a leading supplier of a broad range of products and services used in a substantial number of aerospace and defense platforms. L-3 also is a major supplier of systems, subsystems and products on many platforms, including those for secure communication networks and communications products, mobile satellite communications, information security systems, shipboard communications, naval power systems, missiles and munitions, telemetry and instrumentation and airport security systems. The Company also is a prime system contractor for aircraft modernization and operations & maintenance (O&M), Command, Control and Communications (C³), Intelligence, Surveillance and Reconnaissance (ISR) collection systems and services, training and simulation, intelligence services and government support services. The Company's customers include the U.S. Department of Defense (DoD) and its prime contractors, the U.S. Department of Homeland Security (DHS), U.S. Government intelligence agencies, major aerospace and defense contractors, allied foreign government ministries of defense, commercial customers and certain other U.S. federal, state and local government agencies.

The Company has four reportable segments. During the third quarter of 2005 the Company renamed three of its four reportable segments as follows: (i) Secure Communications & ISR changed to Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C³ ISR), (ii) Training, Simulation & Government Services changed to Government Services, and (iii) Aircraft Modernization, O&M and Products changed to Aircraft Modernization and Maintenance (AM&M). The Specialized Products reportable segment name remained the same.

During the third quarter of 2005, the Company revised the aggregation of its operating segments within its four reportable segments in connection with its acquisition of The Titan Corporation (Titan), which was completed on July 29, 2005, to provide a more clearly defined presentation of L-3's businesses, focused on customers, markets, products and services and independent research and development. Consequently, the Company has restated its reportable segments, by reclassifying into the Specialized Products reportable segment the following: (i) L-3's aviation products operating segments, which were previously included within the Aircraft Modernization and Maintenance reportable segment, and (ii) L-3's Link Training and Microdyne Outsourcing operating segments, which was previously included within the Government Services reportable segment. Prior period reportable segment data included in Notes 3, 5 and 18 have been restated to conform to the current period presentation.

The C³ISR segment provides products and services for the global ISR market, C³ systems and secure, high data rate communication systems and equipment primarily for intelligence, reconnaissance and surveillance applications. The Company believes that these products and services are critical elements for a substantial number of major command, control, communication, intelligence gathering and space systems. These products and services are used to connect a variety of airborne, space, ground and sea-based communication systems and are used in the transmission, processing, recording, monitoring and dissemination functions of these communication systems. The Government Services reportable segment provides communications systems support and engineering services, information technology services, teaching and training services, marksmanship training systems and services, and intelligence support and analysis services. The Aircraft Modernization and Maintenance reportable segment provides specialized aircraft modernization and upgrades, maintenance and logistics support services. The Specialized Products reportable segment provides a broad range of products, including naval warfare products, aviation products, telemetry and navigation products, sensors and imaging products, premium fuzing products, security systems, simulation devices, microwave components and information products.

F-50

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

2.    Summary of Significant Accounting Policies

Basis of Presentation:    The accompanying financial statements comprise the consolidated financial statements of L-3 Holdings and L-3 Communications. L-3 Holdings' only asset is its investment in the common stock of L-3 Communications, its wholly-owned subsidiary. L-3 Holdings' obligations of 5¼% Convertible Senior Subordinated Notes due 2009 and 4% Senior Subordinated Convertible Contingent Debt Securities due 2011 (CODES) were converted into L-3 Holdings' common stock during 2004. L-3 Holdings has also guaranteed the borrowings under the senior credit facilities of L-3 Communications. L-3 Holdings' obligations have been jointly, severally, fully and unconditionally guaranteed by L-3 Communications and certain of its domestic subsidiaries, and accordingly, such debt has been reflected as debt of L-3 Communications in its consolidated financial statements in accordance with the U.S. Securities and Exchange Commission's (SEC) Staff Accounting Bulletin (SAB) No. 54. In addition, all issuances of and conversions into L-3 Holdings' equity securities, including grants of stock options and restricted stock by L-3 Holdings to employees of L-3 Communications, have been reflected in the consolidated financial statements of L-3 Communications. As a result, the consolidated financial positions, results of operations and cash flows of L-3 Holdings and L-3 Communications are substantially the same. See Note 20 for additional information.

Principles Of Consolidation:    The consolidated financial statements of the Company include all wholly-owned and significant majority-owned subsidiaries. All significant intercompany transactions are eliminated in consolidation. Investments in equity securities, joint ventures and limited liability corporations over which the Company has significant influence but does not have voting control are accounted for by the equity method. Investments over which the Company does not have significant influence and do not have readily determinable fair values are accounted for using the cost method.

Sales And Costs And Expenses Presentation:    The Company presents its sales and costs and expenses in two categories on the statement of operations, "Contracts, primarily U.S. Government" and "Commercial, primarily products." Sales and costs and expenses for the Company's businesses that are primarily U.S. Government contractors are presented as "Contracts, primarily U.S. Government." The sales for the Company's U.S. Government contractor businesses are transacted using written revenue arrangements, or contracts, which primarily require the Company to design, develop, manufacture, modify, upgrade, test and integrate complex aerospace and electronic equipment, and to provide related engineering and technical services according to the buyer's specifications. Such buyers are predominantly the U.S. Department of Defense and other agencies of the U.S. Government, allied foreign government ministries of defense and defense prime contractors. These contracts are covered by the American Institute of Certified Public Accountants (AICPA) Statement of Position 81-1, Accounting for Performance of Construction — Type and certain Production-Type Contracts (SOP 81-1), Accounting Research Bulletin No. 43, Chapter 11, Section A, Government Contracts, Cost-Plus-Fixed Fee Contracts (ARB 43) and Accounting Research Bulletin No. 45, Long-Term Construction Type Contracts (ARB 45). Sales reported under "Contracts, primarily U.S. Government" also include certain sales from contracts with domestic and foreign commercial customers, which also are within the scope of SOP 81-1 and ARB 45. Additionally, certain fixed price contacts require the Company to perform services that are not related to the production of tangible assets which are not covered by SOP- 81-1, and these sales are recognized in accordance with the SEC's SAB No. 104, Revenue Recognition (SAB 104). Sales and costs and expenses for the Company's businesses whose customers are primarily commercial business enterprises are presented as "Commercial, primarily products". Most of these sales are recognized in accordance with SAB 104, and substantially all of the related revenue arrangements are not within the scope of SOP 81-1, ARB 43 or ARB 45. The Company's commercial businesses are substantially comprised of Aviation Communication & Surveillance Systems (ACSS), Aviation Recorders, Microwave Components, Security & Detection Systems and Avionics Systems.

F-51

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

Cash and Cash Equivalents:    Cash equivalents consist of highly liquid investments with a maturity of three months or less at time of purchase.

Revenue Recognition:    The substantial majority of the Company's direct and indirect sales to the U.S. Government and certain of the Company's sales to allied foreign governments and commercial customers are within the scope of SOP 81-1, ARB 43 and ARB 45 and sales and profits on them are recognized using percentage-of-completion methods of accounting. Sales and profits on fixed-price production contracts under which units are produced and delivered in a continuous or sequential process are recorded as units are delivered based on their contractual selling prices (the "units-of-delivery" method). Sales and profits on fixed-price production contracts under which units are not produced and delivered in a continuous or sequential process, or under which a relatively few number of units are produced, are recorded based on the ratio of total actual incurred costs to date to the total estimated costs for each contract (the "cost-to-cost" method). Under the percentage-of-completion methods of accounting, a single estimated total profit margin is used to recognize profit for each contract over its entire period of performance, which can exceed one year. Amounts representing contract change orders or claims are included in sales and estimated contract values only when they can be reliably estimated and their realization is reasonably assured. Losses on contracts are recognized in the period in which they are determined. The impact of revisions of contract estimates, which may result from contract modifications, performance or other reasons, are recognized on a cumulative catch-up basis in the period in which the revisions are made. Sales and profits on fixed-price contracts that require us to perform services that are not related to production of tangible assets are recognized in accordance with SAB 104.

Sales and profits on cost-reimbursable type contracts that are within the scope of ARB 43 in addition to SOP 81-1 are recognized as allowable costs are incurred on the contract and become billable to the customer, at an amount equal to the allowable costs plus the estimated profit on those costs. The estimated profit on a cost-reimbursable contract is generally fixed or variable based on the contract fee arrangement. Incentive and award fees on these contracts are recorded as revenue when the conditions under which they are earned are reasonably assured of being met.

Sales and profits on time and material type contracts are recognized on the basis of direct labor hours expended at fixed hourly rates plus the cost of materials and other specified costs.

Sales on arrangements that are not within the scope of SOP 81-1, ARB 43 or ARB 45 are recognized in accordance with SAB 104. Sales are recognized when there is persuasive evidence of an arrangement, delivery has occurred or services have been performed, the selling price to the buyer is fixed or determinable and collectibility is reasonably assured. For fixed-price contracts that are not within the scope of SOP 81-1, which the performance of services are not related to production of tangible assets and do not contain measurable units of work performed, sales are recognized on straight-line basis over the contractual service period. For fixed-price service contracts that are not within the scope of SOP 81-1, and contain measurable units of work performed, sales are recognized when the units of work are completed.

Contracts in Process:    Contracts in process include receivables and inventories for contracts that are within the scope of SOP 81-1, ARB 43 and ARB 45, as well as receivables and inventories related to other contractual arrangements. Billed Receivables represent the uncollected portion of amounts recorded as sales and billed to customers for all revenue arrangements, net of allowances for uncollectible accounts. Unbilled Contract Receivables represent accumulated incurred costs and earned profits or losses on contracts in process that have been recorded as sales, primarily using the cost-to-cost percentage of completion method, which have not yet been billed to customers. Inventoried Contract Costs represent incurred costs on contracts in process that have not yet been recognized as costs and expenses because the related sales, which are primarily recorded using the units-of-delivery percentage of completion method, have not been recognized. Contract costs include direct costs and indirect costs, including overhead costs. As discussed below in Note 4, the Company's inventoried contract costs for U.S. Government contracts,

F-52

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

and contracts with prime contractors or subcontractors of the U.S. Government include allocated general and administrative costs, independent research and development costs and bid and proposal costs. Contracts in Process contain amounts relating to contracts and programs with long performance cycles, a portion of which may not be realized within one year. For contracts in a loss position, the unrecoverable costs expected to be incurred in future periods are recorded in Estimated Costs in Excess of Estimated Contract Value to Complete Contracts in Process, which is a component of Other Current Liabilities. Under the terms of certain revenue arrangements (contracts) with the U.S. Government, the Company may receive progress payments as it incurs costs, or milestone payments as it performs work. The U.S. Government has a security interest in the Unbilled Contract Receivables and Inventoried Contract Costs to which progress payments have been applied, and such progress payments are reflected as a reduction of the related Unbilled Contract Receivables and Inventoried Contract Costs. Milestone payments that have been received in excess of contract costs and estimated profits on revenue arrangements are reported on the Company's balance sheet as a component of current liabilities as Billings in Excess of Costs and Estimated Profits. Customer Advances are reported in the balance sheet as a component of current liabilities.

Inventories other than Inventoried Contract Costs are stated at the lower of cost or market primarily using the average cost method.

The Company values its acquired contracts in process on the date of acquisition at contract value less the Company's estimated costs to complete the contract and a reasonable profit allowance on the Company's completion effort commensurate with the profit margin that the Company earns on similar contracts.

Derivative Financial Instruments:    The Company has entered into interest rate swap agreements and foreign currency forward contracts. Derivative financial instruments also include embedded derivatives. The Company's interest rate swap agreements have been accounted for as fair value hedges. The difference between the variable interest rates paid on the interest rate swap agreements and the fixed interest rate on the debt instrument underlying the swap agreements is recorded as increases or decreases to interest expense. Upon termination of an interest rate swap agreement, the cash received or paid that relates to the future value of the swap agreements at the termination date is a deferred gain or loss, which is recognized as a decrease or increase to interest expense over the remaining term of the underlying debt instrument. Foreign currency forward contracts are accounted for as cash flow hedges. Gains and losses on foreign currency forward contracts are recognized in earnings when the underlying hedged transaction within contracts in process affects earnings. The embedded derivatives related to the issuance of the Company's debt are recorded at fair value with changes reflected in the statement of operations.

Property, Plant and Equipment:    Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed by applying principally the straight-line method to the estimated useful lives of the related assets. Useful lives range substantially from 10 to 40 years for buildings and improvements and 3 to 10 years for machinery, equipment, furniture and fixtures. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. When property or equipment is retired or otherwise disposed of, the net book value of the asset is removed from the Company's balance sheet and the net gain or loss is included in the determination of operating income.

Debt Issue Costs:    Costs to issue debt are capitalized and deferred when incurred, and subsequently amortized to interest expense over the term of the related debt using a method that approximates the effective interest method.

Identifiable Intangible Assets:    Identifiable intangible assets represent assets acquired as part of the Company's business acquisitions and include customer relationships, technology and non-compete

F-53

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

agreements. Effective January 1, 2002, the initial measurement of these intangible assets has been based on their fair values. The values assigned to acquired identifiable intangible assets are determined, as of the date of acquisition, based on estimates and judgements regarding expectations for the estimated future after-tax cash flows from those assets over their lives, including the probability of expected future contract renewals and sales, less a cost-of-capital charge, all of which is discounted to present value. Identifiable intangible assets are amortized over their estimated useful lives as the economic benefits are consumed, ranging from 5 to 20 years.

Goodwill:    Effective January 1, 2002, the Company accounts for goodwill in accordance with Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and other Intangible Assets. The carrying value of goodwill and indefinite lived identifiable intangible assets are not amortized, but are tested for impairment based on their estimated fair values using discounted cash flows valuation at the beginning of each year, and whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Prior to January 1, 2002, goodwill was amortized on a straight-line basis over periods ranging from 15 to 40 years except for goodwill related to acquisitions consummated after June 30, 2001. Prior to the adoption of SFAS 142, the Company evaluated the carrying amount of goodwill by reference to current and estimated profitability and undiscounted cash flows.

Income Taxes:    The Company provides for income taxes using the liability method. Deferred income tax assets and liabilities reflect tax carryforwards and the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes, as determined under enacted tax laws and rates. The effect of changes in tax laws or rates is accounted for in the period of enactment. Valuation allowances for deferred tax assets are provided when it is more likely than not that the assets will not be realized, considering, when appropriate, tax planning strategies.

Research and Development:    Independent research and development costs sponsored by the Company include bid and proposal costs, and relate to both U.S. Government products and services and those for commercial and foreign customers. The independent research and development (IRAD) and bid and proposal costs (B&P) for the Company's businesses that are U.S. Government contractors are recoverable indirect contract costs that are allocated to our U.S. Government contracts in accordance with U.S. Government procurement regulations, and are specifically excluded from the scope of SFAS No. 2, Accounting for Research and Development Costs (SFAS 2). In accordance with SOP 81-1 and the AICPA Audit and Accounting Guide, Audits of Federal Government Contractors, the Company includes IRAD and B&P costs allocated to U.S. Government contracts in inventoried contract costs, and charges them to costs of sales when the related contract sales are recognized as revenue. Research and development costs for the Company's businesses that are not U.S. Government contractors are expensed as incurred in accordance with SFAS 2.

Customer-funded research and development costs are incurred pursuant to contracts (revenue arrangements) to perform research and development activities according to customer specifications. These costs are not accounted for as research and development expenses in accordance with SFAS 2, and are also not indirect contract costs. Instead, these costs are direct contract costs and are expensed when the corresponding revenue is recognized, which is generally as the research and development services are performed. Customer-funded research and development costs are substantially all incurred under cost-reimbursable type contracts with the U.S. Government.

Computer Software Costs:    The Company's software development costs for computer software products to be sold, leased or marketed that are incurred after establishing technological feasibility for the computer software products are capitalized as other assets and amortized on a product by product basis using the amount that is the greater of the straight-line method over the useful life or the ratio of current revenues to total estimated revenues in accordance with SFAS No. 86, Accounting for the Costs of Computer Software to Be Sold, Leased or Otherwise Marketed. Substantially all of the capitalized software

F-54

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

development costs pertain to products of the Company's commercial businesses. Capitalized software development costs, net of accumulated amortization, was $34,557 at December 31, 2004 and $29,990 at December 31, 2003, and is included in Other Assets on the consolidated balance sheets. Amortization expense for capitalized software development costs was $7,760 for 2004, $6,917 for 2003 and $5,209 for 2002.

Stock-Based Compensation:    The Company accounts for employee stock-based compensation under the recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. Compensation expense for employee stock-based compensation is recognized in income based on the excess, if any, of the fair value of L-3 Holdings' stock at the grant date of the award or other measurement date over the amount an employee must pay to acquire the stock. When the exercise price for stock-based compensation arrangements granted to employees equals or exceeds the fair value of the L-3 Holdings common stock at the date of grant, the Company does not recognize compensation expense. The Company elected not to adopt the fair value based method of accounting for stock-based employee compensation as permitted by the Financial Accounting Standards Board's (FASB) Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation (SFAS 123), as amended by SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of SFAS No. 123. Had the Company adopted the fair value based method provisions of SFAS 123 for all of its stock-based compensation, it would have recorded a non-cash expense for the estimated fair value of the stock-based compensation arrangements that the Company has granted to its employees amortized over the vesting period of the grants. Stock-based employee compensation is a non-cash expense, because the Company settles its stock-based compensation obligations by issuing shares of common stock instead of settling such obligations with cash payments. All of the stock options granted to employees by the Company are non-qualified stock options under U.S. income tax regulations. As discussed below in Recently Issued Accounting Standards, SFAS 123 was revised in December 2004.

The table below presents the "as reported" net income and L-3 Holdings earnings per share (EPS) and the "pro forma" net income and L-3 Holdings EPS that the Company would have reported if the Company had elected to recognize non-cash compensation expense in accordance with the fair value based method of accounting of SFAS 123.

				Year Ended December 31,
				2004				2003				2002
Net income:
As reported				$	381,880			$	277,640			$	178,097
Pro forma					358,776				259,997				160,079
L-3 Holdings Basic EPS:
As reported				$	3.54			$	2.89			$	2.05
Pro forma					3.33				2.71				1.84
L-3 Holdings Diluted EPS:
As reported				$	3.33			$	2.62			$	1.90
Pro forma					3.13				2.47				1.72

The assumptions used to calculate the fair value of stock options at their grant dates are presented in Note 14.

Product Warranties:    Product warranty costs are accrued when revenue is recognized for the covered products. Product warranty expense is recognized based on the terms of the product warranty and the related estimated costs. Accrued warranty costs are reduced as product warranty costs are incurred.

F-55

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

Use of Estimates:    The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs and expenses during the reporting period. The most significant of these estimates and assumptions relate to contract revenue, profit and loss recognition, market values for inventories reported at lower of cost or market, pension and postretirement benefit obligations, recoverability and valuation of recorded amounts of long-lived assets, identifiable intangible assets, goodwill, income taxes, including the valuations of deferred tax assets, litigation reserves and environmental obligations. Changes in estimates are reflected in the periods during which they become known. Actual amounts will differ from these estimates.

Recently Issued Accounting Standards:    In December of 2004, the FASB revised its FASB Statement No. 123, Accounting for Stock Based Compensation (SFAS 123) and renamed it FASB Statement No. 123, Share-Based Payment (SFAS 123R). SFAS 123R requires that compensation expense relating to share-based payment transactions be recognized in financial statements at estimated fair value. The scope of SFAS 123R includes a wide range of share-based compensation arrangements, including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. This standard replaces SFAS 123 and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. The Company is required to adopt the provisions of SFAS 123R for the interim period ending September 30, 2005. The Company is currently assessing the provisions of SFAS 123R. The Company previously elected not to adopt the fair value based method of accounting for stock-based employee compensation as permitted by SFAS 123. The adoption of SFAS 123R will result in the recording of non-cash compensation expenses, which is not currently recognized in the Company's financial statements. In accordance with SFAS 123, the Company discloses pro forma net income and earnings per share adjusted for non-cash compensation expense arising from the estimated fair value of share-based payment transactions. See "Stock-Based Compensation" above for a further discussion of the Company's accounting for stock-based employee compensation and disclosure of pro forma historical net income and earnings per share.

The U.S. enacted the American Jobs Creation Act of 2004 (the American Jobs Creation Act) in October 2004 which contains many provisions affecting corporate taxation. The American Jobs Creation Act phases out the extraterritorial income (ETI) exclusion benefit for export sales and phases in a new tax deduction for income from qualified domestic production activities (QPA) over a transition period beginning in 2005. In December 2004, the FASB issued FASB Staff Position 109-1 (FSP 109-1), which provides guidance that the QPA deduction should be treated as a special income tax deduction as described in SFAS 109. As such, QPA has no impact on the Company's deferred tax assets or liabilities existing as of the enactment date. Rather, the QPA deduction will be reported in the period that the deductions are claimed on the Company's income tax returns. While the Company has not completed its evaluation of the net impact of the American Jobs Creation Act, the Company believes that the benefit from the phase-in of the OPA deduction will be substantially equivalent to the lost benefit from the phase-out of the ETI exclusion in 2005. The Company does not expect that the other provisions included in the American Jobs Creation Act will have a significant impact on the Company's financial position, results of operations or cash flows.

On September 30, 2004, the EITF reached a consensus on issue No. 04-8, The Effect of Contingently, Convertible Debt on Diluted Earnings per Share. See Note 12 for a description of EITF No. 04-8 and its impact on the Company's results of operations.

On December 8, 2003, President Bush signed the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act). This Act introduces a federal subsidy to employers who sponsor retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare

F-56

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

Part D. On January 21, 2005, the Centers for Medicare and Medical Services (CMS) released final regulations implementing the Act. The Company has not determined the possible effect of the final regulations on its accumulated postretirement benefit obligation. In May of 2004, the FASB issued FASB Staff Position 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (FSP 106-2). FSP 106-2 provides guidance on the accounting for the effects of the Act and requires certain disclosures regarding the effect of the federal subsidy provided by the Act. In accordance with FSP 106-2 the Company has accounted for the effect of the Act on a preliminary basis and disclosed the effect in Note 16 of these audited consolidated financial statements.

Reclassifications:    Effective January 1, 2004, the Company combined its explosives detection systems (EDS) business into L-3 Security and Detection Systems, its IMC business into L-3 Government Services, Inc., the EMP business into its ESSCO business and the Apcom business into its Communication Systems-East business (2004 Business Realignments). As a result of the 2004 Business Realignments, reclassifications between "Contracts, primarily U.S. Government" and "Commercial, primarily products" have been made to the prior period sales and operating income amounts, however, since EDS was primarily a U.S. Government contracting business prior to 2003, the sales and operating income for EDS were not reclassified for 2002 and 2001. Specifically, $96,456 of 2003 sales, $9,070 of 2002 sales, $26,293 of 2003 operating income and $6,149 of 2002 operating loss was reclassified from "Contracts, primarily U.S. Government" to "Commercial, primarily products." Additionally, $30,645 of 2003 sales, $9,239 of 2002 sales, $2,126 of 2003 operating income and $7,432 of 2002 operating loss was reclassified from "Commercial, primarily products" to "Contracts, primarily U.S. Government." The 2004 Business Realignments and related reclassifications did not result in any changes to the Company's consolidated results of operations, financial position or cash flow.

3.    Acquisitions

2004 Business Acquisitions

During 2004, in separate transactions, the Company acquired 11 businesses, for an aggregate purchase price of $434,673 in cash, plus acquisition costs. Based on preliminary purchase price allocations, the goodwill recognized for these business acquisitions was $366,529, of which $110,810 is expected to be deductible for income tax purposes. Goodwill of $8,212 was preliminarily assigned to the C³ISR segment, $51,639 to the Government Services segment, $60,612 to the Aircraft Modernization and Maintenance segment and $246,066 to the Specialized Products segment. The 2004 business acquisitions were financed with cash on hand. The purchase prices for Beamhit LLC, AVISYS, Inc., D.P. Associates, Inc., Cincinnati Electronics, Inc., BAI Aerosystems, Inc. and L-3 Electronic Systems are subject to adjustment based on the closing date net assets or net working capital of the respective acquired business. The Company completed the business acquisitions listed below during 2004:

	•	Substantially all of the assets and certain specified liabilities of Beamhit LLC on May 13, 2004, for $40,000 in cash, plus additional consideration contingent upon the financial performance of Beamhit for the years ending December 31, 2005, 2006 and 2007. Any such additional consideration will be accounted for as goodwill. Beamhit is a developer and supplier of laser marksmanship training systems, and adds a series of new products to the Company's expanding role in readiness training and simulation products and services;

	•	Substantially all of the assets and liabilities of Brashear, LP on June 14, 2004, for $36,290 in cash. Brashear is a developer and supplier of complex electro-optical systems, including laser ranging and tracking systems, test range instrumentation, telescope systems, naval fire control systems and laser beam directors for military and international customers. Brashear adds new capabilities to the Company's role in advanced optics;

F-57

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

	•	Substantially all of the assets and liabilities of the Commercial Infrared business of Raytheon Company (Raytheon) on November 9, 2004, for $44,212 in cash. The business was renamed L-3 Communications Infrared Products (Infrared Products). Infrared Products is a leading producer of uncooled thermal imaging products for the public safety, fire and rescue, security, transportation and industrial markets;

	•	All of the outstanding stock of Cincinnati Electronics, Inc. on December 9, 2004, for $176,438 in cash. Cincinnati Electronics designs and manufactures a range of infrared (IR) detectors, imaging sensors, missile warning systems, space launch vehicle products and spacecraft electronics;

	•	All of the outstanding stock of the Canadian Navigation Systems and Space Sensors System business of Northrop Grumman on December 30, 2004, for $65,000 in cash. The business was renamed L-3 Electronics Systems (LES). LES designs, develops and integrates electronic products and systems for aviation and ground vehicles, primarily in Canada and the United States; and

	•	AVISYS, Inc., the General Electric Driver Development (GEDD) business, Bay Metals and Fabrication, Inc., BAI Aerosystems (BAI), certain video security product lines of Sarnoff Corporation and D.P. Associates, Inc. for an aggregate purchase price of $72,733 in cash, plus additional consideration, expected not to exceed $31,500, which is contingent upon the financial performance for certain of these acquired businesses for the years ending December 31, 2005 and 2006.

2003 Business Acquisitions

Vertex Aerospace.    On December 1, 2003, the Company acquired Vertex Aerospace LLC (Vertex). In May of 2004, the Company and the seller of Vertex Aerospace agreed to a final purchase price of $664,750, based on the closing date net assets of Vertex Aerospace. The final purchase price, excluding acquisition costs, represents an $11,500 increase to the contractual consideration paid prior to May of 2004. Based on the final purchase price allocation for Vertex, goodwill of $498,643 was assigned to the Aircraft Modernization and Maintenance segment and approximately $440,362 is expected to be deductible for income tax purposes. Vertex is a leading provider of aerospace and other technical services to the U.S. Department of Defense and other U.S. Government agencies. Vertex's services include logistics support, modernization and maintenance for fixed and rotary wing aircraft, supply chain management and pilot training. Vertex's engineering and technical staff support tactical, cargo and utility aircraft and other defense-related platforms.

The table below presents a summary of the final purchase price allocation for Vertex, which includes the final appraisals and other valuations of fair values of the assets acquired and liabilities assumed on the closing date of the acquisition (December 1, 2003).

F-58

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

Cash				$	2,187
Contracts in process					163,494
Deferred income taxes					14,059
Other current assets					1,490
Property, plant and equipment					28,563
Goodwill					498,643
Intangible assets					49,335
Deferred income taxes					939
Total assets acquired					758,710
Current liabilities					79,624
Long-term liabilities					11,114
Total liabilities assumed					90,738
Net assets acquired				$	667,972

During 2003, in separate transactions, the Company also acquired five businesses for an aggregate consideration of $353,611 in cash, plus acquisition costs. These acquisitions were financed with cash on hand. Based on the final purchase price allocations, the goodwill recognized for these business acquisitions was $315,582, of which $300,631 is expected to be deductible for income tax purposes. Goodwill of $44,603 was assigned to the C³ISR segment, $90,379 was assigned to the Aircraft Modernization and Maintenance segment and $180,600 was assigned to the Specialized Products segment. The Company completed the business acquisitions listed below during 2003:

	•	Certain defense and aerospace assets of IPICOM, Inc. (IPICOM) on December 10, 2003. This acquisition adds innovative optical networking technology to the Company's existing and growing ISR and secure communications businesses;

	•	The net assets of the Military Aviation Services (MAS) business of Bombardier, Inc. on October 31, 2003. MAS provides a full range of technical services in the areas of aircraft maintenance, repair and upgrade for military aircraft, and the refurbishment and modernization of selected commercial aircraft. Its customers include the Canadian Armed Forces, the DoD, aerospace and defense prime contractors and foreign military organizations;

	•	All of the outstanding common stock of Klein Associates, Inc. (Klein), a business unit of OYO Corporation of Japan, on September 30, 2003. Klein designs, manufactures and supports side-scan sonar, sub-bottom profilers and related instruments and accessories for undersea search and survey, including intrusion detection systems for port security applications. Klein provides complimentary product capabilities, which the Company has integrated into L-3's port and maritime security systems offerings. Klein is also synergistic with the Company's acoustic undersea warfare products;

	•	All of the outstanding common stock of Aeromet, Inc. (Aeromet), on May 30, 2003. Aeromet designs, develops and integrates infrared and optical systems for airborne ISR. The acquisition advances the Company's strategy to expand its electro-optical and infrared product lines and provides the Company with the ability to apply Aeromet's technology to L-3's current ISR products; and

	•	All of the outstanding common stock of the avionics systems (Avionics Systems) business of Goodrich Corporation, on March 28, 2003. Avionics Systems develops and manufactures innovative avionics solutions for substantially all segments of the aviation market, and sells its products to the military, business jet, general aviation, rotary wing aircraft and air transport markets.

F-59

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

2002 Business Acquisitions

Aircraft Integration Systems.    On March 8, 2002, the Company acquired the assets of Aircraft Integration Systems (AIS), a division of Raytheon Company (Raytheon), for approximately $1,148,700 in cash, which includes $1,130,000 for the original contract purchase price, and an increase to the contract purchase price of approximately $18,700 related to additional net assets received at closing, plus acquisition costs. Following the acquisition, the Company changed AIS's name to L-3 Communications Integrated Systems (IS). The purchase price is subject to adjustment based on the IS closing date net tangible book value, as defined in the asset purchase agreement. Based on the purchase price allocation for IS, the goodwill recognized was $765,879, of which $514,728 is expected to be deductible for income tax purposes. Goodwill of $520,798 was assigned to the C³ISR segment and $245,081 was assigned to the Aircraft Modernization and Maintenance segment. The Company acquired IS because it is a long-standing supplier of critical communication and signal intelligence and unique sensor systems for special customers within the U.S. Government.

The Company is continuing its discussions with Raytheon regarding the adjustment of the purchase price for the acquisition of AIS. The AIS purchase price submitted by Raytheon to the Company amounted to approximately $1,163,000. The Company believes that, in accordance with the terms of the AIS asset purchase agreement concerning the closing date balance sheet, the purchase price for AIS submitted by Raytheon should be reduced by $100,000 to $1,063,000. In accordance with the asset purchase agreement, the Company and Raytheon are in the formal process of settling the disagreement and engaging a neutral accountant to arbitrate the final purchase price. Any amount received by the Company for a reduction to the AIS purchase price will be recorded as a reduction to goodwill.

During 2002, in separate transactions, the Company also acquired ten businesses for an aggregate consideration of $572,735, plus acquisition costs. Based on the final purchase price allocations, the goodwill recognized for the business acquisitions was $412,237, of which $76,193 is expected to be deductible for income tax purposes. Goodwill of $36,435 was assigned to the C³ISR segment, $110,376 was assigned to the Government Services segment and $265,426 was assigned to the Specialized Products segment. The Company completed the business acquisitions listed below during 2002.

	•	All of the outstanding common stock of the detection systems business of PerkinElmer (Detection Systems) on June 14, 2002. Detection Systems offers X-ray screening for several major security applications, including: (1) aviation systems for checked and oversized baggage, break bulk cargo and air freight; (2) port and border applications including pallets, break bulk and air freight; and (3) facility protection, such as parcels, mail and cargo. Detection Systems has a broad range of systems and technology. Detection Systems' customer base includes major airlines and airports, a number of domestic agencies, such as the U.S. Customs Service, U.S. Marshals Service, U.S. Department of Agriculture and U.S. Department of State, and international authorities throughout Europe, Asia and South America;

	•	All of the outstanding common stock of Telos Corporation (Telos), a business incorporated in California, which provides software development for command, control and communications and other related services for military and national security requirements, on July 19, 2002;

	•	All of the outstanding common stock of ComCept, Inc. (ComCept), a company with network-centric warfare capabilities, including requirements development, modeling, simulation, communications and systems development and integration for ISR, on July 31, 2002;

	•	All of the outstanding common stock of Technology, Management and Analysis Corporation (TMA), a provider of professional services to the DoD, primarily in support of the Naval surface and combat fleet, on September 23, 2002. The core competencies of TMA include engineering, logistics, ship test and trials, network engineering and support and hardware and software products;

F-60

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

	•	The net assets of Northrop Grumman's Electron Devices and Displays-Navigation Systems-San Diego businesses on October 25, 2002. Electron Devices is a supplier of microwave power devices to major prime contractors on key military programs, including missile seekers, aircraft navigation and landing systems, airborne and ground radar and electronic warfare and communications systems. Following the acquisition, the Company changed the name of Electron Devices to L-3 Communications Electron Devices (Electron Devices). Displays-Navigation Systems is a supplier of ruggedized displays and computer and electronic systems for both military and commercial applications. Following the acquisition, the Company changed the name of Displays-Navigation Systems to L-3 Communications Ruggedized Command and Control Solutions (Ruggedized Command & Control);

	•	All of the outstanding common stock of Wolf Coach, Inc. (Wolf Coach), a producer of mobile communications vehicles, which are sold to customers in the television industry, the military and to the homeland defense market, on November 1, 2002. The acquisition is subject to additional purchase price not to exceed $1,350 which is contingent upon the financial performance of Wolf Coach for the fiscal year ending October 31, 2005. Any such additional consideration will be accounted for as goodwill;

	•	All of the outstanding common stock of International Microwave Corporation (IMC), a global communications company that provides wireless communications, network support services, information technology, defense communications and enhanced surveillance systems, on November 8, 2002;

	•	All of the outstanding common stock of Westwood Corporation (Westwood), a supplier of shipboard power control, switchgear and power distribution systems to the United States Navy, Army, Air Force and Coast Guard, on November 13, 2002;

	•	All of the outstanding common stock of Wescam Inc. (Wescam), a designer and manufacturer of systems for defense applications that capture images from mobile platforms and transmit them in real time to tactical command centers for interpretation and for commercial broadcast applications to production facilities; and

	•	All of the outstanding common stock of Ship Analytics, Inc. (Ship Analytics), a producer of crisis management software that provides command and control for homeland security applications, on December 19, 2002. Ship Analytics also designs, manufactures and operates real-time simulation systems for critical shipboard operations for commercial maritime and naval customers. The acquisition is subject to additional purchase price not to exceed $4,500, which is contingent upon the financial performance of Ship Analytics for the year ending December 31, 2005. Any such additional consideration will be accounted for as goodwill.

Additionally, during the years ended December 31, 2004, 2003 and 2002, the Company purchased other businesses, which, individually and in the aggregate, were not material to the Company's consolidated results of operations, financial position or cash flows in the year acquired.

Substantially all of the acquisitions were initially financed with cash on hand or borrowings under the Company's bank credit facilities.

All of the business acquisitions are included in the Company's results of operations from their respective effective dates of acquisition. The assets and liabilities recorded in connection with the purchase price allocations for the acquisitions of Beamhit, Brashear, AVISYS, GEDD, Bay Metals Infrared Products, Cincinnati Electronics, LES, D.P. Associates and BAI, all of which were acquired in 2004, are based upon preliminary estimates of fair values for contracts in process, inventories, estimated costs in excess of estimated contract value to complete contracts in process in a loss position, identifiable

F-61

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

intangibles, goodwill, plant and equipment, and deferred income taxes. Actual adjustments will be based on the final purchase prices, including the payment of contingent consideration and final appraisals and other analyses of fair values, which are in process. The Company expects to complete the preliminary purchase price allocations in 2005. The Company does not expect the differences between the preliminary and final purchase price allocations for these acquisitions to be material.

Unaudited Pro Forma Statement of Operations Data

Assuming the business acquisitions the Company completed during 2004 occurred on January 1, 2004, the unaudited pro forma sales, net income and diluted earnings per share would have been approximately $7,184,700, $381,100 and $3.32, respectively, for the year ended December 31, 2004.

Assuming the business acquisitions the Company completed during 2004 and 2003 occurred on January 1, 2003, the unaudited pro forma sales, net income and diluted earnings per share would have been approximately $6,160,800, $291,200 and $2.74, respectively, for the year ended December 31, 2003.

Assuming the business acquisitions the Company completed during 2003 and 2002 occurred on January 1, 2002, the unaudited pro forma sales, income before cumulative effect of a change in accounting principle, net income and diluted earnings per share would have been approximately $5,474,500, $198,500, $174,100 and $1.74, respectively, for the year ended December 31, 2002.

The pro forma results disclosed in the preceding paragraphs are based on various assumptions and are not necessarily indicative of the results of operations that would have occurred had the Company completed the acquisitions on January 1, 2002, January 1, 2003 and January 1, 2004.

Business Acquisitions Completed After the Balance Sheet Date

On February 3, 2005, the Company acquired substantially all of the Marine Controls division of CAE. The remaining business operations of the Marine Controls division will be acquired following the receipt of required approvals. On February 25, 2005, the Company acquired the Propulsion Systems business unit of General Dynamics. On February 28, 2005, the Company acquired the Electron Dynamic Devices business of the Boeing Company. The aggregate purchase price paid in cash for these business acquisitions was $471,807. The Company financed these acquisitions using cash on hand.

4.    Contracts in Process

The components of contracts in process are presented in the table below. The unbilled contract receivables, inventoried contract costs and unliquidated progress payments are principally related to contracts with the U.S. Government and prime contractors or subcontractors of the U.S. Government.

				December 31,
				2004				2003
Billed receivables, less allowances of $16,541 and $25,221				$	781,931			$	637,254
Unbilled contract receivables					810,720				676,604
Less: unliquidated progress payments					(179,276	)			(193,672	)
Unbilled contract receivables, net					631,444				482,932
Inventoried contract costs, gross					432,741				353,247
Less: unliquidated progress payments					(50,927	)			(17,624	)
Inventoried contract costs, net					381,814				335,623
Inventories at lower of cost or market					183,838				159,539
Total contracts in process				$	1,979,027			$	1,615,348

F-62

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

Unbilled Contract Receivables.    Unbilled contract receivables represent accumulated incurred costs and earned profits on contracts that have been recorded as sales, which have not yet been billed to customers. The majority of unbilled contract receivables arise from the cost-to-cost percentage-of-completion (POC) method, which is used to record sales on certain fixed-price contracts as costs are incurred at amounts equal to the ratio of cumulative costs incurred to total estimated costs at completion, multiplied by the total estimated contract revenue. Unbilled contract receivables from fixed price-type contracts are converted to billed receivables when amounts are invoiced to customers according to contractual billing terms, which generally occur when deliveries or other performance milestones are completed. To a lesser extent, unbilled contract receivables also arise from cost reimbursable-type contracts and time & material-type contracts, for revenue amounts that have not been billed by the end of the accounting period due to the timing of preparation of invoices for customers. The Company believes that approximately 89% of the unbilled contract receivables at December 31, 2004 will be billed and collected within one year.

Unliquidated Progress Payments.    Unliquidated progress payments arise from fixed price-type contracts with the U.S. Government that contain progress payment clauses, and represent progress payment invoices which have been collected in cash, but have not yet been liquidated. Progress payment invoices are billed to the customer as contract costs are incurred at an amount generally equal to 75% to 80% of incurred costs. Unliquidated progress payments are liquidated as deliveries or other contract performance milestones are completed, at an amount equal to a percentage of the contract sales price for the items delivered or work performed, based on a contractual liquidation rate. Therefore, unliquidated progress payments are a contra asset account, and are classified against unbilled contract receivables if revenue for the underlying contract is recorded using the cost-to-cost POC method, and against inventoried contract costs if revenue is recorded using the units-of-delivery POC method.

Inventoried Contract Costs.    In accordance with SOP 81-1 and the AICPA Audit and Accounting Guide, Audits of Federal Government Contractors, the Company's Inventoried Contract Costs include selling, general and administrative (SG&A) costs, independent research and development (IRAD) costs and bid and proposal (B&P) costs allocated to U.S. Government contracts (revenue arrangements) for which the U.S. Government is the end customer, because they are reimbursable indirect contract costs on revenue arrangements with the U.S. Government, pursuant to U.S. Government procurement regulations. The Company accounts for SG&A, IRAD and B&P costs allocated to U.S. Government contracts as product costs, instead of period expenses, and charges them to costs of sales when sales are recognized. Therefore, such allocated indirect costs are included in inventoried contract costs prior to the recognition of cost of sales for the related revenue arrangement (contract).

The table below presents a summary of SG&A, IRAD and B&P costs included in inventoried contract costs and the changes to them, including amounts used in the determination of costs and expenses for "Contracts, primarily U.S. Government." The cost data in the table below does not include the SG&A and research and development expenses for the Company's businesses that are primarily not U.S. government contractors, which are separately presented on the statements of operations under costs and expenses for "Commercial, primarily products" and are expensed as incurred.

F-63

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

				Year Ended December 31,
				2004				2003				2002
Amounts included in inventoried contract costs at beginning of period				$	38,024			$	52,253			$	19,970
Add: Amounts included in acquired inventoried contract costs					5,555				—				34,417
Amounts incurred during the period(1)					582,933				485,694				430,622
Less: Amounts charged to costs and expenses during the period					(582,848	)			(499,923	)			(432,756	)
Amounts included in inventoried contract costs at end of period				$	43,644			$	38,024			$	52,253

(1)	Incurred costs include IRAD and B&P costs of $149,388 for 2004, $129,366 for 2003, and $124,248 for 2002.

Inventories at Lower of Cost or Market.    The table below presents the components of Inventories at lower of cost or market at December 31, 2004 and 2003.

				2004				2003
Finished goods				$	42,577			$	44,254
Work in process					51,302				49,559
Raw materials, components and sub-assemblies					89,959				65,726
Total				$	183,838			$	159,539

5.    Goodwill and Other Intangible Assets

Effective January 1, 2002, the Company ceased recording goodwill amortization expense and began testing goodwill for impairment based on estimated fair values at the beginning of the year using a discounted cash flows valuation. Based on the estimated fair values of the Company's reporting units as of January 1, 2002, the goodwill for certain space and broadband commercial communications businesses included in the Specialized Products segment was impaired. In the first quarter of 2002, the Company completed its valuation of the assets and liabilities for these businesses and recorded an impairment charge of $24,370, net of a $6,428 income tax benefit. The impairment charge was recorded as a cumulative effect of a change in accounting principle effective January 1, 2002, in accordance with the adoption provisions of SFAS No. 142.

Goodwill.    The table below presents the changes in goodwill allocated to each of our reportable segments during the year ended December 31, 2004. At December 31, 2004, the goodwill of $175,248 allocated to Cincinnati Electronics, Inc., which was acquired on December 9, 2004, was preliminary assigned to the C³ISR reportable segment. During the first quarter of 2005, the Company completed its evaluation of the reportable segment classification for Cincinnati Electronics and assigned it to the Specialized Products reportable segment. Also, in connection with the Company's revised aggregation of its operating segments among its four reportable segments, the Company restated the balances at January 1, 2004 to conform to the current year presentation by reclassifying $517,420 of goodwill to the Specialized Products reportable segment. The Company reclassified $90,702 from the Government Services reportable segment for the Link Training and Microdyne Outsourcing operating segments and $426,718 from the Aircraft Modernization and Maintenance reportable segment for the ACSS, Avionics Systems, Aviation Recorders, Display Systems, and Electrodynamics operating segments.

F-64

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

				C3ISR				Government Services				Aircraft Modernization and Maintenance				Specialized Products				Consolidated Total
Balance January 1, 2004				$	726,880			$	420,949			$	924,100			$	1,580,507			$	3,652,436
Business acquisitions					18,491				52,383				74,807				256,697				402,378
Balance December 31, 2004				$	745,371			$	473,332			$	998,907			$	1,837,204			$	4,054,814

During the year ended December 31, 2004, goodwill was increased by a total of $402,378, which was comprised of (i) $366,529 for business acquisitions completed during the year ended December 31, 2004, (See Note 3) (ii) $36,034 for increases to purchase price payments for certain business acquisitions completed prior to January 1, 2004, related to the final closing date net assets and contingent purchase price adjustments or earnouts, which were resolved during the period, and (iii) a decrease of $185 primarily related to final estimates of fair value for assets acquired and liabilities assumed in connection with business acquisitions completed prior to January 1, 2004.

Identifiable Intangible Assets.    The gross carrying amount and accumulated amortization balances of the Company's identifiable intangible assets that are subject to amortization are presented in the tables below. The Company has no indefinite-lived identifiable intangible assets.

				December 31, 2004
				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Identifiable intangible assets that are subject to amortization:
Customer relationships				$	164,041			$	17,709			$	146,332
Technology					43,595				5,303				38,292
Non-compete agreements					2,000				820				1,180
Total				$	209,636			$	23,832			$	185,804

				December 31, 2003
				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Identifiable intangible assets that are subject to amortization:
Customer relationships				$	154,770			$	6,519			$	148,251
Technology					14,500				2,325				12,175
Non-compete agreements					2,000				270				1,730
Total				$	171,270			$	9,114			$	162,156

The Company recorded amortization expense for its identifiable intangible assets of $14,718 for 2004, $6,610 for 2003 and $1,337 for 2002. Based on gross carrying amounts at December 31, 2004, the Company's estimate for identifiable intangible assets amortization expense for the years ending December 31, 2005 through 2009 are presented in the table below.

F-65

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

Year Ending December 31,				Estimated Amortization Expense
2005				$	20,629
2006					19,978
2007					18,732
2008					16,381
2009					15,110

6.    Other Current Liabilities and Other Liabilities

The components of other current liabilities are presented in the table below.

				December 31,
				2004				2003
Accrued product warranty costs				$	49,816			$	41,184
Estimated cost in excess of estimated contract value to complete contracts in process in a loss position					49,695				52,063
Accrued interest					29,871				25,898
Aggregate purchase price payable for acquired businesses					9,648				28,331
Notes payable and capital lease obligations					—				9,312
Deferred revenues					5,019				7,850
Current portion of net deferred gains from terminated interest rate swap agreements					3,284				4,246
Other					43,080				47,738
Total other current liabilities				$	190,413			$	216,622

The components of other liabilities are presented in the table below.

				December 31,
				2004				2003
Non-current portion of net deferred gains from terminated interest rate swap agreements				$	21,928			$	29,224
Accrued workers compensation					19,401				14,549
Long-term deferred tax liabilities					7,990				—
Fair value of interest rate swap agreements					2,036				—
Notes payable and capital lease obligations					13,911				1,485
Non-current portion of accrued product warranty costs					—				4,630
Other non-current liabilities					63,467				51,763
Total other liabilities				$	128,733			$	101,651

F-66

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

The table below presents the changes in the Company's accrued product warranty costs for the year ended December 31, 2004.

Balance at January 1, 2004				$	45,814
Acquisitions during this period					3,003
Accruals for product warranties issued during the period					19,856
Accruals for product warranties existing before January 1, 2004(1)					3,518
Settlements made during the period					(22,375	)
Balance at December 31, 2004				$	49,816

(1)	Represents changes to estimated product warranty costs related to sales recognized prior to January 1, 2004.

7.    Property, Plant and Equipment

				December 31,
				2004				2003
Land				$	35,399			$	35,668
Buildings and improvements					207,855				147,860
Machinery, equipment, furniture and fixtures					465,214				417,978
Leasehold improvements					143,366				138,654
Gross property, plant and equipment					851,834				740,160
Less: accumulated depreciation and amortization					(294,862	)			(220,411	)
Property, plant and equipment, net				$	556,972			$	519,749

Depreciation expense for property, plant and equipment was $91,541 for 2004, $77,340 for 2003, and $66,230 for 2002.

8.    Debt

The components of long-term debt and a reconciliation to the carrying amount of long-term debt are presented in the table below.

				December 31,
				2004				2003
L-3 Communications:
Borrowings under Senior Credit Facilities				$	—			$	—
8% Senior Subordinated Notes due 2008					—				200,000
7 5/8% Senior Subordinated Notes due 2012					750,000				750,000
6 1/8% Senior Subordinated Notes due 2013					400,000				400,000
6 1/8% Senior Subordinated Notes due 2014					400,000				400,000
5 7/8% Senior Subordinated Notes due 2015					650,000				—
					2,200,000				1,750,000
L-3 Holdings:
5¼% Convertible Senior Subordinated Notes due 2009					—				298,370
4% Senior Subordinated Convertible Contingent Debt Securities due 2011					—				420,000
Principal amount of long-term debt					2,200,000				2,468,370
Less:   Unamortized discounts					(8,158	)			(11,070	)
Fair value of interest rate swap agreements					(2,036	)			—
Carrying amount of long-term debt				$	2,189,806			$	2,457,300

F-67

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

L-3 Communications

At December 31, 2004, the Company's Senior Credit Facilities were comprised of a $500,000 five-year revolving credit facility maturing on May 15, 2006 and a $250,000 364-day revolving facility. The 364-day revolving credit facility expired on February 22, 2005.

At December 31, 2004, available borrowings under the Company's Senior Credit Facilities were $677,521, after reductions for outstanding letters of credit of $72,479. There were no outstanding borrowings under the Senior Credit Facilities at December 31, 2004.

On March 9, 2005, the Company entered into a new five-year senior revolving credit facility (the New Senior Credit Facility) maturing on March 9, 2010 and allowing for total aggregate borrowings of up to $1,000,000. At March 9, 2005, available borrowings under our new senior credit facility were approximately $906,000, after reductions for outstanding letters of credit of approximately $94,000. At the time the Company entered into this facility, the existing senior credit facility was terminated.

Borrowings under the New Senior Credit Facility bear interest, at L-3 Communications' option, at either: (i) a "base rate" equal to the higher of 0.50% per annum above the latest federal funds rate and the Bank of America "prime rate" (as defined) plus a spread ranging from 0.75% to 0.00% per annum depending on L-3 Communications' Debt Rating at the time of determination or (ii) a "LIBOR rate" (as defined) plus a spread ranging from 1.75% to 0.625% per annum depending on L-3 Communications' Debt Rating at the time of determination. The Debt Rating is based on the ratings as determined by Standard & Poor's Ratings Services, Moody's Investors Service, Inc. and Fitch Ratings of the Company's non-credit-enhanced, senior unsecured long-term debt.

L-3 Communications pays commitment fees calculated on the daily amounts of the available unused commitments under the New Senior Credit Facility at a rate ranging from 0.375% to 0.125% per annum, depending on L-3 Communications' Debt Rating in effect at the time of determination. L-3 Communications pays letter of credit fees calculated at a rate ranging from 1.3125% to 0.46875% per annum for performance and commercial letters of credit and 1.75% to 0.625% for financial letters of credit, in each case depending on L-3 Communications' Debt Rating at the time of determination.

On November 12, 2004, L-3 Communications sold $650,000 of 5 7/8% Senior Subordinated Notes due January 15, 2015 (2004 Notes) with interest payable semi-annually on January 15 and July 15 of each year commencing January 15, 2005. The net cash proceeds from this offering amounted to approximately $639,000 after deducting commissions and other offering expenses and were used to redeem the Company's 8% Senior Subordinated Notes due 2008 and to increase cash and cash equivalents. The 2004 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications. On or after January 15, 2010, the 2004 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, at redemption prices (plus accrued and unpaid interest) starting at 102.938% of the principal amount (plus accrued and unpaid interest) during the 12-month period beginning January 15, 2010 and declining annually to 100% of principal (plus accrued and unpaid interest) on January 15, 2013 and thereafter. Prior to January 15, 2008, L-3 Communications may redeem up to 35% of the 2004 Notes with the proceeds of certain equity offerings at a redemption price of 105.875% of the principal amount (plus accrued and unpaid interest).

On November 12, 2004, L-3 Communications initiated a full redemption of all of its outstanding $200,000 aggregate principal amount of 8% Senior Subordinated Notes due 2008 (December 1998 Notes). Such notes were redeemed by L-3 Communications at a redemption price of 102.667% of the principal amount thereof, plus accrued and unpaid interest. This redemption was completed on December 13, 2004. In connection with the early redemption of the December 1998 Notes, the Company recorded a pre-tax debt retirement charge of $4,969. The change was comprised of premiums of $5,334 and $2,751 to write

F-68

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

off the remaining balance of unamortized debt issue costs relating to these notes, partially offset by a gain of $3,116 to recognize the remaining balance of the deferred gain on the terminated interest rate swap agreements relating to these notes.

On December 22, 2003, L-3 Communications sold $400,000 of 6 1/8% Senior Subordinated Notes due January 15, 2014 (December 2003 Notes) at a discount of $7,372. The discount was recorded as a reduction to the principal amount of the notes and is amortized as interest expense over the term of the notes. The effective interest rate of the December 2003 Notes is 6.31% per annum. Interest is payable semi-annually on January 15 and July 15 of each year. The net cash proceeds from this offering amounted to approximately $390,000 after deducting the discounts, commissions and other offering expenses and were used to repay $275,000 of borrowings outstanding under the Senior Credit Facilities and to increase cash and cash equivalents. The December 2003 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications. On or after January 15, 2009, the December 2003 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, at redemption prices (plus accrued and unpaid interest) starting at 103.063% of the principal amount (plus accrued and unpaid interest) during the 12-month period beginning January 15, 2009 and declining annually to 100% of principal (plus accrued and unpaid interest) on January 15, 2012 and thereafter. Prior to January 15, 2007, L-3 Communications may redeem up to 35% of the December 2003 Notes with the proceeds of certain equity offerings at a redemption price of 106.125% of the principal amount (plus accrued and unpaid interest).

On May 21, 2003, L-3 Communications sold $400,000 of 6 1/8% Senior Subordinated Notes due July 15, 2013 (May 2003 Notes) at a discount of $1,840. The discount was recorded as a reduction to the principal amount of the notes and is amortized as interest expense over the term of the notes. The effective interest rate of the May 2003 Notes is 6.17% per annum. Interest is payable semi-annually on January 15 and July 15 of each year. The net cash proceeds from this offering amounted to approximately $391,000 after deducting discounts, commissions and other offering expenses and were used to redeem the 8½% Senior Subordinated Notes due 2008 and to increase cash and cash equivalents. The May 2003 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications. On or after July 15, 2008, the May 2003 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, at redemption prices (plus accrued and unpaid interest) starting at 103.063% of the principal amount (plus accrued and unpaid interest) during the 12-month period beginning July 15, 2008 and declining annually to 100% of principal (plus accrued and unpaid interest) on July 15, 2011 and thereafter. Prior to July 15, 2006, L-3 Communications may redeem up to 35% of the May 2003 Notes with the proceeds of certain equity offerings at a redemption price of 106.125% of the principal amount (plus accrued and unpaid interest).

On May 21, 2003, L-3 Communications initiated a full redemption of all its outstanding $180,000 aggregate principal amount of 8½% Senior Subordinated Notes due 2008 (May 1998 Notes). On June 20, 2003, L-3 Communications purchased and paid cash for all the outstanding May 1998 Notes, including accrued interest. During 2003, L-3 Communications recorded a pre-tax charge of $11,225, comprising of premiums and other transaction costs of $7,795 and $3,430 to write-off the unamortized balance of debt issue costs and the deferred loss on the terminated interest rate swap agreements related to the May 1998 Notes.

In June of 2002, L-3 Communications sold $750,000 of 7 5/8% Senior Subordinated Notes due June 15, 2012 (June 2002 Notes) with interest payable semi-annually on June 15 and December 15 of each year. The net proceeds from this offering and the concurrent sale of common stock by L-3 Holdings (see Note 10) were used to (i) repay $500,000 borrowed on March 8, 2002, under the Company's senior subordinated bridge loan facility, (ii) repay the indebtedness outstanding under the Company's Senior Credit Facilities,

F-69

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  — (continued)

(Dollars in thousands, except per share data)

(iii) repurchase and redeem the 10 3/8% Senior Subordinated Notes due 2007 and (iv) increase cash and cash equivalents. The June 2002 Notes are general unsecured obligations of L-3 Communications and are subordinated in right of payment to all existing and future senior debt of L-3 Communications. The June 2002 Notes are subject to redemption at any time, at the option of L-3 Communications, in whole or in part, on or after June 15, 2007 at redemption prices (plus accrued and unpaid interest) starting at 103.813% of the principal amount (plus accrued and unpaid interest) during the 12-month period beginning June 15, 2007 and declining annually to 100% of principal (plus accrued and unpaid interest) on June 15, 2010 and thereafter. Prior to June 15, 2005, L-3 Communications may redeem up to 35% of the June 2002 Notes with the proceeds of certain equity offerings at a redemption price of 107.625% of the principal amount (plus accrued and unpaid interest).

In June of 2002, L-3 Communications commenced a tender offer to purchase any and all of its $225,000 aggregate principal amount of 10 3/8% Senior Subordinated Notes due 2007. The tender offer expired on July 3, 2002. On June 25, 2002, L-3 Communications sent a notice of redemption for all of its 10 3/8% Senior Subordinated Notes due 2007 that remained outstanding after the expiration of the tender offer. Upon sending the notice, the remaining notes became due and payable at the redemption price as of July 25, 2002. During 2002, the Company recorded a pre-tax charge of $16,187, comprised of premiums, fees and other transaction costs of $12,469 and $3,718 to write-off the remaining balance of unamortized debt issue costs relating to these notes.

Depending on interest rate levels, the Company may enter into interest rate swap agreements to convert certain of its fixed interest rate debt obligations to variable interest rates, or terminate any existing interest rate swap agreements. The variable interest rate paid by the Company under the swap agreements is equal to (i) the variable rate basis, plus (ii) the variable rate spread. The table below presents the Company's interest rate swap agreement that is currently outstanding.

Inception Date

Fixed Rate Debt Obligation

Notional Amount

Variable Rate Basis

Average Variable Rate Spread

Interest Settlement Dates

March 2004

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

$

100,000

Six-Month USD LIBOR(1)

1.55

%

January 15 and July 15

(1)	The six-month USD LIBOR interest rate was 2.78% on December 31, 2004, 2.20% on September 30, 2004, 1.94% on June 30, 2004 and 1.16% on March 31, 2004.

F-70

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

The table below presents the Company's terminated interest rate swap agreements activity through December 31, 2004.

																				Cash Proceeds Received at Termination(1)												December 31, 2004
Inception Date				Termination Date				Fixed Rate Debt Obligation				Notional Amount				Average Variable Rate Paid(2)				Interest Expense Reduction(3)				Deferred Gain (Loss)(4)				Total				Cumulative Recognized Deferred Gain (Loss)(5)				Balance of Unamortized Deferred Gain (Loss)(6)
April 2004				September 2004				$400,000 of 6 1/8% Senior Subordinated Notes due 2014				$	100,000				2.9	%		$	542			$	(542	)		$	—			$	(15	)		$	(527	)
March 2004				September 2004				$400,000 of 6 1/8% Senior Subordinated Notes due 2014				$	100,000				3.6	%			415				(415	)			—				(11	)			(404	)
July 2003				September 2003				$400,000 of 6 1/8% Senior Subordinated Notes due 2013				$	400,000				2.1	%			2,687				8,017				10,704				1,024				6,993
March 2003				June 2003				$750,000 of 7 5/8% Senior Subordinated Notes due 2012				$	200,000				4.4	%			1,578				6,727				8,305				1,152				5,575
January 2003				March 2003				$750,000 of 7 5/8% Senior Subordinated Notes due 2012				$	200,000				4.0	%			1,202				5,238				6,440				1,015				4,223
June 2002				September 2002				$750,000 of 7 5/8% Senior Subordinated Notes due 2012				$	200,000				4.1	%			1,762				12,173				13,935				2,821				9,352
November 2001				August 2002				$180,000 of 8½% Senior Subordinated Notes due 2008				$	180,000				5.3	%			1,186				(559	)			627				(559	)			—
July 2001				June 2002				$200,000 of 8% Senior Subordinated Notes due 2008				$	200,000				3.9	%			3,446				5,229				8,675				5,229				—
																				$	12,818			$	35,868			$	48,686			$	10,656			$	25,212

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

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

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

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

(5)	Represents the cumulative amount of deferred gain (loss) recognized as a reduction (increase) to interest expense through December 31, 2004.

(6)	The current portion of unamortized deferred gains at December 31, 2004, aggregating $3,284, is included in other current liabilities. The remaining $21,928 is included in other liabilities.

F-71

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

L-3 Holdings

On October 5, 2004, L-3 Holdings announced a full redemption of all the $420,000 of its 4.00% Senior Subordinated Convertible Contingent Debt Securities (CODES) due 2011, which expired on Thursday, October 21, 2004. On October 21, 2004, holders of $419,785 of the principal amount of CODES exercised their conversion rights and converted such CODES into 7,800,797 shares of L-3 Holdings common stock. The remaining $215 of the CODES were redeemed for cash on October 25, 2004, at a redemption price of 102.0% of the principal amount, plus accrued and unpaid interest (including contingent interest) to October 25, 2004. As a result of the conversions and redemptions, L-3's principal amount of long-term debt decreased by $418,219 and shareholders' equity increased by $430,431, including the transfer of the related deferred tax liability of $21,398 and unamortized debt issue costs of $8,960 to additional paid-in-capital.

On December 22, 2003, L-3 Holdings announced a full redemption of $300,000 of its 5.25% Convertible Senior Subordinated Notes due 2009 (Convertible Notes), which expired on January 9, 2004. At December 31, 2003, holders of approximately $1,630 of the Convertible Notes had exercised their conversion rights and converted such notes into 40,000 shares of L-3 Holdings common stock. On January 9, 2004, holders of $298,183 of the Convertible Notes exercised their conversion rights and converted such notes into 7,317,327 shares of L-3 Holdings common stock. The remaining $187 of Convertible Notes were redeemed on January 12, 2004 for cash. As a result of these conversions and redemptions, L-3's principal amount of long-term debt decreased by $298,370 and shareholders' equity increased by $292,319 in January 2004 compared to December 31, 2003.

Covenants

The New Senior Credit Facilities and Senior Subordinated Notes indentures contain financial and other restrictive covenants that limit, among other things, the ability of the Company to borrow additional funds, incur liens, make investments, merge or consolidate, dispose of assets, or pay dividends. The Company is in compliance with those covenants in all material respects. The Company's New Senior Credit Facility contains covenants that require that (i) the Company's Consolidated Leverage Ratio be less than or equal to 4.0 to 1.0, (ii) the Company's Consolidated Senior Leverage Ratio be less than or equal to 3.0 to 1.0 and (iii) the Company's Consolidated Interest Coverage Ratio be greater than or equal to 3.0 to 1.0. Calculations of the Consolidated Leverage Ratio, Consolidated Senior Leverage Ratio and Consolidated Interest Coverage Ratio are to take into account acquisitions on a pro forma basis as if they had occurred at the beginning of the applicable period.

The Consolidated Leverage Ratio is defined as the ratio of Consolidated Funded Indebtedness, minus the lesser of actual unrestricted domestic cash balances in excess of $25,000 and $250,000, to Consolidated EBITDA. Consolidated Funded Indebtedness is equal to the sum of (1) outstanding indebtedness for borrowed money or for preferred stock accounted for as indebtedness (which is referred to under the New Senior Credit Facility as "disqualified preferred stock"), (2) the deferred purchase price of property or services, (3) capitalized lease obligations and (4) outstanding indebtedness of L-3 Holdings guaranteed by L-3 Communications or its subsidiaries. Consolidated EBITDA is equal to consolidated net income of L-3 Communications (excluding (A) impairment losses incurred on goodwill and other intangible assets or on debt and equity investments, (B) gains or losses incurred on the retirement of debt, (C) extraordinary gains and losses, (D) gains and losses in connection with asset dispositions, and (E) non-cash gains or losses on discontinued operations) for the applicable period, plus consolidated interest expense (including consolidated interest expense of L-3 Holdings for indebtedness guaranteed by L-3 Communications and its subsidiaries), income taxes, depreciation and amortization expense and non-cash stock-based compensation expenses.

The Consolidated Senior Leverage Ratio is defined as the ratio of Consolidated Funded Indebtedness, minus subordinated debt of L-3 Communications and indebtedness of L-3 Holdings that is

F-72

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

guaranteed by L-3 Communications on a subordinated basis, to Consolidated EBITDA. The Consolidated Interest Coverage Ratio is defined as the ratio of Consolidated EBITDA to cash interest expense of L-3 Communications and its subsidiaries plus cash interest expense of L-3 Holdings with respect to indebtedness guaranteed by L-3 Communications or any of its subsidiaries.

In addition, the Senior Subordinated Notes indentures contain covenants that restrict the ability of L-3 Communications to incur indebtedness and issue capital stock that matures or is redeemable 91 days or less after the maturity date of such series of notes, and the ability of its restricted subsidiaries to incur indebtedness or issue preferred stock, unless the Company's Fixed Charge Coverage Ratio would have been at least 2.0 to 1.0 on a pro forma basis. The covenants are subject to several exceptions, including an exception for indebtedness under credit facilities up to a specified amount. The Fixed Charge Coverage Ratio is defined as the ratio of Consolidated Cash Flow to Fixed Charges of L-3 Communications and its restricted subsidiaries. Consolidated Cash Flow is equal to the consolidated net income of L-3 Communications, plus extraordinary losses, net losses realized upon an asset sale, income taxes of L-3 Communications and its restricted subsidiaries, consolidated interest expense of L-3 Communications and its restricted subsidiaries (whether or not capitalized), depreciation and amortization expense of L-3 Communications and its restricted subsidiaries, and other non-cash expenses of L-3 Communications and its restricted subsidiaries, minus non-cash items not in the ordinary course of business that increased consolidated net income. Fixed Charges are equal to consolidated interest expense of the Company and its restricted subsidiaries (whether or not capitalized), third-party interest expense guaranteed or secured by the Company and its restricted subsidiaries and preferred stock dividends of the Company and its restricted subsidiaries (other than dividends payable in capital stock of L-3 Communications), grossed up for taxes. Calculations of the Fixed Charge Coverage Ratio are to take into account incurrence, assumption or redemption of indebtedness and acquisitions on a pro forma basis as if they had occurred at the beginning of the applicable period and are to exclude Consolidated Cash Flow from discontinued operations and businesses disposed of and related Fixed Charges under non-continuing obligations.

The New Senior Credit Facility limits the ability of L-3 Communications to pay dividends to and make investments in L-3 Holdings. However, the New Senior Credit Facility permits L-3 Communications to:

	•	fund payments of interest on indebtedness of L-3 Holdings and to fund payments of dividends on disqualified preferred stock issued by L-3 Holdings, so long as (1) any such indebtedness or disqualified preferred stock is guaranteed by L-3 Communications and (2) the proceeds received by L-3 Holdings from the issuance of such indebtedness or disqualified preferred stock have been invested by L-3 Holdings in L-3 Communications;

	•	fund payments and prepayments of principal of indebtedness of L-3 Holdings and to fund optional and mandatory redemptions of disqualified preferred stock issued by L-3 Holdings, so long as (1) any such indebtedness or disqualified preferred stock is guaranteed by L-3 Communications and (2) the amount of such fundings does not exceed the aggregate amount of investments made by L-3 Holdings in L-3 Communications with the proceeds from any issuance of indebtedness or disqualified preferred stock by L-3 Holdings after March 9, 2005 that is guaranteed by L-3 Communications;

	•	pay regularly scheduled dividends on disqualified preferred stock issued by L-3 Communications;

	•	redeem disqualified preferred stock issued by L-3 Communications so long as the amount of such redemptions does not exceed the aggregate proceeds received by L-3 Communications from the issuance of disqualified preferred stock;

	•	pay other dividends on and make other redemptions of its equity interests (including for the benefit of L-3 Holdings) and make other investments in L-3 Holdings, so long as no default or

F-73

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

		event of default has occurred and is continuing, up to an aggregate amount of $1,000,000, increased (or decreased) quarterly by an amount equal to 50% of the consolidated net income (or deficit) of L-3 Communications for the quarter, plus (1) 100% of the proceeds from any issuance of capital stock (other than disqualified preferred stock) by L-3 Holdings after March 9, 2005 if those proceeds were invested in L-3 Communications, plus (2) 100% of the proceeds from any issuance of indebtedness or disqualified preferred stock by L-3 Holdings after March 9, 2005 if those proceeds were invested in L-3 Communications and the indebtedness or disqualified preferred stock is not guaranteed by L-3 Communications, plus (3) 100% of the proceeds of any issuances of capital stock (other than disqualified preferred stock) by L-3 Communications after March 9, 2005, minus (4) the aggregate amount of subordinated debt of L-3 Communications prepaid after March 9, 2005 (other than in connection with a refinancing) in excess of the aggregate proceeds received from the issuance of subordinate debt by L-3 Communications after March 9, 2005 (other than in connection with a refinancing).

The New Senior Credit Facility contains cross default provisions that are triggered when a payment default occurs or certain other defaults occur that would allow the acceleration of indebtedness, guarantee obligations or certain other agreements of L-3 Communications or its subsidiaries in an aggregate amount of at least $40,000 and those defaults (other than payment defaults and defaults that have resulted in acceleration) have not been cured after 10 days. The Senior Subordinated Notes indentures contain cross acceleration provisions that are triggered when holders of the indebtedness of L-3 Holdings, L-3 Communications or their restricted subsidiaries (or the payment of which is guaranteed by such entities) accelerate at least $10,000 in aggregate principal amount of those obligations.

In addition, the Senior Subordinated Notes indentures contain provisions that limit the ability of L-3 Communications to pay dividends to L-3 Holdings and make investments in L-3 Holdings, subject to exceptions. The indentures permit L-3 Communications to make such restricted payments so long as it would be able to incur at least one dollar of additional indebtedness under the Fixed Charge Coverage Ratio test described above and meets other conditions. Assuming the New Senior Credit Facility had been in effect at December 31, 2004, the restricted payments provisions therein would have been more restrictive as of such date than the other conditions contained in the Senior Subordinated Notes indentures.

Subordination and Guarantees

The borrowings under the New Senior Credit Facility are guaranteed by L-3 Holdings and by substantially all of the material wholly-owned domestic subsidiaries of L-3 Communications on a senior basis. The payment of principal and premium, if any, and interest on the Senior Subordinated Notes are unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally, by substantially all of L-3 Communications' restricted subsidiaries other than its foreign subsidiaries. The guarantees of the Senior Subordinated Notes rank pari passu with one another and are junior to the guarantees of the New Senior Credit Facility.

In the event that the long-term debt rating of L-3 Communications is reduced below BBB–, or the equivalent, by two of the three rating agencies, Standard & Poor's Ratings Services, Moody's Investors Service, Inc. or Fitch Ratings, L-3 Holdings will be required, within 45 business days, to pledge 100% of the capital stock of L-3 Communications, and L-3 Communications and each subsidiary guarantor will be required to pledge 100% of the capital stock of each of their material wholly-owned domestic subsidiaries and 65% of their material wholly-owned foreign subsidiaries, in favor of the lenders under the New Senior Credit Facility.

F-74

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

9.    Financial Instruments

Fair Value of Financial Instruments.    At December 31, 2004 and 2003, the Company's financial instruments consisted primarily of cash and cash equivalents, billed receivables, notes receivable, equity securities, trade accounts payable, customer advances, Senior Credit Facilities, Senior Subordinated Notes, Convertible Notes, CODES, foreign currency forward contracts, interest rate swap agreements and embedded derivatives related to the issuance of the CODES. The carrying amounts of cash and cash equivalents, billed receivables, trade accounts payable, Senior Credit Facilities, and customer advances are representative of their respective fair values because of the short-term maturities or expected settlement dates of these instruments. The Company's investments in nonreadily marketable securities are stated at estimated fair value, which is generally equal to historical cost, except for those that haveexperienced other-than-temporary impairments. The Senior Subordinated Notes are registered, unlisted public debt which are traded in the over-the-counter market and their fair values are based on quoted trading activity. The fair values of the Convertible Notes and CODES are based on quoted prices for the same or similar issues. The fair values of foreign currency forward contracts were estimated based on exchange rates at December 31, 2004 and 2003. The fair values of the embedded derivatives were estimated by discounting expected cash flows using quoted market interest rates. The carrying amounts and estimated fair values of the Company's financial instruments are presented in the table below.

				December 31,
				2004								2003
				Carrying Amount				Estimated Fair Value				Carrying Amount				Estimated Fair Value
Notes receivable				$	2,700			$	2,700			$	1,200			$	1,200
Investments in equity securities accounted for using the cost method					1,528				1,528				3,033				3,033
Senior Subordinated Notes					2,189,806				2,291,750				1,740,923				1,775,375
Convertible Notes					—				—				298,370				375,946
CODES					—				—				418,007				460,950
Foreign currency forward contracts					(2,121	)			(2,121	)			1,153				1,153
Embedded derivatives					—				—				(2,666	)			(2,666	)

Interest Rate Risk Management.    The Company has entered into interest rate swap agreements on certain of its Senior Subordinated Notes to take advantage of variable interest rates, which are lower than the fixed rates on those notes. These swap agreements exchanged the fixed interest rate for a variable interest rate on a notional amount equal to either a portion or the entire principal amount of the related notes, were denominated in U.S. dollars and have designated maturities which occurred on the interest payment dates of the related Senior Subordinated Notes. Cash payments received from or paid to the counterparties on the interest rate swap agreements are the difference between the amount that the fixed interest rates are greater than or less than the variable contract rates on the designated maturity dates, multiplied by the notional amounts underlying the respective interest rate swap agreements. Cash payments or receipts between the Company and counterparties were recorded as a component of interest expense. The Company manages exposure to counterparty credit risk by entering into the interest rate swap agreements only with major financial institutions that are expected to fully perform under the terms of such agreements. The notional amounts are used to measure the volume of these agreements and do not represent exposure to credit loss. See Note 8 for a table of our interest rate swap agreement that was outstanding as of December 31, 2004.

Foreign Currency Exchange Risk Management.    The Company conducts its operations outside the U.S. in functional currencies other than the U.S. dollar. Additionally, some of the Company's U.S. and

F-75

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

foreign operations have contracts with customers which are denominated in currencies other than the functional currencies of those operations. To mitigate the risk associated with certain of these contracts denominated in foreign currency, the Company has entered into foreign currency forward contracts and put options. The Company's activities involving foreign currency forward contracts and put options are designed to hedge the foreign denominated cash paid or received, primarily Canadian dollar, Euro, British Pound and U.S. dollar. The Company manages exposure to counterparty credit risk by entering into foreign currency forward contracts only with major financial institutions that are expected to fully perform under the terms of such contracts. The notional amounts are used to measure the volume of these contracts and do not represent exposure to foreign currency losses.

There were no foreign currency put option contracts outstanding at December 31, 2004 and 2003. Information with respect to foreign currency forward contracts is presented in the table below.

				December 31,
				2004								2003
				Notional Amount				Unrealized Loss				Notional Amount				Unrealized Gain
Foreign currency forward contracts				$	126,256			$	(2,121	)		$	71,390			$	1,153

10.    L-3 Holdings Common Stock

In 2004, L-3 Holdings' Board of Directors declared four quarterly cash dividends each for $0.10 per share, which aggregated $43,418.

On February 10, 2005, L-3 Holdings' Board of Directors increased its regular quarterly cash dividend by 25% to $0.125 per share, payable on March 15, 2005, to shareholders of record on February 22, 2005.

On June 28, 2002, L-3 Holdings sold 14,000,000 shares of its common stock in a public offering for $56.60 per share. Upon closing, L-3 Holdings received net proceeds after deducting discounts, commissions and other offering expenses of $766,780. The net proceeds from this sale, which were contributed to L-3 Communications, and the concurrent sale of senior subordinated notes by L-3 Communications (See Note 8) were used to (i) repay $500,000 borrowed on March 8, 2002, under the Company's senior subordinated bridge loan facility, (ii) repay the indebtedness outstanding under the Company's Senior Credit Facilities, (iii) repurchase and redeem the 10 3/8% Senior Subordinated Notes due 2007 and (iv) increase cash and cash equivalents.

On April 23, 2002, the Company announced that its Board of Directors authorized a two-for-one stock split on all shares of L-3 Holdings common stock. The stock split entitled all shareholders of record at the close of business on May 6, 2002 to receive one additional share of L-3 Holdings common stock for every share held on that date. The additional shares were distributed to shareholders in the form of a stock dividend on May 20, 2002. Upon completion of the stock split, L-3 Holdings had approximately 80 million shares of common stock outstanding. All of L-3 Holdings' historical share and earnings per share (EPS) data have been restated to give effect to the stock split.

On April 23, 2002, the Company's shareholders approved an increase in the number of authorized shares of L-3 Holdings common stock from 100,000,000 to 300,000,000 and an increase in the number of authorized shares of L-3 Holdings preferred stock from 25,000,000 to 50,000,000.

On June 29, 2001, the Company established the L-3 Communications Corporation Employee Stock Purchase Plan (ESPP) and registered 3,000,000 shares of L-3 Holdings common stock, which may be purchased by employees of L-3 Communications Corporation, its U.S. subsidiaries and certain of its foreign subsidiaries through payroll deductions. In general, an eligible employee who participates in the ESPP may purchase L-3 Holdings' common stock at a fifteen percent discount. The Company received $32,931, $26,384 and $17,478 of employee contributions for the ESPP in 2004, 2003 and 2002, respectively.

F-76

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

These contributions were recorded as a component of shareholders' equity in the consolidated balance sheet. L-3 Holdings issued 705,178 shares in 2004, 603,599 shares in 2003 and 352,054 shares in 2002 of its common stock to the trustee of the ESPP. In January 2005, the Company issued 322,764 shares of L-3 Holdings' common stock to the trustee of the ESPP relating to contributions received during the period July 1, 2004 to December 31, 2004.

11.    Accumulated Other Comprehensive Loss

The changes in the Company's accumulated other comprehensive balances for each of the three years ended December 31, 2004 are presented in the table below.

				Foreign currency translation adjustments				Unrealized losses on securities				Unrealized gains (losses) on hedging instruments				Minimum pension liability adjustments				Accumulated other comprehensive Income (loss)
Balance at January 1, 2002				$	(2,852	)		$	(246	)		$	(163	)		$	(20,409	)		$	(23,670	)
Period change					65				—				(114	)			(45,580	)			(45,629	)
Balance at December 31, 2002					(2,787	)			(246	)			(277	)			(65,989	)			(69,299	)
Period change					(245	)			—				896				(4,189	)			(3,538	)
Balance at December 31, 2003					(3,032	)			(246	)			619				(70,178	)			(72,837	)
Period change					7,098				246				(1,911	)			(5,290	)			143
Balance at December 31, 2004				$	4,066			$	—			$	(1,292	)		$	(75,468	)		$	(72,694	)

F-77

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

12.    L-3 Holdings Earnings Per Share

A reconciliation of basic and diluted earnings per share (EPS) is presented in the table below.

				Year Ended December 31,
				2004				2003				2002
Basic:
Income before cumulative effect of a change in accounting principle				$	381,880			$	277,640			$	202,467
Cumulative effect of a change in accounting principle, net of income taxes					—				—				(24,370	)
Net income				$	381,880			$	277,640			$	178,097
Weighted average common shares outstanding					107,838				96,022				86,943
Basic earnings per share before cumulative effect of a change in accounting principle				$	3.54			$	2.89			$	2.33
Basic earnings per share				$	3.54			$	2.89			$	2.05
Diluted:
Income before cumulative effect of a change in accounting principle				$	381,880			$	277,640			$	202,467
After-tax interest expense savings on the assumed conversion of convertible debt					9,147				20,797				21,315
Income before cumulative effect of a change in accounting principle, including assumed conversion of convertible debt					391,027				298,437				223,782
Cumulative effect of a change in accounting principle, net of income taxes					—				—				(24,370	)
Net income, including assumed conversion of convertible debt				$	391,027			$	298,437			$	199,412
Common and potential common shares:
Weighted average common shares outstanding					107,838				96,022				86,943
Assumed exercise of stock options					9,836				7,573				7,750
Assumed purchase of common shares for treasury					(6,731	)			(4,888	)			(4,642	)
Assumed conversion of convertible debt					6,429				15,162				15,165
Common and potential common shares					117,372				113,869				105,216
Diluted earnings per share before cumulative effect of a change in accounting principle				$	3.33			$	2.62			$	2.13
Diluted earnings per share				$	3.33			$	2.62			$	1.90

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

F-78

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

fourth quarter. The impact of applying EITF 04-8 to L-3 Holdings CODES resulted in non-cash reductions to the Company's reported diluted EPS of $0.09 from $2.71 to $2.62 for the year ended December 31, 2003, and $0.03 from $1.93 to $1.90 for the year ended December 31, 2002. See Note 8 above for a discussion of the conversion and redemption of the CODES, which occurred during October 2004.

13.    Income Taxes

Income before income taxes and cumulative effect of a change in accounting principle is summarized in the table below.

				2004				2003				2002
Domestic				$	558,998			$	404,340			$	295,405
Foreign					37,690				29,473				18,618
Income before income taxes and cumulative effect of a change in accounting principle				$	596,688			$	433,813			$	314,023

The components of the Company's current and deferred portions of the provision for income taxes are presented in the table below.

				Year Ended December 31,
				2004				2003				2002
Current income tax provision:
Federal				$	64,065			$	36,251			$	26,759
State and local					11,436				11,966				1,254
Foreign					15,898				13,209				4,451
Subtotal					91,399				61,426				32,464
Deferred income tax provision (benefit):
Federal					108,621				87,343				63,593
State and local					16,567				9,301				11,568
Foreign					(1,779	)			(1,897	)			3,931
Subtotal					123,409				94,747				79,092
Total provision for income taxes				$	214,808			$	156,173			$	111,556

A reconciliation of the statutory federal income tax rate to the effective income tax rate of the Company is presented in the table below.

				Year Ended December 31,
				2004				2003				2002
Statutory federal income tax rate					35.0	%			35.0	%			35.0	%
State and local income taxes, net of federal income tax benefit					3.2				3.4				3.8
Foreign income taxes					(0.7	)			0.7				0.2
Foreign sales corporation and extraterritorial income exclusion benefits					(1.2	)			(1.5	)			(1.9	)
Research and experimentation and other tax credits					(1.1	)			(1.9	)			(2.1	)
Other, net					0.8				0.3				0.5
Effective income tax rate					36.0	%			36.0	%			35.5	%

F-79

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

The provision for income taxes excludes current tax benefits related to compensation expense deductions for income tax purposes arising from the exercise of stock options by the Company's employees, which were credited directly to shareholders' equity of $16,657 for 2004, $8,457 for 2003 and $13,303 for 2002. These tax benefits reduced current income taxes payable.

The significant components of the Company's net deferred tax assets and liabilities are presented in the table below.

				December 31,
				2004				2003
Deferred tax assets:
Inventoried costs				$	36,936			$	29,036
Compensation and benefits					49,887				36,173
Pension and postretirement benefits					143,145				139,308
Property, plant and equipment					—				6,347
Income recognition on contracts in process					16,683				48,621
Loss carryforwards					3,783				17,184
Tax credit carryforwards					18,529				36,066
Other					43,816				25,094
Total deferred tax assets					312,779				337,829
Deferred tax liabilities:
Goodwill and other intangible assets					153,563				84,476
Property, plant and equipment					22,012				—
Other					18,128				86
Total deferred tax liabilities					193,703				84,562
Net deferred tax assets				$	119,076			$	253,267

The following table presents the classification of the Company's net deferred tax assets.

				December 31,
				2004				2003
Current deferred tax assets				$	127,066			$	152,785
Long-term deferred tax assets (liabilities)					(7,990	)			100,482
Total net deferred tax assets				$	119,076			$	253,267

At December 31, 2004, the Company's loss carryforwards included $390 of federal net operating loss carryforwards that are subject to limitations and will expire, if unused, between 2011 and 2021, and $58,433 of state net operating losses that will expire, if unused, between 2005 and 2021. The Company also has $18,529 of tax credit carryforwards primarily related to U.S. federal and state research and experimentation credits and state investment tax credits that will expire, if unused, primarily beginning in 2012. The Company believes that it will generate sufficient taxable income, of the appropriate character, to utilize these loss and credit carryforwards before they expire.

The Company is subject to ongoing tax examinations in various jurisdictions, which may result in challenges to tax positions taken and, accordingly, the Company may record adjustments to provisions based on the probable outcomes of such matters. However, the Company believes that the resolution of these matters, after considering amounts accrued, will not have a material effect on its financial position, results of operations or cash flows.

F-80

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

14.    Stock Options

In April 1999, the Company adopted the 1999 Long Term Performance Plan (1999 Plan). Awards under the 1999 Plan may be granted to any employee or to any other individual who provides services to or on behalf of the Company or any of its subsidiaries, subject to the discretion of the Compensation Committee of the Board of Directors. Awards under the 1999 Plan may be in the form of stock options, stock appreciation rights (SARs), restricted stock and other incentive awards, consistent with the 1999 Plan. In April 1997, the Company adopted the 1997 Stock Option Plan (1997 Plan). The 1997 Plan authorizes the Compensation Committee of the Board of Directors to grant stock options to key employees of the Company and its subsidiaries. Awards under both plans are in the form of L-3 Holdings common stock. At December 31, 2004, the number of shares of L-3 Holdings' common stock authorized for grant under the 1999 Plan and 1997 Plan was 23,411,630, of which 6,308,021 shares were available for awards under these plans. The price at which stock options may be granted at shall not be less than the fair market value of L-3 Holdings' common stock on the date of grant. In general, options expire after 10 years and are exercisable ratably over a three year period on the annual anniversary of the date of grant. All of the awards under the 1999 Plan and 1997 Plan granted to employees are non-qualified stock options for U.S. income tax regulations.

The Company awards shares of restricted stock of L-3 Holdings to employees under the 1999 Plan. The Company awarded 80,831 shares on January 1, 2004, 88,245 shares on January 1, 2003, and 54,958 shares on January 1, 2002. The aggregate fair values of the restricted stock awards on their grant dates were $4,151 in 2004, $3,963 in 2003 and $2,473 in 2002. The restricted stock awards granted on January 1, 2004, January 1, 2003 and January 1, 2002 vest three years after the date of grant. Compensation expense charged against pre-tax earnings for these restricted stock awards was $3,325 in 2004, $2,975 in 2003 and $2,134 in 2002. Shareholders' Equity has been reduced by $3,932 at December 31, 2004 for unearned compensation on these restricted stock awards.

The table below presents the Company's stock option activity over the past three years under the 1999 Plan and 1997 Plan.

				Number of Options				Weighted Average Exercise Price
				(in thousands)
Outstanding at January 1, 2002 (4,216 exercisable)					7,980			$	16.68
Options granted					2,169				52.02
Options exercised					(970	)			17.99
Options cancelled					(155	)			35.62
Outstanding at January 1, 2003 (5,216 exercisable)					9,024				24.71
Options granted					2,301				40.92
Options exercised					(835	)			17.24
Options cancelled					(406	)			39.95
Outstanding at January 1, 2004 (5,919 exercisable)					10,084				28.41
Options granted					1,665				63.98
Options exercised					(1,532	)			34.07
Options cancelled					(303	)			45.37
Outstanding at December 31, 2004 (6,311 exercisable)					9,914			$	32.99

The table below summarizes information about the Company's stock options outstanding at December 31, 2004.

F-81

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

				Outstanding												Exercisable
Range of Exercise Prices				Number of Options				Weighted Average Exercise Price				Weighted Average Remaining Contractual Life (Years)				Number of Options				Weighted Average Exercise Price
				(in thousands)												(in thousands)
$3.24					3,147			$	3.24				2.5				3,147			$	3.24
$11.00					78				11.00				3.3				78				11.00
$16.38 – $23.13					433				19.69				4.6				433				19.69
$29.00 – $39.70					1,936				35.65				7.2				1,301				35.65
$45.11 – $60.84					3,470				52.04				8.2				1,352				51.00
$68.16					850				68.16				9.9				—				—
Total					9,914			$	32.99				6.2				6,311			$	21.38

The weighted average fair values of awarded stock options, calculated at their dates of grant, were $19.63 for 2004, $13.22 for 2003 and $18.75 for 2002. In accordance with APB 25, no compensation expense was recognized on the stock option awards because they were granted at exercise prices equal to the stock price of L-3 Holdings common stock on the grant date.

For purposes of estimating the fair value provisions of SFAS 123, the Company estimates the fair value of its stock options at the date of grant using the Black-Scholes option-pricing valuation model. The weighted average assumptions used in the valuation models are presented in the table below.

				Year Ended December 31,
				2004				2003				2002
Expected holding period (in years)					4.2				4.0				4.0
Expected volatility					35.6	%			38.3	%			39.2	%
Expected dividend yield					0.7	%			0.2	%			—
Risk-free interest rate					3.1	%			2.5	%			4.0	%

15.    Commitments and Contingencies

Operating Leases.    The Company leases certain facilities and equipment under agreements expiring at various dates through 2028. The following table presents future minimum payments under non-cancelable operating leases with initial or remaining terms in excess of one year at December 31, 2004.

				Real Estate				Equipment				Total
2005				$	99,812			$	15,860			$	115,672
2006					65,277				11,311				76,588
2007					57,618				7,872				65,490
2008					49,210				5,459				54,669
2009					44,386				5,114				49,500
Thereafter					165,491				52,131				217,622
Total				$	481,794			$	97,747			$	579,541

Real estate lease commitments have been reduced by minimum sublease rental income of $8,106 due in the future under non-cancelable subleases. Leases covering major items of real estate and equipment contain renewal and/or purchase options. Rent expense, net of sublease income was $79,401 for 2004, $71,779 for 2003 and $65,277 for 2002.

F-82

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

On December 31, 2002, the Company entered into two real estate lease agreements, as lessee, with a third-party lessor, which expire on December 31, 2005 and are accounted for as operating leases. On or before the lease expiration date, the Company can exercise options under the lease agreements to either renew the leases, purchase both properties for $28,000, or sell both properties on behalf of the lessor (the "Sale Option"). If the Company elects the Sale Option, the Company must pay the lessor a residual guarantee amount of $22,673 for both properties, on or before the lease expiration date, and at the time both properties are sold, the Company must pay the lessor a supplemental rent equal to the gross sales proceeds in excess of the residual guarantee amount not to exceed $5,327. For these real estate lease agreements, if the gross sales proceeds are less than the sum of the residual guarantee amount and the supplemental rent, the Company is required to pay a supplemental rent to the extent the reduction in the fair value of the properties are demonstrated by an independent appraisal to have been caused by the Company's failure to properly maintain the properties. The aggregate residual guarantee amounts of $22,673 are included in the future minimum payments under non-cancelable real estate operating lease payments relating to the expiration dates of such leases.

The Company has a contract to provide and operate for the U.S. Air Force (USAF) a full-service training facility, including simulator systems adjacent to a USAF base in Oklahoma. The Company acted as the construction agent on behalf of the third-party owner-lessors for procurement and construction for the simulator systems, which were completed and delivered in August 2002. On December 31, 2002, the Company, as lessee, entered into an operating lease agreement for a term of 15 years for one of the simulator systems with the owner-lessor. At the end of the lease term, the Company may elect to purchase the simulator system at fair market value, which can be no less than $2,552 and no greater than $6,422. If the Company does not elect to purchase the simulator system then on the date of expiration, the Company shall pay to the lessor, as additional rent, $2,552 and return the simulator system to the lessor. The aggregate remaining non-cancelable rental payments under this operating lease are $29,333, including the additional rent of $2,552. On February 27, 2003, the Company, as lessee, entered into an operating lease agreement for a term of 15 years for the remaining simulation systems with the owner-lessor. At the end of the lease term, the Company may elect to purchase the simulator systems at fair market value, which can be no less than $4,146 and no greater than $14,544. If the Company does not elect to purchase the simulator systems, then on the date of expiration, the Company shall return the simulator systems to the lessor. The aggregate remaining non-cancelable rental payments under this operating lease are $47,662.

U.S. Government Procurement Regulations.    A substantial majority of the Company's revenues are generated from providing products and services under legally binding agreements, or contracts with U.S. Government customers. The U.S. Government contracts are subject to extensive legal and regulatory requirements, and, from time to time, agencies of the U.S. Government investigate whether such contracts were and are being conducted in accordance with these requirements. The Company is currently cooperating with the U.S. Government on several investigations, none of which the Company anticipates will have a material adverse effect on its consolidated financial position, results of operations or cash flows. Under U.S. Government procurement regulations, an indictment of the Company by a federal grand jury could result in the Company being suspended for a period of time from eligibility for awards of new government contracts. A conviction could result in debarment from contracting with the federal government for a specified term. In addition, all of the Company's U.S. Government contracts are subject to audit and various pricing and cost controls, and include standard provisions for termination for the convenience of the U.S. Government. U.S. Government contracts and related orders are subject to cancellation if funds for contracts become unavailable or for termination for the convenience of the U.S. Government. Foreign government contracts generally include comparable provisions relating to termination for the convenience of the relevant foreign government.

F-83

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

Environmental Matters.    Management continually assesses the Company's obligations with respect to applicable environmental protection laws. While it is difficult to determine the timing and ultimate cost to be incurred by the Company in order to comply with these laws, based upon available internal and external assessments, with respect to those environmental loss contingencies of which management is aware, the Company believes that, after considering amounts accrued there are no environmental loss contingencies that, individually or in the aggregate, would be material to the Company's consolidated results of operations. The Company accrues for these contingencies when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated.

In connection with the Integrated Systems business acquisition, the Company assumed responsibility for implementing certain corrective actions, required under federal law to remediate the Greenville, Texas site location, and to pay a portion of those remediation costs. The hazardous substances requiring remediation have been substantially characterized, and the remediation system has been partially implemented. The Company has estimated that its share of the remediation cost will not exceed $2,500, and will be incurred over a period of 25 years. The Company believes that it has established adequate reserves for these costs.

Litigation Matters.    Additionally, the Company has been periodically subject to litigation, claims or assessments and various contingent liabilities incidental to its businesses or assumed in connection with certain business aquisitions. With respect to those investigative actions, items of litigation, claims or assessments of which it is aware, management of the Company believes that the likelihood of loss is less than probable that after taking into account certain provisions for these matters, the ultimate resolution of any such investigative actions, items of litigation, claims or assessments will not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company. However, as discussed below, the Company is a party to a number of material litigations, for which an adverse determination could have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

L-3 Integrated Systems and its predecessors have been involved in a litigation with Kalitta Air arising from a contract to convert Boeing 747 aircraft from passenger configuration to cargo freighters. The lawsuit was brought in the northern district of California on January 31, 1997. The aircraft were modified using Supplemental Type Certificates (STCs) issued in 1988 by the Federal Aviation Administration (FAA) to Hayes International, Inc. (Hayes/Pemco) as a subcontractor to GATX/Airlog Company (GATX). Between 1988 and 1990, Hayes/Pemco modified five aircraft as a subcontractor to GATX using the STCs. Between 1990 and 1994, Chrysler Technologies Airborne Systems, Inc. (CTAS), a predecessor to L-3 Integrated Systems, performed as a subcontractor to GATX and modified an additional five aircraft using the STCs. Two of the aircraft modified by CTAS were owned by American International Airways, the predecessor to Kalitta Air. In 1996, the FAA determined that the engineering data provided by Hayes/Pemco supporting the STCs was inadequate and issued an Airworthiness Directive that effectively grounded the ten modified aircraft. The Kalitta Air aircraft have not been in revenue service since that date. The matter was tried in January 2001 against GATX and CTAS with the jury finding fault on the part of GATX but rendering a unanimous defense verdict in favor of CTAS. Certain co-defendants had settled prior to trial. The U.S. Ninth Circuit Court of Appeals reversed and remanded the trial court's summary judgment rulings in favor of CTAS regarding a negligence claim by Kalitta Air, which asserts that CTAS as an expert in aircraft modification should have known that the STCs were deficient, and excluding certain evidence at trial. In preparation for retrial, Kalitta Air submitted to us an expert report on damages that calculated Kalitta Air's damages at either $232,000 or $602,000, depending on different factual assumptions. The Company has retained experts whose reports indicate that, even in the event of an adverse jury finding on the liability issues at trial, Kalitta Air has already recovered amounts from the other parties to the initial suit that the Company believes more than fully compensated Kalitta Air for any damages it incurred. CTAS' insurance carrier has accepted defense of the matter with a reservation of its

F-84

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

right to dispute its obligations under the applicable insurance policy in the event of an adverse jury finding. The trial began on January 18, 2005, and ended on March 2, 2005 with a deadlocked jury and mistrial. At trial, Kalitta Air claimed damages of $235,000. Although no date has been set for any further proceedings, a second retrial may be necessary in this matter. The Company believes that it has meritorious defenses and intends to continue to vigorously defend this matter. However, litigation is inherently uncertain and it is possible that an adverse decision could be rendered, which could have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

On November 18, 2002, the Company initiated a proceeding against OSI Systems, Inc. (OSI) in the United States District Court sitting in the Southern District of New York seeking, among other things, a declaratory judgment that the Company had fulfilled all of its obligations under a letter of intent with OSI (the "OSI Letter of Intent"). Under the OSI Letter of Intent, the Company was to negotiate definitive agreements with OSI for the sale of certain businesses the Company acquired from PerkinElmer, Inc. on June 14, 2002. On February 7, 2003, OSI filed an answer and counterclaims alleging, among other things, that the Company defrauded OSI, breached obligations of fiduciary duty to OSI and breached its obligations under the OSI Letter of Intent. OSI seeks damages in excess of $100,000, not including punitive damages. Under the OSI Letter of Intent, the Company proposed selling to OSI the conventional detection business and the ARGUS business that the Company acquired from PerkinElmer, Inc. Negotiations with OSI lasted for almost one year and ultimately broke down over issues regarding, among other things, intellectual property, product-line definitions, allocation of employees and due diligence. Discovery on the matter is essentially complete. The Company believes that the claims asserted by OSI in its suit are without merit and intends to vigorously defend against the OSI claims.

L-3 Communications Vertex Aerospace LLC (formerly known as Vertex Aerospace LLC and acquired by the Company on December 1, 2003) (L-3 Vertex) is named as a defendant in one remaining wrongful death lawsuit in the United States District Court, Western District of North Carolina arising from the crash of Air Midwest Flight 5481 at Charlotte-Douglas International Airport in Charlotte, North Carolina on January 8, 2003. The crash resulted in the deaths of nineteen passengers and two crewmembers. Each of the lawsuits alleges contributing factors, including that the accident was caused by the improper maintenance of the aircraft by L-3 Vertex, and seeks to recover compensatory and punitive damages. Twenty claims resulting from this incident have previously settled. The National Transportation Safety Board (NTSB) investigated the cause of the crash and has concluded that the crash was caused by the incorrect rigging of the elevator control system compounded by the airplane's center of gravity, which was substantially aft of the certified limit, with several other contributing factors. L-3 Vertex believes that it has meritorious defenses to the pending lawsuit, and intends to defend the case vigorously. The actions have been tendered to L-3 Vertex's insurance carrier, who has accepted the defense of each action served upon L-3 Vertex to date. L-3 Vertex was also indemnified by Air Midwest for losses L-3 Vertex incurred arising out of its provision of maintenance services to Air Midwest. Based on the availability of insurance and the indemnification from Air Midwest, the Company does not believe it will have a material liability in this matter.

On July 1, 2004, lawsuits were filed on behalf of the estates of 31 Russian children in the state courts of Washington, Arizona, California, Florida, New York and New Jersey against Honeywell, Honeywell TCAS, the Company, ACSS, Thales USA and Thales France. The suits are based on facts arising out of the crash over southern Germany of a Bashkirian Airways Tupelov TU 154M aircraft and a DHL Boeing 757 cargo aircraft. On-board the Tupelov aircraft were 12 crew members and 57 passengers, including 45 children. The Boeing aircraft carried a crew of 3. Both aircrafts were equipped with Honeywell/ACSS Model 2000, Change 7 Traffic Collision and Avoidance Systems. Sensing the other aircraft, the on-board DHL TCAS instructed the DHL pilot to climb, and the Tupelov on-board TCAS instructed the Tupelov pilot to descend. However, the Swiss air traffic controller ordered the Tupelov pilot to climb. The Tupelov

F-85

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

pilot disregarded the on-board TCAS and put the Tupelov aircraft into a climb striking the DHL aircraft in midair at approximately 35,000 feet. All crew and passengers of both planes were lost. Investigations by the NTSB after the crash revealed that both TCAS units were performing as designed. The suits allege negligence and strict product liability based upon the design of the units and the training provided to resolve conflicting commands and seek compensatory damages. The Company's insurers have accepted defense of the matter and retained counsel. All parties subsequently agreed to litigate this matter in the Federal Court in New Jersey and to dismiss the actions brought in the state courts. Based on the defenses available to the Company and ACSS and the insurance coverage, the Company does not expect to incur a material liability in this matter.

16.    Pensions and Other Employee Benefits

The Company maintains multiple pension plans, both contributory and non-contributory, covering employees at certain locations. Eligibility for participation in these plans varies and benefits are generally based on the participant's compensation and/or years of service. The Company's funding policy is generally to contribute in accordance with cost accounting standards that affect government contractors, subject to the Internal Revenue Code and regulations thereon. Plan assets are invested primarily in listed stocks, mutual funds, bonds, U.S. Government obligations and U.S. Government agency obligations.

The Company also provides postretirement medical and life insurance benefits for retired employees and dependents at certain locations. Participants are eligible for these benefits when they retire from active service and meet the eligibility requirements for the Company's pension plans. These benefits are funded primarily on a pay-as-you-go basis with the retiree generally paying a portion of the cost through contributions, deductibles and coinsurance provisions.

F-86

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

The following table summarizes the aggregate balance sheet impact, as well as the benefit obligations, assets and funded status for all of the Company's pension and postretirement benefit plans. The Company uses a November 30 measurement date to calculate its end of year (December 31) benefit obligations, fair value of plan assets and annual net periodic benefit cost.

				Pension Plans								Postretirement Benefit Plans
				2004				2003				2004				2003
Change in benefit obligation:
Benefit obligation at the beginning of the year				$	902,132			$	713,925			$	141,153			$	129,406
Service cost					54,957				45,901				4,336				3,803
Interest cost					55,127				49,789				8,066				7,781
Participants' contributions					1,075				246				1,663				1,006
Amendments					4,851				9,657				(3,842	)			(6,796	)
Actuarial loss					62,183				76,863				965				6,972
Actuarial gain due to medicare subsidy					—				—				(4,734	)			—
Obligations assumed in connection with business acquisitions					92,845				25,754				880				2,272
Settlement					(16,938	)			—				—				(107	)
Foreign currency exchange rate changes					6,102				8,452				1,382				2,965
Benefits paid					(30,757	)			(28,455	)			(7,799	)			(6,149	)
Benefit obligation at end of the year				$	1,131,577			$	902,132			$	142,070			$	141,153
Change in plan assets:
Fair value of plan assets at beginning of the year				$	561,753			$	431,771			$	8,739			$	—
Actual return on plan assets					56,838				64,043				890				121
Assets acquired in connection with business acquisitions					96,144				24,122				—				—
Employer contributions					60,928				60,846				13,652				13,761
Participants' contributions					1,075				246				1,663				1,006
Settlement					(16,938	)			—				—				—
Foreign currency exchange rate changes					5,543				9,180				—				—
Benefits paid					(30,757	)			(28,455	)			(7,799	)			(6,149	)
Fair value of plan assets at end of the year				$	734,586			$	561,753			$	17,145			$	8,739
Funded status of the plans				$	(396,991	)		$	(340,379	)		$	(124,925	)		$	(132,414	)
Unrecognized actuarial loss					267,635				224,641				3,995				7,706
Unrecognized prior service cost					13,458				9,631				(14,370	)			(13,347	)
Net amount recognized				$	(115,898	)		$	(106,107	)		$	(135,300	)		$	(138,055	)
Amounts recognized in the balance sheets consist of:
Accrued benefit liability				$	(273,789	)		$	(233,397	)		$	(135,300	)		$	(138,055	)
Prepaid benefit cost (included in Other Assets)					19,890				12,432				—				—
Intangible asset (included in Other Assets)					14,080				—				—				—
Accumulated other comprehensive loss					123,921				114,858				—				—
Net amount recognized				$	(115,898	)		$	(106,107	)		$	(135,300	)		$	(138,055	)

F-87

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

The aggregate accumulated benefit obligation (ABO) for all of the Company's pension plans combined was $909,202 at year end 2004 and $721,123 at year end 2003. The table below presents the aggregate ABO and fair value of plan assets for those pension plans with ABO in excess of the fair value of plan assets at year end 2004 and 2003.

				2004				2003
Accumulated benefit obligation				$	797,796			$	701,855
Fair value of plan assets					585,631				534,338

The table below summarizes the weighted average assumptions used to determine the benefit obligations for the Company's pension and postretirement plans disclosed at December 31, 2004 and 2003.

				Pension Plans								Postretirement Benefit Plans
				2004				2003				2004				2003
Benefit obligations:
Discount rate					6.00	%			6.25	%			6.00	%			6.25	%
Rate of compensation increase					4.50	%			4.50	%			4.50	%			4.50	%

The following table summarizes the components of net periodic benefit cost for the Company's pension and postretirement benefit plans for the years ended December 31, 2004, 2003 and 2002.

				Pension Plans												Postretirement Benefit Plans
				2004				2003				2002				2004				2003				2002
Components of net periodic benefit cost:
Service cost				$	54,957			$	45,901			$	35,825			$	4,336			$	3,803			$	3,777
Interest cost					55,127				49,789				43,108				8,066				7,781				7,779
Amortization of prior service cost					1,123				625				312				(2,864	)			(2,326	)			(1,701	)
Expected return on plan assets					(51,242	)			(39,357	)			(40,663	)			(1,138	)			(155	)			—
Recognized actuarial (gain) loss					11,620				13,591				3,246				255				(743	)			(530	)
Recognition due to settlement					3,238				—				62				(38	)			(155	)			—
Net periodic benefit cost				$	74,823			$	70,549			$	41,890			$	8,617			$	8,205			$	9,325

The table below summarizes the weighted average assumptions used to determine the net periodic benefit cost for the years ended December 31, 2004, 2003 and 2002.

				Pension Plans												Postretirement Benefit Plans
				2004				2003				2002				2004				2003				2002
Net periodic benefit cost:
Discount rate					6.25	%			6.75	%			7.25	%			6.25	%			6.75	%			7.25	%
Expected long-term return on plan assets					9.00	%			9.00	%			9.50	%			9.00	%			9.00	%			n.a.
Rate of compensation increase					4.50	%			4.50	%			4.50	%			4.50	%			4.50	%			4.50	%

The expected long-term return on plan asset assumption represents the average rate that the Company expects to earn over the long-term on the assets of the Company's benefit plans, including those from dividends, interest income and capital appreciation. The assumption has been determined based on expectations regarding future rates of return for the plans' investment portfolio, with consideration given to the allocation of investments by asset class and historical rates of return for each individual asset class.

F-88

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

The annual increase in cost of benefits (health care cost trend rate) is assumed to be an average of 9.75% in 2005 and is assumed to gradually decrease to a rate of 5.0% in 2011 and thereafter. Assumed health care cost trend rates have a significant effect on amounts reported for postretirement medical benefit plans. A one percentage point decrease in the assumed health care cost trend rates would have the effect of decreasing the aggregate service and interest cost by $568 and the postretirement medical obligations by $5,769. A one percentage point increase in the assumed health care cost trend rate would have the effect of increasing the aggregate service and interest cost by $702 and the postretirement medical obligations by $6,344.

Plan Assets.    The Company's Benefit Plan Committee (Committee) has the responsibility to formulate the investment policies and strategies for the plans' assets. These policies and strategies are: (1) invest assets of the plans in a manner consistent with the fiduciary standards of ERISA; (2) preserve the plans' assets; (3) maintain sufficient liquidity to fund benefit payments and pay expenses; (4) evaluate the performance of investment managers; and (5) achieve, on average, a minimum total rate of return equal to the established benchmarks for each asset category.

The Committee retains a professional investment consultant to advise and help ensure that the above policies and strategies are met. The Committee does not involve itself with the day to day operations and selection process of individual securities and investments, and, accordingly, has retained the professional services of investment management organizations to fulfill those tasks. The investment management organizations have investment discretion over the assets placed under their management. The Committee provides each investment manager with specific investment guidelines relevant to its asset class.

The Committee has established the allowable range that plans' assets may be invested in for each major asset category and regularly monitors each to make sure that the actual investment allocation remains within guidelines. The table below presents the range for each major category of the plans' assets at December 31, 2004.

Asset Category				Range
Domestic equity				40%–60%
International equity				5%–15%
Fixed income				25%–35%
Real estate securities				5%–15%
Cash and cash equivalents				0%–20%

The following table presents the Company's pension plan and postretirement benefit plan weighted-average asset allocations at year-end 2004 and 2003, by asset category.

Asset Category				2004				2003
Domestic equity					46	%			44	%
International equity					14				7
Fixed income securities					23				25
Real estate securities					7				7
Other, primarily cash and cash equivalents					10				17
Total					100	%			100	%

Contributions.    For 2005, the Company expects to contribute cash of approximately $70,000 to its pension plans and $13,000 to its postretirement benefit plans.

In connection with the Company's acquisition in 1997 of the ten business units from Lockheed Martin and the formation of the Company, the Company assumed certain defined benefit pension plan liabilities for present and former employees and retirees of certain businesses, which were transferred from

F-89

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

Lockheed Martin to the Company. Lockheed Martin also has provided the Pension Benefit Guaranty Corporation (PBGC) with commitments to assume sponsorship or other forms of financial support under certain circumstances with respect to the Company's pension plans for Communication Systems West and Aviation Recorders (the "Subject Plans"). Upon the occurrence of certain events, Lockheed Martin, at its option, has the right to decide whether to cause the Company to transfer sponsorship of any or all of the Subject Plans to Lockheed Martin, even if the PBGC has not sought to terminate the Subject Plans. If Lockheed Martin did assume sponsorship of these plans, it would be primarily liable for the costs associated with funding the Subject Plans or any costs associated with the termination of the Subject Plans but the Company would be required to reimburse Lockheed Martin for these costs. To date, there has been no impact on pension expense and funding requirements resulting from this arrangement. However, should Lockheed Martin assume sponsorship of the Subject Plans or if these plans were terminated, the impact of any increased pension expenses or funding requirements could be material to the Company. For the year ended December 31, 2004, the Company contributed $492 to the Subject Plans. The Company has performed its obligations under the letter agreement with Lockheed Martin and the Lockheed Martin Commitment and has not received any communications from the PBGC concerning actions which the PBGC contemplates taking in respect of the Subject Plans.

Estimated Future Benefit Payments.    The following table presents expected pension and postretirement benefit payments and expected postretirement subsidies due to the Medicare Act described in Note 2, which reflect expected future service, as appropriate.

								Postretirement Benefits
				Pension Benefits				Benefit Payments				Subsidy Receipts
2005				$	35,246			$	7,446			$	—
2006					38,812				8,042				58
2007					42,122				8,533				81
2008					46,211				8,902				113
2009					50,313				9,461				138
Years 2010-2014					325,733				52,885				1,179

Employee Savings Plans.    Under its various employee savings plans, the Company matches the contributions of participating employees up to a designated level. The extent of the match, vesting terms and the form of the matching contributions vary among the plans. Under these plans, the Company's matching contributions in L-3 Holdings' common stock and cash were $61,184 for 2004, $43,262 for 2003 and $36,120 for 2002.

F-90

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

17.    Supplemental Cash Flow Information

				Year Ended December 31,
				2004				2003				2002
Interest paid				$	138,213			$	119,940			$	109,301
Income tax payments					41,112				24,373				8,004
Income tax refunds					4,088				7,075				5,877
Noncash transactions:
Common stock issued for business acquisition consideration					6,982				4,969				10,607
Conversion of 4% senior subordinated convertible contingent debt securities (CODES) to L-3 Holdings' common stock					419,785				—				—
Conversion of 5¼% convertible senior subordinated notes to L-3 Holdings' common stock					298,181				1,630				—

18.    Segment Information

As discussed in Note 1 above, during the third quarter of 2005, the Company restated the prior period reportable segment data to conform to the current period presentation, and renamed three of its four reportable segments. The Company's four reportable segments are: (1) C³ISR, (2) Government Services, (3) Aircraft Modernization and Maintenance and (4) Specialized Products, which are described in Note 1. The Company evaluates the performance of its operating segments and reportable segments based on their sales and operating income. All corporate expenses are allocated to the Company's divisions using an allocation methodology prescribed by U.S. Government regulations for government contractors. Accordingly, all costs and expenses are included in the Company's measure of segment profitability. The table below and amounts in Notes 3 and 5 relating to goodwill and identifiable intangible assets have been adjusted, as appropriate, for the reclassifications.

F-91

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

				C3ISR				Government Services				Aircraft Modernization and Maintenance				Specialized Products				Corporate				Elimination of Intersegment Sales				Consolidated Total
2004
Sales				$	1,667,804			$	1,081,119			$	1,913,539			$	2,313,147			$	—			$	(78,612	)		$	6,896,997
Operating income					218,008				124,119				186,103				220,389				—				—				748,619
Total assets					1,280,961				844,323				1,646,287				3,118,033				891,161				—				7,780,765
Capital expenditures					25,911				3,483				10,025				40,679				409				—				80,507
Depreciation and amortization					32,241				6,251				21,914				58,543				—				—				118,949
2003
Sales				$	1,440,596			$	842,440			$	733,744			$	2,117,276			$	—			$	(72,462	)		$	5,061,594
Operating income					172,903				100,714				100,661				206,743				—				—				581,021
Total assets					1,201,187				656,525				1,444,956				2,685,623				517,031				—				6,505,322
Capital expenditures					25,982				2,980				6,070				47,519				323				—				82,874
Depreciation and amortization					29,169				6,226				11,494				48,534				—				—				95,423
2002
Sales				$	1,054,297			$	624,887			$	461,855			$	1,896,675			$	—			$	(26,485	)		$	4,011,229
Operating income					103,449				75,344				62,551				212,635				—				—				453,979
Total assets					1,149,016				596,932				576,427				2,381,438				538,495				—				5,242,308
Capital expenditures					19,350				2,608				7,429				32,497				174				—				62,058
Depreciation and amortization					23,692				4,873				10,684				36,611				—				—				75,860

Corporate assets not allocated to the reportable segments primarily include cash and cash equivalents, corporate office fixed assets, deferred income tax assets and deferred debt issuance costs. In addition, substantially all of the Company's assets are located in North America.

The Company's sales attributable to U.S. customers and foreign customers, based on location of the customer, is summarized in the table below.

				Year Ended December 31,
				2004				2003				2002
U.S.				$	5,993,746			$	4,208,273			$	3,436,219
Foreign:
Canada					234,910				127,936				63,447
United Kingdom					112,802				158,836				115,910
Australia					71,926				51,949				62,103
Germany					56,258				60,763				61,024
Other					427,355				453,837				272,526
Total foreign					903,251				853,321				575,010
Consolidated				$	6,896,997			$	5,061,594			$	4,011,229

Sales to principal customers are summarized in the table below.

F-92

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

				Year Ended December 31,
				2004				2003				2002
U.S. Government agencies				$	5,538,852			$	3,843,025			$	3,107,271
Allied foreign governments					581,300				506,508				395,062
Commercial export					321,951				346,813				179,948
Other (principally U.S. commercial)					454,894				365,248				328,948
Consolidated				$	6,896,997			$	5,061,594			$	4,011,229

The Company's sales by product and services are summarized in the table below.

				Year Ended December 31,
				2004				2003				2002
Products:
ISR systems				$	826,708			$	714,622			$	403,179
Aircraft modernization					820,009				654,093				517,309
Communication systems for intelligence collection and imagery processing					469,175				401,383				303,650
Naval power, control and sonar systems					429,737				418,019				280,564
Microwave components and telemetry and space products					395,409				377,768				271,664
Secure communications products					392,533				339,166				300,200
Aviation products					381,217				288,926				216,134
Precision guidance and munitions					338,084				348,513				373,452
Security and detection systems					236,039				253,052				428,984
Training devices and motion simulators					202,219				160,718				144,310
Sensors and imaging products					152,162				103,287				7,233
Subtotal products					4,643,292				4,059,547				3,246,679
Services:
Aircraft maintenance and logistics support services					1,101,019				79,651				—
Government and support services					822,097				734,732				571,692
Training services					459,180				302,622				256,935
Subtotal services					2,382,296				1,117,005				828,627
Intercompany eliminations					(128,591	)			(114,958	)			(64,077	)
Consolidated				$	6,896,997			$	5,061,594			$	4,011,229

F-93

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

19.    Unaudited Quarterly Financial Data

Unaudited summarized financial data by quarter for the years ended December 31, 2004 and 2003 is presented in the table below.

				March 31				June 30				September 30				December 31
2004
Sales				$	1,521,644			$	1,679,985			$	1,784,132			$	1,911,236
Operating income					151,602				178,118				199,360				219,539
Net income					72,008				88,071				102,490				119,311
Basic EPS					0.69				0.83				0.96				1.05
Diluted EPS					0.65				0.78				0.89				1.01

				March 31				June 30				September 30				December 31
2003
Sales				$	1,089,047			$	1,226,881			$	1,264,611			$	1,481,055
Operating income					108,837				128,746				152,372				191,066
Net income					49,737				53,379				76,107				98,417
Basic EPS					0.52				0.56				0.79				1.02
Diluted EPS					0.49				0.52				0.71				0.90

20.    Financial Information of L-3 Communications and Its Subsidiaries

Total shareholders' equity for L-3 Communications equals that of L-3 Holdings, but the components, common stock and additional paid-in capital, are different. The table below presents information regarding the balances and changes in common stock and additional paid-in capital of L-3 Communications for each of the three years ended December 31, 2004.

				L-3 Communications Common Stock
				Shares Issued				Par Value				Additional Paid-in Capital				Total
Balance at December 31, 2001					100			$	—			$	939,037			$	939,037
Contributions from L-3 Holdings													855,939				855,939
Balance at December 31, 2002					100				—				1,794,976				1,794,976
Contributions from L-3 Holdings					—				—				98,512				98,512
Balance at December 31, 2003					100				—				1,893,488				1,893,488
Contributions from L-3 Holdings					—				—				886,970				886,970
Balance at December 31, 2004					100			$	—			$	2,780,458			$	2,780,458

The net proceeds received by L-3 Holdings from the sale of its common stock, exercise of L-3 Holdings employee stock options and L-3 Holdings common stock contributed to the Company's savings plans are contributed to L-3 Communications. L-3 Holding common stock issued to holders of the Convertible Notes and CODES who converted such notes were also contributed to L-3 Communications. See Notes 2 and 8.

The debt of L-3 Communications, including the Senior Subordinated Notes and borrowings under amounts drawn against the Senior Credit Facilities are guaranteed, on a joint and several, full and unconditional basis, by certain of its wholly-owned domestic subsidiaries (the "Guarantor Subsidiaries"). See Note 8. The foreign subsidiaries and certain domestic subsidiaries of L-3 Communications (the

F-94

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

"Non-Guarantor Subsidiaries") do not guarantee the debt of L-3 Communications. None of the debt of L-3 Communications has been issued by its subsidiaries. There are no restrictions on the payment of dividends from the Guarantor Subsidiaries to L-3 Communications.

In lieu of providing separate audited financial statements for the Guarantor Subsidiaries, the Company has included the accompanying condensed combining financial statements based on Rule 3-10 of SEC Regulation S-X. The Company does not believe that separate financial statements of the Guarantor Subsidiaries are material to users of the financial statements.

The following condensed combining financial information present the results of operations, financial position and cash flows of (i) L-3 Holdings, excluding L-3 Communications, (ii) L-3 Communications, excluding its consolidated subsidiaries (the "Parent"), (iii) the Guarantor Subsidiaries, (iv) the Non-Guarantor Subsidiaries and (v) the eliminations to arrive at the information for L-3 Communications on a consolidated basis.

F-95

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Balance Sheets:
At December 31, 2004:
Current assets:
Cash and cash equivalents				$	—			$	643,173			$	(45,220	)		$	55,466			$	—			$	653,419
Contracts in process					—				591,018				1,111,253				276,756				—				1,979,027
Other current assets					—				127,465				39,390				9,023				—				175,878
Total current assets					—				1,361,656				1,105,423				341,245				—				2,808,324
Goodwill					—				885,242				2,709,731				459,841				—				4,054,814
Other assets					—				307,929				492,264				117,434				—				917,627
Investment in and amounts due from consolidated subsidiaries					3,799,761				4,259,200				831,062				40,000				(8,930,023	)			—
Total assets				$	3,799,761			$	6,814,027			$	5,138,480			$	958,520			$	(8,930,023	)		$	7,780,765
Current liabilities				$	—			$	495,190			$	489,500			$	191,150			$	—			$	1,175,840
Other long-term liabilities					—				329,270				182,679				25,873				—				537,822
Long-term debt					—				2,189,806				—				—				—				2,189,806
Minority interests					—				—				—				77,536				—				77,536
Shareholders' equity					3,799,761				3,799,761				4,466,301				663,961				(8,930,023	)			3,799,761
Total liabilities and shareholders' equity				$	3,799,761			$	6,814,027			$	5,138,480			$	958,520			$	(8,930,023	)		$	7,780,765
At December 31, 2003:
Current assets:
Cash and cash equivalents				$	—			$	155,375			$	(41,291	)		$	20,792			$	—			$	134,876
Contracts in process					—				528,056				817,547				269,745				—				1,615,348
Other current assets					—				159,194				21,928				6,356				—				187,478
Total current assets					—				842,625				798,184				296,893				—				1,937,702
Goodwill					—				805,388				2,425,591				421,457				—				3,652,436
Other assets					—				356,346				446,403				112,435				—				915,184
Investment in and amounts due from consolidated subsidiaries					3,290,873				3,708,989				596,696				21,052				(7,617,610	)			—
Total assets				$	3,290,873			$	5,713,348			$	4,266,874			$	851,837			$	(7,617,610	)		$	6,505,322
Current liabilities				$	—			$	396,868			$	370,468			$	156,876			$	—			$	924,212
Other long-term liabilities					—				284,684				167,275				21,144				—				473,103
Long-term debt					716,377				2,457,300				—				—				(716,377	)			2,457,300
Minority interests					—				—				—				76,211				—				76,211
Shareholders' equity					2,574,496				2,574,496				3,729,131				597,606				(6,901,233	)			2,574,496
Total liabilities and shareholders' equity				$	3,290,873			$	5,713,348			$	4,266,874			$	851,837			$	(7,617,610	)		$	6,505,322

F-96

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Statements of Operations:
For the year ended December 31, 2004:
Sales				$	—			$	2,038,704			$	4,051,825			$	834,169			$	(27,701	)		$	6,896,997
Costs and expenses					—				1,782,128				3,651,414				742,537				(27,701	)			6,148,378
Operating income					—				256,576				400,411				91,632				—				748,619
Other expense (income), net					—				(20,108	)			805				(670	)			12,721				(7,252	)
Interest expense					15,020				143,926				635				13,508				(27,741	)			145,348
Minority interests in net income of consolidated subsidiaries					—				—				—				8,862				—				8,862
Loss on retirement of debt					—				4,973				—				—				—				4,973
Provision (benefit) for income taxes					(5,407	)			46,002				143,630				25,176				5,407				214,808
Equity in net income of consolidated subsidiaries					391,493				300,097				—				—				(691,590	)			—
Net income				$	381,880			$	381,880			$	255,341			$	44,756			$	(681,977	)		$	381,880
For the year ended December 31, 2003:
Sales				$	—			$	1,918,288			$	2,715,558			$	445,485			$	(17,737	)		$	5,061,594
Costs and expenses					—				1,635,998				2,464,534				397,778				(17,737	)			4,480,573
Operating income					—				282,290				251,024				47,707				—				581,021
Other expense (income), net					—				(9,575	)			92				784				8,484				(215	)
Interest expense					34,058				131,734				501				8,932				(42,542	)			132,683
Minority interests in net income of consolidated subsidiaries					—				—				—				3,515				—				3,515
Loss on retirement of debt					—				11,225				—				—				—				11,225
Provision (benefit) for income taxes					(12,261	)			53,607				90,155				12,411				12,261				156,173
Equity in net income of consolidated subsidiaries					299,437				182,341				—				—				(481,778	)			—
Net income				$	277,640			$	277,640			$	160,276			$	22,065			$	(459,981	)		$	277,640
For the year ended December 31, 2002:
Sales				$	—			$	1,875,389			$	1,895,410			$	260,799			$	(20,369	)		$	4,011,229
Costs and expenses					—				1,622,200				1,736,233				219,186				(20,369	)			3,557,250
Operating income					—				253,189				159,177				41,613				—				453,979
Other expense (income), net					—				(11,202	)			286				(262	)			6,257				(4,921	)
Interest expense					35,499				120,774				1,622				6,353				(41,756	)			122,492
Minority interests in net income of consolidated subsidiaries					—				—				—				6,198				—				6,198
Loss on retirement of debt					—				16,187				—				—				—				16,187
Provision (benefit) for income taxes					(13,880	)			44,942				56,145				10,469				13,880				111,556
Cumulative effect of a change in accounting principle					—				(14,749	)			—				(9,621	)			—				(24,370	)
Equity in net income of consolidated subsidiaries					199,716				110,358				—				—				(310,074	)			—
Net income				$	178,097			$	178,097			$	101,124			$	9,234			$	(288,455	)		$	178,097

F-97

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
Condensed Combining Statements of Cash Flows:
For the year ended December 31, 2004:
Operating activities:
Net cash from operating activities				$	—			$	219,057			$	311,748			$	89,866			$	—			$	620,671
Investing activities:
Business acquisitions, net of cash acquired					—				(102,341	)			(303,550	)			(67,542	)			—				(473,433	)
Other investing activities					(164,220	)			(407,959	)			(38,651	)			(6,492	)			535,312				(82,010	)
Net cash used in investing activities					(164,220	)			(510,300	)			(342,201	)			(74,034	)			535,312				(555,443	)
Financing activities:
Proceeds from sale of senior subordinated notes					—				650,000				—				—				—				650,000
Redemption of senior subordinated notes					—				(205,751	)			—				—				—				(205,751	)
Other financing activities, net					164,220				334,792				26,524				18,842				(535,312	)			9,066
Net cash from financing activities					164,220				779,041				26,524				18,842				(535,312	)			453,315
Net increase (decrease) in cash					—				487,798				(3,929	)			34,674				—				518,543
Cash and cash equivalents, beginning of the period					—				155,375				(41,291	)			20,792				—				134,876
Cash and cash equivalents, end of the period				$	—			$	643,173			$	(45,220	)		$	55,466			$	—			$	653,419
For the year ended December 31, 2003:
Operating activities:
Net cash from (used in) operating activities				$	—			$	219,890			$	240,672			$	(4,499	)		$	—			$	456,063
Investing activities:
Business acquisitions, net of cash acquired					—				(53,626	)			(869,863	)			(90,950	)			—				(1,014,439	)
Other investing activities					(98,512	)			(1,000,542	)			(23,530	)			(10,359	)			1,059,325				(73,618	)
Net cash used in investing activities					(98,512	)			(1,054,168	)			(893,393	)			(101,309	)			1,059,325				(1,088,057	)
Financing activities:
Proceeds from sale of senior subordinated notes					—				790,788				—				—				—				790,788
Redemption of senior subordinated notes					—				(187,650	)			—				—								(187,650	)
Other financing activities, net					98,512				260,094				618,678				110,917				(1,059,325	)			28,876
Net cash from financing activities					98,512				863,232				618,678				110,917				(1,059,325	)			632,014
Net increase (decrease) in cash					—				28,954				(34,043	)			5,109				—				20
Cash and cash equivalents, beginning of the period					—				126,421				(7,248	)			15,683				—				134,856
Cash and cash equivalents, end of the period				$	—			$	155,375			$	(41,291	)		$	20,792			$	—			$	134,876

F-98

L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)

(Dollars in thousands, except per share data)

				L-3 Holdings				L-3 Communications (Parent)				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated L-3 Communications
For the year ended December 31, 2002:
Operating activities:
Net cash from operating activities				$	—			$	137,837			$	169,221			$	11,402			$	—			$	318,460
Investing activities:
Business acquisitions, net of cash acquired					—				(146,913	)			(1,499,891	)			(95,329	)			—				(1,742,133	)
Other investing activities					(855,939	)			(1,627,853	)			(27,130	)			(8,632	)			2,451,159				(68,395	)
Net cash used in investing activities					(855,939	)			(1,774,766	)			(1,527,021	)			(103,961	)			2,451,159				(1,810,528	)
Financing activities:
Proceeds from sale of senior subordinated notes					—				750,000				—				—				—				750,000
Redemption of senior subordinated notes					—				(237,468	)			—				—				—				(237,468	)
Proceeds from sale of L-3 Holdings' common stock, net					766,780				—				—				—				—				766,780
Other financing activities					89,159				930,608				1,354,964				63,018				(2,451,159	)			(13,410	)
Net cash from financing activities					855,939				1,443,140				1,354,964				63,018				(2,451,159	)			1,265,902
Net decrease in cash					—				(193,789	)			(2,836	)			(29,541	)			—				(226,166	)
Cash and cash equivalents, beginning of the period					—				320,210				(4,412	)			45,224				—				361,022
Cash and cash equivalents, end of the period				$	—			$	126,421			$	(7,248	)		$	15,683			$	—			$	134,856

F-99

THE TITAN CORPORATION

Unaudited Consolidated Financial Statements as of June 30, 2005 and December 31, 2004
and for the three and six months ended June 30, 2005 and 2004

F-100

THE TITAN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)

				Three months ended June 30,								Six months ended June 30,
				2005				2004				2005				2004
Revenues				$	620,333			$	514,932			$	1,179,326			$	968,954
Costs and expenses:
Cost of revenues					517,445				438,082				987,940				820,354
Selling, general and administrative					46,622				38,143				87,215				74,032
Research and development					4,271				4,695				7,861				8,113
Mergers, investigations and settlements cost (Notes 2 and 3)					74,260				34,423				80,078				52,002
Asset impairment charges (Note 4)					—				15,495				—				15,495
Total costs and expenses					642,598				530,838				1,163,094				969,996
Operating profit (loss)					(22,265	)			(15,906	)			16,232				(1,042	)
Interest expense					(10,363	)			(9,158	)			(20,335	)			(18,274	)
Interest income					243				240				532				403
Net gain on sale of investments (Note 9)					1,484				—				1,484				—
Net gain on sale of assets (Note 9)					—				—				—				563
Loss from continuing operations before income taxes					(30,901	)			(24,824	)			(2,087	)			(18,350	)
Income tax provision					14,795				68				25,456				2,911
Loss from continuing operations					(45,696	)			(24,892	)			(27,543	)			(21,261	)
Income (loss) from discontinued operations, net of tax (Note 7)					1,562				(41,660	)			2,421				(42,232	)
Net loss					(44,134	)			(66,552	)			(25,122	)			(63,493	)
Dividend requirements on preferred stock					—				—				—				(190	)
Net loss applicable to common stock				$	(44,134	)		$	(66,552	)		$	(25,122	)		$	(63,683	)
Basic earnings (loss) per share:
Loss from continuing operations				$	(0.54	)		$	(0.30	)		$	(0.32	)		$	(0.26	)
Income (loss) from discontinued operations, net of tax					0.02				(0.49	)			0.03				(0.50	)
Net loss				$	(0.52	)		$	(0.79	)		$	(0.30	)		$	(0.76	)
Weighted average shares					85,180				83,970				84,991				83,347
Diluted earnings (loss) per share:
Loss from continuing operations				$	(0.54	)		$	(0.30	)		$	(0.32	)		$	(0.26	)
Income (loss) from discontinued operations, net of tax					0.02				(0.49	)			0.03				(0.50	)
Net loss				$	(0.52	)		$	(0.79	)		$	(0.30	)		$	(0.76	)
Weighted average shares					85,180				83,970				84,991				83,347

The accompanying notes are an integral part of these consolidated financial statements.

F-101

THE TITAN CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars, except share and per share data)

				June 30, 2005				December 31, 2004
Assets				(Unaudited)
Current Assets:
Cash and cash equivalents				$	23,105			$	16,672
Accounts receivable — net					545,215				515,386
Inventories					24,874				21,336
Prepaid expenses and other					32,272				29,039
Deferred income taxes					69,270				95,390
Current assets of discontinued operations (Note 7)					3,389				1,665
Total current assets					698,125				679,488
Property and equipment — net					54,862				57,542
Goodwill					501,022				464,469
Intangible assets					21,834				19,819
Other assets — net					38,855				41,599
Deferred income taxes					49,935				52,647
Non-current assets of discontinued operations (Note 7)					17,924				26,469
Total assets				$	1,382,557			$	1,342,033
Liabilities and Stockholders' Equity
Current Liabilities:
Current portion of amounts outstanding under line of credit				$	3,500			$	3,500
Accounts payable					111,902				116,032
Current portion of long-term debt					36				500
Accrued compensation and benefits					112,007				98,368
Other accrued liabilities					156,641				115,168
Current liabilities of discontinued operations (Note 7)					8,201				20,995
Total current liabilities					392,287				354,563
Long-term portion of amounts outstanding under line of credit					383,269				352,750
Senior subordinated notes					200,000				200,000
Other long-term debt					469				491
Other non-current liabilities					48,364				52,831
Non-current liabilities of discontinued operations Note 7)					27,319				33,318
Commitments and contingencies (Note 10)
Stockholders' Equity:
Preferred stock, $1 par value, authorized 5,000,000 shares:
Series A junior participating, designated 1,000,000 authorized shares: None issued					—				—
Common stock, $.01 par value, authorized 200,000,000 shares: 85,731,246 and 84,779,939 shares issued and outstanding as of March 31, 2005 and March 31, 2004, respectively					857				848
Capital in excess of par value					693,764				684,934
Deferred compensation					(18	)			(53	)
Accumulated deficit					(361,740	)			(336,618	)
Treasury stock at cost: 323,258 shares					(2,014	)			(1,031	)
Total stockholders' equity					330,849				348,080
Total liabilities and stockholders' equity				$	1,382,557			$	1,342,033

The accompanying notes are an integral part of these consolidated financial statements.

F-102

THE TITAN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands of dollars)

				Six months ended June 30,
				2005				2004
Cash Flows from Operating Activities:
Loss from continuing operations				$	(27,543	)		$	(21,261	)
Adjustments to reconcile loss from continuing operations to net cash provided by (used for) operating activities, net of effects of net assets sold and businesses acquired:
Asset impairment charge (Note 4)					—				15,495
Provision for estimated Class Action Settlement (Note 2 and 10)					67,400				—
Net gain on investments					(1,483	)			—
Depreciation and amortization					7,993				7,784
Deferred income taxes and other					25,163				4,567
Deferred compensation					35				853
Changes in operating assets and liabilities, net of effects of net assets sold and businesses acquired:
Accounts receivable					(24,827	)			(57,160	)
Inventories					(3,538	)			1,409
Prepaid expenses and other assets					(6,330	)			(12,987	)
Accounts payable					(6,091	)			2,606
Accrued compensation and benefits					12,591				(5,047	)
Accrual for FCPA investigation settlement charge					(28,500	)			25,500
Other liabilities					1,165				2,321
Net cash provided by (used for) continuing operations					16,035				(35,920	)
Income (loss) from discontinued operations					2,421				(42,232	)
Asset impairment charges (Note 4)					—				43,183
Proceeds from divestiture of businesses (Note 7)					8,433				6,000
Changes in net assets and liabilities of discontinued operations					(14,619	)			(5,819	)
Net cash provided by (used for) discontinued operations					(3,765	)			1,132
Net cash provided by (used for) operating activities					12,270				(34,788	)
Cash Flows from Investing Activities:
Capital expenditures					(4,158	)			(16,776	)
Acquisition of business, net of cash acquired					(39,844	)			—
Proceeds from sale of investments and net assets					4,115				2,880
Earnout payment related to prior year acquisition					(658	)			(2,460	)
Other investments					(66	)			(1,243	)
Other					—				1,103
Net cash used for investing activities					(40,611	)			(16,496	)
Cash Flows from Financing Activities:
Additions to debt					30,519				49,125
Retirements and other payments of debt					(486	)			(241	)
Preferred stock redemption (Note 5)					—				(12,518	)
Proceeds from exercise of stock options and other					4,757				13,566
Dividends paid					—				(190	)
Other					(16	)			(220	)
Net cash provided by financing activities					34,774				49,522
Effect of exchange rate changes on cash					—				215
Net increase (decrease) in cash and cash equivalents					6,433				(1,547	)
Cash and cash equivalents at beginning of period					16,672				26,974
Cash and cash equivalents at end of period				$	23,105			$	25,427

The accompanying notes are an integral part of these consolidated financial statements.

F-103

THE TITAN CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands of dollars, except per share data)

				Cumulative Convertible Preferred Stock				Common Stock				Capital In Excess of Par Value				Deferred Compen- sation				Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)				Treasury Stock				Total
Six Months Ended June 30, 2005
Balances at December 31, 2004				$	—			$	848			$	684,934			$	(53	)		$	(336,618	)		$	—			$	(1,031	)		$	348,080
Exercise of stock options and other					—				6				5,734				—				—				—				(983	)			4,757
Amortization of deferred compensation					—				—				—				35				—				—				—				35
Shares issued under the employee stock purchase plan					—				3				3,096				—				—				—				—				3,099
Net loss					—				—				—				—				(25,122	)			—				—				(25,122	)
Balances at June 30, 2005				$	—			$	857			$	693,764			$	(18	)		$	(361,740	)		$	—			$	(2,014	)		$	330,849
Six Months Ended June 30, 2004
Balances at December 31, 2003				$	687			$	822			$	670,733			$	(1,584	)		$	(298,221	)		$	(215	)		$	(813	)		$	371,409
Exercise of stock options and other					—				21				13,673				—				—				—				(128	)			13,566
Redemption of preferred stock (Note 5)					(626	)			—				(11,892	)			—				—				—				—				(12,518	)
Conversion of preferred stock					(61	)			—				61				—				—				—				—				—
Amortization of deferred compensation					—				—				—				853				—				—				—				853
Foreign currency translation adjustment					—				—				—				—				—				215				—				215
Shares issued under the employee stock purchase plan					—				3				2,715				—				—				—				—				2,718
Dividends on preferred stock —Cumulative convertible, $.28 per share					—				—				(190	)			—				—				—				—				(190	)
Net loss					—				—				—				—				(63,493	)			—				—				(63,493	)
Balances at June 30, 2004				$	—			$	846			$	675,100			$	(731	)		$	(361,714	)		$	—			$	(941	)		$	312,560

The accompanying notes are an integral part of these consolidated financial statements.

F-104

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

Note (1)    Basis of Financial Statement Preparation

The accompanying consolidated financial information of The Titan Corporation and its subsidiaries (Titan or the Company) should be read in conjunction with Titan's Annual Report on Form 10-K to the Securities and Exchange Commission (SEC) for the year ended December 31, 2004. The accompanying financial information includes substantially all subsidiaries on a consolidated basis and all normal recurring adjustments which are considered necessary by the Company's management for a fair presentation of the financial position, results of operations and cash flows for the periods presented. However, these results are not necessarily indicative of results for a full fiscal year. Additionally, certain prior period amounts have been reclassified to conform to the current period presentation.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant Accounting Policies

Reclassifications.    Certain reclassifications have been made to the prior year presentation to conform to the 2005 presentation.

Stock-Based Compensation.    As allowed by Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation," Titan has elected to continue to apply the intrinsic value based method of accounting for stock options and has adopted the disclosure only provisions of the fair value method contained in SFAS No. 123. Compensation cost, if any, is measured as the excess of the quoted market price of Titan's stock on the date of grant over the exercise price of the grant. Had compensation cost for Titan stock-based compensation plans been determined based on the fair value method at the grant dates for awards under those plans, our results of operations would have been reduced to the pro forma amounts indicated below:

				Three months ended June 30,								Six months ended June 30,
				2005				2004				2005				2004
Net loss, as reported				$	(44,134	)		$	(66,552	)		$	(25,122	)		$	(63,493	)
Add: Total stock-based employee compensation expense in reported net loss, net of related tax effects					11				202				22				512
Less: Total stock-based employee compensation expense determined under fair value method for all awards, net of related tax effects					(1,861	)			(1,498	)			(3,680	)			(3,218	)
Net loss, pro forma				$	(45,984	)		$	(67,848	)		$	(28,780	)		$	(66,199	)
Earnings (loss) per share:
Basic as reported				$	(0.52	)		$	(0.79	)		$	(0.30	)		$	(0.76	)
Basic pro forma				$	(0.54	)		$	(0.81	)		$	(0.34	)		$	(0.79	)
Diluted as reported				$	(0.52	)		$	(0.79	)		$	(0.30	)		$	(0.76	)
Diluted pro forma				$	(0.54	)		$	(0.81	)		$	(0.34	)		$	(0.79	)

Goodwill and Other Intangible Assets.    Goodwill represents the excess of costs over fair value of assets of businesses acquired. Effective January 1, 2002, Titan adopted SFAS No. 142, "Goodwill and Other Intangible Assets," which establishes financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, "Intangible Assets." Goodwill and

F-105

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets."

SFAS No. 142 requires that goodwill be tested for impairment at the reporting unit level at least annually, utilizing a two step methodology. The initial step requires Titan to assess whether indications of impairment exist. If indications of impairment are determined to exist, the second step of measuring impairment is performed, wherein the fair value of the relevant reporting unit is compared to the carrying value, including goodwill, of such unit. If the fair value exceeds the carrying value, no impairment loss is recognized. However, if the carrying value of the reporting unit exceeds its fair value, the goodwill of the reporting unit is impaired.

Titan performs its annual testing for impairment of goodwill and other intangible assets in connection with the preparation of its annual financial statements.

Note (2)    Merger with L-3 Communications Corporation

On June 2, 2005, Titan, L-3 Communications Corporation (L-3) and Saturn VI Acquisition Corp. (Merger Sub) entered into an Agreement and Plan of Merger (Merger Agreement), pursuant to which Merger Sub would be merged with and into Titan, with Titan continuing as the surviving corporation and a wholly-owned subsidiary of L-3 (the Merger). On July 29, 2005, the Merger was completed on the terms and subject to the conditions of the Merger Agreement, such that each share of common stock, par value $0.01 per share, of Titan (Titan Common Stock) was converted into the right to receive $23.10 in cash (the Merger Consideration). Each outstanding option to purchase Titan Common Stock was canceled and converted into the right to receive in cash the amount by which the Merger Consideration exceeded the exercise price. Also in connection with the acquisition, L-3 assumed all Titan's debt, including its Senior Credit Facility and its Senior Subordinated Notes (Note 8).

Concurrently with entering into the Merger Agreement, Titan entered into two memoranda of understanding (MOUs) to settle federal and state securities law class actions and derivative suits pending in both federal and state courts in California and the Delaware Court of Chancery. As part of the settlement, which became effective after the closing of the Merger, L-3 assumed a cash obligation of $67.4 million. The MOUs contemplated execution of separate stipulations of settlements that were filed in the California federal court and the Delaware Chancery Court. The MOUs resolved the class actions and derivative suits against Titan and its directors and officers arising out of, among other things, allegations involving the Foreign Corrupt Practices Act and the failed merger with Lockheed Martin. The settlement of the derivative action also resolved claims that were filed in the Delaware Court of Chancery on June 3, 2005 challenging the Merger (Note 10).

Note (3)    Merger, Investigation and Settlement Costs

Proposed Merger with L-3 Communications Corporation

In the three months ended June 30, 2005, Titan incurred $71.6 million of settlement provision, legal, accounting, printing and other professional fees and costs related to the proposed merger with L-3.

F-106

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

Terminated Merger with Lockheed Martin Corporation

On June 26, 2004, Lockheed Martin Corporation terminated the merger agreement pursuant to which Lockheed Martin was to have acquired Titan. The merger agreement was entered into in September 2003 and amended in March 2004 and April 2004 to provide additional time for Titan to resolve the Securities and Exchange Commission (SEC) and Department of Justice (DoJ) investigations under the Foreign Corrupt Practices Act (FCPA) (see Note 10).

On March 1, 2005, Titan settled the government investigations related to the FCPA. In the three and six months ended June 30, 2005, respectively, merger, investigation and settlement costs in the accompanying consolidated statement of operations include $1.9 million and $7.3 million in legal costs related to the resolution of the FCPA investigation and $0.8 million and $ 1.2 million in legal costs stemming from FCPA-related litigation and investigations (see Note 10).

In the three months and six months ended June 30, 2004, respectively, Titan incurred approximately $34.4 million and $52.0 million in settlement provision, legal, investment banking, accounting, printing and other professional fees and costs related to the terminated merger, which are reflected in merger, investigation and settlement costs in the accompanying consolidated statements of operations. The investigation related costs which approximated $6.2 million and $18.1 million of these costs in the three months and six months ended June 30, 2004, respectively, include the costs associated with the comprehensive internal review conducted by Titan to evaluate whether payments involving international consultants for Titan or its subsidiaries were made in violation of applicable law. The legal, accounting and other professional fees incurred also supported the related inquiry by the Department of Justice and the investigation by the Securities and Exchange Commission. Also included are costs of approximately $2.7 million and $8.4 million for the three and six months ended June 30, 2004, respectively, related to the merger transaction itself, including the exchange offer and consent solicitation for Titan's senior subordinated notes and the redemption of Titan's preferred stock, both of which were conditions to close the terminated merger.

In the three months and six months ended June 30, 2004, Titan recorded an additional provision of $25.5 million for anticipated settlement costs related to the government FCPA investigations. Titan had previously recorded $3.0 million as of December 31, 2003, for resolution of this matter, thereby bringing the total amount recorded to $28.5 million. Titan did not accrue for any remaining legal costs expected to be incurred to reach resolution of the FCPA matter, and those costs were expensed as incurred.

Note (4)    Asset Impairment Charges

During the three months and six months ended June 30, 2004, Titan recorded asset impairment charges totaling $15.5 million. Approximately $10 million of these charges pertain to impairment of fixed assets directly related to the termination of a program by a U.S. civilian government agency in the second quarter, and impairment of assets associated with a reduction in scope of planned business activities in Saudi Arabia. As a result of curtailing the activities in Saudi Arabia and with the U.S. civilian government agency, future cash flows will be insufficient to recover the carrying value of certain dedicated assets. Approximately $5.5 million related to a charge for impairment of a technology license Titan purchased from SureBeam in 2001 (see Note 10).

Note (5)    Redemption of Cumulative Convertible Preferred Stock

On March 15, 2004, Titan redeemed all outstanding shares of its cumulative convertible preferred stock. The redemption was a condition to the close of the terminated merger with Lockheed Martin. An aggregate of 625,846 shares were redeemed at $20 per share, plus cumulative dividends in arrears of $0.03 per share, which utilized cash of approximately $12.5 million, and the remaining 60,983 shares

F-107

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

of preferred stock were converted by shareholders into 47,580 shares of common stock. The redemption of the preferred stock is recorded in stockholders' equity.

Note (6)    Acquisition of Intelligence Data Systems

On April 21, 2005, Titan completed the acquisition of 100% of the outstanding shares of Intelligence Data Systems, Inc. (IDS), a high-technology and professional services firm supporting the U.S. intelligence community through highly specialized expertise in data mining, high-performance computing, data analysis, information fusion, and information sharing. The acquisition was to further Titan's goal of acquiring government information technology companies that fit strategically with its government business, particularly within the intelligence community marketplace. At the closing, Titan paid $39.9 million, net of cash acquired, plus applicable acquisition costs. Of this amount, $6.3 million has been placed in escrow to satisfy any indemnification claims by Titan. The excess of the $42.8 million purchase price over the estimated fair market value of the net assets acquired was approximately $41.2 million. In connection with the acquisition, Titan had an independent valuation completed by the McLean Group, LLC to assist management in its purchase price allocation for the IDS acquisition. The independent valuation was the basis for Titan's allocation of $36.5 million to goodwill and $4.7 million to intangible assets. The intangible assets consist of customer related intangibles, such as customer contracts and customer relationships, which will be amortized over the estimated useful life of 8 years. IDS's operations are reported in our operating results from April 22, 2005. The acquisition was accounted for as a purchase in accordance with the provisions of SFAS No. 141, "Business Combinations", and accordingly, the results of operations of IDS have been included in Titan's results of operations beginning as of the date of acquisition. Pro forma financial information has not been provided as the acquisition is not significant to Titan.

Note (7)    Discontinued Operations

In June 2004, Titan's board of directors decided to sell or otherwise divest its Datron World Communications business (Datron World) and its Titan Scan Technologies service business (Scan Services). These non-core operations did not perform to management's expectations, and their divestiture would allow Titan to better focus on its core National Security Solutions business. Subsequently, in November 2004, Titan sold its Datron World business for approximately $4.7 million, resulting in a loss of approximately $2.0 million. Additionally, in February 2005, Titan sold Scan Services for $4.9 million, resulting in a gain of $0.2 million. In connection with the sale, Titan assigned its lease on one facility to the buyer, but remained liable for facilities restoration costs on this facility. Prior to its sale, Scan Services generated revenues for the first quarter of 2005 of $0.6 million. These businesses have been reported as discontinued operations in accordance with SFAS No. 144, and all periods presented have been restated accordingly to reflect these operations as discontinued.

In July 2002, Titan's board of directors decided to exit all of its international telecommunications businesses by selling and winding down its Titan Wireless operation. Titan immediately began implementing these actions, which were substantially completed during 2003. Titan reported this exit of the Titan Wireless business as a discontinued operation in accordance with SFAS No. 144.

On December 10, 1999, Titan's wholly-owned subsidiary, Titan Africa, Inc. (Titan Africa), in connection with its contract to build a satellite-based telephone system for its customer, the national telephone company of Benin, Africa (the OPT), entered into a Loan Facility agreement for up to 30.0 billion Francs CFA (the currency of the African Financial Community), equivalent to approximately $45.0 million U.S. dollars, with a syndicate of five banks, with Africa Merchant Bank as the arranger. This financing was subsequently increased by 6.0 billion francs CFA to approximately $54.0 million. This medium-term financing is a non-recourse loan to Titan Africa which is guaranteed by the OPT and secured by the OPT's equipment and revenues related to the project. The facility has

F-108

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

a fixed interest rate of 9.5% per year and was originally to be repaid in seven equal semi-annual payments from the net receipts of this project, or by the OPT in the event that such receipts are not adequate to make these payments, which commenced on December 31, 2000 and were scheduled to end on December 31, 2003. The payment terms were subsequently amended calling for quarterly payments through mid-2006. The borrowings on this facility have been utilized to fund various equipment and subcontractor costs incurred most notably by Alcatel of France, a major subcontractor to this project.

Related to Titan's contract with the OPT, Titan has a $28.8 million gross receivable due from the OPT, less a reserve of $10.9 million, which is reflected as a net $17.9 million in non-current assets of discontinued operations as of June 30, 2005. The $17.9 million receivable is equal to the outstanding balance on the non-recourse loan, drawn to cover subcontract costs. The $17.9 million balance on the non-recourse loan is included in non-current liabilities of discontinued operations at June 30, 2005. The $10.9 million difference between the gross receivable of $28.8 million and the $17.9 million balance on the non-recourse loan represents amounts currently due from the OPT under the Titan settlement agreement entered into with the OPT in 2003. This agreement contemplated a $25 million payment by the OPT to Titan, which was due in full by November 30, 2003. On December 31, 2003, Titan received a partial payment of $11 million on the settlement. Based on the facts available in the second quarter of 2004, principally the OPT's cash flow deficiencies and inability to obtain adequate financing, Titan recorded a full reserve for the then remaining $14.3 million balance outstanding. Notwithstanding this reserve, Titan has commenced an international arbitration against the OPT seeking collection of this receivable. In July 2005, Titan received an additional cash payment from the OPT of $3.4 million which is reflected as income in the second quarter as the receivable was previously fully reserved.

At December 31, 2004, Titan Wireless had an accrual for $10.3 million for estimated costs of resolving a contingent liability with a subcontractor related to this project. In February 2005, Titan received a demand for full payment from the subcontractor, based on an international arbitration ruling which Titan was in the process of appealing. In light of this, Titan and the subcontractor later reached a final settlement whereby, in March 2005, Titan paid $9.0 million in full settlement of the matter, resulting in a gain of $1.3 million in the first quarter of 2005.

A summary of the utilization of exit and restructuring accruals related to the Titan Wireless discontinued operation during the six months ended June 30, 2005 is as follows:

				Balance December 31, 2004				Cash Paid				Change in Estimate				Balance June 30, 2005
Titan Wireless:
Contingent liability with subcontractor				$	10,311			$	(8,980	)		$	(1,331	)		$	—
Estimated exit costs					3,192				(639	)			(594	)			1,959
				$	13,503			$	(9,619	)		$	(1,925	)		$	1,959

On June 2, 2004, Titan sold Cayenta Canada, its remaining commercial information technology business for a net $5.6 million in cash, with no resulting gain or loss recorded on the sale. Titan recorded current liabilities related to this sale of approximately $1.8 million related to potential purchase price adjustments due to the buyer and transaction-related costs and indemnification obligations related to the sale. Additionally, Titan had previously guaranteed performance on several customer contracts and leased a facility that was subleased to Cayenta Canada. Although the buyer agreed to indemnify Titan for performance on certain of these contracts and subleased the facility, Titan was not released from its obligations under these guarantees or under the facility lease. The face value of the performance guarantees is approximately $14 million at June 30, 2005. Substantially all of the guarantees were issued prior to December 31, 2003 and are therefore not required to be

F-109

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

recognized and measured under the provisions of FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others—an Interpretation of FASB Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34." Titan has not had to make any payments with respect to performance guarantees provided to customers of this business since Titan acquired the business in 1999 and has not provided any reserves for these contingencies at June 30, 2005, based on management's assessment that such payments are not probable of being made.

In October 2001, Titan adopted a definitive plan to spin-off SureBeam in the form of a tax-free dividend to Titan stockholders within the next 12 months from that date. At the time Titan adopted the plan to spin-off SureBeam, in accordance with APB No. 30, Titan accounted for SureBeam as a discontinued operation. On August 5, 2002, Titan's remaining ownership interest in SureBeam was spun-off to Titan stockholders as a tax-free dividend. Prior to the adoption of the spin-off plan, Titan reported the SureBeam business as a separate segment.

In January 2004, SureBeam began liquidation proceedings under Chapter 7 of the United States Bankruptcy Code. During 2004, as a result of the bankruptcy proceedings, Titan assumed certain lease obligations and idle facilities which were previously guaranteed by Titan. Additionally, and since the time of the completion of the bankruptcy proceedings, Titan has incurred expenses and recorded charges related to these lease obligations and idle facilities that have been accounted for in discontinued operations, as such guarantees on the obligations of SureBeam existed at the time SureBeam was originally discontinued in October 2001. In the second and fourth quarters of 2004, the Company recorded charges aggregating $14.4 million to accrue the estimate of the shortfall between the amount of the SureBeam lease guarantees and the amount expected to be recovered by subleasing activities and for amounts to be incurred for facilities restoration costs.

As of June 30, 2005, the total amount of the accrual remaining to cover the aforementioned costs was $12.8 million, reflecting an approximate $0.6 million and $1.1 million use of the accrual for lease payments made on idle facilities in the three and six months ended June 30, 2005. In June 2005, Titan entered into a sub-lease agreement with a third party with the same rights and duties as Titan's lease. To date, Titan has not transferred any of the guaranteed leases to third parties. The gross obligations under leases and lease guarantees are approximately $20.5 million.

In relation to SureBeam's strategic alliance with Hawaii Pride, Titan has guaranteed repayment of Hawaii Pride's bank debt up to the greater of SureBeam's equity interest in Hawaii Pride (which is zero), or 19.9% of Hawaii Pride's $6.8 million, 15-year loan from its lender, WebBank. As of June 30, 2005, Titan has guaranteed approximately $1.0 million, or 19.9% of the current loan balance of $5.2 million. In the event that Hawaii Pride defaults on the loan, Titan currently expects to be obligated to cover any defaults on the entire outstanding balance of the loan if the default is not cured within 90 days. In late October 2003, Titan was notified by Hawaii Pride that Hawaii Pride had stopped receiving financial support from SureBeam and did not have sufficient cash resources to make its monthly principal and interest payments to WebBank. Titan subsequently extended a credit facility to Hawaii Pride of up to a maximum of $0.8 million in principal to cover shortfalls in debt service payments. This facility is secured by a second lien on the assets of Hawaii Pride, including a second mortgage on its facility. As of June 30, 2005, Titan has loaned approximately $0.6 million to Hawaii Pride and, to Titan's knowledge, Hawaii Pride is current in its debt service to WebBank. All amounts outstanding under the Titan credit facility are required to be repaid in twenty equal quarterly installments commencing on October 1, 2005.

F-110

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

Income Statement Summary

Following is a summary of the income (loss) from discontinued operations for 2005 and 2004:

				Three months ended June 30,								Six months ended June 30,
				2005				2004				2005				2004
Loss from discontinued operations				$	(99	)		$	(2,519	)		$	(735	)		$	(3,611	)
Impairment of assets					—				(50,383	)			—				(50,383	)
Gain (loss) on subcontractor liability settlement					—				(3,900	)			1,331				(3,900	)
Collection of previously reserved receivable					3,389				—				3,389				—
Change in estimated exit costs					110				—				594				—
Gain on sale of businesses, net					—				—				185				—
Net income (loss), pro forma					3,400				(56,802	)			4,764				(57,894	)
Tax expense (benefit)					1,838				(15,142	)			2,343				(15,662	)
Net income (loss)				$	1,562			$	(41,660	)		$	2,421			$	(42,232	)

Balance Sheet Summary

Following is a table of all related balance sheet categories for discontinued operations:

				As of June 30, 2005				As of December 31, 2004
Current assets of discontinued operations:
Accounts receivable, inventory and other				$	3,389			$	1,665
				$	3,389			$	1,665
Non-current assets of discontinued operations:
Accounts receivable				$	17,924			$	23,387
Fixed assets and other					—				3,082
				$	17,924			$	26,469
Current liabilities of discontinued operations:
Subcontractor contingency reserve				$	—			$	10,311
Lease obligations and facilities restoration					4,280				5,095
Exit costs					1,959				3,192
Other					1,962				2,397
				$	8,201			$	20,995
Non-current liabilities of discontinued operations:
Non-recourse loan				$	17,924			$	23,387
Lease obligations and facilities restoration					9,395				9,931
				$	27,319			$	33,318

F-111

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

Note (8)    Debt

Senior Credit Facility

On May 23, 2002, Titan entered into an agreement with Wachovia Bank, National Association and Wachovia Securities for a $485 million senior credit facility from a syndicate of commercial banks including Wachovia Securities acting as sole lead arranger and Wachovia Bank, National Association, as Administrative Agent, The Bank of Nova Scotia and Comerica Bank as Co-Syndication Agents and Branch Banking and Trust Company and Toronto Dominion Bank as Co-Documentation Agents and other financial institutions. The senior credit facility is comprised of an aggregate credit commitment of $485 million, consisting of a seven-year term loan in an aggregate principal amount of $350 million and a six-year $135 million revolving credit facility. The seven-year term loan matures on June 30, 2009, and the senior revolver matures on May 28, 2008.

At June 30, 2005, total borrowings outstanding under Titan's senior credit facility were $386.8 million at a weighted average interest rate of 5.84%. Commitments under letters of credit, which reduce availability under the senior credit facility, were approximately $4.6 million at June 30, 2005, resulting in approximately $73.4 million of borrowing availability on the senior revolver at June 30, 2005. Of the total outstanding borrowings, $3.5 million was short-term. At June 30, 2005, Titan was in compliance with all financial covenants under its various debt agreements; which are comprised of a maximum total debt to EBITDA ratio of 4.5 to 1.0, a maximum total senior debt to EBITDA ratio of 2.75 to 1.0, a minimum interest coverage ratio of 3.0 to 1.0, a minimum fixed charge coverage ratio of 1.35 to 1.0 and a minimum net worth of approximately $278.0 million at June 30, 2005. The remaining unamortized deferred costs and expenses of $6.2 million related to the senior credit facility, which were incurred primarily in 2002, are included in Intangible Assets at June 30, 2005 and will be amortized over the remaining term of the senior credit facility, assuming no prepayment is made.

Senior Subordinated Notes

On May 15, 2003, Titan sold $200 million of 8% senior subordinated notes due May 15, 2011 in a private placement (the Notes). Titan used the net proceeds from the issuance of the Notes, plus borrowings of $50 million under its revolving credit facility and additional cash on hand, to redeem all of the $250 million of the then-outstanding 5¾% HIGH TIDES convertible preferred securities. The redemption of HIGH TIDES occurred on June 4, 2003.

Titan is required to make interest payments on the Notes semi-annually in arrears on May 15 and November 15 at the rate of 8% per annum. Titan may redeem the Notes, in whole or in part, on or after May 15, 2007 at the following redemption prices, plus accrued and unpaid interest and liquidated damages, if any:

Year				Percentage
2007					104.0	%
2008					102.0	%
2009 and thereafter					100.0	%

In addition, on or prior to May 15, 2006, Titan may redeem up to 35% of the aggregate principal amount of the Notes with the net proceeds of certain equity offerings at a redemption price of 108% of principal together with accrued and unpaid interest. The Notes are unsecured and rank or will rank equally with Titan's current or future senior subordinated indebtedness. Each of Titan's domestic subsidiaries, other than Cayenta, guarantee the Notes. The guarantees are unsecured and rank equally with each guarantor's senior subordinated indebtedness. The Notes and the guarantees are junior to all of Titan's and each guarantor's senior indebtedness and senior to all of Titan's and each guarantor's subordinated indebtedness (see Note 11).

F-112

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

On July 19, 2004, Titan completed the exchange of the existing Notes for a new series of substantially identical 8% senior subordinated notes due May 15, 2011 registered under the Securities Act.

The remaining unamortized deferred costs and expenses of $4.6 million related to the Notes, which were incurred in May 2003, are included in Intangible Assets at June 30, 2005, and will be amortized over the term of the Notes, assuming no prepayment is made.

Note (9)    Other Financial Information

Earnings Per Share

Basic and diluted earnings per share were computed based on net income (loss), less the regular quarterly dividend requirement for preferred stock and the accrued dividend to the date of redemption.

The following data summarize information relating to the per share computations for income from continuing operations:

				Three months ended June 30, 2005												Three months ended June 30, 2004
				Income (loss) (Numerator)				Shares (000's) (Denominator)				Per Share Amounts				Income (Loss) (Numerator)				Shares (000's) (Denominator)				Per Share Amounts
Loss from continuing operations				$	(45,696	)										$	(24,892	)
Basic EPS:
Loss from continuing operations available to common stockholders					(45,696	)			85,180			$	(0.54	)			(24,892	)			83,970			$	(0.30	)
Effect of dilutive securities:
Stock options and warrants					—				—				—				—				—				—
Diluted EPS:
Loss from continuing operations available to common stockholders				$	(45,696	)			85,180			$	(0.54	)		$	(24,892	)			83,970			$	(0.30	)

				Six months ended June 30, 2005												Six months ended June 30, 2004
				Income (loss) (Numerator)				Shares (000's) (Denominator)				Per Share Amounts				Income (Loss) (Numerator)				Shares (000's) (Denominator)				Per Share Amounts
Loss from continuing operations				$	(27,543	)										$	(21,261	)
Less preferred stock dividends					—												(190	)
Basic EPS:
Loss from continuing operations available to common stockholders					(27,543	)			84,991			$	(0.32	)			(21,451	)			83,347			$	(0.26	)
Effect of dilutive securities:
Stock options and warrants					—				—				—				—				—				—
Diluted EPS:
Loss from continuing operations available to common stockholders				$	(27,543	)			84,991			$	(0.32	)		$	(21,451	)			83,347			$	(0.26	)

F-113

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

In the three months ended June 30, 2005, options and warrants to purchase approximately 8,741,600 shares of common stock at prices ranging from $1.04 to $18.03 per share were not included in the computation of diluted EPS, as the effect would have been anti-dilutive due to the net loss. In the three months ended June, 2005, options and warrants to purchase approximately 194,300 shares of common stock at prices ranging from $20.68 to $29.74 per share were not included in the computation of diluted EPS, as their effect was anti-dilutive due to the exercise price being higher than Titan's average market price in the period. In the three months ended June 30, 2004, options and warrants to purchase approximately 3,136,200 shares of common stock at prices ranging from $1.04 to $17.29 per share were not included in the computation of diluted EPS, as the effect would have been anti-dilutive due to the net loss. In the three months ended June 30, 2004, options and warrants to purchase approximately 362,500 shares of common stock at prices ranging from $19.43 to $29.74 were not included in the computation of diluted EPS, as their effect was anti-dilutive due to the exercise price being higher than Titan's average market price in the period.

In the six months ended June 30, 2005, options and warrants to purchase approximately 8,853,700 shares of common stock at prices ranging from $1.04 to $18.03 per share were not included in the computation of diluted EPS, as the effect would have been anti-dilutive due to the net loss. In the six months ended June 30, 2005, options and warrants to purchase approximately 198,600 shares of common stock at prices ranging from $19.43 to $29.74 per share were not included in the computation of diluted EPS, as their effect was anti-dilutive due to the exercise price being higher than Titan's average market price in the period. In the six months ended June 30, 2004, options and warrants to purchase approximately 3,448,800 shares of common stock at prices ranging from $1.04 to $19.43 per share were not included in the computation of diluted EPS, as the effect would have been anti-dilutive due to the net loss. In the six months ended June 30, 2004, options and warrants to purchase approximately 353,200 shares of common stock at prices ranging from $19.43 to $29.74 were not included in the computation of EPS, as their effect was anti-dilutive due to the exercise price being higher than Titan's average market price in the period.

Approximately 223,600 shares of common stock in the six month period in 2004 that could have been issued from the potential conversion of cumulative convertible preferred stock were not included in the computation of diluted EPS, as the effect would have been anti-dilutive. The change in potential dilution from 2004 to 2005 is the result of its redemption on March 15, 2004 (see Note 5).

Select Statement of Operations Data

Included in revenue for the three and six months ended June 30, 2005, are revenues related to a single contract with the U.S. Army to provide linguist services of $109.8 million and 194.8 million, representing 17.7% and 16.5% of total revenues for the three and six months, respectively. Revenues related to our enterprise information technology contract for U.S. Special Operations Command were $19.8 million and $38.7 million, or 3.2% and 3.3%, of total revenues for the three and six month periods, respectively. Revenues related to our Joint Deployable Intelligence Support Systems contract were $10.8 million and $24.6 million, or 1.7% and 2.1% of total revenues for the three and six months, respectively. Revenues related to our Enterprise Architecture and Decision Support contract for NSA were $12.2 million and $24.6 million, or 2% and 2.1% of total revenues for the three and six months, respectively. No other single contract accounted for more than 2% of total revenues for these periods.

Also included in revenues for the three and six months ended June 30, 2005 is $1.0 million related to the sale of SureBeam inventory, which was awarded to Titan during 2004 in liquidation proceedings under Chapter 7 of the United States Bankruptcy Code.

The net gain on sale of investments reflected in the consolidated statement of operations for the three months ended June 30, 2005 includes a gain of $2.6 million derived from proceeds received in a capital distribution of $4.1 million as a result of the successful sale of a component of Titan

F-114

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

Investment Partners (TIP), formerly E-Celerator, over the cost basis of $1.5 million. This gain was offset by a loss of $0.2 million on another component of TIP based on an indication from the Portfolio Manager that the fair market value was impaired and a loss of $0.9 million as a result of recording a full write-down on another investment.

The net gain on sale of assets reflected in the consolidated statement of operations for the six months ended June 30, 2004 represents a gain on the sale of certain contracts and related assets and liabilities of $0.9 million, which sale was completed in order to mitigate concerns raised by one customer related to organizational conflict of interest issues arising from the terminated merger with Lockheed Martin. The aforementioned gain was partially offset by a loss of $0.3 million on another sale of certain contracts and related assets and liabilities, which were sold as part of Titan's ongoing strategy to divest non-core assets and operations.

Select Balance Sheet Data

The following are details concerning certain balance sheet data:

				June 30, 2005				December 31, 2004
Accounts Receivable:
U.S. government - - billed				$	395,413			$	415,889
U.S. government - unbilled					128,004				88,257
Trade					25,026				14,648
Less: Allowance for doubtful accounts					(3,228	)			(3,408	)
				$	545,215			$	515,386
Inventories:
Materials				$	9,332			$	6,988
Work-in-process					12,252				10,107
Finished goods					3,290				4,241
				$	24,874			$	21,336

A summary of the utilization of exit and restructuring accruals during the six months ended June 30, 2005 is as follows:

				Balance December 31, 2004				Cash Paid				Change in Estimate				Balance June 30, 2005
Titan Systems restructuring:
Estimated facilities consolidation costs				$	14,856			$	(2,584	)		$	(195	)		$	12,077
Cayenta headquarters exit costs:
Lease commitment costs					383				(184	)			41				240
Employee termination costs and other					45				(46	)			18				17
					428				(230	)			59				257
				$	15,284			$	(2,814	)		$	(136	)		$	12,334

At June 30, 2005, $3.4 million of the exit and restructuring accruals are included in Other Accrued Liabilities and $8.9 million are included in Other Non-current Liabilities on the consolidated balance sheet. The remaining accrual balance is primarily comprised of amounts due under the excess facilities as a result of facilities consolidation, which requires lease payments and other lease costs, net of assumed sublease income, to be paid over the remaining lease terms, which expire in 2009.

F-115

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

Supplemental Cash Flow Information

Supplemental disclosure of cash flow information:

				Six months ended June 30,
				2005				2004
Non-cash investing and financing activities:
Shares contributed to employee benefit plans				$	3,099			$	2,718
Shares tendered for stock option exercises					983				128
Cash paid for interest				$	18,028			$	17,430
Cash paid for income tax					2,018				869

Note (10)    Commitments and Contingencies

Legal Matters

Foreign Corrupt Practices Act Investigation

During the first quarter of 2004, Titan learned of allegations that improper payments under the Foreign Corrupt Practices Act (FCPA) had been made, or items of value had been provided, involving international consultants for Titan or its subsidiaries to foreign officials. The allegations, which were identified as part of internal reviews conducted by Titan and Lockheed Martin Corporation (Lockheed) in connection with their failed merger, were reported at that time to the government. Titan's Board of Directors established a committee of the Board to oversee Titan's internal review of these matters. In connection with the internal review, the SEC commenced an investigation into whether payments involving Titan's international consultants were made in violation of applicable law, particularly the FCPA. In addition, the Department of Justice (DoJ) initiated a criminal inquiry into this matter, and also initiated an investigation into whether these same alleged practices violated provisions of the United States Internal Revenue Code of 1986, as amended.

On March 1, 2005, Titan announced that it had entered into a consent to entry of a final judgment with the SEC without admitting or denying the SEC's allegations, and reached a plea agreement with the DoJ, under which Titan pled guilty to three FCPA counts related to its overseas operations. These counts consist of violations of the anti-bribery and the books and records provisions of the FCPA and aiding and assisting in the preparation of a false tax return.

In connection with the FCPA settlement, Titan made total payments of $28,500, including a DoJ-recommended fine of $13,000 and payments to the SEC of $15,500. A federal judge also imposed a three-year term of supervised probation. As part of these agreements, Titan agreed to: (1) implement a best-practices compliance program designed to detect and deter future violations of the FCPA; and (2) retain an independent consultant to review its policies and procedures with respect to FCPA compliance and to adopt the consultant's recommendations. If Titan fails to comply with its sentence or the consent to entry of a final judgment, it could be subject to additional criminal and civil fines or penalties and limitations on its ability to enter into or perform under U.S. government contracts, which would have a material adverse effect on the Company's financial position, results of operations or cash flows.

Titan has made voluntary disclosures to the U.S. Department of State of suspected violations of law discovered in the course of Titan's internal FCPA investigation. The voluntary disclosures have not yet been resolved and may result in the assessment of fines or penalties against Titan. Further, as a result of Titan's plea agreement, Titan is currently unable to obtain new export licenses for items regulated by the U.S. Department of State. Titan has been working with the U.S. Department of State

F-116

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

to obtain relief from this licensing ineligibility rule, but there is no assurance that Titan will be able to obtain new export licenses or amendments to existing ones or to utilize licensing exemptions in the foreseeable future. In addition, Titan's privilege to export products or services under existing export licenses may also be suspended. If Titan were prevented from obtaining new licenses and/or exporting products or services under existing licenses for a significant period of time, this could breach its obligations under certain contracts and could cause Titan to suffer adverse consequences, including termination of contracts and/or claims for damages. Titan does not know when, or if, it will be able to obtain relief from the licensing ineligibility rule, or for any further export license suspensions. Certain of Titan's revenues are generated by contracts with international customers which require export licenses. For the year ended December 31, 2004, Titan had revenues of approximately $27,000 that required it to have export licenses.

On March 2, 2005, the Navy, acting on behalf of the DoD, and Titan executed an administrative settlement agreement that would allow Titan to continue to receive U.S. government contracts. The agreement imposes certain duties and limitations on Titan and provides that the Navy will monitor for three years Titan's compliance with, among other things, the FCPA and federal procurement laws and regulations. Under the agreement, the Navy agreed not to undertake any administrative action to propose Titan for debarment, but reserved the right to undertake appropriate administrative action, in its discretion, in the event of the indictment or conviction of any then-current (as of the date of execution of the agreement) officer or director of Titan or any of its wholly-owned subsidiaries arising out of continuing investigations into the underlying matters that were the subject of the Titan plea agreement or the final judgment entered by the SEC. The Justice Department is continuing its investigation of individuals involved in these matters. The Navy agreement defines "Titan" to include, among other things, Titan's "affiliates."

Titan has an ongoing obligation under its by-laws and under indemnity agreements with current and former employees to advance their costs of defense relating to the FCPA investigations and related class action and derivative litigation, subject to the individuals undertaking to repay the costs of defense if it is ultimately determined that such individual is not entitled to be indemnified by Titan.

Other Legal Matters

Titan is involved in legal actions in the normal course of its business, including audits and investigations by various governmental agencies that result from its work as a defense contractor. Titan and its subsidiaries are named as defendants in legal proceedings from time to time and third parties, including the government, may assert claims against Titan from time to time. In addition, Titan has acquired companies from time to time that have legal actions pending against them at the time of acquisition. Based upon current information, including consultation with its lawyers, Titan does not believe that the ultimate liability arising from any of these actions, including those discussed below, will materially affect its consolidated financial position. However, the March 1, 2005 FCPA settlement payment materially impacted cash flow and Titan's borrowings under its senior revolver in the first quarter of 2005. Titan's evaluation of the likely impact of these actions, including those discussed below, could change in the future and Titan could have unfavorable outcomes that it does not expect. Any of these matters could have a material adverse effect on Titan's results of operations or cash flows in a future period and could have other adverse effects on Titan's business.

Stockholder and Derivative Actions

Titan and its officers and directors are subject to several lawsuits arising out of the FCPA settlement and the failed merger with Lockheed Martin Corporation.

In re Titan Inc. Securities Litigation, No. 04-CV-0701-K(NLS), is a consolidated putative class action filed before the U.S. District Court for the Southern District of California (the Federal Securities Action). The complaint alleges, among other things, that Titan and its officers and directors

F-117

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Securities and Exchange Commission (SEC) Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act, by issuing a series of press releases, public statements and filings disclosing significant historical and future revenue growth, but omitting to mention certain allegedly improper payments involving international consultants in connection with Titan's international operations, thereby artificially inflating the trading price of Titan's common stock. On July 18, 2005, an amended complaint in the securities action was filed that, among other things, added the claims that were previously pled in the "Holder Actions" described in the next paragraph. The Federal Securities Action and the Holder Actions are referred to collectively as the "Securities Action."

Certain Titan officers are also parties to putative class action complaints filed in the Superior Court for the State of California in and for San Diego County (the Holder Actions). These cases include Paul Berger v. Gene W. Ray, et al., No. GIC 828346, and Robert Garfield v. Mark W. Sopp, et. al, No. GIC 828345. These actions purport to be brought on behalf of all holders of Titan common stock as of April 7, 2004. The Holder Actions allege, among other things, that the defendants breached their fiduciary duties by acquiescing in or condoning Titan's alleged violations of the FCPA by failing to establish adequate procedures to prevent the alleged FCPA violations, and by failing, in bad faith, to voluntarily report the alleged FCPA violations to government officials.

Titan's directors and certain Titan officers, with Titan as a nominal defendant, are also party to Theodore Weisgerber v. Gene Ray, et al., No. 832018, which was filed in the Superior Court for the State of California, San Diego; Robert Ridgeway v. Gene Ray, et al., No. 542-N, which was filed in Delaware Court of Chancery, New Castle County; Bernd Bildstein v. Gene Ray, et al., No. 833701, which was filed in the Superior Court for the State of California, San Diego County; and Madnick v. Gene Ray, et al., No. 1215-N, which was filed in the Delaware Court of Chancery, New Castle County (the Derivative Actions). The Derivative Actions purport to be brought for the benefit of the nominal defendant, Titan, and allege that the defendants breached their fiduciary duties by failing to monitor and supervise management in a way that would have either prevented the alleged FCPA violations or would have detected the alleged FCPA violations. The Weisgerber complaint was subsequently amended to include allegations that the defendants breached their fiduciary duties by failing to monitor and supervise management in a way that would have prevented the alleged mistreatment of prisoners at the Abu Ghraib prison in Iraq, alleged billing errors relating to the work performed by foreign nationals, and the loss of contracts with the government. On June 3, 2005, an amended complaint was filed in the Ridgeway action which added, among other things, a claim alleging that Titan's directors breached their fiduciary duty in connection with their approval of the merger with the Company. The Company was named as a defendant in the Ridgeway action for allegedly aiding and abetting this alleged breach of fiduciary duty.

On June 6, 2005, a putative class action, Gentsch v. Titan Corp. et al., No. GIC 848598, was filed in Superior Court for the State of California against Titan and its board of directors challenging the merger between Titan and the Company.

Concurrently with entering into the merger agreement relating to the merger with L-3, two memoranda of understanding were executed. First, the defendants in the Securities Action, including Titan and certain of its directors and officers, entered into a memorandum of understanding (the Securities MOU) with plaintiffs in the Federal Securities and Holder actions. Pursuant to the Securities MOU, plaintiffs and their counsel will receive $61.5 million. Second, the defendants in the Derivative Actions, including Titan and certain of its directors and officers and the Company, entered into a separate memorandum of understanding (the Derivative MOU) with plaintiffs in the Derivative Actions. As a result of negotiations by the plaintiffs in the Derivative Actions, the Company agreed to, among other things, increase the purchase price it was willing to pay for Titan's common stock to $23.10 per share of Titan's common stock and reduced the termination fee potentially payable by

F-118

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

Titan. Pursuant to the Derivative MOU, the Company has agreed to pay any plaintiff attorneys' fees awarded by the Delaware Court of Chancery up to $5.9 million.

After the completion of confirmatory discovery, including the review by plaintiffs' counsel of certain documents of Titan and the Company and the taking of several depositions, the parties executed stipulations of settlement (i.e., the Securities Settlement and the Derivative Settlement) on July 22, 2005. The Derivative Settlement that was executed included the settlement of the Gentsch matter. The Securities Settlement was preliminarily approved on September 26, 2005 and a Final Settlement Hearing is scheduled for December 19, 2005. The Derivative Settlement was preliminarily approved on August 8, 2005 and received final approval on November 2, 2005.

SureBeam Related Litigation

In August 2002, Titan completed the spin-off of its former subsidiary, SureBeam Corporation. On January 19, 2004, SureBeam voluntarily filed for bankruptcy relief to be liquidated under Chapter 7 of the United States Bankruptcy Court. Various lawsuits have been filed against Titan and/or certain directors and executive officers of Titan in connection with SureBeam.

Titan, certain corporate officers of SureBeam, Dr. Gene Ray and Susan Golding, as SureBeam directors, and certain investment banks that served as lead underwriters for SureBeam's March 2001 initial public offering, have been named as defendants in several purported class action lawsuits filed by holders of common stock of SureBeam in the U.S. District Court. On October 6, 2003, these lawsuits were consolidated into In re SureBeam Corporation Securities Litigation, No. 03-CV-001721-JM (POR) in the U.S. District Court for the Southern District of California. The consolidated action seeks an unspecified amount of damages and alleges that each of the defendants, including Titan, as a "control person" of SureBeam within the meaning of Section 15 of the Securities Act, should be held liable under Section 11 of the Securities Act because the prospectus for SureBeam's initial public offering was allegedly inaccurate and misleading, contained untrue statements of material facts, and omitted to state other facts necessary to make the statements made therein not misleading. The consolidated action further alleges that the defendants, including Titan, as a control person of SureBeam within the meaning of Section 20(a) of the Exchange Act, should be held liable under Section 10(b) of the Exchange Act for false and misleading statements made during the period from March 16, 2001 to August 27, 2003. On January 3, 2005, the court granted in part and denied in part motions to dismiss the operative complaint. An amended complaint was filed on March 1, 2005. Titan intends to defend the claims vigorously.

On September 17, 2004, the bankruptcy trustee in the SureBeam Corporation bankruptcy pending in the United States Bankruptcy Court for the Southern District of California brought an action in San Diego Superior Court, on behalf of the bankruptcy estate, against certain directors and current and former executive officers of Titan who served at one time as directors or officers of SureBeam. The bankruptcy trustee's complaint raises claims of breach of fiduciary duties, gross mismanagement, abuse of corporate control, waste of corporate assets, breach of the duty of loyalty, unjust enrichment, breach of fiduciary duties for insider trading and violation of the California Corporation Code. Because the defendants were named by reason of the fact that they were serving as directors or officers of SureBeam at the request of Titan, Titan is covering the costs of defense of these claims, subject to indemnification agreements and bylaw provisions. L-3 has agreed to settle the bankruptcy trustee claim for $5.0 million and is in the process of working to finalize the settlement.

Government Investigations

In October 2002, Titan received a grand jury subpoena from the Antitrust Division of the DoJ requesting the production of documents relating to information technology services performed for the Air Force at Hanscom Air Force Base in Massachusetts and Wright-Patterson Air Force Base in Ohio. Titan has been informed that other companies who have performed similar services have

F-119

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

received subpoenas as well. A senior Titan employee has provided a handwriting exemplar in connection with this matter and three Titan employees have previously testified before the grand jury in exchange for receiving immunity. Titan is not aware of any illegal or inappropriate conduct and has been cooperating and will continue to cooperate fully with the investigation.

In March 2003, Titan received a subpoena from the Office of Inspector General for the National Aeronautics and Space Administration (NASA) seeking certain records relating to billing for labor services in connection with its contracts with NASA. Titan also received a subpoena from the Office of Inspector General for the General Services Administration (GSA) seeking similar records relating to billing for labor categories in connection with contracts with GSA. In response to these subpoenas, Titan has provided documents relating to billing for labor services in connection with government contracts. Titan has been informed by NASA that the NASA investigation is closed. Titan is not aware of any illegal or inappropriate conduct and has been cooperating and will continue to cooperate fully with the GSA investigation.

These investigations are ongoing, and we are unable to predict their outcome at this time. Any penalties imposed by the U.S. Government in these matters could have a material adverse effect on our financial position, results of operations or cash flows.

Other Legal Proceedings

Since June 9, 2004, two lawsuits have been filed alleging that Titan and other defendants either participated in, approved of, or condoned the mistreatment of prisoners by United States military officials in certain prison facilities in Iraq in violation of federal, state and international law. The first of these cases, Saleh v. Titan Corporation, No. 04-CV-1143 R, was filed in the United States District Court for the Southern District of California against The Titan Corporation, CACI International, Inc. (CACI), and its affiliates, and three individuals (one formally employed by Titan and one by a Titan subcontractor). Plaintiffs in Saleh seek class certification. The second case, Ibrahim v. Titan Corporation, No. 04-CV-1248, was filed on July 27, 2004, on behalf of five individual plaintiffs against Titan, CACI and CACI affiliates, and contains allegations similar to those in Saleh. Class certification has not been requested in Ibrahim. Titan intends to defend these lawsuits vigorously.

On January 23, 2004, Titan, together with its wholly-owned subsidiary, Titan Wireless, Inc., and Titan Wireless's wholly-owned subsidiary, Titan Africa, Inc., were named as defendants in Gonzales Communications, Inc. v. Titan Wireless, Inc., Titan Africa, Inc., The Titan Corporation, Geolution International Inc., and Mundi Development, Inc., a lawsuit filed in the U.S. District Court for the Southern District of California, No. 04-CV-00147 WQH (JMA). The complaint relates to the purchase by Gonzales Communications of equipment and related services under an equipment purchase agreement entered into with Titan Wireless in June 2001. Gonzales Communications contends that the equipment and services delivered were unsatisfactory. In the complaint, Gonzales Communications seeks direct damages in the amount of $0.9 million plus interest, representing the amount Gonzales Communications alleges to have previously paid under the agreement, and consequential damages of approximately $16.3 million. To date, Titan and its subsidiaries have not received payment in full under the agreement for the equipment and services that were delivered to Gonzales Communications. Titan has filed a counterclaim against Gonzales Communications for in excess of $1.2 million. On July 11, 2005, the court granted in part and denied in part Titan's motion for summary judgment. Titan intends to defend its position vigorously.

On March 14, 2005, Makram Majid Chams, a former consultant of Titan filed a claim with the Preliminary Committee on Labor Disputes Settlement in Saudi Arabia. Mr. Chams alleges that Titan wrongfully terminated his consulting agreement and that he was defamed by Titan's publication in a local newspaper of a mandatory notice that he is no longer representing Titan. The plaintiff is seeking approximately $21.9 million in damages. Titan intends to defend its position vigorously.

F-120

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2005
(in thousands, except share and per share data, or as otherwise noted)

In December 2001, the current occupants of a property formerly owned by Titan commenced an environmental action, Lefcourt Associates, Ltd. et al. v. The Thor Corporation, et al., against Titan and others in New Jersey state court. Plaintiffs contend that Titan is liable for the damages caused by hazardous waste materials originating from adjacent land to the extent that Titan purportedly provided indemnification to plaintiffs when it sold the property to them in 1986. Discovery is in progress, and we cannot predict the outcome of this litigation at this time.

Note (11)     Guarantor Condensed Consolidating Financial Statements

As discussed in Note 8, on May 15, 2003, Titan sold $200 million of 8% senior subordinated notes in a private placement. Titan used the net proceeds from the issuance of the 8% senior subordinated notes, plus borrowings of $50 million made under its revolving credit facility and additional cash on hand, to redeem all of the $250 million of the then-outstanding 5¾% HIGH TIDES convertible preferred securities. The redemption of HIGH TIDES occurred on June 4, 2003.

Following are consolidating condensed balance sheets as of June 30, 2005 (unaudited) and December 31, 2004, and unaudited statements of operations for the three and six months ended June 30, 2005 and 2004, and statements of cash flows for the six months ended June 30, 2005 and 2004 for the Guarantor Subsidiaries and the Non-guarantor Subsidiaries as defined below. The following consolidated condensed financial statements present financial information for:

Parent: The Titan Corporation on a stand-alone basis.

Guarantor Subsidiaries: All directly and indirectly owned domestic subsidiaries of Parent other than Cayenta Inc. on a stand-alone basis.

Non-guarantor Subsidiaries: Cayenta Inc., and all direct and indirect subsidiaries of Parent that are not organized under the laws of the United States, any state of the United States or the District of Columbia and that conduct substantially all business operations outside the United States.

Reclassifications and Eliminations:     Entries that eliminate the investment in subsidiaries and intercompany balances and transactions.

The Titan Corporation and Subsidiaries:     The financial information for The Titan Corporation on a condensed consolidated basis.

The classification of operating entities within each of the columns is based on the legal status of the entity as of June 30, 2005. Accordingly, certain legal entities that existed in prior years that have been merged into Titan as of June 30, 2005 have been reclassified in the prior year condensed financial statements to conform to the current year presentation.

F-121

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Statement of Operations
For the Three Months Ended June 30, 2005
(Unaudited)
(In thousands)

				Parent				Guarantor Subsidiaries				Non- guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Revenues				$	598,641			$	20,031			$	2,720			$	(1,059	)		$	620,333
Costs and expenses:
Cost of revenues					498,893				16,895				2,631				(974	)			517,445
Selling, general and administrative					44,369				955				1,298				—				46,622
Research and development					3,579				692				—				—				4,271
Mergers, investigations and settlements cost					74,260				—				—				—				74,260
Total costs and expenses					621,101				18,542				3,929				(974	)			642,598
Operating profit (loss)					(22,460	)			1,489				(1,209	)			(85	)			(22,265	)
Interest expense					(10,278	)			—				(85	)			—				(10,363	)
Interest income					239				3				1				—				243
Net gain on sale of investments					1,484				—				—				—				1,484
Income (loss) from continuing operations before income taxes					(31,015	)			1,492				(1,293	)			(85	)			(30,901	)
Income tax provision (benefit)					14,753				553				(479	))			(32	)			14,795
Income (loss) from continuing operations					(45,768	)			939				(814	)			(53	)			(45,696	)
Income (loss) from discontinued operations, net of taxes					(567	)			2,129				—				—				1,562
Earnings (loss) before equity in earnings of subsidiaries					(46,335	)			3,068				(814	)			(53	)			(44,134	)
Equity in losses of subsidiaries					2,254				—				—				(2,254	)			—
Net earnings (loss)				$	(44,081	)		$	3,068			$	(814	)		$	(2,307	)		$	(44,134	)

F-122

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Statement of Operations
For the Six Months Ended June 30, 2005
(Unaudited)
(In thousands)

				Parent				Guarantor Subsidiaries				Non- guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Revenues				$	1,140,313			$	36,304			$	4,661			$	(1,952	)		$	1,179,326
Costs and expenses:
Cost of revenues					954,356				31,056				4,323				(1,795	)			987,940
Selling, general and administrative					83,095				2,317				1,803				—				87,215
Research and development					6,938				923				—				—				7,861
Mergers, investigations and settlements cost					80,078				—				—				—				80,078
Total costs and expenses					1,124,467				34,296				6,126				(1,795	)			1,163,094
Operating profit (loss)					15,846				2,008				(1,465	)			(157	)			16,232
Interest expense					(20,250	)			—				(85	)			—				(20,335	)
Interest income					526				3				3				—				532
Net gain on sale of investments					1,484				—				—				—				1,484
Income (loss) from continuing operations before income taxes					(2,394	)			2,011				(1,547	)			(157	)			(2,087	)
Income tax provision (benefit)					25,342				744				(572	)			(58	)			25,456
Income (loss) from continuing operations					(27,736	)			1,267				(975	)			(99	)			(27,543	)
Income (loss) from discontinued operations, net of taxes					(578	)			2,999				—				—				2,421
Earnings (loss) before equity in earnings of subsidiaries					(28,314	)			4,266				(975	)			(99	)			(25,122	)
Equity in losses of subsidiaries					3,291				—				—				(3,291	)			—
Net earnings (loss)				$	(25,023	)		$	4,266			$	(975	)		$	(3,390	)		$	(25,122	)

F-123

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Statement of Operations
For the Three Months Ended June, 2004
(Unaudited)
(In thousands)

				Parent				Guarantor Subsidiaries				Non- guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Revenues				$	491,387			$	20,235			$	5,611			$	(2,301	)		$	514,932
Costs and expenses:
Cost of revenues					410,699				18,013				11,135				(1,765	)			438,082
Selling, general and administrative					36,209				(4	)			1,938				––				38,143
Research and development					3,952				743				––				––				4,695
Merger, investigation and settlement costs					34,423				––				––				––				34,423
Asset impairment charges					5,500				––				9,995				––				15,495
Total costs and expenses					490,783				18,752				23,068				(1,765	)			530,838
Operating profit (loss)					604				1,483				(17,457	)			(536	)			(15,906	)
Interest expense					(9,158	)			––				––				––				(9,158	)
Interest income					228				––				12				––				240
Income (loss) from continuing operations before income taxes					(8,326	)			1,483				(17,445	)			(536	)			(24,824	)
Income tax provision (benefit)					6,667				593				(6,978	)			(214	)			68
Income (loss) from continuing operations					(14,993	)			890				(10,467	)			(322	)			(24,892	)
Loss from discontinued operations, net of taxes					(23,991	)			(16,595	)			(1,074	)			––				(41,660	)
Earnings (loss) before equity in earnings of subsidiaries					(38,984	)			(15,705	)			(11,541	)			(322	)			(66,552	)
Equity in losses of subsidiaries					(27,246	)			––				––				27,246				––
Net earnings (loss)				$	(66,230	)		$	(15,705	)		$	(11,541	)		$	26,924			$	(66,552	)

F-124

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Statement of Operations
For the Six Months Ended June 30, 2004
(Unaudited)
(In thousands)

				Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Revenues				$	927,320			$	32,283			$	13,305			$	(3,954	)		$	968,954
Costs and expenses:
Cost of revenues					775,597				28,757				19,368				(3,368	)			820,354
Selling, general and administrative					69,517				1,223				3,292				––				74,032
Research and development					7,129				984				––				––				8,113
Merger, investigation and settlement costs					52,002				––				––				––				52,002
Asset impairment charges					5,500				––				9,995				––				15,495
Total costs and expenses					909,745				30,964				32,655				(3,368	)			969,996
Operating profit (loss)					17,575				1,319				(19,350	)			(586	)			(1,042	)
Interest expense					(18,274	)			––				––				––				(18,274	)
Interest income					391				––				12				––				403
Gain (loss) on sale of assets					863				(300	)			––				––				563
Income (loss) from continuing operations before income taxes					555				1,019				(19,338	)			(586	)			(18,350	)
Income tax provision (benefit)					10,472				408				(7,735	)			(234	)			2,911
Income (loss) from continuing operations					(9,917	)			611				(11,603	)			(352	)			(21,261	)
Loss from discontinued operations, net of taxes					(24,158	)			(17,209	)			(865	)			––				(42,232	)
Loss before equity in losses of subsidiaries					(34,075	)			(16,598	)			(12,468	)			(352	)			(63,493	)
Equity in losses of subsidiaries					(29,066	)			––				––				29,066				––
Net earnings (loss)				$	(63,141	)		$	(16,598	)		$	(12,468	)		$	28,714			$	(63,493	)

F-125

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Balance Sheet
As of June 30, 2005
(Unaudited)
(In thousands)

				Parent				Guarantor Subsidiaries				Non- guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Assets
Current Assets:
Cash and cash equivalents				$	19,578			$	2,776			$	751			$	—			$	23,105
Accounts receivable—net					512,586				22,027				10,602				—				545,215
Inventories					24,874				—				—				—				24,874
Prepaid expenses and other					31,648				338				442				(156	)			32,272
Deferred income taxes					69,270				—				—				—				69,270
Current assets of discontinued operations					—				3,389				—				—				3,389
Total current assets					657,956				28,530				11,795				(156	)			698,125
Property and equipment—net					53,610				753				499				—				54,862
Goodwill					457,803				43,160				59				—				501,022
Other assets—net					55,934				4,673				82				—				60,689
Deferred income taxes					49,935				—				—				—				49,935
Non-current assets of discontinued operations					—				17,924				—				—				17,924
Intercompany investments, advances and liabilities —net					382,745				(230,138	)			(152,607	)			—				—
Total assets				$	1,657,983			$	(135,098	)		$	(140,172	)		$	(156	)		$	1,382,557
Liabilities and Stockholders' Equity
Current Liabilities:
Current portion of amounts outstanding under line of credit				$	3,500			$	—			$	—			$	—			$	3,500
Accounts payable					107,443				4,295				164				—				111,902
Current portion of long-term debt					36				—				—				—				36
Accrued compensation and benefits					108,817				2,633				557				—				112,007
Other accrued liabilities					153,298				2,040				1,303				—				156,641
Current liabilities of discontinued operations					6,163				2,038				—				—				8,201
Total current liabilities					379,257				11,006				2,024				—				392,287
Long-term portion of amounts outstanding under line of credit					382,282				987				—				—				383,269
Senior subordinated notes					200,000				—				—				—				200,000
Other long-term debt					469				—				—				—				469
Other non-current liabilities					48,221				—				143				—				48,364
Non-current liabilities of discontinued operations					9,395				17,924				—				—				27,319
Stockholders' equity (deficit)					638,359				(165,015	)			(142,339	)			(156	)			330,849
Total liabilities and equity				$	1,657,983			$	(135,098	)		$	(140,172	)		$	(156	)		$	1,382,557

F-126

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Balance Sheet
As of December 31, 2004
(In thousands)

				Parent				Guarantor Subsidiaries				Non- guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Assets
Current Assets:
Cash and cash equivalents				$	17,364			$	(611	)		$	(81	)		$	—			$	16,672
Accounts receivable—net					484,664				15,973				14,749				—				515,386
Inventories					21,336				—				—				—				21,336
Prepaid expenses and other					28,885				501				230				(577	)			29,039
Deferred income taxes					95,390				—				—				—				95,390
Current assets of discontinued operations					—				1,665				—				—				1,665
Total current assets					647,639				17,528				14,898				(577	)			679,488
Property and equipment—net					56,243				427				872				—				57,542
Goodwill					456,033				8,377				59				—				464,469
Other assets—net					61,325				21				72				—				61,418
Deferred income taxes					52,647				—				—				—				52,647
Non-current assets of discontinued operations					—				26,469				—				26,469
Intercompany investments, advances and liabilities —net					321,296				(171,744	)			(149,552	)			—				—
Total assets				$	1,595,183			$	(118,922	)		$	(133,651	)		$	(577	)		$	1,342,033
Liabilities and Stockholders' Equity
Current Liabilities:
Current portion of amounts outstanding under line of credit				$	3,500			$	—			$	—			$	—			$	3,500
Accounts payable					107,991				7,296				745				116,032
Current portion of long-term debt					500				—				—				—				500
Accrued compensation and benefits					93,412				2,213				2,743				—				98,368
Other accrued liabilities					109,536				3,339				2,293				—				115,168
Current liabilities of discontinued operations					6,872				14,123				—				—				20,995
Total current liabilities					321,811				26,971				5,781				—				354,563
Long-term portion of amounts outstanding under line of credit					352,750				—				—				—				352,750
Senior subordinated debt					200,000				—				—				—				200,000
Other long-term debt					491				—				—				—				491
Other non-current liabilities					50,899				—				1,932				—				52,831
Non-current liabilities of discontinued operations					9,931				23,387				—				—				33,318
Stockholders' equity (deficit)					659,301				(169,280	)			(141,364	)			(577	)			348,080
Total liabilities and equity				$	1,595,183			$	(118,922	)		$	(133,651	)		$	(577	)		$	1,342,033

F-127

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Statement of Cash Flows
For the Six Months Ended June 30, 2005
(Unaudited)
(In thousands)

				Parent				Guarantor Subsidiaries				Non- guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Cash Flows from Operating Activities:
Income (loss) from continuing operations				$	(27,471	)		$	1,267			$	(975	)		$	(364	)		$	(27,543	)
Adjustments to reconcile income (loss) from continuing operations to net cash used for continuing operations					52,901				(8,297	)			(1,390	)			364				43,578
Net cash used by continuing operations					25,430				(7,030	)			(2,365	)			—				16,035
Income (loss) from discontinued operations					(578	)			2,999				—				—				2,421
Adjustments to reconcile income (loss) from discontinued operations to cash used for discontinued operations					4,541				(10,727	)			—				—				(6,186	)
Net cash provided (used) by discontinued operations					3,963				(7,728	)			—				—				(3,765	)
Net cash used by operating activities					29,393				(14,758	)			(2,365	)			—				12,270
Cash Flows from Investing Activities:
Capital expenditures					(3,841	)			(230	)			(87	)			—				(4,158	)
Acquisition of business, net of cash acquired					(39,844	)			—				—								(39,844	)
Proceeds from sale of investments and net assets					4,115				—				—				—				4,115
Earnout payment related to prior year acquisition					(658	)			—				—				—				(658	)
Proceeds (payments) on intercompany investments, advances and liabilities					(21,604	)			18,549				3,055				—				—
Other					(295	)			—				229				—				(66	)
Net cash provided (used ) by investing activities					(62,127	)			18,319				3,197				—				(40,611	)
Cash Flows from Financing Activities:
Retirement of debt					(486	)			—				—				—				(486	)
Additions to debt					30,519				—				—				—				30,519
Proceeds from exercise of stock options and other					4,757				—				—				—				4,757
Other					158				(174	)			—				—				(16	)
Net cash provided (used) by financing activities					34,948				(174	)			—				—				34,774
Net decrease in cash and cash equivalents					2,214				3,387				832				—				6,433
Cash and cash equivalents at beginning of year					17,364				(611	)			(81	)			—				16,672
Cash and cash equivalents at end of period				$	19,578			$	2,776			$	751			$	—			$	23,105

F-128

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Statement of Cash Flows
For the Six Months Ended June 30, 2004
(Unaudited)
(In thousands)

				Parent				Guarantor Subsidiaries				Non- guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Cash Flows from Operating Activities:
Income (loss) from continuing operations				$	(9,917	)		$	611			$	(11,603	)		$	(352	)		$	(21,261	)
Adjustments to reconcile income (loss) from continuing operations to net cash used for continuing operations					(18,665	)			(7,326	)			10,980				352				(14,659	)
Net cash used for continuing operations					(28,582	)			(6,715	)			(623	)			—				(35,920	)
Loss from discontinued operations					(24,158	)			(17,209	)			(865	)			—				(42,232	)
Adjustments to reconcile loss from discontinued operations to cash provided by (used for) discontinued operations					16,402				11,753				15,209				—				43,364
Net cash provided by (used for) discontinued operations					(7,756	)			(5,456	)			14,344				—				1.132
Net cash provided by (used for) operating activities					(36,338	)			(12,171	)			13,721				—				(34,788	)
Cash Flows from Investing Activities:
Capital expenditures					(6,494	)			(10,001	)			(281	)			—				(16,776	)
Proceeds from sale of investments and net assets					2,494				386				—				—				2,880
Earnout payment related to prior year acquisition					(2,460	)			—				—				—				(2,460	)
Other investments					(1,243	)			—				—				—				(1,243	)
Proceeds (payments) on intercompany investments, advances and liabilities					(6,078	)			22,072				(15,994	)			—				—
Other					706				27				370				—				1,103
Net cash provided by (used for) investing activities					(13,075	)			12,484				(15,905	)			—				(16,496	)
Cash Flows from Financing Activities:
Additions to debt					49,125				—				—				—				49,125
Retirement of debt					(241	)			—				—				—				(241	)
Preferred stock redemption					(12,518	)			—				—				—				(12,518	)
Proceeds from exercise of stock options and other					13,566				—				—				—				13,566
Dividends paid					(190	)			—				—				—				(190	)
Other					(35	)			(174	)			(11	)			—				(220	)
Net cash provided by (used for) financing activities					49,707				(174	)			(11	)			—				49,522
Effect of exchange rate changes on cash					—				—				215				—				215
Net increase (decrease) in cash and cash equivalents					294				139				(1,980	)			—				(1,547	)
Cash and cash equivalents at beginning of year					25,950				(941	)			1,965				—				26,974
Cash and cash equivalents at end of period				$	26,244			$	(802	)		$	(15	)		$	—			$	25,427

F-129

THE TITAN CORPORATION

Consolidated Financial Statements as of December 31, 2004 and 2003
and for the Years Ended December 31, 2004, 2003 and 2002

F-130

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
The Titan Corporation:

We have audited the accompanying consolidated balance sheets of The Titan Corporation and subsidiaries as of December 31, 2004 and 2003, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 2004. In connection with our audit of the consolidated financial statements, we have also audited the valuation and qualifying accounts financial statement schedule. These consolidated financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement 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 financial position of The Titan Corporation and subsidiaries as of December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2004, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule referred to above, 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 3 to the consolidated financial statements, the Company adopted the provisions of SFAS No. 142, "Accounting for Goodwill and Other Intangible Assets" on January 1, 2002 and, accordingly, has changed its method of accounting for goodwill.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of The Titan Corporation's internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 16, 2005 expressed an unqualified opinion on management's assessment of, and the effective operation of, internal control over financial reporting.

/s/ KPMG LLP

San Diego, California
March 16, 2005

F-131

THE TITAN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

				For the Years Ended December 31,
				2004				2003				2002
Revenues				$	2,046,525			$	1,756,206			$	1,369,729
Costs and expenses:
Cost of revenues					1,729,963				1,464,709				1,113,273
Selling, general and administrative					155,082				153,609				172,157
Research and development					15,106				10,422				7,756
Exit and restructuring charges and other (Note 6)					—				—				53,317
Merger investigation and settlement costs					59,932				5,247				—
Asset impairment charges (Note 5)					15,495				15,757				—
Total costs and expenses					1,975,578				1,649,744				1,346,503
Operating profit					70,947				106,462				23,226
Interest expense					(37,684	)			(34,489	)			(32,553	)
Interest income					758				2,326				1,708
Debt extinguishment costs					—				(12,423	)			(9,435	)
Loss on investments					(3,867	)			(6,154	)			—
Net gain on sale of assets					563				—				—
Income (loss) from continuing operations before income taxes, and cumulative effect of change in accounting principle					30,717				55,722				(17,054	)
Income tax provision (benefit)					16,953				23,813				(5,603	)
Income (loss) from continuing operations before cumulative effect of change in accounting principle					13,764				31,909				(11,451	)
Loss from discontinued operations, net of tax benefit of ($19,395), ($17,069), and ($110,127) (Note 7)					(52,161	)			(2,812	)			(219,899	)
Income (loss) before cumulative effect of change in accounting principle					(38,397	)			29,097				(231,350	)
Cumulative effect of change in accounting principle, net of tax benefit (Notes 3 and 7)					—				—				(40,111	)
Net income (loss)					(38,397	)			29,097				(271,461	)
Dividend requirements on preferred stock					(190	)			(688	)			(689	)
Net income (loss) applicable to common stock				$	(38,587	)		$	28,409			$	(272,150	)
Basic earnings (loss) per share:
Income (loss) from continuing operations before cumulative effect of change in accounting principle				$	0.16			$	0.39			$	(0.16	)
Loss from discontinued operations, net of taxes					(0.62	)			(0.03	)			(2.89	)
Cumulative effect of change in accounting principle, net of taxes					—				—				(0.53	)
Net income (loss)				$	(0.46	)		$	0.36			$	(3.58	)
Weighted average shares					83,902				79,957				75,988
Diluted earnings (loss) per share:
Income (loss) from continuing operations before cumulative effect of change in accounting principle				$	0.16			$	0.37			$	(0.16	)
Loss from discontinued operations, net of taxes					(0.60	)			(0.03	)			(2.89	)
Cumulative effect of change in accounting principle, net of taxes					—				—				(0.53	)
Net income (loss)				$	(0.44	)		$	0.34			$	(3.58	)
Weighted average shares					86,962				83,398				75,988

The accompanying notes are an integral part of these consolidated financial statements.

F-133

THE TITAN CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

				As of December 31,
				2004				2003
Assets
Current Assets:
Cash and cash equivalents				$	16,672			$	26,974
Accounts receivable—net					515,386				381,265
Inventories					21,336				21,430
Prepaid expenses and other					29,039				23,702
Deferred income taxes					95,390				91,272
Current assets of discontinued operations (Note 7)					1,665				37,477
Total current assets					679,488				582,120
Property and equipment—net					57,542				52,508
Goodwill					464,469				462,909
Intangible assets—net					19,819				29,949
Other assets—net					41,599				36,176
Deferred income taxes					68,380				62,781
Non-current assets of discontinued operations (Note 7)					26,469				64,192
Total assets				$	1,357,766			$	1,290,635
Liabilities and Stockholders' Equity
Current Liabilities:
Current portion of amounts outstanding under line of credit				$	3,500			$	3,500
Accounts payable					116,032				90,086
Current portion of long-term debt					500				863
Accrued compensation and benefits					98,368				81,332
Other accrued liabilities					115,168				93,129
Current liabilities of discontinued operations (Note 7)					20,995				22,681
Total current liabilities					354,563				291,591
Long-term portion of amounts outstanding under line of credit					352,750				341,250
Senior subordinated notes					200,000				200,000
Other long-term debt					491				988
Other non-current liabilities					68,564				50,352
Non-current liabilities of discontinued operations (Note 7)					33,318				35,045
Commitments and contingencies (Notes 4, 5, 6 and 11)
Stockholders' Equity:
Preferred stock: $1 par value, authorized 5,000,000 shares:
Cumulative convertible, $13,700 liquidation preference, designated 1,068,102 shares: None and 686,829 shares issued and outstanding					—				687
Series A junior participating, designated 1,000,000 authorized shares: None issued
Common stock: $.01 par value, authorized 200,000,000 shares: 84,779,939 and 82,182,250 shares issued and outstanding					848				822
Capital in excess of par value					684,934				670,733
Deferred compensation					(53	)			(1,584	)
Accumulated deficit					(336,618	)			(298,221	)
Accumulated other comprehensive loss					—				(215	)
Treasury stock (278,652 and 265,124 shares), at cost					(1,031	)			(813	)
Total stockholders' equity					348,080				371,409
Total liabilities and stockholders' equity				$	1,357,766			$	1,290,635

The accompanying notes are an integral part of these consolidated financial statements.

F-134

THE TITAN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)

				For the Years Ended December 31,
				2004				2003				2002
Cash Flows from Operating Activities:
Income (loss) from continuing operations before cumulative effect of change in accounting principle				$	13,764			$	31,909			$	(11,451	)
Adjustments to reconcile income (loss) from continuing operations to net cash provided by continuing operations, net of effects of businesses acquired and sold:
Debt extinguishment costs					—				12,423				9,435
Loss on investments					3,867				6,154				—
Depreciation and amortization					15,916				19,222				19,895
Write-offs due to asset impairments					15,495				15,757				—
Deferred income taxes and other					25,484				26,240				20,295
Deferred compensation charges					1,531				7,207				27,835
Changes in operating assets and liabilities, net of effects of businesses acquired and sold:
Accounts receivable					(137,480	)			(74,768	)			59,156
Inventories					1,075				3,026				(4,727	)
Prepaid expenses and other assets					(10,925	)			(9,206	)			(7,173	)
Accounts payable					26,114				5,462				9,676
Accrued compensation and benefits					18,422				21,209				(4,812	)
Accrual for settlement charge					25,500				3,000				—
Other liabilities					6,492				13,733				41,744
Net cash provided by continuing operations					5,255				81,368				159,873
Loss from discontinued operations					(52,161	)			(2,812	)			(219,899	)
Holdback payment related to prior year acquisition (Note 8)					—				(2,000	)			—
Proceeds from divesture of businesses (Note 7)					6,623				2,700				—
Deferred compensation charge attributable to discontinued operations					—				—				7,780
Issuance of stock in subsidiaries					—				—				172
Minority interest attributable to discontinued operations					—				—				(130	)
Changes in net assets and liabilities of discontinued operations					39,542				(4,754	)			70,535
Net cash used for discontinued operations					(5,996	)			(6,866	)			(141,542	)
Net cash provided by (used for) operating activities					(741	)			74,502				18,331
Cash Flows from Investing Activities:
Capital expenditures					(22,591	)			(13,799	)			(23,305	)
Acquisition of businesses, net of cash acquired					(3,460	)			(14,089	)			27,409
Capitalized software development costs					—				—				(1,532	)
Proceeds from sales of investments and net assets					2,880				—				6,917
Advances to SureBeam on line of credit					—				—				(25,000	)
Other investments					(1,243	)			(1,615	)			(6,789	)
Other					2,685				457				7,588
Net cash used for investing activities					(21,729	)			(29,046	)			(14,712	)
Cash Flows from Financing Activities:
Extinguishment of HIGH TIDES					—				(250,000	)			—
Issuance of senior subordinated notes					—				200,000				—
Other debt reductions					(860	)			(4,541	)			(4,647	)
Other debt additions					11,500				—				18,250
Preferred stock redemption					(12,518	)			—				—
Deferred debt issuance costs					(500	)			(8,924	)			(8,908	)
Debt extinguishment costs					—				(4,352	)			—
Proceeds from stock issuances					14,619				15,491				8,566
Issuance of stock by subsidiaries					—				—				19
Dividends paid					(190	)			(688	)			(689	)
Decrease (increase) in restricted cash					—				394				(394	)
Other					(98	)			98				(54	)
Net cash provided by (used for) financing activities					11,953				(52,522	)			12,143
Effect of exchange rate changes on cash					215				(83	)			(260	)
Net increase (decrease) in cash and cash equivalents					(10,302	)			(7,149	)			15,502
Cash and cash equivalents at beginning of year					26,974				34,123				18,621
Cash and cash equivalents at end of year				$	16,672			$	26,974			$	34,123

The accompanying notes are an integral part of these consolidated financial statements.

F-135

THE TITAN CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
(In thousands of dollars, except per share data)

				Cumulative Convertible Preferred Stock				Common Stock				Capital in Excess of Par Value				Deferred Compensation				Retained Earnings (Deficit)				Accumulated Other Comprehensive Income (Loss)				Treasury Stock				Total
Balances at December 31, 2001				$	690			$	701			$	586,802			$	(34,519	)		$	(55,857	)		$	128			$	(987	)		$	496,958
Spin-off of SureBeam													(124,722	)			19,318																(105,404	)
Stock issued for acquisitions									68				137,431																312				137,811
Exercise of stock options and other									10				8,556																				8,566
Shares contributed to employee benefit plans									4				7,519																6				7,529
Conversion of preferred stock					(2	)							2																				—
Deferred compensation, related to the issuance of stock options													29,834				(29,834	)															—
Write-off of deferred compensation related to discontinued operations													(629	)			629																—
Amortization of deferred compensation																	35,615																35,615
Income tax benefit from employee stock transactions													3,648																				3,648
Dividends on preferred stock—Cumulative Convertible, $1.00 per share													(689	)																			(689	)
Foreign currency translation adjustment																									(260	)							(260	)
Net loss																					(271,461	)											(271,461	)
Balances at December 31, 2002					688				783				647,752				(8,791	)			(327,318	)			(132	)			(669	)			312,313
Exercise of stock options and other									27				15,608																(144	)			15,491
Issuance of stock for acquisition (Note 4)									3				3,256																				3,259
Return of shares related to acquisition (Note 8)													(2,000	)																			(2,000	)
Amortization of deferred compensation																	7,207																7,207
Shares contributed to employee benefit plans									9				6,518																				6,527
Foreign currency translation adjustment																									(83	)							(83	)
Conversion of preferred stock					(1	)							1																				—
Income tax benefit from employee stock transactions													286																				286
Dividends on preferred stock—Cumulative Convertible, $1.00 per share													(688	)																			(688	)
Net income																					29,097												29,097
Balances at December 31, 2003					687				822				670,733				(1,584	)			(298,221	)			(215	)			(813	)			371,409
Exercise of stock options and other									23				14,814																(218	)			14,619
Shares contributed to employee benefit plans									3				2,715																				2,718
Redemption of preferred stock					(626	)							(11,892	)																			(12,518	)
Conversion of preferred stock					(61	)							61																				—
Amortization of deferred compensation																	1,531																1,531
Foreign currency translation adjustment																									215								215
Income tax benefit from employee stock transactions													8,693																				8,693
Dividends on preferred stock—Cumulative Convertible, $1.00 per share													(190	)																			(190	)
Net loss																					(38,397	)											(38,397	)
Balances at December 31, 2004				$	—			$	848			$	684,934			$	(53	)		$	(336,618	)		$	—			$	(1,031	)		$	348,080

The accompanying notes are an integral part of these consolidated financial statements.

F-136

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Note 1.    Nature of Operations

The Titan Corporation (Titan) is a leading provider of comprehensive information and communications systems solutions and services to the Department of Defense, the Department of Homeland Security, and intelligence and other key government agencies. These systems, solutions, and services include research and development, design, assembly, installation, integration, test and evaluation, deployment, logistics and operations support, maintenance, and training. Systems and products Titan provides to military and government agencies include transformational weapons systems, sophisticated satellite communications systems, antennas/telemetry systems, tactical radios, signals intelligence systems, encryption devices, classified systems, and complex computer-based information systems for information processing, information fusion, dissemination, and data mining.

Titan's services include system procurement selection and acquisition management services, program management, systems engineering and integration for mission-critical defense platforms and communications systems, enterprise information technology network design, integration, deployment, and operations support, translation and interpreter services, military and first responder training and situational exercises and evaluation, and test, modeling, and continuity of operations analysis for blast, nuclear, electro-magnetic, and chemical/biological threats.

Titan applies its core capabilities to provide technology, products, and services with a focus in four often overlapping and synergetic market areas: C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance), Transformational Military Programs, Government Enterprise Information Technology, and the War on Terrorism/Homeland Security.

Prior to the discontinuance of certain operations in 2002, Titan grouped its businesses into five business segments—Titan Systems, Titan Wireless, Software Systems (including Cayenta), Titan Technologies and SureBeam. Titan is no longer reporting its results of operations by these segments; however, reference may be made to these segments in discussions of historical information (see Note 8). In accordance with Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures about Segments of an Enterprise and Related Information," substantially all of Titan's operations are aggregated into one reportable segment given the similarities of economic characteristics between the operations and the common nature of the products, services and customers.

Note 2.    Merger, Investigation and Settlement Costs

On June 26, 2004, Lockheed Martin Corporation terminated the merger agreement pursuant to which Lockheed Martin was to have acquired Titan. The merger agreement was entered into in September 2003 and amended in March 2004 and April 2004 to provide additional time for Titan to resolve the Securities and Exchange Commission (SEC) and Department of Justice (DoJ) investigations under the Foreign Corrupt Practices Act (FCPA) (see Note 11).

In the year ended December 31, 2004, Titan incurred approximately $59.9 million in settlement provision, legal, investment banking, accounting, printing and other professional fees and costs related to the government investigations and the terminated merger with Lockheed Martin, which are reflected in merger, investigation and settlement costs in the accompanying consolidated statements of operations. The merger-related costs include the costs of an exchange offer and consent solicitation for Titan's senior subordinated notes and administrative costs associated with the redemption of Titan's preferred stock (see Note 12), both of which were conditions to close the proposed merger. The investigation-related costs which approximated $25.3 million in the year ended December 31, 2004, include the costs associated with the comprehensive internal review conducted by Titan to evaluate whether payments involving international consultants for Titan or its subsidiaries were made in violation of applicable law. The legal, accounting and other professional fees incurred also supported the related inquiry by the DoJ and the investigation by the SEC. Refer to Note 10 for a discussion of the impact of the terminated merger on Titan's outstanding debt.

F-137

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

In the year ended December 31, 2004, Titan recorded an additional provision of $25.5 million for its revised estimate of anticipated settlement costs related to the government FCPA investigations. Titan had previously recorded $3.0 million as of December 31, 2003, for resolution of this matter. Titan's $28.5 million provision does not include investigation related legal costs being incurred to reach resolution of the FCPA matter, as those costs are expensed as incurred each period. On March 1, 2005, in connection with the FCPA settlement, Titan made total payments of $28.5 million, the same figure it reserved for this purpose.

Note 3.    Significant Accounting Policies

Principles of Consolidation.    The consolidated financial statements include the accounts of Titan and its subsidiaries. All significant intercompany transactions and balances have been eliminated. From time to time, Titan makes investments in joint ventures which may involve international locations and operations. Management evaluates its investment in each joint venture on an individual basis for purposes of determining whether or not consolidation is appropriate. Titan also considers whether its investments are variable interest entities in accordance with Interpretation No. 46, "Consolidation of Variable Interest Entities," (FIN 46). Investments in such ventures are generally consolidated in instances where Titan retains control through decision-making ability and generally a greater than 50% ownership interest. In the absence of such factors, Titan generally accounts for these investments under the cost or equity method, depending upon management's evaluation of Titan's ability to exercise significant influence or control.

Reclassifications.    Certain reclassifications have been made to prior year presentations to conform to the 2004 presentation.

Stock-Based Compensation.    Titan has elected to adopt the disclosure only provisions of Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation." Accordingly, Titan accounts for its stock-based compensation plans under the provisions of Accounting Principles Board (APB) No. 25. Titan also follows the disclosure requirements of SFAS No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure," which amends SFAS No. 123.

As allowed by SFAS No. 123, Titan has elected to continue to apply the intrinsic value method of accounting for stock options and has adopted the disclosure only provisions of the fair value method contained in SFAS No. 123. Compensation cost, if any, is measured as the excess of the quoted market price of Titan stock on the date of grant over the exercise price of the grant. Had compensation cost for Titan stock-based compensation plans been determined based on the fair value method at the grant dates for awards under those plans, Titan's results of operations would have been reduced to the pro forma amounts indicated below:

F-138

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

				2004				2003				2002
Net income (loss), as reported				$(38,397)				$29,097				$(271,461)
Add: Total stock-based employee compensation expense in reported net income (loss), net of related tax effects				965				4,324				5,759
Less: Total stock-based employee compensation expense determined under fair value method for all awards, net of related tax effects				(8,169)				(8,812)				(11,334)
Net income (loss), pro forma				$(45,601)				$24,609				$(277,036)
Earnings per share:
Basic as reported				$(0.46)				$0.36				$(3.58)
Basic pro forma				$(0.55)				$0.30				$(3.66)
Diluted as reported				$(0.44)				$0.34				$(3.58)
Diluted pro forma				$(0.53)				$0.29				$(3.66)

Stock-based compensation expense included in income (loss) as reported results primarily from deferred compensation amortization (see Note 13).

Minority Interest in Subsidiaries.    Minority interest in subsidiaries consists primarily of equity securities issued in 2000 by Titan's subsidiary, Cayenta, Inc., which was the operations of the Software Systems business, which primarily included certain components which were discontinued in March 2002. Titan owned substantially all of the voting equity of Cayenta both before and after the transaction. Titan records minority interest to reflect the portion of the earnings or losses of majority-owned operations which are applicable to the minority interest partners. The minority interest percentages of Cayenta were approximately, 23% as of December 31, 2002 and 23% as of December 31, 2003. The minority interest portion of Cayenta's losses from the discontinued components are reflected in the loss from discontinued operations. In addition, the minority interest portion of the continuing components of Cayenta are reflected in continuing operations.

Financial Instruments.    The fair values of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, line of credit and other long-term debt approximate the carrying amounts due to their short maturities or variable interests. The estimated fair value of Titan's senior subordinated notes at December 31, 2004, approximate $214 million compared with the carrying value of $200 million.

Foreign Currency Translation.    The financial statements of certain of Titan's foreign subsidiaries are measured using the local functional currency. Assets and liabilities of these subsidiaries are translated at exchange rates in effect as of the balance sheet date. Revenues and expenses are translated at average rates of exchange in effect during the year. The resulting cumulative translation adjustments have been recorded in other comprehensive income within stockholders' equity. Foreign currency transaction gains and losses are included in consolidated net income.

Use of Estimates.    The preparation of financial statements in conformity with generally accepted accounting principles in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition.    A majority of Titan's revenue is derived from products manufactured and services performed under cost-reimbursable, time-and-materials, and fixed-price contracts. Cost reimbursable contracts for the government provide for reimbursement of costs plus the payment of a fee. Under fixed-price contracts, the Company agrees to perform certain work for a fixed price. Under time and materials contracts, the Company is reimbursed for labor hours at negotiated hourly billing

F-139

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

rates and is reimbursed for travel and other direct expenses at actual costs plus applied general and administrative expense. Titan's contracts with government customers may use various cost-type contracts. They include cost-plus fixed fee, cost-plus award fee, cost-plus incentive fee with incentives based upon both cost and/or performance, and cost sharing contracts. Under fixed-price contracts, revenues are generally recognized as services are performed, using the percentage-of-completion method, applying the cost-to-cost or units of delivery method, in accordance with Accounting Research Bulletin No. 45 and American Institute of Certified Public Accountants (AICPA) Statement of Position 81-1 "Accounting for Performance of Construction-Type and Certain Production-Type Contracts" (SOP 81-1). Total estimated costs are based on management's assessment of costs to complete the project based upon evaluation of the level of work achieved and costs expended to date. Estimated contract losses are fully charged to operations when identified. Billings in excess of costs incurred are recorded as reductions in accounts receivable in the accompanying consolidated balance sheet. For award and incentive fee type contracts, the Company recognizes the expected fee to be awarded by the customer at the time such fee can be reasonably estimated, based on factors such as prior award experience and communications with the customer regarding performance, including any interim performance evaluations rendered by the customer.

As most of Titan's revenue recognition practices are in accordance with SOP 81-1 and AICPA Statement of Position 97-2 "Software Revenue Recognition" (SOP 97-2), the adoption of Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements" in 2000 had no material impact on the consolidated financial statements.

Deferred Revenues.    Included in other accrued liabilities are deferred revenues which consist principally of customer deposits whereby Titan receives payment in advance of performing the service.

Cash Equivalents.    All highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents.

Unbilled Accounts Receivable.    Unbilled accounts receivable are included in accounts receivable and include work-in-process which will be billed in accordance with contract terms and delivery schedules, as well as amounts billable upon final execution of contracts, contract completion, milestones or completion of rate negotiations. Generally, unbilled accounts receivable are expected to be billed and collected within one year. Payments to Titan for performance on certain U.S. government contracts are subject to audit by the Defense Contract Audit Agency. Revenues have been recorded at amounts expected to be realized upon final settlement. See Note 8 to the consolidated financial statements.

Concentration of Risk.    Sales to the U.S. government, including both defense and non-defense agencies, and sales as a subcontractor as well as direct sales, aggregated approximately $2.0 billion in 2004, $1.7 billion in 2003, and $1.3 billion in 2002. With the exception of Titan's linguist contract with the U.S. Army's Intelligence and Security Command and the contract to provide enterprise information technology support for the U.S. Special Operations Command which contributed 12.1% and 3.6% of total revenues for 2004, respectively, and 7.6% and 3.5% of total revenues for 2003, respectively, no other single contract accounted for more than 3% of total revenue for 2004. Substantially all of Titan's operations are located in the United States. Export and foreign revenues amounted to approximately $27.0 million, $29.2 million and $18.7 million, in 2004, 2003 and 2002, respectively, related primarily to customers in Europe, the Middle East, Africa and Asia. Sales of approximately $12 million, or 43.7% of total foreign revenues, and approximately $10 million, or 36.2% of total foreign revenues, were related to contracts with government customers in the United Kingdom, in 2004 and 2003, respectively.

A majority of Titan's total revenues are from U.S. government contracts. Any cancellations or modifications of its significant contracts or subcontracts, or failure by the U.S. government to exercise an option period relating to those contracts or subcontracts, could adversely affect Titan's financial

F-140

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

condition and results of operations in the short- and long-term. A significant and continuing decline in U.S. defense and other federal agency budgets also may negatively impact its business. Although Titan bids for and is awarded long-term U.S. government contracts and subcontracts, the U.S. government only funds these contracts on an annual basis, and many of its contracts and subcontracts include option years. The U.S. government may cancel these contracts at any time without penalty or may change its requirements, programs or contract budget, and generally has the right not to exercise option periods. The U.S. Congress may decline to appropriate funds needed to complete the contracts awarded to Titan or the prime contractor. On Titan's subcontracts, Titan generally does not control the prime contractor's allocation of resources. Titan also depends upon the prime contractor to perform its obligations on the primary government contract. In addition to contract cancellations and declines in agency budgets, Titan's financial condition and results of operations may be adversely affected by:

•	budgetary constraints affecting U.S. government spending generally, and changes in fiscal policy or available funding;

•	curtailment of the U.S. government's use of technology services providers;

•	the adoption of new laws or regulations;

•	U.S. government facilities closures or agency realignments;

•	competition and consolidation in Titan's business areas; and

•	general economic conditions.

These or other factors could cause government agencies to reduce their purchases under contracts, to exercise their right to terminate contracts or not to exercise options to renew contracts. Any of these actions could have a material adverse effect on Titan's business, financial condition and results of operations.

Inventories.    Inventories include the cost of material, labor and overhead, and are stated at the lower of cost, determined on the first-in, first-out (FIFO) and weighted average methods, or market. Titan periodically evaluates on-hand stock and makes appropriate dispositions of any stock deemed excess or obsolete.

Property and Equipment.    Property and equipment are stated at cost. Depreciation is provided using the straight-line method, with estimated useful lives of 5 to 30 years for buildings, 2 to 15 years for leasehold improvements, representing the lesser of the useful life of the improvement or the lease term, and 3 to 15 years for machinery and equipment and furniture and fixtures. In Titan's discontinued medical sterilization business, certain machinery and equipment is depreciated based on units of production.

Goodwill and Other Intangible Assets.    Goodwill represents the excess of costs over fair value of assets of businesses acquired. Effective January 1, 2002, Titan adopted SFAS No. 142, "Goodwill and Other Intangible Assets," which establishes financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB Opinion No. 17, "Intangible Assets." Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets."

SFAS No. 142 requires that goodwill be tested for impairment at the reporting unit level at least annually, utilizing a two step methodology. The initial step requires Titan to assess whether indications of impairment exist. If indications of impairment are determined to exist, the second step of

F-141

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

measuring impairment is performed, wherein the fair value of the relevant reporting unit is compared to the carrying value, including goodwill, of such unit. If the fair value exceeds the carrying value, no impairment loss is recognized. However, if the carrying value of the reporting unit exceeds its fair value, the goodwill of the reporting unit is impaired.

Titan performs its annual testing for impairment of goodwill and other intangible assets in connection with the preparation of its annual financial statements. Based on testing performed as of December 31, 2004, there were no indicators of impairment.

Initial Adoption

In connection with the initial adoption of this standard as of January 1, 2002, during the first quarter of 2002, Titan's independent valuation consultant, Bearing Point, completed step one of the test for impairment, which indicated that the carrying values of certain reporting units exceeded their estimated fair values, as determined utilizing various evaluation techniques including discounted cash flow and comparative market analysis. Thereafter, given the indication of a potential impairment, Titan completed step two of the test. Based on that analysis, a transitional impairment loss of $40.1 million, which was net of a $10.0 million tax benefit, was recognized in the first quarter of 2002 as the cumulative effect of an accounting change. The impairment charge resulted from a change in the criteria for the measurement of the impairment loss from an undiscounted cash flow method, as required by SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," to an estimated fair value analysis as required by SFAS No. 142. The gross $50.1 million impairment charge recorded in the first quarter of 2002 was comprised of approximately $27.5 million in certain components of our Cayenta business, approximately $14.9 million in our AverCom business, which was previously reported in our Titan Technologies segment, both attributable to lower valuations and weakened outlook in commercial IT services, and approximately $7.7 million in our Titan Wireless business. The entire $50.1 million charge was related to discontinued businesses; approximately $42.4 million of this charge pertained to businesses that were discontinued by Titan on March 1, 2002 with the remaining charge of $7.7 million related to Titan's long distance telecommunications business that was discontinued in the third quarter of 2002.

All other intangible assets were amortized on a straight-line basis from 1 to 10 years.

Impairment Subsequent to Initial Adoption

In the second quarter of 2004, approximately $17.3 million of goodwill and purchased intangibles was impaired in connection with Titan's board of directors' decision to divest Datron World Communications (Datron World). The measurement of the impairment was based upon indications of fair value determined by offers from potential buyers.

As a result of Titan's board of directors' decision in July 2002 to exit its long distance telecommunications business, and the deterioration in pricing and valuations in the telecommunications industry, Titan recorded an additional impairment charge in 2002 of $74.8 million of goodwill in its international telecommunications business, Titan Wireless, based upon indications of fair value as determined by recent sales offers from potential buyers.

In connection with Titan's board of directors' decision in the third quarter of 2002 to divest its LinCom Wireless business, Titan recorded a $2.7 million impairment of goodwill in the third quarter of 2002 based upon indications of fair value as determined by offers from potential buyers. In October 2002, Titan shut down the operations of LinCom Wireless.

In addition, approximately $19.4 million of additional goodwill was determined to be impaired in 2002 related to previously discontinued components of Cayenta, AverCom and other commercial information technology businesses, which impairment was recorded based upon estimates of fair value.

F-142

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

All impairment charges recognized subsequent to our initial adoption of SFAS No. 142 have been reported in the loss from discontinued operations, as all impairments were incurred in businesses held for sale or disposed of during both 2004 and 2002 (see Note 7).

Impairment of Investments in Non-marketable Securities.    Periodically, Titan reviews for possible impairments its non-marketable securities, which include its investments in emerging businesses, which are accounted for under the cost method. Whenever events or changes in circumstances indicate that the carrying amount of an asset is other than temporarily impaired, asset values are adjusted accordingly based on a write down of cost to estimated fair value. In evaluating whether a loss in the carrying value of an investment is other than temporary, Titan evaluates the financial condition and near-term prospects of the investee and the region and industry of the investee, including any specific events which may influence the operations of the investee such as changes in technology, and its overall investment intent. Titan will generally deem an impairment to be other than temporary if its cost basis has exceeded its fair value for a period of six to nine months. If a loss in the carrying value of an investment is deemed to be other than temporary, Titan recognizes such loss based on a write down of cost to realizable value. During 2004, Titan recorded impairments on investments totaling approximately $3.9 million, which was principally comprised of a write-off of its investment in Etenna Corporation.

Impairment of Long-Lived Assets.    SFAS No. 144 provides a single accounting model for long-lived assets to be disposed of. SFAS No. 144 also changes the criteria for classifying an asset as held for sale, broadens the scope of businesses to be disposed of that qualify for reporting as discontinued operations and changes the timing of recognizing losses on such operations. Titan adopted SFAS No. 144 on January 1, 2002. Refer to Note 7 for discussion of operations discontinued since Titan's adoption of SFAS No. 144.

In accordance with SFAS No. 144, long-lived assets, such as property, plant, and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.

Goodwill and intangible assets not subject to amortization are tested annually for impairment, and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset's fair value.

Income Taxes.    Titan accounts for income taxes under SFAS No. 109, "Accounting for Income Taxes," which requires the use of the liability method of accounting for deferred income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

Per Share Information.    Titan computes earnings per share based on the provisions of SFAS No. 128, "Earnings Per Share."

The following data summarize information relating to the per share computations for continuing operations before extraordinary loss and cumulative effect of change in accounting principle:

F-143

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

				For the Year Ended December 31, 2004
				Income (Loss) (Numerator)				Shares (000's) (Denominator)				Per-Share Amounts
Income from continuing operations					13,764
Less preferred stock dividends					(190	)
Basic EPS:
Income from continuing operations available to common stockholders					13,574				83,902				0.16
Effect of dilutive securities: Stock options and warrants					—				3,060				—
Diluted EPS:
Income from continuing operations available to common stockholders					13,574				86,962				0.16

				For the Year Ended December 31, 2003
				Income (Loss) (Numerator)				Shares (000's) (Denominator)				Per-Share Amounts
Income from continuing operations					31,909
Less preferred stock dividends					(688	)
Basic EPS:
Income from continuing operations available to common stockholders					31,221				79,957				0.39
Effect of dilutive securities:
Stock options and warrants					—				3,441				(0.02	)
Diluted EPS:
Income from continuing operations available to common stockholders					31,221				83,398				0.37

				For the Year Ended December 31, 2002
				Income (Loss) (Numerator)				Shares (000's) (Denominator)				Per-Share Amounts
Loss from continuing operations					(11,451	)
Less preferred stock dividends					(689	)
Basic and Diluted EPS:
Loss from continuing operations available to common stockholders					(12,140	)			75,988				(0.16	)

F-144

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Note 3.    Significant Accounting Policies

In the year ended December 31, 2004, options and warrants to purchase approximately 1,026,800 shares of common stock at prices ranging from $17.05 to $29.74 per share were not included in the computation of diluted EPS, as their effect was anti-dilutive due to the exercise price being higher than Titan's average market price in the period.

In the year ended December 31, 2003, options and warrants to purchase approximately 2,531,700 shares of common stock at prices ranging from $13.85 to $29.74 per share were not included in the computation of diluted EPS, as their effect was anti-dilutive due to the exercise price being higher than Titan's average market price in the period.

In the year ended December 31, 2002, options to purchase approximately 3,357,700 shares of common stock at exercise prices ranging from $1.04 to $13.09 per share were not included in the computation of diluted EPS, as their effect was anti-dilutive due to the loss from continuing operations before cumulative effect of change in accounting principle. In the year ended December 31, 2002, options to purchase approximately 3,963,900 shares of common stock at prices ranging from $13.18 to $29.74 were not included in the computation of diluted EPS, as their effect was anti-dilutive due to the exercise price being higher than Titan's average market price in the period.

In 2003 and 2002, approximately 537,300 and 538,400 shares of common stock, respectively, that could result from the conversion of cumulative convertible preferred stock were not included in the computation of dilutive EPS, as the effect would have been anti-dilutive on the results of continuing operations. The preferred stock was redeemed on March 15, 2004 (see Note 12). Similarly, in 2003 and 2002, approximately 2,859,100 and 6,776,500 shares, respectively, that could result from the conversion of the remarketable term income deferrable equity securities (HIGH TIDES) were not included in the computation of diluted EPS. The change in potential dilution from 2002 to 2003 for the HIGH TIDES is due to their redemption on June 4, 2003.

Comprehensive Income.    Comprehensive income represents all changes in equity of an enterprise that result from transactions and other economic events of the period other than transactions with owners. Comprehensive income is the total of net income and all other non-owner changes in equity.

During the year ended December 31, 2004, Titan did not have any other comprehensive income items. During the years ended December 31, 2003 and 2002, Titan's only element of other comprehensive income resulted from foreign currency translation adjustments, which are reflected in the consolidated statements of changes in stockholders' equity as foreign currency translation adjustments within accumulated other comprehensive income.

New Accounting Standards

In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 123R (SFAS 123R), "Share-Based payment", which replaces SFAS No. 123, "Accounting for Stock-Based Compensation" and supercedes APB Opinion No. 25, "Accounting for Stock Issued to Employees." SFAS 123R requires compensation costs related to share-based payment transactions to be recognized in the financial statements whereas under the provisions of SFAS No. 123, Titan has adopted the disclosure only provision. With limited exception, the amount of compensation cost is measured based on the grant date fair value of the equity or liability instruments used. SFAS 123R requires liability awards to be re-measured each reporting period and compensation costs to be recognized over the period that an employee provides service in exchange for the award. SFAS123R is effective beginning the first interim or annual reporting period that begins after June 15, 2005. Titan plans to adopt the provisions of SFAS 123R prospectively during the third quarter of 2005. Titan is currently evaluating the effect of adopting this pronouncement and the ultimate impact of adopting SFAS 123R is not yet known.

In December 2003, the SEC issued Staff Accounting Bulletin No. 104, "Revenue Recognition" (SAB No. 104), which codifies, revises and rescinds certain sections of SAB No. 101, "Revenue

F-145

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Recognition", in order to make this interpretive guidance consistent with current authoritative accounting and auditing guidance and SEC rules and regulations. The changes noted in SAB No. 104 did not have a material effect on the consolidated financial position or results of operations.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." SFAS No. 149 amends SFAS No. 133 by requiring that contracts with comparable characteristics be accounted for similarly and clarifies when a derivative contains a financing component that warrants special reporting in the statement of cash flows. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003, and must be applied prospectively. The adoption of SFAS No. 149 had no effect on the consolidated financial condition or results of operations.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150 requires that certain financial instruments, which under previous guidance were accounted for as equity, must now be accounted for as liabilities. The financial instruments affected include mandatory redeemable stock, certain financial instruments that require or may require the issuer to buy back some of its shares in exchange for cash or other assets and certain obligations that can be settled with shares of stock. SFAS No. 150 is effective for all financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. Titan adopted SFAS No. 150 effective July 1, 2003, and the adoption did not have a material impact on the consolidated financial position or results of operations.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46), which addresses the consolidation of certain entities (variable interest entities, or VIEs) in which an enterprise has a controlling financial interest through other than voting interests. FIN 46 requires that a variable interest entity be consolidated by the holder of the majority of the expected risks and rewards associated with the activities of the variable interest entity. FIN 46 was effective for VIEs entered into prior to February 1, 2003 in periods beginning after June 15, 2003. The adoption of FIN 46 did not have a material impact on our consolidated financial condition or results of operations. In January 2004, the FASB issued a revision to FIN 46 (FIN 46R), to clarify some requirements and add new scope exceptions. The revised guidance is effective for the first reporting period beginning after December 15, 2003. The adoption of the provisions of FIN 46R did not have a material impact on the consolidated financial condition or results of operations.

In November 2002, the FASB's Emerging Issues Task Force (EITF) issued EITF Issue No. 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables." EITF Issue No. 00-21 addresses how to determine whether a revenue arrangement involving multiple deliverables contains more than one unit of accounting for the purposes of revenue recognition and how the revenue arrangement consideration should be measured and allocated to the separate units of accounting. EITF Issue No. 00-21 applies to revenue arrangements entered into after June 15, 2003. The adoption of this statement did not have a material impact on the consolidated financial condition or results of operations.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, an interpretation of FASB Statements No. 5, 57 and 107 and a rescission of FASB Interpretation No. 34." This Interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees issued. The Interpretation also clarifies that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation undertaken. The initial recognition and measurement provisions of the Interpretation are applicable to guarantees issued or modified after December 31, 2002 and did not have a material effect on Titan's financial statements. The disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002.

F-146

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

In July 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated with Exit or Disposal Activities" (SFAS 146). SFAS 146 is effective for exit or disposal activities initiated after December 31, 2002. This standard requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. The standard replaces the existing guidance provided by the FASB's Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." Titan did not initiate any activities in 2003 or 2004 that would be included within the scope of this standard.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections as of April 2002", which was effective for fiscal years beginning after May 15, 2002. SFAS No. 145 rescinded SFAS No. 4 and SFAS No. 64, which required that all gains and losses from extinguishment of debt be aggregated, and if material, classified as an extraordinary item. As a result of changes in the criteria, gains and losses from debt extinguishment are to be classified as extraordinary only if they meet the criteria set forth in Accounting Principles Board (APB) Opinion No. 30, "Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions." In accordance with SFAS 145 and APB 30, the deferred debt issuance costs and other extinguishment costs related to the HIGH TIDES were expensed upon extinguishment of that debt in 2003. The charge is reflected in the results of continuing operations as Debt Extinguishment Costs in the accompanying consolidated statement of operations. Also in accordance with SFAS No. 145, 2002 debt extinguishment costs associated with the termination of a senior credit facility have been reclassified from an extraordinary item to results from continuing operations. See Note 10 for further discussion of the charges.

Note 4.    Acquisitions

On November 3, 2003, Titan acquired Advent Systems for total cash consideration, net of cash acquired, of approximately $12.1 million. Advent provides intelligence, surveillance, reconnaissance, support and mission planning services to the U.S. government. The acquisition was to further Titan's strategic goal of acquiring government information technology companies that fit strategically with its government business. The transaction was accounted for using the purchase method, and accordingly, results of operations of Advent Systems are included in Titan's results of operations as of the date of purchase. The excess of the purchase price over the estimated fair market value of the net assets acquired was approximately $10.1 million, and has been reported as goodwill. Pro forma information related to the Advent Systems acquisition has not been presented, as the effect on Titan's results of operations is not significant.

In January 2003, Titan announced that the agreement to acquire Science & Engineering Associates, Inc. (SEA), a privately held provider of engineering and information technology services, had expired and that Titan and SEA mutually agreed not to extend the purchase agreement at that time. Direct costs of $1.2 million related to this transaction were included in exit and restructuring charges and other in 2002 (see Note 6).

During 2002, Titan completed three acquisitions within the U.S. government business that were accounted for using the purchase method and, accordingly, results of operations of the acquired companies are included in Titan's operating results as of the date of the purchase. The following table represents selected data regarding each acquisition.

F-147

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Name

Date of Acquisition

Consideration Paid and Accrued

Goodwill and Purchased Intangibles

Wave Science, Inc.

September 12, 2002

$11.3 million*

$10.9 million

Jaycor, Inc.

March 21, 2002

$103.5 million

$49.9 million

International Systems, LLC

February 22, 2002

$7.9 million*

$8.4 million

*	Consideration paid is subject to adjustment if certain earn-out conditions are achieved.

On September 12, 2002, Titan completed the acquisition of 100% of the outstanding shares of Wave Science, Inc. (Wave Science), a privately held designer of radio components and communication systems, for a purchase price of approximately $8.5 million in cash, subject to post-closing adjustments and indemnification obligations. The acquisition was to further Titan's goal of acquiring government information technology companies which fit strategically with its government business, particularly the addition of Wave Science's experienced engineering team. The purchase agreement provided for additional consideration of up to $3.0 million based on achieving certain revenue and profit margin targets for the two-year period beginning January 1, 2002 through December 31, 2003, and additional consideration of up to $1.0 million based on the receipt of certain contract awards through December 31, 2004. Additional consideration of $1.8 million was accrued at December 31, 2003, representing the total amount due based on the revenue and profit margin targets through December 31, 2003, and was paid in February 2004. Additional consideration of $1.0 million was paid during 2004, representing the receipt of certain contract awards. No further amounts are payable under the provisions of the purchase agreement. These additional purchase price adjustments were accounted for as an increase to goodwill.

On March 21, 2002, Titan completed the acquisition of Jaycor, Inc. (Jaycor), a San Diego, California, based provider of information technology services and specialized communications and sensor products to further Titan's goal of acquiring government information technology companies which fit strategically with its government business. At the closing, Titan issued approximately 4,919,500 shares of Titan common stock for all the outstanding shares of common stock of Jaycor, based on an exchange ratio of 0.50160 shares of Titan common stock for each share of Jaycor common stock at an aggregate value of $99.6 million, based on $20.24 per Titan share, the average trading price ending March 20, 2002, the date on which the formula for the purchase consideration became fixed. The excess of the $99.6 million purchase price over the estimated fair market value of the net assets acquired ($57.6 million) was approximately $42.0 million. In April 2002, Titan obtained an independent valuation completed by Bearing Point to assist management in its purchase price allocation for the Jaycor acquisition. The independent valuation was used by Titan to allocate $38.1 million to goodwill and $3.9 million to intangible assets. The intangible assets consist of backlog, customer relationships and trade name of $0.7 million, $1.3 million, and $1.9 million, respectively, which are being amortized over the estimated useful lives of 1 year, 1 to 3 years and 5 years, respectively. At December 31, 2004, the unamortized balance of purchased intangibles was $1.0 million included in intangible assets in the consolidated balance sheet. The transaction value was increased by approximately $3.9 million to an aggregate total of $103.5 million to reflect an additional 173,099 shares issued in July 2003 to cover certain costs of the shareholders of Jaycor, and an additional 20,948 shares issued in July 2002 and August 2002 related to certain working capital adjustments. The additional purchase price of $3.9 million was accounted for as an increase to goodwill resulting in goodwill of $45.9 million.

On February 22, 2002, Titan completed the acquisition of International Systems, LLC (International Systems), which designs and builds low-cost combat systems for the Department of Defense and agencies of the Department of Defense, to further Titan's goal of acquiring government information technology companies which fit strategically with its government business. The purchase price, which aggregated approximately $1.8 million, was comprised of approximately 100,000 shares of

F-148

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Titan common stock, subject to post-closing adjustments and indemnification obligations. In addition, additional consideration may be paid based on the receipt of certain contract awards and the achievement of defined earnings level on all contracts by International Systems, which consideration may be satisfied with cash or Titan common stock. The additional consideration for defined earnings levels will be equal to 20% of International Systems' EBIT (earnings before income tax and benefit allowances) from certain specified defense technology programs for each year from 2002 to 2006 and 7.5% of International Systems' EBIT from those defense technology programs for each year from 2007 to 2011. In July 2002, 100,000 shares of Titan stock valued at $1.2 million were issued based on the receipt of certain of these contract awards. In July 2003, Titan issued 350,000 shares of common stock valued at $3.3 million and paid $0.2 million in cash of additional consideration related to the receipt of these contract awards and the percentage of EBIT earned in these contracts in 2002. The value of the shares, in addition to the cash paid, were recorded as an increase to goodwill. The additional consideration for contract awards was fully paid as of December 31, 2003. Additional consideration of $0.8 million and $0.6 million was accrued at December 31, 2003 and December 31, 2004, repectively, representing the total amount due based on EBIT achieved in each fiscal year. As the total consideration for the acquisition of International Systems may change based upon the achievement of defined earnings levels, goodwill will change to reflect any such additional consideration.

During 2002, approximately $2.0 million was paid in satisfaction of purchase price holdbacks for the SenCom Corporation acquisition made in 2000 and approximately $2.7 million was paid in satisfaction of purchase price holdbacks for the System Resources Corporation acquisition made in 1999. Each of these amounts had been recorded as liabilities in periods prior to January 1, 2002.

In 1999, Titan's subsidiary, Titan Systems Corporation, acquired Atlantic Aerospace Corporation. The terms of the acquisition provided for up to an additional $3.0 million in contingent consideration payable based upon the award of future contracts. During 2001, approximately $1.2 million of contingent consideration was paid upon the award of certain contracts. In the third quarter of 2003, Titan paid $1.8 million in full satisfaction of the contingent consideration payable. All amounts paid in 2001 and 2003 had been previously accrued.

In connection with the determination of the fair value of assets acquired in connection with acquisitions in 2001, 2000 and 1999, and pursuant to the provisions of SFAS No. 141, Titan has valued acquired contracts in process at contract price, minus the estimated costs to complete and an allowance for the normal industry profit on its effort to complete such contracts. This adjustment has been reflected in the accompanying consolidated balance sheet as an increase to goodwill and a corresponding increase to deferred profit. We recognized approximately $0.5 million, $0.2 million and $2.3 million as a reduction of costs against the deferred profit in 2004, 2003, and 2002, respectively. The remaining amount of $0.1 million at December 31, 2004 is estimated to reduce costs in 2005.

Note 5.    Asset Impairment Charges

In the second quarter of 2004, Titan recorded asset impairment charges totaling $15.5 million. Approximately $10 million of these charges pertained to impairment of fixed assets directly related to the termination of a program by a U.S. civilian government agency in the second quarter, and impairment of assets associated with a reduction in scope of planned business activities in Saudi Arabia. As a result of curtailing the activities in Saudi Arabia and with the U.S. civilian government agency, future cash flows will be insufficient to recover the carrying value of certain dedicated assets. Approximately $5.5 million related to a charge for impairment of a technology license Titan purchased from SureBeam in 2001. The termination of the program by a civilian agency has generated a claim for recovery of contract costs which Titan intends to file in 2005. Management believes the facts of the claim form a legal basis for successful recovery; however, if the claim is unsuccessful, an additional charge of up to approximately $5.8 million could be incurred to write-off uncollected contract costs. Management identified an impairment to the value of the asset based on revised estimates of future

F-149

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

cash flows from sales of systems, resulting in a charge of $5.5 million to reduce the carrying value. The remaining license balance will be amortized over a 5-year period. The license was purchased in September 2001 and includes a world-wide perpetual and exclusive, non-royalty bearing license to use SureBeam's intellectual property for all applications and fields other than the food, animal hide and flower markets. Titan utilizes this technology for its contract with the U.S. Postal Service to provide mail sanitization systems and has outstanding bids using these technology rights. The remaining unamortized balance of $1.1 million at December 31, 2004, is reflected as a non-current asset in intangible assets in the consolidated balance sheet.

Prior to and in connection with the spin-off of SureBeam Corporation, a former subsidiary of Titan, Titan and SureBeam entered into a number of agreements, including the extension of $25 million under a $50 million senior secured revolving credit facility, which was secured by a lien on substantially all of SureBeam's assets. In addition, Titan guaranteed certain lease obligations of SureBeam and subleased facilities to SureBeam. The aggregate amount of the lease obligations Titan has guaranteed as of December 31, 2004 is approximately $17.6 million. The leases extend through periods ending in 2023. The aggregate amount payable by Titan as December 31, 2004, for future obligations under the leases for approximately 63,800 square feet that were subleased to SureBeam for periods through 2010 is approximately $3.8 million. SureBeam's obligation to reimburse Titan for any amounts paid under the guarantees or subleases was secured under the senior credit facility.

On January 19, 2004, SureBeam voluntarily filed for bankruptcy relief to be liquidated under Chapter 7 of the United States Bankruptcy Code. As a result of this filing, Titan recorded an estimated pre-tax impairment charge of $15.8 million (and an associated tax benefit of $6.3 million) in the fourth quarter of 2003 related to the senior credit facility with SureBeam as well as SureBeam's other indebtedness and obligations to Titan. The impairment charge was offset by an $8.1 million liability previously accrued by Titan to SureBeam under a tax allocation agreement. The ultimate amount of impairment to be recognized is contingent upon the amount of actual proceeds recovered by Titan from the liquidation of assets provided to Titan under the settlement agreement with the SureBeam bankruptcy trustee described below. The current estimate of such proceeds, which includes estimated sales of equipment and inventory, primarily electron beam systems and other related components, is approximately $3.0 million. The actual amount of Titan's losses could be lower or higher than currently estimated depending on the proceeds received from the liquidation of SureBeam assets provided to Titan under the settlement agreement.

On April 5, 2004, the United States Bankruptcy Court for the Southern District of California approved the settlement agreement that Titan had entered into with the bankruptcy trustee of SureBeam Corporation and SB Operating Co LLC (SureBeam). Under the settlement agreement, substantially all of the SureBeam assets were transferred to Titan and the trustee, on behalf of the bankruptcy estate, released Titan from any claims held by SureBeam. These assets include all equipment and inventory, patents, intellectual property, certain customer receivables and leased and subleased properties. Titan agreed to exclude from the settlement agreement approximately $4 million in assets that will remain in the bankruptcy estate. The excluded assets consist of cash and two customer receivables. Costs incurred, primarily legal and other professional fees, in 2004 related to the bankruptcy settlement and other SureBeam related matters, including the defense of class action litigation, were approximately $2.9 million, and are reflected on the consolidated statement of operations in selling, general and administrative expenses.

Note 6.    Exit and Restructuring Charges and Other

Included in the year ended December 31, 2002, is $53.3 million of restructuring costs related to the merger of Titan Systems into Titan on September 25, 2002, and exit charges related to the shutdown of Cayenta's headquarters office. Approximately $11.7 million of these exit charges are related to the shutdown of the Cayenta headquarters office and network operations center, which

F-150

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

includes employee termination costs and other liabilities of approximately $4.5 million, lease commitment costs of approximately $4.8 million, and non-cash asset impairment charges of approximately $2.4 million relating primarily to the unamortized leasehold improvements and other fixed assets at the Cayenta headquarters. The remaining lease commitment costs are expected to be paid through future periods ending in January 2007. Included in the employee termination costs were 33 personnel reductions.

Approximately $39.9 million of the restructuring charges were related to the merger of Titan Systems into Titan and other associated reorganization and consolidation costs. The costs included approximately $32.2 million for the consolidation of various Titan Systems facilities into centralized locations in Virginia and California. This charge reflects the estimated losses, net of estimated sublease income, on future lease commitments of facilities with terms extending through year 2009. Titan has subleased certain of these facilities and continues to actively pursue additional sublease opportunities for the remaining facilities. However, the remaining available space is in markets adversely affected by the economy and may not be subleased at attractive rates or at all. The actual amount of estimated losses on these lease commitments could change based upon Titan's ability to obtain sublease arrangements for these facilities. Included in the employee termination costs are 19 personnel reductions.

Approximately $7.7 million of the Titan Systems restructuring costs were primarily related to employee termination costs, employee retention costs, duplicate transition costs and professional fees related to acquisitions and certain reorganization and consolidation activities within Titan Systems.

The remaining $1.7 million was related to direct transaction costs incurred by Titan on acquisitions that did not close, primarily the Science and Engineering Associates, Inc. proposed acquisition.

At December 31, 2004, accruals for all exit and restructuring charges totaled $15.3 million, comprised primarily of restructuring charges related to the merger of Titan Systems into Titan on September 25, 2002 and exit charges related to the shutdown of Cayenta's headquarters. These exit and restructuring activities were accounted for under EITF Issue No. 94-3, which allowed accrual of restructuring costs upon commitment to a plan and certain other criteria. Effective January 1, 2003, Titan was required to adopt SFAS No. 146 "Accounting for Costs Associated with Exit or Disposal Activities". SFAS No. 146 requires companies to defer recognition of a liability for a cost associated with an exit or disposal activity until that liability is incurred and can be measured at fair value. As these restructuring activities were entered into prior to Titan's adoption of SFAS No. 146, Titan has accounted for these activities under EITF 94-3. A summary of exit and restructuring charges and other recorded and the utilization of those accruals during the years ended December 31, 2003 and 2004 is as follows:

F-151

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

				Balance December 31, 2002				Cash paid 2003				Balance December 31, 2003				Cash paid 2004				Change in Estimate				Asset Disposal				Balance December 31, 2004
Titan Systems restructuring:
Estimated facilities consolidation costs				$	32,071			$	(4,775	)		$	27,296			$	(11,804	)		$	1,110			$	(1,746	)		$	14,856
Employee termination/retention costs and other					1,738				(1,738	)			—																—
					33,809				(6,513	)			27,296				(11,804	)			1,110				(1,746	)			14,856
Transaction costs for unsuccessful deals					597				(597	)																			—
					34,406				(7,110	)			27,296				(11,804	)			1,110				(1,746	)			14,856
Cayenta headquarters exit costs:
Lease commitment costs					3,136				(2,511	)			625				(499	)			257				—				383
Asset impairment costs					—				—				—
Employee termination costs and other					219				(212	)			7				(88	)			126				—				45
					3,355				(2,723	)			632				(587	)			383				—				428
				$	37,761			$	(9,833	)		$	27,928			$	(12,391	)		$	1,493			$	(1,746	)		$	15,284

At December 31, 2004, $5.1 million of the exit and restructuring accruals are included in Other Accrued Liabilities on the consolidated balance sheet and $10.2 million are included in Other Non-current Liabilities. The remaining accrual balance is primarily comprised of amounts due under the facilities consolidation, which requires payments in 2005 for certain lease cancellation fees and other lease costs, net of assumed sublease income, with the remainder expected to be paid over the remaining lease terms, which expire in 2009.

Note 7.    Discontinued Operations

2004 Discontinued Operations

In June 2004, Titan's board of directors decided to sell or otherwise divest Datron World and its Titan Scan Technologies service business (Scan Services). These non-core operations did not perform to management's expectation, and their divestiture will allow Titan to better focus on its National Security Solutions business. Previously, Datron World was reported in the Titan Systems segment, and Scan Services was reported in the Titan Technologies segment and they are presented below within those segments. These businesses have been reported as a discontinued operation in accordance with SFAS No. 144, and all periods presented have been restated accordingly to reflect these operations as discontinued. During the fourth quarter of 2004, Datron World was sold for approximately $4.7 million, resulting in a loss of approximately $2.0 million. In February 2005, the Scan Services was sold for approximately $4.9 million, which did not result in a material gain on the transaction.

The results of discontinued operations for the year ended December 31, 2004, include asset impairment charges of approximately $20.3 million for Datron World, consisting of goodwill and purchased intangibles of approximately $17.3 million and approximately $3.0 million related to inventory value not expected to be recovered in the disposal of this business. Revenues for Datron World for the year ended December 31, 2004, were $9.9 million.

F-152

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

The results of discontinued operations for the year ended December 31, 2004, include asset impairment charges of approximately $8.5 million for Scan Services, primarily representing fixed asset values not expected to be recovered in the disposal of the business. The estimate of value expected to be recovered upon disposition is based on indications of interest and proposed letters of intent received by Titan. Revenues for Scan Services for the year ended December 31, 2004, were $5.5 million.

2002 Discontinued Operations

In August 2002, Titan's board of directors made the decision to sell or otherwise divest its LinCom Wireless business and to sell Cayenta Canada, Titan's remaining commercial information technology business, both of which were previously reported in Titan's Titan Technologies segment. Accordingly, Titan has reflected both operations as discontinued in accordance with SFAS No. 144. In October 2002, the LinCom Wireless business was shut down. On June 2, 2004, Titan sold Cayenta Canada for a net $5.6 million in cash, with no resulting gain or loss recorded on the sale. Titan retained current liabilities related to this business which are included in Titan Technologies below, of approximately $1.8 million related to potential purchase price adjustments due to the buyer and transaction-related costs and indemnification obligations related to the sale. Additionally, Titan had previously guaranteed performance on several customer contracts and a facility lease related to this business and these guarantees were not transferred to the buyer in the June 2004 sale. The face value of these guarantees is approximately $14 million at December 31, 2004. Substantially all of the guarantees were issued prior to December 31, 2003 and are therefore not required to be recognized and measured under the provisions of FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others—an Interpretation of FASB Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34." Titan has not had to make any payments with respect to contract guarantees related to this business since its acquisition in 1999 and has not provided any reserves for these contingencies at December 31, 2004, based on management's assessment that such payments are not probable of being made.

In July 2002, Titan's board of directors made the decision to exit all of its international telecommunications business through a combination of selling and winding down Titan's operations within its Titan Wireless segment. Titan immediately began implementing these actions, which were substantially completed during 2003. Titan reported this exit of the Titan Wireless segment as a discontinued operation in accordance with SFAS No. 144.

During the first quarter of 2002, Titan's board of directors made the decision to sell certain of its commercial information technology operations within the Cayenta segment and the AverCom business within the Titan Technologies segment. These businesses were sold in 2002.

In the third quarter of 2003, Titan completed the sale of its GlobalNet business. Payments received for the sale of GlobalNet consisted of approximately $2 million in cash, notes receivable of approximately $1.5 million, and the buyer's assumption of all of the outstanding liabilities of GlobalNet, which aggregated to approximately $21 million at the time of the consummation of the sale. Titan has collected approximately $0.6 million of the amounts due under the notes receivable; however, the remaining $0.9 million is past due and was previously reserved, as Titan has no assurance that this remaining balance will ultimately be collected. In accordance with SFAS No. 144, all commercial operations that have been sold or are held for sale have been reflected as discontinued operations for all periods presented in Titan's consolidated financial statements.

Titan Wireless

Overview

On July 11, 2002, Titan announced it would exit all of its international telecommunications business, directly as a result of an increasingly deteriorating market, particularly in the wholesale long

F-153

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

distance business. Notably, the bankruptcies of Global Crossing, Ltd., WorldCom, Inc. and Phone1Globalwide Corporation (formerly Globaltron Corporation), and the dire financial condition of other providers, such as ibasis, imposed a rapid and sudden deterioration in wholesale prices in 2002. As a direct result of decreasing wholesale margins, and the difficulty of providers to obtain financing to invest in new projects globally, Titan's telecommunications business operating results declined substantially beginning in the second quarter of 2002. The losses in the second quarter of 2002 and the bleak outlook of the telecommunications market globally led to the July 2002 Titan board of directors decision to exit these markets. Titan has substantially completed the sale and winding down of all of its operations within Titan Wireless, including all of the operations discussed below.

Acquisitions and Investments

GlobalNet, Inc.

On March 21, 2002, Titan completed the acquisition of GlobalNet, Inc. (GlobalNet), a provider of international voice, data, and Internet services. Titan issued approximately 1,452,800 shares of its common stock for all the common stock of GlobalNet at an aggregate value of $28.6 million, based on $19.67 per Titan share, the average trading price ending March 15, 2002, the date on which the formula for consideration became fixed, and assumed stock options and warrants representing approximately 77,900 shares of Titan common stock at an aggregate value of $0.8 million, based on an exchange ratio of 0.3853 shares of Titan common stock for each share of GlobalNet common stock. GlobalNet's operations from March 22, 2002 were reported in Titan's, Titan Wireless business, which was discontinued in the third quarter of 2002. The transaction was accounted for as a purchase. The excess of the purchase price of $29.4 million over the estimated fair market value of the net liabilities acquired of approximately $26.4 million was approximately $55.8 million. In April 2002, Titan obtained an independent valuation completed by independent valuation specialists Bearing Point to assist in its purchase price allocation of the GlobalNet acquisition. The independent valuation was used by Titan to allocate $55.8 million to goodwill and $0 to intangible assets as of March 31, 2002.

As a result of Titan's decision on July 11, 2002, to exit its telecommunications business and to sell certain of these businesses, Titan determined in the third quarter of 2002 that there was an impairment of the carrying value of GlobalNet's goodwill of approximately $55.8 million in accordance with SFAS No. 142. The measurement of this impairment was evident based upon estimates of fair value, as determined by recent offers from potential buyers, compared to the carrying value of the asset. As discussed above, Titan completed the sale of its GlobalNet business in the third quarter of 2003. The sale resulted in a gain of $12.2 million, resulting from a previous write-down of the carrying value of the net assets, which ultimately was recovered at the time of the sale.

F-154

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Ivoire Telecom

On June 28, 2000, Titan Wireless Afripa Holding, Inc., a subsidiary of Titan Wireless, made a $5 million investment to acquire 80% of the outstanding equity interests in Ivoire Telecom S.A., a Luxembourg-chartered company that intended to engage, through various majority-owned local subsidiaries, in a wireless telecommunications business in Africa using a satellite uplink through France. In the third quarter of 2002, the entire carrying value of the investment of approximately $52 million was determined to be impaired and was written off. This investment was subsequently sold in the second quarter of 2003 for approximately $0.5 million cash consideration.

Sakon LLC

In January 1999, the Company invested approximately $0.5 million for a 19.9% ownership interest in a joint venture with Sakon. In July 2000, Titan loaned Sakon $15 million pursuant to a loan agreement. In October 2000, Titan exercised its option pursuant to the loan agreement to convert amounts owed under the loan into additional equity interest of 30.0% of Sakon, bringing the total equity interest in Sakon to 49.9%. This equity interest was converted in August 2002 from a 49.9% voting interest to a 15% voting interest and a 34.9% non-voting interest. At such time, the amount outstanding of $15 million under the loan was converted to purchase consideration as the initial payment due under the terms of the agreement and recorded as goodwill. Under the terms of the agreement, an additional $12.5 million of consideration was due and payable upon certain revenue targets being attained. These targets were met in January 2001, and a $5.0 million installment was made in the second quarter of 2001, a $3.75 million installment was made in the first quarter of 2002, and the remainder was paid in the third quarter of 2002. The excess of the purchase price over the estimated fair market value of the net assets acquired, which has been amortized over 20 years, was approximately $26.8 million at December 31, 2001. In connection with the new requirements for evaluation of goodwill under SFAS No. 142, the $26.8 million was determined to be impaired and was fully expensed in the third quarter of 2002. Prior to August 2002, Titan consolidated the operating results of Sakon due to Titan's ability to control and significantly influence the operations and policies of Sakon, in accordance with a management agreement with Sakon. In August 2002, the management agreement was modified to nullify Titan's ability to control Sakon, and Titan resigned from the management committee of Sakon. Accordingly, Titan has no ability to substantially influence or control the operations of Sakon. Thereafter, Titan's investment in Sakon has been accounted for under the cost method, for which the investment carrying value was written down to zero in 2002.

Benin

On December 10, 1999, Titan's wholly owned subsidiary, Titan Africa, Inc. (Titan Africa), in connection with its contract to build a satellite-based telephone system for its customer, the national telephone company of Benin, Africa (the OPT), entered into a Loan Facility agreement for up to 30.0 billion Francs CFA (the currency of the African Financial Community), equivalent to approximately $45.0 million U.S. dollars, with a syndicate of five banks, with Africa Merchant Bank as the arranger. This financing was subsequently increased by 6.0 billion francs CFA to approximately $54.0 million. This medium term financing is a non-recourse loan to Titan Africa which is guaranteed by the OPT and secured by the OPT's equipment and revenues related to the project. The facility has a fixed interest rate of 9.5% per year and was originally to be repaid in seven equal semi-annual payments from the net receipts of this project, or by the OPT in the event that such receipts are not adequate to make these payments, which commenced on December 31, 2000 and were scheduled to end on December 31, 2003. The payment terms were subsequently amended calling for quarterly payments through mid 2006. The borrowings on this facility have been utilized to fund various equipment and subcontractor costs incurred most notably by Alcatel of France, a major subcontractor to this project.

Related to Titan's contract with the OPT, Titan has a $37.7 million gross receivable due from the OPT, of which $14.3 million is reflected in current assets of discontinued operations and of which

F-155

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

$23.4 million is reflected in non-current assets of discontinued operations as of December 31, 2004. The $23.4 million receivable is recorded as a net non-current receivable on the project, reflecting the outstanding balance on the non-recourse loan, drawn to cover subcontract costs. The $23.4 million balance on the non-recourse loan is included in non-current liabilities of discontinued operations at December 31, 2004. The $14.3 million difference between the gross receivable of $37.7 million and the $23.4 million balance on the non-recourse loan represents amounts currently due from the OPT under the Titan settlement agreement entered into with the OPT in 2003. This agreement contemplated a $25 million payment by the OPT to Titan, which was due in full by November 30, 2003. On December 31, 2003, Titan received a partial payment of $11 million on the settlement. Based on the facts available in the second quarter of 2004, principally the OPT's cash flow deficiencies and inability to obtain adequate financing, Titan recorded a full reserve for the $14.3 million balance outstanding. Notwithstanding this reserve, Titan has commenced an international arbitration against the OPT seeking collection of this receivable. The Titan Wireless results of discontinued operations also reflect a provision totaling approximately $5.3 million recorded during 2004, for estimated costs of resolving a contingent liability with a subcontractor related to this project. The current liabilities of $13.5 million of Titan Wireless include approximately $10.3 million for estimated costs of resolving the aforementioned contingent liability with a subcontractor and $3.2 million of remaining exit costs.

In February 2005, Titan received a demand for full payment from the subcontractor, based on an international arbitration ruling which Titan was in the process of appealing. In light of this, Titan and the subcontractor later reached a final settlement whereby, in March 2005, Titan agreed to pay $9.0 million in full settlement of the matter.

Operating Results

While Titan continues to hold assets and liabilities of Titan Wireless in discontinued operations, there were no revenues in Titan Wireless for the year ended December 31, 2004. The net loss of $14.1 million for the year ended December 31, 2004, is mostly composed of a provision to impair accounts receivable from the OPT and a provision for litigation related to a subcontractor on the Benin contract.

For the year ended December 31, 2003, Titan Wireless generated $71.5 million of revenues and net income of $1.0 million, net of a $7.4 million tax benefit. The revenues were primarily generated by the GlobalNet business for the period prior to the sale of the business in the third quarter of 2003. The net income was primarily a result of operating losses of $2.8 million, and the gain from the disposition of the GlobalNet business of $12.2 million, resulting from a previous write-down of the carrying value of the net assets, for which a tax provision was not provided due to prior losses. The gain was offset by impairment charges of $10.8 million resulting from the terms of the settlement agreements with Titan's customers in Nigeria and Benin, and by approximately $5 million of charges accrued for the exit activities in Benin. Included in the operating losses of Titan Wireless for 2003 is interest expense allocated to discontinued operations of $0.7 million.

Included in Titan Wireless' net loss for the year ended December 31, 2002 are impairment charges of $211.4 million, or $137.4 million, net of tax, that were recorded as a result of Titan's decision to exit its international telecommunications business. The charges were comprised of the following: (1) impairment of goodwill in accordance with SFAS No. 142 of approximately $74.8 million, primarily comprised of Titan's acquisition of GlobalNet discussed above and Sakon, recorded in accordance with SFAS No. 142; (2) impairment of investments of approximately $62.6 million, primarily comprised of Titan's investment in Ivoire Telecom discussed above; (3) and impairment of fixed and other assets of approximately $74.0 million.

In addition, exit charges of approximately $20.1 million were recorded in the third quarter of 2002, primarily related to outstanding commitments of warranty obligations of $3.9 million, commitments for space satellite segments of $3.0 million, and outstanding lease obligations of

F-156

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

$1.6 million. The remaining $11.6 million of the charge is primarily related to employee termination costs of $2.6 million, other estimated direct costs to exit these businesses of $4.0 million and the estimated settlements of other obligations of approximately $5.0 million. Such commitments are expected to be paid through the first half of 2004. As of December 31, 2003, approximately $9.8 million is included in current and non-current liabilities of discontinued operations.

In summary, included in Titan Wireless' net loss for 2002 is an impairment charge of $211.4 million, exit charges of $20.1 million and pre-tax losses excluding impairment and exit charges of $8.8 million for the year ended December 31, 2002. Included in the operating losses of Titan Wireless for 2002 is interest expense allocated to discontinued operations of $0.7 million.

Titan Technologies

For the year ended December 31, 2003, the discontinued operations of Titan Technologies had revenues of approximately $13.8 million and a net loss of $1.9 million, net of a tax benefit of $8.2 million. The loss was comprised of a $7.4 million operating loss and a $2.7 million impairment loss recorded to reflect the most recent indications of fair value of the carrying value of the net assets. Included in the results for Titan Technologies is a tax benefit of $2.3 million to reflect the estimated tax impact of adjusting the carrying value of certain assets which are currently held for sale related to the remaining commercial information technology business that was formerly reported in the Titan Technologies segment. Included in the operating losses of 2003 is interest expense allocated to discontinued operations of $0.4 million.

For the year ended December 31, 2002, the discontinued operations of Titan Technologies generated revenues of $31.4 million and a net loss of $48.0 million, net of a $20.6 million tax benefit. Included in Titan Technologies' net loss for 2002 is an impairment charge of $43.7 million, related to LinCom Wireless, AverCom and Titan's commercial information technology business. The measurement of this impairment is based upon indications of fair value, resulting in a write-off of the carrying value of its assets which included an impairment of goodwill of $21.0 million, in accordance with SFAS No. 142, and impairment of other assets of $22.7 million consisting primarily of fixed assets and capitalized software. In addition, exit charges of approximately $4.3 million were recorded primarily related to employee termination costs, lease termination costs and other outstanding commitments.

In September 2002, certain assets of the AverCom business were sold for $0.5 million cash and an earn-out of $0.6 million of additional consideration based on certain gross margin targets. In addition, Titan retained approximately $3.0 million of net accounts receivable balances, which were substantially collected by December 31, 2002. In addition to the impairment of goodwill of $21.0 million, a charge of $14.9 million was recorded on January 1, 2002, when Titan adopted SFAS No. 142 which was reported as a cumulative effect of a change in accounting principle.

In addition to the impairment charges discussed above, pre-tax losses excluding impairment and exit charges for the Titan Technologies businesses for 2002 were $20.5 million. Included in the operating losses for 2002 is interest expense allocated to discontinued operations of $0.8 million.

Cayenta

In July 2002, the two information technology businesses of Cayenta were sold, for cash received to date of $0.2 million. For the year ended December 31, 2002, these businesses generated revenues of $6.4 million and a net loss of $4.8 million, net of a tax benefit of $2.7 million. Included in the net loss is a charge for goodwill impairment in accordance with SFAS No. 142 associated with these two businesses of approximately $1.1 million, and other asset impairments of approximately $3.2 million. In addition, a $27.5 million impairment of goodwill was recorded on January 1, 2002, when Titan adopted SFAS No. 142 which was reported as a cumulative effect of a change in accounting principle. In addition to the impairment charges noted above, operating losses, net of tax, for the year ended December 31, 2002 were $3.2 million, and included $0.1 million in interest expense allocated to discontinued operations.

F-157

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

The consolidated financial statements of Titan for all periods presented have been restated to reflect all businesses discussed above as discontinued in accordance with SFAS No. 144.

2001 Discontinued Operations

On March 16, 2001, SureBeam Corporation, Titan's former subsidiary that provided electronic irradiation systems and services, completed an initial public offering (IPO) of 6,700,000 shares of Class A common stock at a price of $10 per share. On October 16, 2001, Titan adopted a definitive plan to spin off SureBeam in the form of a tax-free dividend to Titan stockholders within the next 12 months from that date. On August 5, 2002, Titan's remaining ownership interest in SureBeam was spun-off to Titan stockholders as a tax-free dividend. Prior to the adoption of the spin-off plan, Titan reported the SureBeam business as a separate segment. The net assets of SureBeam as of August 5, 2002 and tax liabilities and other costs resulting from the spin-off resulted in a net dividend of approximately $105.4 million which was recorded as a decrease to paid-in-capital, partially offset by the reduction in deferred compensation related to deferred compensation charges in 2000 and 2001, reflecting the net value distributed to Titan's stockholders

At the time Titan adopted the plan to spin-off SureBeam, in accordance with APB No. 30, it recorded a charge of $35.4 million for estimated costs of disposal and for estimated operating losses up to the date of disposal. This charge was recorded in the third quarter of 2001. All losses incurred by SureBeam after that time were charged against this accrual. Losses charged against the accrual in 2001 were $14.9 million and in 2002 were $20.5 million in the six months ended June 30, 2002. An additional charge of $11.0 million was taken during the second quarter of 2002 to record the net losses (in excess of the accrual) incurred by SureBeam during the second quarter of 2002 as well as estimated operating losses and spin-off expenses expected to be incurred through the spin-off date of August 5, 2002. Subsequent to that date, SureBeam is no longer included in Titan's results of operations. Losses through August 5, 2002 charged against the accrual in the third quarter of 2002 were $1.8 million. Approximately $3.5 million of costs related to the spin-off were charged against the loss accruals, which is $0 as of December 31, 2004.

In the second and fourth quarters of 2004, Titan recorded pre-tax charges of $7.2 million to accrue Titan's estimate of the shortfall between the amount of the SureBeam lease guarantees and the amount expected to be recovered by subleasing activities. Titan also incurred $0.4 million of costs associated with maintaining facilities during 2004. The total of $14.8 million has been reflected in the accompanying consolidated Statement of Operations as a $9.3 million loss, net of tax in discontinued operations, as all of such costs relate to obligations of SureBeam operating facilities and such operations were discontinued in 2001.

To date, Titan has not yet subleased or otherwise transferred any of the guaranteed leases or lease obligations to third parties. The current estimate of such mitigation of obligations under leases and lease guarantees is approximately $21.4 million.

In relation to SureBeam's strategic alliance with Hawaii Pride, Titan has guaranteed repayment of Hawaii Pride's bank debt up to the greater of SureBeam's equity interest in Hawaii Pride (which is zero), or 19.9% of Hawaii Pride's $6.8 million, 15-year loan from its lender, WebBank. As of December 31, 2004, Titan has guaranteed approximately $1.1 million, or 19.9% of the current loan balance of $5.4 million. In the event that Hawaii Pride defaults on the loan, Titan currently expects to be obligated to cover any defaults on the entire outstanding balance of the loan if the default is not cured within 90 days. In late October 2003, Titan was notified by Hawaii Pride that Hawaii Pride had stopped receiving financial support from SureBeam and did not have sufficient cash resources to make its monthly principal and interest payments to WebBank. As of December 31, 2004, Titan has loaned approximately $0.6 million to Hawaii Pride under a new credit facility for a maximum amount of $0.8 million to be advanced to Hawaii Pride to cover shortfalls in debt service payments. All amounts outstanding under this facility are required to be repaid in twenty equal quarterly installments commencing on October 1, 2005. In the impairment charge discussed above, Titan has assumed that Hawaii Pride will repay amounts advanced on the new credit facility.

F-158

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Following are summaries in tabular format of the loss from discontinued operations for 2004, 2003 and 2002:

				Year ended December 31, 2004
				Titan Systems				Titan Wireless				Titan Technologies				SureBeam				Total
Subcontractor contingency reserves				$	—			$	(5,311	)		$	—			$	—			$	(5,311	)
Impairment of assets					(20,332	)			(14,351	)			(8,500	)			—				(43,183	)
Loss of sale of assets					(2,054	)			—				—				—				(2,054	)
					(22,386	)			(19,662	)			(8,500	)			—				(50,548	)
Losses from operations					(1,397	)			(2,774	)			(2,044	)			(14,793	)			(21,008	)
					(23,783	)			(22,436	)			(10,544	)			(14,793	)			(71,556	)
Tax benefit					(2,083	)			(8,301	)			(3,537	)			(5,474	)			(19,395	)
Net loss				$	(21,700	)		$	(14,135	)		$	(7,007	)		$	(9,319	)		$	(52,161	)

				Year ended December 31, 2003
				Titan Systems				Titan Wireless				Titan Technologies				Total
Gain on sale of business, net				$	—			$	12,195			$	—			$	12,195
Subcontractor contingency reserves					—				(5,000	)			—				(5,000	)
Impairment assets					—				(10,790	)			(2,679	)			(13,469	)
					—				(3,595	)			(2,679	)			(6,274	)
Losses from operations					(2,269	)			(2,783	)			(8,555	)			(13,607	)
					(2,269	)			(6,378	)			(11,234	)			(19,881	)
Tax benefit					(969	)			(7,392	)			(8,708	)			(17,069	)
Net loss				$	(1,300	)		$	1,014			$	(2,526	)		$	(2,812	)

As discussed above, the 2003 tax benefit reflected in Titan Wireless was impacted by the GlobalNet sale for which a tax provision was not provided due to prior losses, and the Titan Technologies tax benefit was impacted by an adjustment to the carrying value of certain assets which are currently held for sale in Titan's remaining commercial information technology business that was previously part of Titan Technologies.

				Year ended December 31, 2002
				Titan Systems				Titan Wireless				Titan Technologies				Cayenta				SureBeam				Total
Impairment of goodwill				$	—			$	(74,818	)		$	(21,022	)		$	(1,121	)		$	—			$	(96,961	)
Impairment of investments					—				(62,600	)			—				—				—				(62,600	)
Impairment of fixed and other assets					—				(74,001	)			(22,714	)			(3,134	)			—				(99,849	)
Exit charges					—				(20,062	)			(4,341	)			—				—				(24,403	)
					—				(231,481	)			(48,077	)			(4,255	)			—				(283,813	)
Losses from operations					(3,026	)			(8,824	)			(20,151	)			(3,197	)			(11,014	)			(46,212	)
					(3,026	)			(240,305	)			(68,228	)			(7,452	)			(11,014	)			(330,025	)
Tax benefit					(993	)			(84,888	)			(20,446	)			(2,698	)			(1,101	)			(110,126	)
Net loss				$	(2,033	)		$	(155,417	)		$	(47,782	)		$	(4,754	)		$	(9,913	)		$	(219,899	)

F-159

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Balance Sheet Summary

Following is a table of all related balance sheet categories for each discontinued operation:

				As of December 31,
				2004				2003
Current assets of discontinued operations:
Titan Systems				$	—			$	13,747
Titan Wireless					—				14,277
Titan Technologies					1,665				9,453
				$	1,665			$	37,477
Non-current assets of discontinued operations:
Titan Systems				$	—			$	19,153
Titan Wireless					23,387				32,307
Titan Technologies					3,082				12,732
				$	26,469			$	64,192
Current liabilities of discontinued operations:
Titan Systems				$	—			$	3,442
Titan Wireless					13,503				12,540
Cayenta					—				97
Titan Technologies					2,798				6,602
SureBeam					4,694				—
				$	20,995			$	22,681
Non-current liabilities of discontinued operations:
Titan Systems				$	—			$	208
Titan Wireless					23,387				32,307
Cayenta					—				535
Titan Technologies					723				1,995
SureBeam					9,208				—
				$	33,318			$	35,045

Included in the total assets of Titan Wireless as of December 31, 2004 is the net $23.4 million accounts receivable from the OPT. The current liabilities of $13.5 million of Titan Wireless include a $10.3 million provision for litigation related to a subcontractor on the Benin contract and $3.2 million of remaining exit costs. The non-current liabilities of $23.4 million is the non-recourse loan to Titan Africa which is guaranteed by the OPT and secured by OPT's equipment and revenues related to the project.

The current assets of Titan Technologies as of December 31, 2004 are primarily comprised of accounts receivable balances, inventory and prepaid assets.

The total liabilities of SureBeam as of December 31, 2004 represent Titan's estimate of the shortfall between the amount of the SureBeam lease guarantees and the amount expected to be recovered by subleasing activities as well as amounts to be incurred for facilities restoration costs.

F-160

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Note 8.    Other Financial Data

Following are details concerning certain balance sheet accounts:

Accounts Receivable:

				At December 31,
				2004				2003
U.S. Government—billed				$	415,889			$	307,601
U.S. Government—unbilled					88,257				63,141
Trade					14,648				14,070
Less allowance for doubtful accounts					(3,408	)			(3,547	)
				$	515,386			$	381,265

Billing in excess of costs incurred are recorded as reductions to accounts receivable and total $0.2 million and $5.1 million at December 31, 2004 and 2003, respectively. Deferred revenue included in Other Accrued Liabilities totaled $16.5 million at December 31, 2004.

Inventories:

				At December 31,
				2004				2003
Materials				$	6,988			$	5,493
Work-in-process					10,107				12,227
Finished goods					4,241				3,710
				$	21,336			$	21,430
Property and Equipment:
Machinery and equipment				$	73,642			$	107,008
Furniture and fixtures					21,255				21,250
Land, buildings and leasehold improvements					38,723				24,551
Construction in progress					736				1,985
					134,356				154,794
Less accumulated depreciation and amortization					(76,814	)			(102,286	)
				$	57,542			$	52,508

Intangible Assets:

				As of December 31, 2004
				Gross Carrying Amount				Accumulated Amortization				Net Value
Purchased intangibles				$	16,522			$	11,660			$	4,862
License agreement					2,456				1,365				1,091
Deferred financing costs					17,041				5,012				12,029
All other intangible assets					2,556				719				1,837
				$	38,575			$	18,756			$	19,819

There are no estimated salvage values related to Titan's intangible assets. In 2004, 2003 and 2002, aggregate amortization expense totaled $5.5 million, $7.0 million and $7.5 million, respectively. Amortization of deferred financing costs included in interest expense in 2004, 2003 and 2002 totaled

F-161

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

$2.4 million, $2.1 million and $1.7 million, respectively. The remaining amortization expense is included in selling, general and administrative expense on the consolidated statement of operations.

				Deferred Financing Fees				Purchased and Other				Total
Estimated aggregate amortization expense:
2005				$	2,414			$	2,653			$	5,067
2006					2,414				2,282				4,696
2007					2,414				695				3,109
2008					2,414				603				3,017
2009					1,328				320				1,648
Thereafter					1,045				1,237				2,282
				$	12,029			$	7,790			$	19,819

Supplemental disclosures of cash flow information:

				2004				2003				2002
Noncash investing and financing activities:
Stock issued for acquisitions				$	—			$	3,259			$	137,811
Deferred compensation related to the issuance of stock options					—				—				29,834
Shares contributed to employee benefit plans					2,718				6,527				7,529
Write-off of deferred debt issuance costs					—				8,071				9,435
Write-off of deferred compensation related to discontinued operations					—				—				629
Shares tendered for option exercises					—				144				—
Cash paid for interest				$	33,661			$	31,557			$	32,408
Cash paid (refunds) for taxes					(1,129	)			1,149				(8,747	)

In 2002, Titan issued 172,153 shares of Titan common stock valued at $3.8 million as consideration for the purchase of assets of a company which became part of the Cayenta business, now reported in discontinued operations. In the second quarter of 2003, the indemnification period as defined per the asset purchase agreement expired, and as provided for in the purchase agreement, Titan elected to exchange all of the Titan common stock for cash of $2.0 million and the extinguishment of notes receivable of $1.8 million for cash advances made in 2002.

Details regarding the acquisition of businesses, net of cash acquired, in the consolidated statements of cash flows are as follows:

				Year Ended December 31, 2004
				Cash Paid				Cash Acquired				Net
Acquisition:
International Systems				$	(679	)		$	—			$	(679	)
Wave Science					(2,781	)			—				(2,781	)
				$	(3,460	)		$	—			$	(3,460	)

F-162

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

				Year Ended December 31, 2003
				Cash Paid				Cash Acquired				Net
Acquisition:
Advent Systems				$	(14,781	)		$	2,682			$	(12,099	)
International Systems					(217	)			—				(217	)
Earn-out consideration for Atlantic Aerospace Electronics Corporation					(1,773	)			—				(1,773	)
				$	(16,771	)		$	2,682			$	(14,089	)

				Year Ended December 31, 2002
				Cash Paid				Cash Acquired				Net
Acquisition:
Jaycor				$	—			$	35,982			$	35,982
Wave Systems					(8,476	)			4,678				(3,798	)
International Systems					—				172				172
Purchase adjustments for prior year acquisitions					(4,947	)			—				(4,947	)
				$	(13,423	)		$	40,832			$	27,409

Non-Marketable Securities:

Titan's investments in non-marketable securities as of December 31, 2004 includes a $4.2 million investment in E-Celerator, reported in Other Assets. In 2004, Titan recorded a loss on investments of $3.9 million, mostly attributable to the write-off of the remaining $3.5 million equity carrying value for Etenna Corporation. Due to lack of product acceptance and capitalization, Titan expects that Etenna and/or its technology will be sold at a value less than the threshold required to earn a return of capital. In 2004, Titan also wrote down its investment in Wavestream Wireless by $0.4 million to reflect the reduction in fair market value due to a dilutive financing transaction in 2004.

Titan's investments in non-marketable securities as of December 31, 2003, include $3.5 million in Etenna Corporation, reported in Other Assets. In 2003, Titan recorded a loss on investments of $6.2 million related to an unrealized loss on the carrying value of its investment in Etenna Corporation based upon recent indications of fair value, and an unrealized loss on its investment in DOAR Communications that was subsequently sold at a loss in January 2004. All other investments in non-marketable securities totaled $1.8 million and $8.5 million at December 31, 2004 and December 31, 2003, and are reported in Other Assets.

Sales Information:

Substantially all of Titan's operations are located in the United States. Export and foreign revenues amounted to approximately $27.0 million, $29.2 million and, $18.7 million, in 2004, 2003 and 2002, respectively, related primarily to customers in Europe, the Middle East, Africa and Asia. Sales of approximately $12 million, or 43.7% of total foreign revenues, and approximately $10 million, or 36.2%, of total foreign revenues, were related to contracts with Titan customers in the United Kingdom, in 2004 and 2003, respectively.

Sales to the U.S. government, including both defense and non-defense agencies, and sales as a subcontractor as well as direct sales, aggregated approximately $1,983.5 million in 2004, $1,695.5 million in 2003, and $1,313.1 million in 2002.

F-163

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Note 9.    Income Taxes

The components of the income tax provision (benefit) from continuing operations are as follows:

				2004				2003				2002
Current:
Federal				$	—			$	—			$	—
Foreign					307				—				—
State					454				2,372				1,458
					761				2,372				1,458
Deferred					16,192				21,441				(7,061	)
				$	16,953			$	23,813			$	(5,603	)

Following is a reconciliation of the income tax provision (benefit) from continuing operations expected (based on the United States federal income tax rate applicable in each year) to the actual tax provision (benefit) on income (loss):

				2004				2003				2002
Expected federal tax provision on continuing operations				$	10,751			$	19,470			$	(5,798	)
State income taxes, net of federal income tax benefit					1,382				2,457				(1,048	)
State taxes in separate filing states, net of federal benefit					—				—				963
FCPA settlement					9,435				1,110				—
Settlement of audits and other tax accruals					(4,535	)			(2,285	)			—
Capital loss on investment not benefited					1,431				2,277				—
Acquisition charges and other					(796	)			796				—
Meals and entertainment					484				399				251
Other					(1,199	)			(411	)			29
Actual tax provision (benefit) on continuing operations				$	16,953			$	23,813			$	(5,603	)

The net deferred tax asset as of December 31, 2004 and 2003, results from the following temporary differences:

				2004				2003
Loss carryforward				$	101,363			$	92,336
Employee benefits					23,928				24,696
Purchased other intangibles					(2,019	)			(3,287	)
Tax credit carryforwards					1,104				—
Inventory, contract loss and other reserves					37,337				39,254
Accounts and unbilled receivables					(12,386	)			(6,471	)
Accrued liabilities					13,596				11,974
Depreciation and amortization					(14,886	)			(9,027	)
Other					7,333				2,277
					155,370				151,752
Valuation allowance					(7,333	)			(8,767	)
Deferred tax asset, net				$	148,037			$	142,985

Realization of certain components of the net deferred tax asset is dependent upon our generating sufficient taxable income prior to expiration of loss and credit carryforwards. The federal net operating losses at December 31, 2004, to be carried forward to 2005 are approximately $274 million, which carryforwards will expire in periods from 2010 through 2024. Although realization is not assured, management believes it is more likely than not that the net deferred tax asset will be fully

F-164

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

realized. The amount of the net deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. In order to fully utilize the net operating loss carryforwards prior to the expiration dates, taxable income of $274 million needs to be generated. Given that the Company has incurred recent net operating losses, management considered whether a valuation allowance should be recorded to reduce the carrying value of the total deferred tax asset, including the component related to net operating losses. In evaluating whether a valuation allowance was needed, management considered negative evidence and positive evidence as required under the provisions of SFAS No. 109. The primary negative evidence considered by management is the Company's cumulative loss position. The cumulative losses have been generated primarily by businesses that have been discontinued, sold or wound down and, consequently, no significant recurring losses are expected to be generated by those operations in future periods. The positive evidence considered by management is the historical profitability of the Company's continuing operations, which consist almost entirely of government contracting activities. As of December 31, 2004, those operations have significant funded and unfunded backlog. Consequently, management concluded that the positive evidence regarding the realization of the deferred tax asset out weighed the negative evidence and that a valuation allowance for the deferred tax assets was not deemed necessary.

The valuation allowance recorded is provided against certain capital loss carryforwards which may not be utilized. The change in the valuation allowance from 2003 to 2004 primarily reflects the sale of Canco, LLC (Cayenta Canada) in 2004, and to the capital losses that were not benefited in 2004. The provision for income taxes was reduced by $4.5 million due to net favorable adjustments related to previously estimated tax liabilities. Prepaid Expenses and Other at December 31, 2004 and 2003 include prepaid taxes of $2.0 million and $3.5 million. Other Non-current Liabilities at December 31, 2004 and 2003 include a deferred tax liability of $15.7 million and $11.1 million, respectively.

During 2004, 2003 and 2002, Titan recognized tax deductions related to stock option exercises in the amount of $23.5 million, $0.8 million, and $9.9 million, respectively, or $8.7 million, $0.3 million, and $3.6 million, net of tax. The net benefits were recorded as an increase to capital in excess of par value.

Note 10.    Debt

Senior Credit Facility

On May 23, 2002, Titan entered into an agreement with Wachovia Bank, National Association and Wachovia Securities for a $485 million senior credit facility from a syndicate of commercial banks including Wachovia Securities acting as sole lead arranger and Wachovia Bank, National Association, as Administrative Agent, The Bank of Nova Scotia and Comerica Bank as Co-Syndication Agents and Branch Banking and Trust Company and Toronto Dominion Bank as Co-Documentation Agents and other financial institutions. The senior credit facility is comprised of an aggregate credit commitment of $485 million, consisting of a seven-year term loan in an aggregate principal amount of $350 million and a six-year $135 million revolving credit facility.

On September 2, 2004, Titan entered into an amendment of its senior credit facility, which ties its effective borrowing rate on its term loan within the facility, within a limited range, to changes in ratings from the two major agencies. The amendment immediately reduced the interest rate on Titan's term loan by 50 basis points from LIBOR plus 325 basis points (or prime plus 200 basis points) to LIBOR plus 275 basis points (or prime plus 150 basis points). The rate reduction is based on Titan's current senior debt credit rating and outlook from Moody's Investor Services and Standard & Poor's. The amendment includes a provision that automatically increases or decreases the rate on the term loan to either LIBOR plus 300 basis points (or prime plus 175 basis points) or LIBOR plus 250 basis points (or prime plus 125 basis points), if Titan's senior debt credit rating from Standard & Poor's or

F-165

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Moody's Investor Services changes, per the terms of the amendment. As of March 10, 2005, both rating agencies completed their credit reviews of Titan reflecting the resolution of the government FCPA investigation. Both agencies confirmed Titan's existing ratings, but improved Titan's credit outlook to "stable". As a result, effective March 10, 2005 the rate on Titan's Senior Secured Term B loan of $341 million was reduced by 25 basis points (bps) to LIBOR plus 250 bps (or prime plus 125 bps).

The amendment does not affect the interest rate on Titan's senior revolver within its credit facility. The senior credit facility, as amended, provides for interest rates per annum applicable to amounts outstanding under the senior revolver that are, at Titan's option, either the administrative agent's most recently established base rate for U.S. dollars loaned in the United States (or, if greater, the Federal Funds Rate plus 0.5%) plus a margin of 0.75% per annum to 1.50% per annum, based on its ratio of total debt to EBITDA (as defined in the senior credit facility), or the LIBOR rate for the applicable interest period plus a margin of 2.00% per annum to 2.75% per annum, based on Titan's ratio of total debt to EBITDA. Currently, interest rates for base rate and LIBOR revolving loans are 0.25% higher than Titan's interest rates for base rate and LIBOR term loans. Titan is required to pay the lenders under the senior credit facility a non-utilization fee ranging from 0.50% per annum to 1.00% per annum, payable quarterly in arrears, based on the applicable percentage of the undrawn portion of the senior revolver. Titan is also required to pay letter of credit fees for outstanding letters of credit equal to 0.25% per annum of the stated amount of the letter of credit, plus the product of the applicable margin (from 2.00% to 2.75%, based on its ratio of total debt to EBITDA) for loans under the revolving credit facility maintained as LIBOR loans multiplied by the stated amount of the letter of credit.

The seven-year term loan matures on June 30, 2009, and the revolving credit facility matures on May 23, 2008. The seven-year term loan amortizes at 1.0% per year for years one through six (through the quarter ending June 30, 2008), with the remaining 94% due in equal quarterly payments in year seven of the loan (through the quarter ending June 30, 2009). Titan may prepay amounts borrowed under the term loan and the revolving credit facility at its option without any fee, provided that any voluntary prepayment of the outstanding term loan made before September 3, 2005, resulting from a refinancing of the term loan (other than any refinancing resulting from a change of control) shall be at 101% of the par value. Titan is also required to make prepayments, subject to certain exceptions, of the outstanding amounts under the term loan and the revolving credit facility from asset sales, issuance of subordinated debt and equity securities, insurance or condemnation proceeds and from excess cash flows.

The terms of the senior credit facility require Titan to provide certain customary covenants for a senior credit facility, including certain financial covenants. As amended, these financial covenants, as set forth in the senior credit agreement for fiscal year 2004, are comprised of a maximum total debt to EBITDA ratio of 4.75 to 1.0, declining to 4.0 to 1.0 in subsequent years, a maximum total senior debt to EBITDA ratio of 3.00 to 1.0, declining to 2.50 to 1.0 in subsequent years, a minimum interest coverage ratio of 3.0 to 1.0, a minimum fixed charge coverage ratio of 1.35 to 1.0 and a minimum net worth of approximately $268.0 million at December 31, 2004. Titan was in compliance with all financial covenants as of December 31, 2004.

Deferred costs and expenses of $7.1 million related to the senior credit facility are included in intangible assets at December 31, 2004 and are being amortized over the remaining term of the senior credit facility.

Senior Subordinated Notes

On May 15, 2003, Titan sold $200 million of 8% senior subordinated notes due May 15, 2011 in a private placement (the Notes). Titan used the net proceeds from the issuance of the Notes, plus borrowings of $50 million under its revolving credit facility and additional cash on hand, to redeem all

F-166

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

of the $250 million of the then-outstanding 5³4% HIGH TIDES convertible preferred securities. The redemption of HIGH TIDES occurred on June 4, 2003.

Titan is required to make interest payments on the Notes semi-annually in arrears on May 15 and November 15 at the rate of 8% per annum. Titan may redeem the Notes, in whole or in part, on or after May 15, 2007 at the following redemption prices, plus accrued and unpaid interest and liquidated damages, if any:

Year				Percentage
2007					104.0	%
2008					102.0	%
2009 and thereafter					100.0	%

In addition, on or prior to May 15, 2006, Titan may redeem up to 35% of the aggregate principal amount of the Notes with the net proceeds of certain equity offerings at a redemption price of 108% of the principal together with accrued and unpaid interest. The Notes are unsecured and rank or will rank equally with Titan's current or future senior subordinated indebtedness. Each of Titan's domestic subsidiaries other than Cayenta guarantee the Notes. The guarantees are unsecured and rank equally with each guarantor's senior subordinated indebtedness. The Notes and the guarantees are junior to all of Titan's and each guarantor's senior indebtedness and senior to all of Titan's and each guarantor's subordinated indebtedness.

On July 19, 2004, Titan completed the exchange of the existing Notes for a new series of substantially identical 8% senior subordinated notes due May 15, 2011 registered under the Securities Act.

Liquidated damages of 0.25% per annum per $1,000 whole dollars in principal amount of the then-outstanding Notes began to accrue in October 2003 when we did not complete an exchange offer required under the registration rights agreement because of the proposed merger with Lockheed Martin. Beginning in January 2004, the liquidated damages rate increased to 0.50% and such liquidated damages continued to accrue at rates increasing every 90 days by 0.25% per annum per $1,000 whole dollars in principal amount of existing Notes up to a maximum of 2.00%, until the exchange offer described below was completed. The remaining balance accrued at September 30, 2004 of $0.3 million was paid with the regular semi-annual interest payment on November 15, 2004.

Deferred costs and expenses of $5.0 million related to the issuance of the Notes are included in intangible assets at December 31, 2004, and are being amortized over the term of the Notes.

At December 31, 2004, Titan had other secured and unsecured debt outstanding under various agreements totaling $0.5 million short-term and $0.5 million long-term, with interest rates ranging from 8.5% to 9.3%. These agreements mature by 2015.

F-167

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Other Debt Information

Details of long-term debt are as follows:

				December 31,
				2004				2003
Senior credit facility				$	356,250			$	344,750
Senior subordinated debt					200,000				200,000
Note payable to bank, interest at 9.30%, due February 2005, secured by a First Deed of Trust on an office building					280				355
Note payable to Urban Business Development Corporation, interest at 8.58%, due January 2015, guaranteed by the Small Business Administration and secured by a Second Deed of Trust on an office building					524				558
Acquisition related notes payable of acquired companies, interest at 8.5%, due March 2005					187				938
					557,241				546,601
Less: Current portion					(4,000	)			(4,363	)
				$	553,241			$	542,238

Titan Debt Maturities

Maturities of long-term debt, excluding non-recourse debt, are as follows:

2005				$	4,000
2006					3,538
2007					3,541
2008					181,295
2009					164,549
Thereafter					200,318
				$	557,241

Note 11.    Commitments and Contingencies

Leases

Titan leases certain buildings and equipment under non-cancelable operating lease agreements. These leases generally require Titan to pay all executory costs such as taxes, insurance and maintenance related to the leased assets. Certain of the leases contain provisions for periodic rate accelerations to reflect cost-of-living increases. Rental expense under these leases was $47.3 million in 2004, $39.3 million in 2003 and $38.8 million in 2002. In February 2000, Titan's Cayenta subsidiary entered into a new long-term lease agreement which requires future minimum lease payments of approximately $6.6 million over 7 years. Titan is a guarantor on the lease. Due to Titan's discontinuance of its Cayenta business, Titan has subleased this facility under agreements that extend through 2007. Rental expense in 2002 includes $0.9 million, paid related to this space.

Future minimum lease payments under non-cancellable operating leases at December 31, 2004, are as follows:

F-168

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

2005				$	53,933
2006					49,606
2007					40,839
2008					31,264
2009					23,569
Thereafter					93,608
Total minimum lease payments				$	292,819

Obligations under capital leases were $0.1 million at December 31, 2004, which were primarily long-term and included in Other Non-current Liabilities in the consolidated balance sheet.

During the first quarter of 2003, Titan entered into new long-term lease and sublease agreements for office space in Virginia and Maryland as part of its restructuring efforts to consolidate various facilities of its government business into centralized locations (see Note 6). The lease and subleases in Virginia require future minimum lease payments of approximately $81 million over approximately 13 years, commencing on various dates from May 2003 through May 2004. The lease in Maryland requires future minimum lease payments of approximately $57 million over 10 years, commencing approximately July 1, 2004.

Legal Matters

    Foreign Corrupt Practices Act Related Investigations

As previously disclosed, during the first quarter of 2004, Titan learned of allegations that improper payments under the Foreign Corrupt Practices Act (FCPA) had been made, or items of value had been provided, involving international consultants for Titan or its subsidiaries to foreign officials. The allegations were identified as part of internal reviews conducted by Titan and Lockheed Martin, and jointly reported by them to the government. Titan's board of directors established a committee of the board to oversee Titan's internal review of these matters.

The internal review began with a focus on Titan's Datron World Communications unit, which was discontinued in June 2004 and sold in November 2004, but the internal review later was expanded to a number of Titan's international businesses, including Titan Wireless (which was discontinued in 2002 and was substantially wound down in 2003) and Titan's National ID Card contract in Saudi Arabia. Titan agreed to, and did, provide the Securities and Exchange Commission (SEC) and the Department of Justice (DoJ) with the results of the investigation on an ongoing basis. In connection with the internal review, the SEC commenced an investigation into whether payments involving Titan's international consultants were made in violation of applicable law, particularly the FCPA. In addition, the DoJ initiated a criminal inquiry into this matter, and also initiated an investigation into whether these same alleged practices violated provisions of the United States Tax Code.

As previously disclosed, Titan had recorded a provision of $3.0 million as of December 31, 2003 for resolution of the government FCPA investigations. Titan recorded an additional provision of $25.5 million in the second quarter of 2004 to reflect the change in its estimate of the cost of resolving these investigations.

As a result of the investigation, Titan began to implement significant expanded FCPA and International Traffic in Arms Regulations (ITAR) policies. To lead and oversee those expanded policies, in September 2004, Titan brought in Dave Danjczek as its Vice-President for Compliance and Ethics.

On March 1, 2005, Titan announced that it had entered into a consent to entry of a final judgment with the SEC without admitting or denying the SEC's allegations, and reached a plea agreement with the DoJ, under which Titan pled guilty to three felony FCPA counts related to its

F-169

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

overseas operations, including in particular its operations in Benin. These counts consist of violations of the anti-bribery and the books and records provisions of the FCPA and aiding and assisting in the preparation of a false tax return. Matters resolved through the plea agreement with the DoJ involved commercial international business that Titan had discontinued and is in the process of winding down. As a part of the settlement, Titan was given credit for self reporting and cooperating with the government, and for accepting responsibility.

On March 1, 2005, in connection with the FCPA settlement, Titan made total payments of $28.5 million, the same figure Titan reserved for this purpose in 2003 and 2004. The total includes a DoJ-recommended fine of $13 million, and payments to the SEC consisting of disgorgement of $12.6 million and prejudgment interest of $2.9 million. The Hon. Roger T. Benitez, a judge of the Federal District Court in San Diego, imposed upon Titan a fine of $13 million and a three-year term of supervised probation, both of which are consistent with the DoJ's and Titan's agreed-upon recommendations to the Court. In addition, the sentence imposed by the Court incorporated Titan's agreement to implement a best-practices compliance program designed to detect and deter future violations of the FCPA.

Further, as a result of Titan's plea agreement, Titan is currently unable to obtain new export licenses. Titan has been working with the U.S. Department of State to obtain relief from this automatic statutory provision.

The IRS agreement requires Titan to file an amended corporate tax return for 2002 to correct deductions previously taken with respect to matters at issue in the investigations. The amended tax return will not result in additional taxes, but will reduce Titan's net operating loss carry forward benefit by approximately $1.3 million. The tax provision affect of the amended tax return was made in the fourth quarter of 2004. Under the Consent to Entry of Final Judgment with the SEC, Titan agreed, within 30 days, to retain a qualified independent consultant to review Titan's policies and procedures with respect to its compliance with the FCPA, and to adopt the consultant's recommendations.

After the plea was entered, Titan and the Navy executed an administrative settlement agreement that will allow Titan to continue to conduct business under U.S. government contracts and receive U.S. government contracts. The agreement also provides for Navy monitoring of Titan's compliance activities for three years.

On June 26, 2004, Lockheed Martin Corporation terminated the merger agreement pursuant to which Lockheed Martin was to have acquired Titan. The merger agreement was entered into in September 2003 and amended in March 2004 and April 2004 to provide additional time for Titan to resolve the FCPA investigations.

    Other Legal Matters

Titan is involved in legal actions in the normal course of its business, including audits and investigations by various governmental agencies that result from its work as a defense contractor. Titan and its subsidiaries are named as defendants in legal proceedings from time to time and third parties, including the government, may assert claims against Titan from time to time. In addition, Titan has acquired companies from time to time that have legal actions pending against them at the time of acquisition. Based upon current information, including consultation with its lawyers, Titan does not believe that the ultimate liability arising from any of these actions, including those discussed below, will materially affect its consolidated financial position. The March 1, 2005 FCPA settlement payment will materially impact cash flow in the first quarter of 2005. Titan's evaluation of the likely impact of these actions, including those discussed below, could change in the future and Titan could have unfavorable outcomes that it does not expect. Any of these events could have a material adverse effect on Titan's results of operations or cash flows in a future period and could have other adverse effects on Titan's business.

F-170

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

    Stockholder Class Actions

Since April 2, 2004, two stockholder class action lawsuits have been filed against Titan and certain of its officers, asserting claims under the federal securities laws, which we refer to collectively as the federal securities actions. On September 17, 2004, these class action lawsuits were consolidated as In re Titan Inc. Securities Litigation, No. 04-CV-0701-K(NLS), a consolidated purported class action filed before the U.S. District Court for the Southern District of California. The federal securities action purports to be brought on behalf of all purchasers of Titan common stock during the period from July 24, 2003 through and including March 22, 2004. The complaint seeks an unspecified amount of damages. The complaint alleges, among other things, that the defendants violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and SEC Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act, by issuing a series of press releases, public statements and filings disclosing significant historical and future revenue growth, but omitting to mention certain allegedly improper payments involving international consultants in connection with Titan's international operations, thereby artificially inflating the trading price of Titan's common stock. On January 14, 2005, Titan and certain individual defendants jointly filed a motion to dismiss. The hearing on the defendants' motion is currently scheduled to be heard on May 9, 2005. Titan intends to defend the claims vigorously.

Since April 7, 2004, two stockholder class action complaints have been filed against certain Titan officers, asserting that these officers breached their fiduciary duties to Titan's stockholders. The complaints, which we refer to as the fiduciary duty actions, were filed in the Superior Court for the State of California in and for San Diego County. The cases include Paul Berger v. Gene W. Ray, et al., No. GIC 828346, and Robert Garfield v. Mark W. Sopp, et. al, No. GIC 828345. The fiduciary duty actions purport to be brought on behalf of all holders of Titan common stock as of April 7, 2004. The fiduciary duty actions allege, among other things, that the defendants breached their fiduciary duties by acquiescing in or condoning Titan's alleged violations of the FCPA by failing to establish adequate procedures to prevent the alleged FCPA violations, and by failing, in bad faith, to voluntarily report the alleged FCPA violations to government officials. The complaints seek compensatory damages in respect of the loss of value sustained by Titan stockholders as a result of the reduction in merger consideration payable to them under the terms of the amendment to the merger agreement with Lockheed Martin delivered on April 7, 2004. The Berger and Garfield matters have been consolidated and are now treated, for all purposes, as the Garfield matter. Additionally, plaintiffs and defendants have agreed that defendants are not required to answer or otherwise respond to the Garfield complaint until the motions to dismiss in the federal securities action have been denied or granted with prejudice. Titan intends to defend the claims vigorously.

Since June 28, 2004, three shareholder derivative lawsuits have been filed against Titan directors and certain Titan officers, naming Titan as a nominal defendant, which we refer to collectively as the derivative actions. The derivative actions include Theodore Weisgerber v. Gene Ray, et al., No. 832018, which was filed in the Superior Court for the State of California, San Diego; Robert Ridgeway v. Gene Ray, et al., No. 542-N, which was filed in Delaware Court of Chancery, New Castle County; and Bernd Bildstein v. Gene Ray, et al., No. 833701, which was filed in the Superior Court for the State of California, San Diego County. The derivative actions purport to be brought for the benefit of the nominal defendant, Titan, and allege that the defendants breached their fiduciary duties by failing to monitor and supervise management in a way that would have either prevented alleged FCPA violations or would have detected the FCPA violations. The Weisgerber complaint was subsequently amended to include allegations that the defendants breached their fiduciary duties by failing to monitor and supervise management in a way that would have prevented the alleged mistreatment of prisoners at the Abu Ghraib prison in Iraq, alleged billing errors relating to work performed by foreign nationals, and the loss of contracts with the government. The plaintiffs seek to recover the costs incurred in the internal and external investigations, penalties or damages paid to settle private

F-171

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

litigation or government proceedings, and lost goodwill. The Weisgerber and Bildstein matters have been consolidated and are now treated, for all purposes, as the Weisgerber matter. Titan intends to defend the claims vigorously.

    SureBeam Related Litigation

In August 2002, Titan completed the spin-off of its former subsidiary, SureBeam Corporation. On January 19, 2004, SureBeam voluntarily filed for bankruptcy relief to be liquidated under Chapter 7 of the United States Bankruptcy Court. Various lawsuits have been filed against Titan and/or certain directors and executive officers of Titan in connection with SureBeam.

Since August 2003, Titan, certain corporate officers of SureBeam Corporation, a former subsidiary of Titan, Dr. Gene Ray and Susan Golding, as SureBeam directors, and certain investment banks that served as lead underwriters for SureBeam's March 2001 initial public offering, have been named as defendants in several purported class action lawsuits filed by holders of common stock of SureBeam in the U.S. District Court. On October 6, 2003, these class action lawsuits were consolidated into In re SureBeam Corporation Securities Litigation, No. 03-CV-001721-JM (POR), a single class action for which an amended consolidated class action complaint was filed on March 24, 2004, with the U.S. District Court for the Southern District of California. The complaint seeks an unspecified amount of damages. The SureBeam class action complaint alleges that each of the defendants, including Titan, as a "control person" of SureBeam within the meaning of Section 15 of the Securities Act, should be held liable under Section 11 of the Securities Act because the prospectus for SureBeam's initial public offering was allegedly inaccurate and misleading, contained untrue statements of material facts, and omitted to state other facts necessary to make the statements made not misleading. The SureBeam class action complaint also alleges that the defendants, including Titan, as a control person of SureBeam within the meaning of Section 20(a) of the Exchange Act, should be held liable under Section 10(b) of the Exchange Act for false and misleading statements made during the period from March 16, 2001 to August 27, 2003. On January 3, 2005, the court granted in part and denied in part motions to dismiss the amended consolidated complaint. The court granted plaintiffs 45 days leave to amend their complaint, which amended complaint has been filed. Titan intends to defend the claims vigorously.

On September 17, 2004, the bankruptcy trustee in the SureBeam Corporation bankruptcy pending in the United States Bankruptcy Court for the Southern District of California brought an action in San Diego Superior Court, on behalf of the bankruptcy estate, against certain directors and current and former executive officers of Titan who served at one time as directors or officers of SureBeam. Titan is not named as defendant in this litigation and received a prior release of claims from the bankruptcy trustee. Because the defendants were named by reason of the fact that they were serving as directors or officers of SureBeam at the request of Titan, Titan is covering the costs of defense of these claims, subject to indemnification agreements and bylaw provisions.

    Other Legal Proceedings

Since June 9, 2004, two lawsuits have been filed alleging that Titan and other defendants either participated in, approved of, or condoned the mistreatment of prisoners by United States military officials in certain prison facilities in Iraq in violation of federal, state and international law. The first of these cases, Saleh v. Titan Corporation, No. 04-CV-1143 R, was filed in the United States District Court for the Southern District of California against The Titan Corporation, CACI International, Inc. (CACI), and its affiliates, and three individuals (one formally employed by Titan and one by a Titan subcontractor). Plaintiffs in Saleh seek class certification. The second case, Ibrahim v. Titan Corporation, NO. 04-CV-1248, was filed on July 27, 2004, on behalf of five individual plaintiffs against Titan, CACI and CACI affiliates, and contains allegations similar to those in Saleh. Class certification has not been requested in Ibrahim. Titan intends to defend these lawsuits vigorously.

On August 16, 2002, Perimex International Corporation (Perimex) filed a complaint against Titan, Titan Wireless, Inc. (Titan Wireless) and a former Titan Wireless employee in San Diego Superior

F-172

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Court in San Diego, California. The complaint alleged breach of contract, breach of the covenant of good faith and fair dealing, intentional interference with existing contractual relationships and prospective business advantage and violation of the California unfair competition law arising from an alleged failure of Titan Wireless to enter a joint venture with Perimex to develop a telecommunications network in Argentina and other related alleged misconduct. The complaint sought damages of $52.7 million and sought injunctive relief prohibiting Titan and Titan Wireless from transferring any of Titan Wireless's assets. The court denied Perimex's request for a preliminary injunction, sustained Titan's and Titan Wireless's demurrer as to all causes of action in the complaint and granted Perimex leave to amend the complaint. Perimex dismissed its complaint voluntarily without prejudice. On May 22, 2003, however, Perimex filed a new complaint in the United States District Court for the Southern District of California, NO. 03-cv-1037 IEG (WMC), alleging substantially similar causes of action and claiming a similar amount of damages. Perimex twice amended this federal complaint to add additional claims. Titan intends to defend the claims vigorously.

On January 23, 2004, Titan, together with its wholly-owned subsidiary, Titan Wireless, Inc., and Titan Wireless's wholly-owned subsidiary, Titan Africa, Inc., were named as defendants in Gonzales Communications, Inc. v. Titan Wireless, Inc., Titan Africa, Inc., The Titan Corporation, Geolution International Inc., and Mundi development, Inc., a lawsuit filed in the U.S. District Court for the Southern District of California, NO. 04-cv-0147 WQH (WMc). The complaint relates to the purchase by Gonzales Communications of equipment and related services under an equipment purchase agreement entered into with Titan Wireless in June 2001. Gonzales Communications contends that the equipment and services delivered were unsatisfactory. In the complaint, Gonzales Communications seeks direct damages in the amount of $0.9 million plus interest, representing the amount Gonzales Communications alleges to have previously paid under the agreement, and consequential damages of approximately $16.3 million. To date, Titan and its subsidiaries have not received payment in full under the agreement for the equipment and services that were delivered to Gonzales Communications. Titan has filed a counterclaim against Gonzales Communications for in excess of $1.2 million. Titan intends to defend its position vigorously.

In October 2002, Titan received a grand jury subpoena from the Antitrust Division of the DoJ requesting the production of documents relating to information technology services performed for the Air Force at Hanscom Air Force Base in Massachusetts. Titan has been informed that other companies who have performed similar services have received subpoenas as well. Titan is not aware of any illegal or inappropriate conduct and has been cooperating and will continue to cooperate fully with the investigation.

In March 2003, Titan received a subpoena from the Office of Inspector General for the National Aeronautics and Space Administration, or NASA, seeking certain records relating to billing for labor services in connection with its contracts with NASA. Titan also received a subpoena from the Office of Inspector General for the General Services Administration, or GSA, seeking similar records relating to billing for labor categories in connection with contracts with GSA. Titan is not aware of any illegal or inappropriate conduct and has been cooperating and will continue to cooperate fully with the investigation.

Note 12.    Cumulative Convertible Preferred Stock

On March 15, 2004, Titan redeemed all outstanding shares of its cumulative convertible preferred stock. The redemption was a condition to the closing of the then-proposed merger with Lockheed Martin. An aggregate of 625,846 shares were redeemed at $20 per share, plus cumulative dividends in arrears of $0.03 per share, which utilized cash of approximately $12.5 million, and the remaining 60,983 shares of preferred stock were converted by shareholders into 47,580 shares of common stock. The redemption of the preferred stock is recorded as a reduction to stockholders' equity.

F-173

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Note 13.    Common Stock

At December 31, 2004, approximately 4,100,000 common shares were reserved for future issuance for employee benefit and stock incentive plans.

On September 25, 2002, Titan Systems Corporation, Titan's national security subsidiary, was merged into The Titan Corporation. As a result of this merger, outstanding stock options held by employees of Titan Systems Corporation were exchanged using an exchange ratio of .8371, for approximately 5.4 million stock options in The Titan Corporation. The exchange ratio was determined by Titan using a valuation of Titan Systems Corporation, as determined by a globally recognized valuation firm, and the average Titan Corporation closing stock price for the 20 trading days ending on the day before the merger.

The exchange of Titan options resulted in a non-cash deferred compensation charge of approximately $21.3 million in the third quarter of 2002, which is reflected in selling, general and administrative expense in the accompanying consolidated statements of operations. Approximately $1.5 million, $4.8 million and $2.0 million was amortized in 2004, 2003 and 2002, respectively. Unamortized non-cash deferred compensation of $0.1 million will be amortized in 2005 as the options become fully vested.

On July 26, 2001, Titan sold 8,048,685 shares of its common stock in a public offering, which included an over-allotment of 1,125,000 shares, at a price of $18.00 per share. We received approximate aggregate proceeds from the offering of $137.6 million in July 2001, net of underwriters' commissions. Transaction expenses related to the offering were approximately $1.4 million. In addition, certain Titan stockholders sold 576,315 shares, including 489,972 shares from the exercise of options, from which Titan received proceeds of $3.0 million.

On August 17, 1995, the Board of Directors adopted a Shareholder Rights Agreement and subsequently distributed one preferred stock purchase right (Right) for each outstanding share of Titan common stock. Each Right entitles the registered holder to purchase from Titan one one-hundredth of a share of Series A Junior Participating Preferred Stock, par value $1.00 per share (the Preferred Shares) at a price of $42.00 per one one-hundredth of a Preferred Share, subject to adjustment. The Rights become exercisable if a person or group acquires, in a transaction not approved by Titan's Board of Directors (Board), 15% or more of Titan's common stock or announces a tender offer for 15% or more of the stock.

If a person or group acquires 15% or more of Titan's common stock, each Right (other than Rights held by the acquiring person or group which become void) will entitle the holder to receive upon exercise a number of shares of Titan's common stock having a market value of twice the Right's exercise price. If Titan is acquired in a transaction not approved by the Board, each Right may be exercised for common shares of the acquiring company having a market value of twice the Right's exercise price. Titan may redeem the Rights at $.01 per Right, subject to certain conditions. The Rights expire on August 17, 2005.

Options authorized for grant under the 2002 Employee and Director Stock Option and Incentive Plan (the 2002 Plan) and under the 2000 Employee and Director Stock Option Plan (the 2000 Plan) are 5,500,000 and 4,000,000, respectively. Options authorized for grant under the Stock Option Plans of 1994 and 1997 are 2,000,000 and under The 1996 Directors' Stock Option and Equity Participation Plan (the 1996 Directors' Plan) are 125,000. Grants in 1999 and the beginning of 2000 exceeded the remaining shares available under the stock option plans of 1994 and 1997. The 2000 Plan was approved by Titan's stockholders on May 30, 2000. Under all plans, the options outstanding have been granted at prices that are equal to the market price of Titan's stock on the date of grant. Under the intrinsic value method prescribed by APB 25, no compensation cost is recorded. However, the grants in 1999 that exceeded the shares available at that time were placed under the 2000 Plan after its approval by the stockholders. Under the provisions of Financial Accounting Standards Board

F-174

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Interpretation No. 44 "Accounting for Certain Transactions Involving Stock Compensation" (an Interpretation of APB 25), the plan approval date becomes the grant date for purposes of comparison of market value to exercise price. This resulted in deferred compensation related to these options of $15.6 million in 2000 based on the difference in market value at May 30, 2000, and the grant price. This deferred compensation has been fully amortized to expense over the four-year vesting period of these options, including $2.4 million in 2003, $3.9 million in 2002 and $3.9 million in 2001, respectively.

Under the 2002 and 2000 Employee and Director plans, and previous employee plans, an option's maximum term is ten years. Under these plans, vested options expire 90 days after a grantee's termination of employment or other relationship. Under the 1996 Directors' Plan, options expire 90 days after the option holder ceases to be a director. Under the applicable plans, directors may elect to receive stock in lieu of fees, such stock to have a fair market value equal to the fees. Employee options may be granted throughout the year; directors' options are granted annually. Under the 2000 Plan, vesting for directors and first-time option grantees is over four years, with 25% exercisable at the completion of one year, and monthly vesting thereafter. For option grants prior to the 2000 Plan, vesting is monthly over 4 years. Options in the Stock Option Plans of 1994 and 1997 and the 1996 Directors' Plan vest in 25% increments beginning one year after the grant date. Stock options assumed by Titan as a result of the mergers in prior years generally retain the terms under which they were granted. Stock options assumed by The Titan Corporation as a result of the merger with Titan Systems Corporation discussed above retain the terms of the Titan Systems plans.

Titan elected to follow APB No. 25 and related interpretations in accounting for its stock options. See Note 3 for a calculation of Titan's pro forma net income and earnings per share under the fair value method pursuant to SFAS No. 123.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model using the following weighted-average assumptions: zero dividend yield and an expected life of 5 years in all years; expected volatility of 78% in 2004, 73% in 2003, and 73% in 2002; and a risk free interest rate of 3.38% in 2004, 3.82% in 2003, and 3.82% in 2002.

A summary of the status of Titan's fixed stock option plans as of December 31, 2004, 2003 and 2002, and changes during the years ending on those dates is presented below:

				2004								2003								2002
				Shares (000)				Weighted- Average Exercise Price				Shares (000)				Weighted- Average Exercise Price				Shares (000)				Weighted- Average Exercise Price
Outstanding at beginning of year					9,648			$	9.04				11,006			$	8.56				5,128			$	14.45
Granted					2,519				13.48				2,108				8.14				952				13.32
Adjustment for TSC merger					—				—				—				—				5,248				4.55
Adjustment for SureBeam spin-off					—				—				—				—				1,789				—
Exchanged in acquisitions					—				—				—				—				14				12.79
Exercised					(2,214	)			6.61				(2,758	)			5.57				(1,209	)			6.92
Canceled					(796	)			11.67				(708	)			12.04				(916	)			9.07
Outstanding at end of year					9,157				10.61				9,648				9.04				11,006				8.56
Options exercisable at year-end					5,473								6,190								6,957
Weighted-average fair value of options granted during the year				$	8.74							$	5.08							$	8.49

The following table summarizes information about fixed stock options outstanding at December 31, 2004:

F-175

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

				Options Outstanding												Options Exercisable
Range of Exercise Prices				Number Outstanding at 12/31/04				Weighted-Average Remaining Contractual Life				Weighted-Average Exercise Price				Number Exercisable at 12/31/04				Weighted-Average Exercise Price
$1.04-$6.86					1,875,817				4.07			$	3.29				1,857,001			$	3.25
6.88- 10.90					2,531,164				7.46				8.57				1,411,100				8.60
10.94- 13.44					2,777,607				9.15				13.16				496,278				12.59
13.58- 17.29					1,773,193				6.09				15.41				1,510,278				15.55
19.43- 29.74					198,849				5.17				27.29				197,949				27.32
1.04- 29.74					9,156,630				6.96				10.61				5,472,606				9.75

As a result of the SureBeam spin-off, all Titan outstanding stock options under each of Titan's stock option plans were adjusted such that the number of options was increased by a factor of 1.345 and the exercise price was decreased by dividing by 1.345. This adjustment maintained the same aggregate intrinsic value of the stock options that existed prior to the spin-off compared to the aggregate intrinsic value of the stock options immediately after the transaction and ensured that the ratio of the exercise price per share to the market value per share was not reduced. The adjustment was determined in accordance with the FASB's Financial Interpretation No. 44 (FIN 44), "Accounting for Certain Transactions Involving Stock Compensation," and resulted in no compensation charge.

Under the 2002 Employee Stock Purchase Plan, Titan is authorized to issue up to 2,500,000 shares of common stock to its full-time employees. This plan replaced Titan's 2000 Employee Stock Purchase Plan and Titan's 1995 Employee Stock Purchase Plan, which were authorized to issue 1,500,000 and 500,000 shares respectively. All employees of Titan are eligible to participate in the plan. Under the terms of the plan, employees may elect to have between 1 and 15 percent of their regular earnings, as defined in the plan, withheld to purchase Titan's common stock. The purchase price of the stock is 85 percent of the lower of its market price at the beginning or at the end of each offering period. An offering period is six months, beginning January 1 and July 1 of each year. Approximately 17%, 14%, and 21% of eligible employees participated in the Plan and purchased approximately 305,000, 784,000, and 655,100 shares of Titan's common stock in 2004, 2003, and 2002, respectively. During 2003 and 2002, grants of approximately 243,400 and 202,800 shares of Titan stock under the 2002 Employee and Director Stock Option and Incentive Plan were utilized to fulfill Titan's funding requirement under the 2000 Employee Stock Purchase Plan. The weighted-average fair value of the purchase rights granted in 2004, 2003, and 2002 was $3.32, $2.37, and $3.73, respectively, which represents the approximate intrinsic value to the participants related to the benefits of participation in the plan as determined in accordance with SFAS 123.

Note 14.    Related Party Transactions

Agreements With Executive Officers

Employment Agreements.    On April 2, 2003, Titan entered into an Employment Agreement with Dr. Ray in connection with his duties as Chairman, Chief Executive Officer and President of Titan. Among other things, the terms of the agreement provide for continued employment of Dr. Ray by Titan for a term of three years, and eligibility to receive annual incentive awards and to participate in long-term incentive, employee benefit and retirement programs. In the event that Dr. Ray is terminated without cause, or retires at the end of the term of the agreement, he will be entitled to a lump sum equal to three times the sum of his current base salary and target bonus, vesting of all outstanding stock options and participation for Dr. Ray and his dependents in Titan's extended health benefits program for retired senior executives.

Also, on April 2, 2003, Titan entered into Employment Agreements with Messrs. Costanza and Sopp in connection with their duties as Senior Vice President, General Counsel and Secretary and

F-176

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Senior Vice President, Chief Financial Officer and Treasurer, respectively. Among other things, the terms of their agreements provide for continued employment by Titan for a term of two years, eligibility to receive annual incentive awards and to participate in long-term incentive, employee benefit and retirement programs. In the event of termination without cause, Messrs. Costanza and Sopp will each be entitled to a lump sum equal to two times the sum of their respective current base salaries and target bonuses, vesting of all outstanding stock options and continued medical and dental benefits coverage for a period of two years. Messrs. Ray, Costanza and Sopp have agreed to non-competition and non-solicitation covenants in connection with their respective employment agreements.

In March of 2005, Titan entered into agreements to renew the term of the Employment Agreements, previously entered into with Messrs. Costanza and Sopp. These agreements renew the terms of the original agreements, on the same terms, for an additional two years.

In no event, however, shall the Executive be entitled to duplication as to any item of compensation or benefit or as to any other entitlement that is provided under both the Employment Agreement and the Change of Control Agreement described below. In the case of any such duplication, the Executive shall be entitled to the provision of the Employment Agreement or the Change of Control Agreement described below that is most favorable to the Executive.

Change in Control Agreements.    In March 2000, Titan entered into executive agreements with Titan's Chairman of the Board, President and Chief Executive Officer (hereinafter referred to as the CEO) and Titan's General Counsel, which provide special benefits after a change in control. The parties subsequently amended these agreements on September 14, 2003 to clarify certain terms and conditions as they related to the change in control that would result from the then proposed merger with Lockheed Martin. Effective as of August 20, 2003, Titan also entered into an executive agreement with Titan's Chief Financial Officer, which mirrors the executive agreement, as amended, for Titan's General Counsel. Pursuant to these agreements, as amended, if (1) there is a change in control of Titan and (2) the executive is terminated by Titan other than for "Cause" (as defined in the agreements) or such executive terminates his employment for "Good Reason" (as defined in the agreements) within three years following a change in control or if the executive is terminated prior to a change in control and the executive reasonably believes that his termination arose in connection with or anticipation of a change in control, the terminated executive will be entitled to a lump sum payment amount equal to three times the sum of his base salary and his "Highest Annual Bonus" (as defined in the agreements). Each executive will have a right under these agreements to resign for "Good Reason" if at the effective time of a change of control Titan will cease to be a publicly traded company. Also, the executive will receive a prorated bonus for the year of termination and continuation of the executive's and his family's welfare benefits (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) for three years after the later of the executive's date of termination or, as applicable, the expiration of the executive's continuation coverage period under the Consolidated Omnibus Budget Reconciliation Act, referred to as COBRA. In addition, all options that have been previously granted to the executive to acquire shares of Titan or any affiliate of Titan that have not previously been forfeited or exercised will vest and become exercisable in full and will remain exercisable for the remainder of their original terms. Titan will be obligated under these agreements to reimburse the CEO, Titan's General Counsel and Titan's Chief Financial Officer for all legal fees and all expenses which they incur in asserting or in defending their rights under these agreements.

In June 2004, Titan's Board adopted resolutions that provide for executive agreements with Dr. Delaney and each of Messrs. Branch, Brennan, Frederickson, Gorda, Osterloh, Pontius, Rose and Sullivan, which shall provide for substantially the same rights of such individuals upon a change of control as Messrs. Costanza and Sopp are entitled under their current agreements of similar purpose. The principal difference between the rights under these executive agreements and those of

F-177

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Messrs. Costanza and Sopp is that "Good Reason" to terminate employment with Titan does not include Titan ceasing to be a publicly traded company as it does for Messrs. Costanza and Sopp. Mr. Gorda may, in his sole discretion, retain his existing rights pursuant to an executive severance agreement between Mr. Gorda and the Company entered into in November 1995 or he may elect to receive the new benefits.

Investor Relations Consulting Agreements

In September 2004, Titan entered into an agreement with the Berlin Group, an investor relations firm. A principal in the firm is a family member of one of its senior executives. Management believes the terms of the agreement reflect the market value of the services received.

Certain Relationships And Related Transactions

In conjunction with Titan's exit of its international telecommunications business, Titan entered into an agreement with Geolutions, Inc. (Geolutions) to assume and perform all of Titan Wireless's outstanding warranty obligations. Geolutions was a newly formed company, founded by a former executive of Titan Wireless and former officer of Titan. Titan entered into a fixed price contract of $1.9 million, plus incidental expenses of up to $0.6 million and other third party costs of an aggregate maximum of $1.4 million, which was subsequently reduced by $0.5 million. These fees were payable through September 2004, the period over which Titan's warranty obligations exist on its existing customer contracts. In March 2004, Titan settled its remaining contractual liability to Geolutions and no longer has outstanding warranty obligations concerning Titan Wireless.

In March 2002, Titan's Board of Directors adopted a stock option relinquishment program, the primary purpose of which was to align the interests of its directors and senior executives more closely with its stockholders' interests by allowing directors and senior executives to participate in the appreciation in Titan equity value:

•	without requiring Titan's Directors and executive officers to trade shares of its common stock obtained through the exercise of options on the open market; and

•	without the dilutive and potentially stock-price depressive effects associated with the exercise and subsequent sale of stock option shares.

The program also was intended to assist the participants with their individual financial planning. Under the program, a participant was allowed to relinquish eligible, in-the-money stock options in exchange for a loan, the principal amount of which was 150% of the difference between the aggregate exercise price of the options and the product of (i) the number of shares issuable upon exercise of the options and (ii) a 20 day trailing average of the daily high and low sales price of Titan's common stock prior to relinquishment. The loans bear interest at a rate equal to the applicable federal rate as published by the Internal Revenue Service for the month in which the loan was made. The loans were made contingent upon the participant's utilizing a portion of the loan proceeds to purchase a life insurance policy with a death benefit sufficient to repay the loan and accrued interest thereon upon maturity.

Under the program the following transactions occurred (in whole shares and dollars):

•	Dr. Ray, Chairman of the Board and Chief Executive Officer: 222,380 options relinquished on June 18, 2002, $3,985,725 principal amount of loan, 5.48% interest per annum;

•	Mr. Fink, Director: 15,000 options relinquished on June 27, 2002, $336,337.50 principal amount of loan, 5.48% interest per annum; and

•	Mr. Alexander, Director: 19,972 options relinquished effective June 19, 2002, $499,999 principal amount of loan, 5.48% interest per annum.

The amount of the stock options relinquished under the program do not reflect any adjustment as a result of the spin-off of Titan's subsidiary SureBeam Corporation on August 5, 2002, since the

F-178

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

relinquishment occurred before the date for said adjustment. Titan has recorded interest income of $0.5 million to date related to the accrued interest on the outstanding loans due from the directors noted above.

As of the effective date of the Sarbanes-Oxley Act in July 2002, which precludes such loans to company officers and directors, the Stock Option and Relinquishment Plan was no longer available to Titan Directors and executive officers.

An officer of one of Titan's operating units has a financial interest in a facility rented by the unit. Total rent paid by the unit in 2003 related to this facility was $0.2 million and this facility was sold by the officer to an unrelated party in the first quarter of 2004.

Note 15.    Benefit Plans

Titan has various defined contribution benefit plans covering certain employees. Titan's contributions to these plans were $17.6 million, $19.5 million, and $14.6 million, in 2004, 2003, and 2002, respectively. No discretionary contributions were made in 2004, 2003, or 2002.

Titan has a non-qualified executive deferred compensation plan for certain officers and key employees. Titan's expense for this plan, including interest, was $0.9 million, $1.9 million, and $0.9 million, in 2004, 2003, and 2002, respectively. Interest expense for the years ended December 31, 2004, 2003, and 2002 includes $0.5 million, $0.3 million, and $0.6 million, respectively, related to the plan. This obligation has been fully funded and is carried in a Rabbi trust. Included in other non-current liabilities is $21.7 million and $15.6 million related to this plan at December 31, 2004 and 2003, respectively. Included in other current liabilities is $1.7 million related to this plan at December 31, 2004. Cash surrender value of the life insurance related to this plan was $23.1 million and $15.8 million included in Other Assets in the consolidated balance sheet at December 31, 2004 and 2003, respectively. Titan also has performance bonus plans for certain of its employees. Related expense amounted to approximately $21.7 million, $21.9 million, and $14.5 million in 2004, 2003, and 2002, respectively.

Titan has previously provided for post-retirement benefits for employees of certain operations discontinued in prior years. Titan also implemented a post-retirement medical benefit plan for senior executives in 2000. All values related to this plan are immaterial. Titan has no other post-retirement benefit or pension obligations for any of its continuing operations or for its recently discontinued businesses.

Note 16.    Guarantor Condensed Consolidating Financial Statements

On May 15, 2003, Titan sold $200 million aggregate principal amount of 8% senior subordinated notes in a private placement. Titan used the net proceeds from its issuance of the 8% senior subordinated notes, plus borrowings of $50 million we made under its revolving credit facility and additional cash on hand, to redeem all of its then-outstanding 5³4% HIGH TIDES convertible preferred securities, effective June 4, 2003.

Following are consolidating condensed financial statements to quantify the financial position as of December 31, 2004, and 2003, and the operations and cash flows for the years ended December 31, 2004, 2003, and 2002, for the Guarantor Subisdiaries listed below and the Non-Guarantor Subsidiaries listed below. The following consolidating condensed balance sheets, consolidating condensed statements of operations and consolidating condensed statements of cash flows present financial information for:

Parent: The Titan Corporation on a stand-alone basis.

Guarantor Subsidiaries: All directly and indirectly owned domestic subsidiaries of Parent other than Cayenta Inc. on a stand-alone basis.

F-179

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Non-guarantor Subsidiaries: Cayenta Inc. and all direct and indirect subsidiaries of Parent that are not organized under the laws of the United States, any state of the United States or the District of Columbia and that conduct substantially all business operations outside the United States.

Reclassifications and Eliminations: Entries that eliminate the investment in subsidiaries and intercompany balances and transactions.

The Titan Corporation and Subsidiaries: The financial information for The Titan Corporation on a condensed consolidated basis.

The classification of operating entities within each of the columns is based on the legal status of the entity as of December 31, 2004. Accordingly, certain legal entities that existed in prior years that had been merged into Titan as of December 31, 2004 have been reclassified in the prior year condensed financial statements to conform with the current year presentation.

F-180

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Statement of Operations
For the Year Ended December 31, 2004
(In thousands)

				Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Revenues				$	1,960,374			$	72,244			$	21,273			$	(7,366	)		$	2,046,525
Cost and expenses:
Cost of revenues					1,644,098				62,410				30,244				(6,789	)			1,729,963
Selling, general and administrative					142,223				5,160				7,699				—				155,082
Research and development					13,464				1,642				—				—				15,106
Merger, investigation and settlement					59,932				—				—				—				59,932
Asset impairments					5,500				—				9,995				—				15,495
Total costs and expenses					1,865,217				69,212				47,938				(6,789	)			1,975,578
Operating profit (loss)					95,157				3,032				(26,665	)			(577	)			70,947
Interest expense					(37,684	)			—				—				—				(37,684	)
Interest income					745				—				13				—				758
Loss on investments					(3,867	)			—				—				—				(3,867	)
Net gain on sale of asset					863				(300	)			—				—				563
Income (loss) from continuing operations before income taxes					55,214				2,732				(26,652	)			(577	)			30,717
Income tax provision (benefit)					26,017				1,011				(9,861	)			(214	)			16,953
Income (loss) from continuing operations					29,197				1,721				(16,791	)			(363	)			13,764
Loss from discontinued operations, net of taxes					(31,217	)			(20,052	)			(892	)			—				(52,161	)
Earnings (loss) before equity in losses of subsidiaries					(2,020	)			(18,331	)			(17,683	)			(363	)			(38,397	)
Equity in losses of subsidiaries					(36,013	)			—				—				36,013				—
Net earnings (loss)				$	(38,033	)		$	(18,331	)		$	(17,683	)		$	35,650			$	(38,397	)

F-181

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Statement of Operations
For the Year Ended December 31, 2003
(In thousands)

				Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Revenues				$	1,667,509			$	60,065			$	31,376			$	(2,744	)		$	1,756,206
Cost and expenses:
Cost of revenues					1,389,111				50,769				27,365				(2,536	)			1,464,709
Selling, general and administrative					140,215				7,836				5,558				—				153,609
Research and development					8,368				2,054				—				—				10,422
Impairment charge related to SureBeam					15,757				—				—				—				15,757
Merger related costs					5,247				—				—				—				5,247
Total costs and expenses					1,558,698				60,659				32,923				(2,536	)			1,649,744
Operating profit (loss)					108,811				(594	)			(1,547	)			(208	)			106,462
Interest expense					(34,463	)			—				(26	)			—				(34,489	)
Interest income					2,315				4				7				—				2,326
Debt extinguishment costs					(12,423	)			—				—				—				(12,423	)
Loss on investments					(6,154	)			—				—				—				(6,154	)
Income (loss) from continuing operations before income taxes					58,086				(590	)			(1,566	)			(208	)			55,722
Income tax provision (benefit)					24,781				(251	)			(633	)			(84	)			23,813
Income (loss) from continuing operations					33,305				(339	)			(933	)			(124	)			31,909
Loss from discontinued operations, net of taxes					(1,578	)			(419	)			(815	)			—				(2,812	)
Earnings (loss) before equity in losses of subsidiaries					31,727				(758	)			(1,748	)			(124	)			29,097
Equity in losses of subsidiaries					(2,506	)			—				—				2,506				—
Net earnings (loss)				$	29,221			$	(758	)		$	(1,748	)		$	2,382			$	29,097

F-182

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Statement of Operations
For the Year Ended December 31, 2002
(In thousands)

				Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Revenues				$	1,327,284			$	17,169			$	30,306			$	(5,030	)		$	1,369,729
Cost and expenses:
Cost of revenues					1,084,257				14,964				18,586				(4,534	)			1,113,273
Selling, general and administrative					159,733				4,960				7,464				—				172,157
Research and development					7,378				378				—				—				7,756
Exit and restructuring charges and other					41,642				—				11,675				—				53,317
Total costs and expenses					1,293,010				20,302				37,725				(4,534	)			1,346,503
Operating profit (loss)					34,274				(3,133	)			(7,419	)			(496	)			23,226
Interest expense					(32,551	)			—				(2	)			—				(32,553	)
Interest income					1,708				—				—				—				1,708
Debt extinguishment costs					(9,435	)			—				—				—				(9,435	)
Loss from continuing operations before income taxes and cumulative effect of change in accounting principle					(6,004	)			(3,133	)			(7,421	)			(496	)			(17,054	)
Income tax benefit					(503	)			(262	)			(4,783	)			(55	)			(5,603	)
Loss from continuing operations before cumulative effect of change in accounting principle					(5,501	)			(2,871	)			(2,638	)			(441	)			(11,451	)
Loss from discontinued operations, net of taxes					(18,711	)			(157,240	)			(43,948	)			—				(219,899	)
Loss before cumulative effect of change in accounting principle					(24,212	)			(160,111	)			(46,586	)			(441	)			(231,350	)
Cumulative effect of change in accounting principle, net of tax benefit					(9,414	)			—				(30,697	)			—				(40,111	)
Loss before equity in losses of subsidiaries					(33,626	)			(160,111	)			(77,283	)			(441	)			(271,461	)
Equity in losses of subsidiaries					(237,394	)			(35,972	)			—				273,366				—
Net earnings (loss)				$	(271,020	)		$	(196,083	)		$	(77,283	)		$	272,925			$	(271,461	)

F-183

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Balance Sheet
As of December 31, 2004
(In thousands)

				Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Assets
Current Assets:
Cash and cash equivalents				$	17,364			$	(611	)		$	(81	)		$	—			$	16,672
Accounts receivable—net					484,664				15,973				14,749				—				515,386
Inventories					21,336				—				—				—				21,336
Prepaid expenses and other					28,885				501				230				(577	)			29,039
Deferred income taxes					95,390				—				—				—				95,390
Current assets of discontinued operations					—				1,665				—				—				1,665
Total current assets					647,639				17,528				14,898				(577	)			679,488
Property and equipment, net					56,243				427				872				—				57,542
Goodwill					456,033				8,377				59				—				464,469
Other assets—net					61,325				21				72				—				61,418
Deferred income taxes					68,380				—				—				—				68,380
Non-current assets of discontinued operations					—				26,469				—				—				26,469
Intercompany investments and advances—net					319,519				(171,744	)			(147,775	)			—				—
Total assets				$	1,609,139			$	(118,922	)		$	(131,874	)		$	(577	)		$	1,357,766
Liabilities and Stockholders' Equity
Current Liabilities:
Current portion of amounts outstanding under line of credit				$	3,500			$	—			$	—			$	—			$	3,500
Accounts payable					107,991				7,296				745				—				116,032
Current portion of long-term debt					500				—				—				—				500
Accrued compensation and benefits					93,412				2,213				2,743				—				98,368
Other accrued liabilities					109,536				3,339				2,293				—				115,168
Current liabilities of discontinued operations					5,095				14,123				1,777				—				20,995
Total current liabilities					320,034				26,971				7,558				—				354,563
Long-term portion of amounts outstanding under line of credit					352,750				—				—				—				352,750
Senior subordinated debt					200,000				—				—				—				200,000
Other long-term debt					491				—				—				—				491
Other non-current liabilities					66,632				—				1,932				—				68,564
Non-current liabilities of discontinued operations					9,931				23,387				—				—				33,318
Stockholders' equity (deficit)					659,301				(169,280	)			(141,364	)			(577	)			348,080
Total liabilities and equity				$	1,609,139			$	(118,922	)		$	(131,874	)		$	(577	)		$	1,357,766

F-184

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Balance Sheet
As of December 31, 2003
(In thousands)

				Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Assets
Current Assets:
Cash and cash equivalents				$	25,950			$	(941	)		$	1,965			$	—			$	26,974
Accounts receivable—net					339,580				14,324				27,361				—				381,265
Inventories					12,676				1,918				6,836				—				21,430
Prepaid expenses and other					23,076				538				296				(208	)			23,702
Deferred income taxes					91,272				—				—				—				91,272
Current assets of discontinued operations					13,747				15,545				8,185				—				37,477
Total current assets					506,301				31,384				44,643				(208	)			582,120
Property and equipment, net					37,541				3,028				11,939				—				52,508
Goodwill					455,016				7,834				59				—				462,909
Other assets—net					57,825				8,295				5				—				66,125
Deferred Income tax					62,781				—				—				—				62,781
Non-current assets of discontinued operations					19,153				45,039				—				—				64,192
Intercompany investments and advances—net					348,309				(182,666	)			(165,643	)			—				—
Total assets				$	1,486,926			$	(87,086	)		$	(108,997	)		$	(208	)		$	1,290,635
Liabilities and Stockholders' Equity
Current Liabilities:
Current portion of amounts outstanding under line of credit				$	3,500			$	—			$	—			$	—			$	3,500
Accounts payable					76,685				10,499				2,902				—				90,086
Current portion of long-term debt					863				—				—				—				863
Accrued compensation and benefits					77,271				2,752				1,309				—				81,332
Other accrued liabilities					87,695				3,667				1,767				—				93,129
Current liabilities of discontinued operations					3,810				14,148				4,723				—				22,681
Total current liabilities					249,824				31,066				10,701				—				291,591
Long-term portion of amounts outstanding under line of credit					341,250				—				—				—				341,250
Senior subordinated debt					200,000				—				—				—				200,000
Other long-term debt					988				—				—				—				988
Other non-current liabilities					47,152				—				3,200				—				50,352
Non-current liabilities of discontinued operations					1,249				32,798				998				—				35,045
Stockholders' equity (deficit)					646,463				(150,950	)			(123,896	)			(208	)			371,409
Total liabilities and equity				$	1,486,926			$	(87,086	)		$	(108,997	)		$	(208	)		$	1,290,635

F-185

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Statement of Cash Flows
For the Year Ended December 31, 2004
(In thousands)

				Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Cash Flows from Operating Activities:
Income (loss) from continuing operations				$	29,197			$	1,722			$	(16,791	)		$	(364	)		$	13,764
Adjustments to reconcile income (loss) from continuing operations to cash provided by (used for) continuing operations, net of effects of businesses acquired					(23,422	)			(3,892	)			18,441				364				(8,509	)
Net cash provided by (used for) continuing operations					5,775				(2,170	)			1,650				—				5,255
Income (loss) from discontinued operations					(31,217	)			(20,052	)			(892	)			—				(52,161	)
Adjustments to reconcile income (loss) from discontinued operations to cash used for discontinued operations					20,123				11,350				14,692				—				46,165
Net cash provided by (used for) discontinued operations					(11,094	)			(8,702	)			13,800				—				(5,996	)
Net cash provided by (used for) operating activities					(5,319	)			(10,872	)			15,450				—				(741	)
Cash Flows from Investing Activities:
Capital expenditures					(10,869	)			(11,509	)			(213	)			—				(22,591	)
Proceeds from sale of investments and net assets					2,494				386				—				—				2,880
Earnout payments on prior year acquisitions					(3,460	)			—				—				—				(3,460	)
Other investments					(1,243	)			—				—				—				(1,243	)
Proceeds (payments) on intercompany investments and advances					(4,631	)			22,499				(17,868	)			—				—
Other					2,315				—				370				—				2,685
Net cash provided by (used for) investing activities					(15,394	)			11,376				(17,711	)			—				(21,729	)
Cash Flows from Financing Activities:
Extinguishment of HIGH TIDES and other debt reductions					(860	)			—				—				—				(860	)
Issuance of senior subordinated notes and other debt additions					11,500				—				—				—				11,500
Preferred stock redemption					(12,518	)			—				—				—				(12,518	)
Deferred debt issuance costs					(500	)			—				—				—				(500	)
Proceeds from stock issuances					14,619				—				—				—				14,619
Dividends paid					(190	)			—				—				—				(190	)
Other					76				(174	)			—				—				(98	)
Net cash used for financing activities					12,127				(174	)			—				—				11,953
Effect of exchange rate changes on cash					—				—				215				—				215
Net increase (decrease) in cash and cash equivalents					(8,586	)			330				(2,046	)			—				(10,302	)
Cash and cash equivalents at beginning of year					25,950				(941	)			1,965				—				26,974
Cash and cash equivalents at end of year				$	17,364			$	(611	)		$	(81	)		$	—			$	16,672

F-186

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Statement of Cash Flows
For the Year Ended December 31, 2003
(In thousands)

				Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Cash Flows from Operating Activities:
Income (loss) from continuing operations				$	33,305			$	(339	)		$	(933	)		$	(124	)		$	31,909
Adjustments to reconcile income (loss) from continuing operations to cash provided by (used for) continuing operations, net of effects of businesses acquired					76,690				(16,614	)			(10,741	)			124				49,459
Net cash provided by (used for) continuing operations					109,995				(16,953	)			(11,674	)			—				81,368
Income (loss) from discontinued operations					(1,578	)			(419	)			(815	)			—				(2,812	)
Adjustments to reconcile income (loss) from discontinued operations to cash used for discontinued operations					(3,425	)			5,985				(6,614	)			—				(4,054	)
Net cash provided by (used for) discontinued operations					(5,003	)			5,566				(7,429	)			—				(6,866	)
Net cash provided by (used for) operating activities					104,992				(11,387	)			(19,103	)			—				74,502
Cash Flows from Investing Activities:
Capital expenditures					(10,795	)			(2,940	)			(64	)			—				(13,799	)
Acquisition of businesses, net of cash acquired					(13,872	)			(217	)			—				—				(14,089	)
Other investments					(1,595	)			(20	)			—				—				(1,615	)
Proceeds (payments) on intercompany investments and advances					(34,283	)			12,980				21,303				—				—
Other					570				(144	)			31				—				457
Net cash provided by (used for) investing activities					(59,975	)			9,659				21,270				—				(29,046	)
Cash Flows from Financing Activities:
Extinguishment of HIGH TIDES and other debt reductions					(254,541	)			—				—				—				(254,541	)
Issuance of senior subordinated notes and other debt additions					200,000				—				—				—				200,000
Deferred debt issuance costs					(8,924	)			—				—				—				(8,924	)
Debt extinguishment costs					(4,352	)			—				—				—				(4,352	)
Proceeds from stock issuances					15,491				—				—				—				15,491
Dividends paid					(688	)			—				—				—				(688	)
Decrease in restricted cash					394				—				—				—				394
Other					163				(6	)			(59	)			—				98
Net cash used for financing activities					(52,457	)			(6	)			(59	)			—				(52,522	)
Effect of exchange rate changes on cash					—				—				(83	)			—				(83	)
Net increase (decrease) in cash and cash equivalents					(7,440	)			(1,734	)			2,025				—				(7,149	)
Cash and cash equivalents at beginning of year					33,390				793				(60	)			—				34,123
Cash and cash equivalents at end of year				$	25,950			$	(941	)		$	1,965			$	—			$	26,974

F-187

The Titan Corporation
Condensed Consolidating Parent Company, Guarantor and Non-guarantor
Statement of Cash Flows
For the Year Ended December 31, 2002
(In thousands)

				Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Reclassifications and Eliminations				The Titan Corporation and Subsidiaries
Cash Flows from Operating Activities:
Loss from continuing operations				$	(6,023	)		$	(2,349	)		$	(2,638	)		$	(441	)		$	(11,451	)
Adjustments to reconcile loss from continuing operations to cash provided by (used for) continuing operations, net of effects of businesses acquired					144,520				29,648				(3,285	)			441				171,324
Net cash provided by (used for) continuing operations					138,497				27,299				(5,923	)			—				159,873
Loss from discontinued operations					(18,711	)			(157,240	)			(43,948	)			—				(219,899	)
Adjustments to reconcile loss from discontinued operations to cash used for discontinued operations					(84,063	)			124,863				37,557				—				78,357
Net cash used for discontinued operations					(102,774	)			(32,377	)			(6,391	)			—				(141,542	)
Net cash provided by (used for) operating activities					35,723				(5,078	)			(12,314	)			—				18,331
Cash Flows from Investing Activities:
Capital expenditures					(13,454	)			(1,663	)			(8,188	)			—				(23,305	)
Acquisition of businesses, net of cash acquired					27,237				172				—				—				27,409
Capitalized software development costs					—				(1,287	)			(245	)			—				(1,532	)
Proceeds from sales of investments					6,917				—				—				—				6,917
Advances to SureBeam on line of credit					(25,000	)			—				—				—				(25,000	)
Other investments					(6,789	)			—				—				—				(6,789	)
Proceeds (payments) on intercompany investments and advances					(27,319	)			9,328				17,991				—				—
Other					4,301				(46	)			3,333				—				7,588
Net cash provided by (used for) investing activities					(34,107	)			6,504				12,891				—				(14,712	)
Cash Flows from Financing Activities:
Additions to debt					18,250				—				—				—				18,250
Retirements of debt					(4,177	)			(470	)			—				—				(4,647	)
Deferred debt issuance costs					(8,908	)			—				—				—				(8,908	)
Proceeds from stock issuances					8,566				—				—				—				8,566
Issuance of stock in subsidiaries					15				4				—				—				19
Dividends paid					(689	)			—				—				—				(689	)
Increase in restricted cash					(394	)			—				—				—				(394	)
Other					139				—				(193	)			—				(54	)
Net cash provided by (used for) financing activities					12,802				(466	)			(193	)			—				12,143
Effect of exchange rate changes on cash					—				(220	)			(40	)			—				(260	)
Net increase in cash and cash equivalents					14,418				740				344				—				15,502
Cash and cash equivalents at beginning of year					18,972				53				(404	)			—				18,621
Cash and cash equivalents at end of year				$	33,390			$	793			$	(60	)		$	—			$	34,123

F-188

THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data, or as otherwise noted)

Note 17.    Unaudited Quarterly Financial Data

2004				First Quarter				Second Quarter				Third Quarter				Fourth Quarter				Total Year
Revenues				$	454,022			$	514,932			$	525,997			$	551,574			$	2,046,525
Gross profit					71,750				76,850				80,893				87,069				316,562
Income (loss) from continuing operations					3,629				(24,892	)			16,644				18,383				13,764
Net income (loss)					3,057				(66,552	)			15,805				9,293				(38,397	)
Basic earnings per share:
Income (loss) from continuing operations				$	0.04			$	(0.30	)		$	0.20			$	0.22			$	0.16
Net income (loss)					0.03				(0.79	)			0.19				0.11				(0.46	)
Diluted earnings per share:
Income (loss) from continuing operations					0.04				(0.30	)			0.19				0.21				0.16
Net income (loss)					0.03				(0.79	)			0.18				0.11				(0.44	)

2003				First Quarter				Second Quarter				Third Quarter				Fourth Quarter				Total Year
Revenues				$	374,228			$	433,934			$	468,397			$	479,646			$	1,756,206
Gross profit					62,313				71,857				74,774				82,554				291,498
Income from continuing operations					8,563				6,667				15,572				1,107				31,909
Net income					7,000				5,865				15,177				1,055				29,097
Basic earnings per share:
Income from continuing operations				$	0.11			$	0.08			$	0.19			$	0.01			$	0.39
Net income					0.09				0.07				0.19				0.01				0.36
Diluted earnings per share:
Income from continuing operations					0.10				0.08				0.18				0.01				0.37
Net income					0.09				0.07				0.18				0.01				0.34

The above financial information for each quarter reflects all normal and recurring adjustments. The above income from continuing operations for the second quarter of 2004 reflects the reclassification of $7.2 million of pre-tax charges to discontinued operations. Such costs, which were associated with obligations related to SureBeam, and discontinued in prior years, were previously reported as asset impairment charges in continuing operations in the second quarter of 2004. The above net income figure in the fourth quarter includes an additional $7.2 million pre-tax charge associated with the obligations related to SureBeam.

The 2004 net income includes pre-tax merger, investigation and pre-tax settlement costs of $59.9 million, asset impairment charges of $15.5 million, legal and other professional fees of $2.9 million related to the SureBeam bankruptcy settlement and the defense of the SureBeam-related class action litigation and a loss on investments of $3.9 million. The 2003 net income includes an estimated impairment charge of $15.8 million related to Titan's former subsidiary, SureBeam Corporation, debt extinguishment costs of $12.4 million and a loss on investments of $6.2 million.

F-189

OFFER TO EXCHANGE ALL OUTSTANDING 6 3/8% SENIOR SUBORDINATED NOTES DUE 2015 FOR 6 3/8% SERIES B SENIOR SUBORDINATED NOTES DUE 2015, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933

PROSPECTUS

UNTIL                   , 2005 ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

                  , 2005

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.    Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law (the "DGCL") provides for, among other things:

a.    permissive indemnification for expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by designated persons, including directors and officers of a corporation, in the event such persons are parties to litigation other than stockholder derivative actions if certain conditions are met;

b.    permissive indemnification for expenses (including attorneys' fees) actually and reasonably incurred by designated persons, including directors and officers of a corporation, in the event such persons are parties to stockholder derivative actions if certain conditions are met;

c.    mandatory indemnification for expenses (including attorneys' fees) actually and reasonably incurred by designated persons, including directors and officers of a corporation, in the event such persons are successful on the merits or otherwise in defense of litigation covered by a. and b. above; and

d.    that the indemnification provided for by Section 145 is not deemed exclusive of any other rights which may be provided under any by-law, agreement, stockholder or disinterested director vote, or otherwise.

In addition to the indemnification provisions of the DGCL described above, the Registrant's certificate of incorporation (the "Certificate of Incorporation") authorizes indemnification of the Registrant's officers and directors, subject to a case-by-case determination that they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the Company, and in the case of any criminal proceeding, they had no reasonable cause to believe their conduct was unlawful. In the event that a Change in Control (as defined in the Certificate of Incorporation) shall have occurred, the proposed indemnitee director or officer may require that the determination of whether he met the standard of conduct be made by special legal counsel selected by him. In addition, whereas the DGCL would require court-ordered indemnification, if any, in cases in which a person has been adjudged to be liable to the Registrant, the Certificate of Incorporation also permits indemnification in such cases if and to the extent that the reviewing party determines that such indemnity is fair and reasonable under the circumstances.

The Certificate of Incorporation requires the advancement of expenses to an officer or director (without a determination as to his conduct) in advance of the final disposition of a proceeding if such person furnishes a written affirmation of his good faith belief that he has met the applicable standard of conduct and furnishes a written undertaking to repay any advances if it is ultimately determined that he is not entitled to indemnification. In connection with proceedings by or in the right of the Registrant, the Certificate of Incorporation provides that indemnification shall include not only reasonable expenses, but also penalties, fines and amounts paid in settlement. Unless ordered by a court, such indemnification shall not include judgments. Under the Certificate of Incorporation, no officer or director is entitled to indemnification or advancement of expenses with respect to a proceeding brought by him against the Registrant other than a proceeding seeking or defending such officer's or director's right to indemnification or advancement of expenses. Finally, the Certificate of Incorporation provides that the Company may, subject to authorization on a case by case basis, indemnify and advance expenses to employees or agents to the same extent as a director or to a lesser extent (or greater, as permitted by law) as determined by the Board of Directors.

The Certificate of Incorporation purports to confer upon officers and directors contractual rights to indemnification and advancement of expenses as provided therein. In addition, as permitted by the DGCL, the Registrant has entered into indemnity agreements with its directors and selected officers that provide contract rights substantially identical to the rights to indemnification and advancement of expenses set forth in the Certificate of Incorporation, as described above.

II-1

The Certificate of Incorporation limits the personal liability of directors to the Registrant or its stockholders for monetary damages for breach of the duty as a director, other than liability as a director (i) for breach of duty of loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL (certain illegal distributions), or (iv) for any transaction for which the director derived an improper personal benefit.

The Registrant maintains officers' and directors' insurance covering certain liabilities that may be incurred by officers and directors in the performance of their duties.

Item 21.    Exhibits and Financial Statement Schedules.

A list of exhibits filed with this registration statement on Form S-4 is set forth in the Exhibit Index and is incorporated into this Item 21 by reference.

Item 22.    Undertakings.

The undersigned registrants hereby undertake:

(1)    To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)    To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii)    To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.

(iii)    To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2)    That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)    To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by the director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-2

The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on November 23, 2005.

L-3 COMMUNICATIONS CORPORATION

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria
Title: Senior Vice President, Secretary and General            Counsel

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Michael T. Strianese and Frank C. Lanza, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 relating to the notes and the subsidiary guarantees and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza				Chairman, Chief Executive Officer and Director				November 23, 2005
Frank C. Lanza
/s/ Michael T. Strianese				Senior Vice President and Chief Financial Officer (Principal Financial Officer)				November 23, 2005
Michael T. Strianese
/s/ Ralph G. D'Ambrosio				Vice President – Finance (Principal Accounting Officer)				November 23, 2005
Ralph G. D'Ambrosio
/s/ Claude R. Canizares				Director				November 23, 2005
Claude R. Canizares
/s/ Peter A. Cohen				Director				November 23, 2005
Peter A. Cohen
/s/ Thomas A. Corcoran				Director				November 23, 2005
Thomas A. Corcoran
/s/ Robert B. Millard				Director				November 23, 2005
Robert B. Millard
				Director
John M. Shalikashvili
/s/ Arthur L. Simon				Director				November 23, 2005
Arthur L. Simon
/s/ Alan H. Washkowitz				Director				November 23, 2005
Alan H. Washkowitz
/s/ John P. White				Director				November 23, 2005
John P. White

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants certifies has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on November 23, 2005.

APCOM, INC.
BROADCAST SPORTS INC.
D.P. ASSOCIATES INC.
ELECTRODYNAMICS, INC.
HENSCHEL INC.
HYGIENETICS ENVIRONMENTAL SERVICES, INC.
INTELLIGENCE DATA SYSTEMS, INC.
INTERSTATE ELECTRONICS CORPORATION
KDI PRECISION PRODUCTS, INC.
L-3 COMMUNICATIONS AEROMET, INC.
L-3 COMMUNICATIONS AIS GP CORPORATION
L-3 COMMUNICATIONS ADVANCED LASER SYSTEMS     TECHNOLOGY, INC.
L-3 COMMUNICATIONS AVIONICS SYSTEMS, INC.
L-3 COMMUNICATIONS AVISYS CORPORATION
L-3 COMMUNICATIONS CSI, INC.
L-3 COMMUNICATIONS AYDIN CORPORATION
L-3 COMMUNICATIONS CE HOLDINGS, INC.
L-3 COMMUNICATIONS CINCINNATI ELECTRONICS     CORPORATION
L-3 COMMUNICATIONS EO/IR, INC.
L-3 COMMUNICATIONS ELECTRON TECHNOLOGIES,     INC.
L-3 COMMUNICATIONS ESSCO, INC.
L-3 COMMUNICATIONS GOVERNMENT SERVICES, INC.
L-3 COMMUNICATIONS ILEX SYSTEMS, INC.
L-3 COMMUNICATIONS INFRAREDVISION
    TECHNOLOGY CORPORATION
L-3 COMMUNICATIONS INVESTMENTS INC.
L-3 COMMUNICATIONS KLEIN ASSOCIATES, INC.
L-3 COMMUNICATIONS MAS (US) CORPORATION
L-3 COMMUNICATIONS MOBILE-VISION, INC.
L-3 COMMUNICATIONS SECURITY AND DETECTION     SYSTEMS, INC.
L-3 COMMUNICATIONS SONOMA EO, INC.
L-3 COMMUNICATIONS TITAN CORPORATION
L-3 COMMUNICATIONS WESTWOOD CORPORATION
LINCOM WIRELESS, INC.
MCTI ACQUISITION CORPORATION
MICRODYNE COMMUNICATIONS TECHNOLOGIES     INCORPORATED
MICRODYNE CORPORATION
MICRODYNE OUTSOURCING INCORPORATED
MPRI, INC.
PAC ORD INC.
POWER PARAGON, INC.
PROCOM SERVICES, INC.
SHELLCO, INC.
SPD ELECTRICAL SYSTEMS, INC.
SPD SWITCHGEAR, INC.
SYCOLEMAN CORPORATION

II-5

TITAN FACILITIES, INC.
TITAN SCAN TECHNOLOGIES CORPORATION
TROLL TECHNOLOGY CORPORATION
WESCAM AIR OPS INC.
WESCAM HOLDINGS (US) INC.
WOLF COACH, INC.

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria
Title: Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Michael T. Strianese and Frank C. Lanza, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 relating to the notes and the subsidiary guarantees and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza				Chief Executive Officer				November 23, 2005
Frank C. Lanza
/s/ Michael T. Strianese				Chief Financial Officer				November 23, 2005
Michael T. Strianese
/s/ Christopher C. Cambria				Vice President, Secretary and Director				November 23, 2005
Christopher C. Cambria

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on November 23, 2005.

L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P.

By:   L-3 COMMUNICATIONS AIS GP CORPORATION,
as General Partner

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria
Title: Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Frank C. Lanza and Michael T. Strianese, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 relating to the notes and the subsidiary guarantees and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza				Chief Executive Officer				November 23, 2005
Frank C. Lanza
/s/ Michael T. Strianese				Chief Financial Officer				November 23, 2005
Michael T. Strianese
/s/ Christopher C. Cambria				Vice President, Secretary and Director of L-3 Communications AIS GP Corporation				November 23, 2005
Christopher C. Cambria

II-7

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on November 23, 2005.

L-3 COMMUNICATIONS VERTEX AEROSPACE LLC

By:   L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P., as Sole Member

By:   L-3 COMMUNICATIONS AIS GP CORPORATION,
as General Partner

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria
Title: Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Frank C. Lanza and Michael T. Strianese, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 relating to the notes and the subsidiary guarantees and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza				Chief Executive Officer				November 23, 2005
Frank C. Lanza
/s/ Michael T. Strianese				Chief Financial Officer				November 23, 2005
Michael T. Strianese
/s/ Christopher C. Cambria				Vice President, Secretary and Director of L-3 Communications AIS GP Corporation				November 23, 2005
Christopher C. Cambria

II-8

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on November 23, 2005.

L-3 COMMUNICATIONS FLIGHT INTERNATIONAL     AVIATION LLC
L-3 COMMUNICATIONS FLIGHT CAPITAL LLC
L-3 COMMUNICATIONS VECTOR INTERNATIONAL     AVIATION LLC

By:   L-3 COMMUNICATIONS VERTEX AEROSPACE LLC, as Sole Member

By:   L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P., as Sole Member

By:   L-3 COMMUNICATIONS AIS GP CORPORATION, as General Partner

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria

Title: Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Frank C. Lanza and Michael T. Strianese, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 relating to the notes and the subsidiary guarantees and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza				Chief Executive Officer				November 23, 2005
Frank C. Lanza
/s/ Michael T. Strianese				Chief Financial Officer				November 23, 2005
Michael T. Strianese
/s/ Christopher C. Cambria				Vice President, Secretary and Director of L-3 Communications AIS GP Corporation				November 23, 2005
Christopher C. Cambria

II-9

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on November 23, 2005.

INTERNATIONAL SYSTEMS LLC
    
By: L-3 COMMUNICATIONS TITAN CORPORATION

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria
Title: Vice President
and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Michael T. Strianese and Frank C. Lanza, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 relating to the notes and the subsidiary guarantees and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza				Chief Executive Officer				November 23, 2005
Frank C. Lanza
/s/ Michael T. Strianese				Chief Financial Officer				November 23, 2005
Michael T. Strianese
/s/ Christopher C. Cambria				Vice President, Secretary and Director				November 23, 2005
Christopher C. Cambria

II-10

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on November 23, 2005.

WESCAM AIR OPS LLC

By:   L-3 COMMUNICATIONS EO/IR, INC.,
as Sole Member

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria
Title: Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christopher C. Cambria, Frank C. Lanza and Michael T. Strianese, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 relating to the notes and the subsidiary guarantees and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza				Chief Executive Officer				November 23, 2005
Frank C. Lanza
/s/ Michael T. Strianese				Chief Financial Officer				November 23, 2005
Michael T. Strianese
/s/ Christopher C. Cambria				Vice President, Secretary and Director of L-3 Communications EO/IR, Inc.				November 23, 2005
Christopher C. Cambria

II-11

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, each of the registrants has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on November 23, 2005.

WESCAM LLC

By:   L-3 COMMUNICATIONS CORPORATION,
as Sole Member

By:    /s/ Christopher C. Cambria

Name: Christopher C. Cambria
Title: Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

Each person whose signature appears below authorizes Christoper C. Cambria, Frank C. Lanza and Michael T. Strianese, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 relating to the notes and the subsidiary guarantees and any amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)) necessary or advisable to enable the registrants to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature				Title				Date
/s/ Frank C. Lanza				Chief Executive Officer				November 23, 2005
Frank C. Lanza
/s/ Michael T. Strianese				Chief Financial Officer				November 23, 2005
Michael T. Strianese
/s/ Christopher C. Cambria				Senior Vice President, Secretary and General Counsel of L-3 Communications Corporation				November 23, 2005
Christopher C. Cambria

II-12

EXHIBIT INDEX

Exhibit No.				Description of Exhibit
3.1				Certificate of Incorporation of L-3 Communications Corporation (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-4 No. 333-31649).
3.2				By-Laws of L-3 Communications Corporation (incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form S-4 No. 333- 31649).
3.3				Certificate of Incorporation of Hygienetics Environmental Services, Inc. (incorporated by reference to Exhibit 3.3 to the Company's Registration Statement on Form S-1 No. 333-46983).
3.4				By-laws of Hygienetics Environmental Services, Inc. (incorporated by reference to Exhibit 3.4 to the Company's Registration Statement on Form S-1 No. 333- 46983).
3.5				Certificate of Incorporation of L-3 Communications ILEX Systems, Inc. (incorporated by reference to Exhibit 3.5 to the Company's Registration Statement on Form S-1 (No. 333-46983).
3.6				By-laws of L-3 Communications ILEX Systems, Inc. (incorporated by reference to Exhibit 3.6 to the Company's Registration Statement on Form S-1 No. 333- 46983).
3.7				Certificate of Incorporation of L-3 Communications ESSCO, Inc. (incorporated by reference to Exhibit 3.11 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.8				By-laws of L-3 Communications ESSCO, Inc. (incorporated by reference to Exhibit 3.12 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.11				Certificate of Incorporation of SPD Electrical Systems, Inc. (incorporated by reference to Exhibit 3.17 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.12				By-laws of SPD Electrical Systems, Inc. (incorporated by reference to Exhibit 3.18 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.13				Certificate of Incorporation of SPD Switchgear Inc. (incorporated by reference to Exhibit 3.19 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.14				By-laws of SPD Switchgear Inc. (incorporated by reference to Exhibit 3.20 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.15				Certificate of Incorporation of Pac Ord Inc. (incorporated by reference to Exhibit 3.21 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.16				By-laws of Pac Ord Inc. (incorporated by reference to Exhibit 3.22 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.17				Certificate of Incorporation of Henschel, Inc. (incorporated by reference to Exhibit 3.23 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.18				By-laws of Henschel, Inc. (incorporated by reference to Exhibit 3.24 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.19				Certificate of Incorporation of Power Paragon, Inc. (incorporated by reference to Exhibit 3.25 to the Company's Registration Statement on Form S-4 No. 333-70199).
3.20				By-laws of Power Paragon, Inc. (incorporated by reference to Exhibit 3.26 to the Company's Registration Statement on Form S-4 No. 333-70199).

Exhibit No.				Description of Exhibit
3.21				Certificate of Incorporation of Apcom, Inc. (incorporated by reference to Exhibit 3.31 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.22				By-laws of Apcom, Inc. (incorporated by reference to Exhibit 3.32 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.23				Certificate of Incorporation of L-3 Communications CSI, Inc. (incorporated by reference to Exhibit 3.34 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.24				By-laws of L-3 Communications CSI, Inc. (incorporated by reference to Exhibit 3.34 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.25				Certificate of Incorporation of L-3 Communications Government Services, Inc. (incorporated by reference to Exhibit 3.37 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.26				By-laws of L-3 Communications Government Services, Inc. (incorporated by reference to Exhibit 3.38 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.27				Certificate of Incorporation of Electrodynamics, Inc. (incorporated by reference to Exhibit 3.39 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.28				By-laws of Electrodynamics, Inc. (incorporated by reference to Exhibit 3.40 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.29				Certificate of Incorporation of Interstate Electronics Corporation (incorporated by reference to Exhibit 3.41 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.30				By-laws of Interstate Electronics Corporation (incorporated by reference to Exhibit 3.42 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.31				Certificate of Incorporation of KDI Precision Products, Inc. (incorporated by reference to Exhibit 3.43 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.32				By-laws of KDI Precision Products, Inc. (incorporated by reference to Exhibit 3.44 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.33				Certificate of Incorporation of L-3 Communications AIS GP Corporation (incorporated by reference to Exhibit 3.45 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.34				By-laws of L-3 Communications AIS GP Corporation (incorporated by reference to Exhibit 3.46 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.35				Certificate of Incorporation of L-3 Communications Aydin Corporation (incorporated by reference to Exhibit 3.51 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.36				By-laws of L-3 Communications Aydin Corporation (incorporated by reference to Exhibit 3.52 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.37				Certificate of Limited Partnership of L-3 Communications Integrated Systems L.P (incorporated by reference to Exhibit 3.53 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.38				Limited Partnership Agreement of L-3 Communications Integrated Systems L.P. (incorporated by reference to Exhibit 3.54 to the Company's Registration Statement on Form S-4 No. 333-99757).

Exhibit No.				Description of Exhibit
3.39				Certificate of Incorporation of L-3 Communications Investments Inc. (incorporated by reference to Exhibit 3.55 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.40				By-laws of L-3 Communications Investments Inc. (incorporated by reference to Exhibit 3.56 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.41				Certificate of Incorporation of Microdyne Communications Technologies Incorporated (incorporated by reference to Exhibit 3.57 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.42				By-laws of Microdyne Communications Technologies Incorporated (incorporated by reference to Exhibit 3.58 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.43				Certificate of Incorporation of Microdyne Corporation (incorporated by reference to Exhibit 3.59 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.44				By-laws of Microdyne Corporation (incorporated by reference to Exhibit 3.60 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.45				Certificate of Incorporation of Microdyne Outsourcing Incorporated (incorporated by reference to Exhibit 3.61 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.46				By-laws of Microdyne Outsourcing Incorporated (incorporated by reference to Exhibit 3.62 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.47				Certificate of Incorporation of MPRI, Inc. (incorporated by reference to Exhibit 3.63 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.48				By-laws of MPRI, Inc. (incorporated by reference to Exhibit 3.64 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.49				Certificate of Incorporation of MCTI Acquisition Corporation (incorporated by reference to Exhibit 3.65 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.50				Bylaws of MCTI Acquisition Corporation (incorporated by reference to Exhibit 3.66 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.51				Certificate of Incorporation of L-3 Communications Security and Detection Systems, Inc. (incorporated by reference to Exhibit 3.67 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.52				Bylaws of L-3 Communications Security and Detection Systems, Inc. (incorporated by reference to Exhibit 3.68 to the Company's Registration Statement on Form S-4 No. 333-99757).
3.53				Certificate of Incorporation of Broadcast Sports, Inc. (incorporated by reference to Exhibit 3.69 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.54				Bylaws of Broadcast Sports, Inc. (incorporated by reference to Exhibit 3.70 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.55				Certificate of Incorporation of L-3 Communications Avionics Systems, Inc. (incorporated by reference to Exhibit 3.73 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.56				Bylaws of L-3 Communications Avionics Systems, Inc. (incorporated by reference to Exhibit 3.74 to the Company's Registration Statement on Form S-4 No. 333-106106).

Exhibit No.				Description of Exhibit
3.57				Certificate of Incorporation of D.P. Associates Inc. (incorporated by reference to Exhibit 3.57 to the Company's Registration Statement on Form S-4 No. 333-122499).
3.58				Bylaws of D.P. Associates Inc. (incorporated by reference to Exhibit 3.58 to the Company's Registration Statement on Form S-4 No. 333-122499).
3.59				Certificate of Restated and Amended Articles of Incorporation of L-3 Communications Westwood Corporation (incorporated by reference to Exhibit 3.83 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.60				Bylaws of L-3 Communications Westwood Corporation (incorporated by reference to Exhibit 3.84 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.67				Certificate of Incorporation of SYColeman Corporation (incorporated by reference to Exhibit 3.91 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.68				Bylaws of SYColeman Corporation (incorporated by reference to Exhibit 3.92 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.69				Certificate of Incorporation of Troll Technology Corporation (incorporated by reference to Exhibit 3.95 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.70				Bylaws of Troll Technology Corporation (incorporated by reference to Exhibit 3.96 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.71				Certificate of Incorporation of Wescam Air Ops Inc. (incorporated by reference to Exhibit 3.97 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.72				Bylaws of Wescam Air Ops Inc. (incorporated by reference to Exhibit 3.98 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.73				Certificate of Formation of Wescam Air Ops LLC (incorporated by reference to Exhibit 3.99 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.74				Limited Liability Company Agreement of Wescam Air Ops LLC (incorporated by reference to Exhibit 3.100 to the Company's Registration Statement on Form S-4 No. 333-106106).
**3.75				Articles of Incorporation of L-3 Communications EO/IR, Inc.
3.76				Bylaws of L-3 Communications EO/IR, Inc. (incorporated by reference to Exhibit 3.102 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.77				Certificate of Formation of Wescam LLC (incorporated by reference to Exhibit 3.103 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.78				Limited Liability Company Agreement of Wescam LLC (incorporated by reference to Exhibit 3.104 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.81				Certificate of Incorporation of Wescam Holdings (US) Inc. (incorporated by reference to Exhibit 3.107 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.82				Bylaws of Wescam Holdings (US) Inc. (incorporated by reference to Exhibit 3.108 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.83				Articles of Organization of Wolf Coach, Inc. (incorporated by reference to Exhibit 3.109 to the Company's Registration Statement on Form S-4 No. 333-106106).
3.84				Bylaws of Wolf Coach, Inc. (incorporated by reference to Exhibit 3.110 to the Company's Registration Statement on Form S-4 No. 333-106106).

Exhibit No.				Description of Exhibit
3.85				Certificate of Formation of L-3 Communications Vertex Aerospace LLC (incorporated by reference to Exhibit 3.85 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.86				Limited Liability Company Agreement of L-3 Communications Vertex Aerospace LLC (incorporated by reference to Exhibit 3.86 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.87				Certificate of Formation of L-3 Communications Flight International Aviation LLC (incorporated by reference to Exhibit 3.87 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.88				Limited Liability Company Agreement of L-3 Communications Flight International Aviation LLC (incorporated by reference to Exhibit 3.88 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.89				Certificate of Formation of L-3 Communications Flight Capital LLC (incorporated by reference to Exhibit 3.89 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.90				Limited Liability Company Agreement of L-3 Communications Flight Capital LLC (incorporated by reference to Exhibit 3.90 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.91				Certificate of Formation of L-3 Communications Vector International Aviation LLC (incorporated by reference to Exhibit 3.91 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.92				Limited Liability Company Agreement of L-3 Communications Vector International Aviation LLC (incorporated by reference to Exhibit 3.92 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.93				Certificate of Incorporation of L-3 Communications Klein Associates, Inc. (incorporated by reference to Exhibit 3.93 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.94				Bylaws of L-3 Communications Klein Associates, Inc. (incorporated by reference to Exhibit 3.94 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.95				Certificate of Incorporation of L-3 Communications MAS (US) Corporation (incorporated by reference to Exhibit 3.95 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.96				Bylaws of L-3 Communications MAS (US) Corporation (incorporated by reference to Exhibit 3.96 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.97				Articles of Incorporation of L-3 Communications Aeromet, Inc. (incorporated by reference to Exhibit 3.97 to the Company's Registration Statement on Form S-4 No. 333-113802).
3.98				Bylaws of L-3 Communications Aeromet, Inc. (incorporated by reference to Exhibit 3.98 to the Company's Registration Statement on Form S-4 No. 333-113802)
3.99				Certificate of Incorporation of L-3 Communications Avysis Corporation (incorporated by reference to Exhibit 3.99 to the Company's Registration Statement on Form S-4 No. 333-122499).
3.100				Bylaws of L-3 Communications Avysis Corporation (incorporated by reference to Exhibit 3.100 to the Company's Registration Statement on Form S-4 No. 333-122499).

Exhibit No.				Description of Exhibit
3.101				Certificate of Incorporation of L-3 Communications CE Holdings, Inc. (incorporated by reference to Exhibit 3.101 to the Company's Registration Statement on Form S-4 No. 333-122499).
3.102				Bylaws of L-3 Communications CE Holdings, Inc. (incorporated by reference to Exhibit 3.102 to the Company's Registration Statement on Form S-4 No. 333-122499).
3.103				Certificate of Incorporation of L-3 Communications Cincinnati Electronics Corporation (incorporated by reference to Exhibit 3.103 to the Company's Registration Statement on Form S-4 No. 333-122499).
3.104				Bylaws of L-3 Communications Cincinnati Electronics Corporation (incorporated by reference to Exhibit 3.104 to the Company's Registration Statement on Form S-4 No. 333-122499).
**3.105				Articles of Organization of International Systems, LLC.
**3.106				Operating Agreement of International Systems, LLC.
**3.107				Articles of Incorporation of L-3 Communications Advanced Laser Systems Technology, Inc.
**3.108				Bylaws of L-3 Communications Advanced Laser Systems Technology, Inc.
**3.109				Certificate of Incorporation of L-3 Communications Electron Technologies, Inc.
**3.110				Bylaws of L-3 Communications Electron Technologies, Inc.
**3.111				Articles of Incorporation of L-3 Communications InfraredVision Technology Corporation.
**3.112				Bylaws of L-3 Communications Infraredvision Technology Corporation.
**3.113				Certificate of Incorporation of L-3 Communications Mobile-Vision, Inc.
**3.114				Bylaws of L-3 Communications Mobile-Vision, Inc.
**3.115				Articles of Incorporation of L-3 Communications Sonoma EO, Inc.
**3.116				Bylaws of L-3 Communications Sonoma EO, Inc.
**3.117				Certificate of Incorporation of L-3 Communications Titan Corporation.
**3.118				Bylaws of L-3 Communications Titan Corporation.
**3.119				Certificate of Incorporation of Lincom Wireless, Inc.
**3.120				Bylaws of Lincom Wireless, Inc.
**3.121				Articles of Incorporation of ProCom Services, Inc.
**3.122				Bylaws of ProCom Services, Inc.
**3.123				Certificate of Incorporation of Shellco, Inc.
**3.124				Bylaws of Shellco, Inc.
**3.125				Articles of Incorporation of Titan Facilities, Inc.
**3.126				Bylaws of Titan Facilities, Inc.
**3.127				Certificate of Incorporation of Titan Scan Technologies Corporation.
**3.128				Bylaws of Titan Scan Technologies Corporation.
**3.129				Articles of Incorporation of Intelligence Data Systems, Inc.
**3.130				Bylaws of Intelligence Data Systems, Inc.

Exhibit No.				Description of Exhibit
4.1				Indenture dated as of July 29, 2005 (the "2005 Notes Indenture") among L-3 Communications Corporation, the Guarantors and The Bank of New York, as Trustee (incorporated by reference to Exhibit 10.69 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005).
4.2				Form of 6 3/8% Senior Subordinated Note due 2015 (attached as Exhibit A to Exhibit 4.1).
4.3				Form of 6 3/8% Series B Senior Subordinated Note due 2015 (attached as Exhibit A to Exhibit 4.1).
4.4				Registration Rights Agreement, dated as of July 29, 2005, among L-3 Communications Corporation, the Guarantors, Lehman Brothers Inc., Banc of America Securities LLC, Bear Stearns & Co. Inc. and Credit Suisse First Boston LLC, as representatives of the initial purchasers (incorporated by reference to Exhibit 10.73 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005).
4.5				Supplemental Indenture dated as of November 1, 2005 among L-3 Communications Corporation, The Bank of New York, as trustee, and the guarantors named therein to the Indenture dated as of July 29, 2005 among L-3 Communications Corporation, the guarantors named therein and The Bank of New York, as trustee (incorporated by reference to Exhibit 10.71 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005).
**5				Opinion of Simpson Thacher and Bartlett LLP.
10.6				Employment Agreement dated April 30, 1997 between Frank C. Lanza and L-3 Communications Holdings, Inc. (incorporated by reference to Exhibit 10.5 to L-3 Communications Holdings' Registration Statement on Form S-1 No. 333-46975).
10.11				1997 Stock Option Plan for Key Employees (incorporated by reference to Exhibit 10.11 to L-3 Communications Holdings' Registration Statement on Form S-1, No. 333-70125).
10.12				Non-Qualified Stock Option Agreement dated as of April 30, 1997 by and between L-3 Communications Holdings, Inc. and Frank C. Lanza (incorporated by reference to Exhibit 10.12 to L-3 Communications Holdings' Registration Statement on Form S-1, No. 333-70125).
10.15				1998 Directors Option Plan for Non-Employee Directors of L-3 Communications Holdings, Inc. (incorporated by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K filed on March 31, 1999).
10.16				1999 Long Term Performance Plan dated as of April 27, 1999 (incorporated by reference to Exhibit 10.16 to the Company's annual report on Form 10-K filed on March 30, 2000).
10.20				L-3 Communications Corporation Pension Plan (incorporated by reference to Exhibit 10.10 to L-3 Communications Holdings' Registration Statement on Form S-1 No. 333-46975).
10.25				L-3 Communications Corporation Employee Stock Purchase Plan (incorporated by reference to Appendix A of L-3 Communications Holdings' Definitive Proxy Statement filed April 2, 2001).
10.32				Indenture dated as of December 22, 2003 ("December 2003 Indenture") among L-3 Communications Corporation, the Guarantors named therein and The Bank of New York, as Trustee (incorporated by reference to Exhibit 10.33 to the Company's Annual Report on Form 10-K for the year ended December 31, 2003).

Exhibit No.				Description of Exhibit
10.33				Indenture dated as of May 21, 2003 ("May 2003 Indenture") among L-3 Communications Corporation, the Guarantors named therein and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-4, No. 333-106106).
10.40				Amended and Restated Credit Agreement, dated as of July 29, 2005, among L-3 Communications Corporation, L-3 Communications Holdings, Inc. and certain subsidiaries of the Company from time to time party thereto as guarantors, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.40 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005).
10.55				Supplemental Indenture dated as of November 1, 2005 among L-3 Communications Corporation, The Bank of New York, as trustee, and the guarantors named therein, to the Indenture dated as of June 28, 2002 among L-3 Communications Corporation, the guarantors named therein and The Bank of New York, as trustee (incorporated by reference to Exhibit 10.55 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005).
10.58				Asset Purchase Agreement dated as of January 11, 2002 among Raytheon Company, Raytheon Australia Pty Ltd. and L-3 Communications Corporation (incorporated by reference to Exhibit 10.59 of the Company's Annual Report on Form 10-K for the year ended December 31, 2001).
10.59				Amendment dated as of March 8, 2002 among Raytheon Company, Raytheon Australia Pty Ltd., L-3 Communications Corporation, L-3 Communications Integrated Systems L.P. and L-3 Communications Australia Pty Ltd to the Asset Purchase Agreement dated as of January 11, 2002 (incorporated by reference to Exhibit 10.60 of the Company's Annual Report on Form 10-K for the year ended December 31, 2001).
10.61				Indenture dated as of November 12, 2004 (the "2004 Indenture") among L-3 Communications Corporation, the Guarantors and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-4 No. 333-122499).
10.62				Indenture dated as of June 28, 2002, ("2002 Indenture") among L-3 Communications Corporation, the guarantors named therein and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 of the Company's Registration Statement on Form S-4, No. 333-99757).
10.63				Supplemental Indenture dated as of November 1, 2005 among L-3 Communications Corporation, The Bank of New York, as trustee, and the guarantors named therein to the Indenture dated as of May 21, 2003 among L-3 Communications Corporation, the guarantors named therein and The Bank of New York, as trustee (incorporated by reference to Exhibit 10.63 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005).
10.64				Transaction Agreement dated as of October 21, 2003 by and among L-3 Communications Corporation, RAAH I, LLC and Vertex Aerospace LLC (incorporated by reference to Exhibit 10.95 to the Company's Annual Report on Form 10-K for the year ended December 31, 2003).

Exhibit No.				Description of Exhibit
10.65				Supplemental Indenture dated as of November 1, 2005 among L-3 Communications Corporation, The Bank of New York, as trustee, and the guarantors named therein, to the Indenture dated as of December 22, 2003 among L-3 Communications Corporation, the guarantors named therein and The Bank of New York, as trustee (incorporated by reference to Exhibit 10.65 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005).
10.66				Amendment to the L-3 Communications Holdings, Inc. 1999 Long Term Performance Plan (incorporated by reference to Exhibit 4.4 of L-3 Communications Holdings' registration statement on Form S-8, No. 333-120393)
10.67				Amendment to the L-3 Communications Holdings, Inc. 1999 Long Term Performance Plan (incorporated by reference to Exhibit 4.5 of L-3 Communications Holdings' registration statement on Form S-8, No. 333-120393)
10.68				Supplemental Indenture dated as of November 1, 2005 among L-3 Communications Corporation, The Bank of New York, as trustee, and the guarantors named therein, to the Indenture dated as of November 12, 2004 among L-3 Communications Corporation, the guarantors named therein and The Bank of New York, as trustee (incorporated by reference to Exhibit 10.68 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005).
10.70				Indenture dated as of July 29, 2005 (the "2005 CODES Indenture") among L-3 Communications Holdings, Inc., the guarantors named therein and The Bank of New York, as Trustee (incorporated by reference to Exhibit 10.70 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005).
10.72				Supplemental Indenture dated as of November 1, 2005 among L-3 Communications Holdings, Inc., The Bank of New York, as trustee, and the guarantors named therein to the Indenture dated as of July 29, 2005 among L-3 Communications Holdings, Inc., the guarantors named therein and The Bank of New York, as trustee (incorporated by reference to Exhibit 10.72 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005).
10.74				Registration Rights Agreement dated as of July 29, 2005 among L-3 Communications Holdings, Inc., the Guarantors and Lehman Brothers Inc., Bear, Stearns & Co. Inc., Credit Suisse First Boston LLC and Banc of America Securities LLC, as representatives of the initial purchasers (incorporated by reference to Exhibit 10.74 to the Registrant's Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005).
10.96				Form of L-3 Communications Holdings, Inc. 1998 Directors Stock Option Plan Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.96 to the Company's Annual Report on Form 10-K for the year ended December 31, 2004).
10.97				Form of L-3 Communications Holdings, Inc. 1999 Long Term Performance Plan Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.97 of the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2004).
10.98				2005 Base Salaries for Named Executive Officers (incorporated by reference to the Company's Form 8-K filed on March 7, 2005).
*11				L-3 Communications Holdings, Inc. Computation of Basic Earnings Per Share and Diluted Earnings Per Share.

Exhibit No.				Description of Exhibit
12				Ratio of Earnings to Fixed Charges (incorporated by reference to Exhibit 12 to the Company's Annual Report on Form 10-K for the year ended December 31, 2004 and Exhibit 12.1 to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2005).
**21				Subsidiaries of the Registrant.
**23.1				Consent of PricewaterhouseCoopers LLP.
**23.2				Consent of KPMG LLP.
**23.3				Consent of Simpson Thacher & Bartlett LLP (included in Exhibit 5.1).
24				Powers of Attorney (included on the signature pages hereto).
**25				Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as Trustee.
**99.1				Form of Letter of Transmittal.
**99.2				Form of Notice of Guaranteed Delivery.
**99.3				Form of Letter to Securities Dealers, Commercial Banks, Trust Companies and other Nominees.
**99.4				Form of Letter to Clients.

*	The information required in this exhibit is presented on Note 12 to the Consolidated Financial Statements as of December 31, 2004 and Note 10 to the Unaudited Condensed Consolidated Financial Statements as of September 30, 2005, in each case in accordance with the provisions of SFAS No. 128, Earnings Per Share.

**	Filed herewith.

EX-3.75

                                                                    Exhibit 3.75

                            ARTICLES OF INCORPORATION
                                       OF
                                WESCAM-USA, INC.


     I, the undersigned, hereby make, subscribe, acknowledge and file these
Articles of Incorporation for the purpose of becoming a corporation under the
laws of the State of Florida.

                                    ARTICLE I

                                 IDENTIFICATION

     The name of this corporation is WESCAM-USA, INC., having a principal place
of business at 270 East Drive, Suite A, Melbourne, Florida 32904.

                                   ARTICLE II

                                    DURATION

     This corporation shall have perpetual existence which shall commence at the
date of the filing of these Articles with the Secretary of State.

                                   ARTICLE III

                                AUTHORIZED SHARES

     The aggregate number of shares that the corporation is authorized to issue
is 1,348,000 shares, divided into two classes. The designation of each class,
the number of shares of each class, and the par value of the shares of each
class, are as follows:

              Class               No. of Shares             Par Value/Share
              -----               -------------             ---------------
              Common                1,000,000                   $0.001
              Preferred               348,000                   $0.001


     The Common stock shall have unlimited voting rights. The Preferred stock
shall be non-voting and non-cumulative, and shall be redeemable at the option of
the corporation or the stockholder at the rate of One Dollar ($1.00) per share.
All or part of said stock to be issued from time to time shall be determined by
the Board of Directors. On dissolution or liquidation of the corporation,
holders of the Common stock shall be entitled to distribution ratably as their
holdings may appear upon the stock record of the corporation.





                                   ARTICLE IV

                           REGISTERED AGENT AND OFFICE

     The initial registered agent of this corporation and his address is as
follows: David A. Schwartz, Esquire, 8181 West Broward Boulevard, Suite 204,
Plantation, Florida 33324.

                                    ARTICLE V

                                  INCORPORATOR

     The name and address of the Incorporator of these Articles of Incorporation
is as follows: David A. Schwartz, Esquire, 8181 West Broward Boulevard, Suite
204, Plantation, Florida 33324.

                                   ARTICLE VI

                              ADDITIONAL PROVISIONS

     The following additional provisions for the regulation of the business and
for the conduct of the affairs of the corporation, and creating, dividing,
limiting, and regulating the powers of the corporation, its stockholders, and
Directors are hereby adopted as a part of these Articles of Incorporation:

     1. The Board of Directors from time to time shall determine whether and to
what extent, and at what times and places, and under what conditions and
regulations, the accounts and books of the corporation, or any of them, shall be
opened to the inspection of the stockholders, and no stockholder shall have the
right to inspect any account or document of the corporation except as conferred
by a statute or authorized by the Board of Directors or by resolution of the
stockholders.

     2. No person shall be required to own, hold, or control stock in
corporation as a condition precedent to holding an office in this corporation.

     3. Except as otherwise provided by law, the Directors may prescribe a
method or methods for replacement of lost certificates, and may prescribe
reasonable conditions by way of security upon the issuance of new certificates
therefor.

     4. This corporation shall indemnify any officer or Director, and any former
officer or Director, to the full extent provided by law. This corporation may
provide such indemnification, or a portion thereof, through the purchase of
insurance.







     5. The power to adopt, alter, and repeal By-laws shall be in the Board of
Directors of the corporation or in the stockholders; By-laws adopted by the
Board of Directors may be altered or repealed by the stockholder and vice versa,
except that the stockholders may prescribe in any By-law made by them that such
By-law shall not be altered, amended, or repealed by the Board of Directors.

     6. Every stockholder upon the issuance of any new stock of the corporation
of the same kind shall have the right to purchase his pro rata thereof, at the
price at which it is offered to others.

     IN WITNESS WHEREOF, the undersigned, has made and subscribed these Articles
of Incorporation at the City of Plantation, Broward County, Florida, for the
uses and purposes aforesaid this 17th day of March, 1995.


                                    /s/ David A. Schwartz
                                    ------------------------------
                                    DAVID A. SCHWARTZ
                                    INCORPORATOR


STATE OF FLORIDA)
     :  SS.
COUNTY OF BROWARD)

     BEFORE ME, the undersigned authority, personally appeared David A.
Schwartz, who is to me well known to be the person described in and who
subscribed the above and foregoing Articles of Incorporation; and he has freely
and voluntarily acknowledged before me according to law that he made and
subscribed the same for the uses and purposes therein mentioned and set forth.

    IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, at Plantation, Broward County, Florida, this 17th day of March, 1995.


                                    /s/ Signature of Notary Public
                                    ------------------------------
                                    (Signature of Notary Public -
                                      State of Florida)


My commission Expires:

Personally Known [ ] OR Produced Identification [ ]
                   --
Type of  Identification Produced:
                                 --------------------------------------------
DID Take Oath [ ] OR DID NOT Take Oath [ ]
                   --





              CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE
              FOR THE SERVICE OF PROCESS WITHIN THIS STATE, NAMING
                      AGENT UPON WHOM PROCESS MAY BE SERVED
- --------------------------------------------------------------------------------

     In pursuance of Chapter 607, Florida Statutes, the following is submitted
in compliance with said Act:

     WESCAM-USA, INC., desiring to organize under the laws of the State of
Florida with its principal office as indicated in the Articles of Incorporation
at City of Melbourne, County of Brevard, State of Florida, has named David A.
Schwartz, as its agent to accept service of process within this state.

ACKNOWLEDGEMENT:

     Having been named to accept service of process for the above stated
corporation, at place designated in this certificate, I hereby accept to act in
this capacity and I agree to comply with the provision of said Act relative to
keeping open said office and I accept the obligations of Section 607.0505 of the
Florida Statutes.

                                    By  /s/ David A. Schwartz
                                       -----------------------------
                                         DAVID A. SCHWARTZ
                                         Registered Agent




















                              ARTICLES OF AMENDMENT
                                       TO
                            ARTICLES OF INCORPORATION
                                       OF

 ------------------------------------------------------------------------------
                                WESCAM-USA, INC.

 ------------------------------------------------------------------------------
                                 (present name)

Pursuant to the provisions of section 607.1006, Florida Statutes, this Florida
profit corporation adopts the following articles of amendment to its articles of
incorporation:

FIRST:  Amendment(s) adopted:  (indicate article number(s) being amended, added
        or deleted)

        That ARTICLE 1, IDENTIFICATION, of the Articles of Incorporation of
        Wescam-USA, Inc., be amended in its entirety to read as follows:

          "The name of this corporation is Wescam Incorporated, having a
        principal place of business at 4356 Fortune Place, Suite C, Melbourne,
        Florida 32904."


SECOND: If an amendment provides for an exchange, reclassification or
cancellation of issued shares, provisions for implementing the amendment if not
contained in the amendment itself, are as follows: N/A

THIRD:  The date of each amendment's adoption:  April 30, 1998

FOURTH:  Adoption of Amendment(s) (CHECK ONE)

   [ ]  The amendment(s) was/were approved by the shareholders. The number of
        votes cast for the amendment(s) was/were sufficient for approval.

   [ ]  The amendment(s) was/were approved by the shareholders through voting
        groups. The following statement must be separately provided for each
        voting group entitled to vote separately on the amendment(s):

        "The number of votes cast for the amendment(s) was/were sufficient
        for approval by







                 --------------------------------------------."
                                  voting group

   [ ]  The amendment(s) was/were adopted by the board of directors without
        shareholder action and shareholder action was not required.

   [ ]  The amendment(s) was/were adopted by the incorporators without
        shareholder action and shareholder action was not required.

        Signed on this   26th     day of   May   , 1998   .


        Signature   /s/ Bruce Latimer
                 -----------------------------------------------------------
                 (By the Chairman or Vice Chairman of the Board of Directors,
                  President or other officer if adopted by the shareholders)


                                       OR


                   (By a director if adopted by the directors)


                                       OR


              (By an incorporator if adopted by the incorporators)


                                  Bruce Latimer
                  ---------------------------------------------
                              Typed or printed name


                                 Vice President
                  ---------------------------------------------
                                      Title











                              ARTICLES OF AMENDMENT
                                       TO
                            ARTICLES OF INCORPORATION
                                       OF

                               Wescam Incorporated
- --------------------------------------------------------------------------------
    (Name of corporation as currently filed with the Florida Dept. of State)





                                  P95000022415
       ------------------------------------------------------------------
                   (Document number of corporation (if known)



Pursuant to the provisions of section 607.1006, Florida Statutes, this FLORIDA
PROFIT CORPORATION adopts the following amendment(s) to its Articles of
Incorporation:

NEW CORPORATE NAME (IF CHANGING):

L-3 Communications EO/IR, Inc.
- --------------------------------------------------------------------------------
(Must contain the word "corporation," "company," or "incorporated" or the
abbreviation "Corp.," "Inc.," or "Co.") (A professional corporation must contain
the word "chartered", "professional association," or the abbreviation "P.A.")

AMENDMENTS ADOPTED- (OTHER THAN NAME CHANGE) Indicate Article Number(s) and/or
Article Title(s) being amended, added or deleted: (BE SPECIFIC)

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

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

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

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

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

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

- --------------------------------------------------------------------------------
                     (Attach additional pages if necessary)

If an amendment provides for exchange, reclassification, or cancellation of
issued shares, provisions for implementing the amendment if not contained in the
amendment itself: (if not applicable, indicate N/A)

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







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

- --------------------------------------------------------------------------------
                                   (continued)

THE DATE OF EACH AMENDMENT(S) ADOPTION: 9/23/05
                                        ----------------------------------------

EFFECTIVE DATE IF APPLICABLE:
                               -------------------------------------------------
                               (no more than 90 days after amendment file date)

ADOPTION OF AMENDMENT(S)                 (CHECK ONE)
                                          ---------

        [X]   The amendment(s) was/were approved by the shareholders. The
              number of votes cast for the amendment(s) by the shareholders
              was/were sufficient for approval.

        [ ]   The amendment(s) was/were approved by the shareholders through
              voting groups. The following statement must be separately
              provided for each voting group entitled to vote separately on
              the amendment(s):

              "The number of votes cast for the amendment(s) was/were sufficient
              for approval by

              -------------------------------------."
                         (voting group)

        [ ]   The amendment(s) was/were adopted by the board of directors
              without shareholder action and shareholder action was not
              required.

        [ ]   The amendment(s) was/were adopted by the incorporators without
              shareholder action and shareholder action was not required.

                       Signature /s/ Christopher C. Cambria
                                -------------------------------------
                                (By a director, president or other officer - if
                                directors or officers have not been selected, by
                                an incorporator - if in the hands of a receiver,
                                trustee, or other court appointed fiduciary by
                                that fiduciary)

                                Christopher C. Cambria
                                -----------------------------------------------
                                (Typed orprinted name of person signing)

                                Vice President, Secretary
                                -----------------------------------------------
                                (Title of person signing)





                               FILING FEE: $35.00

EX-3.105

- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  EXHIBIT 3.105

                               STATE OF CALIFORNIA
                                   BILL JONES
                               SECRETARY OF STATE
                                                                                                                   LLC-1
                            LIMITED LIABILITY COMPANY
                            ARTICLES OF ORGANIZATION

          IMPORTANT - Read the instructions before completing the form.
This document is presented for filing pursuant to Section 17050 of the California Corporation Code.
- ------------------------------------------------------------------------------------------------------------------------------------
1. Limited liability company name:
         (End the name with "LLC" or "Limited Liability Company". No periods
between the letters in "LLC". "Limited" and "Company" may be abbreviated to
"Ltd." and "Co.")

         INTERNATIONAL SYSTEMS, LLC
- ------------------------------------------------------------------------------------------------------------------------------------
2.       Latest date (month/day/year) on which the limited liability company is
         to dissolve: December 31, 2015
- ------------------------------------------------------------------------------------------------------------------------------------
3.    The purpose of the limited liability company is to engage in any lawful
      act or activity for which a limited liability company may be organized
      under the Beverly-Killea Limited Liability Company Act.
- ------------------------------------------------------------------------------------------------------------------------------------
4. Enter the name of initial agent for service of process and check the
appropriate provision below:
         Allan H. Wegner                                                                                                  , which is
         ----------------------------------------------------------------------------------------------------------------

         [X] an individual residing in California. Proceed to Item 5.

         [   ] a corporation which has filed a certificate pursuant to Section 1505 of the California Corporation Code.  Skip Item 5
               and proceed to Item 6.
- ------------------------------------------------------------------------------------------------------------------------------------
5.    If the initial agent for service of process is an individual, enter a
      business or residential street address in California:

      Street address: 14124 Recuerdo Drive

      City:  Del Mar                         State:  California                                 Zip Code:  92014
- ------------------------------------------------------------------------------------------------------------------------------------
6. The limited liability company will be managed by: (check one)
      [   ] one manager                      [X] more than one manager                 [   ] limited liability company members
- ------------------------------------------------------------------------------------------------------------------------------------
7.    If other matters are to be included in the Articles of Organization attach
      one or more separate pages. Number of pages attached, if any:
- ------------------------------------------------------------------------------------------------------------------------------------
8.    It is hereby declared that I am the person who executed this instrument,
      which execution is my act and deed.


/s/ Allan H. Wegner
- -----------------------------------
Signature of organizer


      Allan H. Wegner
- -----------------------------------
Type or print name of organizer


Date:    February 15, 1996
         ----------------

- --------------------------------------------------------
LLC-1           Approved by the Secretary of State

Filing Fee $70                                1/96
- -------------------------------------------------------- ---------------------------------------------------------------------------

EX-3.106

                                                                   EXHIBIT 3.106

                             OPERATING AGREEMENT OF
                           INTERNATIONAL SYSTEMS, LLC
                     A CALIFORNIA LIMITED LIABILITY COMPANY

         This Operating Agreement (the "Agreement") is entered into as of March
7, 1996 by and among the signatories to this Agreement, (hereinafter sometimes
referred to as the "Members").

         WHEREAS, the Members have or will cause to be filed with the California
Secretary of State Articles of Organization (the "Articles") for INTERNATIONAL
SYSTEMS, LLC, a limited liability company (the "Company"), under the laws of the
State of California; and

         WHEREAS, the Members desire to adopt and approve an operating agreement
for the Company under the Beverly-Killea Limited Liability Company Act (the
"Act");

         NOW, THEREFORE, the parties agree as follows:

                                    ARTICLE I
                                  DEFINED TERMS

         When used in this Agreement, the following terms shall have the
meanings set forth below. These defined terms are in addition to any other terms
defined elsewhere in this Agreement.

         "Act" means the Beverly-Killea Limited Liability Company Act, as
amended from time to time.

         "Adjusted Capital Account Deficit" means, with respect to any Interest
Holder, the deficit balance, if any, in the Interest Holder's Capital Account as
of the end of the relevant taxable year, after giving effect to the following
adjustments:

                  (a) The deficit shall be decreased by the amounts which the
         Interest Holder is obligated to restore pursuant to Section 4.4.2 or is
         deemed obligated to restore pursuant to Regulation Sections 1. 704- 1
         (b)(2)(ii)(c), 1.704-2(g), and 1.704-2 (i)(5); and

                  (b) The deficit shall be increased by the items described in
         Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5), and (6).

         "Adjusted Capital Balance" means, as of any day, an Interest Holder's
total Contributions less all amounts actually distributed to the Interest Holder
pursuant to Sections 4.2.3.4.1 and 4.4 hereof. If any Interest is transferred in
accordance with the terms of this Agreement, the Transferee shall succeed to the
Adjusted Capital Balance of the transferor to the extent the Adjusted Capital
Balance relates to the Interest transferred.

                  "Affiliate" means:

                  (a) A Person directly or indirectly controlling, controlled
         by, or under common control with another Person;




                                                                               2

                  (b) A Person owning or controlling ten percent (10%) or more
         of the outstanding voting securities or beneficial interests of another
         Person;

                  (c) An officer, director, partner, or member of the immediate
         family of an officer, director or partner of another Person; and/or

                  (d) Any affiliate of any such Person.

         "Agreement" means this Operating Agreement, as amended from time to
time, including each exhibit hereto.

         "Assignee" means the Person who has acquired an Economic Interest in
the Company but who is not a Member.

         "Capital Account" means the account to be maintained by the Company for
each Interest Holder in accordance with the following provisions:

                  (a) An Interest Holder's Capital Account shall be credited
         with the amount of money and the fair market value of any property
         contributed to the Company (net of liabilities secured by such property
         that the Company either assumes or to which such property is subject),
         the amount of any Company unsecured liabilities assumed by the Interest
         Holder, and the Interest Holder's distributive share of Profit and any
         item in the nature of income or gain specially allocated to the
         Interest Holder pursuant to the provisions of Section 4.3 (other than
         Section 4.3.3); and

                  (b) An Interest Holder's Capital Account shall be debited with
         the amount of money and the fair market value of any Company property
         distributed to the Interest Holder (net of liabilities secured by such
         distributed property that the Interest Holder either assumes or to
         which such property is subject), the amount of any unsecured
         liabilities of the Interest Holder assumed by the Company, and the
         Interest Holder's distributive share of Loss and any item in the nature
         of expenses or losses specially allocated to the Interest Holder
         pursuant to the provisions of Section 4.3 (other than Section 4.3.3).

         If any Interest is transferred pursuant to the terms of this Agreement,
the transferee shall succeed to the Capital Account of the transferor to the
extent the Capital Account is attributable to the transferred Interest. If the
book value of Company property is adjusted pursuant to Section 4.3.3, the
Capital Account of each Interest Holder shall be adjusted to reflect the
aggregate adjustment in the same manner as if the Company had recognized gain or
loss equal to the amount of such aggregate adjustment. It is intended that the
Capital Accounts of all Interest Holders shall be maintained in compliance with
the provisions of Regulation Section 1.704-1(b), and all provisions of this
Agreement relating to the maintenance of Capital Accounts shall be interpreted
and applied in a manner consistent with that Regulation.

         "Capital Proceeds" means the gross receipts received by the Company
from a Capital Transaction.





                                                                               3

         "Capital Transaction" means any transaction not in the ordinary course
of business which results in the Company's receipt of cash or other
consideration other than Contributions, including, without limitation, proceeds
of sales, exchanges, or other dispositions of property not in the ordinary
course of business, financings, refinancings, condemnations, recoveries of
damage awards, and insurance proceeds.

         "Cash Flow" means all cash derived from operations of the Company
(including interest received on reserves), without reduction for any non-cash
charges, but less cash (i) used to pay current operating expenses and/or (ii) to
pay or establish reasonable reserves for future expenses, debt payments, capital
improvements, replacements, expansion, new projects, acquisitions, or other
reasonable needs of the Company's business as determined by the Managers. Cash
Flow shall not include Capital Proceeds, but shall be increased by the reduction
of any reserve previously established.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any corresponding provision of any succeeding revenue law.

         "Company" means the limited liability company formed in accordance with
this Agreement.

         "Contribution" means any money, property, or services rendered, or a
promissory note or other binding obligation to contribute money or property, or
to render services as permitted in this title, which a Member contributes to the
Company as capital in that Member's capacity as a Member pursuant to an
agreement between the Members, including an agreement as to value.

         "Economic Interest" means a person's right to share in the income,
gains, losses, deductions, credits, or similar items of, and to receive
Distributions from, the Company, but does not include any other rights of a
Member including, without limitation, the right to vote or to participate in
management, or (except as provided in Section 17106 of the Act) any right to
information concerning the business and affairs of the Company.

         "Interest Holder" means any Person who holds an Economic Interest,
whether as a Member or as an Assignee of a Member.

         "Majority Interest" means a majority of the Percentage Interests which
all Members hold.

         "Member" means any person who executes a counterpart of this Agreement
as a Member, and any Person who subsequently is admitted as a Member of the
Company.

         "Member Loan Nonrecourse Deductions" means any Company deductions that
would be Nonrecourse Deductions if they were not attributable to a loan made or
guaranteed by a Member within the meaning of Regulation Section 1.704-2(i).

         "Member Nonrecourse Debt Minimum Gain" has the meaning set forth in
Regulation Section 1.704-2(i)(2) (determined by substituting "Member" or
"Interest Holder" for "partner").




                                                                               4

         "Membership Interest" means a Member's rights in the Company,
collectively, including the Member's Economic Interest, any right to vote or
participate in management, and any right to information concerning the business
and affairs of the Company.

         "Minimum Gain" has the meaning set forth in Regulation Section
1.704-2(d). Minimum Gain shall be computed separately for each Interest Holder
in a manner consistent with the Regulations under Code Section 704(b).

         "Negative Capital Account" means a Capital Account with a balance of
less than zero.

         "Nonrecourse Deductions" has the meaning set forth in Regulation
Section 1.704-2(b)(1). The amount of Nonrecourse Deductions for a taxable year
of the Company equals the net increase, if any, in the amount of Minimum Gain
during that taxable year, determined according to the provisions of Regulation
Section 1.704-2(c).

         "Nonrecourse Liability" has the meaning set forth in Regulation Section
1.704-2(b)(3).

         "Percentage Interest" means, as to a Member, the percentage set forth
after the Member's name on Exhibit "A," as may be amended from time to time, and
as to an Interest Holder who is not a Member, the percentage or part of the
percentage that corresponds to the portion of a Member's Economic Interest that
the Interest Holder has acquired, to the extent the Interest Holder has
succeeded to that Member's interest.

         "Person" means and includes an individual, corporation, partnership,
association, limited liability company, trust, estate, or other entity.

         "Positive Capital Account" means a Capital Account with a balance
greater than zero.

         "Profit" and "Loss" means, for each taxable year of the Company (or
other period for which Profit or Loss must be computed), the Company's taxable
income or loss determined in accordance with Code Section 703(a), with the
following adjustments:

                  (a) All items of income, gain, loss, deduction, or credit
         required to be stated separately pursuant to Code Section 703(a)(1)
         shall be included in computing taxable income or loss;

                  (b) Any tax-exempt income of the Company, not otherwise taken
         into account in computing Profit or Loss, shall be included in
         computing taxable income or loss;

                  (c) Any expenditures of the Company described in Code Section
         705(a)(2)(B) (or treated as such pursuant to Regulation Section
         1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing
         Profit or Loss, shall be subtracted from taxable income or loss;

                  (d) Gain or loss resulting from any taxable disposition of
         Company property shall be computed by reference to the book value as
         adjusted under Regulation Section 1.704-1(b) ("adjusted book value") of
         the property disposed of, notwithstanding the fact that the



                                                                               5

         adjusted book value differs from the adjusted basis of the property
         for federal income tax purposes;

                  (e) In lieu of the depreciation, amortization, or cost
         recovery deductions allowable in computing taxable income or loss,
         there shall be taken into account the depreciation computed based upon
         the adjusted book value of the assets; and

                  (f) Notwithstanding any other provision of this definition,
         any items which are specially allocated pursuant to Section 4.3 shall
         not be taken into account in computing Profit or Loss.

         "Regulations" means the income tax regulations, including any temporary
regulations, from time to time promulgated under the Code.

         "Secretary of State" means the Secretary of State of the State of
California.

         "Transfer" means, when used as a noun, any sale, hypothecation, pledge,
assignment, attachment, or other transfer, and, when used as a verb, to sell
hypothecate, pledge, assign, or otherwise transfer.

                                   ARTICLE II
                             ORGANIZATIONAL MATTERS

         2.1 Organization. The Members have formed or will form a California
limited liability company pursuant to the Act by causing Articles of
Organization to be prepared, executed, and filed with the Secretary of State,
and by entering into this Agreement, which Agreement shall be deemed effective
as of the date the Articles were so filed. The rights and liabilities of the
Members shall be determined pursuant to the Act and this Agreement. To the
extent the rights or obligations of any Member are different by reason of any
provision of this Agreement than they would be in the absence of such provision,
this Agreement shall, to the extent permitted by the Act, control.

         2.2 Name of the Company. The name of the Company is INTERNATIONAL
SYSTEMS, LLC.

         2.3 Purpose. The purpose of the Company is to engage in any lawful
activity for which a limited liability company may be organized under the Act,
including but not limited to investment in and operation of various business
enterprises through joint ventures or otherwise, as the Managers deem
appropriate from time to time.

         2.4 Term. The term of the Company's existence shall continue until
December 31, 2015, unless extended or sooner terminated as provided by this
Agreement or the Act.

         2.5 Office and Agent. The Company shall continuously maintain an office
and registered agent in the State of California. The principal office of the
Company shall be 2640 Del Mar Heights Road, #420, Del Mar, California 92014 or
as the Managers may otherwise determine. The Company may also have such offices
anywhere within and outside the State of California as the Managers may
determine from time to time, or as the business of the Company




                                                                               6

may require. The registered agent shall be as stated in the Articles or as may
otherwise be determined by the Managers.

         2.6 Initial Members and Managers. The name and present mailing address
of each initial Manager, and the name, present mailing address, taxpayer
identification number, and Percentage Interest of each initial Member, are set
forth on Exhibit "A" attached hereto and incorporated herein by this reference.

                                  ARTICLE III
                         MEMBERS, CAPITAL CONTRIBUTIONS

         3.1 Initial Contributions. Upon the execution of this Agreement, the
Members shall contribute to the Company cash in the amounts respectively set
forth on Exhibit "A".

         3.2 No Additional Contributions Required. No Member shall be required
to contribute any additional capital to the Company. Additional contributions to
the capital of the Company shall be made only with the unanimous consent of the
Members. No Member shall have personal liability for any obligation of the
Company except as may be expressly provided by law.

         3.3 No Interest on Contributions. Neither Members nor Interest Holders
shall be paid interest with respect to Contributions.

         3.4 Return of Contributions. Except as otherwise provided in this
Agreement, no Member or Interest Holder shall have the right to receive the
return of any Contribution or withdraw from the Company, except upon the
dissolution of the Company.

         3.5 Form of Return of Capital. If a Member or an Interest Holder is
entitled to receive the return of a Contribution, the Company may distribute, in
lieu of money, notes or other property having a value equal to the amount of
money distributable to such Person.

         3.6 Capital Accounts. A separate Capital Account shall be maintained
for each Member and Interest Holder.

                                   ARTICLE IV
                         PROFIT, LOSS, AND DISTRIBUTIONS

         4.1 Allocations of Profit or Loss and Distributions of Cash Other Than
From Capital Transactions.

              4.1.1 Profit or Loss Other Than From a Capital Transaction. After
giving effect to the special allocations set forth in Section 4.3, for any
taxable year of the Company, Profit or Loss (other than Profit or Loss resulting
from a Capital Transaction, which Profit or Loss shall be allocated in
accordance with the provisions of Sections 4.2.1 and 4.2.2) shall be allocated
to the Interest Holders in proportion to their Percentage Interests.




                                                                               7

              4.1.2 Cash Flow. Cash Flow for each taxable year of the Company
shall be distributed to the Interest Holders in proportion to their Percentage
Interests no later than seventy-five (75) days after the end of the taxable
year.

         4.2 Allocation of Profit or Loss from a Capital Transaction. After
giving effect to the special allocations set forth in Section 4.3, Profit and
Loss from a Capital Transaction shall be allocated as follows. For purposes of
this Section 4.2, (i) Profit and Loss shall be allocated prior to reducing
Capital Accounts by the distribution of the Proceeds from the Capital
Transaction and (ii) an Interest Holder's Capital Account shall be determined by
crediting to each Interest Holder's Capital Account such Interest Holder's share
of Minimum Gain and Member Nonrecourse Debt Minimum Gain remaining after such
Capital Transaction.

              4.2.1 Profit. Profit from a Capital Transaction shall be allocated
among the Interest Holders in the following order of priority:

                   4.2.1.1. First, if one or more Interest Holders has a
         Negative Capital Account, to those Interest Holders, in proportion to
         their Negative Capital Accounts, until all of those Negative Capital
         Accounts have been reduced to zero.

                   4.2.1.2. Second, to the Interest Holders as necessary to
         cause each Interest Holder's Capital Account (after applying Section
         4.2.1.1) to equal its respective Adjusted Capital Balance.

                   4.2.1.3. Third, any Profit in excess of the foregoing
         allocations shall be allocated to the Interest Holders in proportion to
         their Percentage Interests.

               4.2.2 Loss. Loss from a Capital Transaction shall be allocated
among the Interest Holders in the following order of priority:

                   4.2.2.1. First, to the Interest Holders, as necessary to
         cause the portion of their Capital Accounts, if any, exceeding their
         Adjusted Capital Balances, to be in the ratio of their Percentage
         Interests.

                   4.2.2.2. Second, to the Interest Holders in proportion to
         their Percentage Interests as necessary to eliminate the excess of
         their respective Capital Accounts (after applying Section 4.2 2.1) over
         their respective Adjusted Capital Balances.

                   4.2.2.3. Third, to the Interest Holders in proportion to
         their Adjusted Capital Balances until all Positive Capital Accounts
         (after applying Sections 4.2.2.1 and 4.2.2.2) have been reduced to
         zero.

                   4.2.2.4. Fourth, any Loss remaining shall be allocated to the
         Interest Holders in proportion to their Percentage Interests.

              4.2.3 Capital Proceeds. Except as provided in Section 4.4 with
respect to the distribution of Capital Proceeds derived in connection with
liquidation of the Company, Capital Proceeds shall be distributed and applied by
the Company in the following order and priority;




                                                                               8

                   4.2.3.1. To the payment of all expenses of the Company
         incident to the Capital Transaction; then

                   4.2.3.2. To the payment of debts and liabilities of the
         Company then due and outstanding (including all debts due to any
         Interest Holder); then

                   4.2.3.3. To the establishment of any reserves which the
         Managers deem necessary for liabilities or obligations of the Company;
         then

                   4.2.3.4. The balance shall be distributed as follows;

                   4.2.3.4.1. To the Interest Holders in proportion to their
         Adjusted Capital Balances, until their remaining Adjusted Capital
         Balances have been paid in full; and

                   4.2.3.4.2. The balance, to the Interest Holders in proportion
         to their Percentage Interests.

              4.2.4 If there is insufficient Profit or Loss from a Capital
Transaction to allocate to the Interest Holders pursuant to any subsection of
Section 4.2 to cause every Interest Holder's Capital Account balance to equal
the entire Capital Account balance described in such subsection with respect to
such Interest Holder, Profit or Loss from a Capital Transaction available to be
allocated among the Interest Holders pursuant to said subsection shall be
allocated in proportion to the amounts thereof that would have been allocated to
each Interest Holder pursuant to such subsection if there had been sufficient
amounts thereof to fully satisfy the requirements of such subsection with
respect to every Interest Holder.

         4.3 Regulatory Allocations.

              4.3.1 Impermissible Deficit and Qualified Income Offset. No
Interest Holder shall be allocated Losses or deductions if the allocation causes
the Interest Holder to have an Adjusted Capital Account Deficit; instead, such
items shall be allocated to the other Interest Holders. If an interest Holder
for any reason (whether or not expected) receives (i) an allocation of Loss or
deduction (or item thereof) or (ii) any distribution, which causes the Interest
Holder to have an Adjusted Capital Account Deficit at the end of any taxable
year, then all items of income and gain of the Company (consisting of a pro rata
portion of each item of Company income, including gross income and gain) for
that taxable year shall be allocated to that Interest Holder, before any other
allocation is made of Company items for that taxable year (other than an
allocation under Section 4.3.2), in the amount and in proportions required to
eliminate the excess as quickly as possible. This Section 4.3.1 is intended to
comply with, and shall be interpreted consistently with, the "alternate test for
economic effect" and "qualified income offset" provisions of the Regulations
promulgated under Code Section 704(b).

              4.3.2 Minimum Gain Chargebacks. In order to comply with the
"minimum gain chargeback" requirements of Regulation Sections 1.704-2(f)(1) and
1.704-2(i)(4), and notwithstanding any other provision of this Agreement to the
contrary, in the event there is a net decrease in an interest Holder's share of
Minimum Gain and/or Member Nonrecourse Debt Minimum Gain during a Company's
taxable year, such Interest Holder shall be allocated items





                                                                               9

of income and gain for that year (and if necessary, other years) as required by
and in accordance with Regulation Sections 1.704-2(f)(1) and 1.704-2(i)(4)
before any other allocation is made. It is the intent of the parties hereto that
any allocation pursuant to this Section 4.3.2 shall constitute a "minimum gain
chargeback" under Regulation Section 1.704-2(f) and 1.704-2(i)(4).

              4.3.3 Contributed Property and Book-Ups. In accordance with Code
Section 704(c) and the Regulations thereunder, including Regulation Section
1.704-1(b)(2)(iv)(d)(3), income, gain, loss, and deduction with respect to any
property contributed (or deemed contributed) to the Company shall, solely for
tax purposes, be allocated among the Interest Holders so as to take account of
any variation between the adjusted basis of the property to the Company for
federal income tax purposes and its fair market value at the date of
Contribution (or deemed Contribution). If the adjusted book value of any Company
asset is adjusted under Regulation Section 1.704-1(b)(2)(iv)(f), subsequent
allocations of income, gain, loss, and deduction with respect to the asset shall
take account any variation between the adjusted basis of the asset for federal
income tax purposes and its adjusted book value in the manner required under
Code Section 704(c) and the Regulations thereunder. The parties hereto agree to
use the traditional method with curative allocations, as described in Regulation
Section 1.704-3(c), for making Code Section 704(c) allocations.

              4.3.4 Code Section 754 Adjustment. To the extent an adjustment to
the tax basis of any Company asset pursuant to Code Section 734(b) or Code
Section 743(b) is required, pursuant to Regulation Section 1.704-1(b)(2)(iv)(m),
to be taken into account in determining Capital Accounts, the amount of the
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases basis), and the gain or loss shall be specially allocated to the
Interest Holders in a manner consistent with the manner in which their Capital
Accounts are required to be adjusted pursuant to that section of the
Regulations.

              4.3.5 Nonrecourse Deductions. Nonrecourse Deductions for a taxable
year or other period shall be specially allocated among the Interest Holders in
proportion to their Percentage Interests.

              4.3.6 Member Loan Nonrecourse Deductions. Any Member Loan
Nonrecourse Deduction for any taxable year or other period shall be specially
allocated to the Interest Holder who bears the risk of loss with respect to the
loan to which the Member Loan Nonrecourse Deduction is attributable in
accordance with Regulation Section 1.704-2(i).

         4.4 Liquidation and Dissolution.

              4.4.1 Upon liquidation of the Company, the assets of the Company
shall be distributed to the Interest Holders in accordance with the positive
balances in their respective Capital Accounts, after giving effect to all
Contributions, distributions, and allocations for all periods. Distributions to
the Interest Holders pursuant to this Section 4.4.1 shall be made in accordance
with Regulation Section 1.704-1(b)(2)(ii)(b)(2).

              4.4.2 No Interest Holder shall be obligated to restore a Negative
Capital Account.




                                                                              10

         4.5 General.

              4.5.1 Except as otherwise provided in this Agreement, the timing
and amount of all distributions shall be determined by the Managers.

              4.5.2 If any assets of the Company are distributed in kind to the
Interest Holders, those assets shall be valued on the basis of their fair market
value, and any Interest Holder entitled to any interest in those assets shall
receive that interest as a tenant-in-common with all other Interest Holders so
entitled. Unless the Members otherwise agree, the fair market value of the
assets shall be determined by an independent appraiser who shall be selected by
the Managers. The Profit or Loss for each unsold asset shall be determined as if
the asset had been sold at its fair market value, and the Profit or Loss shall
be allocated as provided in Section 4.2 and shall be properly credited or
charged to the Capital Accounts of the Interest Holders prior to the
distribution of the assets in liquidation pursuant to Section 4.4.

              4.5.3 All Profit and Loss shall be allocated and all distributions
shall be made to the Persons shown on the records of the Company to have been
Interest Holders as of the last day of the taxable year for which the allocation
or distribution is to be made. Notwithstanding the foregoing, unless the
Company's taxable year is separated into segments, if there is a Transfer or an
Involuntary Withdrawal during the taxable year, the Profit and Loss shall be
allocated between the original Interest Holder and the successor on the basis of
the number of days each was an Interest Holder during the taxable year,
provided, however, the Company's taxable year shall be segregated into two or
more segments in order to account for Profit, Loss, or proceeds attributable to
a Capital Transaction or to any other extraordinary non-recurring items of the
Company.

              4.5.4 The Members hereby authorize and consent to amendment of
this Article IV by the Managers, upon the advice of the Company's tax counsel,
in order to comply with the Code and the Regulations promulgated under Code
Section 704(b); provided, however, that no am amendment shall materially affect
Distributions to an Interest Holder without the Interest Holder's prior written
consent.

                                   ARTICLE V
                      MANAGEMENT AND CONTROL OF THE COMPANY

         5.1 Management.

              5.1.1 Exclusive Management By Managers. The business, property and
affairs of the Company shall be managed exclusively by the Managers. Except for
situations in which the approval of Members is expressly required by the
Articles or this Agreement, the Managers shall have full, complete and exclusive
authority, power and discretion to manage and control the business, property and
affairs of the Company, to make all decisions regarding those matters and to
perform any and all other acts or activities customary or incident to the
management of the Company's business, property and affairs, including, without
limitation, the power to exercise on behalf of and in the name of the Company
all of the powers described in Corporations Code Section 17003.




                                                                              11

              5.1.2 Agency Authority of Managers. Any Manager, acting alone, is
authorized to endorse checks, drafts and other evidences of indebtedness made
payable to the order of the Company, but only for the purpose of deposit into
the Company's accounts. All checks drafts and other instruments obligating the
Company to pay money in an amount of less than One Thousand Dollars ($1,000.00)
may be signed by any one (1) Manager, acting alone. All checks, drafts and other
instruments obligating the Company to pay money in an amount of One Thousand
Dollars ($1,000.00) or more must be signed on behalf of the Company by any two
(2) Managers acting together. Any two (2) Managers acting together shall be
authorized to sign contracts and obligations on behalf of the Company.

              5.1.3 Meetings of Managers. Meetings of the Managers may be called
by any Manager or, if the Company has any of the following officers, by the
Chairperson, President, any Vice-President or the Secretary. All meetings shall
be held upon four (4) days' notice by mail or forty-eight (48) hours' notice
delivered personally or by telephone or facsimile. A notice need not specify the
purpose of any meeting. Notice of a meeting need not be given to any Manager who
signs a waiver of notice or a consent to holding the meeting or an approval of
the minutes thereof, whether before or after the meeting, or who attends the
meeting without protesting, prior to its commencement, the lack of notice to
such Manager. All such waivers, consents and approvals shall be filed with the
Company records or made a part of the minutes of the meeting. A majority of the
Managers present, whether or not a quorum is present, may adjourn any meeting to
another time and place. If the meeting is adjourned for more than twenty-four
(24) hours, notice of any adjournment shall be given prior to the time of the
adjourned meeting to the Managers who are not present at the time of the
adjournment.

                   5.1.3.1. Place of Meetings. Meetings of the Managers may be
         held at any place within or without the State of California which has
         been designated in the notice of the meeting or at such place as may be
         approved by the Managers.

                   5.1.3.2. Quorum. A majority of the authorized number of
         Managers constitutes a quorum of the Managers for the transaction of
         business. Except to the extent that this Agreement expressly requires
         the approval of all Managers, every act or decision done or made by a
         majority of the Managers present at a meeting duly held at which a
         quorum is present is the act of the Managers. A meeting at which a
         quorum is initially present may continue to transact business
         notwithstanding the withdrawal of Managers, if any action taken is
         approved by at least a majority of the required quorum for such
         meeting. The provisions of this subsection shall apply also to any
         committees of the Managers and actions taken by such committees.

                   5.1.3.3. Use of Conference Telephone. Managers may
         participate in a meeting through use of conference telephone or similar
         communications equipment, so long as all Managers participating in such
         meeting can hear one another.

                   5.1.3.4. Managers Acting Without a Meeting by Written
         Consent. Any action required or permitted to be taken by the Managers
         may be taken by the Managers without a meeting, if a majority of the
         Managers individually or collectively consent in writing to such
         action, unless the action requires a unanimous vote of the Managers, in
         which case all Managers must consent in writing. Such action by written
         consent shall




                                                                              12

         have the same force and effect as a majority vote or unanimous vote, as
         applicable, of such Managers.

                   5.1.3.5. Meetings of Managers Not Required. The provisions of
         this Section 5.1.3 govern meetings of the Managers if the Managers
         elect, in their discretion, to hold meetings.

         However, nothing in this Section 5.1.3 or elsewhere in this Agreement
         is intended to require that meetings of Managers be held, it being the
         intent of the Members that meetings of Managers are not required.

         5.2 Election of Managers.

         5.2.1 Number, Term and Qualifications. The Company shall initially have
three (3) Managers. The number of Managers of the Company shall be fixed from
time to time by the affirmative vote or written consent of Members holding a
Majority Interest, provided that in no instance shall there be less than one (1)
Manager, and provided further that if the number of Managers is reduced from
more than one (1) to one (1), the Articles shall be amended to so state, and if
the number of Managers is increased to more than one (1), the Articles shall be
amended to delete the statement that the Company has only one (1) Manager.
Unless he or she dies, resigns or is removed, each Manager shall hold office
until a successor shall have been elected and qualified. Managers shall be
elected by the affirmative vote or written consent of Members holding a Majority
Interest. A Manager need not be a Member, an individual, a resident of the State
of California or a citizen of the United States.

         5.2.2 Resignation. Any Manager may resign at any time by giving written
notice to the Members and remaining Managers without prejudice to the rights, if
any, of the Company under any contract to which the Manager is a party. The
resignation of any Manager shall take effect upon receipt of that notice or at
such later time as shall be specified in the notice; and, unless otherwise
specified in the notice, the acceptance of the resignation shall not be
necessary to make it effective. The resignation of a Manager who is also a
Member shall not affect the Manager's rights as a Member and shall not
constitute a withdrawal of a Member.

         5.2.3 Removal. Any Manager may be removed at any time, with or without
cause, by the affirmative vote of Members holding at least two-thirds (2/3) in
Percentage Interests at a meeting called expressly for that purpose, or by the
written consent of the Members holding at least two-thirds (2/3) in Percentage
Interests. Any removal shall be without prejudice to the rights, if any, of the
Manager under any employment contract and, if the Manager is also a Member,
shall not affect the Manager's rights as a Member or constitute a withdrawal of
a Member.

         A Manager also may be removed by the affirmative vote or written
consent of a majority of the remaining Managers if as the result of injury or
physical or mental illness such Manager becomes incapable of satisfactorily
performing his normal duties under this Agreement for a period of ninety (90)
consecutive days or one hundred twenty (120) in any consecutive twelve (12)
month period.




                                                                              13

              5.2.4 Vacancies. Any vacancy occurring for any reason in the
number of Managers may be filled by the affirmative vote or written consent of
Members holding a Majority Interest. Any vacancy not so filled by the Members
may be filled by vote or written consent of a majority of the remaining
Managers.

         5.3 Limitations on Powers of Managers. Notwithstanding anything to the
contrary in this Agreement, the Managers shall not have authority to cause the
Company to engage in any of the transactions specified in Section 6.9 as
requiring the affirmative vote or written consent of Members without first
obtaining the required vote or written consent of Members.

         5.4 Performance of Duties; Liability of Managers. The Managers shall
perform their managerial duties in good faith, in a manner they reasonably
believe to be in the best interests of the Company and its Members, and with
such care, including reasonable inquiry, as an ordinarily prudent person in a
like position would use under similar circumstances. A Manager who so performs
the duties of Manager shall not have any liability by reason of being or having
been a Manager of the Company. In performing their duties, the Managers shall be
entitled to rely upon information, opinions, reports, or statements, including
financial statements and other financial data, of the following persons or
groups unless they have knowledge concerning the matter in question that would
cause such reliance to be unwarranted, and provided that the Managers act in
good faith and after reasonable inquiry when the need therefor is indicated by
the circumstances:

              (a) One or more officers, employees or other agents of the Company
         whom the Managers reasonably believe to be reliable and competent in
         the matters presented;

              (b) An attorney, independent accountant or other person as to
         matters which the Managers reasonably believe to be within such
         person's professional or expert competence; or

              (c) A committee upon which the Managers do not serve, duly
         designated in accordance with a provision of the Articles or this
         Agreement, as to matters within its designated authority, which
         committee the Managers reasonably believe to merit competence.

         5.5 Devotion of Time. The Managers are not obligated to devote all of
their time or business efforts to the affairs of the Company. The Managers shall
devote so much of their time, effort and skill as is reasonably necessary and
appropriate for the operation of the Company.

         5.6 Payments to Managers.

              5.6.1 Management Fees. Except as may be expressly authorized by
vote or written consent of Managers, no Manager or Affiliate of a Manager shall
be entitled to receive management fees or other remuneration for the Manager's
serving as a Manager of the Company.

              5.6.2 Payment For Services Performed or Goods Provided. The
Company shall pay the Managers or their Affiliates for services rendered or
goods provided to the Company to the extent that the Managers are not required
to render such services or provide such goods themselves without charge to the
Company, and to the extent that the fees paid to such Managers




                                                                              14

or affiliates do not exceed the fees that would be payable to an independent
responsible third party willing to perform such services or provide such goods.

         5.7 Managers' Expenses. The Company shall pay or reimburse each Manager
for the actual cost all reasonable, ordinary and necessary business expenses
incurred by him in the course of performing his duties as a Manager of the
Company, subject to approval by the Managers or any officer designated by the
Managers. The Company shall also reimburse the Managers or their affiliates for
organizational expenses (including, without limitation, legal and accounting
costs) incurred by them to form the Company, prepare and file the Articles, and
prepare this Agreement. Except as otherwise provided herein, the Managers and
their affiliates shall not be reimbursed by the Company for the following
expenses: (i) salaries, other compensation or fringe benefits of directors,
officers or employees of the Managers or their affiliates; (ii) overhead
expenses of the Managers or their affiliates, including (without limitation)
rent and general office expenses; or (iii) the cost of providing any service or
goods for which the Managers or their Affiliates are entitled to compensation.

         5.8 Limited Liability. No person who is a Manager and/or officer of the
Company shall be personally liable under any judgment of a court, or in any
other manner, for any debt, obligation or liability of the Company, whether that
liability or obligation arises in contract, tort, or otherwise, solely by reason
of being a Manager and/or officer of the Company.

         5.9 Membership Interests of Managers. Except as may otherwise be
provided in this Agreement, Membership Interests held by any Managers or their
affiliates as Members shall entitle such Managers or Affiliates to all the
rights of a Member, including without limitation, the economic, voting,
information and inspection rights of a Member.

         5.10 Officers. The Managers may appoint one or more officers of the
Company including, without limitation, a Chairperson or a President, or both, a
Secretary, a Chief Financial Officer, and any other officers with such titles,
powers, and duties as shall be determined by the Managers. An officer may, but
need not, be a Member or Manager of the Company, and any number of offices may
be held by the same individual.

         5.11 Competition By Managers and Company Opportunities. The fiduciary
duties which a Manager owes to the Company and to its Members are those of a
partner to a partnership and its other partners. Without limiting the generality
of the foregoing, and notwithstanding the provisions of Section 6.7 of this
Agreement permitting competing activities on the part of Members and their
Affiliates, if there is presented to a Manager a business opportunity which the
Company is financially able to undertake, and which is, from its nature, in the
line of one or more of the Company's businesses, the Manager may not take
advantage of such opportunity for his own personal account or the account of any
Affiliate of the Manager, and may not recommend or divert such opportunity to
any other Person, without first disclosing all material facts and circumstances
of the opportunity to the Managers of the Company. If a majority of
disinterested Managers of the Company decline the opportunity on behalf of the
Company or consent (by vote or written consent) to the Manager's investment in
or pursuit of such opportunity (whether for his personal account or for the
account of any Affiliate of such Manager), after full disclosure of all material
facts and circumstances concerning the




                                                                              15

opportunity, then and only then may such Manager or his Affiliate(s) be free to
pursue such opportunity.

                                   ARTICLE VI
                                     MEMBERS

         6.1 Limitation on Authority of Members. No Member is an agent of the
Company solely by virtue of being a Member, and no Member has authority to act
for the Company solely by virtue of being a Member. This Section 6.1 supersedes
any authority granted to the Members pursuant to Section 17157 of the Act. Any
Member who takes any action or binds the Company in violation of this Section
6.1 shall be solely responsible for any loss or expense incurred by the Company
as a result of the unauthorized action and shall indemnify and hold the Company
harmless with respect to the loss or expense.

         6.2 Limited Liability. Except as expressly set forth in this Agreement
or mandated by applicable law, no Member shall be personally liable for any
debt, obligation or liability of the Company, whether that debt, obligation or
liability arises in contract, tort or otherwise.

         6.3 Members Not Required To Perform Services. No Member shall be
required to perform services for the Company solely by virtue of being a Member.
Unless approved by the Managers, no Member shall perform services for the
Company or be entitled to compensation for services performed for the Company.

         6.4 Loans and Other Business Transactions. Any Member may at any time
make or cause a loan to be made to the Company in any amount and on those terms
upon which the Company and the Member agree. Members may also transact other
business with the Company and, in doing so, they shall have the same rights and
be subject to the same obligations arising out of any such business transaction
as would be enjoyed by and imposed upon any Person, not a Member, engaged in a
similar business transaction with the Company.

         6.5 Admission of Additional Members. Additional Members may be admitted
with the approval of all Members. Additional Members will participate in the
Profits, Losses, Cash Flow and other distributions of the Company on such terms
as are determined by the Members. Exhibit "A" shall he amended upon the
admission of any additional Members to set forth their names, addresses, capital
contributions, and Percentage Interests.

         6.6 Withdrawals or Resignations. Any Member who is under an obligation
to render services to the Company may voluntarily withdraw or resign as a Member
at any time upon one hundred twenty (120) days' prior written notice to the
Company, without prejudice to the rights, if any, of the Company or other
Members under any contract to which the withdrawing Member is a party. Such
Member's Membership Interest shall be subject to purchase and sale as provided
in Section 8.2 of this Agreement. No other Member may withdraw or resign from
the Company.

         6.7 Competing Activities of Members and Affiliates. It is contemplated
and acknowledged that Members and/or their Affiliates may own, hold and/or
manage other businesses and investments, including businesses which may compete
with the Company and for the Members' time. Apart from any duties which a Member
or an Affiliate of a Member may have as a Manager of the Company, no Member or
Affiliate of a Member as shall be restricted in




                                                                              16

any way from conducting any other business or activity whatsoever, and no Member
or Affiliate of a Member shall be accountable to the Company or to any other
Member with respect to that business or activity even if the business or
activity competes with the Company's business. The organization of the Company
shall be without prejudice to the Members' respective rights (or the rights of
their respective Affiliates) to maintain, expand, or diversify such other
interests and activities and to receive and enjoy profits or compensation
therefrom. Each Member waives any rights the Member might otherwise have to
share or participate in such other interests or activities of any other Member
or the Member's Affiliates.

         6.8 Meetings of and Voting By Members. The voting, approval or consent
rights of the Members shall be limited to those matters expressly set forth in
this Agreement or in the Articles. Except as otherwise provided in this
Agreement, in all matters in which a vote, approval or consent of Members is
required or authorized, the vote, approval or consent of Members holding a
Majority Interest shall be sufficient to authorize or approve the matter.

              6.8.1 Date, Time and Place of Meetings of Members. Meetings of
Members may be held at such date, time and place within or without the State of
California as the Managers may fix from time to time, or if the Managers are
unable to agree to such time and place, as Members holding a Majority Interest
shall determine. No annual or regular meetings of Members are required. At any
Members' meeting, the Managers shall appoint an individual to preside at the
meeting and an individual to act as secretary of the meeting. The secretary of
the meeting shall prepare minutes of the meeting which shall be placed in the
minute book of the Company.

              6.8.2 Power to Call Meetings. Meetings of the Members may be
called by any Manager, or upon written demand of Members holding more than ten
percent (10%) of the Percentage Interests for the purpose of addressing any
matters on which the Members may vote.

              6.8.3 Notice of Meeting. Written notice of a meeting of Members
shall be sent or otherwise given to each Member in accordance with Section
6.8.4. not less than ten (10) nor more than sixty (60) days before the date of
the meeting. The notice shall specify the place, date and hour of the meeting
and the general nature of the business to be transacted. No other business may
be transacted at this meeting. Upon written request to any Manager by any person
entitled to call a meeting of Members, the Managers shall immediately cause
notice to be given to the Members entitled to vote that a meeting will be held
at a time requested by the person calling the meeting, not less than ten (10)
days nor more than sixty (60) days after the receipt of the request. If the
notice is not given within twenty (20) days after the receipt of the request,
the person entitled to call the meeting may give the notice.

              6.8.4 Manner of Giving Notice; Affidavit of Notice. Notice of any
meeting of Members shall be given either personally or by first-class mail,
telegram, facsimile or other written communication, charges prepaid, addressed
to the Member at the address of that Member appearing on the books of the
Company or given by the Member to the Company for the purpose of notice. If no
such address appears on the Company's books or is given, notice shall be deemed
to have been given if sent to that Member by first-class mail, telegram
facsimile or other written communication to the Company's principal executive
office, or if published at least once



                                                                              17

in a newspaper of general circulation in the county where that office is
located. Notice shall be deemed to have been given at the time when delivered
personally or deposited in the mail or sent by telegram or other means of
written communication.

              If any notice addressed to a Member at the address of that Member
appearing on the books of the Company is returned to the Company by the United
States Postal Service marked to indicate that the United States Postal Services
is unable to deliver the notice to the Member at that address, all future
notices or reports shall be deemed to have been duly given without further
mailing if these shall be available to the Members on written demand of the
Member at the principal executive office of the Company for a period of one (1)
year from the date of the giving of the notice.

              An affidavit of the mailing or other means of giving any notice of
any meeting shall be executed by any Manager or any secretary, assistant
secretary or any transfer agent of the Company giving the notice, and shall be
filed and maintained in the minute book of the Company.

              6.8.5 Validity of Action. Any action approved at a meeting, other
than by unanimous approval of those entitled to vote, shall be valid only if the
general nature of the proposal so approved was stated in the notice of meeting
or in any written waiver of notice.

              6.8.6 Quorum. The presence in person or by proxy of the holders of
a Majority Interest shall constitute a quorum at a meeting of Members. The
Members present at a duly called or held meeting at which a quorum is present
may continue to do business until adjournment. Notwithstanding the loss of a
quorum, if any action taken after loss of a quorum (other than adjournment) is
approved by Members holding at least a Majority Interest.

              6.8.7 Adjourned Meeting; Notice. Any Members' meeting, whether or
not a quorum is present, may be adjourned from time to time by the vote of the
majority of the Membership Interests represented at that meeting, either in
person or by proxy, but in the absence of a quorum, no other business may be
transacted at that meeting, except as provided in Section 6.8.6. When any
meeting of Members is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place are announced at a meeting
at which the adjournment is taken, unless a new record date for the adjourned
meeting is subsequently fixed, or unless the adjournment is for more than
forty-five (45) days from the date set for the original meeting, in which case
the Managers shall set a new record date. At any adjourned meeting the Company
may transact any business which might have been transacted at the original
meeting.

              6.8.8 Waiver of Notice or Consent. The actions taken at any
meeting of Members however called and noticed, and wherever held, have the same
validity as if taken at a meeting duly held after regular call and notice, if a
quorum is present either in person or by proxy, and if, either before or after
the meeting, each of the Members entitled to vote, who was not present in person
or by proxy, signs a written waiver of notice or consents to the holding of the
meeting or approves the minutes of the meeting. All such waivers, consents or
approvals shall be filed with the Company records or made a part of the minutes
of the meeting.




                                                                              18

              Attendance of a person at a meeting shall constitute a waiver of
notice of that meeting, except when the person objects, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened, and except that attendance at a meeting is not a waiver of
any right to object to the consideration of matters not included in the notice
of the meeting if that objection is expressly made at the meeting. Neither the
business to be transacted nor the purpose of any meeting of Members need be
specified in any written waiver of notice except as provided in Section 6.8.5.

              6.8.9 Action by Written Consent Without a Meeting. Any action that
may be taken at a meeting of Members may be taken without a meeting, if a
consent in writing setting forth the action so taken, is signed and delivered to
the Company within sixty (60) days of the record date for that action by Members
having not less than the minimum number of votes that would be necessary to
authorize or take that action at a meeting at which all Members entitled to vote
on that action at a meeting were present and voted. All such consents shall be
filed with the Managers or the secretary, if any, of the Company, and shall be
maintained in the Company records. Any Member giving a written consent, or the
Member's proxy holders, may revoke the consent by a writing received by the
Manager or secretary, if any, of the Company before written consents of the
number of votes required to authorize the proposed action have been filed.

              Unless the consents of all Members entitled to vote have been
solicited in writing, (i) notice of any Member approval of an amendment to the
Articles or this Agreement, a dissolution of the Company, or a merger of the
Company, without a meeting by less than unanimous written consent, shall be
given at least ten (10) days before the consummation of the action authorized by
such approval, and (ii) prompt notice shall be given of the taking of any other
action approved by the Members without a meeting by less than unanimous written
consent, to those members entitled to vote who have not consented in writing.

              6.8.10 Telephonic Participation by Member at Meetings. Members may
participate in any Members' meeting through the use of any means of conference
telephones or similar communications equipment as long as all Members
participating can hear one another. A Member so participating is deemed to be
present in person at the meeting.

              6.8.11 Record Date. In order that the Company may determine the
Members of record entitled to notices of any meeting or to vote, or entitled to
receive any distribution or to exercise any rights in respect to any
distribution or to exercise any rights in respect to any other lawful action, a
Manager, or Members representing more than ten percent (10%) of the Percentage
Interests may fix, in advance, a record date, that is not more than sixty (60)
days nor less than ten (10) days prior to the date of the meeting and not more
than sixty (60) days prior to any other action. If no record date is fixed:

                   6.8.11.1.The record date for determining Members entitled to
         notice of to vote at a meeting of Members shall be at the close of
         business on the business day next preceding the day on which notice is
         given or, if notice is waived, at the close of business on the business
         day next preceding the day on which the meeting is held.




                                                                              19

                   6.8.11.2.The record date for determining Members entitled to
         give consent to Company action in writing without a meeting shall be
         the day on which the first written consent is given.

                   6.8.11.3.The record date for determining Members for any
         other purpose shall be at the close of business on the day on which the
         Managers adopt the resolution relating thereto, or the sixtieth (60th)
         day prior to the date of the other action, whichever is later.

                   6.8.11.4.The determination of Members of record entitled to
         notice of or to vote at a meeting of Members shall apply to any
         adjournment of the meeting unless a Manager or the Members who called
         the meeting fix a new record date for the adjourned meeting, but the
         Manager or the Members who called the meeting shall fix a new record
         date if the meeting is adjourned for more than forty-five (45) days
         from the date set for the original meeting.

              6.8.12 Proxies. Every Member entitled to vote for Managers or on
any other matter shall have the right to do so either in person or by one or
more agents authorized by a written proxy signed by the person and filed with
the Managers or secretary, if any, of the Company. A proxy shall be deemed
signed if the Member's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission, electronic transmission or otherwise) by
the Member or the Member's attorney-in-fact. A proxy may be transmitted by an
oral telephonic transmission if it is submitted with information from which it
may be determined that the proxy was authorized by the Member or the Member's
attorney-in-fact. A validly executed proxy which does not state that it is
irrevocable shall continue in full force and effect unless (i) revoked by the
person executing it, before the vote pursuant to that proxy, by a writing
delivered to the Company stating that the proxy is revoked, or by a subsequent
proxy executed by, or attendance at the meeting and voting in person by, the
person executing the proxy; or (ii) written notice of the death or incapacity of
the maker of that proxy is received by the Company before the vote pursuant to
that proxy is counted; provided, however, that no proxy shall be valid after the
expiration of eleven (11) months from the date of the proxy, unless otherwise
provided in the proxy. The revocability of a proxy that states on its face that
it is irrevocable shall be governed by the provisions of Corporations Code
Sections 705(e) and 705(f).

              6.8.13 Certificate of Membership Interest. A Membership Interest
may be represented by a certificate of membership, setting forth the name of the
Company, date and state of organization, the name of the Person to whom the
certificate is issued, the date of issuance, the Percentage Interest represented
thereby, and such other information as shall be determined by the Managers.

              6.8.14 Cancellation of Certificate. Except as herein provided
regarding lost, stolen or destroyed certificates, no new certificates of
membership shall be issued in lieu of previously issued certificates until
former original certificates for a like Percentage Interest shall have been
surrendered for cancellation.

              6.8.15 Replacement of Lost, Stolen or Destroyed Certificate. Any
Member claiming that his or her certificate of membership is lost, stolen or
destroyed may execute an




                                                                              20

affidavit to that effect in form and substance satisfactory to the Managers and
request a new certificate. Upon the giving of a satisfactory indemnity to the
Company, as reasonably required by the Managers, a new certificate may be issued
of the same tenor and representing the same Percentage Interest of membership as
was represented by the certificate claimed to be lost, stolen or destroyed.

         6.9 Matters Requiring Affirmative Vote or Written Consent of Members.
Notwithstanding anything in this Agreement to the contrary, the Managers shall
not have authority to cause the Company to engage in the following transactions
without first obtaining the affirmative vote or written consent of Members
holding a Majority Interest or such greater Percentage Interests as may be set
forth below:

              6.9.1 Sale of All or Substantially All Assets. The sale, exchange,
or other disposition of all or substantially all of the Company's assets
occurring as part of a single transaction or plan, or in multiple transactions
over a period twelve (12) months or less, except in the orderly liquidation and
winding up of the business of the company upon its duly authorized dissolution,
shall require the affirmative vote or written consent of Members holding at
least two-thirds (2/3) in Percentage Interests;

              6.9.2 Merger With Limited Liability Company or Limited
Partnership. The merger of the Company with another limited liability company or
limited partnership shall require the affirmative vote or written consent of
Members holding at least two-thirds (2/3) in Percentage Interests (provided in
no event shall a Member be required to become a general partner in a merger with
a limited partnership without his express written consent or unless the
agreement of merger provides each Member with the dissenter's rights described
in the Act);

              6.9.3 Merger With Corporation or General Partnership. The merger
of the Company with a corporation or a general partnership or other Person shall
require the affirmative vote or written consent of all Members;

              6.9.4 Incurring Certain Liabilities. Incurring any debtor
liability of more than $5,000.00 on behalf of the Company shall require the
affirmative vote or written consent of all Members:

              6.9.5 Establishing Different Classes of Members. The establishment
of different classes of Members shall require the affirmative vote or written
consent of all Members;

              6.9.6 Admission of Additional Members. The admission of additional
Members shall require the affirmative vote or written consent of all Members;

              6.9.7 Amendment of Agreement or Articles. Unless otherwise
expressly provided in this Agreement, any amendment of the Articles and/or this
Agreement shall require the affirmative vote or written consent of all Members;

              6.9.8 Certain Acts. Any act which would make it impossible to
carry on the ordinary business of the Company shall require the affirmative vote
or written consent of all Members;




                                                                              21

              6.9.9 Capital Transactions. Engaging in any Capital Transaction
shall require the affirmative vote or written consent of all Members;

              6.9.10 Dissolution. Dissolution of the Company shall require the
affirmative vote or written consent of Members holding at least two-thirds (2/3)
in Percentage Interests;

              6.9.11 Transfer of Membership Interest; Admission of Assignee.
Except as otherwise expressly provided in Section 7.4 of this Agreement, the
transfer of a Membership Interest and the admission of the Assignee as a
substitute Member of the Company shall require the affirmative vote or written
consent of all Members;

              6.9.12 Additional Capital Contributions. Additional contributions
to the capital of the Company shall be made only with the affirmative vote or
written consent of all Members;

              6.9.13 Continuation of Business After Dissolution. A decision made
pursuant to Section 8.1 to continue the business of the Company after the
occurrence of an Dissolution Event shall be made only with the affirmative vote
or written consent of all Remaining Members; and

              6.9.14 Other Transactions. Any other transaction described
elsewhere in this Agreement as requiring the approval, consent or vote of
Members.

         6.10 Power of Attorney.

              6.10.1 Grant of Power. Each Member constitutes and appoints the
Managers as the Member's true and lawful attorney-in-fact, and in the Member's
name, place, and stead, to make, execute, sign, acknowledge, and/or file:

                   6.10.1.1. Articles of Organization;

                   6.10.1.2. One or more fictitious business name statements;

                   6.10.1.3. Any and all documents (including amendments to
         Articles of Organization) which the Managers deem appropriate to
         reflect any duly adopted or authorized amendment, change, or
         modification of this Agreement;

                   6.10.1.4. Any and all other certificates or other instruments
         required to be filed by the Company under the laws of the State of
         California or of any other state or jurisdiction, including, without
         limitation, any certificate or other instruments necessary in order for
         the Company to continue to qualify as a limited liability company under
         the laws of the State of California;

                   6.10.1.5. An estoppel certificate pursuant to Section 12.13 of
         this Agreement; and

                   6.10.1.6. Any and all documents which may be required to
         dissolve and terminate the Company and to cancel its Articles of
         Organization.



                                                                              22

              6.10.2 Irrevocability. The foregoing power of attorney is
irrevocable and is coupled with an interest, and, to the extent permitted by
applicable law, shall survive the death, disability or dissolution of a Member.
It also shall survive the Transfer of a Membership Interest, except that if the
Assignee is admitted as a Member, this power of attorney shall survive the
delivery of the assignment for the sole purpose of enabling the Managers to
execute, acknowledge, and file any documents needed to effectuate the
substitution. Each Member shall be bound by any representations made by any
Manager acting in good faith pursuant to this power of attorney, and each Member
hereby waives any and all defenses which may be available to contest, negate, or
disaffirm the action of any Manager taken in good faith under this power of
attorney.

              6.10.3 Signatures. The Managers may exercise the foregoing power
of attorney by an original or facsimile signature of any Manager or one of its
authorized officers.

                                   ARTICLE VII
                      TRANSFER AND ASSIGNMENT OF INTERESTS

         7.1 Transfers. No Member shall be entitled to transfer, convey, assign,
sell encumber or in any way alienate (collectively, "transfer") all or any part
of his or her Membership Interest, except with the prior written consent of all
Members, which consent may be given or withheld, conditioned or delayed (as
allowed by this Agreement or the Act), as the other Members may determine in
their sole and absolute discretion. Transfers which are not in full compliance
with this Article VII shall only be effective to the extent set forth in Section
7.5. After the consummation of any transfer of any part of a Membership
Interest, the Membership Interest so transferred shall continue to be subject to
the terms and conditions of this agreement, and any further transfers must be in
compliance with all the terms and conditions of this Agreement.

         Without limiting the generality of the foregoing, in the case of a
Member which is an entity, the sale or exchange of at least fifty percent (50%)
of the voting stock of a corporate Member, or the transfer of an interest or
interests of at least fifty percent (50%) in the capital and/or profits of a
Member which is a partnership or limited liability company (whether or not
accomplished by the sale or exchange of interests or by the admission of new
partners or members), or the cumulative transfer of such interests in a Member
through a series of transactions which is effectively equivalent to the
foregoing (including transfers of interests followed by the incorporation of a
Member and subsequent stock transfers, or transfers of stock followed by the
liquidation of a Member and subsequent transfers of interests) will be deemed to
be a transfer of a Membership Interest subject to this Article VII.

         7.2 Further Restriction on Transfers. In addition to other restrictions
found in this Agreement, no Member shall transfer all or any part of his or her
Membership Interest without compliance with all applicable state and federal
securities laws. Furthermore, no Member shall transfer all or any part of his or
her Membership Interest if the Membership Interest to be transferred, when added
to the total of all the Membership Interests transferred in the preceding twelve
(12) months prior thereto, would cause the tax termination of the Company under
Code Section 708(b)(1)(B).




                                                                              23

         7.3 Substitution of Members. An Assignee of a Membership Interest shall
have the right to become a substitute Member only if (i) the requirements of
Section 7.1 and 7.2 hereof are met (relating to unanimous consent of Members,
compliance with securities laws and non-termination of the Company for tax
purposes), (ii) the Assignee executes a written instrument satisfactory to the
Managers accepting and adopting the terms of this Agreement, and (iii) the
Assignee pays any and all reasonable costs or expenses in connection with his or
her admission as a substitute Member. The admission of an Assignee as a
substitute Member shall not release the Member who assigned the Membership
Interest from any liability that such Member may have to the Company.

         7.4 Permitted Transfers.

              7.4.1 Transfer to Other Member(s). The Membership Interest of any
Member may be transferred to any other Member, subject to compliance with
Section 7.2 without the prior written consent of the other Members or the
Managers.

              7.4.2 Transfer of Economic Interest by Gift or Testamentary
Transfer. The Economic Interest of any Member may be transferred, subject to
compliance with Section 7.2, and without the prior written consent of the
Members as required by Section 7.1, upon consent of the Managers, which shall
not be unreasonably withheld, by the Member (i) by inter vivos gift or by
testamentary transfer to any spouse, parent, sibling, in-law, child or
grandchild of the Member, or to a trust for the benefit of the Member or any
such relative of the member, or (ii) to any affiliate of the Member, provided,
however, that no permitted transferee of an Economic Interest under this Section
7.4.2 shall become or be entitled to the rights of a substitute Member without
the prior written consent of all Members.

              7.5 Transfers Not in Compliance with Agreement. If any transfer of
a Membership Interest or portion thereof does not fully comply with all the
applicable provisions of this Article VII, the transferee shall have no right to
vote or participate in the management of the business, property or affairs of
the Company or to exercise any rights of a Member (except as may otherwise be
expressly provided in this Agreement). Such transferee shall be entitled only to
become an Assignee and thereafter shall only receive the share of the Company's
Net Profits, Net Losses and distributions of the Company's assets to which the
transferor of such Economic Interest would otherwise be entitled.
Notwithstanding the foregoing, if, in the determination of the Managers, a
transfer not in compliance with this Article VII would cause the tax termination
of the Company under Code Section 708(b)(1)(B), the transfer shall be null and
void, and the purported transferee shall not become either a Member or Assignee.

              Upon and simultaneously with any transfer (whether arising out of
an attempted charge upon the Member's Economic Interest by judicial process,
foreclosure by a Member's creditor, or otherwise) of a Member's Economic
Interest (other than in accordance with Section 7.4) which does not at the same
time transfer the balance of the voting and other rights associated with the
Membership Interest transferred by the Member, the Company shall purchase from
the Member, and the Member shall sell to the Company, for a purchase price of
$100.00 cash, all remaining rights and interests retained by the Member that
were associated with the transferred Economic Interest immediately prior to the
transfer. Such purchase and sale shall not, however, result in the release of
any liability which the Member may have to the Company.




                                                                              24

              Each Member acknowledges and agrees that the Company's right to
purchase such remaining rights and interests from a Member who transfers a
Membership Interest without fully complying with this Article VII is not
unreasonable under the circumstances as of the date of this Agreement.

                                  ARTICLE VIII
                       CONSEQUENCES OF DISSOLUTION EVENTS
                     AND TERMINATION OF MEMBERSHIP INTEREST

         8.1 Dissolution Event. Upon the occurrence of the death, withdrawal,
resignation, retirement, insanity, bankruptcy or dissolution of any Member
("Dissolution Event"), the Company shall dissolve unless all the remaining
Members ("Remaining Members") consent within ninety (90) days of the Dissolution
Event to continue the business of the Company. If the Remaining Members so
consent, the Company and/or Remaining Members shall have the right to purchase,
and if such right is exercised, the Member (or the Member's legal
representative) whose death, withdrawal, resignation, retirement, insanity,
bankruptcy or dissolution resulted in the Dissolution Event ("Former Member")
shall sell, the Former Member's Membership Interest ("Former Member's Interest")
as provided in this Article VIII.

         8.2 Withdrawal. Notwithstanding section 8.1., upon the voluntary
withdrawal by a Member in accordance with Section 6.6, such Member shall be
treated as a Former Member and, unless the Company dissolves as a result of such
withdrawal, the Company and/or Remaining Members shall have the right to
purchase, and if such right is exercised, the Former Member shall sell, the
Former Member's Interest as provided in this Article VIII.

         8.3 Purchase Price. The purchase price for the Former Member's Interest
shall be the fair market value of such Interest as determined by an independent
appraiser jointly selected by the Former Member and by Remaining Members holding
a majority of the remaining Membership Interests. The Company and the Former
Member shall each pay one-half (1/2) the cost of the appraisal. Notwithstanding
the foregoing, if the Dissolution Event results from a breach of this Agreement
by the Former Member, the purchase price shall be reduced by an amount equal to
the damages suffered by the Company or the Remaining Members as a result of the
breach.

         8.4 Notice of Intent to Purchase. Within thirty (30) days after the
fair market value of the Former Member's Interest has been determined in
accordance with Section 8.3, each Remaining Member shall notify the Members in
writing of his or her desire to purchase a portion of the Former Member's
Interest. The failure of any Remaining Member to submit a notice within the
applicable period shall constitute an election on the part of such Remaining
Member not to purchase any of the Former Member's Interest. Each Remaining
Member who does elect to purchase shall be entitled to purchase a portion of the
Former Member's Interest in the same proportion that the Membership Interest of
such Remaining Member bears to the aggregate Membership Interests of all of the
Remaining Members who elect to purchase the Former Member's Interest.

         8.5 Election to Purchase Less Than all of Former Member's Interest. If
any Remaining Member elects to purchase none or less than all of his or her pro
rata share of the



                                                                              25

Former Member's Interest, then the other Remaining Members can elect to purchase
more than their pro rata share. If the Remaining Members fail to purchase the
entire interest of the Former Member, the Company may purchase any remaining
share of the Former Member's Interest. Any purchase of a Former Member's
Interest must, however, be the entire interest, and the Former Member or his or
her legal representative may refuse to sell the Former Member's Interest if
unless the entire interest is purchased pursuant to this Article.

         8.6 Payment of Purchase Price. The Company or the Remaining Members, as
the case may be, shall pay at the closing one-fifth (1/5) of the purchase price
for the Former Member's Interest, and the balance of the purchase price shall be
paid in four (4) equal annual principal installments, plus accrued interest,
payable each year on the anniversary date of the closing. The unpaid principal
shall accrue interest at the applicable federal rate as provided under the Code
in effect on the date of the closing, but the Company and/or Remaining Members
may prepay all or a portion of the outstanding balance at any time without
penalty. The obligations of the purchasing Remaining Members and/or the Company,
as applicable to pay their respective portions of the purchase price shall be
several and not joint and shall be evidenced by separate promissory notes
executed by the respective purchasing Remaining Members and/or the Company. Each
such note shall be in an original principal amount equal to the portion owed by
each purchasing Remaining Member and/or the Company. The note executed by each
purchasing Remaining Member (and by the Company, if applicable) shall be secured
by a security interest in that portion of the Former Member's Interest purchased
by such party.

         8.7 Closing of Purchase of Former Member's Interest. The closing of the
sale of a Former Member's Interest pursuant to this Article VIII shall be held
at a mutually agreeable time at the principal office of the Company (or such
other place as the parties may mutually agree upon) no later than sixty (60)
days after the determination of the purchase price. At the closing, the Former
Member or his or her legal representative shall deliver to the Company or the
Remaining Members one or more instruments of transfer (containing warranties of
title and against encumbrances) conveying the Former Member's Interest. The
Former Member, the Company and the Remaining Members shall do all things and
execute and deliver all documents as may be reasonably necessary to consummate
such purchase and sale in accordance with the terms and conditions of this
Agreement and applicable laws.

                                   ARTICLE IX
                           DISSOLUTION AND WINDING UP

         9.1 Conditions of Dissolution. The Company shall dissolve upon the
occurrence of any of the following events:

              9.1.1 Upon the date specified in the Articles as the latest date
         on which the Company is to dissolve, unless such date is extended as
         provided by this Agreement or the act;

              9.1.2 Upon the happening of any other event, if any, specified in
         the Articles as causing or requiring dissolution;




                                                                              26

              9.1.3 Upon the entry of a decree of judicial dissolution pursuant
         to Section 17351 of the Act;

              9.1.4 Upon the vote or written consent of Members holding at least
         two-thirds (2/3) in Percentage Interests;

              9.1.5 The occurrence of a Dissolution Event (Section 8.1) and the
         failure of the Remaining Members to consent in accordance with Section
         8.1 to continue the business of the Company within ninety (90) days
         after the occurrence of such event; or

              9.1.6 The sale of all or substantially all of the assets of the
         Company.

         9.2 Winding Up. Upon the dissolution of the Company, the Company's
assets shall be disposed of and its affairs wound up. The Company shall give
written notice of the commencement of the dissolution to all of its known
creditors.

         9.3 Order of Payment of Liabilities Upon Dissolution. After determining
that all the known debts and liabilities of the Company, including debts and
liabilities to Members who are creditors of the Company, have been paid or
adequately provided for, the remaining assets shall be distributed to the
Members in accordance with their positive capital account balances, after taking
into account income and loss allocations for the Company's taxable year during
which liquidation occurs. Such liquidating distributions shall be made by the
end of the Company's taxable year in which the Company is liquidated, or if
later, within ninety (90) days after the date of such liquidation.

         9.4 Limitation on Payments Made in Dissolution. Except as may otherwise
be specifically provided in this Agreement, each Member shall be entitled to
look only to the assets of the Company for the return of his or her positive
Capital account balance and shall have no recourse for his or her Capital
Contribution and/or share of Profits (upon dissolution or otherwise) against the
Managers or any other Member.

         9.5 Certificates of Dissolution, Cancellation. As soon as possible
following the occurrence of any of the events specified in Section 9.1, the
Managers who have not wrongfully dissolved the Company or, if none, the Members
shall execute a Certificate of Dissolution in such form as shall be prescribed
by the Secretary of State and shall file the Certificate as required by the Act.
The Managers or Members who filed the Certificate of Dissolution shall further
cause to be filed with the Secretary of State a Certificate of Cancellation of
the Articles upon the completion of the winding up of the affairs of the
Company.

                                   ARTICLE X
                  BOOKS, RECORDS, ACCOUNTING, AND TAX ELECTIONS

         10.1 Bank Accounts. All funds of the Company shall be deposited in a
bank account or accounts opened in the Company's name. The Managers shall
determine the financial institution or institutions at which the accounts will
be opened and maintained, the types of accounts, and the Persons who will have
authority with respect to the accounts and the funds therein.




                                                                              27

         10.2 Banks and Records.

              10.2.1 The Managers shall keep or cause to be kept complete and
accurate books, records, and financial statements of the Company and supporting
documentation of transactions with respect to the conduct of the Company's
business. The books, records, and financial statements of the Company shall be
maintained in accordance with generally accepted accounting principles. Such
books, records, financial statements, and documents shall include, but not be
limited to, the following:

                   10.2.1.1.A current list of the full name and last known
         business or residence address of each Member and Interest Holder, in
         alphabetical order, with the Contribution, Capital Account and
         Percentage Interest of each Member and Interest Holder specified in
         such list;

                   10.2.1.2.A current list of the full name and business or
         residence address of each Manager;

                   10.2.1.3.A copy of the Articles of Organization, including
         all amendments; and any powers of attorney under which the Articles of
         Organization or amendments were executed;

                   10.2.1.4.Federal, state, and local income tax or information
         returns and reports, if any, for the six (6) most recent taxable years;

                   10.2.1.5.A copy of this Agreement and any amendments thereto;
         and any powers of attorney under which this Agreement or amendments
         were executed;

                   10.2.1.6.Financial statements for the six (6) most recent
         fiscal years of the Company;

                   10.2.1.7.The Company's books and records as they relate to
         the internal affairs of the Company for at least the current and past
         four (4) fiscal years; and

                   10.2.1.8.Copies of relevant records indicating the amount,
         cost, and value of all property which the Company owns, claims,
         possesses, or controls.

              10.2.2 Such books, records, and financial statements of the
Company and supporting documentation shall be kept, maintained, and available at
the Company's office within the State of California.

         10.3 Right to Inspect Books and Records; Receive Information.

              10.3.1 Upon the reasonable request of a Member or Assignee for a
purpose reasonably related to the interest of that Person as a Member or
Assignee, the Managers shall promptly deliver to the requesting Member or
Assignee at the expense of the Company a copy of this Agreement, as well as the
information required to be maintained by the Company under subsections 10 2.1.1,
10.2.1.2 and 10.2.1.4.




                                                                              28

              10.3.2 Each Member, Assignee and Manager has the right upon
reasonable request, and for purposes reasonably related to the interest of that
Person as Member, Assignee or Manager of the Company, to do the following:

                   10.3.2.1.To inspect and copy during normal business hours any
         of the records required to be maintained by the Company under Section
         10.2.1 of this Agreement; and

                   10.3.2.2.To obtain from the Company promptly after becoming
         available, a copy of the Company's federal, state and local income tax
         or information returns for each year.

              10.3.3 If the Company should have more than thirty-five (35)
Members, Members representing at least five percent (5%) of the voting interests
of all Members, or three (3) or more Members, may make a written request to the
Managers for an income statement of the Company for the initial three-month,
six-month, or nine-month period of the current fiscal year ended more than
thirty (30) days prior to the date of the request, and a balance sheet of the
Company as of the end of that period. The statement must be delivered or mailed
to the Members within thirty (30) days thereafter. Such financial statements
shall be accompanied by the report thereon, if any, of the independent
accountants engaged by the Company or, if there is no report, the certificate of
a Manager that the financial statements were prepared without audit from the
books and records of the Company.

              10.3.4 If the Company should have more than thirty-five (35)
Members, the Managers shall cause an annual report to be sent to each Member of
the Company not later than 120 days after the close of the Company's fiscal
year. Such report must contain the Company's balance sheet as of the end of the
Company's fiscal year and an income statement and statement of changes in
financial position for such fiscal year. Such financial statements shall be
accompanied by the report thereon, if any, of the independent accountants
engaged by the Company or, if there is no report, the certificate of a Manager
that the financial statements were prepared without audit from the books and
records of the Company.

              10.3.5 If a Manager has executed an amendment to the Articles of
Organization or this Agreement pursuant to a power of attorney from the Members,
the Manager must promptly furnish to the Members a copy of such amendment

              10.3.6 The Managers shall send or shall cause to be sent to each
Member or Assignee within ninety (90) days after the end of each fiscal year of
the Company: (i) such information as is necessary to complete the recipient's
federal and state income tax or information returns, and (ii) if the Company has
thirty-five (35) or fewer Members, a copy of the Company's federal, state, and
local income tax or information returns for the fiscal year.

              10.3.7 Unless otherwise expressly provided in this Agreement, the
inspecting or requesting Member, Assignee or Manager as the case may be, shall
reimburse the Company for all reasonable costs and expenses incurred by the
Company in connection with such inspection and copying of the Company's books
and records and the production and delivery of any other books or records.




                                                                              29

         10.4 Annual Accounting Period. The annual accounting period of the
Company shall be its taxable year. The Company's taxable year shall be selected
by the Managers, subject to the requirements and limitations of the Code.

         10.5 Tax Matters Partner. The Managers shall select one of the Managers
to be the "Tax Matters Partner" for purposes of Code Section 6231 (a) (7), who
shall have all the authority granted by the Code to the Tax Matters Partner,
including the authority to represent the Company (at the Company's expense) in
connection with all examinations of the Company's affairs by tax authorities.

         10.6 Tax Elections. The Managers shall have the authority to make all
Company elections permitted under the Code, including, without limitation,
elections of methods of depreciation and elections under Code Section 754, as
the Managers deem to be in the best interests of the Company and its Members.

         10.7 Title to Company Property. All real and personal property acquired
by the Company shall be acquired and held by the Company in the Company's name.

                                   ARTICLE XI
                                 INDEMNIFICATION

         11.1 Indemnification of Agents. The Company shall defend and indemnify
any Member or Manager, and may indemnify any other Person, who was or is a party
or who is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding by reason of the fact that he or she was or is a
Member, Manager, officer, employee or other agent of the Company or by reason of
the fact that, being or having been such a Member, Manager, officer, employee or
other agent, he or she is or was serving at the request of the Company as a
manager, director, officer employee or other agent of another limited liability
company, corporation, partnership, joint venture or other enterprise (any such
person being referred to hereinafter as an "agent"), to the fullest extent as
applicable law may permit. The Managers are authorized, on behalf of the
Company, to enter into indemnity agreements from time to time with any Person
entitled to be indemnified by the Company hereunder, upon such terms and
conditions as the Managers deem appropriate in their business judgment. The
Company may purchase and maintain insurance on behalf of any Person who is or
was an agent of the Company against any liability asserted against such Person
and incurred by such Person in any such capacity, or arising out of such
Person's status as an agent, whether or not the Company would have the power to
indemnify such Person against such liability under the provisions of this
Section 6.9 or applicable law.

                                  ARTICLE XII
                               GENERAL PROVISIONS

         12.1 Assurances. Each Member shall execute all certificates and other
documents and shall do all such filing, recording, publishing, and other acts as
the Managers deem appropriate to comply with the requirements of law for the
formation and operation of the Company and to comply with any laws, rules, and
regulations relating to the acquisition, operation, or holding of the property
of the Company.




                                                                              30

         12.2 Notifications. Any notice, demand, consent, election, offer,
approval, request, or other communication (collectively a "notice") required or
permitted under this Agreement shall be in writing and shall be deemed given
upon actual delivery in the case of personal delivery, or three (3) business
days after deposit in the U.S. mail, first class postage and certified fees
prepaid with return receipt requested, in either case addressed to the party to
be notified at its last known address indicated in the Company's records or at
such other address as such party may have specified in a written notice given in
accordance with this Section to the other party or parties.

         12.3 Specific Performance. The parties recognize that irreparable
injury will result from a breach of any provision of this Agreement and that
money damages will be inadequate to fully remedy the injury. Accordingly, in the
event of a breach or threatened breach of one or more of the provisions of this
Agreement, any party who may be injured (in addition to any other remedies which
may be available to that party) shall be entitled to one or more preliminary or
permanent orders (i) restraining and enjoining any act which would constitute a
breach or (ii) compelling the performance of any obligation which, if not
performed, would constitute a breach.

         12.4 Complete Agreement. This Agreement contains the entire agreement
of the parties hereto as of the date hereof with respect to the subject matter
of this Agreement, and supersedes any and all other prior or contemporaneous
written or oral agreements, understandings, representations, discussions,
promises and negotiations by or between the parties or their representatives.

         12.5 Applicable Law. All questions concerning the construction,
validity, and interpretation of this Agreement and the performance of the
obligations imposed by this Agreement shall be governed by the internal laws of
the State of California without giving effect to conflict of law principles.

         12.6 Article and Section Titles. The headings herein are inserted as a
matter of convenience only and do not define, limit, or describe the scope of
this Agreement or the intent of the provisions hereof.

         12.7 Binding Effect. Subject to any prohibition or limitation on
transfer of Membership Interests set forth herein, this Agreement shall inure to
the benefit of and be binding upon the parties and their respective heir, legal
representatives, successors and assigns.

         12.8 Number and Gender. As used herein, the singular and plural number,
and the masculine, feminine and neuter gender, shall each be deemed to include
the other whenever the context so indicates.

         12.9 Separability of Provisions. In case this Agreement, or any one or
more of the provisions hereof, are held to be invalid, illegal or unenforceable,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, and this Agreement shall be construed as if the
invalid, illegal or unenforceable provision had never been contained herein, and
there shall be deemed substituted such other provision as will most nearly
accomplish the intent of the parties to the extent permitted by applicable law.




                                                                              31

         12.10 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original and all of
which, when taken together, shall constitute one and the same document. The
signature of any party to any counterpart shall be deemed a signature to, and
may be appended to, any other counterpart.

         12.11 Costs of Legal Action. If any legal action is commenced between
the parties concerning any provisions of this Agreement, or the rights and
duties of any Person in relation to this Agreement, the party or parties
prevailing in such action shall be entitled, in addition to such other relief
that is granted, to a reasonable sum as and for its attorneys' fees in such
action.

         12.12 Independent Representation. Each signatory to this Agreement
confirms that such party has had the opportunity to obtain independent legal
advice and representation with respect to this Agreement, and has either done so
or freely elected not to do so. Each signatory further acknowledges that this
Agreement accurately reflects the mutual agreement of the parties hereto, and
agrees that no provision of this Agreement shall be construed or interpreted
against any party to this Agreement on the grounds that such party or its
attorney drafted such provision.

         12.13 Estoppel Certificate. Each Member shall, within ten (10) days
after written request by any Manager, deliver to the requesting Person a
certificate stating, to the best of the Member's knowledge, that: (i) this
Agreement is in full force and effect; (ii) this Agreement has not been modified
except by any instrument or instruments identified in the certificate; and (iii)
there is no default hereunder by the requesting Person, or if there is a
default, the nature and extent thereof. If the certificate is not received
within the ten (10) day period, any Manager may execute and deliver the
certificate on behalf of such Member, without qualification, pursuant to the
power of attorney granted in this Agreement.

         12.14 Remedies Cumulative. All rights and remedies provided to each
party in this Agreement are cumulative and are in addition to any other rights
and remedies which such party may have in law or in equity.

         12.15 Authority of Person Signing Agreement. If a Member is a
corporation, partnership or other entity, neither the Company nor any Manager or
Member will (i) be required to determine the authority of the individual signing
this Agreement to make any commitment or undertaking on behalf of such entity or
to determine any fact or circumstance bearing upon the existence of the
authority of such individual, or (ii) be responsible for the application or
distribution of proceeds paid or credited to individuals signing this Agreement
on behalf of such entity. Each individual signing this Agreement on behalf of an
entity warrants and represents that it is an entity corporation duly organized,
validly existing and in good standing under the laws of its place of
organization; that it is authorized to execute all its powers, rights and
privileges as an entity; that it has full right, power and authority to execute,
deliver and perform this Agreement; that the execution, delivery and performance
of this Agreement by such individual has been duly authorized by all requisite
action required under applicable laws governing such entity; that the individual
executing this Agreement on behalf of such entity has authority to do so; that
neither the execution, delivery or performance of this Agreement violates any
law, agreement, regulation, charter, bylaw, order or obligation to which such
entity is subject or by which any of its property is bound; and that this
Agreement constitutes such entity's valid and binding obligation.




                                                                              32

         12.16 Consent of Spouse. Within ten (10) days after a natural person
becomes a Member or such a Member marries, such Member shall have his or her
spouse execute a written consent acknowledging the contents of this Agreement
and approving any and all provisions of this Agreement allowing the purchase of
the Member's Membership Interest (including any community property interest of
the spouse in such Interest) by the Company and/or Remaining Members.

         12.17 Parties In Interest. Except as expressly provided in the Act,
nothing in this Agreement shall confer any rights or remedies under this
Agreement on any Persons other than the Members and Managers and their
respective heirs, successors and assigns, nor shall anything in Agreement
relieve or discharge the obligation or liability of any third party to any party
to this Agreement, nor shall any provision of this Agreement give any third
party any right of subrogation or action over or against any party to this
Agreement.

         IN WITNESS WHEREOF, all the Members have executed this Agreement as of
the date first written above

                                    MEMBERS:

                                    MIDNIGHT OIL SERVICES, INC.
                                    A California Corporation

                                    By: /s/ ALLAN H. WEGNER
                                        -----------------------------------
                                        Allan H. Wegner, President


                                    R. W. CONSULTANTS, INC. A
                                    A California Corporation

                                    By: /s/ ROBERT J. WHALEN
                                        ------------------------------------
                                        Robert J. Whalen, President


                                    C & N ENTERPRISES, INC.
                                    A Virginia Corporation

                                    By: /s/ RICHARD H. TROYER
                                        ------------------------------------
                                            Richard H. Troyer, President






                                    EXHIBIT A

                                     MEMBERS





                                                          CAPITAL                 PERCENTAGE              DATE
  MEMBER'S NAME, ADDRESS & TAXPAYER ID NO.              CONTRIBUTION               INTEREST             ADMITTED
- ------------------------------------------------      ----------------          --------------        ------------

          MIDNIGHT OIL SERVICES, INC.                      $4,000                    40%                 3/7/96
            A California Corporation
         2640 Del Mar Heights Rd., #421
               Del Mar, CA 92014

           Taxpayer ID No: 33-0698395

            R. W. CONSULTANTS, INC.                        $4,000                    40%                 3/7/96
            A California Corporation
               7625 Hillside Dr.
               La Jolla, CA 92037

           Taxpayer ID No: 95-3747220

            C & N ENTERPRISES, INC.                        $2,000                    20%                 3/7/96
             A Virginia Corporation
               3400 Holly Street
              Alexandria, VA 22305

           Taxpayer ID No: 54-1799518





                                    MANAGERS

           MANAGER'S NAME                        MANAGER'S ADDRESS

          ROBERT J. WHALEN                       7625 Hillside Dr.
                                                La Jolla, CA 92037

          ALLAN H. WEGNER                      14124 Recuerdo Drive
                                                 Del Mar, CA 92014

         RICHARD H. TROYER                       3400 Holly Street
                                                Alexandria, VA 22305

EX-3.107

                                                                   EXHIBIT 3.107

                            ARTICLES OF INCORPORATION
                                       OF
                     ADVANCED LASER SYSTEMS TECHNOLOGY INC.

     The undersigned incorporator, being competent to contract, subscribes to
these Articles of Incorporation to form a corporation for profit under the laws
of the state of Florida.

                                ARTICLE I - Name

     The name of this corporation shall be: ADVANCED LASER SYSTEMS TECHNOLOGY,
INC.

                      ARTICLE II - Business And Activities

     This corporation may, and is authorized to, engage in any activity or
business permitted under the laws of the United States and of the state of
Florida.

                          ARTICLE III - Capital Stock

     The authorized capital stock of this corporation and the maximum number of
shares of stock that this corporation is authorized to issue and have
outstanding at any one time is 7,500 shares of common stock having a par value
of $1.00 per share.

                         ARTICLE IV - Term Of Existence

     The effective date upon which this corporation shall come into existence
shall be the date these Articles are filed with the office of the Secretary of
State, and it shall exist perpetually thereafter unless dissolved according to
law.

                ARTICLE V - Initial Registered Office And Agent

     The street address of the initial registered office of this corporation is
3309 Coleus Court, Winter Park, Florida, 32792, and the name of the initial
registered agent of this corporation at that address is Robert Edwin McKinney.

                             ARTICLE VI - Directors

     A. The initial number of directors of this corporation shall be one.

     B. The number of directors may be either increased or diminished from time
to time by the board of directors or the shareholders in accordance with the
bylaws of this corporation.

     C. Directors, as such, shall receive such compensation for their services,
if any, as may be set by the board of directors at any annual or special meeting
thereof. The board of



directors may authorize and require the payment of reasonable expenses incurred
by directors in attending meetings of the board of directors.

     D. Nothing in this article shall be construed to preclude the directors
from serving the corporation in any other capacity and receiving compensation
therefor.

     E. The names and street addresses of the initial members of the board of
directors, each to hold office until the first annual meeting of the
shareholders of this corporation or until their successors are elected or
appointed and have qualified, are:

         Name               Street Address
         ----               --------------
ROBERT EDWIN McKINNEY   3309 Coleus Court
                        Winter Park, FL 32792

     F. Any director may be removed from office by the holders of a majority of
the stock entitled to vote thereon at any annual or special meeting of the
shareholders of this corporation, for any cause deemed sufficient by such
shareholders.

     G. In case one or more vacancies shall occur in the board of directors by
reason of death, resignation or otherwise, the vacancies shall be filled by the
shareholders of this corporation at their next annual meeting or at a special
meeting called for the purpose of filling such vacancies; provided, however, any
vacancy may he filled by the remaining directors until the shareholders have
acted to fill the vacancy.

                           ARTICLE VII - Incorporator

     The name and street address of the incorporator signing these articles are:

         Name               Street Address
         ----               --------------
ROBERT EDWIN McKINNEY   3309 Coleus Court
                        Winter Park, FL 32792

                 ARTICLE VIII - Lost Or Destroyed Certificates

     Stock certificates to replace lost or destroyed certificates shall be
issued on such basis and according to such procedures as are from time to time
provided for in the bylaws of this corporation.

                       ARTICLE IX - Amendment To Articles

     These articles of incorporation may be amended in the manner provided by
law. Every amendment shall be approved by the board of directors, proposed by
them to the shareholders, and approved at a shareholders' meeting by the holders
of a majority of the stock issued and entitled to be voted, unless all the
directors and all the shareholders sign a written statement manifesting their
intention that a certain amendment to these articles of incorporation be made.



                               ARTICLE X - Bylaws

     The power to adopt, alter, amend or repeal bylaws of this corporation shall
be vested in the shareholders or the board of directors of this corporation;
provided, however, that any bylaws adopted by the directors which are
inconsistent with any bylaws adopted by the shareholders shall be void, and the
directors may not alter, amend or repeal any bylaws adopted by the shareholders.

     IN WITNESS WHEREOF, the undersigned incorporator has executed these
articles of incorporation this 5th day of May, 1987.


                                        /s/ ROBERT EDWIN MCKINNEY
                                        ----------------------------------------
                                        ROBERT EDWIN MCKINNEY



STATE OF FLORIDA

COUNTY OF ORANGE

     The foregoing this instrument was acknowledged before me this 5th day of
May 1987, by ROBERT EDWIN McKINNEY.


                                        /s/ Elizabeth Hernandez
                                        ----------------------------------------
                                        NOTARY PUBLIC
                                        My Commission Expires:

                                           NOTARY PUBLIC OF THE STATE OF FLORIDA
                                           MY COMMISSION EXP. OCT. 2, 1989
                                           BONDED THRU GENERAL INS. UND.





                              Articles of Amendment
                                       to
                            Articles of Incorporation
                                       of

                     Advanced Laser Systems Technology, Inc.
    (Name of corporation as currently filed with the Florida Dept. of State)

                                     J71360
                   (Document number of corporation (if known)

Pursuant to the provisions of section 607.1006, Florida Statutes, this Florida
Profit Corporation adopts the following amendment(s) to its Articles of
Incorporation:

NEW CORPORATE NAME (if changing):

L-3 Communications Advanced Laser Systems Technology, Inc.
(must contain the word "corporation," "company," or "incorporated" or the
abbreviation "Corp.", "Inc.", or "Co.")

AMENDMENTS ADOPTED- (OTHER THAN NAME CHANGE) Indicate Article Number(s) and/or
Article Title(s) being amended, added or deleted: (BE SPECIFIC)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
                     (Attach additional pages if necessary)

If an amendment provides for exchange, reclassification, or cancellation of
issued shares, provisions for implementing the amendment if not contained in the
amendment itself: (if not applicable, indicate N/A)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
                                   (continued)



The date of each amendment(s) adoption: 6/16/05

Effective date if applicable: __________________________________________________
                               (no more than 90 days after amendment file date)

Adoption of Amendment(s)   (CHECK ONE)

     [X]  The amendment(s) was/were approved by the shareholders. The
          number of votes cast for the amendment(s) by the shareholders
          was/were sufficient for approval.

     [_]  The amendment(s) was/were approved by the shareholders through
          voting groups. The following statement must be separately
          provided for each voting group entitled to vote separately on
          the amendment(s):

     "The number of votes cast for the amendments) was/were sufficient for
     approval by _____________________________________________________________"
                                                                (voting group)

     [_]  The amendment(s) was/were adopted by the board of directors
          without shareholder action and shareholder action was not
          required.

     [_]  The amendment(s) was/were adopted by the incorporators without
          shareholder action and shareholder action was not required.

Signed this 16th day of June, 2005.


                                       Signature: /s/ Christopher C. Cambria
                                                  ------------------------------
                                       (By a director, president or other
                                       officer - if directors or officers have
                                       not been selected, by an incorporator -
                                       if in the hands of a receiver, trustee,
                                       or other court appointed fiduciary by
                                       that fiduciary)


                                       Christopher C. Cambria
                                       -----------------------------------------
                                       (Typed or printed name of person signing)


                                       Vice President, Secretary
                                       -----------------------------------------
                                               (Title of person signing)

                                       FILING FEE: $35

EX-3.108

                                                                   EXHIBIT 3.108

                           AMENDED AND RESTATED BYLAWS
                                       OF
                     ADVANCED LASER SYSTEMS TECHNOLOGY, INC.

                                    ARTICLE I

                            MEETINGS OF SHAREHOLDERS

          Section 1. Annual Meeting. The annual meeting of the shareholders of
this corporation for the election of directors and for the transaction of any
proper business shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting shall be held within 4 months
after the close of the fiscal year.

          Section 2. Special Meetings. Special meetings of the shareholders
shall be held when directed by the President or the Board of Directors, or when
requested in writing by the holders of not less than 10% of all the shares
entitled to vote at the meeting. Only business within the purpose or purposes
described in the special meeting notice may be conducted at a special
shareholders' meeting.

          Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.

          Section 4. Notice. Written notice stating the place, date and time of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than 10 nor more than
60 days before the meeting, either personally or by first class mail, by or at
the direction of the President, the Secretary, or the officer or persons calling
the meeting to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be effective when deposited in the United States mail
addressed to the shareholder at his address as it appears on the corporation's
current record of shareholders.

          Section 5. Notice of Adjourned Meetings. When a meeting is adjourned
to another time or place, it shall not be necessary to give any notice of the
adjourned meeting if the time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken, and at the adjourned
meeting any business may be transacted that might have been transacted on the
original date of the meeting, If, however, after the adjournment the Board of
Directors fixes a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given as provided in this section to each shareholder
of record on the new record date entitled to vote at such meeting.

          Section 6. Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any distribution, or
in order to make a determination of shareholders for any other purpose, the
Board of Directors may fix in advance a date as the record date for any
determination of shareholders, such date in any case to be not more than 70 days
and, in case of a



                                                                               2


meeting of shareholders, not less than 10 days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.

          If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at an annual
or special meeting of shareholders, or shareholders entitled to receive payment
of a distribution, the date on which notice of the meeting is mailed or the date
on which the resolution of the Board of Directors declaring such distribution is
adopted shall be the record date for such determination of shareholders.

          When a determination of shareholders entitled to vote at any meeting
of shareholders has been made as provided in this section, such determination
shall apply to any adjournment, unless the Board of Directors fixes a new record
date for the adjourned meeting. A new record date must be fixed if the meeting
is adjourned to a date more than 120 days after the date fixed for the original
meeting.

          Section 7. Voting Record. The officers or agent having charge of the
stock transfer books for shares of the corporation shall make, at least 10 days
before each meeting of shareholders, a complete alphabetical list of the
shareholders entitled to vote at such meeting or any adjournment thereof,
arranged by voting group with the address of and the number and class and
series, if any, of shares held by each. The list, for a period of 10 days prior
to such meeting, shall be available for inspection at the principal office of
the corporation, or at the office of the transfer agent or registrar of the
corporation or at a place identified in the meeting notice in the city where the
meeting will be held. Upon written demand to the corporation, any shareholder or
his agent or attorney shall be entitled to inspect the list at any time during
usual business hours. The list shall also be produced and kept open at the time
and place of the meeting and shall be subject to the inspection of any
shareholder or his agent or attorney at any time during the meeting.

          If the requirements of this section have not been substantially
complied with, the meeting, on demand of any shareholder in person or by proxy,
shall be adjourned until the requirements are complied with. If no such demand
is made, failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.

          Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the shares of such
class or series shall constitute a quorum for the transaction of such item of
business by that class or series.

          If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.

          After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.



                                                                               3


          Section 9. Voting of Shares. Unless otherwise designated in the
Articles of Incorporation, each outstanding share of voting stock, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.

          Shares of stock of this corporation owned directly or indirectly by
another corporation, the majority of the voting stock of which is owned,
directly or indirectly, by this corporation, are not entitled to vote, and shall
not be counted in determining the total number of outstanding shares at any
given time.

          A shareholder or the shareholder's attorney in fact may vote either in
person or by proxy executed in writing by the shareholder or his duly authorized
attorney in fact.

          At each election for directors, every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected at
that time and for whose election he has a right to vote.

          Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the bylaws
of the corporate shareholder; or, in the absence of any applicable bylaw, by
such person as the Board of Directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.

          Shares held by an administrator, executor, guardian, personal
representative, or conservator may be voted by him, either in person or by
proxy, without a transfer of such shares into his name. Shares standing in the
name of a trustee may be voted by him, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him without a transfer of such
shares into his name or the name of his nominee.

          Shares held by or under the control of a receiver, trustee in
bankruptcy proceedings, or an assignee for the benefit of creditors, may be
voted by such receiver, trustee, or assignee, without the transfer thereof into
the name of such receiver, trustee or assignee.

          A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.

          On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a bank, trust company or other
financial institution, with irrevocable instruction and authority to pay the
redemption price to the holders thereof upon surrender of certificates therefor,
such shares shall not be entitled to vote on any matter and shall not be deemed
to be outstanding shares.

          Section 10. Proxies. Every shareholder entitled to vote at a meeting
of shareholders or to express consent or dissent without a meeting or a
shareholder's duly authorized



                                                                               4


attorney in fact may authorize another person or persons to act for him by
proxy. Every proxy must be signed by the shareholder or his attorney in fact. An
appointment of a proxy is effective when received by the secretary or other
officer or agent authorized to tabulate votes. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the shareholder
executing it, except as otherwise provided by law. The authority of the holder
of a proxy to act shall not be revoked by the incompetence or death of the
shareholder who executed the proxy unless, before the authority is exercised,
written notice of an adjudication of such incompetence or of such death is
received by the corporate officer responsible for tabulating votes.

          If a proxy for the same shares confers authority upon two or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one is present then that one, may exercise all the powers
conferred by the proxy; but if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.

          If a proxy expressly provides, any proxy holder may appoint in writing
a substitute to act in his place.

          Section 11. Voting Trusts. One or more shareholders of this
corporation may create a voting trust for the purpose of conferring upon a
trustee or trustees the right to vote or otherwise represent their shares, as
provided by law. Where the counterpart of a voting trust agreement and the copy
of the record of the holders of voting trust certificates has been deposited
with the corporation as provided by law, such documents shall be subject to the
same right of examination by a shareholder of the corporation, in person or by
agent or attorney, as are the books and records of the corporation, and such
counterpart and such copy of such record shall be subject to examination by any
holder of record of voting trust certificates, either in person or by agent or
attorney, at any reasonable time for any proper purpose.

          Section 12. Shareholders' Agreements. Two or more shareholders of this
corporation may enter an agreement providing for the exercise of voting rights
in the manner provided in the agreement or relating to any phase of the affairs
of the corporation as provided by law. Nothing therein shall impair the right of
this corporation to treat the shareholders of record as entitled to vote the
shares standing in their names. A shareholders agreement is not subject to the
provisions of Section 11, above.

          Section 13. Action by Shareholders Without a Meeting. Any action
required by law, these bylaws, or the articles of incorporation of this
corporation to be taken at any annual or special meeting of shareholders of the
corporation, or any action which may be taken at any annual or special meeting
of such shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. To be effective, the executed written consent of the stockholders must be
delivered to the corporation within 60 days of the date the earliest written
consent is received by the corporation. If any class of shares is entitled to
vote thereon as a class, such written consent



                                                                               5


shall be required of the holders of a majority of the shares of each class of
shares entitled to vote thereon.

          Within 10 days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing or
who are not entitled to vote on the action. The notice shall fairly summarize
the material features of the authorized action and, if the action be a merger,
consolidation or sale or exchange of assets for which dissenters rights are
provided by law, the notice shall contain a clear statement of the right of
shareholders dissenting therefrom to be paid the fair value of their shares upon
compliance with further provisions of the law regarding the rights of dissenting
shareholders.

          Section 14. Waiver of Notice of Meetings of Shareholders. Notice of a
meeting of the shareholders need not be given to any shareholder who signs a
Waiver of Notice either before or after the meeting. Attendance of a shareholder
at a meeting shall constitute a waiver of notice of such meeting and waiver of
any and all objections to the place of the meeting, the time of the meeting, the
manner in which it has been called or convened, or the matters considered at a
meeting except when a shareholder states, at the beginning of the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened, or except when a shareholder objects to considering a
particular matter that is not within the purposes described in the meeting
notice.

          Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the shareholders need be specified in any written
Waiver of Notice of such meeting.

                                   ARTICLE II

                                    DIRECTORS

          Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of a corporation shall be
managed under the direction of, the Board of Directors.

          Section 2. Qualification. Directors must be natural persons who are 18
years of age or older, but need not be residents of this state or shareholders
of this corporation.

          Section 3. Compensation. The Board of Directors shall have authority
to fix the compensation of directors.

          Section 4. Duties of Directors. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.

          In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:



                                                                               6


          (a) one or more officers or employees of the corporation whom the
     director reasonably believes to be reliable and competent in the matters
     presented,

          (b) counsel, public accountants or other persons as to matters which
     the director reasonably believes to be within such person's professional or
     expert competence, or

          (c) a committee of the board upon which he does not serve, duly
     designated in accordance with a provision of the articles of incorporation
     or the bylaws, as to matters within its designated authority, which
     committee the director reasonably believes to merit confidence.

          A director shall not be considered to be acting in good faith if he
has knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.

          In discharging his duties, a director may consider such factors as the
director deems relevant, including the long-term prospects and interests of the
corporation and its shareholders, and the social, economic, legal, or other
effects of any action on the employees, suppliers, customers of the corporation
or its subsidiaries, the communities and society in which the corporation or its
subsidiaries operate, and the economy of the state and the nation.

          A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.

          Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors or a committee of the Board of
Directors at which action on any corporate matter is taken shall be presumed to
have assented to the action taken unless (a) he objects at the beginning of the
meeting (or promptly upon his arrival) to holding it or transacting specified
business at the meeting; or (b) he votes against such action or abstains from
voting in respect thereto.

          Section 6. Number. This corporation shall have not less than one
director. The number of directors comprising the corporation's first board of
directors shall be fixed by the shareholders. Thereafter, the number of
directors may be increased or decreased from time to time by resolution adopted
by the Board of Directors in accordance with these Bylaws, but no decrease shall
have the effect of shortening the term of any incumbent director.

          Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified, or until his earlier resignation, removal from
office or death. At the first annual meeting of shareholders and at each annual
meeting thereafter the shareholders shall elect directors to hold office until
the next succeeding annual meeting. Directors shall be elected by a plurality of
the votes cast by the shares entitled to vote in the election at a shareholders'
meeting at which a quorum is present. Each director shall hold office for the
term for which he is elected and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office or death.



                                                                               7


          Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.

          Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.

          Section 10. Quorum and Voting. A majority of the number of directors
shall constitute a quorum for the transaction of business. The act of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.

          Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:

          (a) The fact of such relationship or interest is disclosed or known to
     the Board of Directors or committee which authorizes, approves or ratifies
     the contract or transaction by a vote or consent sufficient for the purpose
     without counting the votes or consents of such interested directors; or

          (b) The fact of such relationship or interest is disclosed or known to
     the shareholders entitled to vote and they authorize, approve or ratify
     such contract or transaction by vote or written consent; or

          (c) The contract or transaction is fair and reasonable as to the
     corporation at the time it is authorized by the board, a committee or the
     shareholders.

          Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors of a committee
thereof which authorizes, approves or ratifies such contract or transaction.

          Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution, shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:

          (a) approve or recommend to shareholders actions or proposals required
     by law to be approved by shareholders,



                                                                               8


          (b) designate candidates for the office of director, for purposes of
     proxy solicitation or otherwise,

          (c) fill vacancies on the Board of Directors or any committee thereof,

          (d) adopt, amend or repeal the bylaws,

          (e) authorize or approve the reacquisition of shares unless pursuant
     to a general formula or method specified by the Board of Directors, or

          (f) authorize or approve the issuance or sale of, or any contract to
     issue or sell, shares or designate the terms of a series of a class of
     shares, except that the Board of Directors, having acted regarding general
     authorization for the issuance or sale of shares, or any contract
     therefore, and, in the case of a series, the designation thereof, may,
     pursuant to a general formula or method specified by the Board of
     Directors, by resolution or by adoption of a stock option or other plan,
     authorize a committee to fix the terms of any contract for the sale of the
     shares and to fix the terms upon which such shares may be issued or sold,
     including, without limitation, the price, the rate or manner of payment of
     dividends, provisions for redemption, sinking fund, conversion, voting or
     preferential rights, and provisions for other features of a class of
     shares, or a series of a class of shares, with full power in such committee
     to adopt any final resolution setting forth all the terms thereof and to
     authorize the statement of the terms of a series for filing with the
     Department of State.

          The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.

          Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.

          Section 14. Time, Notice and Call of Meetings. Regular meetings of the
Board of Directors shall be held at times and places specified by the Board of
Directors without notice of the date, time, place or purpose of the meeting.
Written notice of the date, time and place of special meetings of the Board of
Directors shall be given to each director at least 2 days before the meeting.
The notice need not describe the purpose of the special meeting. In addition to
any other regular meetings, a regular meeting of the Board of Directors shall be
held, without other notice than this bylaw, immediately after and at the same
place as the annual meeting of shareholders.

          Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.



                                                                               9


          Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.

          A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.

          Meetings of the Board of Directors may be called by the chairman of
the board, by the president of the corporation, or by any two directors.

          Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.

          Section 15. Action Without a Meeting. Any action required to be taken
at a meeting of the directors of a corporation, or any action which may be taken
at a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so to be taken, signed
by all of the directors, or all the members of the committee, as the case may
be, is filed in the minutes of the proceedings of the board or of the committee.
Such consent shall have the same effect as a unanimous vote and may be described
as such in any document.

          Section 16. Advisory Directors. The Board of Directors shall have the
authority to elect a board of outside directors consisting of two members
initially, which number can be increased or decreased by a vote of the
shareholders. The outside directors shall not be shareholders or officers of the
corporation, and shall not have voting powers, but rather are to act in the
capacity of consulting and advising the Board of Directors at their invitation.

                                   ARTICLE III

                                    OFFICERS

          Section 1. Officers. The officers of this corporation shall include a
Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a
Chief Executive Officer, a Chief Financial Officer, a President, a Secretary and
a Treasurer. The Corporation may also have at the discretion of the Board of
Directors such Vice Presidents, Assistant Treasurers, Assistant Secretaries and
other officers as the Board of Directors may deem appropriate. Each officer
shall be elected by the Board of Directors, and shall serve until their
successors are chosen and qualify. Such other officers and assistant officers
and agents as may be deemed necessary may be elected or appointed by the Board
of Directors from time to time.

          Any two or more offices may be held by the same person. The failure to
elect any of the officers named above shall not affect the existence of this
corporation.



                                                                              10


          Section 2. Removal of Officers. Any officer or agent elected or
appointed by the Board of Directors may be removed by the board at any time with
or without cause.

          Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of an
officer or agent shall not of itself create contract rights.

          Section 3. Resignation of Officers. An officer may resign at any time
by delivering notice to the corporation. A resignation is effective when the
notice is delivered unless the notice specifies a later effective date. If a
resignation is made effective at a later date and the corporation accepts the
future effective date, the Board of Directors may fill the pending vacancy
before the effective date if the Board of Directors provides that the successor
does not take office until the effective date.

                                   ARTICLE IV

                               STOCK CERTIFICATES

          Section 1. Issuance. Every holder of shares in this corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. The Board of Directors may authorize shares to be issued for
consideration consisting of any tangible or intangible property or benefit to
the corporation, including cash, promissory notes, services performed, promises
to perform services evidenced by a written contract, or other securities of the
corporation.

          Before the corporation issues shares, the Board of Directors must
determine that the consideration received for shares to be issued is adequate.
The determination by the Board of Directors is conclusive insofar as the
adequacy of consideration for the issuance of shares relates to whether the
shares are validly issued, fully paid, and nonassessable. When it cannot be
determined that outstanding shares are fully paid and nonassessable, there shall
be a conclusive presumption that such shares are fully paid and nonassessable if
the Board of Directors makes a good faith determination that there is no
substantial evidence that the full consideration for such shares has not been
paid.

          When the corporation receives the consideration for which the Board of
Directors authorized the issuance of shares, the shares issued therefore are
fully paid and nonassessable. Consideration in the form of a promise to pay
money or a promise to perform services is received by the corporation at the
time of the making of the promise, unless the agreement specifically provides
otherwise.

          Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it



                                                                              11


may be issued by the corporation with the same effect as if he were such officer
at the date of its issuance.

          If this corporation is authorized to issue shares of more than one
class or more than one series of any class, every certificate representing
shares issued by this corporation shall set forth or fairly summarize upon the
face or back of the certificate, or shall state that the corporation will
furnish to any shareholder upon request and without charge a full statement of,
the designations, preferences, limitations and relative rights of the shares of
each class or series authorized to be issued, and the variations in the relative
rights and preferences between the shares of each series so far as the same have
been fixed and determined, and the authority of the Board of Directors to fix
and determine the relative rights and preferences of subsequent series.

          Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such shares
are restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.

          Each certificate representing shares shall state upon the face
thereof: the name of the corporation; that the corporation is organized under
the laws of the State of Florida; the name of the person or persons to whom
issued; the number and class of shares, and the designation of the series, if
any, which such certificate represents.

          Section 3. Transfer of Stock. Transfer of shares of the corporation
shall be made only on the stock transfer books of the corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney authorized by power of
attorney duly executed and filed with the Secretary of the corporation, and on
surrender for cancellation of the certificate of such shares. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.

          Section 4. Lost, Stolen, or Destroyed Certificates. The corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the corporation has notice that the
certificate has been acquired by a purchaser for value in good faith and without
notice of any adverse claim; (c) gives bond in such form as the corporation may
direct to indemnify the corporation, the transfer agent, and registrar against
any claim that may be made on account of the alleged loss, destruction, or theft
of a certificate; and (d) satisfies any other reasonable requirements imposed by
the corporation.

                                    ARTICLE V

                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

          Section 1. Contracts. The Board of Directors may authorize any officer
or agent to enter into any contract or execute and deliver any instrument in the
name of and on behalf of the corporation, and such authority may be general or
confined to specific instances.



                                                                              12


          Section 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.

          Section 3. Checks, Drafts, Etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation shall be signed by such officer or agent of the
corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.

          Section 4. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.

                                   ARTICLE VI

                           BOOKS, RECORDS AND REPORTS

          Section 1. Books, Records and Reports. This corporation shall keep as
permanent records minutes of all meetings of its shareholders and Board of
Directors, a record of all actions taken by the shareholders or Board of
Directors without a meeting, and a record of all actions taken by a committee of
the Board of Directors in place of the Board of Directors on behalf of the
corporation.

          This corporation shall maintain accurate accounting records.

          This corporation or its agent shall maintain a record of its
shareholders in a form that permits preparation of a list of the names and
addresses of all shareholders in alphabetical order by class of shares showing
the number and series of shares held by each.

          This corporation shall maintain its records in written form or in
another form capable of conversion into written form within a reasonable time.

          This corporation shall keep a copy of the following records:

          (a) Its articles or restated articles of incorporation and all
     amendments to them currently in effect;

          (b) Its bylaws or restated bylaws and all amendments to them currently
     in effect;

          (c) Resolutions adopted by its Board of Directors creating one or more
     classes or series and fixing their relative rights, preferences, and
     limitations, if shares issued pursuant to those resolutions are
     outstanding;

          (d) The minutes of all shareholders' meetings and records of all
     action taken by shareholders without a meeting for the past 3 years;



                                                                              13


          (e) Written communications to all shareholders generally or all
     shareholders of a class or series within the past 3 years, including the
     financial statements furnished to shareholders for the past 3 years;

          (f) A list of the names and business street addresses of its current
     directors and officers; and

          (g) Its most recent annual report delivered to the Department of
     State.

          Section 2. Shareholders' Inspection Rights. Any shareholder of this
corporation or his designated agent or attorney is entitled to inspect and copy,
during regular business hours at a reasonable location specified by the
corporation, any of the following records of the corporation if the shareholder
(a) has made a good faith demand and for a proper purpose; (b) has described
with reasonable particularity his purpose and the records he desires to inspect;
(c) has requested records which are directly connected with his purposes; and
(d) he has given the corporation written notice of his demand at least 5
business days before the date on which he wishes to inspect and copy:

          (a) Excerpts from minutes of any meeting of the Board of Directors,
     records of any action of a committee of the Board of Directors while acting
     in place of the Board of Directors on behalf of the corporation, minutes of
     any meeting of the shareholders, and records of action taken by the
     shareholders or Board of Directors without a meeting;

          (b) Accounting records of the corporation;

          (c) The record of shareholders; and

          (d) Any other books and records.

          This corporation may deny any demand for inspection if the demand is
made for an improper purpose, or if the demanding shareholder has within 2 years
preceding his demand sold or offered for sale any list of shareholders of the
corporation or any other corporation, has aided or abetted any person in
procuring any list of shareholders for any such purpose, or has improperly used
any information secured through any prior examination of the records of the
corporation or any other corporation. A "proper purpose" means a purpose
reasonably related to such person's interest as a shareholder.

          The corporation may impose a reasonable charge, covering the costs of
labor and material, for copies of any documents provided to the shareholder.

          Section 3. Financial Information. Unless otherwise provided by a
resolution of the shareholders, not later than 120 days after the close of each
fiscal year, this corporation shall furnish its shareholders annual financial
statements which may be consolidated or combined statements of the corporation
and one or more of its subsidiaries, as appropriate, that include a balance
sheet as of the end of the fiscal year, an income statement for that year, and a
statement of cash flows for that year. If financial statements are prepared for
the corporation on the basis of generally accepted accounting principles, the
annual financial statements must also be prepared on that basis.



                                                                              14


          If the annual financial statements are reported upon by a public
accountant, his report must accompany them. If not, the statements must be
accompanied by a statement of the president or the person responsible for the
corporation's accounting records:

          (a) Stating his reasonable belief whether the statements were prepared
     on the basis of generally accepted accounting principles and, if not,
     describing the basis of preparation; and

          (b) Describing any respects in which the statements were not prepared
     on a basis of accounting consistent with the statements prepared for the
     preceding year.

          A corporation shall mail the annual financial statements to each
shareholder within 120 days after the close of each fiscal year or within such
additional time thereafter as is reasonably necessary to enable the corporation
to prepare its financial statements if, for reasons beyond the corporation's
control, it is unable to prepare its financial statements within the prescribed
period. Thereafter, on written request from a shareholder who was not mailed the
statements, the corporation shall mail him the latest annual financial
statements.

          Section 4. Other Reports to Shareholders. If a corporation indemnifies
or advances expenses to any director, officer, employee, or agent pursuant to
law otherwise than by court order or action by the shareholders or by an
insurance carrier pursuant to insurance maintained by the corporation, the
corporation shall report the indemnification or advance in writing to the
shareholders with or before the notice of the next shareholders' meeting, or
prior to such meeting if the indemnification or advance occurs after the giving
of such notice but prior to the time such meeting is held, which report shall
include a statement specifying the persons paid, the amounts paid, and the
nature and status at the time of such payment of the litigation or threatened
litigation.

          If a corporation issues or authorizes the issuance of shares for
promises to render services in the future, the corporation shall report in
writing to the shareholders the number of shares authorized or issued, and the
consideration received by the corporation, with or before the notice of the next
shareholders' meeting.

                                   ARTICLE VII

                DISTRIBUTIONS, SHARE DIVIDENDS AND SHARE OPTIONS

          Section 1. Distributions. The Board of Directors of this corporation
may, from time to time, authorize and the corporation may pay distributions to
the shareholders. A distribution is a direct or indirect transfer of money or
other property (except a corporation's own shares) or incurrence of indebtedness
by the corporation to or for the benefit of the shareholders in respect of any
of its shares. A distribution may be in the form of a declaration or payment of
a dividend; a purchase, redemption, or other acquisition of shares; a
distribution of indebtedness; or otherwise.

          No distribution may be made if, after giving it effect:



                                                                              15


          (a) The corporation would not be able to pay its debts as they become
     due in the usual course of business; or

          (b) The corporation's total assets would be less than the sum of its
     total liabilities plus the amount that would be needed, if the corporation
     were to be dissolved at the time of the distribution, to satisfy the
     preferential rights upon dissolution of shareholders whose preferential
     rights are superior to those receiving the distribution.

          If the Board of Directors does not fix the record date for determining
shareholders entitled to a distribution (other than one involving a purchase,
redemption, or other acquisition of the corporation's shares), it is the date
the Board of Directors authorizes the distribution.

          The Board of Directors may base a determination that a distribution is
not prohibited either on financial statements prepared on the basis of
accounting practices and principles that are reasonable in the circumstances or
on a fair valuation or other method that is reasonable in the circumstances. In
the case of any distribution based upon such a valuation, each such distribution
shall be identified as a distribution based upon a current valuation of assets,
and the amount per share paid on the basis of such valuation shall be disclosed
to the shareholders concurrent with their receipt of the distribution.

          Section 2. Share Dividends. Unless the articles of incorporation
provide otherwise, shares may be issued pro rata and without consideration to
the corporation's shareholders or to the shareholders of one or more classes or
series. An issuance of shares under this section is a share dividend.

          Shares of one class or series may not be issued as a share dividend in
respect of shares of another class or series unless:

          (a) The articles of incorporation so authorize,

          (b) A majority of the votes entitled to be cast by the class or series
     to be issued approves the issue, or

          (c) There are no outstanding shares of the class or series to be
     issued.

          If the board of directors does not fix the record date for determining
shareholders entitled to a share dividend, it is the date the board of directors
authorizes the share dividend.

          Section 3. Share Options. Unless the articles of incorporation provide
otherwise, the corporation may issue rights, options, or warrants for the
purchase of its shares. The board of directors shall determine the terms upon
which the rights, options, or warrants are issued, their form and content, and
the consideration for which the shares are to be issued.

          The terms and conditions of stock rights and options which are created
and issued by the corporation, or its successor, and which entitle the holders
thereof to purchase from the corporation shares or any class or classes, whether
authorized but unissued shares, treasury shares, or shares to be purchased or
acquired by the corporation, may include, without limitation, restrictions, or
conditions that preclude or limit the exercise, transfer, receipt, or holding of
such



                                                                              16


rights or options by any person, including any person owning or offering to
acquire a specified number or percentage of the outstanding common shares or
other securities of the corporation, or any transferee of any such person, or
that invalidate or void such rights or options held by any such person or any
such transferee.

                                  ARTICLE VIII

                                 CORPORATE SEAL

          The Board of Directors shall provide a corporate seal which shall have
inscribed thereon the name of the corporation and such other words and figures
and in such design as may be prescribed by the Board of Directors, and may be
facsimile, engraved, printed, or an impression, or other type seal.

                                   ARTICLE IX

                                   FISCAL YEAR

          The fiscal year of the corporation shall, by resolution, be determined
by the Board of Directors.

                                   ARTICLE X

                          INDEMNIFICATION OF DIRECTORS,
                         OFFICERS, EMPLOYEES, AND AGENTS

          Section 1. Action Against Party Because of Corporate Position. The
corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending, or completed claim, action, suit, or
proceeding, whether civil, criminal, administrative, or investigative (other
than an action by or in the right of the corporation) by reason of the fact that
he is or was a director or officer of the corporation, or is or was serving at
the request of the corporation as a director, partner or officer of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees inclusive of any appeal), judgments, fines,
and amounts paid in settlement actually and reasonably incurred by him in
connection with such claim, action, suit, or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, not receiving any improper personal benefit, and
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct unlawful. The termination of any claim, action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

          Section 2. Action by or in the Right of Corporation. The corporation
may indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending, or completed claim, action, or suit by or in
the right of the corporation to procure a



                                                                              17


judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, partner, officer, employee, or agent
of another corporation, partnership, joint venture, trust, or other enterprise
against expenses (including attorneys' fees inclusive of any appeal) actually
and reasonably incurred by him in connection with the defense or settlement of
such claim, action, or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and not for improper personal benefit, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation unless and only to
the extent that a court of competent jurisdiction (the "Court") in which such
claim, action, or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court shall deem proper.

          Section 3. Reimbursement if Successful. To the extent that a director
or officer of the corporation or, to the extent determined by the corporation to
be entitled to indemnification, an employee, or agent of the corporation has
been successful on the merits or otherwise in defense of any claim, action,
suit, or proceeding referred to in Sections 1 or 2 of this Article X, or in
defense of any claims, issue, or matter therein, he shall be indemnified against
expenses (including attorneys' fees inclusive of any appeal) actually and
reasonably incurred by him in connection therewith, notwithstanding that he has
not been successful (on the merits or otherwise) on any other claim, issue, or
matter in any such claim, action, suit, or proceeding.

          Section 4. Authorization. Any indemnification under Sections 1, 2 and
3 of this Article X (unless ordered by a court) shall be made by the corporation
to the director, officer, employee, or agent provided he has satisfied the
conditions of Sections 1 and 2.

          Section 5. Advanced Reimbursement. Expenses incurred in defending a
civil or criminal action, suit, or proceeding shall be paid by the corporation
in advance of the final disposition of such action, suit, or proceeding upon
receipt of an undertaking by or on behalf of the director, officer, employee, or
agent to repay such amount unless it shall ultimately be determined that he is
not entitled to be indemnified by the corporation as authorized in this Article.

          Section 6. Indemnification Not Exclusive. The indemnification provided
by this Article shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any statute, rule of law, provision of
certificate of incorporation, bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity, while holding such office, and
shall continue as to a person who has ceased to be a director, officer,
employee, or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person. Where such other provision provides broader
rights of indemnification than these bylaws, said other provision shall control.

          Section 7. Insurance. The corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, partner, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out



                                                                              18


of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this Article.

                                   ARTICLE XI

                                    AMENDMENT

          These bylaws may be repealed or amended, and new bylaws may be
adopted, by either the Board of Directors or the shareholders, but the Board of
Directors may not amend or repeal any bylaw adopted by the shareholders if the
shareholders specifically provide such bylaw is not subject to amendment or
repeal by the directors.

                                   ARTICLE XII

                                EMERGENCY BYLAWS

          Section 1. Emergency Bylaws. The Board of Directors may adopt bylaws
to be effective only in an emergency. An emergency exists for the purposes of
this section if a quorum of the corporation's directors cannot readily be
assembled because of some catastrophic event. The emergency bylaws, which are
subject to amendment or repeal by the shareholders, may make all provisions
necessary for managing the corporation during an emergency, including:

          (a) Procedures for calling a meeting of the Board of Directors:

          (b) Quorum requirements for the meeting; and

          (c) Designation of additional or substitute directors.

          Section 2. Line of Succession. The Board of Directors, either before
or during such emergency, may provide, and from time to time modify, lines of
succession in the event that during such emergency any or all officers or agents
of the corporation are for any reason rendered incapable of discharging their
duties.

          Section 3. Governing Bylaws. All provisions of these bylaws consistent
with the emergency bylaws remain effective during the emergency. The emergency
bylaws are not effective after the emergency ends.

          Section 4. Effect of Corporation Action. Corporate action taken in
good faith in accordance with the emergency bylaws:

          (a) Binds the corporation; and

          (b) May not be used to impose liability on a corporate director,
     officer, employee, or agent.



                                                                              19


          These Amended and Restated Bylaws of Advanced Laser Systems
Technology, Inc. were adopted and approved by the Directors and Shareholders of
the Corporation on May 24, 2005.


                                                /s/ Dennis R. Bellar
                                                --------------------------------
                                                Dennis R. Bellar, Secretary

EX-3.109

                                                                   EXHIBIT 3.109

                          CERTIFICATE OF INCORPORATION
                                       OF
                         Hughes Electron Dynamics, Inc.

FIRST:  The name of the corporation is:

                         HUGHES ELECTRON DYNAMICS, INC.

SECOND: The address of the corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.

THIRD: The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Delaware.

FOURTH: The corporation is authorized to issue one class of stock. The total
number of authorized capital stock of the corporation shall be One Thousand (no
par value).

FIFTH: The name and mailing address of the incorporator is Jan Williamson, 200
No. Sepulveda Blvd. El Segundo, California, 90245.

SIXTH: The Board of Directors of the corporation is expressly authorized to
make, alter or repeal by-laws of the corporation, but the stockholders may make
additional by-laws and may alter or repeal any by-law whether adopted by them or
otherwise.

SEVENTH: Elections of directors need not be by written ballot except and to the
extent provided in the by-laws of the corporation.

The undersigned incorporator hereby acknowledges that the foregoing certificate
of incorporation is her act and deed and that the facts stated therein are true.


Dated:  May 5, 2000


                                                      /s/ Jan Williamson
                                                    ---------------------------
                                                          Jan Williamson




                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION

                         HUGHES ELECTRON DYNAMICS, INC.

                     Pursuant to Section 242 of the General
                    Corporation Law of the State of Delaware

     Hughes Electron Dynamics, Inc., a corporation organized under and existing
under the General Corporation Law of the State of Delaware (hereinafter called
the "Corporation", DOES HEREBY CERTIFY:

     1. That the Board of Directors of the Corporation by unanimous written
consent of its members, filed with minutes of the Board, adopted the following
resolution proposing the amendment of the Certificate of Incorporation of the
Corporation:

     RESOLVED, that it is advisable and in the best interest of this Corporation
     that "FIRST:" of the Certificate of Incorporation be amended to read in its
     entirety as follows:

                  FIRST:   The name of the corporation is

                           Boeing Electron Dynamic Devices, Inc.

     2. That in lieu of a meeting and vote of stockholders, the sole stockholder
of the Corporation, by written consent approved said amendment in accordance
with the provisions of Section 228 of the General Corporation Law of the State
of Delaware.

     3. That said amendment was duly adopted in accordance with the provision of
Section 242 of the General Corporation Law of the State of Delaware.

         IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by its President and attested by its Secretary, as of the 7th day of
October, 2000.

                                         HUGHES ELECTRON DYNAMICS, INC.


                                         By:/s/ Tig H. Krekel
                                            ----------------------------
                                            Tig H. Krekel
                                            President


By:  /s/ James C. Johnson
   -----------------------------------------
         James C. Johnson
            Secretary




                            CERTIFICATE OF AMENDMENT
                                     OF THE
                         CERTIFICATE OF INCORPORATION OF

                      BOEING ELECTRON DYNAMIC DEVICES, INC.


                  The undersigned corporation, in order to amend its Certificate
of Incorporation, hereby certifies as follows:

                  FIRST:   The name of the corporation is:

                      BOEING ELECTRON DYNAMIC DEVICES, INC.

                  SECOND:  The corporation hereby amends its Certificate of
Incorporation as follows:

                  Paragraph FIRST of the Certificate of Incorporation, relating
to the corporate title of the corporation is hereby amended to read, in its
entirety, as follows:

                  FIRST:   The name of the corporation is:

                  L-3 COMMUNICATIONS ELECTRON TECHNOLOGIES, INC.

                  THIRD: The written amendment effected herein was authorized by
the written consent, setting forth the action so taken, of the majority
stockholders of all of the outstanding share entitled to vote thereon pursuant
to Sections 228 and 242 of the General Corporation Law of the State of Delaware.

                  IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate of Amendment, this 28th day of February, 2005.



                                            By: /s/ Christopher C. Garcia
                                               --------------------------------
                                               Name:  Christopher C. Garcia
                                               Title:  Vice President, Secretary

EX-3.110

                                                                   EXHIBIT 3.110

                                     BYLAWS

                                       OF

                      BOEING ELECTRON DYNAMIC DEVICES, INC.

                           As Adopted October 6, 2000






                                TABLE OF CONTENTS




                                                                                                                 Page

ARTICLE 1 OFFICES.................................................................................................1

ARTICLE 2 STOCKHOLDERS............................................................................................1

         2.1      Annual Meeting..................................................................................1

         2.2      Special Meetings................................................................................1

         2.3      Place of Meeting................................................................................1

         2.4      Notice of Meeting...............................................................................1

         2.5      Waiver of Notice................................................................................1

         2.6      Fixing of Record Date for Determining Stockholders..............................................2

         2.7      Voting List.....................................................................................2

         2.8      Quorum..........................................................................................2

         2.9      Manner of Acting................................................................................2

         2.10     Proxies.........................................................................................2

         2.11     Voting of Shares................................................................................2

         2.12     Action by Stockholders Without a Meeting........................................................3

ARTICLE 3 BOARD OF DIRECTORS......................................................................................3

         3.1      General Powers..................................................................................3

         3.2      Number and Tenure...............................................................................3

         3.3      Resignation.....................................................................................3

         3.4      Annual and Regular Meetings.....................................................................3

         3.5      Special Meetings................................................................................3

         3.6      Notice of Special Meetings......................................................................3

         3.7      Waiver of Notice................................................................................3

                  3.7.1      Written..............................................................................3

                  3.7.2      Attendance...........................................................................4

         3.8      Quorum..........................................................................................4

                                                            i




         3.9      Manner of Acting................................................................................4

         3.10     Vacancies.......................................................................................4

         3.11     Removal.........................................................................................4

         3.12     Presumption of Assent...........................................................................4

         3.13     Committees......................................................................................4

         3.14     Compensation....................................................................................5

         3.15     Action by Directors Without a Meeting...........................................................5

         3.16     Meetings by Telephone...........................................................................5

ARTICLE 4 OFFICERS................................................................................................5

         4.1      Number..........................................................................................5

         4.2      Election or Appointment and Term of Office......................................................5

         4.3      Removal.........................................................................................5

         4.4      Vacancies.......................................................................................6

         4.5      Chairman of the Board...........................................................................6

         4.6      President.......................................................................................6

         4.7      Vice President..................................................................................6

         4.8      Secretary.......................................................................................6

         4.9      Treasurer.......................................................................................7

ARTICLE 5 CONTRACTS, LOANS, CHECKS, AND DEPOSITS..................................................................7

         5.1      Contracts.......................................................................................7

         5.2      Loans...........................................................................................7

         5.3      Loans to Officers and Directors.................................................................7

         5.4      Checks. Drafts, Etc.............................................................................7

         5.5      Deposits........................................................................................7

                                                            ii


ARTICLE 6 CERTIFICATES FOR SHARES AND THEIR TRANSFER..............................................................7

         6.1      Issuance of Shares..............................................................................7

         6.2      Certificates for Shares.........................................................................7

         6.3      Transfer of Shares..............................................................................8

ARTICLE 7 BOOKS AND RECORDS.......................................................................................8

ARTICLE 8 FISCAL YEAR.............................................................................................8

ARTICLE 9 SEAL....................................................................................................8

ARTICLE 10 INDEMNIFICATION........................................................................................9

ARTICLE 11 AMENDMENTS.............................................................................................9

ARTICLE 12 ACTIONS BY THE CORPORATION AS STOCKHOLDER..............................................................9




                                                           iii



                                     BYLAWS

                                       OF

                      BOEING ELECTRON DYNAMIC DEVICES, INC.

                                   ARTICLE 1

                                     OFFICES

     The principal office of the corporation shall be located at its principal
place of business, which at the time of adoption of these Bylaws is 3100 Lomita
Blvd., Torrance, California 90505. The corporation may have such other offices,
either within or without the State of Delaware, as the Board of Directors
("Board") may designate or as the business of the corporation may require from
time to time.

                                   ARTICLE 2

                                  STOCKHOLDERS

          2.1 Annual Meeting. The annual meeting of stockholders shall be held
the first Tuesday of February of each year, for the purpose of electing
directors and transacting such other business as may properly come before the
meeting. If the day fixed for the annual meeting is a legal holiday at the place
of the meeting, the meeting shall be held on the next succeeding business day.
If the election of directors is not held on the day designated for the annual
meeting of stockholders, or at any adjournment thereof, the election shall be
held at a special meeting of the stockholders called as soon thereafter as
practicable.

          2.2 Special Meetings. The President, the Board, or the holders of not
less than one-tenth of all the outstanding shares of the corporation entitled to
vote at the meeting may call special meetings of the stockholders for any
purpose.

          2.3 Place of Meeting. All meetings shall be held at the principal
office of the corporation or at such other place within or without the State of
Delaware designated by the Board or by any persons entitled to call a meeting
hereunder, or by a waiver of notice signed by all of the stockholders entitled
to vote at the meeting.

          2.4 Notice of Meeting. The President, the Secretary, the Board, or
stockholders calling an annual or special meeting of stockholders as provided
for herein, shall cause to be delivered to each stockholder entitled to vote at
the meeting either personally or by mail, not less than ten nor more than sixty
days before the meeting, written notice stating the place, day, and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called. If such notice is mailed, it shall be deemed delivered
when deposited in the United States mail properly addressed to the stockholders
at their respective addresses as they appear on the stock transfer books of the
corporation, with postage prepaid.

          2.5 Waiver of Notice. Whenever any notice is required to be given to
any stockholder under the provisions of these Bylaws or the Certificate of
Incorporation or the



General Corporation Law of Delaware, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.

          2.6 Fixing of Record Date for Determining Stockholders. For the
purpose of determining stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or stockholders entitled to
receive payment of any dividend, or in order to make a determination of
stockholders for any other purpose, the Board may fix in advance a date as the
record date for any such determination. Such record date shall be not more than
fifty days and, in case of a meeting of stockholders, not less than ten days
prior to the date on which the particular action requiring such determination is
to be taken. If no record date is fixed for the determination of stockholders
entitled to vote at a meeting or to receive payment of a dividend, the date and
hour on which the notice of meeting is mailed or on which the resolution of the
Board declaring such dividend is adopted, as the case may be, shall be the
record date and time for such determination. When a determination of
stockholders entitled to vote at any meeting of stockholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof.

          2.7 Voting List. At least ten days before each meeting of
stockholders, a complete list of the stockholders entitled to vote at such
meeting, or any adjournment thereof, shall be made, arranged in alphabetical
order, with the address of and number of shares held by each stockholder. This
list shall be open to inspection in accordance with the General Corporation Law
of Delaware for a period of ten days prior to such meeting. The list shall be
kept open at such meeting for the inspection of any stockholder.

          2.8 Quorum. A majority of the outstanding shares of the corporation
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of the stockholders. If less than a majority of the outstanding
shares are represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. At a meeting
adjourned and reconvened, if a quorum is present or represented at the
reconvened meeting, any business may be transacted that might have been
transacted at the meeting as originally notified. The stockholders present at a
duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.

          2.9 Manner of Acting. If a quorum is present, the affirmative vote of
the majority of the shares represented at the meeting and entitled to vote on
the subject matter shall be the act of the stockholders, unless the vote of a
greater number is required by these Bylaws, the Certificate of Incorporation, or
the General Corporation Law of Delaware.

          2.10 Proxies. A stockholder may vote by proxy executed in writing by
the stockholder or by the stockholder's attorney-in- fact. Such proxy shall be
filed with the Secretary of the corporation before or at the time of the
meeting. Unless otherwise provided in the proxy, a proxy shall be invalid after
eleven months from the date of its execution.

          2.11 Voting of Shares. Each outstanding share entitled to vote shall
be entitled to one vote upon each matter submitted to a vote at a meeting of
stockholders.



                                       2


          2.12 Action by Stockholders Without a Meeting. Any action required or
permitted to be taken at a meeting of the stockholders may be taken without a
meeting if a written consent setting forth the action so taken is signed by all
stockholders entitled to vote with respect to the subject matter thereof. Any
such consent shall be inserted in the minute book as if it were the minutes of a
meeting of the stockholders.

                                   ARTICLE 3

                               BOARD OF DIRECTORS

          3.1 General Powers. The business and affairs of the corporation shall
be managed by the Board.

          3.2 Number and Tenure. The number of directors shall not be more than
seven and not fewer than two, as shall be determined from time to time by
resolution of the Board of Directors. The initial board shall be composed of no
less than three directors. No decrease in the number of directors shall have the
effect of shortening the term of any incumbent director. Unless a director dies,
resigns, or is removed, each director shall hold office until the next annual
meeting of stockholders or until the director's successor is elected, whichever
is later. Directors need not be stockholders of the corporation or residents of
the State of Delaware.

          3.3 Resignation. Any director may resign at any time by delivering
written notice to the President or the Secretary, or to the registered office of
the corporation, or by giving oral notice at any meeting of the directors or
stockholders.

          3.4 Annual and Regular Meetings. An annual Board meeting shall he held
without notice promptly after and at the same place as the annual meeting of the
stockholders. By resolution, the Board may specify the time and place either
within or without the State of Delaware for holding regular meetings without
other notice than such resolution.

          3.5 Special Meetings. Special Board meetings may be called by or at
the request of the President, the Secretary or any two directors. The person or
persons authorized to call special meetings may fix any place either within or
without the State of Delaware as the place for holding any special Board meeting
called by them.

          3.6 Notice of Special Meetings. Notice of each special meeting,
stating the time and place of the meeting, shall be given to each director by
mail, telephone, or other electronic transmission or personally. If by mail,
such notice shall be given not less than five days before the meeting; and if by
telephone, other electronic transmission or personally, not less than two days
before the meeting. Neither the business to be transacted at nor the purpose of
any special meeting need be specified in the notice of such meeting.

          3.7 Waiver of Notice.

               3.7.1 Written. Whenever any notice is required to be given to any
director under the provisions of these Bylaws, the Certificate of Incorporation,
or the General Corporation Law of Delaware, a waiver thereof in writing, signed
by the person or persons entitled to such notice, whether before or after the
time stated therein, shall be deemed equivalent



                                       3


to the giving of such notice. Neither the business to be transacted at nor the
purpose of any regular or special meeting of the Board need be specified in the
waiver of notice of such meeting.

               3.7.2 Attendance. The attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.

          3.8 Quorum. Except as provided in these Bylaws, the Certificate of
Incorporation, or the General Corporation Law of Delaware, a majority of the
directors shall constitute a quorum for the transaction of business at any Board
meeting but, if less than a majority is present at a meeting, a majority of the
directors present may adjourn the meeting from time to time without further
notice.

          3.9 Manner of Acting. The act of the majority of the directors present
at a meeting at which there is a quorum shall be the act of the Board, unless
the vote of a greater number is required by these Bylaws, the Certificate of
Incorporation, or the General Corporation Law of Delaware.

          3.10 Vacancies. Any vacancy occurring on the Board may be filled by
the affirmative vote of a majority of the remaining directors though less than a
quorum of the Board. A director elected to fill a vacancy shall be elected for
the unexpired term of such director's predecessor in office. Any directorship to
be filled by reason of an increase in the number of directors may be filled by
the Board for a term of office continuing only until the next election of
directors by the stockholders.

          3.11 Removal. At a meeting of stockholders called expressly for that
purpose, one or more members of the Board (including the entire Board) may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote on the election of directors.

          3.12 Presumption of Assent. A director of the corporation present at a
Board meeting at which action on any corporate matter is taken shall be presumed
to have assented to the action taken unless such director's dissent is entered
in the minutes of the meeting, or unless such director files a written dissent
to such action with the person acting at the secretary of the meeting before the
adjournment thereof, or unless such director forwards such dissent by registered
mail to the Secretary of the corporation immediately after the adjournment of
the meeting. A director who voted in favor of such action may not dissent.

          3.13 Committees. The Board may, by resolution passed by a majority of
the whole Board, appoint standing or temporary committees, each committee to
consist of one or more directors of the corporation, and invest such committees
with such powers as it may see fit, subject to such conditions as may be
prescribed by the Board and by applicable law. The Board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not they
constitute a quorum, may


                                       4


unanimously appoint another member of the Board to act at the meeting in the
place of any such absent or disqualified member. The designation of any such
committee and the delegation of authority thereto shall not relieve the Board,
or any member thereof, of any responsibility imposed by law.

          3.14 Compensation. By Board resolution, directors and committee
members may be paid their expenses, if any, of attendance at each Board or
committee meeting, or a fixed sum for attendance at each Board or committee
meeting, or a stated salary as director or a committee member, or a combination
of the foregoing. No such payment shall preclude any director or committee
member from serving the corporation in any other capacity and receiving
compensation therefor.

          3.15 Action by Directors Without a Meeting. Any action that could be
taken at a meeting of the Board or of any committee appointed by the Board may
be taken without a meeting if a written consent setting forth the action to be
taken is signed by each of the directors or by each committee member. Any such
written consent shall be inserted in the minute book as if it were the minutes
of a Board or a committee meeting.

          3.16 Meetings by Telephone. Members of the Board or any committee
thereof may participate in a meeting of such Board or committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other. Participation by such
means shall constitute presence in person at a meeting.

                                   ARTICLE 4

                                    OFFICERS

          4.1 Number. The officers of the corporation shall be a President, a
Secretary, and a Treasurer, each of whom shall be elected by the Board. One or
more Vice Presidents and such other officers, including a Chairman of the Board
and assistant officers as may be deemed necessary, may be elected or appointed
by the Board, such officers and assistant officers to hold office for such
period, have such authority and perform such duties as are provided in these
Bylaws or as may be provided by resolutions of the Board. The Board may delegate
to any officer or agent the power to appoint any such subordinate officers or
agents and to prescribe their respective terms of office, authorities, and
duties. Any two or more offices may be held by the same person.

          4.2 Election or Appointment and Term of Office. The officers of the
corporation shall be elected or appointed annually by the Board at the Board
meeting held after the annual meeting of the stockholders. If the officers are
not elected at such meeting, such election shall be held as soon thereafter as a
Board meeting conveniently may be held. Unless an officer dies, resigns, or is
removed, each officer shall hold office until the next annual meeting of the
Board or until such officer's successor is elected.

          4.3 Removal. Any officer or agent elected or appointed by the Board
may be removed by the Board whenever in its judgment the best interests of the
corporation would be

                                       5


served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.

          4.4 Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification, or any other cause may be filled by the Board for the
unexpired portion of the term.

          4.5 Chairman of the Board. The Chairman of the Board, if elected,
shall be chosen from among the directors. The Chairman shall preside, when
present, at all meetings of the stockholders and at all meetings of the Board
and shall have such other powers and duties as may from time to time be
prescribed by the Board upon written directions given to him pursuant to
Resolutions duly adopted by the Board.

          4.6 President. The President shall be the chief executive officer of
the corporation unless some other officer is so designated by the Board, and,
subject to the Board's control, the President shall supervise and control all of
the business and affairs of the corporation. In the absence of the Chairman of
the Board, the President shall preside over all meetings of the stockholders and
over all Board meetings. The President may sign certificates for shares of the
corporation, deeds, mortgages, bonds, contracts, or other instruments, except
when the signing thereof has been expressly delegated by the Board or by these
Bylaws to some other officer or agent of the corporation or is required by law
to be otherwise signed by some other officer or in some other manner. In
general, the President shall perform all duties incident to the office of
President and such other duties prescribed by the Board from time to time.

          4.7 Vice President. In the event of the absence or death, inability or
refusal to act, of the President, the Vice President (or, in the event of more
than one Vice President, the Vice President who was first elected to such
office) shall perform the duties of the President, with all the powers of and
subject to all the restrictions upon the President. Any Vice President may sign,
with the Secretary or Assistant Secretary, certificates for shares of the
corporation. Vice Presidents shall have, to the extent authorized by the
President or the Board, the same powers as the President to sign deeds,
mortgages, bonds, contracts, or other instruments. Vice Presidents shall perform
such other duties as from time to time may be assigned to them by the President
or by the Board.

          4.8 Secretary. The Secretary shall: (a) keep the minutes of meetings
of the stockholders and the Board in one or more books provided for that
purpose; (b) see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law; (c) be custodian of the
corporate records and seal of the corporation, the execution of which on behalf
of the corporation under its seal is duly authorized; (d) keep registers of the
post office address of each stockholder as furnished to him or her by each
stockholder; (e) sign with the President or a Vice President certificates for
shares of the corporation, the issuance of which has been authorized by
resolution of the Board; (f) have general charge of the stock transfer books of
the corporation; (g) sign with the President deeds, mortgages, contracts, bonds,
or other instruments; and (h) in general perform all duties incident to the
office of Secretary and such other duties as from time to time may be assigned
to the Secretary by the President or by the Board. In the absence of the
Secretary, an Assistant Secretary may perform his or her duties.



                                       6


          4.9 Treasurer. If required by the Board, the Treasurer shall give a
bond for the faithful discharge of his or her duties in such sum and with such
surety or sureties as the Board shall determine. The Treasurer shall have charge
and custody of and be responsible for all funds and securities of the
corporation; receive and give receipts for monies due and payable to the
corporation from any source whatsoever, and deposit all such monies in the name
of the corporation in banks, trust companies, or other depositories selected by
the Board in accordance with the provisions of these Bylaws; and in general
perform all of the duties incident to the office of Treasurer and such other
duties as from time to time may be assigned to him or her by the President or by
the Board. In the absence of the Treasurer, an Assistant Treasurer may perform
his or her duties.

                                   ARTICLE 5

                     CONTRACTS, LOANS, CHECKS, AND DEPOSITS

          5.1 Contracts. The Board may authorize any officer or agent to enter
into any contract or execute and deliver any instrument in the name of and on
behalf of the corporation. Such authority may be general or may be confined to
specific instances or otherwise limited.

          5.2 Loans. No loans shall be contracted on behalf of the corporation
and no evidences of indebtedness shall be issued in its name unless authorized
by a resolution of the Board. Such authority may be general or confined to
specific instances. No loans shall be made by the corporation secured by its
shares.

          5.3 Loans to Officers and Directors. No loans shall be made by the
corporation to its officers or directors, unless first approved by the holders
of two-thirds of the shares.

          5.4 Checks. Drafts, Etc. All checks, drafts, or other orders for the
payment of money, notes, or other evidences of indebtedness issued in the name
of the corporation shall be signed by such officers or agents of the corporation
and in such manner as is from time to time determined by resolution of the
Board.

          5.5 Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies, or other depositories as the Board may select.

                                   ARTICLE 6

                   CERTIFICATES FOR SHARES AND THEIR TRANSFER

          6.1 Issuance of Shares. No shares of the corporation shall be issued
unless authorized by the Board, which authorization shall include the maximum
number of shares to be issued and the consideration to be received for each
share.

          6.2 Certificates for Shares.

                    6.2.1 Certificates representing shares of the corporation
shall be signed by the President or the Vice President and by the Secretary or
an Assistant Secretary and shall


                                       7


include on their face written notice of any restrictions which the Board may
impose on the transferability of such shares. All certificates shall be
consecutively numbered or otherwise identified.

                    6.2.2 The name and address of the person to whom the shares
represented thereby are issued, together with the number of shares and date of
issue, shall be entered on the stock transfer books of the corporation. The
person in whose name shares stand on the books of the corporation shall be
deemed by the corporation to be the owner thereof for all purposes.

          6.3 Transfer of Shares. Transfer of shares of the corporation shall be
made only on the stock transfer books of the corporation by the holder of record
thereof or by such holder's legal representative, who shall furnish proper
evidence of authority to transfer, or by such holder's attorney-in-fact
authorized by power of attorney duly executed and filed with the Secretary of
the corporation. All certificates surrendered to the corporation for transfer
shall be canceled and no new certificate shall be issued until the former
certificates for a like number of shares shall have been surrendered and
canceled, except that in case of a lost, destroyed, or mutilated certificate, a
new one may be issued therefor upon such terms and indemnity to the corporation
as the Board may prescribe.

                                   ARTICLE 7

                                BOOKS AND RECORDS

     The corporation shall keep correct and complete books and records of
account, stock transfer books, minutes of the proceedings of its stockholders
and Board, and such other records as may be necessary or advisable.

                                   ARTICLE 8

                                   FISCAL YEAR

     The fiscal year of the corporation shall be the calendar year, provided
that if a different fiscal year is selected for purposes of federal income
taxes, the fiscal year shall be the year so selected.

                                    ARTICLE 9

                                      SEAL

     The seal of the corporation shall consist of the name of the corporation,
the state of its incorporation, and the year of its incorporation.



                                       8


                                   ARTICLE 10

                                 INDEMNIFICATION

     To the full extent permitted by the General Corporation Law of Delaware,
the corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any civil, criminal, administrative, or
investigative action, suit, or proceeding (whether brought by or in the right of
the corporation or otherwise) by reason of the fact that such person is or was a
director or officer of the corporation, or is or was serving at the request of
the corporation as a director or officer of another corporation, against
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit, or proceeding; and the Board may, at any time, approve
indemnification of any other person which the corporation has the power to
indemnify under the General Corporation Law of Delaware. The indemnification
provided by this section shall not be deemed exclusive of any other rights to
which a person may be entitled as a matter of law or by contract. The
corporation may purchase and maintain indemnification insurance for any person
to the extent provided by applicable law.

                                   ARTICLE 11

                                   AMENDMENTS

     These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted by the Board at any regular or special meeting of the Board. The
stockholders may also make, alter, amend, and repeal the Bylaws of the
corporation at any annual meeting or at a special meeting called for that
purpose; and all Bylaws made by the directors may be amended, repealed, altered,
or modified by the stockholders at any regular or special meeting called for
that purpose.

                                   ARTICLE 12

                    ACTIONS BY THE CORPORATION AS STOCKHOLDER

     Each of the Chairman, the President, any Vice President and the Secretary
of the corporation may from time to time execute on behalf of the corporation
(a) waivers of notice of annual or special stockholders' meetings of any of the
corporation's subsidiary corporations or any other corporation the stock of
which is held by or for the benefit of the corporation; (b) written consents to
action taken without a meeting by all stockholders of such corporations; and (c)
proxies appointing persons to vote the stock of such corporations that is held
by or for the benefit of the corporation at annual or special meetings for the
purpose of electing directors of such corporations and for the transaction of
such other business as may properly come before such meetings or any adjournment
thereof, and instructing the person or persons so appointed as to the manner of
casting such vote or giving such consent.


                                       9

EX-3.111

                                                                   EXHIBIT 3.111

                            ARTICLES OF INCORPORATION
                            -------------------------

                                       OF
                                       --

                      INFRAREDVISION TECHNOLOGY CORPORATION
                      -------------------------------------


         The undersigned Incorporator hereby executes and acknowledges the
following Articles of Incorporation for the purpose of forming a corporation
under the General Corporation Law of the State of California:

         FIRST:   The name of the Corporation shall be: InfraredVision
Technology Corporation.

         SECOND:  The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of California other than the banking business, the trust company
business or the practice of a profession permitted to be incorporated by the
California Corporations Code.

         THIRD:  The name and address in this state of the Corporation's initial
agent for service of process in accordance with subdivision (b) of Section 1502
of the General Corporation Law is Joseph D. Abkin, 222 East Carrillo Street,
Fourth Floor, Santa Barbara, California, 93101.

         FOURTH:

            (a)  The Corporation is authorized to issue two classes of shares of
stock designated respectively as "Common Stock" and "Preferred Stock," and
referred to herein as "Common Stock" and "Preferred Stock," respectively. Ten
Million (10,000,000) shares of Common Stock may be issued and Ten Million
(10,000,000) shares of Preferred Stock may be issued.

            (b)  The Preferred Stock may be divided into such number of series
as the Board of Directors may determine. The Board of Directors is authorized to
determine and alter the rights, preferences, privileges and restrictions granted
to or imposed upon any wholly unissued series of Preferred Stock, and to fix the
number of shares of any series of Preferred Stock and the designation of any
such series of Preferred Stock. The Board of Directors, within the limits and
restrictions stated in any resolution or resolutions of the Board of Directors
originally fixing the number of shares constituting any series, may increase or
decrease (but not below the number of shares of such series then outstanding)
the number of shares of any series subsequent to the issue of shares of that
series.

         FIFTH:  The liability of the directors of the Corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law. The Corporation may, by bylaw, agreement or otherwise, indemnify its agents
(as that term is defined in Section 317 of the California Corporations Code) in
excess of that expressly permitted by such Section 317, for








breach of duty to the Corporation and its shareholders, to the fullest extent
permissible under California law; provided, however, that such indemnification
shall not extend to any acts or omissions or transactions from which a director
may not be relieved of liability as set forth in the exception to Section
204(a)(10) of the California Corporations Code or as to circumstances in which
indemnity is expressly prohibited by Section 317 of the California Corporations
Code. No amendment, termination or repeal of this article or relevant provisions
of the California Corporations Code or any other applicable laws shall affect or
diminish in any way the rights of any agent (as that term is defined in Section
317 of the California Corporations Code) to indemnification under the provisions
hereof in connection with any action or proceeding arising out of or relating
to, any actions, transactions or facts occurring prior to the final adoption of
such amendment, termination or repeal. If the California Corporations Code or
any other applicable law is amended after approval by the shareholders of this
article to expand further the indemnification permitted to directors or officers
of the Corporation, then the Corporation shall indemnify such persons to the
fullest extent permissible under the California Corporations Code or other
applicable law, as so amended.

         IN WITNESS WHEREOF, the undersigned Incorporator has executed the
foregoing Articles of Incorporation on February 16, 2000.



                                /s/ Joseph D. Abkin
                                ------------------------------------------------
                                Joseph D. Abkin, Incorporator

         The undersigned declares that he is the person who executed the
foregoing Articles of Incorporation and that such instrument is the act and deed
of the undersigned.


                                /s/ Joseph D. Abkin
                                ------------------------------------------------
                                Joseph D. Abkin

                                        2





                            CERTIFICATE OF AMENDMENT
                            ------------------------

                                       TO
                                       --

                            ARTICLES OF INCORPORATION
                            -------------------------

                                       OF
                                       --

                      INFRAREDVISION TECHNOLOGY CORPORATION
                      -------------------------------------


         SHON PAUL GERDAN and JOSEPH D. ABKIN, certify:

         1.    That they are the Vice President and Assistant Secretary,
respectively, of INFRAREDVISION TECHNOLOGY CORPORATION, a California
corporation.

         2.    Article FOURTH of the Articles of Incorporation of the
corporation is amended to read as follows:

               "FOURTH

               (a)  The Corporation is authorized to issue two classes of shares
               of stock designated respectively as "Common Stock" and "Preferred
               Stock," and referred to herein as "Common Stock" and "Preferred
               Stock," respectively. Fifty Million (50,000,000) shares of Common
               Stock may be issued and Ten Million (10,000,000) shares of
               Preferred Stock may be issued. Upon amendment of this Article to
               read as herein set forth, each outstanding share of Common Stock
               is split up and converted into ten (10) shares of Common Stock.

               (b)  The Preferred Stock may be divided into such number of
               series as the Board of Directors may determine. The Board of
               Directors is authorized to determine and alter the rights,
               preferences, privileges and restrictions granted to or imposed
               upon any wholly unissued series of Preferred Stock, and to fix
               the number of shares of any series of Preferred Stock and the
               designation of any such series of Preferred Stock. The Board of
               Directors, within the limits and restrictions stated in any
               resolution or resolutions of the Board of Directors originally
               fixing the number of shares constituting any series, may increase
               or decrease (but not below the number of shares of such series
               then outstanding) the number of shares of any series subsequent
               to the issue of shares of that series."

         3.    The foregoing Amendment to Articles of Incorporation has been
duly approved by the Board of Directors.

         4.    The foregoing Amendment to Articles of Incorporation has been
duly approved by the required vote of shareholders in accordance with Section
903 of the California Corporations Code. The total number of outstanding shares
of Common Stock of the corporation is 822,240. The total number of outstanding
shares of Series A Preferred Stock is 288,760. The






number of shares voting in favor of the amendment equaled or exceeded the vote
required. The percentage vote required was more than fifty percent (50%) of the
outstanding Common Stock voting as a class and more than fifty percent (50%) of
the outstanding Common Stock and the outstanding Series A Preferred Stock voting
together.

         We further declare under penalty of perjury under the laws of the State
of California that the matters set forth in this Certificate are true and
correct of our own knowledge.


         Date:  January 8, 2002



/s/ Shon Paul Gerdan                    /s/ Joseph D. Abkin
- --------------------------------------- ---------------------------------------
Shon Paul Gerdan, Vice President        Joseph D. Abkin, Assistant Secretary














                                       2





                            CERTIFICATE OF AMENDMENT
                            ------------------------

                                       TO
                                       --

                            ARTICLES OF INCORPORATION
                            -------------------------

                                       OF
                                       --

                      INFRAREDVISION TECHNOLOGY CORPORATION
                      -------------------------------------


         SHON PAUL GERDAN and JOSEPH D. ABKIN, certify:

         1.    That they are the President and Assistant Secretary,
respectively, of INFRAREDVISION TECHNOLOGY CORPORATION, a California
corporation.

         2.    Article FOURTH of the Articles of Incorporation of the
corporation is amended to read as follows:

               "FOURTH

               (a)   The Corporation is authorized to issue three (3) classes of
               stock, designated respectively as "Common Stock," "Class B Common
               Stock," and "Preferred Stock." The Common Stock is referred to
               herein as the "Common Stock." The Class B Common Stock is
               referred to herein as the "Class B Common Stock." The Preferred
               Stock is referred to herein as the "Preferred Stock." Fifty
               Million (50,000,000) shares of Common Stock may be issued. Fifty
               Million (50,000,000) shares of Class B Common Stock may be
               issued. Ten Million (10,000,000) shares of Preferred Stock may be
               issued. The rights, preferences, privileges and restrictions
               granted to or imposed upon the Common Stock and the Class B
               Common Stock shall be identical, except that the Common Stock
               shall have voting rights and, except as required by law, the
               Class B Common Stock shall not have voting rights.

               (b)   The Preferred Stock may be divided into such number of
               series as the Board of Directors may determine. The Board of
               Directors is authorized to determine and alter the rights,
               preferences, privileges and restrictions granted to or imposed
               upon any wholly unissued series of Preferred Stock, and to fix
               the number of shares of any series of Preferred Stock and the
               designation of any such series of Preferred Stock. The Board of
               Directors, within the limits and restrictions stated in any
               resolution or resolutions of the Board of Directors originally
               fixing the number of shares constituting any series, may increase
               or decrease (but not below the number of shares of such series
               then outstanding) the number of shares of any series subsequent
               to the issue of shares of that series."

         3.    The foregoing Amendment to Articles of Incorporation has been
duly approved by the Board of Directors.






         4.    The foregoing Amendment to Articles of Incorporation has been
duly approved by the required vote of shareholders in accordance with Section
902 of the California Corporations Code. The total number of outstanding shares
of Common Stock of the corporation is 8,504,318. The total number of outstanding
shares of Series A Preferred Stock is 288,760. The total number of outstanding
shares of Series B Preferred Stock is 137,500. The number of shares voting in
favor of the amendment equaled or exceeded the vote required. The percentage
vote required was more than fifty percent (50%) of the outstanding Common Stock,
the outstanding Series A Preferred Stock, and the outstanding Series B Preferred
Stock, voting together.

         We further declare under penalty of perjury under the laws of the State
of California that the matters set forth in this Certificate are true and
correct of our own knowledge.



         Date:  April 18, 2003



/s/ Shon Paul Gerdan                       /s/ Joseph D. Abkin
- ---------------------------------------    ------------------------------------
Shon Paul Gerdan, Vice President           Joseph D. Abkin, Assistant Secretary














                              CERTIFICATE OF MERGER
                                     MERGING
                         ITC MERGER CORP. WITH AND INTO
                      INFRAREDVISION TECHNOLOGY CORPORATION

         PURSUANT TO SECTION 252 OF THE DELAWARE GENERAL CORPORATION LAW
         ---------------------------------------------------------------

            InfraredVision Technology Corporation ("ITC") DOES HEREBY CERTIFY AS
FOLLOWS:

            FIRST: That ITC Merger Corp. ("IMC") was incorporated on February 2,
2005 pursuant to the Delaware General Corporation Law and that InfraredVision
Technology Corporation ("ITC") was incorporated on February 16, 2000 pursuant to
the California Corporations Code.

            SECOND: That a Merger Agreement (the "Merger Agreement") dated as of
March 28, 2005 among L-3 Communications Corporation, IMC, ITC and the other
parties thereto, setting forth the terms and conditions of the merger of IMC
with and into ITC (the "Merger"), has been approved, adopted, certified,
executed and acknowledged by each of the constituent corporations in accordance
with Section 252 of the Delaware General Corporation Law.

            THIRD: That the name of the surviving corporation (the "Surviving
Corporation") is InfraredVision Technology Corporation. Upon consummation of the
Merger, the name of the surviving corporation shall be "L-3 Communications
InfraredVision Technology Corporation".

            FOURTH: That the certificate of incorporation of ITC shall be the
certificate of incorporation of the Surviving Corporation.

            FIFTH: That an executed copy of the Merger Agreement is on file at
the office of the Surviving Corporation at the following address:

                                600 Third Avenue
                               New York, NY 10016

            SIXTH: That a copy of the Merger Agreement will be furnished by the
Surviving Corporation, on request and without cost, to any stockholder of any
constituent corporation.

            SEVENTH: That ITC, as the Surviving Corporation, agrees that it may
be served with process in the State of Delaware in any proceeding for
enforcement of any obligation of IMC, as well as for enforcement of any
obligation of the Surviving Corporation resulting from the merger, and hereby
irrevocably appoints the Secretary of State of the State of Delaware as its
agent to accept service of process in any such proceeding. The address to which
the Secretary of State of the State of Delaware shall mail a copy of such
process is: c/o L-3 Communications Corporation, 600 Third Avenue, New York, NY
10016; Attention: General Counsel.







                  IN WITNESS WHEREOF, InfraredVision Technology Corporation has
caused this Certificate of Merger to be executed in its name this 30th day of
March, 2005

                                INFRAREDVISION TECHNOLOGY CORPORATION


                                By   /s/ Jerome A. Giacobazzi
                                     -------------------------------------------
                                     Name:  Jerome A. Giacobazzi
                                     Title: President

























Relevant Provisions of the Agreement of Merger of ITC Merger Corp. and
InfraredVision Technology Corporation, dated March 28, 2005.

         1.2   Effects of the Merger.  From and after the Effective Time:

               (a)   the separate existence of Sub shall cease and Sub shall be
merged with and into the Company, which shall be the Surviving Corporation;

               (b)   the Articles of Incorporation of the Surviving Corporation
are hereby amended as follows:

               (i)   Article "FIRST" of the Articles of Incorporation of the
         Surviving Corporation is amended to read as follows:

               "FIRST: The name of the Corporation shall be L-3 Communications
               InfraredVision Technology Corporation."

               (ii)  Article "FOURTH" of the Articles of Incorporation of the
         Surviving Corporation is amended to read as follows:

               "FOURTH: The Corporation is authorized to issue only one class of
               stock, and the total number of shares of stock which the
               Corporation is authorized to issue is one thousand (1,000)."

EX-3.112

                                                                   EXHIBIT 3.112

                           AMENDED AND RESTATED BYLAWS

                                       OF

                      INFRAREDVISION TECHNOLOGY CORPORATION



                           AMENDED AND RESTATED BYLAWS

                                       OF

                      INFRAREDVISION TECHNOLOGY CORPORATION

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
ARTICLE I - CORPORATE OFFICES............................................      1

1.1    PRINCIPAL OFFICE..................................................      1
1.2    OTHER OFFICES.....................................................      1

ARTICLE II - MEETINGS OF SHAREHOLDERS....................................      1

2.1    PLACE OF MEETINGS.................................................      1
2.2    ANNUAL MEETING....................................................      2
2.3    SPECIAL MEETINGS..................................................      2
2.4    NOTICE OF SHAREHOLDERS' MEETINGS..................................      2
2.5    MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE......................      3
2.6    QUORUM............................................................      3
2.7    ADJOURNED MEETING; NOTICE.........................................      3
2.8    VOTING............................................................      4
2.9    VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT.................      4
2.10   SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING...........      5
2.11   RECORD DATE FOR SHAREHOLDER NOTICE; VOTING; GIVING CONSENTS.......      5
2.12   PROXIES...........................................................      6
2.13   INSPECTORS OF ELECTION............................................      6

ARTICLE III - DIRECTORS..................................................      7

3.1    POWERS............................................................      7
3.2    NUMBER OF DIRECTORS...............................................      7
3.3    ELECTION AND TERM OF OFFICE OF DIRECTORS..........................      7
3.4    REMOVAL...........................................................      7
3.5    RESIGNATION AND VACANCIES.........................................      7
3.6    PLACE OF MEETINGS; MEETINGS BY TELEPHONE..........................      8
3.7    REGULAR MEETINGS..................................................      8
3.8    SPECIAL MEETINGS; NOTICE..........................................      8
3.9    QUORUM............................................................      9
3.10   WAIVER OF NOTICE..................................................      9
3.11   ADJOURNMENT.......................................................      9
3.12   NOTICE OF ADJOURNMENT.............................................      9
3.13   BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING.................      9


                                        i



3.14   FEES AND COMPENSATION OF DIRECTORS................................     10
3.15   APPROVAL OF LOANS TO OFFICERS.....................................     10

ARTICLE IV - COMMITTEES..................................................     10

4.1    COMMITTEES OF DIRECTORS...........................................     10
4.2    MEETINGS AND ACTION OF COMMITTEES.................................     11

ARTICLE V - OFFICERS.....................................................     11

5.1    OFFICERS..........................................................     11
5.2    APPOINTMENT OF OFFICERS...........................................     11
5.3    SUBORDINATE OFFICERS..............................................     11
5.4    REMOVAL AND RESIGNATION OF OFFICERS...............................     12
5.5    VACANCIES IN OFFICES..............................................     12
5.6    CHAIRMAN OF THE BOARD.............................................     12

ARTICLE VI - INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND
OTHER AGENTS.............................................................     12

6.1    INDEMNIFICATION OF DIRECTORS......................................     12
6.2    INDEMNIFICATION OF OTHERS.........................................     12
6.3    PAYMENT OF EXPENSES IN ADVANCE....................................     13
6.4    INDEMNITY NOT EXCLUSIVE...........................................     13
6.5    INSURANCE INDEMNIFICATION.........................................     13
6.6    CONFLICTS.........................................................     13
6.7    RIGHT TO BRING SUIT...............................................     14
6.8    INDEMNITY AGREEMENTS..............................................     14
6.9    AMENDMENT, REPEAL OR MODIFICATION.................................     14

ARTICLE VII - RECORDS AND REPORTS........................................     14

7.1    MAINTENANCE AND INSPECTION OF SHARE REGISTER......................     14
7.2    MAINTENANCE AND INSPECTION OF BYLAWS..............................     15
7.3    MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS.............     15
7.4    INSPECTION BY DIRECTORS...........................................     15
7.5    ANNUAL REPORT TO SHAREHOLDERS; WAIVER.............................     16
7.6    FINANCIAL STATEMENTS..............................................     16
7.7    REPRESENTATION OF SHARES OF OTHER CORPORATIONS....................     16


                                       ii



ARTICLE VIII - GENERAL MATTERS...........................................     17

8.1    RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING.............     17
8.2    CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS.........................     17
8.3    CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED.................     17
8.4    CERTIFICATES FOR SHARES...........................................     17
8.5    LOST CERTIFICATES.................................................     18
8.6    CONSTRUCTION; DEFINITIONS.........................................     18

ARTICLE IX - AMENDMENTS..................................................     18

9.1    AMENDMENT BY SHAREHOLDERS.........................................     18
9.2    AMENDMENT BY DIRECTORS............................................     18
9.3    RECORD OF AMENDMENTS..............................................     19

ARTICLE X - INTERPRETATION...............................................     19


                                       iii



                           AMENDED AND RESTATED BYLAWS

                                       OF

                      INFRAREDVISION TECHNOLOGY CORPORATION

                                    ARTICLE I

                                CORPORATE OFFICES

1.1  PRINCIPAL OFFICE

     The Board of Directors shall fix the location of the principal executive
office of the corporation at any place within or outside the State of
California. If the principal executive office is located outside California and
the corporation has one or more business offices in California, then the Board
of Directors shall fix and designate a principal business office in California.

1.2  OTHER OFFICES

     The Board of Directors may at any time establish branch or subordinate
offices at any place or places.

                                   ARTICLE II

                            MEETINGS OF SHAREHOLDERS

2.1  PLACE OF MEETINGS

     Meetings of shareholders shall be held at any place within or outside the
State of California designated by the Board of Directors. In the absence of any
such designation, shareholders' meetings shall be held at the principal
executive office of the corporation or at any place consented to in writing by
all persons entitled to vote at such meeting, given before or after the meeting
and filed with the Secretary of the corporation.



2.2  ANNUAL MEETING

     An annual meeting of shareholders shall be held each year on a date and at
a time designated by the Board of Directors. At that meeting, directors shall be
elected. Any other proper business may be transacted at the annual meeting of
shareholders.

2.3  SPECIAL MEETINGS

     Special meetings of the shareholders may be called at any time, subject to
the provisions of Sections 2.4 and 2.5 of these Bylaws, by the Board of
Directors, the Chairman of the Board, the President or the holders of shares
entitled to cast not less than ten percent (10%) of the votes at that meeting.

     If a special meeting is called by anyone other than the Board of Directors
or the President or the Chairman of the Board, then the request shall be in
writing, specifying the time of such meeting and the general nature of the
business proposed to be transacted, and shall be delivered personally or sent by
registered mail or by other written communication to the Chairman of the Board,
the President, any Vice President or the Secretary of the corporation. The
officer receiving the request forthwith shall cause notice to be given to the
shareholders entitled to vote, in accordance with the provisions of Sections 2.4
and 2.5 of these Bylaws, that a meeting will be held at the time requested by
the person or persons calling the meeting, so long as that time is not less than
thirty-five (35) nor more than sixty (60) days after the receipt of the request.
If the notice is not given within twenty (20) days after receipt of the request,
then the person or persons requesting the meeting may give the notice. Nothing
contained in this paragraph of this Section 2.3 shall be construed as limiting,
fixing or affecting the time when a meeting of shareholders called by action of
the Board of Directors may be held.

2.4  NOTICE OF SHAREHOLDERS' MEETINGS

     All notices of meetings of shareholders shall be sent or otherwise given in
accordance with Section 2.5 of these Bylaws not less than ten (10) (or, if sent
by third-class mail pursuant to Section 2.5 of these Bylaws, not less than
thirty (30)) nor more than sixty (60) days before the date of the meeting to
each shareholder entitled to vote thereat. Such notice shall state the place,
date, and hour of the meeting and (i) in the case of a special meeting, the
general nature of the business to be transacted, and no business other than that
specified in the notice may be transacted, or (ii) in the case of the annual
meeting, those matters which the Board of Directors, at the time of the mailing
of the notice, intends to present for action by the shareholders, but, subject
to the provisions of the next paragraph of this Section 2.4, any proper matter
may be presented at the meeting for such action. The notice of any meeting at
which Directors are to be elected shall include the names of nominees intended
at the time of the notice to be presented by the Board for election.

     If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a director has a direct or indirect financial
interest, pursuant to Section 310 of the California Corporations Code (the
"Code"), (ii) an amendment of the Articles of Incorporation, pursuant to Section
902 of the Code, (iii) a reorganization of the corporation, pursuant to Section
1201 of the Code, (iv) a voluntary dissolution of the corporation, pursuant to
Section 1900 of the Code, or (v) a distribution in dissolution other than in
accordance with the rights of any outstanding preferred shares, pursuant to
Section 2007 of the Code, then the notice shall also state the general nature of
that proposal.


                                        2



2.5  MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE

     Notice of a shareholders' meeting shall be given either personally or by
first-class mail, or, if the corporation has outstanding shares held of record
by five hundred (500) or more persons (determined as provided in Section 605 of
the Code) on the record date for the shareholders' meeting, notice may be sent
by third-class mail, or other means of written communication, addressed to the
shareholder at the address of the shareholder appearing on the books of the
corporation or given by the shareholder to the corporation for the purpose of
notice; or if no such address appears or is given, at the place where the
principal executive office of the corporation is located or by publication at
least once in a newspaper of general circulation in the county in which the
principal executive office is located. The notice shall be deemed to have been
given at the time when delivered personally or deposited in the mail or sent by
other means of written communication.

     If any notice (or any report referenced in Article VII of these Bylaws)
addressed to a shareholder at the address of such shareholder appearing on the
books of the corporation is returned to the corporation by the United States
Postal Service marked to indicate that the United States Postal Service is
unable to deliver the notice to the shareholder at that address, all future
notices or reports shall be deemed to have been duly given without further
mailing if the same shall be available to the shareholder upon written demand of
the shareholder at the principal executive office of the corporation for a
period of one (1) year from the date of the giving of the notice.

     An affidavit of mailing of any notice or report in accordance with the
provisions of this Section 2.5, executed by the Secretary, Assistant Secretary
or any transfer agent, shall be prima facie evidence of the giving of the notice
or report.

2.6  QUORUM

     Unless otherwise provided in the Articles of Incorporation of the
corporation, a majority of the shares entitled to vote, represented in person or
by proxy, shall constitute a quorum at a meeting of the shareholders. The
shareholders present at a duly called or held meeting at which a quorum is
present may continue to transact business until adjournment notwithstanding the
withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.

     In the absence of a quorum, any meeting of shareholders may be adjourned
from time to time by the vote of a majority of the shares represented either in
person or by proxy, but no other business may be transacted, except as provided
in the last sentence of the preceding paragraph.

2.7  ADJOURNED MEETING; NOTICE

     Any shareholders' meeting, annual or special, whether or not a quorum is
present, may be adjourned from time to time by the vote of the majority of the
shares represented at that meeting, either in person or by proxy.

     When any meeting of shareholders, either annual or special, is adjourned to
another time or place, notice need not be given of the adjourned meeting if its
time and place are announced at the meeting at which the adjournment is taken.
However, if the adjournment is for more than forty-five (45) days from the date
set for the original meeting or if a new record date for the adjourned meeting
is fixed, a notice of the adjourned meeting shall be given to each shareholder
of record entitled to vote at the adjourned


                                        3



meeting in accordance with the provisions of Sections 2.4 and 2.5 of these
Bylaws. At any adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting.

2.8  VOTING

     The shareholders entitled to vote at any meeting of shareholders shall be
determined in accordance with the provisions of Section 2.11 of these Bylaws,
subject to the provisions of Sections 702 through 704 of the Code (relating to
voting shares held by a fiduciary, in the name of a corporation, or in joint
ownership).

     Elections for directors and voting on any other matter at a shareholders'
meeting need not be by ballot unless a shareholder demands election by ballot at
the meeting and before the voting begins.

     Except as provided in the last paragraph of this Section 2.8, or as may be
otherwise provided in the Articles of Incorporation, each outstanding share,
regardless of class, shall be entitled to one vote on each matter submitted to a
vote of the shareholders. Any holder of shares entitled to vote on any matter
may vote part of the shares in favor of the proposal and refrain from voting the
remaining shares or may vote them against the proposal other than elections to
office, but, if the shareholder fails to specify the number of shares such
shareholder is voting affirmatively, it will be conclusively presumed that the
shareholder's approving vote is with respect to all shares which the shareholder
is entitled to vote.

     The affirmative vote of the majority of the shares represented and voting
at a duly held meeting at which a quorum is present (which shares voting
affirmatively also constitute at least a majority of the required quorum) shall
be the act of the shareholders, unless the vote of a greater number or voting by
classes is required by the Code or by the Articles of Incorporation.

     At a shareholders' meeting at which directors are to be elected, a
shareholder shall be entitled to cumulate votes either (i) by giving one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which that shareholder's shares are
normally entitled or (ii) by distributing the shareholder's votes on the same
principle among as many candidates as the shareholder thinks fit, if the
candidate or candidates' names have been placed in nomination prior to the
voting and the shareholder has given notice prior to the voting of the
shareholder's intention to cumulate the shareholder's votes. If any one
shareholder has given such a notice, then every shareholder entitled to vote may
cumulate votes for candidates in nomination. The candidates receiving the
highest number of affirmative votes, up to the number of directors to be
elected, shall be elected; votes against any candidate and votes withheld shall
have no legal effect.

2.9  VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT

     The transactions of any meeting of shareholders, either annual or special,
however called and noticed, and wherever held, are as valid as though they had
been taken at a meeting duly held after regular call and notice, if a quorum be
present either in person or by proxy, and if, either before or after the
meeting, each of the persons entitled to vote, not present in person or by
proxy, signs a written waiver of notice or a consent to the holding of the
meeting or an approval of the minutes thereof. Neither the business to be
transacted at nor the purpose of any annual or special meeting of shareholders
need be specified in any written waiver of notice or consent to the holding of
the meeting or approval of the minutes thereof, except that if action is taken
or proposed to be taken for approval of any of those matters specified in the
second paragraph of Section 2.4 of these Bylaws, the waiver of notice or consent


                                        4



or approval shall state the general nature of the proposal. All such waivers,
consents, and approvals shall be filed with the corporate records or made a part
of the minutes of the meeting.

     Attendance of a person at a meeting shall constitute a waiver of notice of
and presence at that meeting, except when the person objects, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened and except that attendance at a meeting is not a
waiver of any right to object to the consideration of matters required by the
Code to be included in the notice of such meeting but not so included, if such
objection is expressly made at the meeting.

2.10 SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING

     Any action which may be taken at any annual or special meeting of
shareholders may be taken without a meeting and without prior notice, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding shares having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted.

     Directors may be elected by the written consent of the holders of a
majority of the outstanding shares entitled to vote for the election of
directors.

     All such consents shall be maintained in the corporate records. Any
shareholder giving a written consent, or the shareholder's proxy holders, or a
transferee of the shares, or a personal representative of the shareholder, or
their respective proxy holders, may revoke the consent by a writing received by
the Secretary of the corporation before written consents of the number of shares
required to authorize the proposed action have been filed with the Secretary.

     If the consents of all shareholders entitled to vote have not been
solicited in writing, the Secretary shall give prompt notice of any corporate
action approved by the shareholders without a meeting by less than unanimous
written consent to those shareholders entitled to vote who have not consented in
writing. Such notice shall be given in the manner specified in Section 2.5 of
these Bylaws. In the case of approval of (i) a contract or transaction in which
a director has a direct or indirect financial interest, pursuant to Section 310
of the Code, (ii) indemnification of a corporate "agent," pursuant to Section
317 of the Code, (iii) a reorganization of the corporation, pursuant to Section
1201 of the Code, and (iv) a distribution in dissolution other than in
accordance with the rights of outstanding preferred shares, pursuant to Section
2007 of the Code, the notice shall be given at least ten (10) days before the
consummation of any action authorized by that approval, unless the consents of
all shareholders entitled to vote have been solicited in writing.

2.11 RECORD DATE FOR SHAREHOLDER NOTICE; VOTING; GIVING CONSENTS

     In order that the corporation may determine the shareholders entitled to
notice of any meeting or to vote, the Board of Directors may fix, in advance, a
record date, which shall not be more than sixty (60) days nor less than ten (10)
days prior to the date of such meeting nor more than sixty (60) days before any
other action. Shareholders at the close of business on the record date are
entitled to notice and to vote, as the case may be, notwithstanding any transfer
of any shares on the books of the corporation after the record date, except as
otherwise provided in the Articles of Incorporation or the Code.

     A determination of shareholders of record entitled to notice of or to vote
at a meeting of shareholders shall apply to any adjournment of the meeting
unless the Board of Directors fixes a new


                                        5



record date for the adjourned meeting, but the Board of Directors shall fix a
new record date if the meeting is adjourned for more than forty-five (45) days
from the date set for the original meeting.

     If the Board of Directors does not so fix a record date:

     (a) The record date for determining shareholders entitled to notice of or
to vote at a meeting of shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day next preceding the day on
which the meeting is held.

     (b) The record date for determining shareholders entitled to give consent
to corporate action in writing without a meeting, (i) when no prior action by
the Board has been taken, shall be the day on which the first written consent is
given, or (ii) when prior action by the Board has been taken, shall be at the
close of business on the day on which the Board adopts the resolution relating
thereto, or the sixtieth (60th) day prior to the date of such other action,
whichever is later.

     The record date for any other purpose shall be as provided in Section 8.1
of these Bylaws.

2.12 PROXIES

     Every person entitled to vote for directors, or on any other matter, shall
have the right to do so either in person or by one or more agents authorized by
a written proxy signed by the person and filed with the Secretary of the
corporation. A proxy shall be deemed signed if the shareholder's name or other
authorization is placed on the proxy (whether by manual signature, typewriting,
telegraphic or electronic transmission or otherwise) by the shareholder or the
shareholder's attorney-in-fact. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (i) the
person who executed the proxy revokes it prior to the time of voting by
delivering a writing to the corporation stating that the proxy is revoked or by
executing a subsequent proxy and presenting it to the meeting or by attendance
at such meeting and voting in person, or (ii) written notice of the death or
incapacity of the maker of that proxy is received by the corporation before the
vote pursuant to that proxy is counted; provided, however, that no proxy shall
be valid after the expiration of eleven (11) months from the date thereof,
unless otherwise provided in the proxy. The dates contained on the forms of
proxy presumptively determine the order of execution, regardless of the postmark
dates on the envelopes in which they are mailed. The revocability of a proxy
that states on its face that it is irrevocable shall be governed by the
provisions of Sections 705(e) and 705(f) of the Code.

2.13 INSPECTORS OF ELECTION

     In advance of any meeting of shareholders, the Board of Directors may
appoint inspectors of election to act at the meeting and any adjournment
thereof. If inspectors of election are not so appointed or designated or if any
persons so appointed fail to appear or refuse to act, then the Chairman of the
meeting may, and on the request of any shareholder or a shareholder's proxy
shall, appoint inspectors of election (or persons to replace those who so fail
to appear) at the meeting. The number of inspectors shall be either one (1) or
two (2). If appointed at a meeting on the request of one (1) or more
shareholders or proxies, the majority of shares represented in person or by
proxy shall determine whether one (1) or three (3) inspectors are to be
appointed.

     The inspectors of election shall determine the number of shares outstanding
and the voting power of each, the shares represented at the meeting, the
existence of a quorum, and the authenticity, validity,


                                        6



and effect of proxies, receive votes, ballots or consents, hear and determine
all challenges and questions in any way arising in connection with the right to
vote, count and tabulate all votes or consents, determine when the polls shall
close, determine the result and do any other acts that may be proper to conduct
the election or vote with fairness to all shareholders.

                                  ARTICLE III

                                   DIRECTORS

3.1  POWERS

     Subject to the provisions of the Code and any limitations in the Articles
of Incorporation and these Bylaws relating to action required to be approved by
the shareholders or by the outstanding shares, the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised by or
under the direction of the Board of Directors. The Board may delegate the
management of the day-today operation of the business of the corporation to a
management company or other person provided that the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised under
the ultimate direction of the Board.

3.2  NUMBER OF DIRECTORS

     The authorized number of directors of the corporation shall be the number
of directors determined from time to time by resolution adopted by the Board of
Directors or by the shareholders. Effective as of the Effective Time, the number
of directors constituting the Board of Directors shall be one (1). No reduction
of the authorized number of directors shall have the effect of removing any
director before that director's term of office expires or such director is
otherwise removed from office in accordance with applicable law.

     No reduction of the authorized number of directors shall have the effect of
removing any director before that director's term of office expires.

3.3  ELECTION AND TERM OF OFFICE OF DIRECTORS

     At each annual meeting of shareholders, directors shall be elected to hold
office until the next annual meeting. Each director, including a director
elected to fill a vacancy, shall hold office until the expiration of the term
for which elected and until a successor has been elected and qualified, except
in the case of the death, resignation, or removal of such a director.

3.4  REMOVAL

     The entire Board of Directors or any individual director may be removed
from office without cause by the affirmative vote of a majority of the
outstanding shares entitled to vote on such removal.

3.5  RESIGNATION AND VACANCIES

     Any director may resign effective upon giving oral or written notice to the
Chairman of the Board, the President, the Secretary or the Board of Directors,
unless the notice specifies a later time for


                                        7



the effectiveness of such resignation. If the resignation of a director is
effective at a future time, the Board of Directors may elect a successor to take
office when the resignation becomes effective.

     Vacancies on the Board of Directors may be filled by a majority of the
remaining directors (including a sole remaining director); however, a vacancy
created by the removal of a director by vote or written consent of the
shareholders or by court order may be filled only by the affirmative vote of a
majority of the shares represented and voting at a duly held meeting at which a
quorum is present or by the written consent of the holders of a majority of the
outstanding shares entitled to vote for the election of directors. Each director
so elected shall hold office until the next annual meeting of the shareholders
and until a successor has been elected and qualified, or until his or her death,
resignation or removal.

     A vacancy or vacancies in the Board of Directors shall be deemed to exist
(i) in the event of the death, resignation or removal of any director, (ii) if
the Board of Directors by resolution declares vacant the office of a director
who has been declared of unsound mind by an order of court or convicted of a
felony, (iii) if the authorized number of directors is increased, or (iv) if the
shareholders fail, at any meeting of the shareholders at which any director or
directors are elected, to elect the full authorized number of directors to be
elected at that meeting.

     The shareholders may elect a director or directors at any time to fill any
vacancy or vacancies not filled by the directors.

3.6  PLACE OF MEETINGS; MEETINGS BY TELEPHONE

     Regular meetings of the Board of Directors may be held at any place within
or outside the State of California that has been designated from time to time by
resolution of the Board. In the absence of such a designation, regular meetings
shall be held at the principal executive office of the corporation. Special
meetings of the Board may be held at any place within or outside the State of
California that has been designated in the notice of the meeting or, if not
stated in the notice or if there is no notice, at the principal executive office
of the corporation.

     Members of the Board may participate in a meeting through the use of
conference telephone or similar communications equipment, so long as all
directors participating in such meeting can hear one another. Participation in a
meeting pursuant to this paragraph constitutes presence in person at such
meeting.

3.7  REGULAR MEETINGS

     Regular meetings of the Board of Directors may be held without notice if
the time and place of such meetings are fixed by the Board of Directors.

3.8  SPECIAL MEETINGS; NOTICE

     Subject to the provisions of the following paragraph, special meetings of
the Board of Directors for any purpose or purposes may be called at any time by
the Chairman of the Board, the President, any Vice President, the Secretary or
any one (1) director.

     Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail,
telegram, charges prepaid, or by telecopier, addressed to each director at that
director's address as it is shown on the records of the corporation. If the
notice is mailed, it shall be deposited in the United States mail at least four
(4) days before the time of the holding of the


                                        8



meeting. If the notice is delivered personally or by telephone or by telecopier
or telegram, it shall be delivered personally or by telephone or by telecopier
or to the telegraph company at least forty-eight (48) hours before the time of
the holding of the meeting. Any oral notice given personally or by telephone may
be communicated either to the director or to a person at the office of the
director who the person giving the notice has reason to believe will promptly
communicate it to the director. The notice need not specify the purpose of the
meeting.

3.9  QUORUM

     A majority of the authorized number of directors shall constitute a quorum
for the transaction of business, except to adjourn as provided in Section 3.10
of these Bylaws. Every act or decision done or made by a majority of the
directors present at a meeting duly held at which a quorum is present is the act
of the Board of Directors, subject to the provisions of Section 310 of the Code
(as to approval of contracts or transactions in which a director has a direct or
indirect material financial interest), Section 311 of the Code (as to
appointment of committees), Section 317(e) of the Code (as to indemnification of
directors), the Articles of Incorporation, and other applicable law.

     A meeting at which a quorum is initially present may continue to transact
business notwith-standing the withdrawal of directors, if any action taken is
approved by at least a majority of the required quorum for such meeting.

3.10 WAIVER OF NOTICE

     Notice of a meeting need not be given to any director who signs a waiver of
notice or a consent to holding the meeting or an approval of the minutes
thereof, whether before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice to such
director. All such waivers, consents, and approvals shall be filed with the
corporate records or made a part of the minutes of the meeting. A waiver of
notice need not specify the purpose of any regular or special meeting of the
Board of Directors.

3.11 ADJOURNMENT

     A majority of the directors present, whether or not a quorum is present,
may adjourn any meeting to another time and place.

3.12 NOTICE OF ADJOURNMENT

     If the meeting is adjourned for more than twenty-four (24) hours, notice of
any adjournment to another time and place shall be given prior to the time of
the adjourned meeting to the directors who were not present at the time of the
adjournment.

3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING

     Any action required or permitted to be taken by the Board of Directors may
be taken without a meeting, if all members of the Board individually or
collectively consent in writing to such action. Such written consent or consents
shall be filed with the minutes of the proceedings of the Board. Such action by
written consent shall have the same force and effect as a unanimous vote of the
Board of Directors.


                                        9



3.14 FEES AND COMPENSATION OF DIRECTORS

     Directors and members of committees may receive such compensation, if any,
for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the Board of Directors. This Section 3.13 shall not
be construed to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee or otherwise and receiving compensation
for those services.

3.15 APPROVAL OF LOANS TO OFFICERS

     If these Bylaws have been approved by the corporation's shareholders in
accordance with the Code, the corporation may, upon the approval of the Board of
Directors alone, make loans of money or property to, or guarantee the
obligations of, any officer of the corporation or of its parent, if any, whether
or not a director, or adopt an employee benefit plan or plans authorizing such
loans or guaranties provided that (i) the Board of Directors determines that
such a loan or guaranty or plan may reasonably be expected to benefit the
corporation, (ii) the corporation has outstanding shares held of record by 100
or more persons (determined as provided in Section 605 of the Code) on the date
of approval by the Board of Directors, and (iii) the approval of the Board of
Directors is by a vote sufficient without counting the vote of any interested
director or directors. Notwithstanding the foregoing, the corporation shall have
the power to make loans permitted by the Code.

                                   ARTICLE IV
                                   COMMITTEES

4.1  COMMITTEES OF DIRECTORS

     The Board of Directors may, by resolution adopted by a majority of the
authorized number of directors, designate one or more committees, each
consisting of two (2) or more directors, to serve at the pleasure of the Board.
The Board may designate one or more directors as alternate members of any
committee, who may replace any absent member at any meeting of the committee.
The appointment of members or alternate members of a committee requires the vote
of a majority of the authorized number of directors. Any such committee shall
have authority to act in the manner and to the extent provided in the resolution
of the Board and may have all the authority of the Board, except with respect
to:

     (a) The approval of any action which, under the Code, also requires
shareholders' approval or approval of the outstanding shares.

     (b) The filling of vacancies on the Board of Directors or in any committee.

     (c) The fixing of compensation of the directors for serving on the Board or
on any committee.

     (d) The amendment or repeal of these Bylaws or the adoption of new Bylaws.

     (e) The amendment or repeal of any resolution of the Board of Directors
which by its express terms is not so amendable or repealable.


                                       10



     (f) A distribution to the shareholders of the corporation, except at a
rate, in a periodic amount or within a price range set forth in the Articles of
Incorporation or determined by the Board of Directors.

     (g) The appointment of any other committees of the Board of Directors or
the members thereof.

4.2  MEETINGS AND ACTION OF COMMITTEES

     Meetings and actions of committees shall be governed by, and held and taken
in accordance with, the provisions of Article III of these Bylaws, Section 3.5
(place of meetings), Section 3.6 (regular meetings), Section 3.7 (special
meetings and notice), Section 3.8 (quorum), Section 3.9 (waiver of notice),
Section 3.10 (adjournment), Section 3.11 (notice of adjournment), and Section
3.12 (action without meeting), with such changes in the context of those Bylaws
as are necessary to substitute the committee and its members for the Board of
Directors and its members; provided, however, that the time of regular meetings
of committees may be determined either by resolution of the Board of Directors
or by resolution of the committee, that special meetings of committees may also
be called by resolution of the Board of Directors, and that notice of special
meetings of committees shall also be given to all alternate members, who shall
have the right to attend all meetings of the committee. The Board of Directors
may adopt rules for the government of any committee not inconsistent with the
provisions of these Bylaws.

                                    ARTICLE V

                                    OFFICERS

5.1  OFFICERS

     The officers of the Corporation shall include a Chairman of the Board of
Directors, a Vice Chairman of the Board of Directors, a Chief Executive Officer,
a Chief Financial Officer, a President, a Secretary and a Treasurer. The
Corporation may also have at the discretion of the Board of Directors such Vice
Presidents, Assistant Treasurers, Assistant Secretaries and other officers as
the Board of Directors may deem appropriate. Any number of offices may be held
by the same person.

5.2  APPOINTMENT OF OFFICERS

     The officers of the corporation, except such officers as may be appointed
in accordance with the provisions of Section 5.3 or Section 5.5 of these Bylaws,
shall be chosen by the Board and serve at the pleasure of the Board, subject to
the rights, if any, of an officer under any contract of employment.

5.3  SUBORDINATE OFFICERS

     The Board of Directors may appoint, or may empower the Chairman of the
Board, the Chief Executive Officer or the Secretary to appoint, such other
officers as the business of the corporation may require, each of whom shall hold
office for such period, have such authority, and perform such duties as are
provided in these Bylaws or as the Board of Directors may from time to time
determine.


                                       11



5.4  REMOVAL AND RESIGNATION OF OFFICERS

     Subject to the rights, if any, of an officer under any contract of
employment, all officers serve at the pleasure of the Board of Directors and any
officer may be removed, either with or without cause, by the Board of Directors
at any regular or special meeting of the Board or, except in case of an officer
chosen by the Board of Directors, by any officer upon whom such power of removal
may be conferred by the Board of Directors.

     Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.

5.5  VACANCIES IN OFFICES

     A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these Bylaws for regular appointments to that office.

                                   ARTICLE VI

               INDEMNIFICATION OF DIRECTORS, OFFICERS. EMPLOYEES,
                                AND OTHER AGENTS

6.1  INDEMNIFICATION OF DIRECTORS

     The corporation shall, to the maximum extent and in the manner permitted by
the Code, indemnify each of its directors against expenses (as defined in
Section 317(a) of the Code), judgments, fines, settlements, and other amounts
actually and reasonably incurred in connection with any proceeding (as defined
in Section 317(a) of the Code), arising by reason of the fact that such person
is or was a director of the corporation. For purposes of this Article VI, a
"director" of the corporation includes any person (i) who is or was a director
of the corporation, (ii) who is or was serving at the request of the corporation
as a director of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise, or (iii) who was a director of a corporation
which was a predecessor corporation of the corporation or of another enterprise
at the request of such predecessor corporation.

6.2  INDEMNIFICATION OF OTHERS

     The corporation shall have the power, to the extent and in the manner
permitted by the Code, to indemnify each of its employees, officers, and agents
(other than directors) against expenses (as defined in Section 317(a) of the
Code), judgments, fines, settlements, and other amounts actually and reasonably
incurred in connection with any proceeding (as defined in Section 317(a) of the
Code), arising by reason of the fact that such person is or was an employee,
officer, or agent of the corporation. For purposes of this Article VI, an
"employee" or "officer" or "agent" of the corporation (other than a director)
includes any person (i) who is or was an employee, officer, or agent of the
corporation, (ii) who is or was serving


                                       12



at the request of the corporation as an employee, officer, or agent of another
foreign or domestic corporation, partnership, joint venture, trust or other
enterprise, or (iii) who was an employee, officer, or agent of a corporation
which was a predecessor corporation of the corporation or of another enterprise
at the request of such predecessor corporation.

6.3  PAYMENT OF EXPENSES IN ADVANCE

     Expenses and attorneys' fees incurred in defending any civil or criminal
action or proceeding for which indemnification is required pursuant to Section
6.1, or if otherwise authorized by the Board of Directors, shall be paid by the
corporation in advance of the final disposition of such action or proceeding
upon receipt of an undertaking by or on behalf of the indemnified party to repay
such amount if it shall ultimately be determined that the indemnified party is
not entitled to be indemnified as authorized in this Article VI.

6.4  INDEMNITY NOT EXCLUSIVE

     The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any Bylaw, agreement, vote of shareholders or directors or
otherwise, both as to action in an official capacity and as to action in another
capacity while holding such office. The rights to indemnity hereunder shall
continue as to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of the person.

6.5  INSURANCE INDEMNIFICATION

     The corporation shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation against any liability asserted against or incurred by such person in
such capacity or arising out of that person's status as such, whether or not the
corporation would have the power to indemnify that person against such liability
under the provisions of this Article VI.

6.6  CONFLICTS

     No indemnification or advance shall be made under this Article VI, except
where such indemnification or advance is mandated by law or the order, judgment
or decree of any court of competent jurisdiction, in any circumstance where it
appears:

     (1) That it would be inconsistent with a provision of the Articles of
Incorporation, these Bylaws, a resolution of the shareholders or an agreement in
effect at the time of the accrual of the alleged cause of the action asserted in
the proceeding in which the expenses were incurred or other amounts were paid,
which prohibits or otherwise limits indemnification; or

     (2) That it would be inconsistent with any condition expressly imposed by a
court in approving a settlement.


                                       13



6.7  RIGHT TO BRING SUIT

     If a claim under this Article is not paid in full by the corporation within
90 days after a written claim has been received by the corporation (either
because the claim is denied or because no determination is made), the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expenses of prosecuting such claim. The
corporation shall be entitled to raise as a defense to any such action that the
claimant has not met the standards of conduct that make it permissible under the
Code for the corporation to indemnify the claimant for the claim. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel, or its shareholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is permissible
in the circumstances because he or she has met the applicable standard of
conduct, if any, nor an actual determination by the corporation (including its
Board of Directors, independent legal counsel, or its shareholders) that the
claimant has not met the applicable standard of conduct, shall be a defense to
such action or create a presumption for the purposes of such action that the
claimant has not met the applicable standard of conduct.

6.8  INDEMNITY AGREEMENTS

     The Board of Directors is authorized to enter into a contract with any
director, officer, employee or agent of the corporation, or any person who is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, including employee benefit plans, or any person who was a director,
officer, employee or agent of a corporation which was a predecessor corporation
of the corporation or of another enterprise at the request of such predecessor
corporation, providing for indemnification rights equivalent to or, if the Board
of Directors so determines and to the extent permitted by applicable law,
greater than, those provided for in this Article VI.

6.9  AMENDMENT, REPEAL OR MODIFICATION

     Any amendment, repeal or modification of any provision of this Article VI
shall not adversely affect any right or protection of a director or agent of the
corporation existing at the time of such amendment, repeal or modification.

                                   ARTICLE VII

                               RECORDS AND REPORTS

7.1  MAINTENANCE AND INSPECTION OF SHARE REGISTER

     The corporation shall keep either at its principal executive office or at
the office of its transfer agent or registrar (if either be appointed), as
determined by resolution of the Board of Directors, a record of its shareholders
listing the names and addresses of all shareholders and the number and class of
shares held by each shareholder.

     A shareholder or shareholders of the corporation holding at least five
percent (5%) in the aggregate of the outstanding voting shares of the
corporation or who hold at least one percent (1%) of


                                       14



such voting shares and have filed a Schedule 14B with the United States
Securities and Exchange Commission relating to the election of directors, shall
have an absolute right to do either or both of the following (i) inspect and
copy the record of shareholders' names, addresses, and shareholdings during
usual business hours upon five (5) days' prior written demand upon the
corporation, or (ii) obtain from the transfer agent for the corporation, upon
written demand and upon the tender of such transfer agent's usual charges for
such list (the amount of which charges shall be stated to the shareholder by the
transfer agent upon request), a list of the shareholders' names and addresses
who are entitled to vote for the election of directors, and their shareholdings,
as of the most recent record date for which it has been compiled or as of a date
specified by the shareholder subsequent to the date of demand. The list shall be
made available on or before the later of five (5) business days after the demand
is received or the date specified therein as the date as of which the list is to
be compiled.

     The record of shareholders shall also be open to inspection and copying by
any shareholder or holder of a voting trust certificate at any time during usual
business hours upon written demand on the corporation, for a purpose reasonably
related to the holder's interests as a shareholder or holder of a voting trust
certificate.

     Any inspection and copying under this Section 7.1 may be made in person or
by an agent or attorney of the shareholder or holder of a voting trust
certificate making the demand.

7.2  MAINTENANCE AND INSPECTION OF BYLAWS

     The corporation shall keep at its principal executive office or, if its
principal executive office is not in the State of California, at its principal
business office in California, the original or a copy of these Bylaws as amended
to date, which shall be open to inspection by the shareholders at all reasonable
times during office hours. If the principal executive office of the corporation
is outside the State of California and the corporation has no principal business
office in such state, then it shall, upon the written request of any
shareholder, furnish to such shareholder a copy of these Bylaws as amended to
date.

7.3  MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS

     The accounting books and records and the minutes of proceedings of the
shareholders and the Board of Directors, and committees of the Board of
Directors shall be kept at such place or places as are designated by the Board
of Directors or, in absence of such designation, at the principal executive
office of the corporation. The minutes shall be kept in written form, and the
accounting books and records shall be kept either in written form or in any
other form capable of being converted into written form.

     The minutes and accounting books and records shall be open to inspection
upon the written demand on the corporation of any shareholder or holder of a
voting trust certificate at any reasonable time during usual business hours, for
a purpose reasonably related to such holder's interests as a shareholder or as
the holder of a voting trust certificate. Such inspection by a shareholder or
holder of a voting trust certificate may be made in person or by an agent or
attorney and the right of inspection includes the right to copy and make
extracts. Such rights of inspection shall extend to the records of each
subsidiary corporation of the corporation.

7.4  INSPECTION BY DIRECTORS

     Every director shall have the absolute right at any reasonable time to
inspect and copy all books, records, and documents of every kind and to inspect
the physical properties of the corporation and each of


                                       15



its subsidiary corporations, domestic or foreign. Such inspection by a director
may be made in person or by an agent or attorney and the right of inspection
includes the right to copy and make extracts.

7.5  ANNUAL REPORT TO SHAREHOLDERS; WAIVER

     The Board of Directors shall cause an annual report to be sent to the
shareholders not later than one hundred twenty (120) days after the close of the
fiscal year adopted by the corporation. Such report shall be sent to the
shareholders at least fifteen (15) (or, if sent by third-class mail, thirty-five
(35)) days prior to the annual meeting of shareholders to be held during the
next fiscal year and in the manner specified in Section 2.5 of these Bylaws for
giving notice to shareholders of the corporation.

     The annual report shall contain a balance sheet as of the end of the fiscal
year and an income statement and statement of changes in financial position for
the fiscal year, accompanied by any report thereon of independent accountants
or, if there is no such report, the certificate of an authorized officer of the
corporation that the statements were prepared without audit from the books and
records of the corporation.

         The foregoing requirement of an annual report shall be waived so long
as the shares of the corporation are held by fewer than one hundred (100)
holders of record.

7.6  FINANCIAL STATEMENTS

     If no annual report for the fiscal year has been sent to shareholders, then
the corporation shall, upon the written request of any shareholder made more
than one hundred twenty (120) days after the close of such fiscal year, deliver
or mail to the person making the request, within thirty (30) days thereafter, a
copy of a balance sheet as of the end of such fiscal year and an income
statement and statement of changes in financial position for such fiscal year.

     A shareholder or shareholders holding at least five percent (5%) of the
outstanding shares of any class of the corporation may make a written request to
the corporation for an income statement of the corporation for the three-month,
six-month or nine-month period of the current fiscal year ended more than thirty
(30) days prior to the date of the request and a balance sheet of the
corporation as of the end of that period. The statements shall be delivered or
mailed to the person making the request within thirty (30) days thereafter. A
copy of the statements shall be kept on file in the principal office of the
corporation for twelve (12) months and it shall be exhibited at all reasonable
times to any shareholder demanding an examination of the statements or a copy
shall be mailed to the shareholder. If the corporation has not sent to the
shareholders its annual report for the last fiscal year, the statements referred
to in the first paragraph of this Section 7.6 shall likewise be delivered or
mailed to the shareholder or shareholders within thirty (30) days after the
request.

     The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report thereon, if any, of any independent
accountants engaged by the corporation or the certificate of an authorized
officer of the corporation that the financial statements were prepared without
audit from the books and records of the corporation.

7.7  REPRESENTATION OF SHARES OF OTHER CORPORATIONS

     The Chairman of the Board or the Secretary of this corporation, or any
other person authorized by the Board of Directors, is authorized to vote,
represent, and exercise on behalf of this corporation all


                                       16



rights incident to any and all shares of any other corporation or corporations
standing in the name of this corporation. The authority herein granted may be
exercised either by such person directly or by any other person authorized to do
so by proxy or power of attorney duly executed by such person having the
authority.

                                  ARTICLE VIII

                                 GENERAL MATTERS

8.1  RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING

     For purposes of determining the shareholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any other lawful action (other than with
respect to notice or voting at a shareholders meeting or action by shareholders
by written consent without a meeting), the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty (60) days prior to
any such action. Only shareholders of record at the close of business on the
record date are entitled to receive the dividend, distribution or allotment of
rights, or to exercise the rights, as the case may be, notwithstanding any
transfer of any shares on the books of the corporation after the record date,
except as otherwise provided in the Articles of Incorporation or the Code.

     If the Board of Directors does not so fix a record date, then the record
date for determining shareholders for any such purpose shall be at the close of
business on the day on which the Board adopts the resolution relating thereto or
the sixtieth (60th) day prior to the date of that action, whichever is later.

8.2  CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS

     From time to time, the Board of Directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.

8.3  CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED

     The Board of Directors, except as otherwise provided in these Bylaws, may
authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the Board of Directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.

8.4  CERTIFICATES FOR SHARES

     A certificate or certificates for shares of the corporation shall be issued
to each shareholder when any of such shares are fully paid. The Board of
Directors may authorize the issuance of certificates for shares partly paid
provided that these certificates shall state the total amount of the
consideration to be paid for them and the amount actually paid. All certificates
shall be signed in the name of the corporation


                                       17



by the Chairman of the Board or the Vice Chairman of the Board or the President
or a Vice President and by the Chief Financial Officer or an Assistant Treasurer
or the Secretary or an Assistant Secretary, certifying the number of shares and
the class or series of shares owned by the shareholder. Any or all of the
signatures on the certificate may be by facsimile.

     In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed on a certificate has ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if that person were an
officer, transfer agent or registrar at the date of issue.

8.5  LOST CERTIFICATES

     Except as provided in this Section 8.5, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation or its transfer agent or registrar and cancelled
at the same time. The Board of Directors may, in case any share certificate or
certificate for any other security is lost, stolen or destroyed (as evidenced by
a written affidavit or affirmation of such fact), authorize the issuance of
replacement certificates on such terms and conditions as the Board may require;
the Board may require indemnification of the corporation secured by a bond or
other adequate security sufficient to protect the corporation against any claim
that may be made against it, including any expense or liability, on account of
the alleged loss, theft or destruction of the certificate or the issuance of the
replacement certificate.

8.6  CONSTRUCTION; DEFINITIONS

     Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the Code shall govern the construction of these
Bylaws. Without limiting the generality of this provision, the singular number
includes the plural, the plural number includes the singular, and the term
"person" includes both a corporation and a natural person.

                                   ARTICLE IX

                                   AMENDMENTS

9.1  AMENDMENT BY SHAREHOLDERS

     New Bylaws may be adopted or these Bylaws may be amended or repealed by the
vote or written consent of holders of a majority of the outstanding shares
entitled to vote; provided, however, that if the Articles of Incorporation of
the corporation set forth the number of authorized Directors of the corporation,
then the authorized number of Directors may be changed only by an amendment of
the Articles of Incorporation.

9.2  AMENDMENT BY DIRECTORS

     Subject to the rights of the shareholders as provided in Section 9.1 of
these Bylaws, Bylaws, other than a Bylaw or an amendment of a Bylaw changing the
authorized number of directors (except to fix the authorized number of directors
pursuant to a Bylaw providing for a variable number of directors), may be
adopted, amended or repealed by the Board of Directors.


                                       18



9.3  RECORD OF AMENDMENTS

     Whenever an amendment or new Bylaw is adopted, it shall be copied in the
book of minutes with the original Bylaws. If any Bylaw is repealed, the fact of
repeal, with the date of the meeting at which the repeal was enacted or written
consent was filed, shall be stated in said book.

                                    ARTICLE X

                                 INTERPRETATION

     Reference in these Bylaws to any provision of the California Corporations
Code shall be deemed to include all amendments thereof.


                                       19

EX-3.113

                                                                   EXHIBIT 3.113

                          CERTIFICATE OF INCORPORATION
                                       OF
                          VIDEO PRODUCT RESOURCES, INC.



                  The undersigned, of the age of twenty-one years or over, in
order to form a corporation pursuant to the provisions of the New Jersey
Business Corporation Act, hereby certifies as follows:

                  1. The name of the corporation is Video Product Resources,
Inc.

                  2. The purpose of the corporation is to engage in any activity
within the purposes for which corporations may be organized under the New Jersey
Corporation Act.

                  3. The corporation is authorized to issue 100 shares of
capital stock without par value.

                  4. The registered office of the corporation is situate at 170
Kinnelon Road, Kinnelon, New Jersey, 07405. The name of the corporation's
registered agent at that office is Louis Blanco.

                  5. One person will constitute the first Board of Directors.
Their names and addresses are as follows: Louis Blanco, 170 Kinnelon Road, Suite
6, Kinnelon, NJ 07405.

                  6. The name and address of the incorporator of the corporation
is as follows: Don X. Bancroft, Esq., 170 Kinnelon Road, Suite 2, Kinnelon, New
Jersey 07405.

                  IN WITNESS WHEREOF, the undersigned has signed this
Certificate of Incorporation on this 1st day of June, 1987.



                                        /s/ Don X. Bancroft
                                        -----------------------------
                                        Don X. Bancroft
                                        Attorney at Law of the
                                        State of New Jersey





STATE OF NEW JERSEY  )
                     )
COUNTY OF MORRIS     )



                  BE IT REMEMBERED, that on this 1st day of June, 1987, before
me, the Subscriber, personally appeared Don X. Bancroft, who I am satisfied is
the person mentioned in the within Instrument, to whom I first made known the
contents thereof, and thereupon he acknowledged that he signed, sealed and
delivered the same as his voluntary act and deed, for the uses and purposes
therein expressed.



                                             /s/ Linda M. Noce
                                             ---------------------------
                                             Linda M. Noce
                                             A Notary Public of New Jersey
                                             My Commission Expires Oct. 10, 1990







Form C-102a
Rev. 7-1-71


                         CERTIFICATE OF AMENDMENT TO THE

                         CERTIFICATE OF INCORPORATION OF

                          VIDEO PRODUCT RESOURCES, INC.
                          -----------------------------

                     (FOR USE BY DOMESTIC CORPORATIONS ONLY)



To:      The Secretary of State
         State of New Jersey

                  Pursuant to the provisions of Section 14A:9-2(4) and Section
14A:9-4(3), Corporations, General, of the New Jersey Statutes, the undersigned
corporation executes the following Certificate of Amendment to its Certificate
of Incorporation:

                  1. The name of the corporation is Video Product Resources,
Inc.

                  2. The following amendment to the Certificate of Incorporation
was approved by the directors and thereafter duly adopted by shareholders to the
corporation on the _________ day of December 1, 1989:

                  Resolved, that Article 1 of the Certificate of Incorporation
be amended to read as follows:

                  The name of the corporation is Mobile-Vision Inc.

                  3. The number of shares outstanding at the time of the
adoption of the amendment was 100. The total number of shares entitled to vote
thereon was 100. If the shares or any class or series are entitled to vote
thereon as a class, set forth below the designation and number of outstanding
shares entitled to vote thereon of each such class or series. (Omit if not
applicable.)

                  4. The number of shares voting for and against such amendment
is as follows: (If the shares of any class or series are entitled to vote as a
class, set forth the number of shares of each such class and series voting for
and against the amendment, respectively.)

       Number of Shares Voting                    Number of Shares Voting
            For Amendment                            Against Amendment
      -------------------------                  -------------------------

                 100                                         0






(If the amendment is accompanied by a reduction of stated capital, the following
clause may be inserted in the Certificate of Amendment, in lieu of filing a
Certificate of Reduction under Section 14A:7-19, Corporations, General, of the
New Jersey Statutes. Omit this clause if not applicable.)

                  5. The stated capital of the corporation is reduced in the
following amount: _____________. The manner in which the reduction is effected
is as follows:



                  The amount of stated capital of the corporation after giving
effect to the reduction is $_____________. (Must be set forth in dollars.)

                  6. If the amendment provides for an exchange, reclassification
or cancellation of issued shares, set forth a statement of the manner in which
the same shall be effected. (Omit if not applicable.)



                  (Use the following only if an effective date, not later than
30 days subsequent to the date of filing is desired.)

                  7. The effective date of this Amendment to the Certificate of
Incorporation shall be _____________________.

Dated this 14th day of December, 1989.


                                              Video Product Resources, Inc.
                                              now Mobile-Vision Inc.
                                              ----------------------------------
                                                          (Corporate Name)



                                              By  /s/Louis Blanco              *
                                                 -------------------------------
                                                            (Signature)



                                              Louis Blanco, President
                                              ----------------------------------
                                                 (Type or Print Name and Title)



(* May be executed by the chairman of the board, or the president, or a
vice-president of the corporation.)

Return to Secretary of State, P.O. Box 1330, Trenton, N.J. 08625,
Attn:  Corporation Filing.

Filing Fee                 $50.00

Note:  No recording fees will be assessed.





C-102A Rev 12/93


                         New Jersey Division of Revenue

          CERTIFICATE OF AMENDMENT TO THE CERTIFICATE OF INCORPORATION
                     (For Use by Domestic Profit Corporations)

                  Pursuant to the provisions of Section 14A:9-2(4) and Section
14A:9-4(3), Corporations, General, of the New Jersey Statutes, the undersigned
corporation executes the following Certificate of Amendment to its Certificate
of Incorporation:

                  1. The name of the corporation is: Mobile-Vision, Inc.

                  2. The following amendment to the Certificate of Incorporation
was approved by the directors and thereafter duly adopted by shareholders to the
corporation on the 14th day of April, 2005

                  Resolved, that Article 1 of the Certificate of Incorporation
be amended to read as follows:

                  The name of the corporation is L-3 Communications
Mobile-Vision, Inc.

                  3. The number of shares outstanding at the time of the
adoption of the amendment was: 100. The total number of shares entitled to vote
thereon was: 100. If the shares or any class or series are entitled to vote
thereon as a class, set forth below the designation and number of outstanding
shares entitled to vote thereon of each such class or series. (Omit if not
applicable).

                  4. The number of shares voting for and against such amendment
is as follows: (if the shares of any class or series are entitled to vote as a
class, set forth the number of shares of each such class and series voting for
and against the amendment, respectively).

       Number of Shares Voting                  Number of Shares Voting
            For Amendment                          Against Amendment
      -------------------------                -------------------------

                 100                                       0


                  5. If the amendment provides for an exchange, reclassification
or cancellation of issued shares, set forth a statement of the manner in which
the same shall be effected. (Omit if not applicable).





                  6. Other provisions: (Omit if not applicable).

Dated this 14th day of April, 2005.

                                            By:  /s/ Christopher C. Cambria
                                                --------------------------------
                                                     Christopher C. Cambria
                                                         Vice President


* May be executed by the Chairman of the Board, or the President, or a
Vice-President of the Corporation.

EX-3.114

                                                                   EXHIBIT 3.114

                                     BY-LAWS

                                       OF

                          VIDEO PRODUCT RESOURCES, INC.

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


                       Adopted     September 16, 1987


                                   ARTICLE I

                                     OFFICES

     1. Registered Office and Agent.--The registered office of the Corporation
in the State of New Jersey is at 170 Kinnelon Road, Kinnelon, New Jersey 07405

The registered agent of the Corporation at such office is Louis Blanco

     2. Principal Place of Business.--The principal place of business of the
Corporation is 170 Kinnelon Road, Kinnelon, New Jersey 07405

     3. Other Places of Business.--Branch or subordinate places of business or
offices may be established at any time by the Board at any place or places where
the Corporation is qualified to do business.


                                                                               2

                                   ARTICLE II

                                  SHAREHOLDERS

     1. Annual Meeting.--The annual meeting of shareholders shall be held upon
not less than ten nor more than sixty days written notice of the time, place,
and purposes of the meeting at 9 o'clock a .m. on the 15th day of the month of
September of each year at 170 Kinnelon Road, Kinnelon, New Jersey or at such
other time and place as shall be specified in the notice of meeting, in order to
elect directors and transact such other business as shall come before the
meeting. If that date is a legal holiday, the meeting shall be held at the same
hour on the next succeeding business day.

     2. Special Meetings.--A special meeting of shareholders may be called for
any purpose by the president or the Board. A special meeting shall be held upon
not less than ten nor more than sixty days written notice of the time, place,
and purposes of the meeting.

     3. Action Without Meeting.--The shareholders may act without a meeting if,
prior or subsequent to such action, each shareholder who would have been
entitled to vote upon such action shall consent in writing to such action. Such
written consent or consents shall be filed in the minute book. However, owners
of non-voting shares must either consent or be notified in accordance with
N.J.S.A. 14A: 5-6 in the case of mergers, consolidations or sales of
substantially all assets.

     4. Quorum.--The presence at a meeting in person or by proxy of the holders
of shares entitled to cast one of the votes shall constitute a quorum.


                                                                               3

                                  ARTICLE III

                               BOARD OF DIRECTORS

     1. Number and Term of Office.--The Board shall consist of one members. Each
director shall be elected by the shareholders at each annual meeting and shall
hold office until the next annual meeting of shareholders and until that
director's successor shall have been elected and qualified.

     2. Regular Meetings.--A regular meeting of the Board shall be held without
notice immediately following and at the same place as the annual shareholders'
meeting for the purposes of electing officers and conducting such other business
as may come before the meeting. The Board, by resolution, may provide for
additional regular meetings which may be held without notice, except to members
not present at the time of the adoption of the resolution.

     3. Special Meetings.--A special meeting of the Board may be called at any
time by the president or by one directors for any purpose. Such meeting shall be
held upon one days notice if given orally, (either by telephone or in person,)
or by telegraph, or by three days notice if given by depositing the notice in
the United States mails, postage prepaid. Such notice shall specify the time and
place of the meeting.

     4. Action Without Meeting.--The Board may act without a meeting if, prior
or subsequent to such action, each member of the Board shall consent in writing
to such action. Such written consent or consents shall be filed in the minute
book.

     5. Quorum.--One of the entire Board shall constitute a quorum for the
transaction of business.

     6. Vacancies in Board of Directors.--Any vacancy in the Board, a vacancy
caused by an increase in the number of directors, may be filled by the
affirmative vote of a majority of the remaining directors, even though less than
a quorum of the Board, or by a sole remaining director.


                                                                               4

                                   ARTICLE IV

                                WAIVERS OF NOTICE

     Any notice required by these by-laws, by the certificate of incorporation,
or by the New Jersey Business Corporation Act may be waived in writing by any
person entitled to notice. The waiver or waivers may be executed either before
or after the event with respect to which notice is waived. Each director or
shareholder attending a meeting without protesting, prior to its conclusion, the
lack of proper notice shall be deemed conclusively to have waived notice of the
meeting.


                                                                               5

                                   ARTICLE V

                                    OFFICERS

     1. Election.-At its regular meeting following the annual meeting of
shareholders, the Board shall elect a president, a treasurer, a secretary, and
it may elect such other officers, including one or more vice presidents, as it
shall deem necessary. One person may hold two or more offices.

     2. Duties and Authority of President.--The president shall be chief
executive officer of the Corporation. Subject only to the authority of the
Board, he shall have general charge and supervision over, and responsibility
for, the business and affairs of the Corporation. Unless otherwise directed by
the Board, all other officers shall be subject to the authority and supervision
of the president. The president may enter into and execute in the name of the
Corporation contracts or other instruments in the regular course of business or
contracts or other instruments not in the regular course of business which are
authorized, either generally or specifically, by the Board. He shall have the
general powers and duties of management usually vested in the office of
president of a corporation.

     3. Duties and Authority of Vice President.--The vice president shall
perform such duties and have such authority as from time to time may be
delegated to him by the president or by the Board. In the absence of the
president or in the event of his death, inability, or refusal to act, the vice
president shall perform the duties and be vested with the authority of the
president.

     4. Duties and Authority of Treasurer.--The treasurer shall have the custody
of the funds and securities of the Corporation and shall keep or cause to be
kept regular books of account for the Corporation. The treasurer shall perform
such other duties and possess such other powers as are incident to that office
or as shall be assigned by the president or the Board.

     5. Duties and Authority of Secretary.--The secretary shall cause notices of
all meetings to be served as prescribed in these by-laws and shall keep or cause
to be kept the minutes of all meetings of the shareholders and the Board. The
secretary shall have charge of the seal of the Corporation. The secretary shall
perform such other duties and possess such other powers as are incident to that
office or as are assigned by the president or the Board.


                                                                               6

                                   ARTICLE VI

                      AMENDMENTS TO AND EFFECT OF BY-LAWS;

                                   FISCAL YEAR

     1. Force and Effect of By-laws.--These by-laws are subject to the
provisions of the New Jersey Business Corporation Act and the Corporation's
certificate of incorporation, as it may be amended from time to time. If any
provision in these by-laws is inconsistent with a provision in that Act or the
certificate of incorporation, the provision of that Act or the certificate of
incorporation shall govern.

     2. Wherever in these by-laws references are made to more than one
incorporator, director or shareholder, they shall, if this is a sole
incorporator, director, shareholder corporation, be construed to mean the
solitary person; and all provisions dealing with the quantum of majorities or
quorums shall be deemed to mean the action by the one person constituting the
corporation.

     3. Amendments to By-laws.--These by-laws may be altered, amended or
repealed by the shareholders or the Board. Any by-law adopted, amended or
repealed by the shareholders may be amended or repealed by the Board, unless the
resolution of the shareholders adopting such by-law expressly reserves to the
shareholders the right to amend or repeal it.

     4. Fiscal Year.--The fiscal year of the Corporation shall begin on the
first day of        of each year.

EX-3.115

                                                                   EXHIBIT 3.115


                           SECOND AMENDED AND RESTATED
                            ARTICLES OF INCORPORATION
                                       OF
                                    SDG, INC.


     The undersigned, Che Voigt and Shanta Drilsma, hereby certify that:

          1. They are the President and Secretary, respectively of SDG, Inc., a
California corporation (the "Corporation")

          2. The Articles of Incorporation of the Corporation are amended and
restated to read as follows:

          FIRST: The name of the Corporation is SDG, Inc.

          SECOND: The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of California other than the banking business, the trust company
business or the practice of a profession permitted to be incorporated by the
California Corporations Code.

          THIRD: The Corporation is authorized to issue two classes of stock to
be designated, respectively, "Common Stock" and "Preferred Stock." The total
number of shares of all classes of stock which the Corporation is authorized to
issue is forty million (40,000,000) shares, of which thirty million (30,000,000)
shares shall be Common Stock, without par value, and ten million (10,000,000)
shares shall be Preferred Stock, without par value.

          The following is a statement of the designations and the powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof in respect of each class of stock of the Corporation:

     A. COMMON STOCK.

          1. Dividend Rights. Dividends may be declared and paid on the Common
Stock from funds legally available therefor as, when and if determined by the
Board of Directors of the Corporation (the "Board"), subject in all cases to the
rights and preferences of the holders of the Preferred Stock.

          2. Liquidation Rights. Subject to the rights and preferences of the
holders of the Preferred Stock, upon any liquidation, dissolution or winding up
of the affairs of the Corporation, whether voluntary or involuntary (each, a
"Liquidation"), the holders of Common Stock shall be entitled to receive all
assets of the Corporation available for distribution to its shareholders.




          3. Voting Rights. The holders of shares of Common Stock shall be
entitled to one vote for each share so held, and shall be entitled to notice of
any shareholders' meeting and to vote upon such matters as provided in the
By-Laws of the Corporation, and as may be provided by law.

     B. PREFERRED STOCK.

          The Preferred Stock may be issued from time to time in one or more
series. The Board is hereby authorized, within the limitations and restrictions
set forth in these Articles, to issue the Preferred Stock in one or more series
and, in connection with the creation of any such series, by resolution or
resolutions providing for the issue of the shares thereof, to fix or alter the
rights, qualifications, preferences, powers, privilege, restrictions and
limitations of any wholly unissued series of Preferred Stock and the number of
shares constituting any such series and the designation thereof, or any of them;
and to increase or decrease the number of shares of any series subsequent to the
issue of shares of that series, but not above the total number of authorized
shares of the class and not below the number of shares of such series then
outstanding. In case the number of shares of any series shall be so decreased,
the shares constituting such decrease shall resume the status which they had
prior to the adoption of the resolution originally fixing the number of shares
of such series.

     C. CONVERTIBLE PREFERRED STOCK.

          1. Designation of Series. Five million (5,000,000) shares of the
authorized Preferred Stock are hereby designated as Series A Convertible
Preferred Stock ("Series A Preferred Stock") and five million (5,000,000) shares
of the authorized Preferred Stock are hereby designated as Series A-1
Convertible Preferred Stock ("Series A-1 Preferred Stock").

          2. Rights, Preferences and Restrictions of the Series A Preferred
Stock and Series A-1 Preferred Stock. The Series A Preferred Stock and the
Series A-1 Preferred Stock shall have the following rights, qualifications,
preferences, powers, privileges, restrictions and limitations:

               (a) Dividend Rights. In the event the Board shall elect to pay or
declare and set apart for payment any cash dividend on any shares of Common
Stock of the Corporation out of funds legally available therefor, the holders of
the Series A Preferred Stock and the Series A-1 Preferred Stock shall also be
entitled to receive, before any dividend shall be declared and paid or set aside
for the Common Stock, dividends payable in an amount per share equal to the per
share amount that would have been payable to such holders had such holders
converted their Series A Preferred Stock or Series A-1 Preferred Stock, as the
case may be, into Common Stock pursuant to subsection (c) below.

               (b) Liquidation Preference.

                    (1) In the event of any Liquidation of the Corporation, the
holders of the outstanding shares of Series A Preferred Stock and Series A-1
Preferred Stock shall be entitled to receive, out of the assets of the
Corporation available for distribution to its shareholders, whether from
capital, surplus funds, earnings or otherwise, prior and in preference to any
distribution of any of the assets of the Corporation to the holders of Common
Stock of any other equity holder of the Corporation, an amount per share equal
to the then effective Series A



                                       2


Issue Price (as hereinafter defined) and the then effective Series A-1 Issue
Price (as hereinafter defined, each of the Series A Issue Price and the Series
A-1 Issue Price, an "Issue Price"), respectively, plus any declared but unpaid
dividends with respect to such share to the date of Liquidation for such share
(the "Series A Liquidation Preference Price" and the "Series A-1 Liquidation
Preference Price," respectively). The "Series A Issue Price" shall be an amount
per share equal to forty seven and one hundred ninety two thousandths cents
($0.47192) (as appropriately adjusted for any stock dividend, combination, stock
split, recapitalization or other similar event). The "Series A-1 Issue Price"
shall be an amount per share equal to eighty four and one thousand six hundred
sixty eight ten thousandths cents ($0.841668) (as appropriately adjusted for any
stock dividend, combination, stock split, recapitalization or other similar
event).

                    (2) Any consolidation, merger or reorganization of the
Corporation with or into any other corporation or entity if the Corporation's
shareholders (determined immediately prior to such consolidation, merger or
reorganization) do not control a majority of the outstanding voting securities
of such resulting combined corporation, or a sale, conveyance or disposition of
all or substantially all of the assets of the Corporation or a transaction or
series of related transactions in which more than fifty percent (50%) of the
voting power or fifty percent (50%) of the capital stock of the Corporation is
disposed of (other than in a Qualified Public Offering (defined below) as a
result of which the Preferred Stock is automatically converted to Common Stock
pursuant to subsection (c)(2) below) shall constitute a "Change of Control";
provided that any transaction or series of transactions resulting in more than
fifty percent (50%) of the voting power or fifty percent (50%) of the capital
stock of the Corporation being controlled by the holders of Preferred Stock
shall not be deemed to be a Change of Control. A Change of Control shall be
deemed to be a Liquidation of the Corporation; provided, however, that a Change
of Control shall not be treated as a Liquidation of the Corporation if the
holders of at least a majority of the then outstanding shares of Series A
Preferred Stock and Series A-1 Preferred Stock so elect (calculated on an
as-converted basis). If the shareholders elect that a Change of Control not be
treated as a Liquidation of the Corporation, then, subject to the following
paragraph, provision shall be made as part of such merger, consolidation, sale
or reorganization so that the holders of the Series A Preferred Stock and Series
A-1 Preferred Stock shall thereafter be entitled to receive upon conversion of
the Series A Preferred Stock and Series A-1 Preferred Stock, respectively, the
number of shares of stock or other securities or property of the Corporation, or
of the successor corporation resulting from such merger, consolidation, sale or
reorganization, to which a holder of that number of shares of Common Stock
deliverable upon conversion of the Series A Preferred Stock or Series A-1
Preferred Stock, as the case may be, would have been entitled upon such merger,
consolidation, sale or reorganization. In any such case, appropriate adjustment
shall be made in the application of the provisions of this subsection (b)(2)
with respect to the rights and interests of each holder of the Series A
Preferred Stock and the Series A-1 Preferred Stock after such merger,
consolidation, sale or reorganization to the end that the provisions of this
subsection (b)(2) (including adjustment of the Series A Conversion Price (as
hereinafter defined, each of the Series A Conversion Price and the Series A-1
Conversion Price, a "Conversion Price") and Series A-1 Conversion Price (as
hereinafter defined) then in effect for, and the number of shares issuable upon
conversion of, the Series A Preferred Stock and Series A-1 Preferred Stock,
respectively) shall thereafter be applicable, as nearly equivalent as may be
practicable.



                                       3


          The Series A Preferred Stock and Series A-1 Preferred Stock shall rank
on a parity as to the receipt of the respective preferential amounts for such
series upon the occurrence of a Liquidation. Notwithstanding the foregoing, if
the value of the stock, securities or property to be received by the holders of
the Series A Preferred Stock and Series A-1 Preferred Stock upon the Liquidation
of the Corporation pursuant to subsection (b)(1) or this subsection (b)(2) is
less than the then applicable Liquidation Preference Price per share for such
series, then the assets of the Corporation legally available for distribution to
the shareholders shall be distributed ratably among the holders of Series A
Preferred Stock and Series A-1 Preferred Stock, in proportion to the shares of
Common Stock underlying the shares of Series A Preferred Stock and Series A-1
Preferred Stock then held by them.

          The Corporation shall give each holder of record of Series A Preferred
Stock and Series A-1 Preferred Stock written notice of an impending transaction
described in this subsection (b)(2) not later than the earlier of (i) twenty
(20) days prior to the shareholders' meeting called to approve such transaction,
or (ii) twenty (20) days prior to the closing of such transaction, and shall
also notify such holders in writing of the final approval of such transaction.
The first of such notices shall describe the material terms and conditions of
the impending transaction and the provisions of this subsection (b)(2), and the
Corporation shall thereafter give such holders prompt notice of any material
changes. The transaction shall in no event take place sooner than twenty (20)
days after the Corporation has given the first notice provided for herein or
sooner than ten (10) days after the Corporation has given notice of any material
changes provided for herein; provided, however, that such periods may be
shortened upon the written consent of the holders of a majority of the Preferred
Stock (calculated on an as-converted basis) entitled to such notice or similar
right to receive notice.

          The provisions of this subsection (b)(2) are in addition to the
protective provisions of subsection (c) below.

                    (3) In the case of any Liquidation of the Corporation in
which the full liquidation preference of the holders of the outstanding shares
of Series A Preferred Stock and Series A-1 Preferred Stock has been satisfied as
set forth in subsection (b)(1) above, the holders of the outstanding shares of
Common Stock shall be entitled to receive, out of the assets of the Corporation
available for distribution to its shareholders, whether from capital, surplus
funds or earnings an amount equal to the Common Stock Liquidation Preference.
The "Common Stock Liquidation Preference" shall equal the number obtained by
multiplying (x) the quotient of (i) the sum of (A) the product of the then
effective Series A issue Price and the number of shares of Series A Preferred
Stock outstanding and (B) the product of the then effective Series A-1 Issue
Price and the number of shares of Series A-1 Preferred Stock outstanding, and
(ii) the percent of total Common Stock of the Corporation represented by the sum
of all outstanding shares of Series A Preferred Stock (on an as-if-converted
basis) plus all outstanding shares of Series A-1 Preferred Stock (on an
as-if-converted basis) and (y) the percent of total Common Stock of the
Corporation on a fully diluted basis (including the shares of Common Stock
issuable upon conversion of the Series A Preferred Stock and the Series A-1
Preferred Stock) represented by all outstanding shares of Common Stock. Each
holder of Common Stock shall be entitled to receive an amount equal to the
product of (A) the number of shares of Common Stock held by such shareholder and
(B) the quotient of the Common Stock Liquidation Preference divided by



                                       4


the number of shares of Common Stock outstanding (such quotient, the "Common
Stock Liquidation Preference Per Share").

          If the value of the stock, securities or property to be received by
the holders of the Common Stock upon the Liquidation of the Corporation pursuant
to this subsection (b)(3) and after satisfaction of the full liquidation
preference of Series A Preferred Stock and Series A-1 Preferred Stock is, on a
per share basis, less than the Common Stock Liquidation Preference Per Share,
then the assets of the Corporation legally available for distribution to holders
of Common Stock pursuant to this subsection (b)(3) shall be distributed ratably
among the holders of Common Stock, in proportion to the shares of Common Stock
then held by them.

                    (4) In the case of any Liquidation of the Corporation in
which the full liquidation preference of the holders of the outstanding shares
of Series A Preferred Stock and Series A-1 Preferred Stock has been satisfied as
set forth in subsection (b)(1) above and the full Common Stock Liquidation
Preference has been satisfied as set forth in the first paragraph of subsection
(b)(3) above, the remaining assets of the Corporation shall be distributed to
the holders of shares of Common Stock, Series A Preferred Stock and Series A-1
Preferred Stock on a pro rata basis per share as if all shares of Series A
Preferred Stock and Series A-1 Preferred Stock had been converted into shares of
Common Stock as of the date of such Liquidation.

                (c) Conversion. The holders of the Series A Preferred Stock and
Series A-1 Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):

                    (1) Right to Convert. Each share of Series A Preferred Stock
and Series A-1 Preferred Stock shall be convertible, at the option of the holder
thereof, at any time after the date of issuance of such share, at the office of
the Corporation or a transfer agent for such series of Preferred Stock, as the
case may be, into such number of duly authorized, fully paid and nonassessable
shares of Common Stock as is determined by dividing the Series A Issue Price or
the Series A-1 Issue Price, as the case may be, determined as of the date such
share is surrendered for conversion, plus declared and unpaid dividends thereon
to such date, by the Series A Conversion Price or Series A-1 Conversion Price,
as the case may be, at the time then in effect. The "Series A Conversion Price"
per share for shares of Series A Preferred Stock shall be the Series A Issue
Price adjusted as set forth in subsection (c)(5) below. The "Series A-1
Conversion Price" per share for shares of Series A-1 Preferred Stock shall be
the Series A-1 Issue Price adjusted as set forth in subsection (c)(5) below.

                    (2) Mandatory Conversion. Each share of Series A Preferred
Stock and Series A-1 Preferred Stock shall automatically be converted into such
number of shares of Common Stock as is determined by dividing the Series A Issue
Price or Series A-1 Issue Price, respectively, plus declared and unpaid
dividends to the date of conversion, by the Series A Conversion Price or Series
A-1 Conversion Price, as the case may be, at the time then in effect for such
stock, without further action by the holders of such shares and whether or not
the certificates representing such shares are surrendered to the Corporation or
its transfer agent, (i) at the closing of an underwritten public offering by the
Corporation of securities under an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act") covering the offer and
sale of capital stock for the account of the Corporation in which the aggregate
gross cash proceeds to the Corporation equals at least $25 million dollars (a
"Qualified



                                       5


Public Offering") or (ii) at such time as the holders of at least 66-2/3% of the
then outstanding shares of Series A Preferred Stock and Series A-1 Preferred
Stock, voting together (calculated on an as-converted basis), elect that all
outstanding shares of Series A Preferred Stock and Series A-1 Preferred Stock be
converted. In the event of a Qualified Public Offering, the person(s) entitled
to receive the Common Stock issuable upon conversion of Preferred Stock shall
not be deemed to have converted such Preferred Stock until immediately prior to
the closing of such offering.

                    (3) Mechanics of Conversion; Fractional Shares. Before any
holder of Preferred Stock shall be entitled to convert the same into shares of
Common Stock pursuant to subsection (c)(1) hereof (or, in the case of an
automatic conversion to receive a certificate for such holder's shares of Common
Stock outstanding as a result of such conversion), such holder shall surrender
the certificate or certificates therefor, duly endorsed, at the office of the
Corporation or of a transfer agent for such shares of Preferred Stock, as the
case may be, and shall give written notice by mail, overnight courier or
personal delivery to the Corporation at its principal corporate office, of the
election to convert the same and shall state therein the name or names in which
the certificate or certificates for shares of Common Stock are to be issued. The
Corporation shall, as soon as practicable thereafter, issue and deliver at such
office to such holder, or to the nominee or nominees of such holder, a
certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Preferred Stock to be converted, and the person or persons entitled to
receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock as of such date. Upon conversion of only a portion of the number of
shares of Preferred Stock represented by a certificate surrendered for
conversion, the Corporation shall issue and deliver to the holder of such
certificate, a new certificate for the number of shares of Preferred Stock not
converted. No fractional shares shall be issued upon conversion of the Preferred
Stock. Whether or not fractional shares are issuable upon such conversion shall
be determined on the basis of the total number of shares of such series of
Preferred Stock the holder is at the time converting into Common Stock and the
number of shares of Common Stock issuable upon such aggregate conversion. In
lieu of fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay such holder a cash amount equal to such fraction
multiplied by the fair market value of a share of the Common Stock, as
reasonably determined by the Board in good faith.

                    (4) Adjustments to Series A Preferred Stock and Series A-1
Preferred Stock Conversion Price.

                        (A) Issue of Additional Stock. Upon each issuance or
sale (or deemed issuance or sale) by the Corporation of any Additional Stock (as
defined in subsection (c)(4)(E) below) without consideration or for a
consideration per share less than the Series A Conversion Price, with respect to
Series A Preferred Stock, or Series A-1 Conversion Price, with respect to Series
A-1 Preferred Stock, in each case in effect immediately prior to the issuance of
such Additional Stock, the Series A Conversion Price and/or Series A-1
Conversion Price in effect immediately prior to each such issuance or sale
shall, upon such issue or sale, be reduced to a price determined by multiplying
the Conversion Price for the shares of the series of



                                       6


Preferred Stock with respect to which the adjustment is being made by a fraction
(i) the numerator of which shall be (x) the number of shares of Common Stock
outstanding (or deemed to be outstanding pursuant to subsection (c)(4)(D)
hereof) immediately prior to such issue or sale, plus (y) the number of shares
of Common Stock which the aggregate consideration received by the Corporation
for the total number of shares of Additional Stock so issued or sold (or deemed
issued or sold) would purchase at the Conversion Price for the shares of the
series of Preferred Stock with respect to which the adjustment is being made,
and (ii) the denominator of which shall be (x) the number of shares of Common
Stock outstanding (or deemed to be outstanding pursuant to subsection (c)(4)(D)
hereof) immediately prior to such issue or sale, plus (y) the number of shares
of such Additional Stock so issued or sold (or deemed issued or sold).

                         (B) No Adjustment of Series A Conversion Price or
Series A-1 Conversion Price. No adjustment of the Series A Conversion Price or
the Series A-1 Conversion Price shall be made in an amount less than one cent
($.01) per share provided that any adjustments which are not required to be made
by reason of this subsection shall be carried forward and shall be either taken
into account in any subsequent adjustment made prior to three (3) years from the
date of the event giving rise to the adjustment being carried forward, or shall
be made at the end of three (3) years from the date of the event giving rise to
the adjustment being carried forward. Except to the limited extent provided for
in subsections (c)(4)(D)(iii), (c)(4)(D)(iv) and (c)(6), no adjustment of the
Series A Conversion Price or Series A-1 Conversion Price shall have the effect
of increasing such Conversion Price above the Conversion Price for such series
at the time then in effect.

                         (C) Determination of Consideration.

                             (i) In the case of the issuance or sale (or deemed
     issuance or sale) of Additional Stock or Options (as defined in subsection
     (c)(4)(D) below) for cash, the consideration shall be deemed to be the net
     amount of cash received by the Corporation after deducting any discounts,
     underwriting or similar commissions, compensation or other expenses
     allowed, paid or incurred by the Corporation in connection with the
     issuance and sale (or deemed issuance or sale) thereof.

                             (ii) In the case of the issuance (or deemed
     issuance or sale) of Additional Stock or Options for a consideration in
     whole or in part other than cash, the consideration other than cash shall
     be deemed to be the fair value thereof as reasonably determined in good
     faith by the Board.

                         (D) Issue of Securities Deemed Issue of Common Stock.
In the case of the Issuance (whether before, on or after the date hereof) of
options, warrants or other rights to purchase or subscribe for Common Stock (all
such options, warrants or rights being hereinafter referred to as "Options"),
securities by their terms convertible into or exchangeable for Common Stock (all
such convertible or exchangeable securities being hereinafter referred to as
"Convertible Securities"), or options to purchase or rights to subscribe for
such convertible or exchangeable securities (which are not excluded from the
definition of Additional Stock), the following provisions shall apply:


                                       7


                             (i) The aggregate maximum number of shares of
     Common Stock deliverable upon exercise of such Options shall be deemed to
     have been issued at the time such Options were issued (whether or not such
     Options are then exercisable) and for a consideration equal to the
     consideration (determined in the manner provided in subsection (c)(4)(C)
     above), if any, received or receivable by the Corporation upon the issuance
     of such Options plus the minimum additional aggregate consideration, if
     any, payable to the Corporation upon the exercise of all such Options.

                             (ii) The aggregate maximum number of shares of
     Common Stock deliverable upon conversion of or in exchange for any such
     Convertible Securities or upon the exercise of options for such Convertible
     Securities and subsequent conversion or exchange thereof shall be deemed to
     have been issued at the time such Convertible Securities or such options
     were issued (whether or not such Convertible Securities are then
     convertible or exchangeable or such options are then exercisable) and for a
     consideration equal to the sum of (1) the consideration, if any, received
     or receivable by the Corporation upon the sale or issuance of any such
     Convertible Securities and related options (excluding any cash received on
     account of accrued interest or accrued dividends), plus (2) the minimum
     additional aggregate consideration, if any, payable to the Corporation upon
     the conversion or exchange of such Convertible Securities or the exercise
     of any related options (the consideration in each case to be determined in
     the manner provided in subsection (c)(4)(C) above).

                             (iii) In the event of any change in the number of
     shares of Common Stock deliverable or any increase or decrease in the
     consideration payable to the Corporation upon exercise of such Options, or
     upon conversion of or in exchange for such Convertible Securities or
     options for such Convertible Securities, any Series A Conversion Price or
     Series A-1 Conversion Price, as the case may be, obtained with respect to
     the adjustment which was made upon the issuance of such Options,
     Convertible Securities or options for such Convertible Securities, and any
     subsequent adjustments based thereon, shall be recomputed to reflect such
     change, but no further adjustment shall be made for the actual issuance of
     Common Stock or any payment of such consideration upon the exercise of any
     such Options or the conversion or exchange of such Convertible Securities
     or the exercise of options for such Convertible Securities.

                             (iv) Upon the expiration of any such Options, the
     termination of any such rights to convert or exchange or the expiration of
     any options or rights related to such Convertible Securities, any Series A
     Conversion Price or Series A-1 Conversion Price, as the case may be,
     obtained with respect to the adjustment which was made upon the issuance of
     such Options or Convertible Securities or options related to such
     Convertible Securities, and any subsequent adjustments based thereon, shall
     be recomputed to reflect the issuance of only the number of shares of
     Common Stock actually issued upon the exercise of such Options, upon the
     conversion or exchange of such Convertible Securities or upon the exercise
     of the options related to such Convertible Securities.

                             (v) In the case of any Options or Convertible
     Securities with respect to which the maximum number of shares of Common
     Stock



                                       8


     issuable upon exercise or conversion or exchange thereof is not
     determinable, no adjustment to the Conversion Price shall be made until all
     or any portion of such number becomes determinable, at which time an
     adjustment will be made with respect to all or such portion of such Options
     or Convertible Securities, as the case may be.

                         (E) Definition of Additional Stock. For the purpose of
this subsection (c)(4), "Additional Stock" shall mean any shares of Common Stock
issued (or deemed to have been issued pursuant to subsection (c)(4)(D) above) by
the Corporation after the date of the first issuance of the Series A Preferred
Stock (such first issuance date, the "Series A Purchase Date") other than:

                             (i) Common Stock issued pursuant to a transaction
     described in subsection (c)(5), (c)(6) or (c)(8) below;

                             (ii) Shares of Common Stock (as constituted on the
     date hereof) issuable or issued to employees, officers, directors, or
     consultants of the corporation pursuant to (1) options to purchase Common
     Stock which are outstanding on the Series A Purchase Date, (2) options to
     purchase Common Stock which are issued in connection with option plans that
     are approved by the Board after the Series A Purchase Date or (3) options
     to purchase Common Stock which are issued in connection with an increase in
     the number of shares of Common Stock that are reserved for issuance under
     any option plan of the Corporation in existence on the Series A Purchase
     Date, provided that such increase in the number of shares of Common Stock
     that are so reserved under such plan shall have been approved by the Board,
     and provided, further, that such options are issued after options for all
     shares of Common Stock that were reserved for issuance under such option
     plan on the Series A Purchase Date, but not yet issued as of the Series A
     Purchase Date, shall have been issued; and

                             (iii) Common Stock issued or issuable upon
     conversion of the Series A Preferred Stock and Series A-1 Preferred Stock.

                         (F) Challenge to Good Faith Determination. Whenever the
Board shall be required to make a determination in good faith of the fair market
value of any item under this subsection (c)(4), such determination may be
challenged in good faith by the holders of a majority of the Preferred Stock
then outstanding (calculated on an as-converted basis), and any dispute shall be
resolved by an investment banking firm of recognized standing selected by the
holders of a majority of the Preferred Stock then outstanding and reasonably
acceptable to the Company.

                     (5) Stock Splits, Subdivisions and Dividends. In the event
the Corporation shall at any time or from time to time after the Series A
Purchase Date, fix a record date for the effectuation of a split or subdivision
of the outstanding shares of Common Stock or the determination of holders of
Common Stock entitled to receive a dividend or other distribution payable in
additional shares of Common Stock or other securities or rights convertible or
exchangeable into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such holder
for the additional shares of Common Stock or the



                                       9


Common Stock Equivalents (including without payment for the additional shares of
Common Stock issuable upon conversion or exercise thereof) then, as of such
record date (or the date of such dividend distribution, split or subdivision if
no record date is fixed), the Series A Conversion Price and the Series A-1
Conversion Price shall be appropriately decreased so that the holders of Series
A Preferred Stock and Series A-1 Preferred Stock shall receive, upon the
conversion thereof, the number of shares of Common Stock and/or Common Stock
Equivalents they would have received as a result of conversion and the
subsequent event described above, if they had converted their shares of Series A
Preferred Stock or Series A-1 Preferred Stock, as the case may be, into Common
Stock immediately prior to the occurrence of such event.

                     (6) Combinations or Consolidations. In the event that the
number of shares of Common Stock outstanding at any time after the Series A
Purchase Date is decreased by a combination, reclassification or consolidation
of the outstanding shares of Common stock then, on the effective date of such
event, the Series A Conversion Price and the Series A-1 Conversion Price shall
be appropriately increased so that the number of shares of Common Stock issuable
on conversion of each share of such series shall be decreased in proportion to
such decrease in the number of outstanding shares.

                     (7) Other Distributions. In the event that the Corporation
shall declare a distribution on the Common Stock payable in securities of other
persons, evidences of indebtedness issued by the Corporation or other persons,
assets (excluding cash dividends) or options or rights not referred to in
subsection (c)(5) above, then, in each such case for the purpose of this
subsection (c)(7), the holders of the Series A Preferred Stock and the Series
A-1 Preferred Stock shall be entitled to a proportionate share of any such
distribution as though they were the holders of the number of shares of Common
Stock of the Corporation into which their shares of Series A Preferred Stock or
Series A-1 Preferred Stock, as the case may be, are convertible as of the record
date fixed for the determination of the holders of Common Stock of the
Corporation entitled to receive such distribution.

                     (8) Recapitalizations. If at any time or from time to time
there shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
this subsection (c)), provision shall be made so that the holders of the Series
A Preferred Stock and Series A-1 Preferred Stock shall thereafter be entitled to
receive upon conversion of such Preferred Stock the number of shares of stock or
other securities or property of the Corporation or otherwise, to which they
would have been entitled to receive, as a result of conversion and the
subsequent recapitalization, if they had converted their shares of such
Preferred Stock immediately prior to such recapitalization. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this subsection (c) with respect to the rights of the holders of such Preferred
Stock after the recapitalization to the end that the provisions of this
subsection (c) (including adjustment of the Conversion Price then in effect and
the number of shares issuable upon conversion of such Preferred Stock) shall be
applicable after that event as nearly equivalent as may be practicable.

                     (9) Other Dilutive Events. In case any event shall occur as
to which the provisions of this subsection (c) are not strictly applicable but
the failure to make any adjustment would not fairly protect the conversion
rights of the Series A Preferred Stock or the Series A-1 Preferred Stock, as the
case may be, in accordance with the essential intent and



                                       10


principle of the provisions of such subsection, then, in each such case, the
Corporation shall appoint a firm of independent certified public accountants of
recognized national standing (which may be the regular auditors of the
Corporation), which shall give their opinion upon the adjustment, if any, on a
basis consistent with the essential intent and principles established in
subsection (c), necessary to preserve, without dilution, the conversion rights
of such Preferred Stock. Upon receipt of such opinion, the Corporation will
promptly mail a copy thereof to the holders of such Preferred Stock and shall
make the adjustments described therein.

                     (10) No Impairment. The Corporation will not, by amendment
and/or restatement of these Articles of Incorporation or through any
reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action or
inaction, avoid or seek to avoid the observance or performance of any terms to
be observed or performed hereunder by the Corporation, but will at all times in
good faith assist in the carrying out of all the provisions of this subsection
(c) and in the taking of all such action as may be necessary or appropriate in
order to protect the holders of the Series A Preferred Stock and Series A-1
Preferred Stock against impairment of the Conversion Rights of such Preferred
Stock.

                     (11) Certificate as to Adjustments. Upon the occurrence of
each adjustment or readjustment of any Conversion Price pursuant to this
subsection (c), the Corporation, at its expense, shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of the Series A Preferred Stock or Series A-1 Preferred
Stock, as the case may be, a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Series A Preferred Stock or Series A-1 Preferred Stock
furnish or cause to be furnished to such holder a like certificate setting forth
(A) any such adjustment and readjustment with respect to such series, (B) the
Conversion Price for such series of Preferred Stock at the time then in effect,
and (C) the number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon the conversion of a share of
such series.

                     (12) Notices of Record Date. In the event of any taking by
the Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a dividend) or other distribution, any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the Corporation shall
mail to each holder of Series A Preferred Stock and Series A-1 Preferred Stock,
at lease twenty (20) days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right.

                     (13) Reservation of Common Stock. The Corporation shall at
all times reserve and keep available out of its authorized but unissued shares
of Common Stock solely for the purpose of effecting the conversion of the shares
of the Series A Preferred Stock and Series A-1 Preferred Stock such number of
its shares of Common Stock as shall from time to time be sufficient to effect
the conversion of all outstanding shares of the Series A Stock and Series A-1
Preferred Stock; and if at any time the number of authorized but unissued shares
of



                                       11


Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series A Preferred Stock and Series A-1 Preferred
Stock, in addition to such other remedies as shall be available to the holders
of such Series A Preferred Stock and Series A-1 Preferred Stock, the Corporation
will take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes, including, without
limitation, engaging in best efforts to obtain the requisite shareholder
approval of any necessary amendment to the Corporation's Articles of
Incorporation.

                     (14) Notices. Any notice required by the provisions of this
subsection (c) to be given to the holders of shares of Series A Preferred Stock
or Series A-1 Preferred Stock shall be deemed effectively given upon receipt by
the party by means of personal delivery, courier service delivery, electronic
mail or five (5) days after deposit with the United States Post Office, by
registered or certified mail, postage prepaid, and addressed to each holder of
record at its address appearing on the books of the Corporation.

               (d) Voting Rights.

                     (1) Except as required by law or pursuant to subparagraph
(2) below or Section (e) hereof, the holders of Series A Preferred Stock and
Series A-1 Preferred Stock and the holders of Common Stock shall be entitled to
notice of any shareholders' meeting and to vote together as a single class, on
an as-converted basis, upon any matter submitted to the shareholders for a vote
as follows: (i) each holder of shares of Series A Preferred Stock and Series A-1
Preferred Stock shall have one (1) vote for each full share of Common Stock into
which their respective shares of Series A Preferred Stock and Series A-1
Preferred Stock are convertible on the record date for the vote and (ii) the
holders of Common Stock shall have one (1) vote per share of Common Stock.

                     (2) The number of directors on the Board will be set at
five (5). Notwithstanding subparagraph (1) above, (i) the holders of the Series
A Preferred Stock and Series A-1 Preferred Stock, voting together, as a separate
class in the manner provided in subparagraph (1)(i) above, shall be entitled to
elect one (1) member to the Board (the "CMC Director") at each meeting of the
Corporation's shareholders for the election of directors or by written consent
of the holders of the requisite number, in accordance with the General
Corporation Law of California, of the outstanding shares of the Series A
Preferred Stock and Series A-1 Preferred Stock, taken together, and to remove
from office such director and to fill any vacancy Caused by the resignation,
death or removal of such director; and (ii) the holders of Common Stock and
Preferred Stock, voting together as a class, shall be entitled to elect four (4)
members of the Board at each meeting of the Corporation's shareholders the
election of directors or by written consent of the holders of the requisite
number, in accordance with the General Corporation Law of California, of shares
of the Common Stock outstanding and the Common Stock issuable upon conversion of
the outstanding Series A Preferred Stock and Series A-1 Preferred Stock, taken
together, and to remove from office any such director and to fill any vacancy
caused by the resignation, death or removal of any such director; provided, that
at any such time as the holders of Series A Preferred Stock and Series A-1
Preferred Stock, taken together, are not holders of, in the aggregate, at least
ten percent (10%) of the Common Stock of the Corporation (on an as-if-converted
basis), the holders of Series A Preferred Stock and Series




                                       12


A-1 Preferred Stock shall forfeit their right to designate a director in
accordance with clause (i) above and such director shall be elected by the
holders of Common Stock and Preferred Stock, voting together as a class, in
accordance with the provisions of clause (ii) above.

               (e) Additional Series A and Series A-1 Preferred Protective
Provisions. For so long as any shares of Series A Preferred Stock and Series A-1
Preferred Stock are outstanding, the Corporation shall not, without first
obtaining the approval of each holder of Series A Preferred Stock and Series A-1
Preferred Stock:

                     (1) Amend, modify or repeal any provision of the
Corporation's Articles of Incorporation or By-Laws in any manner which would
alter or change the rights, qualifications, preferences, powers, privileges or
the restrictions provided for the benefit of, the Series A Preferred Stock or
Series A-1 Preferred Stock, including, but not limited to:

                         (i) Amend Article THIRD sections (C)(2)(a) or (b);

                         (ii) Reduce the stated value or liquidation preference
     of, or dividend on the Series A Preferred Stock or Series A-1 Preferred
     Stock;

                         (iii) Change the place or currency of payment of any
     liquidation preference or dividend to which a holder of shares of Series A
     Preferred Stock or Series A-1 Preferred Stock is entitled pursuant to these
     Articles of Incorporation;

                         (iv) Impair the right to institute suit for the
     enforcement of any payment on or with respect to any share of Series A
     Preferred Stock or Series A-1 Preferred Stock;

                         (v) Reduce the percentage of outstanding Series A
     Preferred Stock or Series A-1 Preferred Stock necessary to modify or amend
     the terms thereof or to grant waivers.

                     (2) Amend the Corporation's Articles of Incorporation in a
manner which would adversely affect the right to convert any share of Series A
Preferred Stock or Series A-1 Preferred Stock including, without limitation, any
amendment which would adversely affect the calculation of the Issue Price or the
Conversion Price for such series.

               (f) Status of Converted or Redeemed Stock. In the event any
shares of Series A Preferred Stock or Series A-1 Preferred Stock shall be
converted pursuant to subsection (c) above, the shares so converted shall be
cancelled and shall not be issuable by the Corporation, and the Articles of
Incorporation of the Corporation shall be appropriately amended to effect the
corresponding reduction in the Corporation's authorized capital stock.
Notwithstanding the foregoing, no such amendment shall be required unless the
aggregate number of shares converted exceeds twenty-five percent (25%) of the
Corporation's then authorized shares of Series A Preferred Stock and Series A-1
Preferred Stock.

                                       13


               FOURTH: The liability of the directors of the Corporation for
monetary damages shall be eliminated to the fullest extent permissible under
California law.

               FIFTH: The Corporation is authorized to provide indemnification
of agents (as defined in Section 317 of the California Corporations Code)
through bylaw provisions, agreements with agents, vote of shareholders or
disinterested directors or otherwise, in excess of the indemnification otherwise
permitted by Section 317 of the California Corporations Code, subject only to
the applicable limits set forth in Section 204 of the California Corporations
Code, with respect to actions for breach of duty to the Corporation and its
shareholders.

               3. The foregoing Second Amended and Restated Articles were duly
approved by the Board of Directors.

               4. The foregoing Second Amended and Restated Articles have been
duly approved by the holders of the requisite number of shares of this
Corporation in accordance with Sections 902 and 903 of the California General
Corporation Law. The total number of outstanding shares of each class entitled
to vote with respect to the foregoing amendment was 12,747,030 shares of Common
Stock and 4,238,006 shares of Series A Preferred Stock. The number of shares of
Common Stock and Series A Preferred Stock voting in favor of the foregoing
Second Amended and Restated Articles equaled or exceeded the vote required. The
vote required was a majority of the outstanding shares of Common Stock and all
holders of the Series A Preferred Stock.




                                       14



               We further declare under penalty of perjury under the laws of the
State of California that the matters set forth in this certificate are true and
correct to our own knowledge.

Signed on November 19, 2003

                                    /s/ Che Voigt
                                    ---------------------------------
                                    Che Voigt
                                    President


                                       15



               We further declare under penalty of perjury under the laws of the
State of California that the matters set forth in this certificate are true and
correct to our own knowledge.

Signed on November 19, 2003

                                           /s/ Shanta Drilsma
                                           -------------------------------
                                           Shanta Drilsma
                                           Secretary


                                       16


                            CERTIFICATE OF AMENDMENT

                                       OF

                 AMENDED AND RESTATED ARTICLES OF INCORPORATION

                                       OF

                                    SDG, INC.

                                 * * * * * * * *

         We, Christopher C. Cambria the Vice President, Secretary and Stephen M.
Souza the Vice President, Treasure of SDG, Inc., a corporation duly organized
and existing under the laws of the State of California, do hereby certify:

         1. That they are the Vice President, Secretary and the Vice President,
Treasurer, respectively, of SDG, Inc., a California corporation.

         2. That an amendment to the articles of incorporation of this
corporation has been approved by the board of directors.

         3. The amendment so approved by the board of directors is as follows:

         Article 1 of the amended and restated articles of incorporation of this
corporation is amended to read as follows:

         The name of the corporation is L-3 Communications Sonoma EO, Inc.

         4. That the shareholders have adopted said amendment by written
consent. That the wording of said amendment as approved by written consent of
the shareholders is the same as that set forth above. That said written consent
was signed by the holders of outstanding shares having not less than the minimum
number of required votes of shareholders necessary to approve said amendment in
accordance with Section 902 of the California Corporation Code.

         5. That the designation and total number of outstanding shares entitled
to vote on or give written consent to said amendment and the minimum percentage
vote required of each class or series entitled to vote on or give written
consent to said amendment for approval thereof are as follows:

Designation            Number of shares        Minimum
                       outstanding entitled    percentage vote
                       to vote                 required to approve*
- ---------------------- ----------------------- ---------------------------
Common Stock           30,000                  more than 50 percent
Preferred Stock        10,000                  voting as a single class






                     OFFICERS' CERTIFICATE OF CORRECTION OF

                           CERTIFICATE OF AMENDMENT OF
                 AMENDED AND RESTATED ARTICLES OF INCORPORATION

                                       OF

                       L-3 COMMUNICATIONS SONOMA EO, INC.

         We, Stephen M. Souza, Vice President-Treasurer, and Christopher C.
Cambria, Vice President-Secretary, of L-3 Communications Sonoma EO, Inc., a
corporation duly organized and existing under the laws of the state of
California, hereby certify:

         1. That they are the Vice President-Treasurer and the Vice
President-Secretary respectively, of L-3 Communications Sonoma EO, Inc.

         2. That the name of the corporation is L-3 Communications Sonoma EO,
Inc., a California corporation.

         3. That the instrument being corrected is entitled Certificate if
Amendment of Amended and Restated Articles of Incorporation, and that said
instrument was filed with the Secretary of State of California on May 19, 2005.

         4. Provision 5 of the Certificate of Amendment of the Amended and
Restated Articles of Incorporation should be corrected to read:

         "5. That the designation and total number of outstanding shares
entitled to vote on or give written consent to said amendment and the minimum
percentage vote required of each class or series entitled to vote on or give
written consent to said amendment for approval thereof are as follows:

Designation                   Number of shares       Minimum
                              outstanding entitled   percentage vote
                              to vote                required to approve*
- ----------------------------- ---------------------- -------------------------
Series A Company Preferred       4,238,006
Series A-1 Company Preferred     3,564,350           more than 50 percent
Common Stock                           100           voting as a single class"






         5. This certificate does not alter the wording of any resolution or
written consent which was in fact adopted by the Board of Directors or the
shareholders of the L-3 Communications Sonoma EO, Inc.

         Each of the undersigned declares under penalty or perjury that the
statements contained in the foregoing certificate are true of their own
knowledge.

         Executed at 600 Third Avenue New York NY 10016, on June 10, 2005.

                                             /s/ Stephen M. Souza
                                             ---------------------------
                                             Vice President-Treasurer



                                             /s/ Christopher C. Cambria
                                             ---------------------------
                                             Vice President-Secretary

EX-3.116

                                                                   EXHIBIT 3.116



                           AMENDED AND RESTATED BYLAWS

                                       OF

                      SDG, INC, D/B/A SONOMA DESIGN GROUP,

                            A CALIFORNIA CORPORATION

                        (HEREINAFTER, THE "CORPORATION")

                                   ARTICLE I

                                     OFFICES
                                     -------

     Section 1. Principal Executive Office. The principal executive office of
the Corporation shall be in such place as the Board of Directors (the "Board")
shall determine. The Board may change the location of such principal executive
office if it so determines.

     Section 2. Other Offices. The Corporation also may have offices (including
branch or subordinate offices) at such other places both within and without the
State of California as the Board may from time to time determine.


                                   ARTICLE II

                             MEETING OF SHAREHOLDERS
                            -------------------------

     Section 1. Place of Meetings. Meetings of the shareholders for the election
of directors or for any other purpose shall be held at such time and place,
either within or without the State of California, as shall be designated from
time to time by the Board and stated in the notice of the meeting or in a duly
executed waiver of notice thereof.

     Section 2. Annual Meetings. The Annual Meeting of Shareholders shall be
held on such date and at such time as shall be designated from time to time by
the Board and stated in the notice of the meeting, at which meeting the
shareholders shall elect a Board of Directors by a plurality vote, and transact
such other business as may properly be brought before the meeting.

     Section 3. Special Meetings. Special Meetings of Shareholders, for any
purpose or purposes, may be called by the President, Secretary or Treasurer, and
shall be called by any such officer at the request in writing of a majority of
the Board. Such request shall state the purpose or purposes of the proposed
meeting.

     Section 4. Notice of Meetings. Written notice of an Annual Meeting or
Special Meeting stating the place, date, and hour of the meeting and in the case
of a Special Meeting, the purpose



                                                                               2

or purposes for which the meeting is called, shall be given not less than ten
nor more than sixty days before the date of the meeting to each shareholder
entitled to vote at such meeting.

     Section 5. Quorum. Except as otherwise provided by law or by the Articles
of Incorporation, the holders of a majority of the capital stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the shareholders for the
transaction of business. If, however, such quorum shall not be present or
represented at any meeting of the shareholders, the shareholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented.

     Section 6. Voting. Any questions brought before any meeting of shareholders
shall be decided by a majority vote of the number of shares entitled to vote,
present in person or represented by proxy. Such votes may be cast in person or
by proxy, but no proxy shall be voted on or after three years from its date,
unless such proxy provides for a longer period.

     Section 7. Action by Written Consent. Any action required to be taken at
any annual or special meeting of shareholders, or any action which may be taken
at any annual or special meeting of such shareholders, may be taken without a
meeting, without prior notice and without a vote, if a consent in writing shall
be signed by the holders of outstanding share having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those shareholders who have not
consented in writing.


                                  ARTICLE III

                                    DIRECTORS
                                    ---------

     Section 1. Number and Election of Directors. The number of directors that
shall constitute the Board shall be not less than two nor more than three. The
first Board of Directors shall consist of two directors. Thereafter, within the
limits specified above, the number of directors shall be determined by the Board
or by the shareholders. Except as provided in Section 2 of this Article III,
directors shall be elected by a plurality of the votes cast at Annual Meetings
of Shareholders, and each director so elected shall hold office until the next
Annual Meeting and until his successor is duly elected and qualified, or until
his earlier resignation or removal.

     Section 2. Vacancies. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority vote of all directors then in office, or by a sole remaining director,
and the directors so chosen shall hold office until the next annual election and
until their successors are duly elected and qualified, or until their earlier
resignation or removal.

     Section 3. Committees. The Board may designate one or more committees,
which committees shall, to the extent provided in the resolution of the Board
establishing such a committee, have all authority and may exercise all the
powers of the Board in the management of



                                                                               3

the business and affairs of the Corporation to the extent lawful under the
General Corporation Law of the State of California.

     Section 4. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board which may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
statute or by the Articles of Incorporation or by these Bylaws directed or
required to be exercised or done by the shareholders.

     Section 5. Meetings. The Board of the Corporation may hold meetings, both
regular and special, either within or without the State of California. Regular
meetings of the Board may be held without notice at such time and at such place
as may from time to time be determined by the Board. Special meetings of the
Board may be called by the president or any one director with one day's notice
to each director, either personally or by mail, telephone or facsimile
transmission.

     Section 6. Quorum; Board Action. Except as may be otherwise specifically
provided by law, the Articles of Incorporation or these Bylaws, at all meetings
of the Board, a majority of the entire Board of Directors shall constitute a
quorum for the transaction of business, and the act of a majority of the entire
Board of Directors shall be the act of the Board. If a quorum shall not be
present at any meeting of the Board, the directors present thereat may adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.

     Section 7. Actions of Board. Unless otherwise provided by the Articles of
Incorporation or these Bylaws, any action required or permitted to be taken at
any meeting of the Board or of any committee thereof may be taken without a
meeting, if all the members of the Board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committee.

     Section 8. Compensation. The Corporation shall reimburse the reasonable
expenses incurred by members of the Board in connection with attendance at
meetings of the Board and of any committee on which such member serves;
provided, that the foregoing shall not preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.

     Section 9. Removal. Unless otherwise restricted by the Articles of
Incorporation or by law, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of shares entitled
to vote at an election of directors.


                                   ARTICLE IV

                                    OFFICERS
                                    --------

     The officers of the Corporation shall consist of a President, a Secretary,
a Treasurer and such other additional officers with such titles as the Board
shall determine, all of whom shall be chosen by and shall serve at the pleasure
of the Board. Such officers shall have the usual powers and shall perform all
the usual duties incident to their respective offices. All officers shall be
subject to the supervision and direction of the Board. The authority, duties or
responsibilities of



                                                                               4

any officer of the Corporation may be suspended by the President with or without
cause. Any officer elected or appointed by the Board may be removed by the Board
with or without cause.


                                    ARTICLE V

                                     NOTICES
                                     -------


     Section 1. Notices. Whenever written notice is required by law, the
Articles of Incorporation or these Bylaws, to be given to any director, member
of a committee or shareholder, such notice may be given by mail, addressed to
such director, member of a committee or shareholder, at his address as it
appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Written notice may also be given personally
or by telegram, electronic mail, facsimile or cable.

     Section 2. Waivers of Notice. Whenever any notice is required by law, the
Articles of Incorporation or these Bylaws, to be given to any director, member
of a committee or shareholder, a waiver thereof in writing, signed by the person
entitled to notice, whether before or after the time stated therein, shall be
deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened.


                                   ARTICLE VI

                               GENERAL PROVISIONS
                               ------------------

     Section 1. Dividends. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Articles of Incorporation, may be declared by
the Board at any regular or special meeting, and may be paid in cash, in
property, or in shares of the capital stock. Before payment of any dividend,
there may be set aside out of any funds of the Corporation available for
dividends such sum or sums as the Board from time to time, in its absolute
discretion, deems proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for any proper purpose, and the Board may modify or abolish any
such reserve.

     Section 2. Fiscal Year. The fiscal year of the Corporation shall be fixed
by resolution of the Board.

     Section 3. Corporate Seal. The corporate seal shall have inscribed thereon
the name of the Corporation, the year of its organization and the words
"Corporate Seal, California". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.


                                                                               5

                                  ARTICLE VII

                                 INDEMNIFICATION
                                 ---------------


     Section 1. Indemnification of Officers and Directors.

         (a) Indemnification. Each person who was or is a party or is threatened
to be made a party or is otherwise involved in any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (a "proceeding"), by
reason of being or having been a director or officer of the Corporation, or of
any predecessor corporation, or being or having been a director or officer
serving at the request of the Corporation as a director, officer, employee, or
other agent of another corporation, partnership, joint venture, trust, or other
enterprise (including service with respect to corporation-sponsored employee
benefit plans), whether the basis of the proceeding is alleged action or
inaction in an official capacity as a director or officer or in any other
capacity while serving as a director or officer, shall, subject to the terms of
any agreement between the Corporation and that person, be indemnified and held
harmless by the Corporation to the fullest extent permissible under California
law and the Articles of Incorporation, against all expense, liability, and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties,
and amounts paid in settlement) actually and reasonably incurred or suffered by
that person in connection therewith, except that amounts shall be payable in
settlement of a proceeding only if the settlement is approved in writing by the
Corporation. This indemnification shall continue as to a person who has ceased
to be a director or officer for acts performed while a director or officer and
shall inure to the benefit of his or her heirs, executors, and administrators.
Notwithstanding the foregoing, the Corporation shall indemnify any such person
in connection with a proceeding (or part thereof) initiated by that person only
if the proceeding (or part thereof) was authorized by the Board. The right to
indemnification conferred in this Article VII shall include the right to be paid
by any proceeding in advance of final disposition to the fullest extent
permitted by law, except that payment under this Article VII of such expenses in
advance of the final disposition of a proceeding shall be conditioned upon
delivery to the Corporation of a written request for such payment and of an
undertaking by or on behalf of the director or officer to repay all amounts so
advanced if it shall be ultimately determined that the director or officer is
not entitled to be indemnified.

         (b) Exclusions. Notwithstanding the foregoing or any other provisions
under this Article VII, the Corporation shall not be liable under this Article
VII to indemnify a director or officer against expenses, liabilities, or losses
incurred or suffered in connection with, or to make any advances with respect
to, any proceeding against a director or officer: (i) as to which the
Corporation is prohibited by applicable law from paying an indemnity; (ii) with
respect to expenses of defense or investigation, if the expenses were or are
incurred without the Corporation's consent (which consent may not be
unreasonably withheld); (iii) for which final payment is actually made to the
director or officer under an insurance policy maintained by the Corporation,
except in respect of any excess beyond the amount of payment under the policy;
(iv) for which payment is actually made to the director or officer under an
indemnity by the Corporation otherwise than pursuant to this Article VII, except
in respect of any excess beyond the amount of payment under that indemnity; (v)
based upon or attributable to the director or officer gaining in fact any
personal profit or advantage to which not legally entitled; (vi) for an
accounting of profits made from the purchase or sale by the director or officer
of securities of the


                                                                               6


Corporation pursuant to the provisions of Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto or similar provisions of any
federal, state, or local statutory law; or (vii) based upon acts or omissions
involving intentional misconduct or a knowing and culpable violation of law.

     Section 2. Indemnification of Employees and Agents. A person who was or is
a party or is threatened to be made a party to or is involved in any proceeding
by reason of being or having been an employee or agent of the Corporation or
being or having been an employee or agent of the Corporation serving at the
request of the corporation as an employee or agent of another enterprise,
including service with respect to Corporation-sponsored employee benefit plans,
whether the basis of such action is alleged action or inaction in an official
capacity or in any other capacity while serving as an employee or agent, may,
upon appropriate action by the Corporation and subject to the terms of any
agreement between the Corporation and that person, be indemnified and held
harmless by the Corporation up to the fullest extent permitted by California law
and the Articles of Incorporation, against all expense, liability, and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties,
and amounts paid or to be paid in settlement) actually and reasonably incurred
or suffered by that person in connection therewith.

     Section 3. Right of Directors and Officers to Bring Suit. If a claim under
Section 1 of this Article VII is not paid by the Corporation or on its behalf
within 90 days after a written claim has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim, and, if successful in whole or in part,
the claimant also shall be entitled to be paid the expense of prosecuting the
claim.

     Section 4. Successful Defense. Notwithstanding any other provision of this
Article VII, to the extent that a director or officer has been successful on the
merits or otherwise (including the dismissal of a proceeding without prejudice
or the settlement with the written consent of the Corporation of a proceeding
without admission of liability), in defense of any proceeding referred to in
Section 1 or in defense of any claim, issue, or matter therein, that director or
officer shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred in connection therewith.

     Section 5. Indemnity Agreements. The Corporation may enter into agreements
with any director, officer, employee, or agent of the Corporation providing for
indemnification to the fullest extent permissible under applicable law and the
Articles of Incorporation.

     Section 6. Subrogation. In the event of payment by the Corporation of a
claim under Section 1 or Section 2 of this Article VII, the Corporation shall be
subrogated to the extent of such payment to all of the rights of recovery of the
indemnified person, who shall execute all papers required and shall do
everything that may be necessary or appropriate to secure such rights, including
the execution of such documents necessary or appropriate to enable the
Corporation effectively to bring suit to enforce such rights.

     Section 7. Nonexclusivity of Rights. The right to indemnification provided
by this Article VII shall not be exclusive of any other right which any person
may have or hereafter


                                                                               7


acquire under any statute, bylaw, agreement, vote of shareholders or
disinterested directors, or otherwise.

     Section 8. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee, or agent of the
Corporation or another corporation, partnership, joint venture, trust, or other
enterprise against any expense, liability, or loss, whether or not the
Corporation would have the power to indemnify that person against such expense,
liability, or loss under California law.

     Section 9. Expenses as a Witness. To the extent that any director, officer,
or employee of the Corporation is by reason of that position a witness in any
action, suit, or proceeding, he or she will be indemnified against all costs and
expenses actually and reasonably incurred by him or her or on his or her behalf
in connection therewith.

     Section 10. Nonapplicability to Fiduciaries of Employee Benefit Plans. This
Article VII does not apply to any proceeding against any trustee, investment
manager, or other fiduciary of an employee benefit plan in that person's
capacity as such, even though that person may also be an agent of the
Corporation. The Corporation shall have power to indemnify that trustee,
investment manager, or other fiduciary to the extent permitted by Corporations
Code Section 207(f) .

     Section 11. Separability. Each and every paragraph, sentence, term, and
provision of this Article VII is separate and distinct so that if any paragraph,
sentence, term, or provision shall be held to be invalid or unenforceable for
any reason, its invalidity or unenforceability shall not affect the validity or
enforceability of any other paragraph, sentence, term, or provision of this
Article VII. To the extent required, any paragraph, sentence, term, or provision
of this Article VII may be modified by a court of competent jurisdiction to
preserve its validity and to provide the claimant with, subject to the
limitations set forth in this Article VII and any agreement between the
Corporation and the claimant, the broadest possible indemnification permitted
under applicable law.

     Section 12. Effect of Repeal or Modification. No repeal or modification of
this Article VII shall adversely affect any right of indemnification of a
director, officer, employee, or agent of the Corporation existing at the time of
the repeal or modification with respect to any action or omission occurring
prior to such repeal or modification.


                                  ARTICLE VIII

                                   AMENDMENTS
                                   ----------

     Section 1. Amending and Repealing. These Bylaws may be altered, amended or
repealed, in whole or in part, or new Bylaws may be adopted by the majority vote
of the entire Board of Directors.

     Section 2. Entire Board of Directors. As used in this Article VIII and in
these Bylaws generally, the term "entire Board of Directors" means the total
number of the directors which the Corporation would have if there were no
vacancies.

EX-3.117

                                                                   EXHIBIT 3.117

                      RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                              THE TITAN CORPORATION

     THE TITAN CORPORATION, a corporation organized and existing under the laws
of the State of Delaware, hereby certifies as follows:

     1. The name of the Corporation is THE TITAN CORPORATION. This Corporation
was originally incorporated under the name "Electronic Memories & Magnetics
Corporation." The date of filing the Corporation's original Certificate of
Incorporation with the Secretary of State of the State of Delaware was July 11,
1969.

     2. The text of the Certificate of Incorporation as amended or supplemented
heretofore is hereby restated to read as herein set forth in full:

     First: The name of this Corporation is The Titan Corporation.

     Second: The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle.
The name of its registered agent at that address is The Corporation Trust
Company.

     Third: The nature of the business or purposes to be conducted or promoted
by the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware.

     Fourth: The Corporation is authorized to issue two classes of shares of
stock, which shall be designated Preferred Stock and Common Stock, respectively.
The total number of shares of all classes of stock which the Corporation shall
have authority to issue shall be 22,500,000, consisting of 2,500,000 shares of
Preferred Stock of the par value of $1 per share, and 20,000,000 shares of
Common Stock of the par value of $.01 per share.

     Preferred Stock: Preferred Stock may be issued from time to time in one or
more series. The initial series of Preferred Stock is designated $1.00
Cumulative Convertible Preferred Stock (referred to hereinafter as the "Initial
Series Preferred Stock"), and the number of shares of the Initial Series
Preferred Stock is 1,068,102 shares.

     1. Initial Series of Preferred Stock. The powers, preferences and rights,
and qualifications, limitations or restrictions thereof, of the Initial Series
Preferred Stock shall be as follows:

     (a) Dividends. The holders of outstanding shares of Initial Series
Preferred Stock shall be entitled to receive, when and as declared by the Board
of Directors of the Corporation out of any funds legally available therefor,
cash dividends at the rate of One Dollar ($1.00) per shares per annum. Dividends
shall be payable quarterly on the 10th day of each March, June, September and
December in each year. Such dividends shall be cumulative and shall accrue
daily, whether or not earned or declared, from the date of issuance or, in the
case of Initial Series




                                                                               2

Preferred Stock issued when other shares of such stock are outstanding, from the
end of the last quarterly dividend period for which dividends have been paid in
full on outstanding Initial Series Preferred Stock. No dividend or other
distribution, other than a dividend solely in shares of the class or series upon
which it is distributed, shall be paid upon or declared or set apart for any
share of any class or series junior as to dividends to the Initial Series
Preferred Stock for any quarterly dividend period unless the dividends accrued
and payable on the Initial Series Preferred Stock for that period and all prior
periods have been paid or declared. No interest shall be payable on any
accumulation of unpaid dividends.

     (b) Voting Rights. The holders of shares of Initial Series Preferred Stock
shall be entitled to one-third vote per share in the election of directors and
all other matters coming before any vote of the stockholders. Except as
otherwise provided by law and hereinbelow, such shares shall not vote as a
class.

     If and whenever accrued dividends on the Initial Series Preferred Stock
shall not have been paid, or declared and a sum sufficient for the payment
thereof set aside, in an amount equivalent to six (6) quarterly dividends on all
shares of Initial Series Preferred Stock at the time outstanding, then and in
such event the holders of the Initial Series Preferred Stock, voting separately
as a class, shall be entitled at any annual meeting of the stockholders or
special meeting held in place thereof, or at a special meeting of the holders of
the Initial Series Preferred Stock called as hereinafter provided, to elect two
(2) directors. Such right of the holders of Initial Series Preferred Stock to
elect two (2) directors may be exercised until all dividends in default on the
Initial Series Preferred Stock shall have been paid in full or declared and
funds sufficient therefor set aside, and when so paid or provided for the right
of the holders of Initial Series Preferred Stock to elect such number of
directors shall cease, but subject always to the same provisions for the vesting
of such voting rights in the case of any such future dividends default or
defaults. At any time when such voting rights shall have so vested in the
holders of the Initial Series Preferred Stock, the Secretary of the Corporation
may, and upon the written request of the holders of not less than twenty five
percent of the number of shares of the Initial Series Preferred Stock then
outstanding, addressed to him at the principal office of the Corporation, shall,
call special meeting of the holders of the Initial Series Preferred Stock for
the election of the directors to be elected by them as hereinafter provided, to
be held in the case of such written request within forty (40) days after
delivery of such request, and in either case to be held at the place and upon
the notice provided by law and in the By-Laws for the holding or meetings of
stockholders; provided, however, that the Secretary shall not be required to
call such a special meeting in the case of any such request received less than
ninety (90) days before the date fixed for the next ensuing annual meeting of
stockholders. No such special meeting and no adjournment thereof shall be held
on a date less than thirty (30) days before the annual meeting of the
stockholders or a special meeting held in place thereof next succeeding the time
when the holders of the Initial Series Preferred Stock become entitled to elect
directors as above provided. If at any such annual or special meeting or any
adjournment thereof the holders of at least a majority of the Initial Series
Preferred Stock then outstanding shall be present or represented by proxy, then
by vote of the holders of at least a majority of the shares of Initial Series
Preferred Stock present or so represented at such meeting, the then authorized
number of directors of the Corporation shall be increased by two (2) and the
holders of the Initial Series Preferred Stock shall be entitled to elect the
additional directors so provided for. The directors so elected shall serve until
the next annual meeting or until their respective successors shall be elected
and




                                                                               3

qualify, provided, however, that whenever the holders of the Initial Series
Preferred Stock shall be divested of voting rights as above provided, the terms
of office of all persons elected as directors by the holders of the Initial
Series Preferred Stock as a class, or elected to fill any vacancies resulting
from the death, resignation or removal of directors so elected by the holders of
Initial Series Preferred Stock, shall forthwith terminate, and the authorized
number of directors shall be reduced accordingly.

     If, during any interval between any special meeting of the holders of the
Initial Series Preferred Stock for the election of directors to be elected by
them as provided above and next ensuing annual meeting of stockholders, or
between annual meetings of stockholders, or between annual meetings of
stockholders, or between annual meetings of stockholders for the election of
directors, and while the holders of the Initial Series Preferred Stock shall be
entitled to elect two (2) directors, the number of directors who have been
elected by the holders of the Initial Series Preferred Stock shall, by reason of
resignation, death or removal be less than the total number of directors subject
to election by the holders of the Initial Series Preferred Stock, (i) the
vacancy or vacancies in the directors elected by the holders of the Initial
Series Preferred Stock may be filled by a majority vote of the remaining
directors then in office, although less than a quorum, and (ii) if such vacancy
or vacancies be not so filled within forty (40) days after the creation thereof,
the Secretary of the Corporation shall call a special meeting of the holders of
the Initial Series Preferred Stock and such vacancy or vacancies shall be filled
at such special meeting of the holders of the Initial Series Preferred Stock and
such vacancy or vacancies shall be filled at such special meeting.

     No director elected by the vote of the holders of Initial Series Preferred
Stock as a class, or elected by other directors to fill a vacancy resulting from
the death, resignation or removal of a director elected by such class vote, may
be removed from office by the vote or written consent of stockholders unless
such vote or written consent includes that of the holders of a majority of the
outstanding shares of Initial Series Preferred Stock.

     So long as any shares of Initial Series Preferred Stock are outstanding,
the Corporation shall not, by an amendment to the Certificate of Incorporation
or by merger or consolidation or in any other manner, authorize or increase any
class or series of stock ranking prior to the Initial Series Preferred Stock
either as to payment of dividends or distribution of assets or both, or change
the preferences or limitation of the Initial Series Preferred Stock in any
material respect adverse to the holders thereof, without the affirmative vote or
written consent of the holders of at least two-thirds (2/3rds) of the shares of
Initial Series Preferred Stock at the time outstanding.

     (c) Redemption. Shares of Initial Series Preferred Stock shall be
redeemable on and after, but not before, the fifth anniversary of the date upon
which the Agreement of Consolidation of which this Certificate is a part is
filed with the Secretary of State of the State of Delaware (the "filing date").
The Redemption Price per share shall be the amount shown in the following table
plus an amount equal to any accrued and unpaid dividends (whether or not earned
or declared) to the date fixed for redemption.



                                                                               4




                                                                                              REDEMPTION PRICE
                                                                                                 PER SHARE
                                                                                               (EXCLUSIVE OF
DATE OF REDEMPTION                                                                           UNPAID DIVIDENDS)
                                                                                             ----------------

On and after fifth anniversary date of the filing date and prior to sixth                        $    21.50
anniversary date thereof

On and after sixth anniversary date of the filing date and prior to seventh                           21.25
anniversary date thereof

On and after seventh anniversary date of the filing date and prior to eighth                          21.00
anniversary date thereof

On and after eighth anniversary date of filing date and prior to ninth anniversary                    20.75
date thereof

On and after ninth anniversary date of filing date and prior to tenth anniversary                     20.50
date thereof

On and after tenth anniversary date of filing date and prior to eleventh anniversary                  20.25
date thereof

On and after eleventh anniversary date of the filing date                                             20.00



     When the shares of Initial Series Preferred Stock shall have become subject
to redemption, they may be redeemed in whole or in part, but only at the option
of the Corporation, by the vote of its Board of Directors, at any time, or from
time to time, at the then applicable Redemption Price. In case of the redemption
of a part only of the shares then outstanding, the shares to be redeemed shall
be selected pro rata or by lot or in such other manner as the Board of Directors
may determine. At least thirty (30) days prior notice of every redemption shall
be mailed to the record holders of the shares to be redeemed at their addresses
shown on the books of the Corporation. Notice shall also be published at least
once not less then thirty (30) days prior to the redemption date in a daily
newspaper printed in the English language and published and of general
circulation in the Borough of Manhattan, City of New York.

     If such notice of redemption shall have been made by the Corporation, and
if on or before the date fixed for redemption an amount in cash sufficient to
pay the Redemption Price of the shares called for redemption shall have been
deposited as a trust fund for the benefit of holders of such shares, with a bank
or trust company in the Borough of Manhattan, City of New York or City of Los
Angeles, California, and having capital, surplus and undivided profits of at
least $5,000,000.00, then after the making of such deposit the holders of such
shares shall be entitled to no rights whatsoever except (a) the right to receive
payment of the Redemption Price from such bank or trust company or from the
Corporation, as hereinafter provided, upon surrender of the certificates thereof
and (b) the right to exercise prior to the close of business on the date fixed
for redemption the right to convert the shares so called for redemption into
Common Stock as set forth herein below.

     Any funds so deposited which shall not be required for such redemption
because of the exercise of such right to convert subsequent to the date of such
deposit shall be returned to the Corporation forthwith. Any interest accrued on
the funds so deposited shall belong to the Corporation and be paid to it from
time to time. Any funds so deposited by the Corporation and unclaimed at the end
of two years from the date fixed for such redemption shall be repaid to the



                                                                               5

Corporation, upon its request, after which repayment the holders of such shares
so called for redemption shall look only to the Corporation for payment of the
Redemption Price thereof.

     On or after the date fixed for redemption and stated in such notice, each
holder of shares called for redemption shall surrender his certificate or
certificates evidencing such shares to the Corporation at the place designated
in such notice and shall thereupon be entitled to receive payment of the
Redemption Price. In case less than all the shares represented by any such
surrendered certificates are redeemed, a new certificate shall be issued
representing the unredeemed shares.

     The Corporation shall not redeem or purchase less than all of the shares of
the Initial Series Preferred Stock outstanding at any time unless all dividends
upon the Initial Series Preferred Stock for all previous quarterly dividend
periods and for the current quarterly dividend period shall have paid or
declared and funds therefor set apart. The shares of Initial Series Preferred
Stock shall not be subject to the operation of a purchase, retirement or sinking
fund.

     All shares of Initial Series Preferred Stock which shall have been redeemed
as herein provided shall be permanently retired and shall not be reissued and
the Corporation may from time to time take such appropriate corporate action as
maybe necessary to reduce the authorized Initial Series Preferred Stock
accordingly.

     (d) Liquidation Preference. In the event of a voluntary or involuntary
liquidation or winding up or dissolution of the Corporation, the holders of
shares of Initial Series Preferred Stock shall be entitled to be paid Twenty
Dollars ($20.00) per share plus, in each case, a further amount equal to the
dividends unpaid and accrued thereon to the date of such distribution, and no
more, before any payment shall be made or any assets distributed to the holders
of any stock of any class or series ranking junior in liquidation to the Initial
Series Preferred Stock.

     If the amounts payable upon liquidation on shares of Initial Series
Preferred Stock have been paid in full, the remaining assets and funds of the
Corporation shall be distributed among the holders of the Common Stock and the
holders of stock of any other class or series ranking junior in liquidation to
Initial Series Preferred Stock according to their respective interests; however,
if the amounts available for distribution upon liquidation to holders of Initial
Series Preferred Stock and of shares of any class or series ranking on a parity
with Initial Series Preferred Stock in liquidation are not sufficient to pay in
full the holders of all outstanding shares of Initial Series Preferred Stock and
of such class or series ranking on a parity with it, then such amounts shall be
distributed ratably among the holders of Initial Series Preferred Stock and the
holders of shares of such other class or series ranking on a parity with Initial
Series Preferred Stock, in proportion to the full preferential amounts to which
the holders of such shares are respectively entitled.

     A consolidation or merger of this Corporation with or into any other
corporation or corporations, shall not be deemed to be a liquidation,
dissolution, or winding up within the meaning of this paragraph (d).



                                                                               6

     (e) Conversion Rights. The holders of shares of Initial Series Preferred
Stock shall have conversion rights as follows:

          (1) Each holder of shares of Initial Series Preferred Stock may at any
     time on or prior to the close of business on such date, if any, as may have
     been fixed for the redemption of said shares in any notice of redemption
     given pursuant to the provisions hereof, upon surrender of the certificates
     therefor, convert any or all of his shares of Initial Series Preferred
     Stock into full paid and nonassessable shares of the Common Stock of the
     Corporation at the rate of one-third (1/3rd) shares of Common Stock for
     each share of Initial Series Preferred Stock surrendered for conversion,
     provided, however, that no payment or adjustment shall be made on account
     of any dividends due or accumulated on shares of Initial Series Preferred
     Stock surrendered for conversion. Such conversion rights shall be exercised
     by surrendering for such purpose to the Corporation, at any place where the
     Corporation shall maintain a transfer agency for its Common Stock or its
     Initial Series Preferred Stock, certificates representing the shares to be
     converted, duly endorsed in blank or accompanied by proper instruments of
     transfer, and upon such surrender the person exercising such option to
     convert shall be deemed to be holder of record of the shares of Common
     Stock issuable upon such conversion, notwithstanding that the shares
     register of the Corporation shall then be closed or the certificates
     representing such shares of Common Stock shall not then be actually
     delivered to him.

          (2) The number of shares of Common Stock into which shares of Initial
     Series Preferred Stock may be converted shall be subject to adjustment from
     time to time in certain cases as follows:

              (a) In case the Corporation shall (i) pay a dividend in shares of
     its Common Stock, (ii) subdivide its outstanding shares of Common Stock,
     (iii) combine its outstanding shares of Common Stock into a smaller number
     of shares, or (iv) issue by reclassification of its shares of Common Stock
     any shares of the Corporation, the number and kind of shares into which the
     Initial Series Preferred Stock is convertible shall be adjusted so that the
     holder of any shares of Initial Series Preferred Stock thereafter
     surrendered for conversion shall be entitled to receive the number and kind
     of shares of the Corporation which he would have owned or have been
     entitled to receive after the happening of any of the events described
     above, had such a share of Initial Series Preferred stock been converted
     immediately prior to the happening of such event. Such adjustment shall be
     made whenever any of the events listed above shall occur and shall become
     effective retroactively immediately after the record date in the case of
     dividend and shall become effective immediately after the effective date in
     the case of a subdivision, combination or reclassification.

              (b) In the case the Corporation shall issue rights or warrants to
     all holders of its Common Stock entitling them to subscribe for or purchase
     shares of Common Stock at a price per share less than the current market
     price per share of Common Stock (as defined in Paragraph (d) below) at the
     record date mentioned below, the number of shares of Common Stock into
     which each share of Initial Series Preferred Stock shall thereafter be
     convertible shall be determined by multiplying the number of




                                                                               7

     shares of Common Stock into which such share of Initial Series Preferred
     Stock was theretofore convertible by a fraction, of which the numerator
     shall be the number of shares of Common Stock outstanding on the record
     date for determination of holders entitled to receive such rights or
     warrants plus the number of additional shares of Common Stock offered for
     subscription or purchase, and of which the denominator shall be the number
     of shares of Common Stock outstanding on such record date plus the number
     of shares which the aggregate offering price (before deduction of
     underwriting discounts or commissions and expenses) of the total number of
     shares so offered would purchase at such current market price. Such
     adjustment shall be made whenever such rights or warrants are issued, and
     shall become affective retroactively immediately after the record date for
     the determination of stockholders entitled to receive such rights or
     warrants.

              (c) In case the Corporation shall distribute to all holders of its
     Common Stock evidences of its indebtedness or assets (excluding cash
     dividends or distributions) or rights to subscribe of warrants (excluding
     those referred to in Paragraph (b) above), then in each such case the
     number of shares of Common Stock into which each share of Initial Series
     Preferred Stock shall thereafter be convertible shall be determined by
     multiplying the number of shares of Common Stock into which such share of
     Initial Series Preferred Stock was theretofore convertible by a fraction,
     of which the numerator shall be the current market price per share of
     Common Stock (as defined in Paragraph (d) below) at the record date
     mentioned below, and of which the denominator shall be such current market
     price per share of the Common Stock, less the then fair market value (as
     determined by the Board of Directors of the Corporation, whose
     determination shall be conclusive) of the portion of the evidences of
     indebtedness, assets, rights to subscribe or warrants so distributed
     applicable to one share of Common Stock. Such adjustment shall be made
     whenever any such distribution is made and shall become effective
     retroactively immediately after the record date for the determination of
     shareholders entitled to receive such distribution.

              (d) For the purpose of any computation under Paragraphs (b) and
     (c) above, the current market price per share of Common Stock at any record
     date shall be deemed to be the average of the daily closing prices for the
     thirty consecutive business days commencing forty-five business days before
     such record date. The closing price for each day shall be the last reported
     sale price (regular way) or, in case no such reported sale takes place on
     such day, the average of the reported closing bid and asked prices (regular
     way), in either case on the New York Stock Exchange, or, if the Common
     Stock is not listed on such Exchange, on the principal national securities
     exchange on which the Common Stock is listed, or if not listed on any
     national securities exchange, the average of the closing bid and asked
     prices as furnished by any New York Stock Exchange firm selected from time
     to time by the Corporation for the purpose.

              (e) In case of any capital reorganization or any reclassification
     of the capital stock of the Corporation or in case of the consolidation or
     merger of the Corporation with or into another corporation or the sale or
     conveyance of all or substantially all of the assets of the Corporation to
     another corporation, each share of Initial Series Preferred Stock shall be
     convertible, as of the day following the date upon




                                                                               8

     which such reorganization, reclassification, consolidation, merger, sale or
     conveyance becomes effective, into the same hind and amount of securities
     (including shares of stock) or other assets, or both, which were issuable
     or distributable to the holders of outstanding shares of Common, Stock of
     the Corporation upon such reorganization, reclassification, consolidation,
     merger, sale or conveyance, in respect of that number of shares of Common
     Stock into which such share of Initial Series Preferred Stock might have
     been converted immediately prior to such reorganization, reclassification,
     consolidation, merger, sale or conveyance; and in any such case,
     appropriate adjustments (as determined by the Board of Directors) shall be
     made in the application of the provisions herein set forth with respect to
     the rights and interests thereafter of the holders of shares of Initial
     Series Preferred Stock, to the end that the provisions set forth herein
     (including provisions with respect to changes in, and other adjustments of,
     the conversion rate) shall thereafter be applicable, as nearly as
     reasonably may be, in relation to any securities or other assets thereafter
     deliverable upon the conversion of shares of Initial Series Preferred
     Stock.

              (f) Whenever the number of shares of Common Stock or other
     securities deliverable upon the conversion of shares of Initial Series
     Preferred Stock shall be adjusted pursuant to the provisions hereof, the
     Corporation shall forthwith file, at its principal office and with any
     transfer agent or agents for shares of Initial Series Preferred Stock and
     for shares of Common Stock, a statement, signed by the President or one of
     the Vice Presidents of the Corporation, and by its Treasurer or one of its
     Assistant Treasurers, stating the adjusted number of its shares of Common
     Stock or other securities deliverable per share or Initial Series Preferred
     Stock calculated to the nearest one-hundredth (1/100) and setting forth in
     reasonable detail the method of calculation and the facts requiring such
     adjustment and upon which such calculation is based. Each adjustment shall
     remain in effect until a subsequent adjustment hereunder is required.

              (g) The Corporation shall at all times reserve and keen available
     out of its authorized but unissued shares of Common Stock the full number
     of shares of Common Stock deliverable upon conversion of all the then
     outstanding shares of Initial Series Preferred Stock and shall take all
     such action as may be necessary to enable the Corporation lawfully to issue
     such shares of Common Stock upon the conversion of shares of Initial Series
     Preferred Stock.

              (h) No fractional shares of Common Stock shall be issued upon
     conversion, but in lieu thereof non-dividend bearing, non-voting scrip
     (exchangeable for full shares) shall be issued in such term, bearer or
     registered, in such denominations, expiring after such reasonable time and
     containing such provision for the sale of the full number of shares of
     Common Stock for which such scrip is exchangeable for the account of the
     holders of such scrip and such other terms and provisions, as the Board of
     Directors of the Corporation may from time to time determine prior to the
     issue of such scrip. The Corporation may, however, at its option, in lieu
     of issuing such scrip, make such equitable provision for the stockholders
     entitled to such scrip as the Board of directors may determine, including
     payment in cash, or sale of stock to the extent of such scrip and
     distribution of the net proceeds or otherwise. The number of full shares
     issuable upon conversion shall be computed on the basis of the aggregate
     number of




                                                                               9

     shares of Initial Series Preferred Stock evidenced by certificates
     surrendered for conversion at one time by the same holder.

              (i) All shares of Initial Series Preferred Stock which shall have
     been surrendered for conversion as herein provided shall be permanently
     retired and shall not be reissued, and the Corporation may from time to
     time take such appropriate corporate action as may be necessary to reduce
     the authorized Initial Series Preferred Stock accordingly.

     2. Other Series of Preferred Stock. With respect to any and all series of
Preferred Stock other than Initial Series Preferred Stock, the Board of
Directors of the Corporation is hereby expressly authorized to fix by resolution
or resolutions:

          (i) The distinctive designation and number of shares comprising such
     series, which number may (except where otherwise provided by the Board of
     Directors in creating such series) be increased or decreased (but not below
     the number of shares than outstanding) from time to time by like action of
     the Board of Directors;

          (ii) The dividend rights and rate of such series, the conditions and
     times upon which such dividends shall be payable, the relation which such
     dividends shall bear to the dividends payable on any other class of stock
     or series thereof, or any other series of the same class, and whether
     preferential dividends, if any, shall be cumulative or non-cumulative;

          (iii) Whether and the conditions upon which the shares of such series
     shall be subject to redemption by the Corporation and the times, prices and
     other terms and provisions upon which the shares of the series may be
     redeemed;

          (iv) Whether or not the shares of the series shall be subject to the
     operation of a retirement or sinking fund to be applied to the purchase or
     redemption of such shares and, if such retirement or sinking fund be
     established, the annual amount thereof and the terms and provisions
     relative to the operation thereof;

          (v) Whether or not the shares of the series shall be convertible into
     or exchangeable for shares of any other class or classes, or of any other
     series of the same class, and, if provision is made for conversion or
     exchange, the times prices, rates, adjustments, and other terms and
     conditions of such conversion or exchange;

          (vi) Whether or not the shares of the series shall have voting rights,
     in addition to the voting rights provided by law, and, if so, the terms of
     such voting rights;

          (vii) The rights of the share of the series in the event of voluntary
     or involuntary liquidation, dissolution, or upon the distribution of assets
     of the Corporation;

          (viii) Any other powers, preferences and relative, participating,
     optional or other special rights, and qualifications, limitations or
     restrictions thereof, of the shares of such series, as the Board of
     Directors may deem advisable and as shall not be inconsistent with the
     provisions of this Certificate of Incorporation.



                                                                              10

     Voting Rights of Common Stock: The holders of Common Stock of the
Corporation shall be entitled to one vote per share in the election of directors
and upon each other matter coming before any vote of stockholders.

     Fifth: No holders of any shares of any class or series of stock of the
Corporation shall have any preemptive right to subscribe to any additional
issues of any class or series of stock or other securities of the Corporation.

     Sixth: Whenever the vote of stockholders at a meeting thereof is required
or permitted to be taken for in connection with any corporate action, the
meeting and vote of stockholders may be dispensed with and such action may be
taken with the written consent of stockholders having not less than the minimum
percentage of the total vote required by statute for the proposed corporate
action, provided that prompt notice be given to all stockholders of the taking
of corporate action without a meeting and by less than unanimous written
consent.

     Seventh: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.

     Eighth: Meetings of stockholders may be held at such place, either within
or without the State of Delaware, as may be designated by or in the manner
provided in the By-Laws. The books of the Corporation may be kept (subject to
any provision contained in the statutes) outside the state of Delaware at such
place or places as may be designated from time to time by the Board of Directors
or in the By-Laws of the Corporation. Elections of directors need not be by
written ballot unless the By-Laws of the Corporation shall so provide.

     Ninth: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.

     Tenth: In addition to the other powers expressly granted by statute, the
Board of Directors of the Corporation shall have the power to repeal, alter or
amend the By-Laws of the Corporation.




                                                                              11

     Eleventh: Headings are for convenience of reference only and do not limit,
extend or otherwise affect the meaning of any section, subsection or paragraph.

     3. This Restated Certificate of Incorporation was duly adopted by the Board
of Directors, at a meeting thereof duly called and held pursuant to the By-laws
on November 6, 1986, at which meeting a quorum was present and acting
throughout, in accordance with Section 245 of the Delaware General Corporation
Law.

     4. The Restated Certificate of Incorporation only restates and integrates
and does not further amend the provisions of the Corporation's Certificate of
Incorporation as heretofore amended, and there is no discrepancy between those
provisions and the provisions of the Restated Certificate of Incorporation.

     IN WITNESS WHEREOF, The Titan Corporation has caused this Restated
Certificate of Incorporation to be made and to be signed by Gene W. Ray, its
President, and attested by D. Marshall Nelson, its Secretary, this 6th day of
November, 1986.

                                                 THE TITAN CORPORATION



                                                 By: /s/ Gene W. Ray
                                                     -------------------
                                                     Gene W. Ray,
                                                     President


ATTEST:

/s/ D. Marshall Nelson
- ------------------------
D. Marshall Nelson,
Secretary






                           CERTIFICATE OF AMENDMENT OF
                      RESTATED CERTIFICATE OF INCORPORATION

     The Titan Corporation, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:

     FIRST: That at a meeting of the Board of Directors of The Titan Corporation
resolutions were duly adopted setting forth two proposed amendments to the
Restated Certificate of Incorporation of said Corporation, declaring said
amendments to be advisable and directing that the amendments proposed be
considered at the next annual meeting of the stockholders of said Corporation.

     The first amendment renumbers Articles Ninth, Tenth and Eleventh of the
Restated Certificate of Incorporation as Articles Tenth, Eleventh and Twelfth
and adds a new Article Ninth to the Restated Certificate of Incorporation to
read in its entirety as follows:

     "Ninth: A director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as director, except to the extent such limitation of liability is
prohibited by Delaware General Corporation Law as the same exists or may
hereafter be amended."

     The second amendment amends the opening paragraph of Article Fourth of the
Restated Certificate of Incorporation, which paragraph now reads as follows:

     "Fourth: The Corporation is authorized to issue two classes of shares of
stock, which shall be designated Preferred Stock and Common Stock, respectively.
The total number of shares of all classes of stock which the Corporation shall
have authority to issue shall be 22,500,000, consisting of 2,500,000 shares of
Preferred Stock of the par value of $1.00 per share, and 20,000,000 shares of
Common Stock of the par value of $.01 per share."

so that from and after adoption of the second amendment, said paragraph shall
read as follows:

     "Fourth: The Corporation is authorized to issue two classes of stock, which
shall be designated Preferred Stock and Common Stock, respectively. The total
number of shares of all classes of stock which the Corporation shall have the
authority to issue shall be 32,500,000, consisting of 2,500,000 shares of
Preferred Stock of the par value of $1.00 per share, and 30,000,000 shares of
Common Stock of the par value of $.01 per share."

     SECOND: That thereafter, pursuant to resolution of its Board of Directors,
the annual meeting of the stockholders of said Corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware, at which meeting the necessary number of shares as
required by statute were voted in favor of the amendments.

     THIRD: That said amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.



                                                                               2

     IN WITNESS WHEREOF, The Titan Corporation has caused this Certificate to be
signed by Gene W. Ray, its President and Chief Executive Officer, and attested
by D. Marshall Nelson, its Secretary, this 25th day of June, 1987.

                                          THE TITAN CORPORATION



                                           By: /s/ Gene W. Ray
                                               ----------------------

                                               President

ATTEST:

By: D. Marshall Nelson
    --------------------------
    Secretary




                                                               STATE OF DELAWARE
                                                              SECRETARY OF STATE
                                                        DIVISION OF CORPORATIONS
                                                       FILED 09:00 AM 10/22/1998
                                                             981408772 - 0720430

                           CERTIFICATE OF AMENDMENT OF
                         CERTIFICATE OF INCORPORATION OF
                              THE TITAN CORPORATION

     The Titan Corporation (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify as follows:

     FIRST: The Board of Directors of the Corporation declared an amendment to
the Corporation's Certificate of Incorporation, as amended (the "Certificate")
advisable and approved a resolution to delete Article Fourth of the Certificate
in its entirety and replace it with the following:

             Fourth: The Corporation is authorized to issue two classes of
             stock, which shall be designated Preferred Stock and Common
             Stock, respectively. The total number of shares of all classes
             of stock which the Corporation shall have the authority to
             issue shall be 102,500,000, consisting of 2,500,000 shares of
             Preferred Stock of the par value of $1.00 per share, and
             100,000,000 shares of Common Stock of the par value of $.01
             per share.

     SECOND: Thereafter, the Board of Directors called a Special Meeting of the
Stockholders for October 21, 1998, at which the necessary number of shares as
required by statute were voted in favor of the amendment.

     THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.

     IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed and attached by its duly authorized officer this 21st day
of October, 1998.

                                          By: /s/ CHERRYL BARR
                                              ----------------------------------
                                               Cherryl Barr, Assistant Secretary



                                                                               2

                            CERTIFICATE OF AMENDMENT
                                       OF
                      RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                              THE TITAN CORPORATION

     The Titan Corporation (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, does herby certify:

     FIRST: That the Board of Directors of the Corporation declared an amendment
to the Corporation's Restated Certificate of Incorporation, as amended (the
"Certificate"), advisable and approved a resolution to amend the opening
paragraph of Article Fourth of the Certificate to read as follows:

             Fourth: The Corporation is authorized to issue two classes of
             stock, which shall be designated Preferred Stock and Common
             Stock, respectively. The total number of shares of all classes
             of stock which the Corporation shall have the authority to
             issue shall be 205,000,000, consisting of 5,000,000 shares of
             Preferred Stock, par value $1.00 per share, and 200,000,000
             shares of Common Stock, par value $.01 share.

     SECOND: That thereafter, pursuant to resolutions of the Board of Directors,
the annual meeting of the Corporation's stockholders was duly called and held,
upon notice in accordance with Section 222 of the General Corporation Law of the
State of Delaware, at which meeting on May 30, 2000 the necessary number of
shares as required by statute were voted in favor of the amendment.

     THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.

     IN WITNESS WHEREOF, The Titan Corporation has caused this Certificate of
Amendment to be signed by its duly authorized officer, as of the 2nd day of
June, 2000.

                                  The Titan Corporation

                                  /s/ GENE RAY
                                  -----------------------------
                                  Gene W. Ray, Chairman, Chief Executive Officer
                                  and President

ATTEST:

/s/ NICHOLAS J. COSTANZA
- ---------------------------
Name:  Nicholas J. Costanza
Senior Vice President, General Counsel and Secretary






                              CERTIFICATE OF MERGER

                                       OF

                           SATURN VI ACQUISITION CORP.

                                  WITH AND INTO

                              THE TITAN CORPORATION

   (UNDER SECTION 251 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE)


     The Titan Corporation, a Delaware corporation ("Titan"), hereby certifies
that:

     1. The name and state of incorporation of such of the constituent
corporations is as follows:

          (a) The Titan Corporation, a Delaware corporation ("Titan"); and

          (b) Saturn VI Acquisition Corp., a Delaware corporation ("Saturn").

     2. The Agreement and Plan of Merger (the "Merger Agreement"), dated as of
June 2, 2005 and amended June 28, 2005, by and between Titan and Saturn has been
approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with Section 251 of the General
Corporation Law of the State of Delaware.

     3. The surviving corporation in the merger is The Titan Corporation (the
"Surviving Corporation"). At the effective time of the merger, the name of the
Surviving Corporation will be changed to "L-3 Communications Titan Corporation."

     4. Article First of the Amended and Restated Certificate of Incorporation
of Titan shall be amended by changing the name to "L-3 Communications Titan
Corporation" and as amended will be the Certificate of Incorporation of the
Surviving Corporation.

     5. The executed Merger Agreement is on the file at an office of the
Surviving Corporation at 3303 Science Park Road, San Diego, CA 92121.

     6. A copy of the Merger Agreement will be furnished by the Surviving
Corporation, on request and without cost, to any stockholder of the constituent
corporation.

     7. This certificate of merger and merger provided for herein shall become
effective upon filing with Secretary of State of the State of Delaware.



                                                                               2

     IN WITNESS WHEREOF, Titan has caused this certificate to be signed as of
the 29th day of July, 2005.

                                                     THE TITAN CORPORATION



                                      By: /s/ Mark W. Sopp
                                          -------------------------------------
                                          Name:  Mark W. Sopp
                                          Title:  Senior Vice President, Chief
                                          Financial Officer and Treasurer

EX-3.118

                                                                   EXHIBIT 3.118

                              THE TITAN CORPORATION

                               Amendment to Bylaws

         On February 4, 2005, the Board of Directors approved the following
amendment to the Bylaws.


                  1. Article III, Section 3.02 of the Bylaws is hereby amended
         to read in its entirety as follows:

                                  "ARTICLE III

                               BOARD OF DIRECTORS

                  SECTION 3.02 Number, Qualification, and Term of Office. The
         number of directors shall be ten (10); provided, however, that the
         number of directors may be increased in the event of certain specified
         arrearages in the payment of dividends on the $1.00 Cumulative
         Preferred Stock of the Corporation, such increases to be in the number,
         for the period of time effected in the manner, prescribed in the
         Certificate of Incorporation. Directors need not be stockholders. Each
         of the directors of the Corporation shall hold office until the annual
         meeting of stockholders held next after his election and until his
         successor shall have been duly elected and shall qualify, or until his
         death in office, or until he shall resign or shall have been removed in
         the matter hereinafter provided."

                  2. Article III of the Bylaws shall remain the same in all
         other respects.


                              THE TITAN CORPORATION

                              AMENDMENTS TO BY-LAWS

         On March 22, 2000 the Board of Directors approved the following
amendments to the Bylaws:

                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

                  SECTION 2.06 Voting.

                  (c) any such voting rights may be exercised by the stockholder
         entitled thereto in person or by his proxy appointed by an instrument
         in writing, telephone, Internet or such other electronic means
         generally used for such purposes, subscribed by such stockholder or by
         his attorney thereunto authorized and delivered to the secretary of the
         meeting; provided, however, that no proxy shall be voted or acted upon
         after three years



         from its date unless said proxy shall provide for a longer period. The
         attendance at any meeting of a stockholder who may theretofore have
         given a proxy shall not have the effect of revoking the same unless he
         shall in writing so notify the secretary of the meeting prior to the
         voting of such proxy. At any meeting of the stockholders all matters,
         except as otherwise provided in these Bylaws or by law, shall be
         decided by the vote of a majority in voting interest of the
         stockholders present in person or by proxy and entitled to vote thereat
         and thereon, a quorum being present. The vote at any meeting of the
         stockholders on any question need not be by ballot, unless so directed
         by the chairman of the meeting. On a vote by ballot each ballot shall
         be signed by the stockholder voting or by his proxy, if there be such a
         proxy, and it shall state the number of shares voted.

         Article II of the By-Laws shall remain the same in all other respects.

         On February 17, 2000 the Board of Directors approved the following
amendments to the Bylaws

                  1. Article III, Section 3.02 of the By-Laws is hereby amended
         to read in its entirety as follows:

                                   ARTICLE III

                               BOARD OF DIRECTORS

                  SECTION 3.02 Number, Qualification, and Term of Office. The
         number of directors shall be nine (9); provided, however, that the
         number of directors may he increased in the event of certain specified
         arrearages in the payment of dividends on the $1.00 Cumulative
         Convertible Preferred Stock of the Corporation, such increases to be in
         the number, for the period of time effected in the manner, prescribed
         in the Certificate of Incorporation. Directors need not be
         stockholders. Each of the directors of the Corporation shall hold
         office until the annual meeting of stockholders held next after his
         election and until his successor shall have been duly elected and shall
         qualify, or until his death in office, or until he shall resign or
         shall have been removed in the manner hereinafter provided.

                  2. Article III of the By-Laws shall remain the same in all
         other respects.

                  3. Article VIII of the By-Laws is hereby amended to read in
         its entirety as follows:

                                  ARTICLE VIII

                                 INDEMNIFICATION

                  Section 8.01 Indemnification and Insurance. (a) Each person
         who was or is made a party or is threatened to be made a party to or is
         involved in any action, suit, or proceeding, whether civil, criminal,
         administrative or investigative (hereinafter a "proceeding"), by reason
         of the fact that he or she or a person of whom he or she is the legal
         representative is or was a director or officer of the Corporation or is
         or was serving

2



         at the request of the Corporation as a director, officer, employee or
         agent of another corporation or of a partnership, joint venture, trust
         or other enterprise, including service with respect to employee benefit
         plans maintained or sponsored by the Corporation, whether the basis of
         such proceeding is alleged action in an official capacity as a
         director, officer, employee or agent or in any other capacity while
         serving as a director, officer, employee or agent, shall be indemnified
         and held harmless by the Corporation to the fullest extent authorized
         by the General Corporation Law of the State of Delaware as the same
         exists or may hereafter be amended (but, in the case of any such
         amendment, only to the extent that such amendment permits the
         Corporation to provide broader indemnification rights than said law
         permitted the Corporation to provide prior to such amendment), against
         all expense, liability and loss including attorneys' fees, judgments,
         fines, ERISA excise taxes or penalties and amounts paid or to be paid
         in settlement) reasonably incurred or suffered by such person in
         connection therewith and such indemnification shall continue as to a
         person who has ceased to be a director, officer, employee or agent and
         shall inure to the benefit of his or her heirs, executors and
         administrators; provided, however, that except as provided in paragraph
         (c) of this By-Law, the Corporation shall indemnity any such person
         seeking indemnification in connection with a proceeding (or part
         thereof) initiated by such person only if such proceeding (or part
         thereof) was authorized by the Board of Directors. The right to
         indemnification conferred in this By-Law shall be a contract right and
         shall include the right to be paid by the Corporation the expenses
         incurred in defending any such proceeding in advance of its final
         disposition, such advances to be paid by the Corporation within 20 days
         after the receipt by the Corporation of a statement or statements from
         the claimant requesting such advance or advances from time to time;
         provided, however, that if the General Corporation Law of the State of
         Delaware requires, the payment of such expenses incurred by a director
         or officer in his or her capacity as a director or officer (and not in
         any other capacity in which service was or is rendered by such person
         while a director or officer, including, without limitation, service to
         an employee benefit plan) in advance of the final disposition of a
         proceeding, shall be made only upon delivery to the Corporation of an
         undertaking by or on behalf of such director or officer, to repay all
         amounts so advanced if it shall ultimately be determined that such
         director or officer is not entitled to be indemnified under this By-Law
         or otherwise.

                  (b) To obtain indemnification under this By-Law, a claimant
         shall submit to the Corporation a written request, including, therein
         or therewith such documentation and information as is reasonably
         available to the claimant and is reasonably necessary to determine
         whether and to what extent the claimant is entitled to indemnification.
         Upon written request by a claimant for indemnification pursuant to the
         first sentence of this paragraph (b), a determination, if required by
         applicable law, with respect to the claimant's entitlement thereto
         shall be made as follows: (1) if requested by the claimant, by
         Independent Counsel (as hereinafter defined), or (2) if no request is
         made by the claimant for a determination by Independent Counsel, (i) by
         the Board of Directors by a majority vote of a quorum consisting of
         Disinterested Directors (as hereinafter defined), or (ii) if a quorum
         of the Board of Directors consisting of Disinterested Directors is not
         obtainable or, even if obtainable, such quorum of Disinterested
         Directors so directs, by Independent Counsel in a written opinion to
         the Board of Directors, a copy of which shall

3



         be delivered to the claimant, or (iii) if a quorum of Disinterested
         Directors so directs, by the stockholders of the Corporation. In the
         event the determination of entitlement to indemnification is to be made
         by Independent Counsel at the request of the claimant, the Independent
         Counsel shall be selected by the Board of Directors unless there shall
         have occurred within two years prior to the date of the commencement of
         the action, suit or proceeding for which indemnification is claimed a
         "Change of Control," as defined in the Change of Control Employment
         Agreement dated March 2000 between the Corporation and certain senior
         executives, in which case the Independent Counsel shall be selected by
         the claimant unless the claimant shall request that such selection be
         made by the Board of Directors. If it is so determined that the
         claimant is entitled to indemnification, payment to the claimant shall
         be made within 10 days after such determination.

                  (c) If a claim under paragraph (a) of this By-Law is not paid
         in full by the Corporation within thirty days after a written claim
         pursuant to paragraph (b) of this By-Law has been received by the
         Corporation, the claimant may at any time thereafter bring suit against
         the Corporation to recover the unpaid amount of the claim and, if
         successful in whole or in part, the claimant shall be entitled to be
         paid also the expense of prosecuting such claim. It shall be a defense
         to any such action (other than an action brought to enforce a claim for
         expenses incurred in defending any proceeding in advance of its final
         disposition where the required undertaking, if any is required, has
         been tendered to the Corporation) that the claimant has not met the
         standard of conduct which makes it permissible under the General
         Corporation Law of the State of Delaware for the Corporation to
         indemnify the claimant for the amount claimed, but the burden of
         proving such defense shall be on the Corporation. Neither the failure
         of the Corporation (including its Board of Directors, Independent
         Counsel or stockholders) to have made a determination prior to the
         commencement of such action that indemnification of the claimant is
         proper in the circumstances because he or she has met the applicable
         standard of conduct set forth in the General Corporation Law of the
         State of Delaware, nor an actual determination by the Corporation
         (including its Board of Directors, Independent Counsel or stockholders)
         that the claimant has not met such applicable standard of conduct,
         shall be a defense to the action or create a presumption that the
         claimant has not met the applicable standard of conduct.

                  (d) If a determination shall have been made pursuant to
         paragraph (b) of this By-Law that the claimant is entitled to
         indemnification, the Corporation shall be bound by such determination
         in any judicial proceeding commenced pursuant to paragraph (c) of this
         By-Law.

                  (e) The Corporation shall be precluded from asserting in any
         judicial proceeding commenced pursuant to paragraph (c) of this By-Law
         that the procedures and presumptions of this By-Law are not valid,
         binding and enforceable and shall stipulate in such proceeding that the
         Corporation is bound by all the provisions of this By-Law.

                  (f) The right to indemnification and the payment of expenses
         incurred in defending a proceeding in advance of its final disposition
         conferred in this By-Law shall not be exclusive of any other right
         which any person may have or hereafter acquire under any statute,
         provision of the Certificate of Incorporation, By-Laws, agreement, vote
         of

4



         stockholders or Disinterested Directors or otherwise. No repeal or
         modification of this By-Law shall in any way diminish or adversely
         affect the rights of any director, officer, employee or agent of the
         Corporation hereunder in respect of any occurrence or matter arising
         prior to any such repeal or modification.

                  (g) The Corporation may maintain insurance, at its expense, to
         protect itself and any director, officer, employee or agent of the
         Corporation or another corporation, partnership, joint venture, trust
         or other enterprise against any expense, liability or loss, whether or
         not the Corporation would have the power to indemnify such person
         against such expense, liability or loss under the General Corporation
         Law of the State of Delaware. To the extent that the Corporation
         maintains any policy or policies providing such insurance, each such
         director or officer, and each such agent or employee to which rights to
         indemnification have been granted as provided in paragraph (h) of this
         By-Law, shall be covered by such policy or policies in accordance with
         its or their terms to the maximum extent of the coverage thereunder for
         any such director, officer, employee or agent.

                  (h) The Corporation may, to the extent authorized from time to
         time by the Board of Directors, grant rights to indemnification, and
         rights to be paid by the Corporation the expenses incurred in defending
         any proceeding in advance of its final disposition, to any employee or
         agent of the Corporation to the fullest extent of the provisions of
         this By-Law with respect to the indemnification and advancement of
         expenses of directors and officers of the Corporation.

                  (i) If any provision or provisions of this By-Law shall be
         held to be invalid, illegal or unenforceable for any reason whatsoever:
         (1) the validity, legality and enforceability of the remaining
         provisions of this By-Law (including, without limitation, each portion
         if any paragraph of this By-Law containing any such provision held to
         be invalid, illegal or unenforceable, that is not itself held to be
         invalid, illegal or unenforceable) shall not in any way be affected or
         impaired thereby; and (2) to the fullest extent possible, the
         provisions of this By-Law (including, without limitation, each such
         portion of any paragraph of this By-Law containing any such provision
         held to be invalid, illegal or unenforceable) shall be construed so as
         to give effect to the intent manifested by the provision held invalid,
         illegal or unenforceable.

                  Section 8.02 Certain Definitions. For purposes of this By-Law:

                  (a) "Disinterested Director" means a director of the
         Corporation who is not and was not a party to the matter in respect of
         which indemnification is sought by the claimant.

                  (b) "Independent Counsel" means a law firm, a member of a law
         firm, or an independent practitioner, that is experienced in matters of
         corporation law and shall include any person who, under the applicable
         standards of professional conduct then prevailing, would not have a
         conflict of interest in representing either the Corporation or the
         claimant in an action to determine the claimant's rights under this
         By-Law.

5



                  Section 8.03 Written Communication Required. Any notice,
         request or other communication required or permitted to be given to the
         Corporation under this By-Law shall be in writing and either delivered
         in person or sent by telecopy, telex, telegram, overnight mail or
         courier service, or certified or registered mail, postage prepaid,
         return receipt requested, to the Secretary of the Corporation and shall
         be effective only upon receipt by the Secretary.


                              THE TITAN CORPORATION

                               AMENDMENT TO BYLAWS

         On August 16, 2000 the Board of Directors approved the following
amendment to the Bylaws

                  1. Article III, Section 3.02 of the Bylaws is hereby amended
         to read in its entirety as follows:

                                   ARTICLE III

                               BOARD OF DIRECTORS

                  SECTION 3.02 Number, Qualification, and Term of Office. The
         number of directors shall be eleven (11); provided, however, that the
         number of directors may be increased in the event of certain specified
         arrearages in the payment of dividends on the $1.00 Cumulative
         Convertible Preferred Stock of the Corporation, such increases to be in
         the number, for the period of time effected in the manner, prescribed
         in the Certificate of Incorporation. Directors need not be
         stockholders. Each of the directors of the Corporation shall hold
         office until the annual meeting of stockholders held next after his
         election and until his successor shall have been duly elected and shall
         qualify, or until his death in office, or until he shall resign or
         shall have been removed in the manner hereinafter provided.

                  2. Article III of the Bylaws shall remain the same in all
         other respects.

6



                              THE TITAN CORPORATION
                            (A DELAWARE CORPORATION)


                                     BYLAWS
                      (AS AMENDED THROUGH OCTOBER 18, 1995)


                                    ARTICLE I

                                     OFFICES

         SECTION 1.01 Registered Office. The registered office of The Titan
Corporation (hereinafter called the Corporation) in the State of Delaware shall
be at No. 100 West Tenth Street, City of Wilmington, County of New Castle, and
the name of the registered agent in charge thereof shall be The Corporation
Trust Company.

         SECTION 1.02 Other Offices. The Corporation may also have an office or
offices at such other place or places, either within or without the State of
Delaware, as the Board of Directors (hereinafter called the Board) may from time
to time determine or as the business of the Corporation may require.


                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

         SECTION 2.01 Annual Meetings. The annual meeting of the stockholders of
the Corporation for the purpose of electing directors and for the transaction of
such other proper businesses as may come before the meeting shall be held at
such time, date and place as the Board shall determine by resolution, and, if
that day is a legal holiday, then on the next succeeding business day not a
legal holiday at the same hour. If the election of directors shall not be held
on the day designated for any annual meeting, or on the day of any adjourned
session thereof, the Board shall cause the election to be held as soon
thereafter as may be convenient at a special meeting of such stockholders.

         SECTION 2.02 Special Meetings. A special meeting of the stockholders
for the transaction of any proper business may be called at any time by the
Board, the Chairman of the Board or by the President.

         SECTION 2.03 Place of Meeting. All meetings of the stockholders shall
be held at such places, within or without the State of Delaware, as may from
time to time be designated in the respective notices or waivers of notice
thereof.

         SECTION 2.04 Notice of Meetings. Except as otherwise required by law,
notice of each meeting of the stockholders, whether annual or special, shall,
not less than ten (10) nor more than fifty (50) days before the date of the
meeting, be given to each stockholder of record





entitled to vote at such meeting by delivering a typewritten or printed notice
thereof to him personally, or by depositing such notice in the United States
mail, in a postage prepaid envelope, directed to him at his post-office address
furnished by him to the Secretary of the Corporation for such purpose or, if he
shall not have furnished to the Secretary of the Corporation his address for
such purpose, then at his post-office address last known to the Secretary, or by
transmitting a notice thereof to him at such address by telegraph, cable, or
wireless. Except as otherwise expressly required by law, no publication of any
notice of a meeting of the stockholders shall be required. Every notice of a
meeting of the stockholders shall state the place, date and hour of the meeting,
and, in the case of a special meeting, shall also state the purpose or purposes
for which the meeting is called. Notice of any meeting of stockholders shall be
deemed waived by any stockholder who shall attend such meeting in person or by
proxy, except a stockholder who shall attend such meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Except as
otherwise expressly required by law, notice of any adjourned meeting of the
stockholders need not be given if the time and place thereof are announced at
the meeting at which the adjournment is taken.

         SECTION 2.05 Quorum. Except in the case of any meeting for the election
of directors summarily ordered as provided by law, the holders of record of a
majority in voting interest of the shares of stock of the Corporation entitled
to be voted thereat, present in person or by proxy, shall constitute a quorum
for the transaction of business at any meeting of the stockholders of the
Corporation or any adjournment thereof. In the absence of a quorum at any
meeting or any adjournment thereof, a majority in voting interest of the
stockholders present in person or by proxy and entitled to vote thereat or, in
the absence therefrom of all the stockholders, any officer entitled to preside
at, or to act as secretary of, such meeting may adjourn such meeting from time
to time. At any such adjourned meeting at which a quorum is present any business
may be transacted which might have been transacted at the meeting as originally
called.

         SECTION 2.06 Voting. (a) Each stockholder shall, at each meeting of the
stockholders, be entitled to vote in person or by proxy each share or fractional
share of the stock of the Corporation having voting rights on the matter in
question and which shall have been held by him and registered in his name on the
books of the Corporation:

                  (i) on the date fixed pursuant to Section 6.05 of these Bylaws
         as the record date for the determination of stockholders entitled to
         notice of and to vote at such meeting, or

                  (ii) if no such record date shall have been so fixed, then (a)
         at the close of business on the day next preceding the day on which
         notice of the meeting shall be given or (b) if notice of the meeting
         shall be waived, at the close of business on the day next preceding the
         day on which the meeting shall be held.

         (b) Shares of its own stock belonging to the Corporation shall not be
entitled to vote. Persons holding in a fiduciary capacity stock of the
Corporation shall be entitled to vote such stock so held. A person whose stock
is pledged shall be entitled to vote such stock, unless in the transfer by the
pledgor on the books of the Corporation he shall have expressly empowered

2



the pledgee to vote thereon, in which case only the pledgee, or his proxy, may
represent such stock and vote thereon. Stock having voting power standing of
record in the names of two or more persons, whether fiduciaries, members of a
partnership, joint tenants in common, tenants by the entirety or otherwise, or
with respect to which two or more persons have the same fiduciary relationship,
shall be voted in accordance with the provisions of the General Corporation Law
of the State of Delaware.

         (c) Any such voting rights may be exercised by the stockholder entitled
thereto in person or by his proxy appointed by an instrument in writing,
subscribed by such stockholder or by his attorney thereunto authorized and
delivered to the secretary of the meeting; provided, however, that no proxy
shall be voted or acted upon after three years from its date unless said proxy
shall provide for a longer period. The attendance at any meeting of a
stockholder who may theretofore have given a proxy shall not have the effect of
revoking the same unless he shall in writing so notify the secretary of the
meeting prior to the voting of the proxy. At any meeting of the stockholders all
matters, except as otherwise provided in these Bylaws or by law, shall be
decided by the vote of a majority in voting interest of the stockholders present
in person or by proxy and entitled to vote thereat and thereon, a quorum being
present. The vote at any meeting of the stockholders on any question need not be
by ballot, unless so directed by the chairman of the meeting. On a vote by
ballot each ballot shall be signed by the stockholder voting, or by his proxy,
if there be such proxy, and it shall state the number of shares voted.

         SECTION 2.07 Judges. If at any meeting of the stockholders a vote by
written ballot shall be taken on any questions, the chairman of such meeting may
appoint a judge or judges to act with respect to such vote. Each judge so
appointed shall first subscribe an oath faithfully to execute the duties of a
judge at such meeting with strict impartiality and according to the best of his
ability. Such judges shall decide upon the qualification of the voters and shall
report the number of shares represented at the meeting and entitled to vote on
such question, shall conduct and accept the votes, and, when the voting is
completed, shall ascertain and report the number of shares voted respectively
for and against the question. Reports of judges shall be in writing and
subscribed and delivered by them to the Secretary of the Corporation. The judges
need not be stockholders of the Corporation, and any officer of the Corporation
may be a judge on any question other than a vote for or against a proposal in
which he shall have a material interest.

         SECTION 2.08 Notice of Stockholder Business and Nominations.

                  (a) Annual Meeting of Stockholders.

                  (i) Nominations of persons for election to the Board of
         Directors of the Corporation and the proposal of business to be
         considered by the stockholders may be made at an annual meeting of
         stockholders (a) pursuant to the Corporation's notice of meeting, (b)
         by or at the direction of the Board of Directors or (c) by any
         stockholder of the Corporation who was a stockholder of record at the
         time of giving of notice provided for in this By-Law, who is entitled
         to vote at the meeting and who complies with the notice procedures set
         forth in this By-Law,

3



                  (ii) For nominations or other business to be properly brought
         before an annual meeting by a stockholder pursuant to clause (c) of
         paragraph (a)(i) of this By-Law, the stockholder must have given timely
         notice thereof in writing to the Secretary of the Corporation and such
         other business must otherwise be a proper matter for stockholder
         action. To be timely, a stockholder's notice shall be delivered to the
         Secretary at the principal executive offices of the Corporation not
         later than the close of business on the 60th day nor earlier than the
         close of business on the 90th day prior to the first anniversary of the
         preceding year's annual meeting; provided, however, that in the event
         that the date of the annual meeting is more than 30 days before or more
         than 60 days after such anniversary date, notice by the stockholder to
         be timely must be so delivered not earlier than the close of business
         on the 90th day prior to such annual meeting and not later than the
         close of business on the later of the 60th day prior to such annual
         meeting or the 10th day following the day on which public announcement
         of the date of such meeting is first made by the Corporation. In no
         event shall the public announcement of an adjournment of an annual
         meeting commence a new time period for the giving of a stockholder's
         notice as described above. Such stockholder's notice shall set forth
         (a) as to each person whom the stockholder proposes to nominate for
         election or re-election as a director all information relating to such
         person that is required to be disclosed in solicitations of proxies for
         election of directors in an election contest, or is otherwise required,
         in each case pursuant to Regulation 14A under the Securities Exchange
         Act of 1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder
         (including such person's written consent to being named in the proxy
         statement as a nominee and to serving as a director if elected); (b) as
         to any other business that the stockholder proposes to bring before the
         meeting, a brief description of the business desired to be brought
         before the meeting, the reasons for conducting such business at the
         meeting and any material interest in such business of such stockholder
         and the beneficial owner, if any, on whose behalf the proposal is made,
         and (c) as to the stockholder giving the notice and the beneficial
         owner, if any, on whose behalf the nomination or proposal is made (i)
         the name and address of such stockholder, as they appear on the
         Corporation's books, and of such beneficial owner and (ii) the class
         and number of shares of the Corporation which are owned beneficially
         and of record by such stockholder and such beneficial owner.

                  (iii) Notwithstanding anything in the second sentence of
         paragraph (A)(2) of this By-Law to the contrary, in the event that the
         number of Directors to be elected to the Board of Directors of the
         Corporation is increased and there is no public announcement by the
         Corporation naming all of the nominees for director or specifying the
         size of the increased Board of Directors at least 70 days prior to the
         first anniversary of the preceding year's annual meeting, a
         stockholder's notice required by this By-Law shall also be considered
         timely, but only with respect to nominees for any new positions created
         by such increase, if it shall be delivered to the Secretary at the
         principal execution offices of the Corporation not later than the close
         of business on the 10th day following the day on which such public
         announcement is first made by the Corporation.

         (b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of stockholders at which directors are to be elected

4



pursuant to the Corporation's notice of meeting (a) by or at the direction of
the Board of Directors at (b) provided that the Board of Directors has
determined that directors shall be elected at such meeting, by any stockholder
of the Corporation who is a stockholder of record at the time of giving of
notice provided for in this By-Law, who shall be entitled to vote at the meeting
and who complies with the notice procedures set forth in this By-Law. In the
event the Corporation calls a special meeting of stockholders for the purpose of
electing one or more directors to the Board of Directors, any such stockholder
may nominate a person or persons (as the case may be), for election to such
position(s) as specified in the Corporation's notice of meeting, if the
stockholder's notice required by paragraph (a)(ii) of this By-Law shall be
delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the close of business on the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event shall the public announcement of an adjournment of a special meeting
commence a new time period for the giving of a stockholder's notice as described
above.

                  (c) General.

                  (i) Only such persons who are nominated in accordance with the
         procedures set forth in this By-Law shall be eligible to serve as
         director; and only such business shall be conducted at a meeting of
         stockholders as shall have been brought before the meeting in
         accordance with the procedures set forth in this By-Law. Except as
         otherwise provided by law, the Certificate of Incorporation or these
         By-Laws, the Chairman of the meeting shall have the power and duty to
         determine whether a nomination or any business proposed to be brought
         before the meeting was made or proposed, as the case may be, in
         accordance with the procedures set forth in this By-Law and, if any
         proposed nomination or business is not in compliance with this By-Law,
         to declare that such defective proposal or nomination shall be
         disregarded.

                  (ii) For purposes of the By-Law, "public announcement" shall
         mean disclosure in a press release reported by the Dow Jones News
         Service, Associated Press or comparable national news service or in a
         document publicly filed by the Corporation with the Securities and
         Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange
         Act.

                  (iii) Notwithstanding the foregoing provisions of this By-Law,
         a stockholder shall also comply with all applicable requirements of the
         Exchange Act and the rules and regulations thereunder with respect to
         the matters set forth in this By-Law. Nothing in this By-Law shall be
         deemed to affect any rights (1) of stockholders to request inclusion of
         proposals in the Corporation's proxy statement pursuant to Rule 14a-8
         under the Exchange Act or (2) of the holders of any series of Preferred
         Stock to elect directors under specified circumstances.

         SECTION 2.09 Record Date for Action by Written Consent. In order that
the Corporation may determine the stockholders entitled to consent to corporate
action in writing without a meeting, the Board of Directors may fix a record
date, which record date shall not

5



precede the date upon which the resolution fixing the record date is adopted by
the Board of Directors, and which date shall not be more than 10 days after the
date upon which the resolution fixing the record date is adopted by the Board of
Directors. Any stockholder of record seeking to have the stockholders authorize
or take corporate action by written consent shall, by written notice to the
Secretary, request the Board of Directors to fix a record date. The Board of
Directors shall promptly, but in all events within 10 days after the date on
which such a request is received, adopt a resolution fixing the record date. If
no record date has been filed by the Board of Directors within 10 days of the
date on which such a request is received, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required by
applicable law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in Delaware, its principal
place of business or to any officer or agent of the Corporation having custody
of the book in which proceedings of meetings of stockholders are recorded.
Delivery made to the Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested. If no record date has
been fixed by the Board of Directors and prior action by the Board of Directors
is required by applicable law, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall be at
the close of business on the date on which the Board of Directors adopts the
resolution taking such prior action.

         SECTION 2.10 Inspectors of Written Consent. In the event of the
delivery, in the manner provided by Section 2.09, to the Corporation of the
requisite written consent or consents to take corporate action and/or any
related revocation or revocations, the Corporation shall engage nationally
recognized independent inspectors of elections for the purpose of promptly
performing a ministerial review of the validity of the consents and revocations.
For the purpose of permitting the inspectors to perform such review, no action
by written consent without a meeting shall be effective until such date as the
independent inspectors certify to the Corporation that the consents delivered to
the Corporation in accordance with Section 2.09 represent at least the minimum
number of votes that would be necessary to take the corporate action. Nothing
contained in this paragraph shall in any way be construed to suggest or imply
that the Board of Directors or any stockholder shall not be entitled to contest
the validity of any consent or revocation thereof, whether before or after such
certification by the independent inspectors, or to take any other actions
(including, without limitation, the commencement, prosecution or defense of any
litigation with respect thereto, and the seeking of injunctive relief in such
litigation.)

         SECTION 2.11 Effectiveness of Written Consent. Every written consent
shall bear the date of signature of each stockholder who signs the consent and
no written consent shall be effective to take the corporate action referred to
therein unless, within 60 days of the date the earliest dated written consent
was received in accordance with Section 2.09, a written consent or consents
signed by a sufficient number of holders to take such action are delivered to
the Corporation in the manner prescribed in Section 2.09.

6



                                   ARTICLE III

                               BOARD OF DIRECTORS

         SECTION 3.01 General Powers. The property, business, and affairs of the
Corporation shall be managed by the Board.

         SECTION 3.02 Number, Qualification, and Term of Office. The number of
directors shall be seven (7); provided, however, that the number of directors
may be increased in the event of certain specified arrearages in the payment of
dividends on the $1.00 Cumulative Convertible Preferred Stock of the
Corporation, such increases to be in the number, for the period of time effected
in the manner, prescribed in the Certificate of Incorporation. Directors need
not be stockholders. Each of the directors of the Corporation shall hold office
until the annual meeting of stockholders held next after his election and until
his successor shall have been duly elected and shall qualify, or until his death
in office, or until he shall resign or shall have been removed in the manner
hereinafter provided.

         SECTION 3.03 Election of Directors. At each meeting of the stockholders
for the election of directors at which a quorum is present the persons receiving
the greatest number of votes, up to the number of directors to be elected, shall
be the directors.

         SECTION 3.04 Resignations. Any director of the Corporation may resign
at any time by giving written notice to the Chairman of the Board or to the
Secretary of the Corporation. Any such resignation shall take effect at the time
specified therein, or, if the time be not specified, it shall take effect
immediately upon its receipt; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.

         SECTION 3.05 Vacancies. Except as otherwise provided in the Certificate
of Incorporation, any vacancy in the Board, whether because of death,
resignation, disqualification, an increase in the number of directors, or any
other cause, may be filled by vote of the majority of the remaining directors,
although less than a quorum, except in the case of a vacancy caused by removal,
in which event a successor must be elected by the stockholders of the
Corporation at a special meeting called for that purpose. Each director so
chosen to fill a vacancy shall hold office until the next annual meeting of
stockholders and until his successor shall have been elected and shall qualify,
or until his death in office, or until he shall resign or shall have been
removed in the manner hereinafter provided.

         SECTION 3.06 Place of Meeting, etc. The Board may hold any of its
meetings at such place or places within or without the State of Delaware as the
Board may from time to time by resolution designate or as shall be designated by
the person or persons calling the meeting or in the notice or a waiver of notice
of any such meeting.

         SECTION 3.07 First Meeting. As soon as practicable after each annual
election of directors, the Board shall meet for the purpose of organization, the
election of officers of the Corporation, and the transaction of other business.
Notice of such first meeting shall be given in the manner hereinafter provided
in Section 3.09 unless as therein provided such notice shall not be required.

7



         SECTION 3.08 Regular Meetings. Regular meetings of the Board may be
held at such times as the Board shall from time to time by resolution determine.
There shall be not less than four such regular meetings held in each calendar
year. If any day fixed for a regular meeting shall be a legal holiday at the
place where the meeting is to be held, then the meeting shall be held at the
same hour and place on the next succeeding business day not a legal holiday.
Except as provided by law, notice of regular meetings need not be given.

         SECTION 3.09 Special Meetings. Special meetings of the Board shall be
held whenever called by the Chairman of the Board or the President or any two of
the directors. Except as otherwise provided by law or by these Bylaws, notice of
the time and place of each such special meeting shall be mailed to each
director, addressed to him at his residence or usual place of business, at least
five (5) days before the day on which the meeting is to be held, or shall be
sent to him at such place by telegraph or cable or be delivered personally not
less than forty-eight (48) hours before the time at which the meeting is to be
held. Except where otherwise required by law or by these Bylaws, notice of the
purpose of a special meeting need not be given. Notice of any meeting of the
Board shall not be required to be given to any director who shall have waived
such notice and such notice shall be deemed to have been waived by any director
who is present at such meeting.

         SECTION 3.10 Quorum and Manner of Acting. Except as otherwise provided
in these Bylaws, or by law, the presence of four (4) members of the Board (but
in any event not less than one-third of the number of directors then authorized)
shall be required to constitute a quorum for the transaction of business at any
meeting of the Board, and all matters shall be decided at any such meeting, a
quorum being present, by the affirmative votes of a majority of the directors
present. In the absence of a quorum, a majority of directors present at any
meeting may adjourn the same from time to time until a quorum shall be present.
Notice of any adjourned meeting need not be given. The directors shall act only
as a Board, and the individual directors shall have no power as such.

         SECTION 3.11 Action by Consent. Any action required or permitted to be
taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if prior to such action a written consent thereto is signed by
all members of the Board or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.

         SECTION 3.12 Removal of Directors. Subject to the provisions of the
Certificate of Incorporation, any director may be removed at any time, either
with or without cause, by the affirmative vote of the stockholders having a
majority of the voting power of the Corporation, given at a special meeting of
the stockholders called for the purpose; and the vacancy in the Board caused by
any such removal may be filled at such meeting or otherwise as provided in
Section 3.05.

         SECTION 3.13 Compensation. The directors shall receive only such
compensation for their services as may be allowed by a resolution of the Board
either as an annual fee or as compensation for his attendance at each meeting of
the Board or of such committee. The Board may also provide that the Corporation
shall reimburse each such director or member of such committee for any expense
incurred by him on account of his attendance at any such meeting.

8



Neither the payment of such compensation nor the reimbursement of such expenses
shall be construed to preclude any director from serving the Corporation or its
subsidiaries in any other capacity and receiving compensation therefor.

         SECTION 3.14 Executive Committee. The Board may, in its discretion, by
resolution adopted by a majority of the whole Board, designate an Executive
Committee consisting of three directors of the Corporation, which Committee
shall have and may exercise, when the Board is not in session, the powers of the
Board in management of the business and affairs of the Corporation, and shall
have power to authorize the issuance of the stock of the Corporation and to
authorize the seal of the Corporation to be affixed to all papers which may
require it. Each member of the Executive Committee may designate another member
of the Board to act as his alternate at any meeting of the Executive Committee.
The Board shall name the Chairman of the Executive Committee and shall have the
power at any time to change the membership of the Executive Committee, to fill
all vacancies in it and to dissolve it. The Executive Committee may make rules
for the conduct of its business and may appoint such committees and assistants
as it shall from time to time deem necessary. Two members of said Committee
shall constitute a quorum, and any action taken by the Executive Committee shall
require the approval of at least two of the members thereof. The Executive
Committee shall keep written minutes of its transactions and report such minutes
to the Board at the next regular meeting of the Board.

         SECTION 3.15 Other Committees. The Board may in its discretion appoint
other committees which shall have and may exercise such powers in the management
of the business and affairs of the Corporation as may be granted by resolutions
of the Board. Any such committee shall consist of two or more directors of the
Corporation, and a majority of any such committee may determine its action and
fix the time and place of its meetings unless the Board shall provide otherwise.
The Board shall have power at any time to fill vacancies in, to change the
membership of and to dissolve any such committee. The Board may designate one or
more directors as alternate members of any committee who may replace any absent
or disqualified member of any meeting of the committee.


                                   ARTICLE IV

                                    OFFICERS

         SECTION 4.01 Number. The officers of the Corporation shall be a
Chairman of the Board, a President, one or more Vice Presidents (the number
thereof and their respective titles to be determined by the Board), a Secretary,
a Treasurer and a Controller.

         SECTION 4.02 Election, Term of Office and Qualifications. The officers
of the Corporation, except such officers as may be appointed in accordance with
Section 4.03, shall be elected annually by the Board at the first meeting
thereof held after the annual meeting of stockholders for the election of
directors. If any officers are not elected at an annual meeting, such officers
may be elected at any subsequent regular or special meeting of the Board. Each
officer shall hold office until his successor shall have been duly elected and
shall qualify, or until his death in office, or until his resignation or removal
in the manner hereinafter provided.

9



         SECTION 4.03 Assistants, Agents and Employees, etc. In addition to the
officers specified in Section 4.01, the Board may appoint other assistants,
agents, and employees as it may deem necessary or advisable, including one or
more Assistant Secretaries, and one or more Assistant Treasurers, each of whom
shall hold office for such period, having such authority, and perform such
duties as the Board or the chief executive officer may from time to time
determine. The Board may delegate to any officer of the Corporation or any
committee of the Board the power to appoint, remove and prescribe the duties of
any such assistants, agents or employees.

         SECTION 4.04 Removal. Any officer, assistant, agent or employee of the
Corporation may be removed, with or without cause, at any time: (i) in the case
of an officer, assistant, agent or employee appointed by the Board, only by
resolution of the Board; and (ii) in the case of any other officer, assistant,
agent or employee, by an officer of the Corporation or committee of the Board
upon whom or which such power of removal may be conferred by the Board.

         SECTION 4.05 Resignations. Any officer of assistant may resign at any
time by giving written notice of his resignation to the Board, the Chairman of
the Board, the chief executive officer, or the Secretary of the Corporation. Any
such resignation shall take effect at the time specified therein or, if the time
be not specified, upon receipt thereof by the Board, the Chairman of the Board,
the chief executive officer, or the Secretary, as the case may be; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.

         SECTION 4.06 Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or other cause, may be filled for the
unexpired portion of the term thereof in the manner prescribed in these Bylaws
for regular appointments or elections to such office.

         SECTION 4.07 The Chairman of the Board. The Chairman of the Board of
the Corporation shall be an officer of the Corporation. He shall preside at all
meetings of the Board and of the stockholders at which he is present, and shall
exercise and perform such other duties as may from time to time be assigned to
him by the Board.

         SECTION 4.08 The President. The President shall be the chief executive
officer of the Corporation and shall have, subject to the control of the Board,
general and active supervision and management over the business of the
Corporation and over its several officers, assistants, agents and employees
other than the Chairman of the Board, and he shall perform such other duties
incident to the office as may from time to time be assigned to him by the Board.
In case of the absence or inability of the Chairman of the Board to act, the
President shall perform the duties of the Chairman of the Board.

         SECTION 4.09 The Vice Presidents. Each Vice President shall have such
powers and perform such duties as the Board or the chief executive officer may
from time to time prescribe. At the request of the President, or in case of the
President's absence or inability to act upon the request of the Board or the
Chairman of the Board, a Vice President shall perform the duties of the
President and, when so acting, shall have all the powers of, and be subject to
all the restrictions upon, the President.

10



         SECTION 4.10 The Secretary. The Secretary shall, if present, record the
proceedings of all meetings of the Board, of the stockholders, and of all
committees of which a secretary shall not have been appointed in one or more
books provided for that purpose; he shall see that all notices are duly given in
accordance with these Bylaws and as required by law; he shall be custodian of
the seal of the Corporation and shall affix and attest the seal to all documents
to be executed on behalf of the Corporation under its seal; and, in general, he
shall perform all the duties incident to the office of Secretary and such other
duties as may from time to time be assigned to him by the Board or by the chief
executive officer.

         SECTION 4.11 The Treasurer. The Treasurer shall have the general care
and custody of the funds and securities of the Corporation, and shall deposit
all such funds in the name of the Corporation in such banks, trust companies or
other depositories as shall be selected by the Board. He shall receive, and give
receipts for, moneys due and payable to the Corporation from any source
whatsoever. He shall exercise general supervision over expenditures and
disbursements made by officers, agents and employees of the Corporation and the
preparation of such records and reports in connection therewith as may be
necessary or desirable. He shall, in general, perform all other duties incident
to the office of Treasurer and such other duties as from time to time may be
assigned to him by the chief executive officer or the Board. If required by the
Board, the Treasurer shall give a bond for the faithful discharge of his duties
in such sum and with such surety or sureties as the Board shall determine.

         SECTION 4.12 The Controller. The Controller shall, subject the
direction of a designated Vice President, establish, coordinate and administer
an adequate plan for the control of operations, which plan shall include profit
planning, programs for capital investing and for financing, sales forecasts,
expense budgets and cost standards, together with the necessary procedures to
effectuate the plan. He shall compare performance with operating plans and
standards and shall report and interpret the results of operations to all levels
of management. The function includes the formulation of accounting policy, the
coordination of systems and procedures, the preparation of operating data and of
special reports as required. He shall establish and administer tax policies and
procedures, assure protection for assets of the company through internal control
and auditing, and insurance coverage, and shall in general, perform all other
duties incident to the office of Controller and such other duties as from time
to time may be assigned to him by the chief executive officer or the Board.

         SECTION 4.13 Compensation. The compensation of the officers of the
Corporation shall be fixed from time to time by the Board. None of such officers
shall be prevented from receiving such compensation by reason of the fact that
he is also a director of the Corporation. Nothing contained herein shall
preclude any officer from serving the Corporation, or any subsidiary
corporation, in any other capacity and receiving proper compensation therefor.


                                   ARTICLE V

                 CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

SECTION 5.01 Execution of Contracts. The Board of Directors, except as in these
Bylaws otherwise provided, may authorize any officer or officers, agent or
agents, to enter into any contract or execute any instrument in the name of and
on behalf of the Corporation, and such

11



authority may be general or confined to specific instances; but absent any
limitation imposed by the Board of Directors or by these Bylaws, the officers of
this Corporation shall have all the usual powers and may exercise the authority
incident to their respective offices and relating to the conduct of the business
and affairs of the Corporation in the ordinary course.

         SECTION 5.02 Checks, Drafts, Etc. All checks, drafts or other orders
for payment of money, notes or other evidences of indebtedness, issued in the
name of or payable to the Corporation, shall be signed or endorsed by such
person or persons and in such manner as, from time to time, shall be determined
by resolution of the Board. Each such officer, assistant, agent or attorney
shall give such bond, if any, as the Board may require.

         SECTION 5.03 Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board may select, or
as may be selected by any officer or officers, assistant or assistants, agent or
agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. For the purpose of deposit and for the purpose
of collection for the account of the Corporation, the Chairman of the Board, the
President, any Vice President, the Treasurer or an Assistant Treasurer (or any
other officer or officers, assistant or assistants, agent or agents, or attorney
or attorneys of the Corporation who shall from time to time be determined by the
Board) may endorse, assign and deliver checks, drafts and other orders for the
payment of money which are payable to the order of the Corporation.

         SECTION 5.04 General and Special Bank Accounts. The Board may from time
to time authorize the opening and keeping of general and special bank accounts
with such banks, trust companies, or other depositories as the Board may select
or as may be selected by any officer or officers, assistant or assistants, agent
or agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. The Board may make such special rules and
regulations with respect to such bank accounts, not inconsistent with the
provisions of these Bylaws, as it may deem expedient.

         SECTION 5.05 Proxies. Unless otherwise provided by resolution of the
Board, the Chairman of the Board may from time to time appoint any officer or
officers, assistant or assistants, agent or agents, attorney or attorneys of the
Corporation to exercise, in the name and on behalf of the Corporation, the
powers and rights which the Corporation may be entitled to exercise as the
holder of the stock or other securities in any other corporation, including the
right to vote or consent in respect of such stock or other securities at
meetings of the holders of such stock or other securities or to consent in
writing, in the name of the Corporation, to any action by such other
corporation. Unless otherwise provided by resolution of the Board, the Chairman
of the Board may instruct the person or persons so appointed as to the manner of
exercising such right to vote or giving such consent, and may execute or cause
to be executed in the name and on behalf of the Corporation and under its
corporate seal, or otherwise, all such written proxies or other instruments as
he may deem necessary or proper.

12



                                   ARTICLE VI

                            SHARES AND THEIR TRANSFER

         SECTION 6.01 Certificates for Stock. Every owner of stock of the
Corporation shall be entitled to have a certificate or certificates, to be in
such form as the Board shall prescribe, certifying the number and class of
shares of stock of the Corporation owned by him. The certificates representing
shares of such stock shall be numbered in the order in which they shall be
issued and shall be signed in the name of the Corporation by the Chairman of the
Board or the Vice Chairman of the Board of the President or a Vice President,
and by the Secretary or an Assistant Secretary or by the Treasurer or an
Assistant Treasurer; provided, however, that if any such certificate is
countersigned by a transfer agent other than the Corporation or its employee, or
by a registrar other than the Corporation or its employee, if the Board shall by
resolution so authorize, the signatures of such Chairman of the Board or Vice
Chairman of the Board or President or vice President and of such Secretary or
Assistant Secretary or Treasurer or Assistant Treasurer may be facsimiles. In
case any officer or assistant of the Corporation who shall have signed, or whose
facsimile signature shall have been placed upon, any such certificate, shall
thereafter have ceased to hold such office, such certificate may nevertheless be
issued by the Corporation with the same effect as though the person who signed
such certificate, or whose facsimile signature shall have been paced thereupon,
were such officer or assistant at the date of issue. A record shall be kept of
the respective names of the persons, firms or corporations owning stock
represented by such certificates, respectively, and the respective dates
thereof, and in case of cancellation, the respective dates of cancellation.
Every certificate surrendered to the Corporation for exchange or transfer shall
be cancelled, and no new certificate or certificates shall be issued in exchange
for any existing certificate until such existing certificate shall have been so
cancelled, except in cases provided for in Section 6.04.

         SECTION 6.02 Transfers of Stock. Transfers of shares of the stock of
the Corporation shall be made only on the books of the Corporation by the
registered holder thereof, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary, or with a transfer clerk or
a transfer agent appointed as provided in Section 6.03, and upon surrender of
the certificate or certificates for such shares properly endorsed and the
payment of all taxes thereon. The person in whose name shares of stock stand on
the books of the Corporation shall be deemed the owner thereof for all purposes
as regards the Corporation. Whenever any transfer of shares shall be made for
collateral security, and not absolutely, such fact shall be so expressed in the
entry of transfer if, when the certificate or certificates shall be presented to
the Corporation for transfer, both the transferor and the transferee request the
Corporation to do so.

         SECTION 6.03 Regulations. The Board may make such rules and regulations
as it may deem expedient, not inconsistent with these Bylaws, concerning the
issue, transfer and registration of certificates for shares of the stock of the
Corporation. It may appoint, or authorize any officer or officers to appoint,
one or more transfer clerks or one or more transfer agents and one or more
registrars, and may require all certificates for stock to bear the signature or
signatures of any of them.

13



         SECTION 6.04 Lost, Stolen, Destroyed, and Mutilated Certificates. In
any case of loss, theft, destruction, or mutilation of any certificate of stock,
another may be issued in its place upon proof of such loss, theft, destruction,
or mutilation and upon the giving of a bond of indemnity to the Corporation in
such form and in such sum as the Board may direct; provided, however, that a new
certificate may be issued without requiring any bond when, in the judgment of
the Board, it is proper so to do.

         SECTION 6.05 Fixing Date for Determination of Stockholders of Record.
In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any other
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board may fix, in advance, a record date, which shall not be more
than 60 nor less than 10 days before the date of such meeting, nor more than 60
days prior to any other action. If in any case involving the determination of
stockholders for any purpose other than notice of or voting at a meeting of
stockholders the Board shall not fix such a record date, the record date for
determining stockholders for such purpose shall be the close of business on the
day on which the Board shall adopt the resolution relating thereto. A
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of such meeting; provided, however,
that the Board may fix a new record for date for the adjourned meeting.


                                  ARTICLE VII

                            DIVIDENDS, SURPLUS, ETC.

         SECTION 7.01 Dividends. Subject to the provisions of law, of the
Certificate of Incorporation and of these Bylaws, the Board may declare and pay
dividends upon the shares of its stock either (a) out of its surplus as defined
in and computed in accordance with the provisions of law or (b) in case it shall
not have any such surplus, out of its net profits for the fiscal year in which
the dividend is declared and/or the preceding fiscal year, whenever and in such
amounts as, in the opinion of the Board, the condition of the affairs of the
Corporation shall render it advisable.

         SECTION 7.02 Surplus, Reserves. Before payment of any dividend, the
Board may in its discretion use or apply any of such surplus or such net profits
as a reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for such other
purposes as the Board shall think conducive to the best interests of the
Corporation, and the Board may modify or abolish any such reserve in the manner
in which it was created. All such surplus or such net profits, until actually
declared in dividends, or used and applied as aforesaid, shall be deemed to have
been so set aside by the Board for one or more of said purposes.

14



                                  ARTICLE VIII

                                 INDEMNIFICATION

         SECTION 8.01 Indemnification of Directors and Officers. The Corporation
shall, to the fullest extent permitted by law, indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including without limitation an action by or in the right of the
Corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, that he had reasonable cause to believe that his
conduct was unlawful. The right of indemnity provided herein shall not be
exclusive, and the Corporation may provide indemnification to any person, by
agreement or otherwise, on such terms and conditions as the Board of Directors
may approve. Any agreement for indemnification of any director, officer,
employee or other person may provide indemnification rights which are broader or
otherwise different from those set forth herein.

         SECTION 8.02 Other Rights and Remedies. The indemnification provided by
this Article shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any Bylaws, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.

         SECTION 8.03 Insurance. Upon resolution passed by the Board, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee, or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article.

         SECTION 8.04 Certain Definitions. For purposes of this Article, (1)
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify

15



its directors, officers, and employees or agents, so that any person who is or
was a director, officer, employee or agent or such constituent corporation, or
is or was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Article with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued; (2) references to "other enterprises" shall include
employee benefit plans; (3) references to "fines" shall include any excise taxes
assessed on a person with respect to an employee benefit plan; (4) references to
"serving at the request of the Corporation" shall include any service as a
director, officer, employee or agent of the Corporation which imposes duties on,
or involves services by, such director, officer, employee or agent with respect
to an employee benefit plan, its participants, or beneficiaries; and (5) a
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the Corporation" as referred to in this Article.


                                   ARTICLE IX

                                  MISCELLANEOUS

         SECTION 9.01 Seal. The Board shall provide a corporate seal, which
shall be in the form of a circle and shall bear the name of the Corporation and
words and figures showing that it was incorporated in the State of Delaware in
the year 1969.

         SECTION 9.02 Waiver of Notices. Whenever notice is required to be given
by these Bylaws or the Certificate of Incorporation or by law, the person
entitled to said notice may waive such notice in writing, either before or after
the time stated herein, and such waiver shall be deemed equivalent to notice.

         SECTION 9.03 Amendments. These Bylaws, or any of them, may be altered,
amended or repealed, and new Bylaws may be made, (i) by the Board, by vote of a
majority of the number of directors then in office as directors, acting at any
annual or regular meeting of the Board, without previous notice, or at any
special meeting of the Board, provided that notice of such proposed amendment,
modification, repeal or adoption of new Bylaws is given in the notice of such
special meeting, or (ii) by the stockholders, at any annual meeting of
stockholders, without previous notice, or at any special meeting of
stockholders, provided that notice of such proposed amendment, modification,
repeal or adoption is given in the notice of special meeting. Any Bylaws made or
altered by the stockholders may be altered by the Board or may be altered or
repealed by the stockholders.

16

EX-3.119

                                                                   EXHIBIT 3.119

                          CERTIFICATE OF INCORPORATION

                                       OF

                              LINCON WIRELESS, INC.

ARTICLE 1. NAME

          The name of this corporation is Lincon Wireless, Inc. (the
"CORPORATION").

ARTICLE 2. REGISTERED OFFICE AND AGENT

          The registered office of the Corporation shall be located at 1013
Centre Road, Wilmington, Delaware 19805 in the County of New Castle. The
registered agent of the Corporation at such address shall be Corporation Service
Company.

ARTICLE 3. PURPOSE AND POWERS

          The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "DELAWARE GENERAL CORPORATION LAW"). The
Corporation shall have all power necessary or convenient to the conduct,
promotion or attainment of such acts and activities.

ARTICLE 4. CAPITAL STOCK

     4.1. AUTHORIZED SHARES

          The total number of shares of all classes of stock that the
Corporation shall have the authority to issue is Seven Million Five Hundred
Thousand (7,500,000), all of which shares shall be Common Stock, all of one
class, having a par value of $.01 per share ("COMMON STOCK").

     4.2. COMMON STOCK

          4.2.1. RELATIVE RIGHTS

          The Common Stock shall be subject to all of the rights, privileges,
preferences and priorities of the Preferred Stock as set forth in the
certificate of designations filed to establish the respective series of
Preferred Stock. Each share of Common Stock shall have the same relative rights
as and be identical in all respects to all the other shares of Common Stock.

          4.2.2. DIVIDENDS

          Whenever there shall have been paid, or declared and set aside for
payment, to the holders of shares of any class of stock having preference over
the Common Stock as to the payment of dividends, the full amount of dividends
and of sinking fund or retirement payments, if any, to which such holders are
respectively entitled in preference to the Common Stock, then



                                                                               2


dividends may be paid on the Common Stock and on any class or series of stock
entitled to participate therewith as to dividends, out of any assets legally
available for the payment of dividends thereon, but only when and as declared by
the Board of Directors of the Corporation.

          4.2.3. DISSOLUTION, LIQUIDATION, WINDING UP

          In the event of any dissolution, liquidation, or winding up of the
Corporation, whether voluntary or involuntary, the holders of the Common Stock,
and holders of any class or series of stock entitled to participate therewith,
to whole or in part, as to the distribution of assets in such event, shall
become entitled to participate in the distribution of any assets of the
Corporation remaining after the Corporation shall have paid, or provided for
payment of, all debts and liabilities of the Corporation and after the
Corporation shall have paid, or set aside for payment, to the holders of any
class of stock having preference over the Common Stock in the event of
dissolution, liquidation or winding up the full preferential amounts (if any) to
which they are entitled.

          4.2.4. VOTING RIGHTS

          Each holder of shares of Common Stock shall be entitled to attend all
special and annual meetings of the stockholders of the Corporation and, share
for share and without regard to class, together with the holders of all other
classes of stock entitled to attend such meetings and to vote (except any class
or series of stock having special voting rights), to cast one vote for each
outstanding share of Common Stock so held upon any matter or thing (including,
without limitation, the election of one or more directors) properly considered
and acted upon by the stockholders.

ARTICLE 5. INCORPORATOR

          The name and mailing address of the incorporator (the "INCORPORATOR")
is Jeffery A. Meyer, c/o Hogan & Hartson LLP, 8300 Greensboro Drive, Suite 1100,
McLean, Virginia 22102. The powers of the Incorporator shall terminate upon the
filing of this Certificate of Incorporation.

ARTICLE 6. BOARD OF DIRECTORS

     6.1. INITIAL DIRECTORS; NUMBER; ELECTION

          The following persons, having the following mailing addresses, shall
serve as the directors of the Corporation until the first annual meeting of the
stockholders of the Corporation or until their successors are elected and
qualified:

NAME           MAILING ADDRESS
- ----           ---------------
Gene Ray       3033 Science Park Road
               San Diego, California 92121

Eric Demarco   3033 Science Park Road
               San Diego, California 92121



                                                                               3


NAME           MAILING ADDRESS
- ----           ---------------
M.C. Baird     3033 Science Park Road
               San Diego, California 92121

          The number of directors of the Corporation shall be such number as
from time to time shall be fixed by, or in the manner provided in, the bylaws of
the Corporation. Unless and except to the extent that the bylaws of the
Corporation shall otherwise require, the election of directors of the
Corporation need not be by written ballot. Except as otherwise provided in this
Certificate of Incorporation, each director of the Corporation shall be entitled
to one vote per director on all matters voted or acted upon by the Board of
Directors.

     6.2. MANAGEMENT OF BUSINESS AND AFFAIRS OF THE CORPORATION

          The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors.

     6.3. LIMITATION OF LIABILITY

          No director of the Corporation shall be liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that this provision shall not eliminate or limit the
liability of a director (a) for any breach of the director's duty of loyalty to
the Corporation or its stockholders; (b) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law; (c) under
Section 174 of the Delaware General Corporation Law; or (d) for any transaction
from which the director derived an improper personal benefit. Any repeal or
modification of this ARTICLE 6.3 shall be prospective only and shall not
adversely affect any right or protection of, or any limitation of the liability
of, a director of the Corporation existing at, or arising out of facts or
incidents occurring prior to, the effective date of such repeal or modification.

ARTICLE 7. COMPROMISE OR ARRANGEMENTS

          Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the Delaware Code
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
the Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which



                                                                               4


the said application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of the
Corporation, as the case may be, and also on the Corporation.

ARTICLE 8. AMENDMENT OF BYLAWS

          In furtherance and not in limitation of the powers conferred by the
Delaware General Corporation Law, the Board of Directors of the Corporation is
expressly authorized and empowered to adopt, amend and repeal the bylaws of the
Corporation.

ARTICLE 9. RESERVATION OF RIGHT TO AMEND CERTIFICATE OF INCORPORATION

          The Corporation reserves the right at any time, and from time to time,
to amend, alter, change, or repeal any provision contained in this Certificate
of Incorporation, and other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted, in the manner now or
hereafter prescribed by law; and all rights, preferences, and privileges of any
nature conferred upon stockholders, directors, or any other persons by and
pursuant to this Certificate of Incorporation in its present form or as
hereafter amended are granted subject to the rights reserved in this ARTICLE 9.

          IN WITNESS WHEREOF, the undersigned, being the Incorporator
hereinabove named, for the purpose of forming a corporation pursuant to the
Delaware General Corporation Law, hereby certifies that the facts hereinabove
stated are truly set forth, and accordingly executes this Certificate of
Incorporation this 9th day of March, 2000.

                                        Incorporator


                                        /s/ Jeffrey A. Meyer
                                        ----------------------------------------
                                        Jeffrey A. Meyer



                            CERTIFICATE OF AMENDMENT
                                       TO
                          CERTIFICATE OF INCORPORATION
                                       OF
                              LINCON WIRELESS, INC.

          The undersigned, being all the directors of Lincon Wireless, Inc., a
corporation duly organized and existing under the General Corporation Law of the
State of Delaware (the "CORPORATION"), do hereby certify that:

1.   The Corporation has not received any payment for stock as of the date
     hereof,

2.   The amendment to the Corporation's Certificate of Incorporation set forth
     below was duly adopted in accordance with the provisions of Section 241 of
     the General Corporation Law of the State of Delaware, and

3.   Article One of the Corporation's Certificate of Incorporation is amended by
     replacing the existing language to read in its entirety as follows:

     Article 1. NAME

          The name of this Corporation is Lincon Wireless, Inc. (the
"Corporation").

4.   Article Four, Section 4.1 of the Corporation's Certificate of Incorporation
     is amended by replacing the existing language to read in its entirety as
     follows:

          4.1 Authorized Shares

               The total number of shares of all classes of stock that the
          Corporation shall have the authority to issue is Twenty Million
          (20,000,000), all of which shares shall be Common Stock, all of one
          class, having a par value of $.001 per share ("Common Stock").

             [The remainder of this page intentionally left blank.]



                                                                               2


          IN WITNESS WHEREOF, all of the directors of the Corporation have
executed this Certificate of Amendment to Certificate of Incorporation on this
17 day of March, 2000.


                                        /s/ Gene Ray
                                        ----------------------------------------
                                        Gene Ray


                                        /s/ Eric DeMarco
                                        ----------------------------------------
                                        Eric DeMarco


                                        /s/ M.C. Baird
                                        ----------------------------------------
                                        M.C. Baird



                              AMENDED AND RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                              LINCOM WIRELESS, INC.

          LinCom Wireless, Inc., a corporation organized under the laws of the
State of Delaware (the "Corporation"), hereby certifies as follows:

          1. The name of the Corporation is LinCom Wireless, Inc. LinCom
Wireless, Inc. was originally incorporated under the name Lincon Wireless, Inc.,
and the original Certificate of Incorporation of the Corporation was filed with
the Secretary of State of Delaware on March 9, 2000.

          2. Pursuant to Sections 242 and 245 of the General Corporation Law of
the State of Delaware, this Amended and Restated Certificate of Incorporation
restates, integrates and amends the provisions of the Certificate of
Incorporation of the Corporation.

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

ARTICLE 1. NAME

          The name of this corporation is LinCom Wireless, Inc. (the
"CORPORATION").

ARTICLE 2. REGISTERED OFFICE AND AGENT

          The registered office of the Corporation shall be located at 2711
Centerville Road, Ste. 400, Wilmington, Delaware 19808 in the County of New
Castle. The registered agent of the Corporation at such address shall be
Corporation Service Company.

ARTICLE 3. PURPOSE AND POWERS

          The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "DELAWARE GENERAL CORPORATION LAW"). The
Corporation shall have all power necessary or convenient to the conduct,
promotion or attainment of such acts and activities.

ARTICLE 4. CAPITAL STOCK

     4.1. AUTHORIZED SHARES

          The total number of shares of all classes of stock that the
Corporation shall have the authority to issue is Twenty Million (20,000,000),
all of which shares shall be Common Stock, all of one class, having a par value
of $0.001 per share ("COMMON STOCK").



                                                                               2


     4.2. COMMON STOCK

          4.2.1. RELATIVE RIGHTS

          The Common Stock shall be subject to all of the rights, privileges,
preferences and priorities of the Preferred Stock as set forth in the
certificate of designations filed to establish the respective series of
Preferred Stock. Each share of Common Stock shall have the same relative rights
as and be identical in all respects to all the other shares of Common Stock.

          4.2.2. DIVIDENDS

          Whenever there shall have been paid, or declared and set aside for
payment, to the holders of shares of any class of stock having preference over
the Common Stock as to the payment of dividends, the full amount of dividends
and of sinking fund or retirement payments, if any, to which such holders are
respectively entitled in preference to the Common Stock, then dividends may be
paid on the Common Stock and on any class or series of stock entitled to
participate therewith as to dividends, out of any assets legally available for
the payment of dividends thereon, but only when and as declared by the Board of
Directors of the Corporation.

          4.2.3. DISSOLUTION, LIQUIDATION, WINDING UP

          In the event of any dissolution, liquidation, or winding up of the
Corporation, whether voluntary or involuntary, the holders of the Common Stock,
and holders of any class or series of stock entitled to participate therewith,
in whole or in part, as to the distribution of assets in such event, shall
become entitled to participate in the distribution of any assets of the
Corporation remaining after the Corporation shall have paid, or provided for
payment of, all debts and liabilities of the Corporation and after the
Corporation shall have paid, or set aside for payment, to the holders of any
class of stock having preference

ARTICLE 5. 1 PAGE IS MISSING

shall not adversely affect any right or protection of, or any limitation of the
liability of, a director of the Corporation existing at, or arising out of facts
or incidents occurring prior to, the effective date of such repeal or
modification.

ARTICLE 6. AMENDMENT OF BYLAWS

          In furtherance and not in limitation of the powers conferred by the
Delaware General Corporation Law, the Board of Directors of the Corporation is
expressly authorized and empowered to adopt, amend and repeal the bylaws of the
Corporation.

ARTICLE 7. RESERVATION OF RIGHT TO AMEND CERTIFICATE OF INCORPORATION

          The Corporation reserves the right at any time, and from time to time,
to amend, alter, change, or repeal any provision contained in this Certificate
of Incorporation, and other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted, in the manner now or
hereafter prescribed by law; and all rights, preferences, and



                                                                               3


privileges of any nature conferred upon stockholders, directors, or any other
persons by and pursuant to this Certificate of Incorporation in its present form
or as hereafter amended are granted subject to the rights reserved in this
ARTICLE 7.

          IN WITNESS WHEREOF, this Amended and Restated Certificate of
Incorporation has been signed by Cheryl L. Barr, its authorized officer this 2nd
day of June, 2003.

                                        LINCOM WIRELESS, INC.


                                        /s/ Cheryl L. Barr
                                        ----------------------------------------
                                        Cheryl L. Barr, Secretary

EX-3.120

                                                                   EXHIBIT 3.120

                              LINCOM WIRELESS, INC.

                                     BYLAWS

                                     ADOPTED

                                      AS OF

                                 MARCH 17, 2000



                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
1.   OFFICES...................................................................1

     1.1.    Registered Office.................................................1

     1.2.    Other Offices.....................................................1

2.   MEETINGS OF STOCKHOLDERS..................................................1

     2.1.    Place of Meetings.................................................1

     2.2.    Annual Meetings...................................................1

     2.3.    Special Meetings..................................................1

     2.4.    Notice of Meetings................................................1

     2.5.    Waivers of Notice.................................................2

     2.6.    Business at Special Meetings......................................2

     2.7.    List of Stockholders..............................................2

     2.8.    Quorum at Meetings................................................2

     2.9.    Voting and Proxies................................................3

     2.10.   Required Vote.....................................................3

     2.11.   Action Without a Meeting..........................................3

3.   DIRECTORS.................................................................4

     3.1.    Powers............................................................4

     3.2.    Number and Election...............................................4

     3.3.    Nomination of Directors...........................................4

     3.4.    Vacancies.........................................................4

     3.5.    Meetings..........................................................5

             3.5.1. Regular Meetings...........................................5

             3.5.2. Special Meetings...........................................5


                                        i



             3.5.3. Telephone Meetings.........................................5

             3.5.4. Action Without Meeting.....................................5

             3.5.5. Waiver of Notice of Meeting................................5

     3.6.    Quorum and Vote at Meetings.......................................5

     3.7.    Committees of Directors...........................................6

     3.8.    Compensation of Directors.........................................6

4.   OFFICERS..................................................................6

     4.1.    Positions.........................................................6

     4.2.    Chairperson.......................................................7

     4.3.    President.........................................................7

     4.4.    Vice President....................................................7

     4.5.    Secretary.........................................................7

     4.6.    Assistant Secretary...............................................7

     4.7.    Treasurer.........................................................8

     4.8.    Assistant Treasurer...............................................8

     4.9.    Term of Office....................................................8

     4.10.   Compensation......................................................8

     4.11.   Fidelity Bonds....................................................8

5.   CAPITAL STOCK.............................................................8

     5.1.    Certificates of Stock; Uncertificated Shares......................8

     5.2.    Lost Certificates.................................................9

     5.3.    Record Date.......................................................9

             5.3.1. Actions by Stockholders....................................9

             5.3.2. Payments..................................................10

     5.4.    Stockholders of Record...........................................10


                                       ii



6.   INDEMNIFICATION; INSURANCE...............................................10

     6.1.    Authorization of Indemnification.................................10

     6.2.    Right of Claimant to Bring Action Against the Corporation........11

     6.3.    Non-exclusivity..................................................11

     6.4.    Survival of Indemnification......................................12

     6.5.    Insurance........................................................12

7.   GENERAL PROVISIONS.......................................................12

     7.1.    Inspection of Books and Records..................................12

     7.2.    Dividends........................................................12

     7.3.    Reserves.........................................................12

     7.4.    Execution of Instruments.........................................12

     7.5.    Fiscal Year,.....................................................13

     7.6.    Seal.............................................................13


                                       iii



                                     BYLAWS

                                       OF

                              LLNCOM WIRELESS, INC.

1.   OFFICES

     1.1. REGISTERED OFFICE

     The initial registered office of the Corporation shall be in Wilmington,
Delaware, and the initial registered agent in charge thereof shall be
Corporation Service Company.

     1.2. OTHER OFFICES

     The Corporation may also have offices at such other places, both within and
without the State of Delaware, as the Board of Directors may from time to time
determine or as may be necessary or useful in connection with the business of
the Corporation.

2.   MEETINGS OF STOCKHOLDERS

     2.1. PLACE OF MEETINGS

     All meetings of the stockholders shall be held at such place as may be
fixed from time to time by the Board of Directors, the Chairperson or the
President.

     2.2. ANNUAL MEETINGS

     Unless directors are elected by written consent in lieu of an annual
meeting, the Corporation shall hold annual meetings of stockholders, commencing
with the year 2001, on such date and at such time as shall be designated from
time to time by the Board of Directors, the Chairperson or the President, at
which stockholders shall elect a Board of Directors and transact such other
business as may properly be brought before the meeting. If a written consent
electing directors is less than unanimous, such action by written consent may be
in lieu of holding an annual meeting only if all of the directorships to which
directors could be elected at an annual meeting held at the effective time of
such action are vacant and are filled by such action.

     2.3. SPECIAL MEETINGS

     Special meetings of the stockholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the Board of Directors, the
Chairperson or the President.

     2.4. NOTICE OF MEETINGS

     Notice of any meeting of stockholders, stating the place, date and hour of
the meeting, and (if it is a special meeting) the purpose or purposes for which
the meeting is called, shall be given to each stockholder entitled to vote at
such meeting not less than ten nor more than sixty days before the date of the
meeting (except to the extent that such notice is waived or is not required as
provided in the General Corporation Law of the State of Delaware (the "DELAWARE



                                                                               2


GENERAL CORPORATION LAW") or these Bylaws). Such notice shall be given in
accordance with, and shall be deemed effective as set forth in, Section 222 (or
any successor section) of the Delaware General Corporation Law.

     2.5. WAIVERS OF NOTICE

     Whenever the giving of any notice is required by statute, the Certificate
of Incorporation or these Bylaws, a waiver thereof, in writing and delivered to
the Corporation, signed by the person or persons entitled to said notice,
whether before or after the event as to which such notice is required, shall be
deemed equivalent to notice. Attendance of a stockholder at a meeting shall
constitute a waiver of notice (1) of such meeting, except when the stockholder
at the beginning of the meeting objects to holding the meeting or transacting
business at the meeting, and (2) (if it is a special meeting) of consideration
of a particular matter at the meeting that is not within the purpose or purposes
described in the meeting notice, unless the stockholder objects to considering
the matter at the beginning of the meeting.

     2.6. BUSINESS AT SPECIAL MEETINGS

     Business transacted at any special meeting of stockholders shall be limited
to the purposes stated in the notice (except to the extent that such notice is
waived or is not required as provided in the Delaware General Corporation Law or
these Bylaws).

     2.7. LIST OF STOCKHOLDERS

     After the record date for a meeting of stockholders has been fixed, at
least ten days before such meeting, the officer who has charge of the stock
ledger of the Corporation shall make a list of all stockholders entitled to vote
at the meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place in the city where the meeting
is to be held, which place is to be specified in the notice of the meeting, or
at the place where the meeting is to be held. Such list shall also, for the
duration of the meeting, be produced and kept open to the examination of any
stockholder who is present at the time and place of the meeting.

     2.8. QUORUM AT MEETINGS

     Stockholders may take action on a matter at a meeting only if a quorum
exists with respect to that matter. Except as otherwise provided by statute or
by the Certificate of Incorporation, the holders of a majority of the shares
entitled to vote at the meeting, and who are present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business. Where a separate vote by a class or series or classes
or series is required, a majority of the outstanding shares of such class or
series or classes or series, present in person or represented by proxy, shall
constitute a quorum entitled to take action with respect to that vote on that
matter. Once a share is represented for any purpose at a meeting (other than
solely to object (1) to holding the meeting or transacting business at the
meeting, or (2) (if it is a special meeting) to consideration of a particular
matter at the meeting that is not within the purpose or purposes described in
the meeting notice), it is deemed present for quorum



                                                                               3


purposes for the remainder of the meeting and for any adjournment of that
meeting unless a new record date is or must be set for the adjourned meeting.
The holders of a majority of the voting shares represented at a meeting, whether
or not a quorum is present, may adjourn such meeting from time to time.

     2.9. VOTING AND PROXIES

     Unless otherwise provided in the Delaware General Corporation Law or in the
Corporation's Certificate of Incorporation, and subject to the other provisions
of these Bylaws, each stockholder shall be entitled to one vote on each matter,
in person or by proxy, for each share of the Corporation's capital stock that
has voting power and that is held by such stockholder. No proxy shall be voted
or acted upon after three years from its date, unless the proxy provides for a
longer period. A duly executed appointment of proxy shall be irrevocable if the
appointment form states that it is irrevocable and if, and only as long as, it
is coupled with an interest sufficient in law to support an irrevocable power.

     2.10. REQUIRED VOTE

     When a quorum is present at any meeting of stockholders, all matters shall
be determined, adopted and approved by the affirmative vote (which need not be
by ballot) of the holders of a majority of the shares present in person or
represented by proxy at the meeting and entitled to vote with respect to the
matter, unless the proposed action is one upon which, by express provision of
statutes or of the Certificate of Incorporation, a different vote is specified
and required, in which case such express provision shall govern and control with
respect to that vote on that matter. Where a separate vote by a class or classes
is required, the affirmative vote of the holders of a majority of the shares of
such class or classes present in person or represented by proxy at the meeting
shall be the act of such class. Notwithstanding the foregoing, directors shall
be elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
directors.

     2.11. ACTION WITHOUT A MEETING

     Any action required or permitted to be taken at a stockholders' meeting may
be taken without a meeting, without prior notice and without a vote, if the
action is taken by persons who would be entitled to vote at a meeting and who
hold shares having voting power equal to not less than the minimum number of
votes that would be necessary to authorize or take the action at a meeting at
which all shares entitled to vote were present and voted. The action must be
evidenced by one or more written consents describing the action taken, signed by
the stockholders entitled to take action without a meeting, and delivered to the
Corporation in the manner prescribed by the Delaware General Corporation Law for
inclusion in the minute book. No consent shall be effective to take the
corporate action specified unless the number of consents required to take such
action are delivered to the Corporation within sixty days of the delivery of the
earliest-dated consent. Written notice of the action taken shall be given in
accordance with the Delaware General Corporation Law to all stockholders who do
not participate in taking the action who would have been entitled to notice if
such action had been taken at a meeting having a record date on the date that
written consents signed by a sufficient number of holders to take the action
were delivered to the Corporation.



                                                                               4


3. DIRECTORS

     3.1. POWERS

     The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors, which may exercise all such powers of
the Corporation and do all such lawful acts and things, subject to any
limitation set forth in the Certificate of Incorporation or as otherwise may be
provided in the Delaware General Corporation Law.

     3.2. NUMBER AND ELECTION

     The number of directors which shall constitute the whole board shall not be
fewer than one nor more than five. The first board shall consist of three
directors. Thereafter, within the limits above specified, the number of
directors shall be determined by resolution of the Board of Directors.

     3.3. NOMINATION OF DIRECTORS

     The Board of Directors shall nominate candidates to stand for election as
directors; and other candidates also may be nominated by any Corporation
stockholder, provided such other nomination(s) are submitted in writing to the
Secretary of the Corporation no later than 90 days prior to the meeting of
stockholders at which such directors are to be elected, together with the
identity of the nominator and the number of shares of the Corporation's stock
owned, directly or indirectly, by the nominator. The directors shall be elected
at the annual meeting of the stockholders, except as provided in SECTION 3.4
hereof, and each director elected shall hold office until such director's
successor is elected and qualified or until the director's earlier death,
resignation or removal. Directors need not be stockholders.

     3.4. VACANCIES

     Vacancies and newly created directorships resulting from any increase in
the authorized number of directors elected by all of the stockholders having the
right to vote as a single class may be filled by the affirmative vote of a
majority of the directors then in office, although fewer than a quorum, or by a
sole remaining director. Whenever the holders of any class or classes of stock
or series thereof are entitled to elect one or more directors by the provisions
of the Certificate of Incorporation, vacancies and newly created directorships
of such class or classes or series may be filled by the affirmative vote of a
majority of the directors elected by such class or classes or series thereof
then in office, or by a sole remaining director so elected. Each director so
chosen shall hold office until the next election of directors of the class to
which such director was appointed, and until such director's successor is
elected and qualified, or until the director's earlier death, resignation or
removal. In the event that one or more directors resign from the Board,
effective at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation or resignations
shall become effective, and each director so chosen shall hold office until the
next election of directors, and until such director's successor is elected and
qualified, or until the director's earlier death, resignation or removal.



                                                                               5


     3.5. MEETINGS

          3.5.1. REGULAR MEETINGS

     Regular meetings of the Board of Directors may be held without notice at
such time and at such place as shall from time to time be determined by the
Board of Directors.

          3.5.2. SPECIAL MEETINGS

     Special meetings of the Board may be called by the Chairperson or President
on one day's notice to each director, either personally or by telephone, express
delivery service (so that the scheduled delivery date of the notice is at least
one day in advance of the meeting), telegram or facsimile transmission, and on
five days notice by mail (effective upon deposit of such notice in the mail).
The notice need not describe the purpose of a special meeting.

          3.5.3. TELEPHONE MEETINGS

     Members of the Board of Directors may participate in a meeting of the board
by any communication by means of which all participating directors can
simultaneously hear each other during the meeting. A director participating in a
meeting by this means is deemed to be present in person at the meeting.

          3.5.4. ACTION WITHOUT MEETING

     Any action required or permitted to be taken at any meeting of the Board of
Directors may be taken without a meeting if the action is taken by all members
of the Board. The action must be evidenced by one or more written consents
describing the action taken, signed by each director, and delivered to the
Corporation for inclusion in the minute book.

          3.5.5. WAIVER OF NOTICE OF MEETING

     A director may waive any notice required by statute, the Certificate of
Incorporation or these Bylaws before or after the date and time stated in the
notice. Except as set forth below, the waiver must be in writing, signed by the
director entitled to the notice, and delivered to the Corporation for inclusion
in the minute book. Notwithstanding the foregoing, a director's attendance at or
participation in a meeting waives any required notice to the director of the
meeting unless the director at the beginning of the meeting objects to holding
the meeting or transacting business at the meeting and does not thereafter vote
for or assent to action taken at the meeting.

     3.6. QUORUM AND VOTE AT MEETINGS

     At all meetings of the board, a quorum of the Board of Directors consists
of a majority of the total number of directors prescribed pursuant to SECTION
3.2 of these Bylaws. The vote of a majority of the directors present at any
meeting at which there is a quorum shall be the act of the Board of Directors,
except as may be otherwise specifically provided by statute or by the
Certificate of Incorporation or by these Bylaws.



                                                                               6


     3.7. COMMITTEES OF DIRECTORS

     The Board of Directors may designate one or more committees, each committee
to consist of one or more directors. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. If a member of a committee
shall be absent from any meeting, or disqualified from voting thereat, the
remaining member or members present and not disqualified from voting, whether or
not such member or members constitute a quorum, may, by unanimous vote, appoint
another member of the Board of Directors to act at the meeting in the place of
such absent or disqualified member. Any such committee, to the extent provided
in the resolution of the Board of Directors, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation, and may authorize the seal of the Corporation to
be affixed to all papers which may require it; but no such committee shall have
the power or authority in reference to approving or adopting, or recommending to
the stockholders, any action or matter expressly required by the Delaware
General Corporation Law to be submitted to stockholders for approval or
adopting, amending or repealing any bylaw of the Corporation; and unless the
resolution designating the committee, these bylaws or the Certificate of
Incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock, or to adopt
a certificate of ownership and merger pursuant to Section 253 of the Delaware
General Corporation Law. Such committee or committees shall have such name or
names as may be determined from time to time by resolution adopted by the Board
of Directors. Each committee shall keep regular minutes of its meetings and
report the same to the Board of Directors, when required. Unless otherwise
specified in the Board resolution appointing the Committee, all provisions of
the Delaware General Corporation Law and these Bylaws relating to meetings,
action without meetings, notice (and waiver thereof), and quorum and voting
requirements of the Board of Directors apply, as well, to such committees and
their members.

     3.8. COMPENSATION OF DIRECTORS

     The Board of Directors shall have the authority to fix the compensation of
directors. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.

4. OFFICERS

     4.1. POSITIONS

     The officers of the Corporation shall be a Chairperson, a President, a
Secretary and a Treasurer, and such other officers as the Board of Directors (or
an officer authorized by the Board of Directors) from time to time may appoint,
including one or more Vice Chairmen, Executive Vice Presidents, Vice Presidents,
Assistant Secretaries and Assistant Treasurers. Each such officer shall exercise
such powers and perform such duties as shall be set forth below and such other
powers and duties as from time to time may be specified by the Board of
Directors or by any officer(s) authorized by the Board of Directors to prescribe
the duties of such other officers. Any number of offices may be held by the same
person, except that in no event shall the President and the Secretary be the
same person. As set forth below, each of the Chairperson,



                                                                               7


President, and/or any Vice President may execute bonds, mortgages and other
contracts under the seal of the Corporation, if required, except where required
or permitted by law to be otherwise executed and except where the execution
thereof shall be expressly delegated by the Board of Directors to some other
officer or agent of the Corporation.

     4.2. CHAIRPERSON

     The Chairperson shall (when present) preside at all meetings of the Board
of Directors and stockholders, and shall ensure that all orders and resolutions
of the Board of Directors and stockholders are carried into effect. The
Chairperson may execute bonds, mortgages and other contracts, under the seal of
the Corporation, if required, except where required or permitted by law to be
otherwise signed and executed and except where the signing and execution thereof
shall be expressly delegated by the Board of Directors to some other officer or
agent of the Corporation.

     4.3. PRESIDENT

     The President shall be the chief operating officer of the Corporation and
shall have full responsibility and authority for management of the day-to-day
operations of the Corporation. The President may execute bonds, mortgages and
other contracts, under the seal of the Corporation, if required, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
Board of Directors to some other officer or agent of the Corporation.

     4.4. VICE PRESIDENT

     In the absence of the President or in the event of the President's
inability or refusal to act, the Vice President (or in the event there be more
than one Vice President, the Vice Presidents in the order designated, or in the
absence of any designation, then in the order of their election) shall perform
the duties of the President, and when so acting shall have all the powers of,
and be subject to all the restrictions upon, the President.

     4.5. SECRETARY

     The Secretary shall have responsibility for preparation of minutes of
meetings of the Board of Directors and of the stockholders and for
authenticating records of the Corporation. The Secretary shall give, or cause to
be given, notice of all meetings of the stockholders and special meetings of the
Board of Directors. The Secretary or an Assistant Secretary may also attest all
instruments signed by any other officer of the Corporation.

     4.6. ASSISTANT SECRETARY

     The Assistant Secretary, or if there be more than one, the Assistant
Secretaries in the order determined by the Board of Directors (or if there shall
have been no such determination, then in the order of their election), shall, in
the absence of the Secretary or in the event of the Secretary's inability or
refusal to act, perform the duties and exercise the powers of the Secretary.



                                                                               8


     4.7. TREASURER

     The Treasurer shall have responsibility for the custody of the corporate
funds and securities and shall see to it that full and accurate accounts of
receipts and disbursements are kept in books belonging to the Corporation. The
Treasurer shall render to the Chairperson, the President, and the Board of
Directors, upon request, an account of all financial transactions and of the
financial condition of the Corporation.

     4.8. ASSISTANT TREASURER

     The Assistant Treasurer, or if there shall be more than one, the Assistant
Treasurers in the order determined by the Board of Directors (or if there shall
have been no such determination, then in the order of their election), shall, in
the absence of the Treasurer or in the event of the Treasurer's inability or
refusal to act, perform the duties and exercise the powers of the Treasurer.

     4.9. TERM OF OFFICE

     The officers of the Corporation shall hold office until their successors
are chosen and qualify or until their earlier resignation or removal. Any
officer may resign at any time upon written notice to the Corporation. Any
officer elected or appointed by the Board of Directors may be removed at any
time, with or without cause, by the affirmative vote of a majority of the Board
of Directors.

     4.10. COMPENSATION

     The compensation of officers of the Corporation shall be fixed by the Board
of Directors.

     4.11. FIDELITY BONDS

     The Corporation may secure the fidelity of any or all of its officers or
agents by bond or otherwise.

5. CAPITAL STOCK

     5.1. CERTIFICATES OF STOCK; UNCERTIFICATED SHARES

     The shares of the Corporation shall be represented by certificates,
provided that the Board of Directors may provide by resolution that some or all
of any or all classes or series of the Corporation's stock shall be
uncertificated shares. Any such resolution shall not apply to shares represented
by a certificate until such certificate is surrendered to the Corporation.
Notwithstanding the adoption of such a resolution by the Board of Directors,
every holder of stock represented by certificates, and upon request every holder
of uncertificated shares, shall be entitled to have a certificate (representing
the number of shares registered in certificate form) signed in the name of the
Corporation by the Chairperson, President or any Vice President, and by the
Treasurer, Secretary or any Assistant Treasurer or Assistant Secretary of the
Corporation. Any or all the signatures on the certificate may be facsimile. In
case any officer, transfer agent or registrar whose signature or facsimile
signature appears on a certificate shall have ceased to be



                                                                               9


such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if such person were
such officer, transfer agent or registrar at the date of issue.

     5.2. LOST CERTIFICATES

     The Board of Directors, Chairperson, President or Secretary may direct a
new certificate of stock to be issued in place of any certificate theretofore
issued by the Corporation and alleged to have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming that the
certificate of stock has been lost, stolen or destroyed. When authorizing such
issuance of a new certificate, the board or any such officer may, as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or such owner's legal representative, to
advertise the same in such manner as the board or such officer shall require
and/or to give the Corporation a bond or indemnity, in such sum or on such terms
and conditions as the board or such officer may direct, as indemnity against any
claim that may be made against the Corporation on account of the certificate
alleged to have been lost, stolen or destroyed or on account of the issuance of
such new certificate or uncertificated shares.

     5.3. RECORD DATE

          5.3.1. ACTIONS BY STOCKHOLDERS

     In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders, the Board of Directors may
fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than sixty days nor less than ten days
before the date of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be the close of business on the day
next preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting,
unless the Board of Directors fixes a new record date for the adjourned meeting.

     In order that the Corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board of Directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. If no
record date has been fixed by the Board of Directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors is required by
the Delaware General Corporation Law, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation in the manner prescribed by Section 213(b) of the
Delaware General Corporation Law. If no record date has been fixed by the Board
of Directors and prior action by the Board of Directors is required by the
Delaware General Corporation Law, the record date for determining stockholders
entitled to consent to corporate action in writing



                                                                              10


without a meeting shall be at the close of business on the day on which the
Board of Directors adopts the resolution taking such prior action.

          5.3.2. PAYMENTS

     In order that the Corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any rights
or the stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.

     5.4. STOCKHOLDERS OF RECORD

     The Corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends, to
receive notifications, to vote as such owner, and to exercise all the rights and
powers of an owner. The Corporation shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise may be provided by the Delaware General Corporation Law.

6. INDEMNIFICATION; INSURANCE

     6.1. AUTHORIZATION OF INDEMNIFICATION

     Each person who was or is a party or is threatened to be made a party to or
is involved in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative and whether by or in
the right of the Corporation or otherwise (a "proceeding"), by reason of the
fact that he or she, or a person of whom he or she is the legal representative,
is or was a director or officer of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee, partner (limited or
general) or agent of another corporation or of a partnership, joint venture,
limited liability company, trust or other enterprise, including service with
respect to an employee benefit plan, shall be (and shall be deemed to have a
contractual right to be) indemnified and held harmless by the Corporation (and
any successor to the Corporation by merger or otherwise) to the fullest extent
authorized by, and subject to the conditions and (except as provided herein)
procedures set forth in the Delaware General Corporation Law, as the same exists
or may hereafter be amended (but any such amendment shall not be deemed to limit
or prohibit the rights of indemnification hereunder for past acts or omissions
of any such person insofar as such amendment limits or prohibits the
indemnification rights that said law permitted the Corporation to provide prior
to such amendment), against all expenses, liabilities and losses (including
attorneys' fees, judgments, fines, ERISA taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred or suffered by such person in
connection therewith; provided, however, that the Corporation shall indemnify
any such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person (except for a suit or action pursuant to
SECTION 6.2 hereof) only



                                                                              11


if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation. Persons who are not directors or officers of the Corporation
and are not so serving at the request of the Corporation may be similarly
indemnified in respect of such service to the extent authorized at any time by
the Board of Directors of the Corporation. The indemnification conferred in this
SECTION 6.1 also shall include the right to be paid by the Corporation (and such
successor) the expenses (including attorneys' fees) incurred in the defense of
or other involvement in any such proceeding in advance of its final disposition;
provided, however, that, if and to the extent the Delaware General Corporation
Law requires, the payment of such expenses (including attorneys' fees) incurred
by a director or officer in advance of the final disposition of a proceeding
shall be made only upon delivery to the Corporation of an undertaking by or on
behalf of such director or officer to repay all amounts so paid in advance if it
shall ultimately be determined that such director or officer is not entitled to
be indemnified under this Section 6.1 or otherwise; and provided further, that,
such expenses incurred by other employees and agents may be so paid in advance
upon such terms and conditions, if any, as the Board of Directors deems
appropriate.

     6.2. RIGHT OF CLAIMANT TO BRING ACTION AGAINST THE CORPORATION

     If a claim under SECTION 6.1 is not paid in full by the Corporation within
sixty days after a written claim has been received by the Corporation, the
claimant may at any time thereafter bring an action against the Corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled to be paid also the expense of prosecuting such
action. It shall be a defense to any such action (other than an action brought
to enforce a claim for expenses incurred in connection with any proceeding in
advance of its final disposition where the required undertaking, if any is
required, has been tendered to the Corporation) that the claimant has not met
the standards of conduct which make it permissible under the Delaware General
Corporation Law for the Corporation to indemnify the claimant for the amount
claimed or is otherwise not entitled to indemnification under SECTION 6.1, but
the burden of proving such defense shall be on the Corporation. The failure of
the Corporation (in the manner provided under the Delaware General Corporation
Law) to have made a determination prior to or after the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law shall not be a defense to the action or create
a presumption that the claimant has not met the applicable standard of conduct.
Unless otherwise specified in an agreement with the claimant, an actual
determination by the Corporation (in the manner provided under the Delaware
General Corporation Law) after the commencement of such action that the claimant
has not met such applicable standard of conduct shall not be a defense to the
action, but shall create a presumption that the claimant has not met the
applicable standard of conduct.

     6.3. NON-EXCLUSIVITY

     The rights to indemnification and advance payment of expenses provided by
SECTION 6.1 hereof shall not be deemed exclusive of any other rights to which
those seeking indemnification and advance payment of expenses may be entitled
under any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office.



                                                                              12


     6.4. SURVIVAL OF INDEMNIFICATION

     The indemnification and advance payment of expenses and rights thereto
provided by, or granted pursuant to, SECTION 6.1 hereof shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee, partner or agent and shall inure to the
benefit of the personal representatives, heirs, executors and administrators of
such person.

     6.5. INSURANCE

     The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, partner (limited or general) or agent of another
corporation or of a partnership, joint venture, limited liability company, trust
or other enterprise, against any liability asserted against such person or
incurred by such person in any such capacity, or arising out of such person's
status as such, and related expenses, whether or not the Corporation would have
the power to indemnify such person against such liability under the provisions
of the Delaware General Corporation Law.

7. GENERAL PROVISIONS

     7.1. INSPECTION OF BOOKS AND RECORDS

     Any stockholder, in person or by attorney or other agent, shall, upon
written demand under oath stating the purpose thereof, have the right during the
usual hours for business to inspect for any proper purpose the Corporation's
stock ledger, a list of its stockholders, and its other books and records, and
to make copies or extracts therefrom. A proper purpose shall mean a purpose
reasonably related to such person's interest as a stockholder. In every instance
where an attorney or other agent shall be the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing which authorizes the attorney or other agent to so act on
behalf of the stockholder. The demand under oath shall be directed to the
Corporation at its registered office or at its principal place of business.

     7.2. DIVIDENDS

     The Board of Directors may declare dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation and
the laws of the State of Delaware.

     7.3. RESERVES

     The directors of the Corporation may set apart, out of the funds of the
Corporation available for dividends, a reserve or reserves for any proper
purpose and may abolish any such reserve.

     7.4. EXECUTION OF INSTRUMENTS

     All checks, drafts or other orders for the payment of money, and promissory
notes of the



                                                                              13


Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.

     7.5. FISCAL YEAR

     The fiscal year of the Corporation shall be fixed by resolution of the
Board of Directors.

     7.6. SEAL

     The corporate seal shall be in such form as the Board of Directors shall
approve. The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or otherwise reproduced.

                                    * * * * *

     The foregoing Bylaws were adopted by the Board of Directors on March 17,
2000.


                                        /s/ ILLEGIBLE
                                        ----------------------------------------
                                        Secretary



                                                                              14


                            CERTIFICATE OF SECRETARY

I certify:

     That I am the duly elected and acting Secretary or Assistant Secretary of
Titan Wireless, Inc., a Delaware corporation; and

     That the foregoing Bylaws, comprising 14 pages, constitute the Bylaws of
such corporation on the date hereof.

     IN WITNESS WHEREOF, I have executed this Certificate and affixed the seal
of such corporation on November 8, 2000.


                                        /s/ CHERYL L. BARR
                                        ----------------------------------------
                                        Name:  Cheryl L. Barr
                                               Assistant Secretary
                                               Title
[SEAL]



                                                                              15


                                TABLE OF CONTENTS
                            CERTIFICATE OF SECRETARY

EX-3.121

                                                                   EXHIBIT 3.121

                            ARTICLES OF INCORPORATION

                                       OF

                              PROCOM SERVICES, INC.

                                      * * *


     FIRST: That the name of the corporation is PROCOM SERVICES, INC.

     SECOND: This corporation is a close corporation. All of the corporation's
issued shares of all classes shall be held of record by not more than one (1)
person.

     THIRD: The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.

     FOURTH: The name of this corporation's initial agent for service of process
in the State of California is: C T CORPORATION SYSTEM

     FIFTH: The total number shares which the corporation is authorized to issue
is five thousand (5,000) of the par value Ten Cents ($0.10) each.

     IN WITNESS WHEREOF, the undersigned have executed these Articles this 22nd
day of August 1988.

                                         /s/ K. Gatell
                                         ---------------------------------------
                                         K. Gatell


                                         /s/ C. Trent
                                         ---------------------------------------
                                         C. Trent


                                        /s/ D. Tiu
                                        ---------------------------------------
                                        D. Tiu

EX-3.122

                                                                   EXHIBIT 3.122


                              PROCOM SERVICES, INC.

                                      * * *

                                     BYLAWS

                                      * * *


                                    ARTICLE I

                                     OFFICES

     SECTION 1. The principal executive office shall be located in San Diego,
California.

     SECTION 2. The corporation may also have offices at such other places both
within and without the State of California as the board of directors may from
time to time determine or the business of the corporation may require.

                                   ARTICLE II

                         ANNUAL MEETINGS OF SHAREHOLDERS

     SECTION 1. All meetings of shareholders for the election of directors shall
be held in San Diego, State of California, at such place as may be fixed from
time to time by the board of directors, or at such other place either within or
without the State of California as shall be designated from time to time by the
board of directors and stated in the notice of the meeting. Meetings of
shareholders for any other purpose may be held at such time and place, within or
without the State of California, as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof. If no other place is stated or
fixed then shareholders' meetings shall be held at the principal executive
office of the corporation.

     SECTION 2. Annual meetings of shareholders, commencing with the year 1989,
shall be held on the first day of August if not a legal holiday, and if a legal
holiday, then on the next secular day following at 4:00 P.M., or at such other
date and time as shall be designated from time to time by the board of directors
and stated in the notice of the meeting, at which they shall elect by a
plurality vote a board of directors, and transact such other business as may
properly be brought before the meeting.

     SECTION 3. Written or printed notice of the annual meeting stating the
place, day and hour of the meeting shall be given to each shareholder entitled
to vote thereat not less than ten (or, if sent by third-class mail, thirty) nor
more than sixty days before the date of the meeting. Notice may be sent by
third-class mail only if the outstanding shares of the corporation are held of




record by five hundred or more people (determined as provided in section 605 of
the California Corporations Code) on the record date for the shareholders'
meeting.

                                  ARTICLE III

                        SPECIAL MEETINGS OF SHAREHOLDERS

     SECTION 1. Special meetings of shareholders for any purpose other than the
election of directors may be held at such time and place within or without the
State of California as shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof.

     SECTION 2. Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the articles of
incorporation, may be called by the president, the board of directors, or the
holders of not less than ten percent of all the shares entitled to vote at the
meeting and if the corporation has a chairman of the board of directors then
special meetings of the shareholders may be called by the chairman.

     SECTION 3. Written or printed notice of a special meeting of shareholders,
stating the time, place and purpose or purposes thereof, shall be given to each
shareholder entitled to vote thereat not less than ten (or, if sent by
third-class mail, thirty) nor more than sixty days before the date fixed for the
meeting. Notice may be sent by third-class mail only if the outstanding shares
of the corporation are held of record by five hundred or more people (determined
as provided in section 605 of the California Corporations Code) on the record
date for the shareholders' meeting.

     SECTION 4. The business transacted at any special meeting of shareholders
shall be limited to the purposes stated in the notice.

                                   ARTICLE IV

                           QUORUM AND VOTING OF STOCK

     SECTION 1. The holders of a majority of the shares of stock issued and
outstanding and entitled to vote, represented in person or by proxy, shall
constitute a quorum at all meetings of the shareholders for the transaction of
business except as otherwise provided by statute or by the articles of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the shareholders, the shareholders present in person or
represented by proxy shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted which might have been
transacted at the meeting as originally notified.

     SECTION 2. If a quorum is present, the affirmative vote of a majority of
the shares of stock represented and voting at the meeting (which shares voting
affirmatively also constitute at least a majority of the required quorum), shall
be the act of the shareholders unless the vote of a greater number of shares of
stock is required by law or the articles of incorporation.

     SECTION 3. Each outstanding share of stock, having voting power, shall be
entitled to one vote on each matter submitted to a vote at a meeting of
shareholders. A shareholder may vote


                                       2



either in person or by proxy executed in writing by the shareholder or by his
duly authorized attorney-in-fact.

         In all elections for directors every shareholder complying with section
708(b) of the California Corporations Code and entitled to vote, shall have the
right to vote, in person or by proxy, the number of shares of stock owned by
him, for as many persons as there are directors to be elected, or to cumulate
the vote of said shares, and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of votes to which the
shareholder's share are normally entitled, or to distribute the votes on the
same principle among as many candidates as he may see fit. As provided in
section 708(b) of the California Corporations Code no shareholder shall be
entitled to cumulate votes for any candidate for the office of director unless
such candidates' names have been placed in nomination prior to the voting and at
least one shareholder has given notice at the meeting prior to the voting of his
intention to cumulate his votes.

     SECTION 4. Unless otherwise provided in the articles, any action except
election of directors which may be taken at any annual or special meeting of
shareholders may be taken without a meeting and without prior notice, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding shares having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Except to fill a
vacancy in the board of directors not filled by the directors, directors may not
be elected by written consent except by unanimous written consent of all shares
entitled to vote for the election of directors. Any election of a director to
fill a vacancy (other than a vacancy created by removal) not filled by the
directors requires the written consent of a majority of the shares entitled to
vote.

                                    ARTICLE V

                                    DIRECTORS

     SECTION 1. The number of directors shall be four (4). Directors need not be
residents of the State of California nor shareholders of the corporation. The
directors, other than the first board of directors, shall be elected at the
annual meeting of the shareholders, and each director elected shall serve until
the next succeeding annual meeting and until his successor shall have been
elected and qualified. The first board of directors shall hold office until the
first annual meeting of shareholders.

     SECTION 2. Unless otherwise provided in the articles of incorporation
vacancies, except for a vacancy created by the removal of a director, and newly
created directorships resulting from any increase in the number of directors may
be filled by a majority of the directors then in office, though less than a
quorum, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify. Unless
otherwise provided in the articles of incorporation any vacancy created by the
removal of a director shall be filled by the shareholders by the vote of a
majority of the shares entitled to vote at a meeting at which a quorum is
present. Any vacancies, which may be filled by directors and are not filled by
the directors, may be filled by the shareholders by a majority of the shares
entitled to vote at a meeting at which a quorum is present.


                                       3



     SECTION 3. The business affairs of the corporation shall be managed by its
board of directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the articles of
incorporation or by these bylaws directed or required to be exercised or done by
the shareholders.

     SECTION 4. The directors may keep the books of the corporation, except such
as are required by law to be kept within the state, outside of the State of
California, at such place or places as they may from time to time determine.

     SECTION 5. The board of directors, by the affirmative vote of a majority of
the directors then in office, and irrespective of any personal interest of any
of its members, shall have authority to establish reasonable compensation of all
directors for services to the corporation as directors, officers or otherwise.

                                   ARTICLE VI

                       MEETINGS OF THE BOARD OF DIRECTORS

     SECTION 1. Meetings of the board of directors, regular or special, may be
held either within or without the State of California.

     SECTION 2. The first meeting of each newly elected board of directors shall
be held at such time and place as shall be fixed by the vote of the shareholders
at the annual meeting and no notice of such meeting shall be necessary to the
newly elected directors in order legally to constitute the meeting, provided a
quorum shall be present, or it may convene at such place and time as shall be
fixed by the consent in writing of all the directors.

     SECTION 3. Regular meetings of the board of directors may be held upon such
notice, or without notice, and at such time and at such place as shall from time
to time be determined by the board.

     SECTION 4. Special meetings of the board of directors may be called by the
president on five (5) days' notice to each director, either personally or by
mail or by telephone or by telegram; special meetings shall be called by the
president or secretary in like manner and on like notice on the written request
of two directors unless the board consists of only one director; in which case
special meetings shall be called by the president or secretary in like manner
and on like notice on the written request of the sole director.

     SECTION 5. Attendance of a director at any meeting shall constitute a
waiver of notice of such meeting, except where a director attends for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the board
of directors need be specified in the notice or waiver of notice of such
meeting.

     SECTION 6. A majority of the directors shall constitute a quorum for the
transaction of business unless a greater number is required by law or by the
articles of incorporation. The act of a majority of the directors present at any
meeting at which a quorum is present shall be the act of the board of directors,
unless the act of a greater number is required by statute or by the articles


                                       4



of incorporation. If a quorum shall not be present at any meeting of directors,
the directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.

     SECTION 7. Any action required or permitted to be taken at a meeting of the
directors may be taken without a meeting if a consent in writing, setting forth
the action so taken, shall be signed by all of the directors entitled to vote
with respect to the subject matter thereof.

                                   ARTICLE VII

                               EXECUTIVE COMMITTEE

     SECTION 1. The board of directors, by resolution adopted by a majority of
the number of directors fixed by the bylaws or otherwise, may designate two or
more directors to constitute an executive committee, which committee, to the
extent provided in such resolution, shall have and exercise all of the authority
of the board of directors in the management of the corporation, except as
otherwise required by law. Vacancies in the membership of the committee shall be
filled by the board of directors at a regular or special meeting of the board of
directors. The executive committee shall keep regular minutes of its proceedings
and report the same to the board when required. The board of directors may
designate one or more directors as alternate members of the executive committee.
The executive committee shall not have authority: (1) To approve any action
which will also require the shareholders' approval; (2) To fill vacancies on the
board or in any committee; (3) To fix the compensation of directors for serving
on the board or on any committee; (4) To amend or repeal the bylaws or adopt new
bylaws; (5) To amend or repeal any resolution of the board which by its express
terms is not so amendable or repealable; (6) To make a distribution to the
shareholders except at a rate or in a periodic amount or within a price range
determined by the board; or (7) To appoint other committees of the board or the
members thereof.

                                  ARTICLE VIII

                                     NOTICES

     SECTION 1. Whenever, under the provisions of the statutes or of the
articles of incorporation or of these bylaws, notice is required to be given to
any director or shareholder, it shall not be construed to mean personal notice,
but such notice may be given in writing, by mail, addressed to such director or
shareholder, at his address as it appears on the records of the corporation,
with postage thereon prepaid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail. Notice to
directors may also be given by telegram. Notice to any shareholder shall be
given at the address furnished by such shareholder for the purpose of receiving
notice. If such address is not given and if no address appears on the records of
the corporation for any shareholder then notice may be given to such shareholder
at the place where the principal executive office of the corporation is located
or by publication at least once in a newspaper of general circulation in the
county in which said principal executive office is located. If a notice of a
shareholders' meeting is sent by mail it shall be sent by first-class mail, or,
in case the corporation has outstanding shares held of record by


                                       5



500 or more persons (determined as provided in section 605 of the California
Corporations Code) on the record date for the shareholders' meeting, notice may
be by third-class mail.

     SECTION 2. Whenever any notice whatever is required to be given under the
provisions of the statutes or under the provisions of the articles of
incorporation of these bylaws, a waiver thereof in writing signed by the person
or persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.

                                   ARTICLE IX

                                    OFFICERS

     SECTION 1. The officers of the corporation, except those elected in
accordance with Sec. 210 of the California General Corporation Law, shall be
chosen by the board of directors and shall be a president, a vice-president, a
secretary and a treasurer. The board of directors may also choose additional
vice-presidents, and one or more assistant secretaries and assistant treasurers.

     SECTION 2. The board of directors at its first meeting after each annual
meeting of shareholders shall choose a president, one or more vice-presidents, a
secretary and a treasurer, none of whom need be a member of the board.

     SECTION 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board of directors.

     SECTION 4. The salaries of all officers and agents of the corporation shall
be fixed by the board of directors.

     SECTION 5. The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the board
of directors may be removed at any time by the affirmative vote of a majority of
the board of directors. Any vacancy occurring in any office of the corporation
shall be filled by the board of directors.

                                  THE PRESIDENT

     SECTION 6. The president shall be the chief executive officer of the
corporation, shall preside at all meetings of the shareholders and the board of
directors, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect.

     SECTION 7. He shall execute bonds, mortgages and other contracts requiring
a seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the board of directors to some
other officer or agent of the corporation.


                                       6



                               THE VICE-PRESIDENTS

     SECTION 8. The vice-president, or if there shall be more than one, the
vice-presidents in the order determined by the board of directors, shall, in the
absence or disability of the president, perform the duties and exercise the
powers of the president and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.

                     THE SECRETARY AND ASSISTANT SECRETARIES

     SECTION 9. The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the shareholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary, shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature or by the signature of such assistant
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.

     SECTION 10. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors, shall,
in the absence or disability of the secretary, perform the duties and exercise
the powers of the secretary and shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.

                     THE TREASURER AND ASSISTANT TREASURERS

     SECTION 11. The treasurer shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.

     SECTION 12. He shal1 disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.

     SECTION 13. If required by the board of directors, he shall give the
corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.

     SECTION 14. The assistant treasurer, or, if there shall be more than one,
the assistant treasurers in the order determined by the board of directors,
shall, in the absence or disability of


                                       7



the treasurer, perform the duties and exercise the powers of the treasurer and
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.

                                    ARTICLE X

                             CERTIFICATES FOR SHARES

     SECTION 1. Every holder of shares in the corporation shall be entitled to
have a certificate, signed by, or in the name of the corporation by, the
chairman or vice-chairman of the board of directors, or the president or a
vice-president and the treasurer or an assistant treasurer, or the secretary or
an assistant secretary of the corporation, certifying the number of shares and
the class or series of shares owned by him in the corporation. If the shares of
the corporation are classified or if any class of shares has two or more series,
there shall appear on the certificate either (1) a statement of the rights,
preferences, privileges and restrictions granted to or imposed upon each class
or series of shares to be issued and upon the holders thereof; or (2) a summary
of such rights, preferences, privileges and restrictions with reference to the
provisions of the articles and any certificates of determination establishing
the same; or (3) a statement setting forth the office or agency of the
corporation from which shareholders may obtain, upon request and without charge,
a copy of the statement referred to in item (1) heretofore. Every certificate
shall have noted thereon any information required to be set forth by the
California General Corporation Law and such information shall be set forth in
the manner provided by such law.

     SECTION 2. Any or all of the signatures on the certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if such
person were an officer, transfer agent or registrar at the date of issue.

                                LOST CERTIFICATES

     SECTION 3. The board of directors may direct a new certificate to be issued
in place of any certificate theretofore issued by the corporation alleged to
have been lost or destroyed. When authorizing such issue of a new certificate,
the board of directors, in its discretion and as a condition precedent to the
issuance thereof, may prescribe such terms and conditions as it deems expedient,
and may require such indemnities as it deems adequate, to protect the
corporation from any claim that may be made against it with respect to any such
certificate alleged to have been lost or destroyed.

                               TRANSFERS OF SHARES

     SECTION 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate representing shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, a new
certificate shall be issued to the person entitled thereto, and the old
certificate cancelled and the transaction recorded upon the books of the
corporation.


                                       8



                            CLOSING OF TRANSFER BOOKS

     SECTION 5. In order that the corporation may determine the shareholders
entitled to notice of any meeting or to vote or entitled to receive payment of
any dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any other lawful action, the board may fix, in
advance, a record date, which shall not be more than 60 nor less than 10 days
prior to the date of such meeting nor more than 60 days prior to any other
action.

     A determination of shareholders of record entitled to notice of or to vote
at a meeting of shareholders shall apply to any adjournment of the meeting
unless the board fixes a new record date for the adjourned meeting, but the
board shall fix a new record date if the meeting is adjourned for more than 45
days from the date set for the original meeting.

                             REGISTERED SHAREHOLDERS

     SECTION 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
California.

                                   ARTICLE XI

                               GENERAL PROVISIONS

                                    DIVIDENDS

     SECTION 1. Subject to the provisions of the articles of incorporation
relating thereto, if any, dividends may be declared by the board of directors at
any regular or special meeting, pursuant to law. Dividends may be paid in cash,
in property or in shares of the capital stock, subject to any provisions of the
articles of incorporation and the California General Corporation Law.

     SECTION 2. Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.

                                     CHECKS

     SECTION 3. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.


                                       9



                                   FISCAL YEAR

     SECTION 4. The fiscal year of the corporation shall be fixed by resolution
of the board of directors.

                                      SEAL

     SECTION 5. The corporate seal shall have inscribed thereon the name of the
corporation, the date of its incorporation and the words "Corporate Seal,
California". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any manner reproduced.

                                   ARTICLE XII

                                   AMENDMENTS

     SECTION 1. These bylaws may be altered, amended or repealed or new bylaws
may be adopted (a) at any regular or special meeting of shareholders at which a
quorum is present or represented, by the affirmative vote of a majority of the
stock entitled to vote, provided notice of the proposed alteration, amendment or
repeal be contained in the notice of such meeting, or (b) by the affirmative
vote of a majority of the board of directors at any regular or special meeting
of the board.

         The board of directors shall not make or alter any bylaw specifying a
fixed number of directors or the maximum or minimum number of directors and the
directors shall not change a fixed board to a variable board or vice versa in
the bylaws. The board of directors shall not change a bylaw, if any, which
requires a larger proportion of the vote of directors for approval than is
required by the California General Corporation Law.

                                  ARTICLE XIII

                            DIRECTORS' ANNUAL REPORT

     SECTION 1. The directors shall cause to be sent to the shareholders not
later than one hundred twenty days after the close of the fiscal year, an annual
report which shall include a balance sheet as of the closing date of the last
fiscal year, and an income statement of changes in financial position for said
fiscal year. Said annual report shall be accompanied by any report thereon of
independent accountants or, if there is no such report, the certificate of an
authorized officer of the corporation that such statements were prepared without
audit from the books and records of the corporation. This annual report is
hereby waived whenever the corporation shall have less than 100 shareholders as
defined in Section 605 of the California Corporations Code. Except when said
waiver applies the annual report shall be sent to the shareholder at least 15
(or if sent by third-class mail, 35) days prior to the date of the annual
meeting. The annual report may be sent by third-class mail only if the
corporation has outstanding shares held by 500 or more persons (as determined by
the provisions of Section 605 of the California Corporations Code) on the record
date for the shareholders' meeting. In addition to the financial statements
included in the annual report, the annual report of the corporation, if it has
more than 100 shareholders as defined in Section 605 of the California
Corporations Code and if it has no class of securities registered under Section
12 of the Securities and Exchange Act of 1934, or exempt


                                       10



from such registration by Section 12(g)(2) of said act, shall also describe
briefly: (1) Any transaction (excluding compensation of officers and directors)
during the previous fiscal year involving an amount in excess of forty thousand
dollars ($40,000) (other than contracts let at competitive bids or services
rendered at prices regulated by law) to which the corporation or its parent or
subsidiary was a party and in which any director or officer of the corporation
or of a subsidiary or (if known to the corporation or its parent or subsidiary)
any holder of more than 10 percent of the outstanding voting shares of the
corporation had a direct or indirect material interest, naming such person and
stating such person's relationship to the corporation, the nature of such
person's interest in the transaction and, where practicable, the amount of such
interest; provided, that in the case of a transaction with a partnership of
which such person is a partner, only the interest of the partnership need be
stated; and provided, further that no such report need be made in the case of
transactions approved by the shareholders under subdivision (a) of Section 310
of the California Corporations Code. (2) The amount and circumstances of any
indemnification or advances aggregating more than ten thousand dollars ($10,000)
paid during the fiscal year to any officer or director of the corporation
pursuant to Section 317 of the California Corporations Code, provided, that no
such report need be made in the case of indemnification approved by the
shareholders under paragraph (2) of subdivision (e) of Section 317 of the
California Corporations Code.


                                       11

EX-3.123

                                                                   EXHIBIT 3.123

                          CERTIFICATE OF INCORPORATION

                                       OF

                                  MERGECO, INC.

          The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 9 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known identified and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:

          FIRST: The name of the corporation (hereinafter the "Corporation") is:
MERGECO, Inc.

          SECOND: the address, including street, number, city and county, of the
registered office of the Corporation in the State of Delaware is 1013 Centre
Road, City of Wilmington, County of New Castle; state of Delaware, zip code
19805 and the name of the registered agent of the Corporation in the State of
Delaware is Corporation Service Company.

          THIRD: The nature of the business and of the purposes to be conducted
and promoted by the Corporation shall be to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.

          FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is Five Million (5,000,000). The par value of each
such share is $0.001. All such shares are of one class and are shares of Common
Stock.

          FIFTH:   The name and mailing address of the incorporator are as
                   follows:

                   Matthew G. Colvin
                   3033 Science Park Road
                   San Diego, California 92121

          SIXTH:   The Corporation is to have perpetual existence.

          SEVENTH: The personal liability of the directors of the Corporation is
hereby eliminated to the fullest extent permitted by paragraph (7) of subsection
(b) of Section 102 of the General Corporation Law of the State of Delaware, as
the same may be amended and supplemented.

          EIGHTH: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, indemnify any and all persons whom it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities or other matters referred to in or



covered by said section, and the indemnification provided for herein shall not
be deemed exclusive of any other rights to which those indemnified may be
entitled under any By-Law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such person.

          NINTH: From time to time any of the provisions of this certificate of
incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the Corporation by this
certificate of incorporation are granted subject to the provisions of this
article NINTH.

          Signed on March 4, 1999


                                        /s/ Matthew G. Colvin
                                        ----------------------------------------
                                        Matthew G. Colvin
                                        Incorporator



                            CERTIFICATE OF AMENDMENT

                                       OF

                          CERTIFICATE OF INCORPORATION

                                       OF

                                  MERGECO, INC.

          MergeCo, Inc. (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware which was incorporated on March 4, 1999, does hereby certify:

          FIRST: That the Board of Directors of the Corporation declared an
     amendment to the Corporation's Certificate of Incorporation (the
     "Certificate"), advisable and approved a resolution to amend and replace
     Article First of the Certificate to read as follows:

               FIRST: "The name of the corporation (hereinafter the
          "Corporation") is Datacentric Automation Corporation"

          SECOND: That the Board of Directors of the Corporation declared an
     amendment to the Certificate advisable and approved a resolution to amend
     and replace Article Fourth of the Certificate to read as follows:

               FOURTH: "This Corporation is authorized to issue only one class
          of stock, to be designated Common Stock. The total number of shares of
          Common Stock presently authorized is Ten Million (10,000,000), each
          having a par value of one-tenth of one cent ($0.001)."

          THIRD: that said amendments were duly adopted by the Corporations Sole
     Stockholder in accordance with the provisions of Title 3, Section 242 of
     the General Corporation Law of the State of Delaware.

          FOURTH: that said amendments shall be effective for accounting
     purposes only as of September 17, 2002.

          IN WITNESS WHEREOF, MergeCo, Inc. has caused this Certificate of
Amendment to be signed by its duly authorized officer, as of the 15th day of
October, 2002.

                                        MergeCo, Inc.


                                        /s/ Cheryl L. Barr
                                        ----------------------------------------
                                        Name: Cheryl L. Barr
                                        Secretary



                            CERTIFICATE OF AMENDMENT

                                       OF

                          CERTIFICATE OF INCORPORATION

                                       OF

                       DATACENTRIC AUTOMATION CORPORATION

          Datacentric Automation Corporation (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware which was incorporated on March 4, 1999, does hereby certify:

          FIRST: That the Board of Directors of the Corporation declared an
     amendment to the Corporation's Certificate of Incorporation (the
     "Certificate"), advisable and approved a resolution to amend and replace
     Article First of the Certificate to read as follows:

               FIRST: "The name of the corporation (hereinafter the
          "Corporation") is Shellco, Inc.",

          SECOND: that said amendment was duly adopted by the Corporations Sole
     Stockholder in accordance with the provisions of Title 3, Section 242 of
     the General Corporation Law of the State of Delaware.

          THIRD: that said amendment shall be effective for accounting purposes
     only as of March 12, 2004.

          IN WITNESS WHEREOF, Datacentric, Automation Corporation has caused
this Certificate of Amendment to be signed by its duly authorized officer, as of
the 12th day of March, 2004.

                                        Datacentric Automation Corporation


                                        /s/ Cheryl L. Barr
                                        ----------------------------------------
                                        Name: Cheryl L. Barr
                                        Secretary

EX-3.124

                                                                   EXHIBIT 3.124

                                     BY-LAWS

                                       OF

                                  MERGECO, INC.



                                TABLE OF CONTENTS

ARTICLE I - OFFICES........................................................    1

   Section 1     Registered Office.........................................    1
   Section 2.    Other Offices.............................................    1

ARTICLE II - MEETINGS OF STOCKHOLDERS......................................    1

   Section 1.    Place of Meetings.........................................    1
   Section 2.    Annual Meetings of Stockholders...........................    1
   Section 3.    Quorum; Adjourned Meeting and Notice Thereof..............    1
   Section 4.    Voting....................................................    1
   Section 5.    Proxies...................................................    2
   Section 6.    Special Meetings..........................................    2
   Section 7.    Notice of Stockholder's Meetings..........................    2
   Section 8.    Maintenance and Inspection of Stockholder List............    2
   Section 9.    Stockholder Action by Written Consent Without a Meeting...    2

ARTICLE III - DIRECTORS....................................................    3

   Section 1.    The Number of Directors...................................    3
   Section 2.    Vacancies.................................................    3
   Section 3.    Powers....................................................    3
   Section 4.    Place of Directors' Meetings..............................    3
   Section 5.    Regular Meetings..........................................    3
   Section 6.    Special Meetings..........................................    3
   Section 7.    Quorum....................................................    4
   Section 8.    Action Without Meeting....................................    4
   Section 9.    Telephone Meetings........................................    4
   Section 10.   Committees of Directors...................................    4
   Section 11.   Minutes of Committee Meetings.............................    4
   Section 12.   Compensation of Directors.................................    5
   Section 13.   Indemnification...........................................    5

ARTICLE IV - OFFICERS......................................................    7

   Section 1.    Officers..................................................    7
   Section 2.    Election of Officers......................................    7
   Section 3.    Subordinate Officers......................................    7
   Section 4.    Compensation of Officers..................................    7
   Section 5.    Term of Office; Removal and Vacancies.....................    7
   Section 6.    Chairman of the Board.....................................    7
   Section 7.    President.................................................    7
   Section 8.    Vice President............................................    8
   Section 9.    Secretary.................................................    8
   Section 10.   Assistant Secretary.......................................    8


                                        i



   Section 11.   Treasurer.................................................    8
   Section 12.   Assistant Treasurer.......................................    9

ARTICLE V - CERTIFICATES OF STOCK..........................................    9

   Section 1.    Certificates..............................................    9
   Section 2.    Signatures on Certificates................................    9
   Section 3.    Statement of Stock Rights, Preferences, Privileges........    9
   Section 4.    Lost Certificates.........................................    9
   Section 5.    Transfers of Stock........................................   10
   Section 6.    Fixing Record Date........................................   10
   Section 7.    Registered Stockholders...................................   10

ARTICLE VI - GENERAL PROVISIONS............................................   10

   Section 1.    Dividends.................................................   10
   Section 2.    Payment of Dividends; Directors' Duties...................   10
   Section 3.    Checks....................................................   10
   Section 4.    Fiscal Year...............................................   10
   Section 5.    Corporate Seal............................................   10
   Section 6.    Manager of Giving Notice..................................   11
   Section 7.    Waiver of Notice..........................................   11
   Section 8.    Annual Statements.........................................   11

ARTICLE VII - AMENDMENTS...................................................   11

   Section 1.    Amendment by Directors or Stockholders....................   11


                                       ii



                                     BY-LAWS

                                       OF

                                  MERGECO, INC.

                               ARTICLE I. OFFICES

          SECTION 1. The Registered Office shall be in the City of Wilmington,
County of New Castle, State of Delaware.

          SECTION 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the Board of Directors may from
time to time determine or the business of the corporation may require.

                      ARTICLE II. MEETINGS OF STOCKHOLDERS

          SECTION 1. Meetings of stockholders may be held at any place within or
outside the State of Delaware designated by the Board of Directors. In the
absence of any such designation, stockholders meetings shall be held at the
principal executive office of the corporation.

          SECTION 2. The annual meeting of stockholders shall be held each year
on a date and time designated by the Board of Directors. At each annual meeting
directors shall be elected and any other proper business may be transacted.

          SECTION 3. A majority of the stock issued and outstanding and entitled
to vote at any meeting of stockholders, the holders of which are present in
person or represented by proxy, shall constitute a quorum for the transaction of
business except as otherwise provided by law, by the Certificate of
Incorporation, or by these By-Laws. A quorum, once established, shall not be
broken by the withdrawal of enough votes to leave less than a quorum and the
votes present may continue to transact business until adjournment. If, however,
such quorum shall not be present or represented at any meeting of the
stockholders, a majority of the voting stock represented in person or by proxy
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. If the adjournment is for more than thirty days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote thereat.

          SECTION 4. When a quorum is present at any meeting, the vote of the
holders of majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which express


                                        1



provision of the statutes, or Certificate of Incorporation, or these By-Laws, a
different vote is required in which case such express provision shall govern and
control the decision in question.

          SECTION 5. At each meeting of the stockholders, each stockholder
having the right to vote may vote in person or may authorize another person or
persons to act for him by proxy appointed by an instrument in writing prescribed
by such stockholder and bearing a date not more than three years prior to said
meeting, unless such instrument provides for a longer period. All proxies must
be filed with the Secretary of the corporation at the beginning of each meeting
in order to be counted in any vote at the meeting. Each stockholder shall have
one vote for each share of stock having voting power, registered in his name on
the books of the corporation on the record date set by the Board of Directors as
provided in Article V, Section 6 hereof. All elections shall be had and all
questions decided by a plurality vote.

          SECTION 6. Special meetings of the stockholders, for any purpose, or
purposes, unless otherwise prescribed by statute or by the Certificate of
Incorporation, may be called by the President and shall be called by the
President or the Secretary at the request in writing of a majority of the Board
of Directors, or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding,
and entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.

          SECTION 7. Whenever stockholders are required or permitted to take any
action at a meeting, a written notice of the meeting shall be given which notice
shall state the place, date and hour of the meeting, and, in the case of a
special meeting, the purpose or purposes for which the meeting is called. The
written notice of any meeting shall be given to each stockholder entitled to
vote at such meeting not less than ten nor more than sixty days before the
meeting. If mailed, notice is given when deposited in the United States mail,
postage prepaid, directed to the stockholder at his address as it appears on the
records of the corporation.

          SECTION 8. The officer whom has the charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of such
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.

          SECTION 9. Unless otherwise provided in the Certificate of
Incorporation, any action required to be taken at any annual or special meeting
of stockholders of the corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a


                                        2



meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing.

                             ARTICLE III. DIRECTORS

          SECTION 1. The number of directors which shall constitute the whole
Board shall be not less than three (3) nor greater than nine (9). The directors
need not be stockholders. The directors shall be elected at the annual meeting
of the stockholders, except as provided in Section 2 of this Article, and each
director shall hold office until his successor is elected and qualified;
provided, however, that unless otherwise restricted by the Certificate of
Incorporation or by law, any director or the entire Board of Directors may be
removed, either with or without cause, from the Board of Directors at any
meeting of the shareholders by a majority of the stock represented and entitled
to vote thereat.

          SECTION 2. Vacancies on the Board of Directors by reason of death,
resignation, retirement, disqualification, removal from office, or otherwise,
and newly created directorships resulting from any increase in the authorized
number of directors may be filled by a majority of the directors then in office,
although less than a quorum, or by a sole remaining director. The directors so
chosen shall hold office until the next annual election of directors and until
their successors are duly elected and shall qualify, unless sooner displaced. If
there are no directors in office, then an election of directors may be held in
the manner provided by statute. If, at the time of the filing any vacancy or any
newly created directorship, the directors then in office shall constitute less
than a majority of the whole Board (as constituted immediately prior to any such
increase), the Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten percent of the total number of shares at the
time outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorships,
or to replace the directors chosen by the directors then in office.

          SECTION 3. The property and business of the corporation shall be
managed by or under the direction of the Board of Directors. In addition to the
powers and authorities by these By-Laws expressly conferred upon them, the Board
may exercise all such powers of the corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by these
Bylaws directed or required to be exercised or done by the stockholders.

          SECTION 4. The directors may hold their meetings and have one or more
offices, and keep the books of the corporation outside the State of Delaware.

          SECTION 5. Regular meetings of the Board of Directors may be held
without notice at such time and place as shall from time to time be determined
by the Board.

          SECTION 6. Special meetings of the Board of Directors may be called by
the President on forty-eight hours' notice to each director, either personally
or by mail or by telegram; special meetings shall be called by the President or
the Secretary in like manner and on like notice on the written request of two
directors unless the Board consists of only one director;


                                        3



in which case special meetings shall be called by the President or Secretary in
like manner or on like notice on the written request of the sole director.

          SECTION 7. At all meetings of the Board of Directors a majority of the
authorized number of directors shall be necessary and sufficient to constitute a
quorum for the transaction of business, and the vote of the majority of the
directors present at any meeting at which there is a quorum, shall be the act of
the Board of Directors, except as may be otherwise specifically provided by
statute, by the Certificate of Incorporation or by these By-Laws. If a quorum
shall not be present at any meeting of the Board of Directors the directors
present thereat may adjourn the meeting from time to time, without notice other
than the announcement at the meeting, until a quorum shall be present. If only
one director is authorized, such sole director shall constitute a quorum.

          SECTION 8. Unless otherwise restricted by the Certificate of
Incorporation, or by these By-Laws, any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting, if all members of the Board or committee, as the case
may be, consent thereto in writing, and the writing or writings are filed with
the minutes of the proceedings of the Board or committee.

          SECTION 9. Unless otherwise restricted by the Certificate of
Incorporation or by these By-Laws, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.

          SECTION 10. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, each such
committee to consist of one or more of the directors of the corporation. The
Board may designate one or more of the directors as alternate members of any
committee, who may replace any absent or disqualified member of the committee.
In the absence or disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the Board of Directors, shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the Certificate of Incorporation,
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease, or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
By-Laws of the Corporation; and, unless the resolution or the Certificate of
Incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock.

          SECTION 11. Each Committee shall keep regular minutes of its meetings
and report the same to the Board of Directors when required.


                                        4



          SECTION 12. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, the Board of Directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as a director. No such payment shall preclude any director from serving
the corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.

          SECTION 13. (a) The corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

          (b) The corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no such indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his duty to the corporation unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or such
other court shall deem proper.

          (c) To the extent that a director, officer, employee or agent of the
corporation shall be successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in paragraphs (a) and (b), or in defense
of any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.


                                        5



          (d) Any indemnification under paragraphs (a) and (b) (unless ordered
by a court) shall be made by the corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (a) and (b). Such
determination shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or (3) by the stockholders.

          (e) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the corporation in advance of the final disposition of
such action, suit or proceeding as authorized by the Board of Directors in the
manner provided in paragraph (d) upon receipt of an undertaking by or on behalf
of the director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this Section 13.

          (f) The indemnification provided by this Section 13 shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.

          (g) The Board of Directors may authorize, by a vote of a majority of a
quorum of the Board of Directors, the corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this Section 13.

          (h) For the purposes of this Section 13, references to "the
corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and employees
or agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Section with
respect to the resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had continued.

          (i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include service
as a director, officer, employee or agent of the corporation


                                        6



which imposes duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.

                              ARTICLE IV. OFFICERS

          SECTION 1. The officers of this corporation shall be chosen by the
Board of Directors and shall include a President, a Secretary, and a Chief
Financial Officer. The corporation may also have at the discretion of the Board
of Directors such other officers as are desired, including a Chairman of the
Board, one or more Vice Presidents, one or more Assistant Secretaries and
Assistant Treasurers, and such other officers as may be appointed in accordance
with the provisions of Section 3 hereof. In the event there are two or more Vice
Presidents, then one or more may be designated as Executive Vice President,
Senior Vice President, or other similar or dissimilar title. At the time of the
election of officers, the directors may by resolution determine the order of
their rank. Any number of offices may be held by the same person, unless the
Certificate of Incorporation or these By-Laws otherwise provide.

          SECTION 2. The Board of Directors, at its first meeting after each
annual meeting of stockholders, shall choose the officers of the corporation.

          SECTION 3. The Board of Directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the Board.

          SECTION 4. The salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors.

          SECTION 5. The officers of the corporation shall hold office until
their successors are chosen and qualify in their stead. Any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors. If the office of any
officer or officers becomes vacant for any reason, the vacancy shall be filled
by the Board of Directors.

          SECTION 6. The Chairman of the Board, if such an officer be elected,
shall, if present, preside at all meetings of the Board of Directors and
exercise and perform such other powers and duties as may be from time to time
assigned to him by the Board of Directors or prescribed by these By-Laws. If
there is no President, the Chairman of the Board shall in addition be the Chief
Executive Officer of the corporation and shall have the powers and duties
prescribed in Section 7 of this Article IV.

          SECTION 7. Subject to such supervisory powers, if any, as may be given
by the Board of Directors to the Chairman of the Board, if there be such an
officer, the President shall be the Chief Executive Officer of the corporation
and shall, subject to the control of the Board of Directors, have general
supervision, direction and control of the business and officers of the
corporation. He shall preside at all meetings of the stockholders and, in the
absence of the


                                        7



Chairman of the Board, or if there be none, at all meetings of the Board of
Directors. He shall be an ex-officio member of all committees and shall have the
general powers and duties of management usually vested in the office of
President and Chief Executive Officer of corporations, and shall have such other
powers and duties as may be prescribed by the Board of Directors or these
By-Laws.

          SECTION 8. In the absence or disability of the President, the Vice
Presidents in order of their rank as fixed by the Board of Directors, or if not
ranked, the Vice President designated by the Board of Directors, shall perform
all the duties of the President, and when so acting shall have all the powers of
and be subject to all the restrictions upon the President. The Vice Presidents
shall have such other duties as from time to time may be prescribed for them,
respectively, by the Board of Directors.

          SECTION 9. The Secretary shall attend all sessions of the Board of
Directors and all meetings of the stockholders and record all votes and the
minutes of all proceedings in a book to be kept for that purpose; and shall
perform like duties for the standing committees when required by the Board of
Directors. He shall give, or cause to be given, notice of all meetings of the
stockholders and of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors or these By-Laws. He shall keep
in safe custody the seal of the corporation, and when authorized by the Board,
affix the same to any instrument requiring it, and when so affixed it shall be
attested by his signature or by the signature of an Assistant Secretary. The
Board of Directors may give general authority to any other officer to affix the
seal of the corporation and to attest the affixing by his signature.

          SECTION 10. The Assistant Secretary, or if there be more than one, the
Assistant Secretaries in the order determined by the Board of Directors, or if
there be no such determination, the Assistant Secretary designated by the Board
of Directors, shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.

          SECTION 11. The Chief Financial Officer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys, and other valuable effects in the name and to the credit of
the corporation, in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and shall
render to the Board of Directors, at its regular meetings, or when the Board of
Directors so requires an account of all his transactions as Chief Financial
Officer and of the financial condition of the corporation. If required by the
Board of Directors, he shall give the corporation a bond, in such sum and with
such surety or sureties as shall be satisfactory to the Board of Directors, for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.


                                        8



          SECTION 12. The Assistant Treasurer, or if there shall be more than
one, the Assistant Treasurers in the order determined by the Board of Directors,
or if there be no such determination, the Assistant Treasurer designated by the
Board of Directors, shall, in the absence or disability of the Chief Financial
Officer, perform the duties and exercise the powers of the Chief Financial
Officer and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.

                        ARTICLE V. CERTIFICATES OF STOCK

          SECTION 1. Every holder of stock of the corporation shall be entitled
to have a certificate signed by, or in the name of the corporation by, the
Chairman or Vice Chairman of the Board of Directors, or the President or a Vice
President, and by the Secretary or an Assistant Secretary, or the Chief
Financial Officer or an Assistant Treasurer of the corporation, certifying the
number of shares represented by the certificate owned by such stockholder in the
corporation.

          SECTION 2. Any or all of the signatures on the certificate may be a
facsimile. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, or registar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent, or registrar at the date of issue.

          SECTION 3. If the corporation shall be authorized to issue more than
one class of stock or more than one series of any class, the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualification,
limitations or restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate which the
corporation shall issue to represent such class or series of stock, provided
that, except as otherwise provided in section 202 of the General Corporation Law
of Delaware, in lieu of the foregoing requirements, there may be set forth on
the face or back of the certificate which the corporation shall issue to
represent such class or series of stock, a statement that the corporation will
furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.

          SECTION 4. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.


                                        9



          SECTION 5. Upon surrender to the corporation, or the transfer agent of
the corporation, of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.

          SECTION 6. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of the
stockholders, or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix a
record date which shall not be more than sixty nor less than ten days before the
date of such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.

          SECTION 7. The corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim or
interest in such share on the part of any other person, whether or not it shall
have express or other notice thereof, save as expressly provided by the laws of
the State of Delaware.

                         ARTICLE VI. GENERAL PROVISIONS

          SECTION 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the Certificate of Incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the Certificate of Incorporation.

          SECTION 2. Before payment of any dividend there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interests of the
corporation, and the directors may abolish any such reserve.

          SECTION 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers as the Board of
Directors may from time to time designate.

          SECTION 4. The fiscal year of the corporation shall be fixed by
resolution of the Board of Directors.

          SECTION 5. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware". Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.


                                       10



          SECTION 6. Whenever, under the provisions of the statutes or of the
Certificate of Incorporation or of these By-Laws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also he given by telegram.

          SECTION 7. Whenever any notice is required to be given under the
provisions of the statutes or of the Certificate of Incorporation or of these
By-Laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
to be equivalent.

          SECTION 8. The Board of Directors shall present at each annual
meeting, and at any special meeting of the stockholders when called for by vote
of the stockholders, a full and clear statement of the business and condition of
the corporation.

                             ARTICLE VII. AMENDMENTS

          SECTION 1. These By-Laws may be altered, amended or repealed or new
By-Laws may be adopted by the stockholders or by the Board of Directors, when
such power is conferred upon the Board of Directors by the Certificate of
Incorporation, at any regular meeting of the stockholders or of the Board of
Directors or at any special meeting of the stockholders or of the Board of
Directors if notice of such alteration, amendment, repeal or adoption of new
By-Laws be contained in the notice of such special meeting. If the power to
adopt, amend or repeal By-Laws is conferred upon the Board of Directors by the
Certificate of Incorporation it shall not divest or limit the power of the
stockholders to adopt, amend or repeal By-Laws.


                                       11

EX-3.125

                                                                   EXHIBIT 3.125

[LOGO]

SCC710N                    COMMONWEALTH OF VIRGINIA
(06/02)                  STATE CORPORATION COMMISSION


                              ARTICLES OF AMENDMENT


                       CHANGING THE NAME OF A CORPORATION
                    BY UNANIMOUS CONSENT OF THE SHAREHOLDERS


The undersigned, pursuant to ss. 13.1-710 of the Code of Virginia, executes
these articles and states as follows:


                                       ONE


The name of the corporation is Delta Construction Management, Inc.
                               ------------------------------------------------
                                       TWO


The name of the corporation is changed to Titan Facilities, Inc.
                                          -------------------------------------


                                      THREE


The foregoing amendment was adopted by unanimous consent of the shareholders on


                                 April 22, 2003.
- -------------------------------------------------------------------------------
                                     (date)


The undersigned declares that the facts herein stated are true as
of                                                                  May 1, 2003.
                                                                   ------------
                                                                      (date)


                       Delta Construction Management, Inc.
                -----------------------------------------------
                              (Name of corporation)


                             By: /s/ CHERYL L. BARR
                -----------------------------------------------
                                   (Signature)


                            Cheryl L. Barr, Secretary
                -----------------------------------------------
                       (Printed name and corporate title)


                        SEE INSTRUCTIONS ON THE REVERSE.


[LOGO]






SCC71ON                      COMMONWEALTH OF VIRGINIA
(06/02)                    STATE CORPORATION COMMISSION


                              ARTICLES OF AMENDMENT
                       CHANGING THE NAME OF A CORPORATION
                    BY UNANIMOUS CONSENT OF THE SHAREHOLDERS


The undersigned, pursuant to ss. 13.1-710 of the Code of Virginia, executes
these articles and states as follows:


                                       ONE


The name of the corporation is      DELTA RESEARCH CORPORATION
                               ------------------------------------------------


                                       TWO


The name of the corporation is changed to DELTA CONSTRUCTION MANAGEMENT, INC.
                                          -------------------------------------


                                      THREE


The foregoing amendment was adopted by unanimous consent of the shareholders on


                                JANUARY 8, 2003.
- -------------------------------------------------------------------------------
                                     (date)


The undersigned declares that the facts herein stated are
true as of                                                      JANUARY 8, 2003.
                                                                ---------------
                                                                     (date)


                           DELTA RESEARCH CORPORATION
             ---------------------------------------------------
                              (Name of corporation)


                             By: /s/ CHERYL L. BARR
             ---------------------------------------------------
                                   (Signature)


                            Cheryl L. Barr, Secretary
             ---------------------------------------------------
                       (Printed name and corporate title)


                         SEE INSTRUCTIONS ON THE REVERSE










                              ARTICLES OF AMENDMENT
                       OF THE ARTICLES OF INCORPORATION OF
                          DELTA RESEARCH, INCORPORATED

     1.    By a consent in writing setting forth a resolution, signed by all of
the Directors of the Corporation before the resolution was submitted to a vote
of the stockholders, the Directors adapted a resolution finding that the
following proposed amendment of its Articles of Incorporation was in the best
interests of the Corporation and directing that it be submitted to a vote of the
stockholders: that the name of the Corporation shall be DELTA RESEARCH
CORPORATION.

     2.    On February 1, 1974, being not less than twenty-five (25) days nor
more than fifty (50) days before the meeting of the stockholders to act upon the
proposed amendment, written notice of the meeting was given personally or by
mail to each stockholder of record entitled to vote on the proposed amendment.
The notice stated the place, day and hour of the meeting and the purpose or
purposes for which it was called, and was called, and was accompanied by a copy
of the proposed meeting amendment.

     3.    On March 1, 1974, the meeting of the stockholders was held and the
amendment proposed by the Board of Directors, as set forth above, was adopted by
the stockholders.

     4.    The number of shares of stock of the Corporation outstanding on the
record date, the number of shares entitled to vote on the proposed amendment,
the number of shares voted for and against the amendment, the number of shares
of each class or series entitled to vote as a class, and the number of shares of
each such class or series voted for or against the amendment were as follows:

     Shares outstanding, all classes, 20,000

     *Shares entitled to vote, all classes, 20,000
















     *Shares, all classes, voted: FOR 20.000; AGAINST -0-

     *Shares entitled to vote as a class, if any: Not applicable

     Executed in the name of the Corporation by its President or a
Vice-president and its Secretary or Assistant Secretary who declare under the
penalties of perjury that the facts stated therein are true.

     DATED: April 2, 1974.

                                  DELTA RESEARCH, INCORPORATED

                                  By   /s/ EARL CRISLER
                                       -----------------------------------
                                           Earl Crisler, President

                                  and

                                      /s/ RICHARD A. BARTL
                                     -----------------------------------
                                          Richard A. Bartl, Secretary




















                                A F F I D A V I T
                                - - - - - - - - -


     COMES NOW EARL CRISLER, President of the Corporation, and, after being duly
sworn, states that the above Articles of Amendment are true and accurate to the
best of his knowledge, information, and belief and that the Articles shall be
executed by the Corporation.

                                  /s/ EARL CRISLER
                                  -------------------------------------------
                                  Earl Crisler



Sworn and subscribed to before me this 1st day of May, 1974.

My commission expires:  (Commissioned as Sarah J. Sigworth)
                         My Commission expires April 6, 1976


                                                                          [SEAL]


                                      /s/ SARAH S. MATHIS
                                      ------------------------------------------
                                      Notary Public




                              ARTICLES OF AMENDMENT
                       OF THE ARTICLES OF INCORPORATION OF
                          DELTA RESEARCH, INCORPORATED

     1.    By a consent in writing setting forth a resolution, signed by all of
the Directors of the Corporation before the resolution was submitted to a vote
of the stockholders, the Directors adopted a resolution finding that the
following proposed amendment of its Articles of Incorporation was in the best
interests of the Corporation and directing that it be submitted to a vote of the
stockholders: that the number of shares the Corporation be authorized to issue
shall be increased to 2,000,000 and that the par value of the shares shall be
$.01 per share.

     2.    On February 1, 1974, being not less than twenty-five (25) days nor
more than fifty (50) days before the meeting of the stockholders to act upon the
proposed amendment, written notice of the meeting was given personally or by
mail to each stockholder of record entitled to vote on the proposed amendment.
The notice stated the place, day and hour of the meeting and the purpose or
purposes for which it was called, and was called, and was accompanied by a copy
of the proposed amendment.

     3.    On March 1, 1974, the meeting of the stockholders was held and the
amendment proposed by the Board of Directors, as set forth above, was adopted by
the stockholders.

     4.    The number of shares of stock of the Corporation outstanding on the
record date, the number of shares entitled to vote on the proposed amendment,
the number of shares voted for and against the amendment, the number of shares
of each class or series entitled to vote as a class, and the number of shares of
each such class or series voted for or against the amendment were as follows:

     Shares outstanding, all classes, 20,000

     *Shares entitled to vote, all classes, 20,000





     *Shares, all classes, voted: FOR 20,000; AGAINST -0-

     *Shares entitled to vote as a class, if any: Not Applicable

     Executed in the name of the Corporation by its President or a Vice
President and its Secretary or Assistant Secretary who declare under the
penalties of perjury that the facts stated therein are true.

     Dated the 2nd day of April, 1974.

                           DELTA RESEARCH, INCORPORATED

                           By   /s/ EARL CRISLER
                                -----------------------------------
                                President -- Earl Crisler



                           and



                                /s/ RICHARD A. BARTL
                                -----------------------------------
                                Secretary -- RICHARD A. BARTL



                                A F F I D A V I T
                                - - - - - - - - -

         Comes now EARL CRISLER, President of the Corporation, and after being
duly sworn, states that the above Articles of Amendment are true and accurate to
the best of his knowledge, information, and belief and that the Articles shall
be executed by the Corporation.

                                /s/ EARL CRISLER
                                -----------------------------------
                                Earl Crisler



Sworn and subscribed to before me this 2nd day of April, 1974.

My commission expires:     (Commissioned as Sarah J. Sigworth)
                            My Commission expires April 6, 1976

                                /s/ SARAH S. MATHIS
                                -----------------------------------
                                Notary Public



                                                                          [SEAL]






                              ARTICLES OF AMENDMENT
                       OF THE ARTICLES OF INCORPORATION OF
                       OPERATIONAL SOLUTIONS, INCORPORATED

     1.    By a consent in writing setting forth a resolution, signed by all of
the directors of the corporation before the resolution was submitted to a vote
of the stockholders, the directors adopted a resolution finding that the
following proposed amendment of its articles of incorporation was in the best
interests of the corporation and directing that it be submitted to a vote of the
stockholders: that the name of the corporation shall be DELTA RESEARCH,
INCORPORATED.

     2.    On May 10, 1973, being not less than twenty-five (25) days nor more
than fifty (50) days before the meeting of the stockholders to act upon the
proposed amendment, written notice of the meeting was given personally or by
mail to each stockholder of record entitled to vote on the proposed amendment.
The notice stated the place, day and hour of the meeting and the purpose or
purposes for which it was called, and was called, and was accompanied by a copy
of the proposed amendment.

     3.    On June 5, 1973, the meeting of the stockholders was held and the
amendment proposed by the board of directors, as set forth above, was adopted by
the stockholders.

     4.    The number of shares of stock of the corporation outstanding on the
record date, the number of shares entitled to vote on the proposed amendment,
the number of shares voted for and against the amendment, the number of shares
of each class or series entitled to vote as a class, and the number of shares of
each such class or series voted for or against the amendment were as follows:

     Shares outstanding, all classes, 10,000

     *Shares entitled to vote, all classes, 10,000

     *Shares, all classes, voted: FOR 10,000; AGAINST -0-

     *Shares entitled to vote as a class, if any: Not applicable





     Executed in the name of the corporation by its president or a vice
president and its secretary or assistant secretary who declare under the
penalties of perjury that the facts stated therein are true.

     Dated June 13, 1973.
           -------------


                          OPERATIONAL SOLUTIONS, INC.

                          by    /s/ THOMAS P. TYLER
                                -----------------------------------
                                President, Thomas P. Tyler



                          and



                                /s/ JANET A. STRANG
                                -----------------------------------
                                Secretary, Janet Strang



                                A F F I D A V I T
                                - - - - - - - - -

     Comes now THOMAS P. TYLER, president of the corporation, and, after being
duly sworn, states that the above Articles of Amendment are true and accurate to
the best of his knowledge, information, and belief and that the articles shall
be executed by the corporation.

                                /s/ THOMAS P. TYLER
                                -----------------------------------
                                THOMAS P. TYLER



Sworn and subscribed to before me this 13th day of June, 1973.

My commission expires the 6th day of April, 1976.

                                /s/ SARAH J. SIGWORTH
                                -----------------------------------
                                Notary Public



                                                                          [SEAL]








                            ARTICLES OF INCORPORATION
                                       OF
                           OPERATIONAL SOLUTIONS, INC.

     We hereby associate to form a stock corporation under the provisions of
Chapter I of Tide 13.1 of the Code of Virginia and to that end set forth the
following:

     1.    The name of the Corporation is Operational Solutions, Inc.

     2.    The purpose for which the Corporation is organized is to provide
technical, financial, business and marketing consulting and related services to
clients in Government and Industry.

     3.    In addition the Corporation shall have the power to enter into
partnership agreements with other corporations and individuals, and also to
carry on business of any character whatsoever that is not prohibited by law or
required to be stated in these Articles.

     4.    The aggregate number of shares which the Corporation shall have the
authority to issue and the par value per share are as follows:

                                   NO. OF                    PAR VALUE
CLASS                              SHARES                    PER SHARE
                                --------------        -----------------------
Common Stock                       100,000                      $.10

     5.    The post office address of the initial registered office of the
Corporation is 901 North Washington Street, Alexandria, Virginia. The name of
the City in which the initial registered office is located is Alexandria,
Virginia. The name of the original registered agent of the Corporation, who is a
resident of Virginia and a member of the Virginia State Bar, and whose address
is the same as the address of the initial registered office of the Corporation
is James I. Burkhardt.

     6.    The number of Directors constituting the initial Board of Directors
is three (3) and the names and addresses are:



NAME                                                  ADDRESS
Thomas P. Tyler                              329 N. Pitt Street
                                             Alexandria, Virginia 22314
Gary Frink                                   2535 Massachusetts Ave., N.W.
                                             Washington, D.C. 20008
Georgia Lawler                               4636 Broadbranch Road, N.W.
                                             Washington, D.C. 20008

     7.    Each person now or hereafter a Director or officer of the Corporation
(and his heirs, executors and administrators) shall be indemnified by the
Corporation against all claims, liabilities, judgments, settlements, costs, and
expenses, including all attorneys' fees, imposed upon or reasonably incurred by
him in connection with or resulting from any action, suit, proceeding or claim
to which he is or may be made a party by reason of his being or having been a
Director or Officer of the Corporation (whether or not a Director or Officer at
the time such costs or expenses are incurred by or imposed upon him), except in
relation to matters to which he shall have been finally adjudged in such action,
suit or proceeding to be liable for gross negligence or willful misconduct in
the performance of his duties as such Director or Officer. In the event of any
other judgment against such Director or Officer or in the event of a settlement,
the indemnification shall be made only if the Corporation shall be advised, in
case none of the persons involved shall be or have been a Director, by the Board
of Directors of the Corporation, and otherwise by independent Counsel to be
appointed by the Board of Directors, that in its or his opinion such Director or
Officer was not guilty of gross negligence or willful misconduct in the
performance of his duty, and in the event of a settlement, that such settlement
was or is in the best interest of the Corporation. If the determination is to be
made by the Board of Directors, it may rely as to all questions of law on the
advice of independent counsel. Such right of indemnification shall not be deemed
exclusive of any rights to which he may he entitled under any by law agreement,
vote of stockholders, or otherwise.

     8.    No holder of shares of any class of stock of the Corporation shall
have any pre-emptive right to purchase or subscribe to (i) any shares of any
class of stock of the corporation, whether now or hereafter authorized, (ii) any
warrants, rights or options to purchase any such stock, or (iii) any securities
or obligations convertible into any such stock or into warrants, rights or
options to purchase such stock.

DATED: OCTOBER 5, 1972.


NAME                                        ADDRESS

/s/ SARAH SIGWORTH                         901 North Washington Street
- ----------------------------------------     Alexandria, Virginia 22314
Sarah Sigworth

/s/ PATRICIA A. DEWITT                     901 North Washington Street
- ----------------------------------------     Alexandria, Virginia 22314
Patricia A. DeWitt

/s/ JAMES I. BURKHARDT                     901 North Washington Street
- ----------------------------------------     Alexandria, Virginia 22314
James I. Burkhard


        Incorporators

EX-3.126

                                                                   Exhibit 3.126

                                     BY-LAWS
                                       OF
                             TITAN FACILITIES, INC.
                     (AS AMENDED THROUGH SEPTEMBER 1, 1998)

                                   ARTICLE I

                                     OFFICES

                  Section 1. Registered Office. The Corporation shall maintain a
registered office in the Commonwealth of Virginia as required by The Virginia
Stock Corporation Act, hereinafter referred to as the Act.

                  Section 2. Additional Offices. The Corporation may also have
offices in such other places either within or without the Commonwealth of
Virginia as the Board of Directors may from time to time designate or as the
business of the Corporation may require.

                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

                  Section 1. Place. Meetings of the stockholders of the
Corporation shall be held at such place either within or without the
Commonwealth of Virginia as may from time to time be designated by the Board of
Directors and stated in the notice of the meeting.

                  Section 2. Annual Meeting. The annual meeting of the
stockholders for the election of Directors and the transaction of such other
business as may properly come before it shall be held each year at a date and
time fixed by the Board of Directors.

                  Section 3. Special Meetings. Special meetings of the
stockholders may be called by the Chairman, a majority of the Directors, or the
President, and must be called by the President upon written request of the
holders of at least Ten percent (10%) of the outstanding shares entitled to vote
at such special meeting. Such request by the holders of at least Ten percent
(10%) of the outstanding shares shall state the purpose or purposes of such
meeting and the matters proposed to be acted on thereat. The Secretary shall
give notice of the meeting as provided in Section 4. No business other than that
specified in the notice of meeting shall be transacted at any such special
meeting. No special meeting need be called upon request of holders of shares
entitled to cast less than a majority of all votes entitled to be cast at such
meeting, to consider any matter which is substantially the same as the matter
voted upon at any special meeting of the stockholders held during the preceding
twelve months.

                  Section 4. Notice of Waiver of Notice. Written or printed
notice of all meetings shall be given, stating the place, date, and hour of the
meeting. The notice of an annual meeting shall state that the meeting is called
for the election of Directors and for the transaction of other business which
may properly come before the meeting, and shall (if any other action which could
be taken at a special meeting is to be taken at such annual meeting) state the
purpose or







                                                                               2

purposes. The notice of a special meeting shall in all instances state the
purpose or purposes for which the meeting is called. If any action is proposed
to be taken which would, if taken, entitle shareholders to receive payment for
their shares of stock, the notice shall include a statement of that purpose and
to that effect. Except as otherwise provided by the Act, a copy of the notice of
any meeting shall be given, personally or by mail, not less than ten days nor
more than sixty days before the date of the meeting, unless the lapse of the
prescribed period of time shall have been waived, and directed to each
stockholder at his record address or at other such address which he may have
furnished in writing to the Secretary of the Corporation. Notice of a
stockholders' meeting to act on an amendment of the articles of incorporation or
on a reduction of stated capital or on a plan of merger, consolidation, or
exchange shall be given, in the manner provided above, not less than 25 nor more
than 60 days before the date of the meeting. Any such notice shall be
accompanied by a copy of the proposed amendment or plan of reduction of stated
capital or on a plan of merger, consolidation, or exchange. Notice by mail shall
be deemed to be given when deposited, with postage thereon prepaid, in the
United States mail. If a meeting is adjourned to another time, not more than
thirty days hence, and/or to another place, and if an announcement of the
adjourned time and/or place is made at the meeting, it shall not be necessary to
give notice of the adjourned meeting. Notice need not be given to any
stockholder who submits a written waiver of notice before or after the time
stated therein. Attendance of a person at a meeting of stockholders shall
constitute a waiver of notice of such meeting, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any meeting of the stockholders need be specified in any written waiver of
notice.

                  Section 5. Quorum. The presence, in person or by proxy, of the
holders of a majority of the outstanding shares entitled to vote thereat shall
be necessary to constitute a quorum for the transaction of business at all
meetings of stockholders, except as may otherwise be provided by law, by the
Articles of Incorporation, or by these By-Laws. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have the power to adjourn the meeting to a future date at which a
quorum shall be present or represented. At such adjourned meeting, any business
may be transacted at the meeting as originally called.

                  Section 6. Voting. A stockholder entitled to vote at a meeting
may vote at such meeting in person or by proxy. Every stockholder shall be
entitled to one vote for each share standing in his name on the record of
stockholders. Except as otherwise provided by law, by the Articles of
Incorporation or by the By-Laws, all stockholder action shall be determined by
vote of a majority of the votes cast at a meeting of stockholders by the holders
of shares entitled to vote thereon provided that, in elections of Directors,
those receiving the greatest number of votes shall be deemed elected even though
not receiving a majority.

                  Section 7. Proxy Representation. Every stockholder may
authorize another person or persons to act for him by proxy in all matters in
which a stockholder is entitled to participate, whether by waiving notice of any
meeting, voting or participating at a meeting, or expressing consent or dissent
without a meeting. Every proxy must be signed by the stockholder. No proxy shall
be voted or acted upon after eleven months from its date unless such proxy
provides for a longer period.






                                                                               3

                  Section 8. Conduct of Meeting. Meetings of the stockholders
shall be presided over by one of the officers in the following order, if present
and acting--the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, the President, a Vice-President, or, if none of the foregoing is in
office and present and acting, by a chairman to be chosen by the stockholders.
The Secretary of the Corporation, or in his/her absence, an Assistant Secretary,
shall act as secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present, the Chairman of the meeting shall appoint a
secretary of the meeting.

                  Section 9. Stockholder List. The officer who has charge of the
stock ledger of the Corporation shall maintain a complete list of stockholders,
arrange in alphabetical order, and showing the address of each stockholder and
the number of shares registered in the name of each stockholder. Such list shall
be open to examination of any stockholder during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a place within the
city or other municipality or community where the meeting is to be held, which
place shall be specified in the notice of the meeting, or if not so specified,
at the place where the meeting is to be held. The list shall also be produced
and kept at the time and place of the meeting during the whole time thereof, and
may be inspected by any stockholder who is present. The stock ledger shall be
prima facie evidence as to who are the stockholders entitled to examine the
stock ledger, the list required by this section or the books of the Corporation,
or to vote at any meeting of stockholders.


                                  ARTICLE III

                               BOARD OF DIRECTORS

                  Section 1. Functions and Definition. The business of the
Corporation shall be managed by the Board of Directors of the Corporation. The
use of the phrase "whole Board" herein refers to the total number of Directors
which the Corporation would have if there were no vacancies.

                  Section 2. Qualifications and Number. A Director need not be a
stockholder, a citizen of the United States, or a resident of the Commonwealth
of Virginia. The number of Directors constituting the whole Board is and shall
continue to be One (1) unless and until that number is increased or decreased by
a majority vote of the Board of Directors.

                  Section 3. Election and Term. Directors are elected at the
annual meeting of stockholders, and shall hold office until the next annual
meeting of stockholders and until their successors have been elected and
qualified or until their earlier resignation or removal. Vacancies in the Board
of Directors, including vacancies resulting from the removal of Directors for
cause or without cause, may be filled by the vote of a majority of the remaining
Directors then in office, although less than a quorum, or by the sole remaining
Director. The interim Directors shall hold office until the next annual meeting
of stockholders and until their successors have been elected and qualified or
until their earlier resignation or removal. Any directorship to be filled by
reason by an increase in the number of Directors shall be filled by election at
an annual meeting or at a special meeting of stockholders called for that
purpose.





                                                                               4


                  Section 4. Time of Meetings. Meetings shall be held at such
time as the Board shall fix, except that the first meeting of the newly elected
Board shall be held as soon after their election as the Directors may
conveniently assemble.

                  Section 5. Place of Meetings. Meetings shall be held at such
place within or without the Commonwealth of Virginia as shall be fixed by the
Board.

                  Section 6. Notice of Actual or Constructive Waiver. No notice
shall be required for regular meetings for which the time and place have been
fixed. Written, oral, or any other mode of notice of the time and place shall be
given for special meetings in sufficient time for the convenient assembly of the
Directors thereat. The notice of any meeting need not specify the purpose of the
meeting. Any requirement of furnishing a notice shall be waived by any Director
who attends the meeting or who signs a written waiver of such notice before or
after the time stated therein.

                  Section 7. Quorum and Action. A majority of the whole Board
shall constitute a quorum except when a vacancy or vacancies prevents such a
majority, whereupon a majority of the Directors in office shall constitute a
quorum, provided, that such majority shall constitute at least one-third of the
whole Board. A majority of the Directors present, whether or not a quorum is
present, may adjourn a meeting to another time and place. Except as herein
otherwise provided, and except as otherwise provided by The Act, the act of the
Board shall be the act by vote of a majority of the Directors present at a
meeting, a quorum being present. The quorum and voting provisions herein stated
shall not be construed as conflicting with any provisions of The Act and these
By-Laws which govern a meeting of Directors held to fill vacancies and newly
created directorships on the Board.

                  Section 8. Chairman of the Meeting. The Chairman of the Board
shall preside at all meetings. Otherwise, the Vice-Chairman of the Board, if
any, or any other Director chosen by the Board shall preside.

                  Section 9. Removal of Directors. Any or all of the Directors
may be removed for cause or without by a Seventy-Five percent (75%) vote of the
stockholders. One or more of the Directors may be removed for cause by a vote of
a majority of the Board of Directors.

                  Section 10. Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees, each committee to consist of two or more of the Directors of the
Corporation. The Board may designate one or more Directors as alternate members
at any meeting of the committee. Any such committee, to the extent provided in
the resolutions of the Board, shall have and may exercise the powers of the
Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it; but the designation of such committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed upon it or him
by law. In the absence or disqualification of any member of any such committee
or committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitutes a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. The committees
shall keep







                                                                               5


minutes of their proceedings and shall report the same to the Board of Directors
at the meeting next succeeding.

                  Section 11. Action in Writing. Any action required or
permitted to be taken at any meeting of the Board of Directors or any committee
thereof may be taken without a meeting if all members of the Board or committee,
as the case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board or committee.

                  Section 12. Compensation. The Directors shall receive such
compensation for their services as Directors and as members of any committee
appointed by the Board as may be prescribed by the Board of Directors and shall
be reimbursed by the Corporation for ordinary and reasonable expenses incurred
in the performance of their duties.

                  Section 13. Manifestation of Dissent. A Director of the
Corporation, who is present at a meeting of the Board of Directors at which
action on any corporate matter is taken, shall be presumed to have assented to
the action taken unless his dissent shall be entered in the minutes of the
meeting, or unless he shall file his written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof, or
shall forward such dissent by registered mail to the Secretary of the
Corporation within three days after the adjournment of the meeting. Such right
to dissent shall not apply to a Director who voted in favor of such action.

                  Section 14. Resignation. Any director may resign his office at
any time, such resignation to be made in writing and to take effect immediately
without acceptance.


                  Section 15. Reserved

                                   ARTICLE IV

                                    OFFICERS

                  Section 1. Officers and Qualifications. The officers of the
Corporation shall be a President, a Chief Executive Officer, a Secretary, and a
treasurer, and such other officers as the Board of Directors may determine. Any
number of offices may be held by the same person except the offices of President
and Secretary.

                  Section 2. Election. All officers of the Corporation shall be
elected by the Board of Directors.

                  Section 3. Term of Office. All officers shall hold office
until their successors have been duly elected and have qualified, or until their
removal as hereinafter provided, or until their resignation.

                  Section 4. Removal of Officers. Any officer may be removed by
a majority vote of the Board of Directors whenever in its best judgment the best
interests of the Corporation will be served thereby. Any removal of an officer
shall be without prejudice to the contractual rights, if any, of the person so
removed.







                                                                               6



                  Section 5. Chairman of the Board. The Chairman of the Board of
Directors shall preside at all meetings of the Board of Directors and of the
stockholders, and shall perform such other duties as may prescribed from time to
time by the Board of Directors or by these By-Laws.

                  Section 6. President. The President shall be the chief
administrative officer of the Corporation. He shall have general and active
management of the business of the Corporation, and shall see that all orders and
resolutions of the Board are carried into effect. He shall exercise such duties
as customarily pertain to the office of President and shall have general and
active supervision over the property, business, and affairs of the Corporation
and over its several officers. He may appoint agents or employees other than
those appointed by the Board of Directors. He shall execute in the corporate
name all authorized deeds, mortgages, bonds, contracts or other instruments
requiring a seal, under the seal of the Corporation, except in cases in which
the signing or execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation.

                  Section 7. Vice President. The Vice President shall, in the
absence or disability of the President, perform the duties and exercise the
powers of the President. He shall also perform such other duties as may be
prescribed from time to time by the President or the Board of Directors.

                  Section 8. Treasurer. The Treasurer shall have general custody
of all funds and securities of the Corporation and have general supervision of
the collection and disbursement of funds of the Corporation. He shall endorse on
behalf of the Corporation for collection checks, notes, and other obligations,
and shall deposit the same to the credit of the Corporation in such bank or
banks or depositories as the Board of Directors or the President may designate.
He may sign, with such other person or persons as may be designated for the
purpose by the Board of Directors, all bills of exchange or promissory notes of
the Corporation. He shall enter or cause to be entered regularly in the books of
the Corporation full and accurate account of all monies received and paid by him
on account of the Corporation; shall at all reasonable times exhibit his books
and accounts to any Director of the Corporation upon application at the office
of the Corporation during business hours; and, whenever required by the Board of
Directors of the President, shall render a statement of his accounts. He may be
required to give bond for the faithful performance of his duties in such sum and
with such surety as shall be approved by the Board of Directors. He shall
perform such other duties as may be prescribed from time to time by the
President, by the Board of Directors or by these By-Laws.

                  Section 9. Secretary. The Secretary shall keep the minutes of
all meetings of the stockholders and of the Board of Directors, and to the
extent ordered by the Board of Directors or by the President, the minutes of
meetings of all committees. He shall cause notice to be given of meetings of
stockholders, of the Board of Directors, and of any committee appointed by the
Board. He shall have custody of the corporate seal and general charge of
records, documents, and papers of the Corporation not pertaining to the
performance of the duties of vested in other officers, which shall at all
reasonable times be open to the examination of any Director. He may sign or
execute contracts in the name of the Corporation and affix the seal of the
Corporation thereto. He shall perform such other duties as may be prescribed
from time to time by the President, by the Board of Directors or by these
By-Laws.






                                                                               7



                  Section 10. Other Officers. Other officers shall perform such
duties as may be assigned to them by the President or Board of Directors.

                  Section 11. Vacancies. In case any office shall become vacant,
the Board of Directors shall have the power to fill such vacancies. In case of
the absence or disability of any officer, the Board of Directors may delegate
the powers or duties of any officer to another officer or a Director for the
time being.

                  Section 12. Compensation. The officers shall receive such
salary or compensation as may be fixed by the Board of Directors and shall be
reimbursed by the Corporation for ordinary and reasonable expenses incurred in
the performance of their duties.

                  Section 13. Exercise of Rights as Stockholders. Unless
otherwise ordered by the Board of Directors, the President or the Vice President
thereunto duly authorized by the President shall have full power and authority
on behalf of the Corporation to attend and to vote at any meeting of
stockholders of any Corporation in which this Corporation may hold stock, and
may exercise on behalf of this Corporation any and all of the rights and powers
incident to the ownership of such stock at any such meeting, and shall have
power and authority to execute and deliver proxies and consents on behalf of
this Corporation in connection with the exercise by this Corporation of the
rights and powers incident to the ownership of such stock.


                                   ARTICLE V

                                      STOCK

                  Section 1. Certificates Representing Stock. Every holder of
stock in the Corporation shall be entitled to have a certificate signed by, or
in the name of, the Corporation by the Chairman or Vice-Chairman of the Board of
Directors, if any, or by the President or a Vice-President and the Treasurer or
an Assistant Treasurer or the Secretary or an Assistant Secretary of the
Corporation certifying the number of shares owned by him in the Corporation. If
such certificate is countersigned by a transfer agent other than the Corporation
or its employee or by a registrar other than the Corporation or its employee,
the signatures of the officers of the Corporation may be facsimiles. In case any
officer who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the Corporation with the same effect as if he were
such officer at the date of issue. All certificates representing stock which is
restricted or limited as to its transferability or voting powers or which is
preferred or limited as to its dividends, or as to its share of the assets upon
liquidation, or is redeemable, shall have a full or summary statement of such
restriction, limitation, preference or redemption provision, plainly stated on
the certificate, or shall state that the Corporation will furnish to any
stockholder upon request and without charge such full or summary statement. No
certificate shall be issued for any share of stock until such share is fully
paid.

                  Section 2. Stock Transfers. Upon compliance with provisions
restricting the transfer or registration of transfer of shares of stock, if any,
transfer or registration of transfers of shares of stock of the Corporation
shall be made only on the stock ledger of the Corporation by the registered
holder thereof, or by his attorney thereunto authorized by power of attorney
duly






                                                                               8



executed and filed with the Secretary of the Corporation or with a transfer
agent or a registrar, if any, and on surrender of the certificate or
certificates for such shares of stock properly endorsed and the payment of all
taxes due thereon. The Corporation shall issue a new certificate for the shares
surrendered to the person or persons entitled thereto.

                  Section 3. Lost Certificates. The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been stolen, lost or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be stolen, lost or
destroyed. When authorizing such issue of a new certificate or certificates, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such stolen, lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and to give the Corporation a bond, with
sufficient surety, to the Corporation to indemnify it against loss or claim
which may arise by reason of the issuance of a new certificate.

                  Section 4. Holder of Record. The Corporation shall be entitled
to treat the holder of record of any share or shares of stock as the holder
thereof in fact and shall not be bound to recognize any equitable or other claim
to or interest in such shares in the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise expressly
provided by law.

                  Section 5. Record Date for Stockholders. For the purpose of
determining the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or for the purpose of determining
stockholders entitled to receive payment of any dividend or other distribution
or the allotment of any rights, or entitled to exercise any rights in respect of
any change, conversion, or exchange of stock, or for the purpose of any other
lawful action, the Directors may fix, in advance, a date as the record date for
any such determination of stockholders. Such date shall not be more than Fifty
(50) days nor less than Ten (10) days before the date of such meeting, nor more
than Fifty (50) days prior to any other action. If no record date is fixed, the
record date for the determination of stockholders entitled to notice of or to
vote at a meeting of stockholders shall be the date on which notice is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the Board of Directors adopts the resolution relating thereto. When
a determination of stockholders of record entitled to notice of or to vote at
any meeting of stockholders has been made as provided in this paragraph, such
determination shall apply to any adjournment thereof; provided, however, that
the Board of Directors may fix a new record date for the adjourned meeting.


                                   ARTICLE VI

                               GENERAL PROVISIONS

                  Section 1. Dividends. Dividends upon the stock of the
Corporation, subject to the provisions of the Articles of Incorporation, if any,
may be declared by the Board of Directors at any meeting, pursuant to law.
Dividends may be paid in cash, in property, or in its own shares, subject to the
provisions of The Act and of the Articles of Incorporation. Before payment of
any dividend, there may be set aside out of any funds of the Corporation
available for dividends such





                                                                               9



sum or sums as the Directors, from time to time, in their absolute discretion,
think proper as a reserve fund to meet contingencies, or for repairing or
maintaining any property of the Corporation, or for such other purpose as the
Directors shall think conducive to the interests of the Corporation, and the
Directors may modify or abolish any such reserve in the manner in which it was
created.

                  Section 2. Fiscal Year. The Board of Directors shall have
power to fix, and from time to time change, the fiscal year of the Corporation.
Unless otherwise fixed by the Board, the fiscal year shall end on March 31.

                  Section 3. Amendment. Except as may be otherwise provided by
law, in the Articles of Incorporation, or in these By-Laws, the Board of
Directors shall have the power to add any provision to or to alter or repeal any
provision of these By-Laws by the vote of a majority of all of the Directors at
any meeting of the Board.





























                                                                              10


                           DELTA RESEARCH CORPORATION
                       WRITTEN CONSENT OF SOLE SHAREHOLDER

         The undersigned, being the sole shareholder of Delta Research
Corporation, a Virginia corporation (the "Corporation"), acting by written
consent in lieu of an annual meeting, does hereby consent to the adoption of the
following resolutions:

         A. AMENDMENT TO BY-LAWS

         RESOLVED, that the By-laws of the Corporation be and they are hereby
amended to provide that the offices of the President and the Chief Executive
Officer of the Corporation may be held by different persons.

         FURTHER RESOLVED, that this Written Consent of Sole Shareholder shall
be filed in the Minute Book of the Corporation.

         IN WITNESS WHEREOF, the undersigned has executed and delivered this
Written Consent of Sole Shareholder effective as of the 31st day of October,
1997.

                                 BTG, INC.

                                 By:  /s/ DR. EDWARD H. BERSOFF
                                      ---------------------------------------
                                            Dr. Edward H. Bersoff
                                      President and Chief Executive Officer
























                                                                              11


                           DELTA RESEARCH CORPORATION
                       WRITTEN CONSENT OF SOLE SHAREHOLDER

         The undersigned, being the sole shareholder of Delta Research
Corporation, a Virginia corporation (the "Corporation"), acting by written
consent in lieu of an annual meeting, does hereby consent to the adoption of the
following resolutions:

         A. AMENDMENT TO BY-LAWS

         RESOLVED, that the By-laws of the Corporation be and they are hereby
amended to provide that the authorized number of directors of the Corporation
shall be two (2).

         B. APPOINTMENT OF DIRECTORS

         FURTHER RESOLVED that the following persons be and hereby are elected
to be the directors of the Corporation and shall serve until their successors
have been duly elected and qualified or until their earlier resignation or
removal:

                  Dr. Edward H. Bersoff
                  Marilynn D. Bersoff

         FURTHER RESOLVED, that this Written Consent of Sole Shareholder shall
be filed in the Minute Book of the Corporation.

         IN WITNESS WHEREOF, the undersigned has executed and delivered this
Written Consent of Sole Shareholder effective as of the 30th day of October,
1997.


                                 BTG, INC.

                                 By: s/ DR. EDWARD H. BERSOFF
                                     -------------------------------------
                                           Dr. Edward H. Bersoff
                                     President and Chief Executive Officer

EX-3.127

                                                                   EXHIBIT 3.127


                          CERTIFICATE OF INCORPORATION

                                       OF

                               TITAN MEDICAL CORP.


         The undersigned, a natural person (the "Sole Incorporator"), for the
purpose of organizing a corporation to conduct the business and promote the
purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware hereby certifies that:

                                       I.

         The name of this corporation is Titan Medical Corp.

                                      II.

         The address of the registered office of the corporation in the State of
Delaware is 1013 Centre Road, City of Wilmington, County of New Castle, and the
name of the registered agent of the corporation in the State of Delaware at such
address is Corporation Service Company.

                                      III.

         The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.

                                      IV.

         This corporation is authorized to issue only one class of stack, to be
designated Common Stock. The total number of shares of Common Stock presently
authorized is one thousand (1,000), each having a par value of one-tenth of one
cent ($0.001).

                                       V.

         A.   The management of the business and the conduct of the affairs of
the corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed by
the Board of Directors in the manner provided in the Bylaws.

         B.   Subject to paragraph (h) of Section 43 of the Bylaws, the Bylaws
may be altered or amended or new Bylaws adopted by the stockholders entitled to
vote. The Board of Directors shall also have the power to adopt, amend or repeal
Bylaws.






                                       VI.

         A.   The liability of the directors for monetary damages shall be
eliminated to the fullest extent under applicable law.

         B.   Any repeal or modification of this Article VI shall be prospective
and shall not affect the rights under this Article VI in effect at the time of
the alleged occurrence of any act or omission to act giving rise to liability or
indemnification.

                                      VII.

         The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon the
stockholders herein are granted subject to this reservation.

                                     VIII.

         The name and the mailing address of the Sole Incorporator is as
follows:

                  Carol R Sayles
                  4365 Executive Drive, Suite 1100
                  San Diego, CA 92121-2128


         IN WITNESS WHEREOF, this Certificate has been subscribed this 17th day
of August, 2000 by the undersigned who affirms that the statements made herein
are true and correct.

                                       /s/ Carol R. Sayles
                                      --------------------------------------
                                      CAROL R. SAYLES
                                      Sole Incorporator










                                       2



                           CERTIFICATE OF AMENDMENT OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                               TITAN MEDICAL CORP.


         TITAN MEDICAL CORP., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:

         FIRST:     The name of the Corporation is Titan Medical Corp.

         SECOND:    The date on which the Certificate of Incorporation of the
Corporation was originally filed with the Secretary of State of the State of
Delaware is August 17, 2000.

         THIRD:     The Company has not received any payment for its stock.

         FOURTH:    The amendment to the Company's Certificate of Incorporation
set forth below was duly adopted by the Company's sole incorporator in
accordance with the provisions of Section 241 of the General Corporation Law.

         FIFTH:     The Certificate of Incorporation of the Company is hereby
amended and restated to read in its entirety as follows:

                                       I.

         The name of this corporation is Titan Scan Technologies Corporation.

                                      II.

         The address of the registered office of the corporation in the State of
Delaware is 2711 Centerville Road Suite 400, City of Wilmington, County of New
Castle 19808. The Corporation's registered agent at such address is Corporation
Service Company.

                                      III.

         The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.

                                      IV.

         This corporation is authorized to issue only one class of stock, to be
designated Common Stock. The total number of shares of Common Stock presently
authorized is ten million (10,000,000), each having a par value of one-tenth of
one cent ($0.001).

                                       V.

         A.   The management of the business and the conduct of the affairs of
the corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the







whole Board of Directors shall be fixed by the Board of Directors in the manner
provided in the Bylaws.

         B.   Subject to paragraph (h) of Section 43 of the Bylaws, the Bylaws
may be altered or amended or new Bylaws adopted by the stockholders entitled to
vote. The Board of Directors shall also have the power to adopt, amend or repeal
Bylaws.

                                      VI.

         A.   The liability of the directors for monetary damages shall be
eliminated to the fullest extent under applicable law.

         B.   Any repeal or modification of this Article VI shall be prospective
and shall not affect the rights under this Article VI in effect at the time of
the alleged occurrence of any act or omission to act giving rise to liability or
indemnification.

                                      VII.

         The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon the
stockholders herein are granted subject to this reservation.

         IN WITNESS WHEREOF, said sole incorporator has caused this Certificate
of Amendment to be signed this 15th day of September 2000.


                                   /s/ Carol R. Sayles
                                  ---------------------------------------
                                  Carol R. Sayles
                                  Sole Incorporator
















                                       2





                            CERTIFICATE OF AMENDMENT

                                       OF

                          CERTIFICATE OF INCORPORATION

                                       OF

                       TITAN SCAN TECHNOLOGIES CORPORATION

                  Titan Scan Technologies Corporation (the "Corporation"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware which was incorporated on August 17,
2000, does hereby certify:

                  FIRST: That the Board of Directors of the Corporation declared
an amendment to the Corporation's Certificate of Incorporation (the
"Certificate"), advisable and approved a resolution to amend and replace Article
Fourth of the Certificate to read as follows:

                           Fourth: "This Corporation is authorized to issue only
                  one class of stock, to be designated Common Stock. The total
                  number of shares of Common Stock presently authorized is
                  TWENTY MILLION (20,000,000), each having a par value of
                  one-tenth of one cent ($0.001).

                  SECOND: That said amendment was duly adopted by the
Corporations Sole Stockholder in accordance with the provisions of Title 3,
Section 242 of the General Corporation Law of the State of Delaware.

                  IN WITNESS WHEREOF, Titan Scan Technologies Corporation has
caused this Certificate of Amendment to be signed by its duly authorized
officer, as of the 1st day of August, 2001.



                                      TITAN SCAN TECHNOLOGIES CORPORATION


                                       /s/ Cheryl L. Barr
                                      -----------------------------------------
                                      Name:  Cheryl L. Barr
                                      Assistant Secretary

EX-3.128

                                                                   EXHIBIT 3.128













                                     BYLAWS

                                       OF

                       TITAN SCAN TECHNOLOGIES CORPORATION
                            (A DELAWARE CORPORATION)















                                TABLE OF CONTENTS



                                                                                                               PAGE

ARTICLE I Offices .................................................................................................1

                     Section 1.     Registered Office..............................................................1

                     Section 2.     Other Offices..................................................................1

ARTICLE II Corporate Seal..........................................................................................1

                     Section 3.     Corporate Seal.................................................................1

ARTICLE III Stockholders' Meetings.................................................................................1

                     Section 4.     Place of Meetings..............................................................1

                     Section 5.     Annual Meeting.................................................................1

                     Section 6.     Special Meetings...............................................................4

                     Section 7.     Notice of Meetings.............................................................4

                     Section 8.     Quorum.........................................................................4

                     Section 9.     Adjournment and Notice of Adjourned Meetings...................................5

                     Section 10.    Voting Rights..................................................................5

                     Section 11.    Joint Owners of Stock..........................................................5

                     Section 12.    List of Stockholders...........................................................6

                     Section 13.    Action Without Meeting.........................................................6

                     Section 14.    Organization...................................................................7

ARTICLE IV Directors...............................................................................................7

                     Section 15.    Number and Term of Office......................................................7

                     Section 16.    Powers.........................................................................8

                     Section 17.    Term of Directors..............................................................8
..
                     Section 18.    Vacancies......................................................................8

                     Section 19.    Resignation....................................................................8





                                       i





                                                                                                               PAGE

                     Section 20.    Removal.......................................................................9

                     Section 21.    Meetings......................................................................9

                                    (a)      Annual Meetings......................................................9

                                    (b)      Regular Meetings.....................................................9

                                    (c)      Special Meetings.....................................................9

                                    (d)      Telephone Meetings...................................................9

                                    (e)      Notice of Meetings...................................................9

                                    (f)      Waiver of Notice.....................................................9

                     Section 22.    Quorum and Voting............................................................10

                     Section 23.    Action Without Meeting.......................................................10

                     Section 24.    Fees and Compensation........................................................10

                     Section 25.    Committees...................................................................10

                                    (a)      Executive Committee.................................................10

                                    (b)      Other Committees....................................................11

                                    (c)      Term................................................................11

                                    (d)      Meetings............................................................11

                     Section 26.    Organization.................................................................12

ARTICLE V Officers...............................................................................................12

                     Section 27.    Officers Designated..........................................................12

                     Section 28.    Tenure and Duties of Officers................................................12

                                    (a)      General.............................................................12

                                    (b)      Duties of Chairman of the Board of Directors........................12

                                    (c)      Duties of President.................................................12

                                    (d)      Duties of Vice Presidents...........................................13

                                    (e)      Duties of Secretary.................................................13




                                       ii






                                                                                                               PAGE

                                    (f)      Duties of Chief Financial Officer...................................13

                     Section 29.    Delegation of Authority......................................................14

                     Section 30.    Resignations.................................................................14

                     Section 31.    Removal......................................................................14

ARTICLE VI Execution of Corporate Instruments and Voting of Securities Owned by the Corporation..................14

                     Section 32.    Execution of Corporate Instruments...........................................14

                     Section 33.    Voting of Securities Owned by the Corporation................................14

ARTICLE VII Shares of Stock......................................................................................15

                     Section 34.    Form and Execution of Certificates...........................................15

                     Section 35.    Lost Certificates............................................................15

                     Section 36.    Transfers....................................................................15

                     Section 37.    Fixing Record Dates..........................................................16

                     Section 38.    Registered Stockholders......................................................17

ARTICLE VIII Other Securities of the Corporation.................................................................17

                     Section 39.    Execution of Other Securities................................................17

ARTICLE IX Dividends 18

                     Section 40.    Declaration of Dividends.....................................................18

                     Section 41.    Dividend Reserve.............................................................18

ARTICLE X Fiscal Year............................................................................................18

                     Section 42.    Fiscal Year..................................................................18

ARTICLE XI Indemnification.......................................................................................18

                     Section 43.    Indemnification of Directors, Executive Officers, Other Officers,
                                     Employees and Other Agents..................................................18

                                    (a)      Directors and Executive Officers....................................18

                                    (b)      Other Officers, Employees and Other Agents..........................19




                                      iii







                                                                                                               PAGE

                                    (c)      Expenses............................................................19

                                    (d)      Enforcement.........................................................19

                                    (e)      Non-Exclusivity of Rights...........................................20

                                    (f)      Survival of Rights..................................................20

                                    (g)      Insurance...........................................................20

                                    (h)      Amendments..........................................................20

                                    (i)      Saving Clause.......................................................20

                                    (j)      Certain Definitions.................................................21

ARTICLE XII Notices..............................................................................................22

                     Section 44.    Notices......................................................................22

                                    (a)      Notice to Stockholders..............................................22

                                    (b)      Notice to Directors.................................................22

                                    (c)      Affidavit of Mailing................................................22

                                    (d)      Time Notices Deemed Given...........................................22

                                    (e)      Methods of Notice...................................................22

                                    (f)      Failure to Receive Notice...........................................22

                                    (g)      Notice to Person with Whom Communication Is Unlawful................23

                                    (h)      Notice to Person with Undeliverable Address.........................23

ARTICLE XIII Amendments..........................................................................................23

                     Section 45.    Amendments...................................................................23

ARTICLE XIV Right of First Refusal...............................................................................24

                     Section 46.    Right of First Refusal.......................................................24

ARTICLE XV Loans to Officers.....................................................................................26

                     Section 47.    Loans to Officers............................................................26




                                       iv






                                                                                                               PAGE

ARTICLE XVI Miscellaneous........................................................................................27

                     Section 48.    Annual Report................................................................27























                                       v






                                     BYLAWS

                                       OF

                       TITAN SCAN TECHNOLOGIES CORPORATION
                            (A DELAWARE CORPORATION)

                                   ARTICLE I

                                     OFFICES

         Section 1.   REGISTERED OFFICE. The registered office of the
corporation in the State of Delaware shall be in the City of Wilmington, County
of New Castle. (Del. Code Ann., tit. 8, ss. 131)

         Section 2.   OTHER OFFICES. The corporation shall also have and
maintain an office or principal place of business at such place as may be fixed
by the Board of Directors, and may also have offices at such other places, both
within and without the State of Delaware, as the Board of Directors may from
time to time determine or the business of the corporation may require. (Del.
Code Ann., tit. 8, ss. 122(8))


                                   ARTICLE II

                                 CORPORATE SEAL

         Section 3.   CORPORATE SEAL. The corporate seal shall consist of a die
bearing the name of the corporation and the inscription, "Corporate
Seal-Delaware." Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise. (Del. Code Ann., tit. 8, ss.
122(3))


                                  ARTICLE III

                             STOCKHOLDERS' MEETINGS

         Section 4.   PLACE OF MEETINGS. Meetings of the stockholders of the
corporation shall be held at such place, either within or without the State of
Delaware, as may be designated from time to time by the Board of Directors, or,
if not so designated, then at the principal office of the corporation required
to be maintained pursuant to Section 2 hereof. (Del. Code Ann., tit. 8, ss.
211(a))

         Section 5.   ANNUAL MEETING.

                (a)   The annual meeting of the stockholders of the
         corporation, for the purpose of election of directors and for such
         other business as may lawfully come before it, shall be held on such
         date and at such time as may be designated from time to time by the
         Board of Directors. Nominations of persons for election to the Board of
         Directors of the corporation and the proposal of business to be
         considered by the stockholders may be made at an annual meeting of
         stockholders: (i) pursuant to the corporation's notice of







         meeting of stockholders; (ii) by or at the direction of the Board of
         Directors; or (iii) by any stockholder of the corporation who was a
         stockholder of record at the time of giving of notice provided for in
         the following paragraph, who is entitled to vote at the meeting and
         who complied with the notice procedures set forth in Section 5. (Del.
         Code Ann., tit. 8, ss. 211(b)).

                (b)   At an annual meeting of the stockholders, only such
         business shall be conducted as shall have been properly brought before
         the meeting. For nominations or other business to be properly brought
         before an annual meeting by a stockholder pursuant to clause (c) of
         Section 5(a) of these Bylaws, (i) the stockholder must have given
         timely notice thereof in writing to the Secretary of the corporation,
         (ii) such other business must be a proper matter for stockholder action
         under the General Corporation Law of Delaware, (iii) if the
         stockholder, or the beneficial owner on whose behalf any such proposal
         or nomination is made, has provided the corporation with a Solicitation
         Notice (as defined in this Section 5(b)), such stockholder or
         beneficial owner must, in the case of a proposal, have delivered a
         proxy statement and form of proxy to holders of at least the percentage
         of the corporation's voting shares required under applicable law to
         carry any such proposal, or, in the case of a nomination or
         nominations, have delivered a proxy statement and form of proxy to
         holders of a percentage of the corporation's voting shares reasonably
         believed by such stockholder or beneficial owner to be sufficient to
         elect the nominee or nominees proposed to be nominated by such
         stockholder, and must, in either case, have included in such materials
         the Solicitation Notice, and (iv) if no Solicitation Notice relating
         thereto has been timely provided pursuant to this section, the
         stockholder or beneficial owner proposing such business or nomination
         must not have solicited a number of proxies sufficient to have required
         the delivery of such a Solicitation Notice under this Section 5. To be
         timely, a stockholder's notice shall be delivered to the Secretary at
         the principal executive offices of the Corporation not later than the
         close of business on the ninetieth (90th) day nor earlier than the
         close of business on the one hundred twentieth (120th) day prior to the
         first anniversary of the preceding year's annual meeting; provided,
         however, that in the event that the date of the annual meeting is
         advanced more than thirty (30) days prior to or delayed by more than
         thirty (30) days after the anniversary of the preceding year's annual
         meeting, notice by the stockholder to be timely must be so delivered
         not earlier than the close of business on the one hundred twentieth
         (120th) day prior to such annual meeting and not later than the close
         of business on the later of the ninetieth (90th) day prior to such
         annual meeting or the tenth (10th) day following the day on which
         public announcement of the date of such meeting is first made. In no
         event shall the public announcement of an adjournment of an annual
         meeting commence a new time period for the giving of a stockholder's
         notice as described above. Such stockholder's notice shall set forth:
         (A) as to each person whom the stockholder proposed to nominate for
         election or reelection as a director all information relating to such
         person that is required to be disclosed in solicitations of proxies for
         election of directors in an election contest, or is otherwise required,
         in each case pursuant to Regulation 14A under the Securities Exchange
         Act of 1934, as amended (the "1934 Act") and Rule 14a-11 thereunder
         (including such person's written consent to being named in the proxy
         statement as a nominee and to serving as a director if elected); (B) as
         to any other business that the stockholder proposes to bring before the
         meeting, a brief description of the business desired to be brought
         before the meeting, the reasons for


                                       2




         conducting such business at the meeting and any material interest in
         such business of such stockholder and the beneficial owner, if any, on
         whose behalf the proposal is made; and (C) as to the stockholder
         giving the notice and the beneficial owner, if any, on whose behalf
         the nomination or proposal is made (i) the name and address of such
         stockholder, as they appear on the corporation's books, and of such
         beneficial owner, (ii) the class and number of shares of the
         corporation which are owned beneficially and of record by such
         stockholder and such beneficial owner, and (iii) whether either such
         stockholder or beneficial owner intends to deliver a proxy statement
         and form of proxy to holders of, in the case of the proposal, at least
         the percentage of the corporation's voting shares required under
         applicable law to carry the proposal or, in the case of a nomination
         or nominations, a sufficient number of holders of the corporation's
         voting shares to elect such nominee or nominees (an affirmative
         statement of such intent, a "Solicitation Notice").

                (c)   Notwithstanding anything in the second sentence of
         Section 5(b) of these Bylaws to the contrary, in the event that the
         number of directors to be elected to the Board of Directors of the
         Corporation is increased and there is no public announcement naming all
         of the nominees for director or specifying the size of the increased
         Board of Directors made by the corporation at least one hundred (100)
         days prior to the first anniversary of the preceding year's annual
         meeting, a stockholder's notice required by this Section 5 shall also
         be considered timely, but only with respect to nominees for any new
         positions created by such increase, if it shall be delivered to the
         Secretary at the principal executive offices of the corporation not
         later than the close of business on the tenth (10th) day following the
         day on which such public announcement is first made by the corporation.

                (d)   Only such persons who are nominated in accordance with
         the procedures set forth in this Section 5 shall be eligible to serve
         as directors and only such business shall be conducted at a meeting of
         stockholders as shall have been brought before the meeting in
         accordance with the procedures set forth in this Section 5. Except as
         otherwise provided by law, the Chairman of the meeting shall have the
         power and duty to determine whether a nomination or any business
         proposed to be brought before the meeting was made, or proposed, as the
         case may be, in accordance with the procedures set forth in these
         Bylaws and, if any proposed nomination or business is not in compliance
         with these Bylaws, to declare that such defective proposal or
         nomination shall not be presented for stockholder action at the meeting
         and shall be disregarded.

                (e)   Notwithstanding the foregoing provisions of this
         Section 5, in order to include information with respect to a
         stockholder proposal in the proxy statement and form of proxy for a
         stockholders' meeting, stockholders must provide notice as required by
         the regulations promulgated under the 1934 Act. Nothing in these Bylaws
         shall be deemed to affect any rights of stockholders to request
         inclusion of proposals in the corporation proxy statement pursuant to
         Rule l4a-8 under the 1934 Act.

                (f)   For purposes of this Section 5, "public announcement"
         shall mean disclosure in a press release reported by the Dow Jones News
         Service, Associated Press or comparable national news service or in a
         document publicly filed by the corporation

                                       3





         with the Securities and Exchange Commission pursuant to Section 13, 14
         or 15(d) of the 1934 Act.

         Section 6.  SPECIAL MEETINGS.

                (a)   Special meetings of the stockholders of the
         corporation may be called, for any purpose or purposes, by (i) the
         Chairman of the Board of Directors, (ii) the Chief Executive Officer,
         (iii) the Board of Directors pursuant to a resolution adopted by a
         majority of the total number of authorized directors (whether or not
         there exist any vacancies in previously authorized directorships at the
         time any such resolution is presented to the Board of Directors for
         adoption) or (iv) by the holders of shares entitled to cast not less
         than ten percent (10%) of the votes at the meeting, and shall be held
         at such place, on such date, and at such time as the Board of Directors
         shall fix.

                (b)   If a special meeting is properly called by any person
         or persons other than the Board of Directors, the request shall be in
         writing, specifying the general nature of the business proposed to be
         transacted, and shall be delivered personally or sent by registered
         mail or by telegraphic or other facsimile transmission to the Chairman
         of the Board of Directors, the Chief Executive Officer, or the
         Secretary of the corporation. No business may be transacted at such
         special meeting otherwise than specified in such notice. The Board of
         Directors shall determine the time and place of such special meeting,
         which shall be held not less than thirty-five (35) nor more than one
         hundred twenty (120) days after the date of the receipt of the request.
         Upon determination of the time and place of the meeting, the officer
         receiving the request shall cause notice to be given to the
         stockholders entitled to vote, in accordance with the provisions of
         Section 7 of these Bylaws. If the notice is not given within sixty (60)
         days after the receipt of the request, the person or persons properly
         requesting the meeting may set the time and place of the meeting and
         give the notice. Nothing contained in this paragraph (b) shall be
         construed as limiting, fixing, or affecting the time when a meeting of
         stockholders called by action of the Board of Directors may be held.

         Section 7.   NOTICE OF MEETINGS. Except as otherwise provided by law or
the Certificate of Incorporation, written notice of each meeting of stockholders
shall be given not less than ten (10) nor more than sixty (60) days before the
date of the meeting to each stockholder entitled to vote at such meeting, such
notice to specify the place, date and hour and purpose or purposes of the
meeting. Notice of the time, place and purpose of any meeting of stockholders
may be waived in writing, signed by the person entitled to notice thereof,
either before or after such meeting, and will be waived by any stockholder by
his attendance thereat in person or by proxy, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Any stockholder so waiving notice of such meeting shall be
bound by the proceedings of any such meeting in all respects as if due notice
thereof had been given. (Del. Code Ann., tit. 8, ss.ss. 222, 229)

         Section 8.   QUORUM. At all meetings of stockholders, except where
otherwise provided by statute or by the Certificate of Incorporation, or by
these Bylaws, the presence, in person or by proxy duly authorized, of the
holders of a majority of the outstanding shares of


                                       4





stock entitled to vote shall constitute a quorum for the transaction of
business. In the absence of a quorum, any meeting of stockholders may be
adjourned, from time to time, either by the chairman of the meeting or by vote
of the holders of a majority of the shares represented thereat, but no other
business shall be transacted at such meeting. The stockholders present at a duly
called or convened meeting, at which a quorum is present, may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum. Except as otherwise provided by law or
by applicable stock exchange or Nasdaq rules, or by the Certificate of
Incorporation or these Bylaws, in all matters other than the election of
directors, the affirmative vote of a majority of shares present in person or
represented by proxy duly authorized at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders. Except as otherwise
provided by statute, the Certificate of Incorporation or these Bylaws, directors
shall be elected by a plurality of the votes of the shares present in person or
represented by proxy duly authorized at the meeting and entitled to vote on the
election of directors. Where a separate vote by a class or classes or series is
required, except where otherwise provided by the statute or by the Certificate
of Incorporation or these Bylaws, a majority of the outstanding shares of such
class or classes or series, present in person or represented by proxy duly
authorized, shall constitute a quorum entitled to take action with respect to
that vote on that matter. Except where otherwise provided by statute or by the
Certificate of Incorporation or these Bylaws, the affirmative vote of the
majority (plurality, in the case of the election of directors) of the
outstanding shares of such class or classes or series present in person or
represented by proxy duly authorized at the meeting shall be the act of such
class or classes or series. (Del. Code Am., tit. 8, ss. 216)

         Section 9.   ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS. Any meeting
of stockholders, whether annual or special, may be adjourned from time to time
either by the chairman of the meeting or by the vote of a majority of the shares
casting votes. When a meeting is adjourned to another time or place, notice need
not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At the adjourned
meeting, the corporation may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than thirty
(30) days or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. (Del. Code Ann., tit. 8,
ss. 222 (c))

         Section 10.  VOTING RIGHTS. For the purpose of determining those
stockholders entitled to vote at any meeting of the stockholders, except as
otherwise provided by law, only persons in whose names shares stand on the stock
records of the corporation on the record date, as provided in Section 12 of
these Bylaws, shall be entitled to vote at any meeting of stockholders. Every
person entitled to vote or execute consents shall have the right to do so either
in person or by an agent or agents authorized by a proxy granted in accordance
with Delaware law. An agent so appointed need not be a stockholder. No proxy
shall be voted after three (3) years from its date of creation unless the proxy
provides for a longer period. (Del. Code Ann., tit. 8, ss.ss. 211(e), 212(b))

         Section 11.  JOINT OWNERS OF STOCK. If shares or other securities
having voting power stand of record in the names of two (2) or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
tenants by the entirety, or otherwise, or if two (2)


                                       5





or more persons have the same fiduciary relationship respecting the same shares,
unless the Secretary is given written notice to the contrary and is furnished
with a copy of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to voting shall
have the following effect: (a) if only one (1) votes, his act binds all; (b) if
more than one (1) votes, the act of the majority so voting binds all; (c) if
more than one (1) votes, but the vote is evenly split on any particular matter,
each faction may vote the securities in question proportionally, or may apply to
the Delaware Court of Chancery for relief as provided in the Delaware General
Corporation Law, Section 217(b). If the instrument filed with the Secretary
shows that any such tenancy is held in unequal interests, a majority or
even-split for the purpose of subsection (c) shall be a majority or even-split
in interest. (Del. Code Ann., tit. 8, ss. 217(b))

         Section 12.  LIST OF STOCKHOLDERS. The Secretary shall prepare and
make, at least ten (10) days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at said meeting, arranged in
alphabetical order, showing the address of each stockholder and the number of
shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not
specified, at the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the whole time thereof
and may be inspected by any stockholder who is present. (Del. Code Ann., tit. 8,
ss. 219(a))

         Section 13.  ACTION WITHOUT MEETING.

                (a)   Unless otherwise provided in the Certificate of
         Incorporation, any action required by statute to be taken at any annual
         or special meeting of the stockholders, or any action which may be
         taken at any annual or special meeting of the stockholders, may be
         taken without a meeting, without prior notice and without a vote, if a
         consent in writing, setting forth the action so taken, shall be signed
         by the holders of outstanding stock having not less than the minimum
         number of votes that would be necessary to authorize or take such
         action at a meeting at which all shares entitled to vote thereon were
         present and voted.

                (b)   Every written consent shall bear the date of signature
         of each stockholder who signs the consent, and no written consent shall
         be effective to take the corporate action referred to therein unless,
         within sixty (60) days of the earliest dated consent delivered to the
         corporation in the manner herein required, written consents signed by a
         sufficient number of stockholders to take action are delivered to the
         corporation by delivery to its registered office in the State of
         Delaware, its principal place of business or an officer or agent of the
         corporation having custody of the book in which proceedings of meetings
         of stockholders are recorded. Delivery made to a corporation's
         registered office shall be by hand or by certified or registered mail,
         return receipt requested. (Del. Code Ann., tit. 8, ss. 228)

                (c)   Prompt notice of the taking of the corporate action
         without a meeting by less than unanimous written consent shall be given
         to those stockholders who have not


                                       6





         consented in writing and who, if the action had been taken at a
         meeting, would have been entitled to notice of the meeting if the
         record date for such meeting had been the date that written consents
         signed by a sufficient number of stockholders to take action were
         delivered to the corporation as provided in Section 228(c) of the
         Delaware General Corporation Law. If the action which is consented to
         is such as would have required the filing of a certificate under any
         section of the Delaware General Corporation Law if such action had
         been voted on by stockholders at a meeting thereof, then the
         certificate filed under such section shall state, in lieu of any
         statement required by such section concerning any vote of
         stockholders, that written consent has been given in accordance with
         Section 228 of the Delaware General Corporation Law.

         Section 14.  ORGANIZATION.

                (a)   At every meeting of stockholders, the Chairman of the
         Board of Directors, or, if a Chairman has not been appointed or is
         absent, the President, or, if the President is absent, a chairman of
         the meeting chosen by a majority in interest of the stockholders
         entitled to vote, present in person or by proxy, shall act as chairman.
         The Secretary, or, in his absence, an Assistant Secretary directed to
         do so by the President, shall act as secretary of the meeting.

                (b)   The Board of Directors of the corporation shall be
         entitled to make such rules or regulations for the conduct of meetings
         of stockholders as it shall deem necessary, appropriate or convenient.
         Subject to such rules and regulations of the Board of Directors, if
         any, the chairman of the meeting shall have the right and authority to
         prescribe such rules, regulations and procedures and to do all such
         acts as, in the judgment of such chairman, are necessary, appropriate
         or convenient for the proper conduct of the meeting, including, without
         limitation, establishing an agenda or order of business for the
         meeting, rules and procedures for maintaining order at the meeting and
         the safety of those present, limitations on participation in such
         meeting to stockholders of record of the corporation and their duly
         authorized and constituted proxies and such other persons as the
         chairman shall permit, restrictions on entry to the meeting after the
         time fixed for the commencement thereof, limitations on the time
         allotted to questions or comments by participants and regulation of the
         opening and closing of the polls for balloting on matters which are to
         be voted on by ballot. Unless and to the extent determined by the Board
         of Directors or the chairman of the meeting, meetings of stockholders
         shall not be required to be held in accordance with rules of
         parliamentary procedure.


                                   ARTICLE IV

                                    DIRECTORS

         Section 15.  NUMBER AND TERM OF OFFICE. The authorized number of
directors of the corporation shall be fixed by the Board of Directors from time
to time. Directors need not be stockholders unless so required by the
Certificate of Incorporation. If for any cause, the directors shall not have
been elected at an annual meeting, they may be elected as soon thereafter as
convenient. (Del. Code Ann., tit, 8, ss.ss. 141(b), 211(b), (c))



                                       7






         Section 16.  POWERS. The powers of the corporation shall be exercised,
its business conducted and its property controlled by the Board of Directors,
except as may be otherwise provided by statute or by the Certificate of
Incorporation. (Del. Code Ann., tit. 8, ss. 141(a))

         Section 17.  TERM OF DIRECTORS. Subject to the rights of the holders of
any series of Preferred Stock to elect additional directors under specified
circumstances, directors shall be elected at each annual meeting of stockholders
for a term of one year. Each director shall serve until his successor is duly
elected and qualified or until his death, resignation or removal. No decrease in
the number of directors constituting the Board of Directors shall shorten the
term of any incumbent director.

         Section 18.  VACANCIES.

                (a)   Unless otherwise provided in the Certificate of
         Incorporation, any vacancies on the Board of Directors resulting from
         death, resignation, disqualification, removal or other causes and any
         newly created directorships resulting from any increase in the number
         of directors shall, unless the Board of Directors determines by
         resolution that any such vacancies or newly created directorships shall
         be filled by stockholders, be filled only by the affirmative vote of a
         majority of the directors then in office, even though less than a
         quorum of the Board of Directors. Any director elected in accordance
         with the preceding sentence shall hold office for the remainder of the
         full term of the director for which the vacancy was created or occurred
         and until such director's successor shall have been elected and
         qualified. A vacancy in the Board of Directors shall be deemed to exist
         under this Bylaw in the case of the death, removal or resignation of
         any director. (Del. Code Ann., tit. 8, ss. 223(a), (b)).

                (b)   If at the time of filling any vacancy or any newly
         created directorship, the directors then in office shall constitute
         less than a majority of the whole board (as constituted immediately
         prior to any such increase), the Delaware Court of Chancery may, upon
         application of any stockholder or stockholders holding at least ten
         percent (10%) of the total number of the shares at the time outstanding
         having the right to vote for such directors, summarily order an
         election to be held to fill any such vacancies or newly created
         directorships, or to replace the directors chosen by the directors then
         in offices as aforesaid, which election shall be governed by Section
         211 of the Delaware General Corporation Law (Del. Code Ann. tit. 8, ss.
         223(c)).

         Section 19.  RESIGNATION. Any director may resign at any time by
delivering his written resignation to the Secretary, such resignation to specify
whether it will be effective at a particular time, upon receipt by the Secretary
or at the pleasure of the Board of Directors. If no such specification is made,
it shall be deemed effective at the pleasure of the Board of Directors. When one
or more directors shall resign from the Board of Directors, effective at a
future date, a majority of the directors then in office, including those who
have so resigned, shall have power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective, and each Director so chosen shall hold office for the unexpired
portion of the term of the Director whose place shall be vacated and until his
successor shall have been duly elected and qualified. (Del. Code Ann., tit. 8,
ss.ss. 141(b), 223(d))



                                       8






         Section 20.  REMOVAL. Subject to any limitations imposed by applicable
law, the Board of Directors or any director may be removed from office at any
time (1) with cause by the affirmative vote of the holders of a majority of the
voting power of all then-outstanding shares of voting stock of the corporation
entitled to vote at an election of directors or (ii) without cause by the
affirmative vote of the holders of a majority of the voting power of all
then-outstanding shares of voting stock of the corporation, entitled to vote at
an election of directors.

         Section 21. MEETINGS.

                (a)   ANNUAL MEETINGS. The annual meeting of the Board of
         Directors shall be held immediately before or after the annual meeting
         of stockholders and at the place where such meeting is held. No notice
         of an annual meeting of the Board of Directors shall be necessary and
         such meeting shall be held for the purpose of electing officers and
         transacting such other business as may lawfully come before it.

                (b)   REGULAR MEETINGS. Unless otherwise restricted by the
         Certificate of Incorporation, regular meetings of the Board of
         Directors may be held at any time or date and at any place within or
         without the State of Delaware which has been designated by the Board of
         Directors and publicized among all directors. No formal notice shall be
         required for a regular meeting of the Board of Directors. (Del. Code
         Ann., tit. 8, ss. 141(g))

                (c)   SPECIAL MEETINGS. Unless otherwise restricted by the
         Certificate of Incorporation, special meetings of the Board of
         Directors may be held at any time and place within or without the State
         of Delaware whenever called by the Chairman of the Board, the President
         or any two of the directors. (Del. Code Ann., tit. 8, ss. 141(g))

                (d)   TELEPHONE MEETINGS. Any member of the Board of
         Directors, or of any committee thereof, may participate in a meeting by
         means of conference telephone or similar communications equipment by
         means of which all persons participating in the meeting can hear each
         other, and participation in a meeting by such means shall constitute
         presence in person at such meeting. (Del. Code Ann., tit. 8, ss.
         141(i))

                (e)   NOTICE OF MEETINGS. Notice of the time and place of
         all meetings of the Board of Directors shall be orally or in writing,
         by telephone, including a voice messaging system or other system or
         technology designed to record and communicate messages, facsimile,
         telegraph or telex, or by electronic mail or other electronic means,
         during normal business hours, at least twenty-four (24) hours before
         the date and time of the meeting, or sent in writing to each director
         by first class mail, postage prepaid, at least three (3) days before
         the date of the meeting. Notice of any meeting may be waived in writing
         at any time before or after the meeting and will be waived by any
         director by attendance thereat, except when the director attends the
         meeting for the express purpose of objecting, at the beginning of the
         meeting, to the transaction of any business because the meeting is not
         lawfully called or convened. (Del. Code Ann., tit. 8, ss. 229)

                (f)   WAIVER OF NOTICE. The transaction of all business at
         any meeting of the Board of Directors, or any committee thereof,
         however called or noticed, or wherever held, shall be as valid as
         though had at a meeting duly held after regular call and notice, if


                                       9





         a quorum be present and if, either before or after the meeting, each
         of the directors not present shall sign a written waiver of notice.
         All such waivers shall be filed with the corporate records or made a
         part of the minutes of the meeting. (Del. Code Ann., tit. 8, ss. 229)

         Section 22.  QUORUM AND VOTING.

                (a)   Unless the Certificate of Incorporation requires a
         greater number and except with respect to indemnification questions
         arising under Section 43 hereof, for which a quorum shall be one-third
         of the exact number of directors fixed from time to time, a quorum of
         the Board of Directors shall consist of a majority of the exact number
         of directors fixed from time to time by the Board of Directors in
         accordance with the Certificate of Incorporation; provided, however, at
         any meeting, whether a quorum be present or otherwise, a majority of
         the directors present may adjourn from time to time until the time
         fixed for the next regular meeting of the Board of Directors, without
         notice other than by announcement at the meeting. (Del. Code Ann., tit.
         8, ss. 141(b))

                (b)   At each meeting of the Board of Directors at which a
         quorum is present, all questions and business shall be determined by
         the affirmative vote of a majority of the directors present, unless a
         different vote be required by law, the Certificate of Incorporation or
         these Bylaws. (Del. Code Ann., tit. 8, ss. 141(b))

         Section 23.  ACTION WITHOUT MEETING. Unless otherwise restricted by the
Certificate of Incorporation or these Bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and such writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee. (Del. Code Ann., tit. 8, ss. 141(f))

         Section 24.  FEES AND COMPENSATION. Directors shall be entitled to such
compensation for their services as may be approved by the Board of Directors,
including, if so approved, by resolution of the Board of Directors, a fixed sum
and expenses of attendance, if any, for attendance at each regular or special
meeting of the Board of Directors and at any meeting of a committee of the Board
of Directors. Nothing herein contained shall be construed to preclude any
director from serving the corporation in any other capacity as an officer,
agent, employee, or otherwise and receiving compensation therefor. (Del. Code
Ann., tit. 8, ss. 141(h))

         Section 25.  COMMITTEES.

                (a)   EXECUTIVE COMMITTEE. The Board of Directors may
         appoint an Executive Committee to consist of one (1) or more members of
         the Board of Directors. The Executive Committee, to the extent
         permitted by law and provided in the resolution of the Board of
         Directors shall have and may exercise all the powers and authority of
         the Board of Directors in the management of the business and affairs of
         the corporation, and may authorize the seal of the corporation to be
         affixed to all papers which may require it; but no such committee shall
         have the power or authority in reference to (i) approving or adopting,
         or recommending to the stockholders, any action or matter expressly
         required

                                       10






         by the Delaware General Corporation Law to be submitted to
         stockholders for approval, or (ii) adopting, amending or repealing any
         bylaw of the corporation. (Del. Code Ann., tit. 8, ss. 141(c))

                (b)   OTHER COMMITTEES. The Board of Directors may, from
         time to time, appoint such other committees as may be permitted by law.
         Such other committees appointed by the Board of Directors shall consist
         of one (1) or more members of the Board of Directors and shall have
         such powers and perform such duties as may be prescribed by the
         resolution or resolutions creating such committees, but in no event
         shall any such committee have the powers denied to the Executive
         Committee in these Bylaws. (Del. Code Ann., tit. 8, ss. 141(c))

                (c)   TERM. Each member of a committee of the Board of
         Directors shall serve a term on the committee coexistent with such
         member's term on the Board of Directors. The Board of Directors,
         subject to any requirements of any outstanding series of Preferred
         Stock, the provisions of subsections (a) or (b) of this Bylaw may at
         any time increase or decrease the number of members of a committee or
         terminate the existence of a committee. The membership of a committee
         member shall terminate on the date of his death or voluntary
         resignation from the committee or from the Board of Directors. The
         Board of Directors may at any time for any reason remove any individual
         committee member and the Board of Directors may fill any committee
         vacancy created by death, resignation, removal or increase in the
         number of members of the committee. The Board of Directors may
         designate one or more directors as alternate members of any committee,
         who may replace any absent or disqualified member at any meeting of the
         committee, and, in addition, in the absence or disqualification of any
         member of a committee, the member or members thereof present at any
         meeting and not disqualified from voting, whether or not he or they
         constitute a quorum, may unanimously appoint another member of the
         Board of Directors to act at the meeting in the place of any such
         absent or disqualified member. (Del. Code Ann., tit. 8, ss. 141(c))

                (d)   MEETINGS. Unless the Board of Directors shall
         otherwise provide, regular meetings of the Executive Committee or any
         other committee appointed pursuant to this Section 25 shall be held at
         such times and places as are determined by the Board of Directors, or
         by any such committee, and when notice thereof has been given to each
         member of such committee, no further notice of such regular meetings
         need be given thereafter. Special meetings of any such committee may be
         held at any place which has been determined from time to time by such
         committee, and may be called by any director who is a member of such
         committee, upon written notice to the members of such committee of the
         time and place of such special meeting given in the manner provided for
         the giving of written notice to members of the Board of Directors of
         the time and place of special meetings of the Board of Directors.
         Notice of any special meeting of any committee may be waived in writing
         at any time before or after the meeting and will be waived by any
         director by attendance thereat, except when the director attends such
         special meeting for the express purpose of objecting, at the beginning
         of the meeting, to the transaction of any business because the meeting
         is not lawfully called or convened. A majority of the authorized number
         of members of any such committee shall constitute a quorum for the
         transaction of business, and the act of a majority of those present at
         any


                                       11






         meeting at which a quorum is present shall be the act of such
         committee. (Del. Code Ann., tit. 8, ss.ss. 141(c), 229)

         Section 26.  ORGANIZATION. At every meeting of the directors, the
Chairman of the Board of Directors, or, if a Chairman has not been appointed or
is absent, the President, or if the President is absent, the most senior Vice
President, (if a director) or, in the absence of any such person, a chairman of
the meeting chosen by a majority of the directors present, shall preside over
the meeting. The Secretary, or in his absence, any Assistant Secretary directed
to do so by the President, shall act as secretary of the meeting.


                                   ARTICLE V

                                    OFFICERS

         Section 27.  OFFICERS DESIGNATED. The officers of the corporation shall
include, if and when designated by the Board of Directors, the Chairman of the
Board of Directors, the Chief Executive Officer, the President, one or more Vice
Presidents, the Secretary, the Chief Financial Officer, the Treasurer and the
Controller, all of whom shall be elected at the annual organizational meeting of
the Board of Directors. The Board of Directors may also appoint one or more
Assistant Secretaries, Assistant Treasurers, Assistant Controllers and such
other officers and agents with such powers and duties as it shall deem
necessary. The Board of Directors may assign such additional titles to one or
more of the officers as it shall deem appropriate. Any one person may hold any
number of offices of the corporation at any one time unless specifically
prohibited therefrom by law. The salaries and other compensation of the officers
of the corporation shall be fixed by or in the manner designated by the Board of
Directors. (Del. Code Ann., tit. 8, ss.ss. 122(5), 142(a), (b))

         Section 28.  TENURE AND DUTIES OF OFFICERS.

                (a)   GENERAL. All officers shall hold office at the
         pleasure of the Board of Directors and until their successors shall
         have been duly elected and qualified, unless sooner removed. Any
         officer elected or appointed by the Board of Directors may be removed
         at any time by the Board of Directors. If the office of any officer
         becomes vacant for any reason, the vacancy may be filled by the Board
         of Directors. (Del. Code Ann., tit. 8, ss. 141(b), (e))

                (b)   DUTIES OF CHAIRMAN OF THE BOARD OF DIRECTORS. The
         Chairman of the Board of Directors, when present, shall preside at all
         meetings of the stockholders and the Board of Directors. The Chairman
         of the Board of Directors shall perform other duties commonly incident
         to his office and shall also perform such other duties and have such
         other powers as the Board of Directors shall designate from time to
         time. If there is no President, then the Chairman of the Board of
         Directors shall also serve as the Chief Executive Officer of the
         corporation and shall have the powers and duties prescribed in
         paragraph (c) of this Section 28. (Del. Code Ann., tit. 8, ss. 142(a))

                (c)   DUTIES OF PRESIDENT. The President shall preside at
         all meetings of the stockholders and at all meetings of the Board of
         Directors, unless the Chairman of the


                                       12





         Board of Directors has been appointed and is present. Unless some
         other officer has been elected Chief Executive Officer of the
         corporation, the President shall be the chief executive officer of the
         corporation and shall, subject to the control of the Board of
         Directors, have general supervision, direction and control of the
         business and officers of the corporation. The President shall perform
         other duties commonly incident to his office and shall also perform
         such other duties and have such other powers as the Board of Directors
         shall designate from time to time. (Del. Code Ann., tit. 8, ss.
         142(a))

                (d)   DUTIES OF VICE PRESIDENTS. The Vice Presidents may
         assume and perform the duties of the President in the absence or
         disability of the President or whenever the office of President is
         vacant. The Vice Presidents shall perform other duties commonly
         incident to their office and shall also perform such other duties and
         have such other powers as the Board of Directors or the President shall
         designate from time to time. (Del. Code Ann., tit. 8, ss. 142(a))

                (e)   DUTIES OF SECRETARY. The Secretary shall attend all
         meetings of the stockholders and of the Board of Directors and shall
         record all acts and proceedings thereof in the minute book of the
         corporation. The Secretary shall give notice in conformity with these
         Bylaws of all meetings of the stockholders and of all meetings of the
         Board of Directors and any committee thereof requiring notice. The
         Secretary shall perform all other duties given him in these Bylaws and
         other duties commonly incident to his office and shall also perform
         such other duties and have such other powers as the Board of Directors
         shall designate from time to time. The President may direct any
         Assistant Secretary to assume and perform the duties of the Secretary
         in the absence or disability of the Secretary, and each Assistant
         Secretary shall perform other duties commonly incident to his office
         and shall also perform such other duties and have such other powers as
         the Board of Directors or the President shall designate from time to
         time. (Del. Code Ann., tit. 8, ss. 142(a))

                (f)   DUTIES OF CHIEF FINANCIAL OFFICER. The Chief Financial
         Officer shall keep or cause to be kept the books of account of the
         corporation in a thorough and proper manner and shall render statements
         of the financial affairs of the corporation in such form and as often
         as required by the Board of Directors or the President. The Chief
         Financial Officer, subject to the order of the Board of Directors,
         shall have the custody of all funds and securities of the corporation.
         The Chief Financial Officer shall perform other duties commonly
         incident to his office and shall also perform such other duties and
         have such other powers as the Board of Directors or the President shall
         designate from time to time. The President may direct the Treasurer or
         any Assistant Treasurer, or the Controller or any Assistant Controller
         to assume and perform the duties of the Chief Financial Officer in the
         absence or disability of the Chief Financial Officer, and each
         Treasurer and Assistant Treasurer and each Controller and Assistant
         Controller shall perform other duties commonly incident to his office
         and shall also perform such other duties and have such other powers as
         the Board of Directors or the President shall designate from time to
         time. (Del. Code Ann., tit. 8, ss. 142(a))


                                       13






         Section 29.  DELEGATION OF AUTHORITY. The Board of Directors may from
time to time delegate the powers or duties of any officer to any other officer
or agent, notwithstanding any provision hereof.

         Section 30.  RESIGNATIONS. Any officer may resign at any time by giving
written notice to the Board of Directors or to the President or to the
Secretary. Any such resignation shall be effective when received by the person
or persons to whom such notice is given, unless a later time is specified
therein, in which event the resignation shall become effective at such later
time. Unless otherwise specified in such notice, the acceptance of any such
resignation shall not be necessary to make it effective. Any resignation shall
be without prejudice to the rights, if any, of the corporation under any
contract with the resigning officer. (Del. Code Ann., tit. 8, ss. 142(b))

         Section 31.  REMOVAL. Any officer may be removed from office at any
time, either with or without cause, by the affirmative vote of a majority of the
directors in office at the time, or by the unanimous written consent of the
directors in office at the time, or by any committee or superior officers upon
whom such power of removal may have been conferred by the Board of Directors.


                                   ARTICLE VI

                  EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
                     OF SECURITIES OWNED BY THE CORPORATION

         Section 32.  EXECUTION OF CORPORATE INSTRUMENTS. The Board of Directors
may, in its discretion, determine the method and designate the signatory officer
or officers, or other person or persons, to execute on behalf of the corporation
any corporate instrument or document, or to sign on behalf of the corporation
the corporate name without limitation, or to enter into contracts on behalf of
the corporation, except where otherwise provided by law or these Bylaws, and
such execution or signature shall be binding upon the corporation. (Del. Code
Ann., tit. 8, ss.ss. 103(a), 142(a), 158)

         All checks and drafts drawn on banks or other depositaries on funds to
the credit of the corporation or in special accounts of the corporation shall be
signed by such person or persons as the Board of Directors shall authorize so to
do.

         Unless authorized or ratified by the Board of Directors or within the
agency power of an officer, no officer, agent or employee shall have any power
or authority to bind the corporation by any contract or engagement or to pledge
its credit or to render it liable for any purpose or for any amount. (Del. Code
Ann., tit. 8, ss.ss. 103(a), 142(a), 158).

         Section 33.  VOTING OF SECURITIES OWNED BY THE CORPORATION. All stock
and other securities of other corporations owned or held by the corporation for
itself, or for other parties in any capacity, shall be voted, and all proxies
with respect thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such authorization,
by the Chairman of the Board of Directors, the Chief Executive Officer, the
President, or any Vice President. (Del. Code Ann., tit. 8, ss. 123)



                                       14





                                  ARTICLE VII

                                 SHARES OF STOCK

         Section 34.  FORM AND EXECUTION OF CERTIFICATES. Certificates for the
shares of stock of the corporation shall be in such form as is consistent with
the Certificate of Incorporation and applicable law. Every holder of stock in
the corporation shall be entitled to have a certificate signed by or in the name
of the corporation by the Chairman of the Board of Directors, or the President
or any Vice President and by the Treasurer or Assistant Treasurer or the
Secretary or Assistant Secretary, certifying the number of shares owned by him
in the corporation. Any or all of the signatures on the certificate may be
facsimiles. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue. Each certificate shall state
upon the face or back thereof, in full or in summary, all of the powers,
designations, preferences, and rights, and the limitations or restrictions of
the shares authorized to be issued or shall, except as otherwise required by
law, set forth on the face or back a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, designations,
preferences and relative, participating, optional, or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Within a reasonable time after
the issuance or transfer of uncertificated stock, the corporation shall send to
the registered owner thereof a written notice containing the information
required to be set forth or stated on certificates pursuant to this section or
otherwise required by law or with respect to this section a statement that the
corporation will furnish without charge to each stockholder who so requests the
powers, designations, preferences and relative participating, optional or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights. Except as
otherwise expressly provided by law, the rights and obligations of the holders
of certificates representing stock of the same class and series shall be
identical. (Del. Code Ann., tit. 8, ss. 158)

         Section 35.  LOST CERTIFICATES. A new certificate or certificates shall
be issued in place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost, stolen, or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. The corporation may require, as a condition
precedent to the issuance of a new certificate or certificates, the owner of
such lost, stolen, or destroyed certificate or certificates, or his legal
representative, to agree to indemnify the corporation in such manner as it shall
require or to give the corporation a surety bond in such form and amount as it
may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen,
or destroyed. (Del. Code Ann., tit. 8, ss. 167)

         Section 36.  TRANSFERS.

                (a)   Transfers of record of shares of stock of the
         corporation shall be made only upon its books by the holders thereof,
         in person or by attorney duly authorized, and upon the surrender of a
         properly endorsed certificate or certificates for a like number of
         shares. (Del. Code Ann., tit. 8, ss. 201, tit. 6, ss. 8-401 (1))






                (b)   The corporation shall have power to enter into and
         perform any agreement with any number of stockholders of any one or
         more classes of stock of the corporation to restrict the transfer of
         shares of stock of the corporation of any one or more classes owned by
         such stockholders in any manner not prohibited by the Delaware General
         Corporation Law. (Del. Code Ann., tit. 8, ss. 160 (a))

         Section 37.  FIXING RECORD DATES.

                (a)   In order that the corporation may determine the
         stockholders entitled to notice of or to vote at any meeting of
         stockholders or any adjournment thereof, the Board of Directors may
         fix, in advance, a record date, which record date shall not precede the
         date upon which the resolution fixing the record date is adopted by the
         Board of Directors, and which record date shall, subject to applicable
         law, not be more than sixty (60) nor less than ten (10) days before the
         date of such meeting. If no record date is fixed by the Board of
         Directors, the record date for determining stockholders entitled to
         notice of or to vote at a meeting of stockholders shall be at the close
         of business on the day next preceding the day on which notice is given,
         or if notice is waived, at the close of business on the day next
         preceding the day on which the meeting is held. A determination of
         stockholders of record entitled to notice of or to vote at a meeting of
         stockholders shall apply to any adjournment of the meeting; provided,
         however, that the Board of Directors may fix a new record date for the
         adjourned meeting.

                (b)   In order that the corporation may determine the
         stockholders entitled to consent to corporate action in writing without
         a meeting, the Board of Directors may fix a record date, which record
         date shall not precede the date upon which the resolution fixing the
         record date is adopted by the Board of Directors, and which date shall
         not be more than ten (10) days after the date upon which the resolution
         fixing the record date is adopted by the Board of Directors. Any
         stockholder of record seeking to have the stockholders authorize or
         take corporate action by written consent shall, by written notice to
         the Secretary, request the Board of Directors to fix a record date. The
         Board of Directors shall promptly, but in all events within ten (10)
         days after the date on which such a request is received, adopt a
         resolution fixing the record date. If no record date has been fixed by
         the Board of Directors within ten (10) days of the date on which such a
         request is received, the record date for determining stockholders
         entitled to consent to corporate action in writing without a meeting,
         when no prior action by the Board of Directors is required by
         applicable law, shall be the first date on which a signed written
         consent setting forth the action taken or proposed to be taken is
         delivered to the corporation by delivery to its registered office in
         the State of Delaware, its principal place of business or an officer or
         agent of the corporation having custody of the book in which
         proceedings of meetings of stockholders are recorded. Delivery made to
         the corporation's registered office shall be by hand or by certified or
         registered mail, return receipt requested. If no record date has been
         fixed by the Board of Directors and prior action by the Board of
         Directors is required by law, the record date for determining
         stockholders entitled to consent to corporate action in writing without
         a meeting shall be at the close of business on the day on which the
         Board of Directors adopts the resolution taking such prior action.


                                       16





                (c)   In order that the corporation may determine the
         stockholders entitled to receive payment of any dividend or other
         distribution or allotment of any rights or the stockholders entitled to
         exercise any rights in respect of any change, conversion or exchange of
         stock, or for the purpose of any other lawful action, the Board of
         Directors may fix, in advance, a record date, which record date shall
         not precede the date upon which the resolution fixing the record date
         is adopted, and which record date shall be not more than sixty (60)
         days prior to such action. If no record date is fixed, the record date
         for determining stockholders for any such purpose shall be at the close
         of business on the day on which the Board of Directors adopts the
         resolution relating thereto. (Del. Code Ann., tit. 8, ss. 213)

         Section 38.  REGISTERED STOCKHOLDERS. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall not
be bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of Delaware.
(Del. Code Ann., tit. 8, ss.ss. 213(a), 219)


                                  ARTICLE VIII

                       OTHER SECURITIES OF THE CORPORATION

         Section 39.  EXECUTION OF OTHER SECURITIES. All bonds, debentures and
other corporate securities of the corporation, other than stock certificates
(covered in Section 34), may be signed by the Chairman of the Board of
Directors, the President or any Vice President, or such other person as may be
authorized by the Board of Directors, and the corporate seal impressed thereon
or a facsimile of such seal imprinted thereon and attested by the signature of
the Secretary or an Assistant Secretary, or the Chief Financial Officer or
Treasurer or an Assistant Treasurer; provided, however, that where any such
bond, debenture or other corporate security shall be authenticated by the manual
signature, or where permissible facsimile signature, of a trustee under an
indenture pursuant to which such bond, debenture or other corporate security
shall be issued, the signatures of the persons signing and attesting the
corporate seal on such bond, debenture or other corporate security may be the
imprinted facsimile of the signatures of such persons. Interest coupons
appertaining to any such bond, debenture or other corporate security,
authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an
Assistant Treasurer of the corporation or such other person as may be authorized
by the Board of Directors, or bear imprinted thereon the facsimile signature of
such person. In case any officer who shall have signed or attested any bond,
debenture or other corporate security, or whose facsimile signature shall appear
thereon or on any such interest coupon, shall have ceased to be such officer
before the bond, debenture or other corporate security so signed or attested
shall have been delivered, such bond, debenture or other corporate security
nevertheless may be adopted by the corporation and issued and delivered as
though the person who signed the same or whose facsimile signature shall have
been used thereon had not ceased to be such officer of the corporation.



                                       17





                                   ARTICLE IX

                                    DIVIDENDS

         Section 40.  DECLARATION OF DIVIDENDS. Dividends upon the capital stock
of the corporation, subject to the provisions of the Certificate of
Incorporation and applicable law, if any, may be declared by the Board of
Directors pursuant to law at any regular or special meeting. Dividends may be
paid in cash, in property, or in shares of the capital stock, subject to the
provisions of the Certificate of Incorporation and applicable law. (Del. Code
Ann., tit. 8, ss.ss. 170, 173)

         Section 41.  DIVIDEND RESERVE. Before payment of any dividend, there
may be set aside out of any funds of the corporation available for dividends
such sum or sums as the Board of Directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the Board of Directors shall think
conducive to the interests of the corporation, and the Board of Directors may
modify or abolish any such reserve in the manner in which it was created. (Del.
Code Ann., tit. 8, ss. 171)


                                   ARTICLE X

                                   FISCAL YEAR

         Section 42.  FISCAL YEAR. The fiscal year of the corporation shall be
fixed by resolution of the Board of Directors.


                                   ARTICLE XI

                                 INDEMNIFICATION

         Section 43.  INDEMNIFICATION OF DIRECTORS, EXECUTIVE OFFICERS, OTHER
OFFICERS, EMPLOYEES AND OTHER AGENTS.

                (a)   DIRECTORS AND EXECUTIVE OFFICERS. The corporation
         shall indemnify its directors and executive officers (for the purposes
         of this Article XI, "executive officers" shall have the meaning defined
         in Rule 3b-7 promulgated under the 1934 Act) to the fullest extent not
         prohibited by the Delaware General Corporation Law or any other
         applicable law; provided, however, that the corporation may modify the
         extent of such indemnification by individual contracts with its
         directors and executive officers; and, provided, further, that the
         corporation shall not be required to indemnify any director or
         executive officer in connection with any proceeding (or part thereof)
         initiated by such person unless (i) such indemnification is expressly
         required to be made by law, (ii) the proceeding was authorized by the
         Board of Directors of the corporation, (iii) such indemnification is
         provided by the corporation, in its sole discretion, pursuant to the
         powers vested in the corporation under the Delaware General Corporation
         Law or any other applicable law or (iv) such indemnification is
         required to be made under subsection (d).

                                       18






                (b)   OTHER OFFICERS, EMPLOYEES AND OTHER AGENTS. The
         corporation shall have power to indemnify other officers, employees and
         other agents as set forth in the Delaware General Corporation Law or
         any other applicable law. The Board of Directors shall have the power
         to delegate the determination of whether indemnification shall be given
         to any such person except executive officers to such officers or other
         persons as the Board of Directors shall determine.

                (c)   EXPENSES. The corporation shall advance to any person
         who was or is a party or is threatened to be made a party to any
         threatened, pending or completed action, suit or proceeding, whether
         civil, criminal, administrative or investigative, by reason of the fact
         that he is or was a director or executive officer, of the corporation,
         or is or was serving at the request of the corporation as a director or
         executive officer of another corporation, partnership, joint venture,
         trust or other enterprise, prior to the final disposition of the
         proceeding, promptly following request therefor, all expenses incurred
         by any director or executive officer in connection with such proceeding
         upon receipt of an undertaking by or on behalf of such person to repay
         said amounts if it should be determined ultimately that such person is
         not entitled to be indemnified under this Bylaw or otherwise.

Notwithstanding the foregoing, unless otherwise determined pursuant to paragraph
(e) of this Bylaw, no advance shall be made by the corporation to an executive
officer of the corporation (except by reason of the fact that such executive
officer is or was a director of the corporation, in which event this paragraph
shall not apply) in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, if a determination is reasonably and promptly
made (i) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to the proceeding, or (ii) if such quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, that the facts known
to the decision-making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to the best interests of the
corporation.

                (d)   ENFORCEMENT. Without the necessity of entering into an
         express contract, all rights to indemnification and advances to
         directors and executive officers under this Bylaw shall be deemed to be
         contractual rights and be effective to the same extent and as if
         provided for in a contract between the corporation and the director or
         executive officer. Any right to indemnification or advances granted by
         this Bylaw to a director or executive officer shall be enforceable by
         or on behalf of the person holding such right in any court of competent
         jurisdiction if (i) the claim for indemnification or advances is
         denied, in whole or in part, or (ii) no disposition of such claim is
         made within ninety (90) days of request therefor. The claimant in such
         enforcement action, if successful in whole or in part, shall be
         entitled to be paid also the expense of prosecuting his claim. In
         connection with any claim for indemnification, the corporation shall be
         entitled to raise as a defense to any such action that the claimant has
         not met the standards of conduct that make it permissible under the
         Delaware General Corporation Law or any other applicable law for the
         corporation to indemnify the claimant for the amount claimed. In
         connection with any claim by an executive officer of the corporation
         (except in any action, suit or proceeding, whether civil, criminal,
         administrative or investigative, by reason of the fact that such



                                       19





         executive officer is or was a director of the corporation) for
         advances, the corporation shall be entitled to raise a defense as to
         any such action clear and convincing evidence that such person acted in
         bad faith or in a manner that such person did not believe to be in or
         not opposed to the best interests of the corporation, or with respect
         to any criminal action or proceeding that such person acted without
         reasonable cause to believe that his conduct was lawful. Neither the
         failure of the corporation (including its Board of Directors,
         independent legal counsel or its stockholders) to have made a
         determination prior to the commencement of such action that
         indemnification of the claimant is proper in the circumstances because
         he has met the applicable standard of conduct set forth in the Delaware
         General Corporation Law or any other applicable law, nor an actual
         determination by the corporation (including its Board of Directors,
         independent legal counsel or its stockholders) that the claimant has
         not met such applicable standard of conduct, shall be a defense to the
         action or create a presumption that claimant has not met the applicable
         standard of conduct. In any suit brought by a director or executive
         officer to enforce a right to indemnification or to an advancement of
         expenses hereunder, the burden of proving that the director or
         executive officer is not entitled to be indemnified, or to such
         advancement of expenses, under this Article XI or otherwise shall be on
         the corporation.

                (e)  NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any
         person by this Bylaw shall not be exclusive of any other right which
         such person may have or hereafter acquire under any applicable statute,
         provision of the Certificate of Incorporation, Bylaws, agreement, vote
         of stockholders or disinterested directors or otherwise, both as to
         action in his official capacity and as to action in another capacity
         while holding office. The corporation is specifically authorized to
         enter into individual contracts with any or all of its directors,
         officers, employees or agents respecting indemnification and advances,
         to the fullest extent not prohibited by the Delaware General
         Corporation Law or any other applicable law.

                (f)   SURVIVAL OF RIGHTS. The rights conferred on any person
         by this Bylaw shall continue as to a person who has ceased to be a
         director, officer, employee or other agent and shall inure to the
         benefit of the heirs, executors and administrators of such a person.

                (g)   INSURANCE. To the fullest extent permitted by the
         Delaware General Corporation Law, or any other applicable law, the
         corporation, upon approval by the Board of Directors, may purchase
         insurance on behalf of any person required or permitted to be
         indemnified pursuant to this Bylaw.

                (h)   AMENDMENTS. Any repeal or modification of this Bylaw
         shall only be prospective and shall not affect the rights under this
         Bylaw in effect at the time of the alleged occurrence of any action or
         omission to act that is the cause of any proceeding against any agent
         of the corporation.

                (i)   SAVING CLAUSE. If this Bylaw or any portion hereof
         shall be invalidated on any ground by any court of competent
         jurisdiction, then the corporation shall nevertheless indemnify each
         director and executive officer to the full extent not prohibited by any


                                       20





         applicable portion of this Bylaw that shall not have been invalidated,
         or by any other applicable law. If this Section 43 shall be invalid due
         to the application of the indemnification provisions of another
         jurisdiction, then the corporation shall indemnify each director and
         executive officer to the full extent under applicable law.

                (j)   CERTAIN DEFINITIONS. For the purposes of this Bylaw,
         the following definitions shall apply:

                      (1)   The term "proceeding" shall be broadly construed and
                shall include, without limitation, the investigation,
                preparation, prosecution, defense, settlement, arbitration and
                appeal of, and the giving of testimony in, any threatened,
                pending or completed action, suit or proceeding, whether civil,
                criminal, administrative or investigative.

                      (2)   The term "expenses" shall be broadly construed and
                shall include, without limitation, court costs, attorneys' fees,
                witness fees, fines, amounts paid in settlement or judgment and
                any other costs and expenses of any nature or kind incurred in
                connection with any proceeding.

                      (3)   The term the "corporation" shall include, in
                addition to the resulting corporation, any constituent
                corporation (including any constituent of a constituent)
                absorbed in a consolidation or merger which, if its separate
                existence had continued, would have had power and authority
                to indemnify its directors, officers, and employees or
                agents, so that any person who is or was a director,
                officer, employee or agent of such constituent corporation,
                or is or was serving at the request of such constituent
                corporation as a director, officer, employee or agent of
                another corporation, partnership, joint venture, trust or
                other enterprise, shall stand in the same position under the
                provisions of this Bylaw with respect to the resulting or
                surviving corporation as he would have with respect to such
                constituent corporation if its separate existence had
                continued.

                      (4)   References to a "director," "executive officer,"
                "officer," "employee," or "agent" of the corporation shall
                include, without limitation, situations where such person is
                serving at the request of the corporation as, respectively, a
                director, executive officer, officer, employee, trustee or agent
                of another corporation, partnership, joint venture, trust or
                other enterprise.

                      (5)   References to "other enterprises" shall include
                employee benefit plans; references to "fines" shall include any
                excise taxes assessed on a person with respect to an employee
                benefit plan; and references to "serving at the request of the
                corporation" shall include any service as a director, officer,
                employee or agent of the corporation which imposes duties on, or
                involves services by, such director, officer, employee, or agent
                with respect to an employee benefit plan, its participants, or
                beneficiaries; and a person who acted in good faith and in a
                manner he reasonably believed to be in the interest of the
                participants and beneficiaries of an employee benefit plan shall
                be deemed to have acted in a


                                       21




                manner "not opposed to the best interests of the
                corporation" as referred to in this Bylaw.


                                  ARTICLE XII

                                     NOTICES

         Section 44.  NOTICES.

                (a)   NOTICE TO STOCKHOLDERS. Whenever, under any provisions
         of these Bylaws, notice is required to be given to any stockholder, it
         shall be given in writing, timely and duly deposited in the United
         States mail, postage prepaid, and addressed to his last known post
         office address as shown by the stock record of the corporation or its
         transfer agent. (Del. Code Ann., tit. 8, ss. 222)

                (b)   NOTICE TO DIRECTORS. Any notice required to be given
         to any director may be given by the method stated in subsection (a), or
         by overnight delivery service, facsimile, telex or telegram, except
         that such notice other than one which is delivered personally shall be
         sent to such address as such director shall have filed in writing with
         the Secretary, or, in the absence of such filing, to the last known
         post office address of such director.

                (c)   AFFIDAVIT OF MAILING. An affidavit of mailing,
         executed by a duly authorized and competent employee of the corporation
         or its transfer agent appointed with respect to the class of stock
         affected, specifying the name and address or the names and addresses of
         the stockholder or stockholders, or director or directors, to whom any
         such notice or notices was or were given, and the time and method of
         giving the same, shall in the absence of fraud, be prima facie evidence
         of the facts therein contained. (Del. Code Ann., tit. 8, ss. 222)

                (d)   TIME NOTICES DEEMED GIVEN. All notices given by mail
         or by overnight delivery service, as above provided, shall be deemed to
         have been given as at the time of mailing, and all notices given by
         facsimile, telex or telegram shall be deemed to have been given as of
         the sending time recorded at time of transmission.

                (e)   METHODS OF NOTICE. It shall not be necessary that the
         same method of giving notice be employed in respect of all directors,
         but one permissible method may be employed in respect of any one or
         more, and any other permissible method or methods may be employed in
         respect of any other or others.

                (f)   FAILURE TO RECEIVE NOTICE. The period or limitation of
         time within which any stockholder may exercise any option or right, or
         enjoy any privilege or benefit, or be required to act, or within which
         any director may exercise any power or right, or enjoy any privilege,
         pursuant to any notice sent him in the manner above provided, shall not
         be affected or extended in any manner by the failure of such
         stockholder or such director to receive such notice.


                                       22




                (g)   NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL.
         Whenever notice is required to be given, under any provision of law or
         of the Certificate of Incorporation or Bylaws of the corporation, to
         any person with whom communication is unlawful, the giving of such
         notice to such person shall not be required and there shall be no duty
         to apply to any governmental authority or agency for a license or
         permit to give such notice to such person. Any action or meeting which
         shall be taken or held without notice to any such person with whom
         communication is unlawful shall have the same force and effect as if
         such notice had been duly given. In the event that the action taken by
         the corporation is such as to require the filing of a certificate under
         any provision of the Delaware General Corporation Law, the certificate
         shall state, if such is the fact and if notice is required, that notice
         was given to all persons entitled to receive notice except such persons
         with whom communication is unlawful.

                (h)   NOTICE TO PERSON WITH UNDELIVERABLE ADDRESS. Whenever
         notice is required to be given, under any provision of law or the
         Certificate of Incorporation or Bylaws of the corporation, to any
         stockholder to whom (i) notice of two consecutive annual meetings, and
         all notices of meetings or of the taking of action by written consent
         without a meeting to such person during the period between such two
         consecutive annual meetings, or (ii) all, and at least two, payments
         (if sent by first class mail) of dividends or interest on securities
         during a twelve-month period, have been mailed addressed to such person
         at his address as shown on the records of the corporation and have been
         returned undeliverable, the giving of such notice to such person shall
         not be required. Any action or meeting which shall be taken or held
         without notice to such person shall have the same force and effect as
         if such notice had been duly given. If any such person shall deliver to
         the corporation a written notice setting forth his then current
         address, the requirement that notice be given to such person shall be
         reinstated. In the event that the action taken by the corporation is
         such as to require the filing of a certificate under any provision of
         the Delaware General Corporation Law, the certificate need not state
         that notice was not given to persons to whom notice was not required to
         be given pursuant to this paragraph, (Del. Code Ann, tit. 8, ss. 230).


                                  ARTICLE XIII

                                   AMENDMENTS

         Section 45.  AMENDMENTS. Subject to paragraph (h) of Section 43 of the
Bylaws, these Bylaws may be amended or repealed and new Bylaws adopted by the
stockholders entitled to vote. The Board of Directors shall also have the power,
if such power is conferred upon the Board of Directors by the Certificate of
Incorporation, to adopt, amend, or repeal Bylaws (including, without limitation,
the amendment of any Bylaw setting forth the number of Directors who shall
constitute the whole Board of Directors), (Del Code Ann., tit. 8, ss.ss. 109(a),
122(6)).



                                       23







                                  ARTICLE XIV

                             RIGHT OF FIRST REFUSAL

         Section 46.  RIGHT OF FIRST REFUSAL. No stockholder shall sell, assign,
pledge, or in any manner transfer any of the shares of common stock of the
corporation or any right or interest therein, whether voluntarily or by
operation of law, or by gift or otherwise, except by a transfer which meets the
requirements hereinafter set forth in this bylaw:

                (a)   If the stockholder desires to sell or otherwise
         transfer any of his shares of common stock, then the stockholder shall
         first give written notice thereof to the corporation. The notice shall
         name the proposed transferee and state the number of shares to be
         transferred, the proposed consideration, and all other terms and
         conditions of the proposed transfer.

                (b)   For thirty (30) days following receipt of such notice,
         the corporation shall have the option to purchase all (but not less
         than all) of the shares specified in the notice at the price and upon
         the terms set forth in such notice; provided, however, that, with the
         consent of the stockholder, the corporation shall have the option to
         purchase a lesser portion of the shares specified in said notice at the
         price and upon the terms set forth therein. In the event of a gift,
         property settlement or other transfer in which the proposed transferee
         is not paying the full price for the shares, and that is not otherwise
         exempted from the provisions of this Section 46, the price shall be
         deemed to be the fair market value of the stock at such time as
         determined in good faith by the Board of Directors. In the event the
         corporation elects to purchase all of the shares or, with consent of
         the stockholder, a lesser portion of the shares, it shall give written
         notice to the transferring stockholder of its election and settlement
         for said shares shall be made as provided below in paragraph (d).

                (c)   The corporation may assign its rights hereunder.

                (d)   In the event the corporation and/or its assignee(s)
         elect to acquire any of the shares of the transferring stockholder as
         specified in said transferring stockholder's notice, the Secretary of
         the corporation shall so notify the transferring stockholder and
         settlement thereof shall be made in cash within thirty (30) days after
         the Secretary of the corporation receives said transferring
         stockholder's notice; provided that if the terms of payment set forth
         in said transferring stockholder's notice were other than cash against
         delivery, the corporation and/or its assignee(s) shall pay for said
         shares on the same terms and conditions set forth in said transferring
         stockholder's notice.

                (e)   In the event the corporation and/or its assignees(s)
         do not elect to acquire all of the shares specified in the transferring
         stockholder's notice, said transferring stockholder may, within the
         sixty-day period following the expiration of the option rights granted
         to the corporation and/or its assignees(s) herein, transfer the shares
         specified in said transferring stockholder's notice which were not
         acquired by the corporation and/or its assignees(s) as specified in
         said transferring stockholder's notice. All shares so sold by


                                       24





         said transferring stockholder shall continue to be subject to the
         provisions of this bylaw in the same manner as before said transfer.

                (f)   Anything to the contrary contained herein
         notwithstanding, the following transactions shall be exempt from the
         provisions of this bylaw:

                      (1)   A stockholder's transfer of any or all shares held
                either during such stockholder's lifetime or on death by will or
                intestacy to such stockholder's immediate family or to any
                custodian or trustee for the account of such stockholder or such
                stockholder's immediate family or to any limited partnership of
                which the stockholder, members of such stockholder's immediate
                family or any trust for the account of such stockholder or such
                stockholder's immediate family will be the general of limited
                partner(s) of such partnership. "Immediate family" as used
                herein shall mean spouse, lineal descendant, father, mother,
                brother, or sister of the stockholder making such transfer.

                      (2)   A stockholder's bona fide pledge or mortgage of any
                shares with a commercial lending institution, provided that any
                subsequent transfer of said shares by said institution shall be
                conducted in the manner set forth in this bylaw.

                      (3)   A stockholder's transfer of any or all of such
                stockholder's shares to the corporation or to any other
                stockholder of the corporation.

                      (4)   A stockholder's transfer of any or all of such
                stockholder's shares to a person who, at the time of such
                transfer, is an officer or director of the corporation.

                      (5)   A corporate stockholder's transfer of any or all of
                its shares pursuant to and in accordance with the terms of any
                merger, consolidation, reclassification of shares or capital
                reorganization of the corporate stockholder, or pursuant to a
                sale of all or substantially all of the stock or assets of a
                corporate stockholder.

                      (6)   A corporate stockholder's transfer of any or all of
                its shares to any or all of its stockholders.

                      (7)   A transfer by a stockholder which is a limited or
                general partnership to any or all of its partners or former
                partners.

         In any such case, the transferee, assignee, or other recipient shall
receive and hold such stock subject to the provisions of this bylaw, and there
shall be no further transfer of such stock except in accord with this bylaw.

                (g)   The provisions of this bylaw may be waived with
         respect to any transfer either by the corporation, upon duly authorized
         action of its Board of Directors, or by the stockholders, upon the
         express written consent of the owners of a majority of the voting power
         of the corporation (excluding the votes represented by those shares to
         be transferred by the transferring stockholder). This bylaw may be
         amended or repealed


                                       25





         either by a duly authorized action of the Board of Directors or by the
         stockholders, upon the express written consent of the owners of a
         majority of the voting power of the corporation.

                (h)   Any sale or transfer, or purported sale or transfer,
         of shares of common stock of the corporation shall be null and void
         unless the terms, conditions, and provisions of this bylaw are strictly
         observed and followed.

                (i)   The foregoing right of first refusal shall terminate
         on either of the following dates, whichever shall first occur:

                      (1)   On August 16, 2010; or

                      (2)   Upon the date securities of the corporation are
                 first offered to the public pursuant to a registration
                 statement filed with, and declared effective by, the United
                 States Securities and Exchange Commission under the
                 Securities Act of 1933, as amended.

                (j)   The certificates representing shares of common stock
         of the corporation shall bear on their face the following legend so
         long as the foregoing right of first refusal remains in effect:

                "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
                RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION
                AND/OR ITS ASSIGNEE(S), AS PROVIDED IN THE BYLAWS OF THE
                CORPORATION."


                                   ARTICLE XV

                                LOANS TO OFFICERS

         Section 47.  LOANS TO OFFICERS. The corporation may lend money to, or
guarantee any obligation of, or otherwise assist any officer or other employee
of the corporation or of its subsidiaries, including any officer or employee who
is a Director of the corporation or its subsidiaries, whenever, in the judgment
of the Board of Directors, such loan, guarantee or assistance may reasonably be
expected to benefit the corporation. The loan, guarantee or other assistance may
be with or without interest and may be unsecured, or secured in such manner as
the Board of Directors shall approve, including, without limitation, a pledge of
shares of stock of the corporation. Nothing in these Bylaws shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute. (Del. Code Ann., tit. 8, ss. 143)



                                       26







                                  ARTICLE XVI

                                  MISCELLANEOUS

         Section 48.  ANNUAL REPORT.

                (a)   Subject to the provisions of paragraph (b) of this
         Bylaw, the Board of Directors shall cause an annual report to be sent
         to each stockholder of the corporation not later than one hundred
         twenty (120) days after the close of the corporation's fiscal year.
         Such report shall include a balance sheet as of the end of such fiscal
         year and an income statement and statement of changes in financial
         position for such fiscal year, accompanied by any report thereon of
         independent accounts or, if there is no such report, the certificate of
         an authorized officer of the corporation that such statements were
         prepared without audit from the books and records of the corporation.
         When there are more than 100 stockholders of record of the
         corporation's shares, as determined by Section 605 of the CGCL,
         additional information as required by Section 1501(b) of the CGCL shall
         also be contained in such report, provided that if the corporation has
         a class of securities registered under Section 12 of the 1934 Act, that
         Act shall take precedence. Such report shall be sent to stockholders at
         least fifteen (15) days prior to the next annual meeting of
         stockholders after the end of the fiscal year to which it relates.

                (b)   If and so long as there are fewer than 100 holders of
         record of the corporation's shares, the requirement of sending of an
         annual report to the stockholders of the corporation is hereby
         expressly waived.






















                                       27

EX-3.129

                                                                   Exhibit 3.129

                    SECOND RESTATED ARTICLES OF INCORPORATION
                                       OF
                         INTELLIGENCE DATA SYSTEMS, INC.

     The following Second Restated Articles of Incorporation were adopted
pursuant to Chapter 9 of Title 13.1-601 et seq. of the Code of Virginia, as
follows:

     FIRST - NAME: The name of the corporation (hereinafter referred to as this
"Corporation") is Intelligence Data Systems, Inc.

     SECOND - POWERS: The purposes for which the Corporation is formed are as
follows:

     (a) To provide information technology and consulting services.

     (b) To enter into any partnership, limited or general, as a limited or
general partner, or both, and to enter into any other arrangement for sharing
profits or the like with any corporation, association, partnership, syndicate,
entity, person, or governmental, municipal, or public authority, domestic or
foreign, in the carrying on of any business which this Corporation is authorized
to carry on, or any business or transaction deemed necessary, convenient, or
incidental to carrying out any of the purposes of this Corporation.

     (c) To loan, or advance money with or without security, without limits as
to amounts to borrow or raise money for any purposes of the Corporation and to
issue bonds, debentures, notes, securities or other obligations of any nature
and in any manner permitted by law, for money so borrowed in payment for
property purchased, or for any other lawful consideration, and to secure the
payment thereof and the interest thereon, by mortgage upon or pledge or
conveyance or assignment in trust of, the whole or any part of the property of
the Corporation real, personal, mixed and or intangible, including contract
rights, whether at the time owned or thereafter acquired, and to sell, pledge,
or otherwise dispose of such bonds, notes, or other obligations of the
Corporation for its corporate purposes.

     (d) To carry on any of the businesses herein enumerated for itself, or for
the account of others, or through others for its own account, and to carry on
any other business which may be deemed by it to be calculated, directly or
indirectly, to effectuate or facilitate the transaction of the hereinstated
objects or businesses, or any of them, or any part thereof, or to enhance the
value of its property, business or rights.

     The foregoing enumeration of the purposes, objects and business of the
Corporation is made in furtherance, and not in limitation, of the powers
conferred upon the Corporation by law, and is not intended, by the mention of
any particular purposes, object or business, in any manner to limit or restrict
the generality of any other purpose, object or business mentioned, or to limit
or restrict any of the powers of the Corporation.



     The Corporation is hereby authorized to engage in any other lawful activity
for which corporations may be organized under the Virginia Stock Corporation Act
of the Code of Virginia, as amended from time to time, and under any successor
and/or replacement to said Act.

     THIRD - CLASSES OF STOCK: The total number of shares of stock which the
Corporation has the authority to issue is ten million (10,000,000) shares having
a par value of one cent per share ($.01). Such shares shall be divided into the
following two classes of stock: six million (6,000,000) shares shall be voting
common stock and four million (4,000,000) shares shall be non-voting common
stock. Both classes of stock confer identical rights to distribution and
liquidation proceeds and the only difference between such classes is voting
rights. The holders of the non-voting common stock shall have no voting rights
whether to increase or decrease the number of authorized shares of such class or
otherwise, except as required by the Virginia Stock Corporation Act and in such
instances shall vote together with the holders of the voting common stock as a
single class. Except as provided for in a contract with the Corporation, no
holder of stock of the Corporation of any class shall have any preemptive or
preferential right to purchase or subscribe to (i) any shares of any class of
the Corporation, whether now or hereafter authorized; (ii) any warrants, rights,
or options to purchase such shares; or (iii) any securities or obligations
convertible into any such shares, whether issued for cash or other consideration
or by way of dividend or otherwise.

     FOURTH - NUMBER OF DIRECTORS: The number of directors of the Corporation
shall be one (1), or such other number as may be designated from time to time by
the shareholders entitled to elect directors within the range specified in the
Bylaws.

     FIFTH - DURATION OF CORPORATION: The duration of the Corporation shall be
perpetual.

     SIXTH - POWERS OF SHAREHOLDERS: The following provisions are hereby adopted
for the purposes of defining, limiting, and regulating the powers of the
Corporation and of the stockholders thereof:

     (a) In each case where the Virginia Stock Corporation Act of the Code of
Virginia, as hereafter amended from time to time, requires approval of a
particular action by the holders of more than a majority of shares entitled to
be cast for a particular action, the required consent shall be lowered to an
affirmative vote of a majority of all votes cast by the class of shares entitled
to vote on the matter at a meeting at which a quorum of such class is present.
This provision in the Articles reduces the more than majority requirement for
(but not limited to) each of the following corporate actions: Article
amendments, consolidation, merger, share exchange, sale of assets other than in
the regular course of business, and dissolution.

     (b) Provided that this Corporation is not a public corporation at the time
an action is taken, any action required or permitted by the Virginia Stock
Corporation Act of the Code of Virginia, as amended, to be approved of by the
shareholders may be approved without a meeting and without prior notice, if the
action is taken by shareholders who would be entitled to vote at a meeting of
holders of outstanding shares having voting power to cast not less than the
minimum number (or numbers, in case of voting by groups) of votes that would be
necessary to



                                       2


authorize or take the action at a meeting at which all shareholders entitled to
vote thereon were present and voted.

     (c) Special meetings of the stockholders may be called at any time by the
Chairman of the Board of Directors, Chief Executive Officer, President, or Board
of Directors, and shall be called by the Secretary at the written request of the
holders of at least a majority of the shares then outstanding and entitled to
vote on any issue proposed to be considered.

     (d) The stockholders of this Corporation shall not be personally liable for
the debts, liabilities or obligations of this Corporation.

     SEVENTH - POWERS OF DIRECTORS: The following provisions are hereby adopted
for the purposes of defining, limiting, and regulating the powers of the
Corporation and of the Board of Directors thereof:

     (a) The qualifications, powers, duties and tenure of office of directors
shall be prescribed and set forth in the Bylaws of this Corporation.

     (b) At all meetings of the Board of Directors, the presence of a majority
of the entire Board shall be necessary and sufficient to constitute a quorum for
the transaction of business.

     (c) The Board of Directors of the Corporation is hereby empowered to direct
issuance from time to time shares of its stock of any class, and convertible
securities, whether now or hereafter authorized by the stockholders, for such
consideration as may be deemed advisable by the Board of Directors and without
any further authorization other than the initial authorization provided in these
Articles of Incorporation of the Corporation and without any further action by
the stockholders. The Board of Directors is further empowered to determine the
preferences, limitations and relative rights, within the limits set forth in
Section 13.1-638 of the Code of Virginia, of any class of shares before the
issuance of any shares of that class, or of one or more series within a class
before the issuance of any shares of that series, and any amendments to these
Articles of Incorporation reflecting such preferences, limitations and relative
rights may be filed without shareholder action.

     (d) Rights, options or warrants for the purchase of shares of the
Corporation may be issued upon such terms and conditions and for such
consideration as may be approved by the Board of Directors. Such rights, options
or warrants may be issued to directors, officers or employees of this
Corporation, or any subsidiary thereof, or to shareholders generally, at the
discretion of the Board of Directors, and shareholder approval of such issuance
shall not be required.

     EIGHTH - INDEMNIFICATION AND LIMITATION OF LIABILITY:

     (a) The Corporation will indemnify a person who is or was made a party to
any proceeding, or is threatened to be made a party to any proceeding, including
a proceeding by or in the right of the Corporation, because the person is or was
a director, advisory director, or officer of the Corporation or because, while a
director, advisory director, or officer of the Corporation, the person is or was
serving any other legal entity in any capacity at the request of



                                       3


the Corporation, against all liabilities, fines, penalties, and claims imposed
upon or asserted against the person (including amounts paid in settlement) and
reasonable expenses incurred in the proceeding (including counsel fees), except,
such liabilities and expenses as are incurred because of the person's willful
misconduct or knowing violation of the criminal law. The right to indemnify
under this paragraph will inure to the benefit of heirs, executors and
administrators of such person.

     (b) Unless a determination has been made that indemnification is not
permissible, the Corporation will make advances and reimbursements for expenses
incurred by a director, advisory director, or officer in a proceeding upon
receipt of an undertaking from the director, advisory director, or officer to
repay the same if it is ultimately determined that the director, advisory
director, or officer is not entitled to indemnification. Such undertaking will
be an unlimited unsecured general obligation of the director, advisory director,
or officer and will be accepted without reference to his or her ability to make
repayment.

     (c) The Corporation may, to a lesser extent or to the same extent that the
Corporation is required to provide indemnification and make advances and
reimbursements for expenses to its present or former directors, advisory
directors, and officers, provide indemnification and make advances and
reimbursements for expenses to its present or former employees and agents, the
directors, advisory directors, officers, employees and agents of its affiliates,
subsidiaries and predecessor entities, and any person serving in any other legal
entity in any capacity at the request of the Corporation, and may contract in
advance to do so. The determination that indemnification under this paragraph is
permissible, the authorization of such indemnification and the evaluation as to
the reasonableness of expenses in a specific case will be made as authorized
from time to time by general or specific action of the Board of Directors, which
action may be taken before or after a claim for indemnification is made, or as
otherwise provided by law.

     (d) In any proceeding brought by a shareholder in the right of the
Corporation or brought by or on behalf of shareholders of the Corporation, no
damages may be assessed against a director, advisory director or officer of the
Corporation arising out of a single transaction, occurrence or course of
conduct, provided that this elimination of liability will not be applicable if
the director, advisory director or officer engaged in willful misconduct or a
knowing violation of the criminal law.

     (e) The provisions of this Article will be applicable from and after its
adoption, even though some or all of the underlying conduct or events relating
to the proceeding with respect to which indemnity is claimed may have occurred
before such adoption. No amendment, modification or repeal of this Article will
diminish the rights provided here to any person arising from conducts or events
occurring before the adoption of the amendment, modification or repeal.

     (f) The Corporation may purchase and maintain insurance to indemnify it
against the whole or any portion of the liability assumed by it in accordance
with this Article and may also procure insurance on behalf of any person who is
or was a director, advisory director, officer, trustee, plan administrator,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, trustee, plan administrator, employee or



                                       4


agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against any liability or expenses incurred by
such person in any such capacity or arising from the person's status as such,
whether or not the Corporation would have the power to indemnify the person
against such liability under the provisions of this Article.




                                       5


                             ARTICLES OF RESTATEMENT
                                     OF THE
                            ARTICLES OF INCORPORATION
                       OF INTELLIGENCE DATA SYSTEMS, INC.

        These Articles of Restatement are filed in accordance with Section
13.1-711 of the Code of Virginia:

     A. The name of the corporation (which is hereinafter referred to as the
"Corporation") is Intelligence Data Systems, Inc.

     B. The Corporation's Articles of Incorporation were admitted to record on
September 17, 1997 under the name IntelData, Inc. The Articles of Incorporation
were amended and restated by First Restated Articles of Incorporation filed on
December 22, 1999 and were amended by Articles of Amendment filed on March 7,
2003.

     C. The Second Restated Articles of Incorporation contain the following
amendments to the First Restated Articles of Incorporation, as amended:

        1. The number of authorized shares of stock of the Corporation shall be
increased from 60,000 voting common stock to 6,000,000 voting common stock and
40,000 non-voting common stock to 4,000,000 non-voting common stock.

        2. The voting rights of the non-voting common shareholders are further
defined as set forth in Article THIRD.

        3. Any action required or permitted to be approved of by the
shareholders may be approved without a meeting and without prior notice, if the
action is taken by shareholders who would be entitled to vote at a meeting of
holders of outstanding shares having voting power to cast not less than the
minimum number (or numbers, in case of voting by groups) of votes that would be
necessary to authorize or take the action at a meeting at which all shareholders
entitled to vote thereon were present and voted.

        4. The business purpose of the Corporation is updated in the manner set
forth in Article SECOND.

        5. The indemnification provisions are amplified in the manner set forth
in Article EIGHTH.

        6. A special meeting of the stockholders may now also be called by the
Chief Executive Officer.

     D. Each share of outstanding stock will be exchanged for ten shares of
outstanding stock immediately after the State Corporation Commission approves of
the restated Articles and included Amendments.




     E. The resolution of the Board of Directors approving of the restated
Articles and included Amendments and recommending the same to the shareholders
for their approval was by unanimous consent on August 21, 2003.

     F. There are currently 45,000 outstanding shares of voting common stock and
8,383 outstanding shares of non-voting common stock. The holders of 45,000
shares of voting common and 5,417 shares of non-voting common stock for the
restated Articles and included amendments in a meeting of the shareholders held
on September 8, 2003. The number of votes cast for the amendment(s) by each
voting group was sufficient for approval by that voting group.

                                 Intelligence Data Systems, Inc.


                                 By:  /s/ Michael Canney
                                      ---------------------
                                      Michael Canney
                                      President


Dated:  September 26, 2003


                                       2

EX-3.130

                                                                   Exhibit 3.130

                        FIRST RESTATED AND AMENDED BYLAWS

                                       OF

                         INTELLIGENCE DATA SYSTEMS, INC.

     The First Restated and Amended Bylaws, adopted by unanimous written consent
of the Board of Directors the 21st day of August 2003, and which supersede any
and all preceding Bylaws of this Corporation, are as follows:

                               ARTICLE I: OFFICES

     SECTION 1. Principal Office. The principal office shall be located in the
Commonwealth of Virginia.

     SECTION 2. Other Offices. The Corporation may also have offices at such
other places both inside and outside the Commonwealth of Virginia as the
shareholders may from time to time determine or the business of the Corporation
may require.

                      ARTICLE II: MEETING OF SHAREHOLDERS

     SECTION 1. Place of Meeting. All meetings of the shareholders shall be held
at such place inside or outside the state as may be from time to time fixed or
determined by the Board of Directors. One or more shareholders may attend by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting may hear each other.

     SECTION 2. Annual Meeting. An annual meeting of the shareholders shall be
held within five (5) months after the close of the fiscal year of the
Corporation at such time as shall be set by the Board of Directors. The
shareholders shall conduct such business as may be properly brought before the
meeting, receive the President's annual report, and elect the Board of
Directors.

     SECTION 3. Special Meeting. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the Articles
of Incorporation, may be called at any time by the Chairman of the Board of
Directors, Chief Executive Officer, President, or Board of Directors, and shall
be called by the Secretary at the written request of the holders of a majority
of the shares then outstanding and entitled to vote on any issue proposed to be
considered. Such request shall state the purpose or purposes of the proposed
meeting. Upon receipt of any such request, it shall be the duty of the Secretary
to call a special meeting of the shareholders. If the Secretary shall neglect to
issue such a call within five (5) days of the request to do so, the person or
persons making the request may issue the call themselves.

     SECTION 4. Notice. A written notice of every meeting of the shareholders,
specifying the place, date and hour and the general nature of the business to be
conducted at the meeting, shall be served to each registered shareholder
entitled to vote thereat. Such notice shall be given not less than ten (10) or
more than sixty (60) days before the meeting, except that notice of a


                                      -1-


shareholder's meeting to act on an amendment of the Articles of Incorporation, a
plan of merger or share exchange, a proposed sale of assets other than in the
regular course of business, or the dissolution of the Corporation shall be given
not less than twenty-five (25) or more than sixty (60) days before the meeting.
Notice of a special meeting shall also state the purpose or purposes for which
the meeting is called, and shall indicate that it is being issued by, or at the
direction of, the person or persons calling the meeting. If the meeting is for
one or more amendments to the Articles of Incorporation, the notice shall also
contain or be accompanied by a copy of any such amendments. If, at any meeting,
action is proposed to be taken that would, if taken, entitle shareholders to
receive payment for their shares pursuant to the Virginia Stock Corporation Act,
or would result in the removal of a director, the notice of such meeting shall
include a statement of that purpose and to that effect.

     SECTION 5. Purpose of Special Shareholder Meetings. Business transacted at
all special meetings of the shareholders shall be limited to the purposes stated
in the notice, except that such other business as may come before the meeting
may be transacted if all the shareholders of the Corporation sign a waiver of
notice and consent to the transaction of any business which may come before the
meeting.

     SECTION 6. Quorum. The holders of a majority of the issued and outstanding
shares entitled to vote, present in person or represented by proxy, shall be
requisite and shall constitute a quorum at all meetings of the shareholders for
the transaction of business, unless otherwise provided by statute, or by the
Articles of Incorporation, or by these Bylaws, with provision that such
provision may not be modified by these Bylaws. If, however, such quorum shall
not be present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or by proxy, shall have
the power to adjourn the meeting to a future date at which a quorum shall be
present and represented. At such adjourned meeting, any business may be
transacted which might have been transacted at the meeting as originally called.

     SECTION 7. Record Date for All Purposes; Shareholder Lists. The Board of
Directors of the Corporation may fix, in advance, a date as the record date for
the purpose of determining the shareholders entitled to notice of, or to vote
at, any meeting of shareholders, or shareholders entitled to receive payment of
any dividend or the allotment of any rights, or in order to make a determination
of shareholders for any other proper purpose. Such date shall not be more than
seventy (70) days, nor less than eleven (11) days prior to the date on which the
shareholders meeting is to be held or the particular action which is to be
taken. The Secretary shall prepare and make, at least ten (10) days before each
meeting of shareholders, a complete list of the shareholders entitled to vote at
the meeting, stating the address and number of shares held by each shareholder,
which list shall be subject to the inspection of any shareholder at any time
during usual business hours. Any such list shall also be available for
inspection at the time and place of the meeting by any shareholder.

     SECTION 8. Voting. In each case where the Virginia Stock Corporation Act of
the Code of Virginia, as hereafter amended from time to time, requires approval
of a particular action by the holders of more than a majority of shares entitled
to be cast for a particular action, the required consent shall be lowered to an
affirmative vote of a majority of all votes cast by the class of shares entitled
to vote on the matter at a meeting at which a quorum of such class is present.
This provision reduces the more than majority requirement for (but not limited
to) each of the



                                      -2-


following corporate actions; amendment of the Articles of Incorporation,
consolidation, merger, share exchange, sale of assets other than in the regular
course of business, and dissolution. All other decisions (excluding the election
of directors) shall be approved by the affirmative vote of a majority of all
votes cast by the class of shares entitled to vote on the matter at a meeting at
which a quorum of such class is present. All elections shall be decided as
follows: (i) in the case of two nominees for a single office, the nominee
receiving a majority of the votes cast at a duly authorized and held meeting
will be elected, and (ii) in the case of more than two nominees for a single
office, the nominee receiving the highest number of votes (a plurality of votes
cast) at a duly authorized and held meeting will be elected.

     SECTION 9. One Share, One Vote; Proxies. A shareholder entitled to vote at
a meeting may vote in person or by proxy. Every shareholder shall be entitled to
one vote for each share standing in his or her name on the Stock Transfer Ledger
as entitles the owner thereof to vote. The shares that entitle the owner thereof
to vote are designated in the Articles of Incorporation, as amended from time to
time. In elections for directors, every shareholder holding shares entitled to
vote shall vote the shares owned of record by him or her for a person to fill
each of the offices to be filled. Voting by shareholders is non-cumulative in
nature.

     Every proxy must be dated and signed by the shareholder or the
shareholder's attorney-in-fact. No proxy shall be valid after the expiration of
eleven (11) months from the day of its execution, unless otherwise provided for
therein. Every proxy is deemed revocable at the pleasure of the shareholder
executing it, except where law permits an irrevocable proxy, and the proxy
affirmatively states that it is to be irrevocable.

     SECTION 10. Written Consent in Lieu of Meeting.

         (a) Provided that this Corporation is not a public corporation at the
time an action is taken, any action required or permitted by the Virginia Stock
Corporation Act of the Code of Virginia, as amended, to be approved of by the
shareholders may be approved without a meeting and without prior notice, if the
action is taken by shareholders who would be entitled to vote at a meeting of
holders of outstanding shares having voting power to cast not less than the
minimum number (or numbers, in case of voting by groups) of votes that would be
necessary to authorize or take the action at a meeting at which all shareholders
entitled to vote thereon were present and voted. The minutes of any written
consent describing the action taken may be signed in several counterparts so
long as the required vote for such consent is otherwise complied with.

         (b) If action is taken by written unanimous consent by less than all of
the shareholders entitled to vote on the action, the Corporation shall give to
all shareholders entitled to vote written notice of the proposed action not less
than five days before the action is taken. The notice shall contain or be
accompanied by the same material that would have been required to be sent to
shareholders in a notice of meeting at which the action would have been
submitted to the shareholders for action.

                             ARTICLE III: DIRECTORS

     SECTION 1. Number and Election of Directors; Tenure. The business and
property of the Corporation, except as otherwise provided by statute, or by the
Articles of Incorporation, or by



                                      -3-


these Bylaws, shall be conducted and managed by its Board of Directors, which
shall be one (1), or such other number but not more than seven (7), as may be
designated from time to time by resolution of the shareholders entitled to elect
directors. The members of the Board of Directors shall be voted on and elected
separately at the annual meeting of shareholders according to the provisions of
ARTICLE II, SECTIONS 8 AND 9. Each director elected at any annual meeting shall
hold office until his or her successor is elected and qualifies or until he or
she shall die or resign or shall have been removed. The Board of Directors shall
keep minutes of its meetings and a full account of its transactions.

     SECTION 2. Written Unanimous Consent in Lieu of Meeting. Whenever by a
provision of statute, or of the Articles of Incorporation, or by these Bylaws,
the vote of Board of Directors is required or permitted to be taken at a meeting
thereof in connection with any corporate action, the meeting and the vote of
Board of Directors may be dispensed with, if all the directors shall consent in
writing to such corporate actions being taken and such consents are filed with
the records of Board of Director's meetings. Such unanimous written consent of
the Board of Directors may be executed in more than one counterpart.

     SECTION 3. Removal or Resignation of Directors. Any director may be removed
either with or without cause, at any time, by a vote of the shareholders holding
a majority of the shares then issued and outstanding and entitled to be cast for
the election of directors. Any director may resign his or her office at any
time, such resignation to be made in writing and delivered to the Chairman of
the Board of Directors, Chief Executive Officer, President, Board of Directors
or Secretary of the Corporation and unless otherwise specified in such notice
shall take effect immediately upon tender thereof to the Corporation.

     SECTION 4. Vacancies. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors (by not more than two in
the number of directors) shall be filled by a majority of the remaining number
of the Board of Directors, though less than a quorum. Each person so elected
shall be a director until his or her successor is elected by the shareholders,
who may make such election at the next annual meeting of the shareholders or at
any special meeting duly called for that purpose and held prior to the next
scheduled annual meeting.

     SECTION 5. Management of Corporation. The business of the Corporation shall
be managed by its Board of Directors which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute, or by
the Articles of Incorporation, or by these Bylaws, directed or required to be
exercised and done by the shareholders. The Board of Directors shall have the
authority to review and modify, amend, revise or overrule any action effected by
any officer.

     SECTION 6. Conduct of Meetings. The Board of Directors of the Corporation
may hold meetings, both regular and special, either inside or outside the
Commonwealth of Virginia. One or more directors may participate in a meeting of
the Board or of a committee of the Board by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other.



                                      -4-


     SECTION 7. Regular Meetings. A regular annual meeting of the Board of
Directors shall be held without notice other than this Bylaw immediately after
the adjournment of the annual meeting of the shareholders and in the same place
as the annual meeting of the shareholders.

     SECTION 8. Special Meetings. The Chairman of the Board of Directors, the
Chief Executive Officer or the President may call special meetings of the Board.
Special meetings of the Board may also be called by the President or Secretary
on the written request of two (2) directors delivered to them. If the President
and/or Secretary shall fail to call a meeting pursuant to a proper request
within five (5) days of the request to do so, then the directors making the
request may give notice of the meeting themselves. At least two (2) days notice
of the date, time, and place of the meeting must precede any special meeting of
the Board of Directors. Any notice does not need to specify the purposes of the
meeting or the business to be transacted. No notice need be given to any
director who attends the meeting and who does not protest the lack of notice
prior to the meeting or at the commencement of the meeting.

     SECTION 9. Quorum. At all meetings of the Board of Directors a majority of
the directors in office shall be necessary to constitute a quorum for the
transaction of business, and the acts of a majority of the directors present at
a meeting at which a quorum is present shall be the acts of the Board of
Directors, unless otherwise specifically provided for by statute or by the
Articles of Incorporation, with provision that such voting requirements may not
be modified by these Bylaws. If a quorum shall not be present at any meeting of
Board of Directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present.

     SECTION 10. Committees. The Board of Directors may, by resolution adopted
by a majority of the whole Board, designate one or more committees, each
committee to consist of one (1) or more of the directors of the Corporation and
any other person appointed by the Board. The Board may designate one (1) or more
directors or other persons as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Any
such committee, to the extent provided in such resolution or in these Bylaws,
shall have and exercise the authority of the Board of Directors in the
management of the business and affairs of the Corporation to the extent allowed
under Section 13.1-689 of the Code of Virginia. Notice and procedure of
committee meetings and business affairs shall be the same as provided for
hereunder for the Board of Directors, as applicable, and under state law. In the
absence or disqualification of any member of such committee or committees, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he, she or they constitute a quorum, may unanimously
appoint another director to act at the meeting in the place of any such absent
or disqualified member. The committees shall keep regular minutes of the
proceedings and report the same to the Board when required.

     SECTION 11. Salary. By resolution of the Board of Directors, the directors
may be paid their expenses, if any, of attendance at each meeting of the Board
of Directors, and may be paid a fixed sum for attendance at each meeting or a
stated salary for services as a director. No such payments shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor.

                                      -5-


     SECTION 12. Assent to Action. A director of the Corporation who is present
at a meeting of the directors at which action on any corporate matter is taken
shall be presumed to have assented to the action taken unless his or her dissent
shall be entered in the minutes of the meeting or unless he or she shall file
his or her written dissent to such action with the person acting as the
Secretary of the meeting before the adjournment thereof or shall forward such
dissent by registered or certified mail to the Secretary of the Corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.

     SECTION 13. Interested Transactions. No contract or other transaction
between this Corporation and any other corporation and no act of this
Corporation shall in any way be affected or invalidated by the fact that any of
the directors of this Corporation has a direct or indirect personal interest in
the transaction as provided for in Section 13.1-691 of the Code of Virginia,
provided that one of the following is true:

         (a) The material facts of the transaction and the director's interest
are disclosed or known to the Board of Directors (or a committee of the Board)
and the Board of Directors (or a committee of the Board) authorize, approve, or
ratify the transaction. Said authorization, approval or ratification must be by
the affirmative vote of a majority of the members of the Board of Directors or
any committee, who have no direct or indirect personal interest in the
transaction. Notwithstanding the foregoing to the contrary, a single director
cannot approve of any such transaction under any circumstance even if such
director constitutes a majority of the disinterested directors. If a majority of
disinterested directors vote to authorize such contract or transaction, such
majority of disinterested directors shall constitute a quorum of the Board of
Directors for the purpose set forth in this SECTION 13.

         (b) The material facts of the transaction and the director's interest
are disclosed or known to the shareholders entitled to vote and such
shareholders authorize, approve or ratify the transaction. The affirmative vote
of the holders of a majority of the voting shares is necessary to authorize,
approve or ratify the conflict of interest transaction. Shares owned by an
interested director or shares owned by an entity in which an interested director
has a material financial interest or serves as a general partner cannot be
counted. A majority of the shares, whether or not present at a meeting of
shareholders and which are owned by the disinterested shareholders, constitute a
quorum for purposes of this SECTION 13(b).

         (c) The transaction is fair and reasonable to this Corporation.

                              ARTICLE IV: OFFICERS

     SECTION 1. Required Officers. The officers of the Corporation shall consist
of one or more officers as the Board of Directors may from time to time deem
advisable. The same person may hold two or more offices, but no officer shall
execute, acknowledge or verify any instrument in more than one capacity.

     SECTION 2. Election of Officers. The directors, at each annual meeting of
the Board of Directors, shall elect the officers.



                                      -6-


     SECTION 3. Salaries. The Board of Directors shall fix the salary of the
highest ranking officer of the Corporation. Salaries to be paid other officers
and employees of the Corporation shall be fixed at the discretion of said
highest ranking officer or any other authorized officer or person; provided,
however, the salaries of all officers and employees of the Corporation are
subject to review and adjustment by the Board of Directors at any time.

     SECTION 4. Term of Office; Removal and Vacancies. The officers of the
Corporation shall hold office until their successors are chosen and qualify. Any
officer elected or appointed by the Board of Directors may be removed at any
time with or without cause by the affirmative vote of a majority of the
directors; provided, however, in no event will such removal affect the terms of
any existing employment contract or other agreement for compensation under which
a removed officer may have been employed. Any officer may resign at any time by
giving written notice of such resignation to the Chairman of the Board of
Directors, Chief Executive Officer, President or Secretary of the Corporation.
Unless otherwise specified in such written notice, such resignation shall take
effect upon receipt thereof by the Chairman of the Board of Directors or by such
officer, and the acceptance of such resignation shall not be necessary to make
it effective. The Board of Directors shall fill any vacancy occurring in any
office of the Corporation.

     SECTION 5. Shares of Other Corporations. Whenever the Corporation is the
holder of shares of any other corporation, any right or power of the Corporation
as such shareholder (including the attendance, acting and voting at
shareholders' meetings and execution of waivers, consents, proxies or other
instruments) may be exercised on behalf of the Corporation by the Chief
Executive Officer, President, any Vice President, or such other person as the
Board of Directors may authorize.

                                    PRESIDENT

     SECTION 6.

         (a) The President shall be the Chief Executive Officer of the
Corporation (unless the Board of Directors appoints a separate Chief Executive
Officer), shall preside at all meetings of the Board of Directors and
shareholders (unless the Board of Directors appoint a Chairman of the Board of
Directors in which case said Chairman of the Board of Directors shall preside),
shall have day-to-day general and active management powers over the business of
the Corporation, and shall see that all orders and resolutions of the
shareholders and Board of Directors are carried into effect. In the event that
the Board of Directors appoints a separate Chief Executive Officer, then the
President's authority as specified in these Bylaws shall be under the
supervision of the Chief Executive Officer.

         (b) The President shall have authority to sign and execute in the name
of the Corporation, all authorized deeds, mortgages, bonds, contracts or other
instruments; he or she shall annually prepare a full and true statement of the
affairs of the Corporation including a Balance Sheet and Operating Statement
which shall be submitted at the annual meeting of the stockholders, and shall be
filed within twenty (20) days thereafter at the principal office of the
Corporation.



                                      -7-


                                 VICE PRESIDENTS

     Section 7. The Vice President (if one is appointed), or if there shall be
more than one, the Vice Presidents, in the order determined by the Board of
Directors shall, in the absence or disability of the President, perform the
duties and exercise the powers of the President, and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.

                       SECRETARY AND ASSISTANT SECRETARIES

     SECTION 8.

         (a) The Secretary (if one is appointed) shall ensure that minutes of
all director, committee and shareholder meetings are recorded in a book to be
kept for that purpose. The Secretary shall give, or cause to be given, notice of
all meetings of the Board of Directors and shareholders, and shall perform such
other duties as may be prescribed by the Board of Directors. He or she shall
keep in safe custody the records and the seal of the Corporation and when
authorized by the Board of Directors, affix the seal to any instrument requiring
it and, when so affixed, it shall be attested by his or her signature or by the
signature of an Assistant Secretary.

         (b) The Secretary may sign, with the President, or a Vice President,
certificates of stock and other instruments and/or deeds of conveyance of the
Corporation; and, in general, shall perform all duties ordinarily incident to
the office of a Secretary of a corporation, and such other duties as, from time
to time, may be assigned to him or her by the Board of Directors, or by the
President, subject to the control of the Board of Directors.

     Section 9. The Assistant Secretary (if one is appointed), and if there be
more than one, the Assistant Secretaries, in the order determined by the Board
of Directors, shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the Secretary, and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.

                       TREASURER AND ASSISTANT TREASURERS

     SECTION 10.

         (a) The Treasurer (if one is appointed) shall have the custody of the
corporate funds and securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation, and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors.

         (b) The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings or when the Board of Directors so require, an account of
all his or her transactions as Treasurer and of the financial condition of the
Corporation.



                                      -8-


         (c) If required by the Board of Directors, the Treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his or her office and for the restoration to the Corporation, in case
of his or her death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in his or her
possession or under his or her control belonging to the Corporation.

         (d) The Treasurer may sign, with the President or a Vice President,
certificates of stock and other instruments and/or deeds of conveyance of the
Corporation; and, in general, shall perform all the duties ordinarily incident
to the office of a Treasurer of a corporation, and such other duties as may be
assigned to the Treasurer by the Board of Directors or by the President.

     Section 11. The Assistant Treasurer (if one is appointed), or if there
shall be more than one, the Assistant Treasurers, in the order determined by the
shareholders, shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer, and shall perform such other
duties, and have such other powers as the Board of Directors may from time to
time prescribe.

                         ARTICLE V: SHARE CERTIFICATES

     SECTION 1.

         (a) Share Certificates. Each shareholder shall be entitled to a stock
certificate or certificates certifying the number and kind of shares owned by
him or her. The certificates representing shares of the Corporation shall be in
such form as shall be adopted by the Board of Directors in conformity with
Section 13.1-647 of the Virginia Stock Corporation Act, and shall be numbered
and registered in the order issued. They shall at a minimum bear the name of the
Corporation and that it is a Virginia Corporation, the holder's name, the number
and class of shares and the designation, if any, of the series the certificate
represents, and the existence of any share transfer restrictions, including that
a copy of any applicable restrictions will be furnished upon request. Each
certificate shall be signed by (i) the Chairman of the Board, the President, or
a Vice President, and (ii) the Secretary, Treasurer, any Assistant Secretary, or
any Assistant Treasurer, and may bear the corporate seal.

         (b) Procedure for Transfer. Shares of stock shall be transferable only
on the books of the Corporation by the Secretary of the Corporation, and on
surrender of the certificate or certificates duly endorsed, and upon proper
verification that the procedures dealing with any applicable restrictions on the
transfer of corporate stock have been fully complied with or do not apply. Upon
surrender to the Corporation or the transfer agent of the Corporation of a
certificate for shares duly endorsed and accompanied with proper evidence of
succession, assignment, and compliance with any applicable restrictions on
transfer of corporate stock, or authority to transfer, it shall be the duty of
the Corporation to issue a new certificate to the person entitled thereto,
cancel the old certificate and record the transaction upon its books.

         (c) Consideration for Shares. The Board of Directors may issue shares
of stock for consideration consisting of cash, any tangible or intangible
property or labor of services



                                      -9-


actually performed for the Corporation. An obligation for future payment or
future services of an officer, director or employee of the Corporation may
constitute payment for stock if, in the judgment of the Board, the plan,
agreement or transaction providing for the purchase of stock reasonably may be
expected to benefit the Corporation.

     SECTION 2. Lost or Destroyed Certificates. The Board of Directors shall
direct a new certificate or certificates to be issued in place of any
certificate or certificates therefore issued by the Corporation alleged to have
been lost, destroyed or wrongfully taken, upon the making of an affidavit of
that fact by the person claiming the share certificate to be lost, destroyed or
wrongfully taken. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in their discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, destroyed or
wrongfully taken certificate or certificates, or his or her legal
representative, to advertise the same in such manner as it shall require and
give the Corporation a bond, or other indemnification, in such sum as it may
direct, as indemnity against any claim that may be made against the Corporation
with respect to the certificate or certificates alleged to have been lost,
destroyed or wrongfully taken.

                         ARTICLE VI: GENERAL PROVISIONS

                    INDEMNIFICATION; LIMITATION OF LIABILITY

     Section 1. The authority of the Corporation to indemnify a director or
officer and any limitation of liability shall be as specified in the Articles of
Incorporation, as amended.

                                    DIVIDENDS

     Section 2. The Board of Directors at any regular or special meeting, held
pursuant to law if any, may declare dividends upon the shares of any class of
the Corporation, subject to the provisions of the Articles of Incorporation.
Dividends may be paid in cash, in property, or in corporate shares, subject to
the provisions of the Articles of Incorporation.

     Section 3. Before payment of any dividend, there may be set aside out of
any funds of the Corporation available for dividends such sum or sums as the
Board of Directors from time to time, in their absolute discretion, think proper
as a reserve or reserves to meet contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the Corporation, or for such other
purpose as the Board of Directors shall think conducive to the interests of the
Corporation, and the Board of Directors may modify or abolish any such reserve
the manner in which it was created.

                                   FISCAL YEAR

     Section 4. The fiscal year of the Corporation shall begin on the first day
of January in each calendar year and shall end on the last day of December of
each calendar year.

                                      SEAL

     Section 5. The seal of the Corporation shall be the same as the impression
affixed below.



                                      -10-


                               BILLS, NOTES, ETC.

     Section 6. All bills payable, notes, checks, drafts, warrants or other
negotiable instruments of the Corporation shall be made in the name of the
Corporation, and shall be signed by the President of the Corporation or such
other officers as the Board of Directors from time to time by resolution direct.

     No officer or agent of the Corporation, either singly or jointly with
others, shall have the power to make any bill payable, note, check, draft, or
warrant, or other negotiable instrument, or endorse the same in the name of the
Corporation, or contract or cause to be contracted any debt or liability in the
name and on behalf of the Corporation except as herein expressly prescribed and
provided.

                                   AMENDMENTS

     SECTION 7.

         (a) By Shareholders. These Bylaws may be altered, amended, repealed, or
added to by the shareholders entitled to vote at any annual meeting or at a
special meeting called for that purpose in accordance with ARTICLE II.

         (b) By Directors. The Board of Directors shall also have power to make,
adopt, alter, amend and repeal, from time to time, Bylaws of the Corporation;
provided, however, that the shareholders entitled to vote with respect thereto
as in ARTICLE VI, SECTION 7(a) above may alter, amend or repeal Bylaws made by
the Board of Directors. Notwithstanding the foregoing, the Board of Directors
shall have no power to change the quorum for meetings of shareholders or to
change any provisions of the Bylaws with respect to the removal of directors or
the filling of vacancies in the Board resulting from the removal by the
shareholders. If any Bylaws regulating an impending election of directors is
adopted, amended or repealed by the Board of Directors, there shall be set forth
in the notice of the next meeting of shareholders for the election of directors
the Bylaws so adopted, amended or repealed, together with a concise statement of
the changes made.

                 MANNER OF PROVIDING NOTICE AND WAIVER OF NOTICE

     SECTION 8.

         (a) Manner of Providing Notice.

             (1) Any notice of an annual or special meeting of the shareholders
shall be considered given or made to a shareholder when it is personally
delivered to the shareholder, left at the shareholder's residence of usual place
of business, mailed to the stockholder at the stockholder's address as it
appears on the records of the Corporation, or transmitted to the stockholder by
electronic mail to any electronic mail address of the stockholder or by any
other electronic means, pursuant to Section 13.1-610 of the Code of Virginia.

                                      -11-


             (2) Any notice of a special meeting of the Board of Directors shall
be considered given or made as follows: where sent by hand or courier, upon
receipt unless delivery is refused in which case on the date of refusal; where
sent by U.S. Mail, first class postage pre-paid, on the fifth day following the
date of posting; or where given by facsimile or electronic mail (subject to
confirmation being sent by first class postage pre-paid and to retention by the
sending party of confirmation of successful transmission), four hours after the
time of successful transmission. Except in the event that notice is actually
received, no notice shall be effective unless it is sent to the street or postal
address, facsimile number or electronic mail address as it appears on the
Corporation's records, unless the director to receive such notice has notified
the Corporation of a change in and a replacement address or facsimile number in
accordance with the foregoing procedures and such notice is sent to the
replacement address or number in accordance with the foregoing procedures.

         (b) Waiver of Notice. Whenever under the provisions of these Bylaws or
of any statute any shareholder or director is entitled to notice of any regular
or special meeting of the Corporation, such meeting may be held without the
giving of such notice, provided every shareholder or director entitled to such
notice waives in writing the requirements of these Bylaws or the statute in
respect thereto. Such written waiver may be executed in one or more counterparts
so long as the requirements for unanimous voting have been complied with.

     The undersigned certifies that the foregoing Bylaws have been adopted as
the First Restated and Amended Bylaws of the Corporation, in accordance with the
requirements of the Corporation Law of the Commonwealth of Virginia.

DATED: 8/21/03                          /s/ Michael Canney
       ----------------------------     ---------------------------------
                                        Michael Canney
                                        Director


                                      -12-

EX-5

                                                                       Exhibit 5

                         SIMPSON THACHER & BARTLETT LLP

                              425 LEXINGTON AVENUE
                            NEW YORK, N.Y. 10017-3954
                                 (212) 455-2000
                                 --------------
                            FACSIMILE (212) 455-2502





                                                             November 23, 2005


L-3 Communications Corporation
600 Third Avenue, 34th Floor
New York, NY 10016

Ladies and Gentlemen:

         We have acted as counsel to L-3 Communications Corporation, a Delaware
corporation (the "Company"), and to the Delaware subsidiaries of the Company
named on Schedule I attached hereto (each, a "Delaware Guarantor" and
collectively, the "Delaware Guarantors") and to the non-Delaware subsidiaries of
the Company named on Schedule II attached hereto (each, a "Non-Delaware
Guarantor," collectively, the "Non-Delaware Guarantors," and taken together with
the Delaware Guarantors, the "Guarantors") in connection with the Registration
Statement on Form S-4 (the "Registration Statement") filed by the Company and
the Guarantors with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended, relating to the issuance by the
Company of $1,000,000,000 aggregate principal amount of 6 3/8% Series B Senior
Subordinated Notes due 2015 (the "Exchange Notes") and the issuance by the
Guarantors of guarantees (the "Guarantees") with respect to the Exchange Notes.
The Exchange Notes and the Guarantees will be issued under an indenture, dated
as of July 29, 2005 (the "Indenture"), among the Company, the Guarantors and The
Bank of New York, as trustee (the "Trustee"). The Exchange Notes will be offered
by the Company in exchange for $1,000,000,000 aggregate principal amount of its
outstanding 6 3/8% Senior Subordinated Notes due 2015.

         We have examined the Registration Statement and the Indenture, which
has been incorporated by reference as an exhibit to the Registration Statement.
We also have examined the originals, or duplicates or certified or conformed
copies, of such records, agreements, documents and other instruments and have
made such other investigations as we have deemed relevant and necessary in
connection with the opinions hereinafter set forth. As to questions of fact
material to this opinion, we have relied upon certificates or




                                        -2-

comparable documents of public officials and of officers and representatives of
the Company and the Guarantors.

         In rendering the opinions set forth below, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as duplicates or certified
or conformed copies and the authenticity of the originals of such latter
documents. We also have assumed that the Indenture is the valid and legally
binding obligation of the Trustee.

         We have assumed further that (1) the Non-Delaware Guarantors have duly
authorized, executed and delivered the Indenture and the Guarantees, (2) the
execution, delivery and performance by the Non-Delaware Guarantors of the
Indenture and the Guarantees do not and will not violate the laws of the
Non-Delaware Guarantors' respective states of formation or any other applicable
laws (excepting the laws of the State of New York and the federal laws of the
United States) and (3) each of the Non-Delaware Guarantors is duly formed and
validly existing under the laws of its respective jurisdiction of organization.

         Based upon the foregoing, and subject to the qualifications,
assumptions and limitations stated herein, we are of the opinion that:

                    1. When the Exchange Notes have been duly executed,
             authenticated, issued and delivered in accordance with the
             provisions of the Indenture upon the exchange, the Exchange Notes
             will constitute valid and legally binding obligations of the
             Company enforceable against the Company in accordance with their
             terms.

                    2. When (a) the Exchange Notes have been duly executed,
             authenticated, issued and delivered in accordance with the
             provisions of the Indenture upon the exchange and (b) the
             Guarantees have been duly endorsed as a notation on the Exchange
             Notes, the Guarantees will constitute valid and legally binding
             obligations of the Guarantors enforceable against the Guarantors in
             accordance with their terms.

         Our opinions set forth above are subject to (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, (ii)
general equitable principles (whether considered in a proceeding in equity or at
law) and (iii) an implied covenant of good faith and fair dealing.

         We do not express any opinion herein concerning any law other than the
law of the State of New York, the federal law of the United States, the Delaware
General Corporation Law (including the statutory provisions, all applicable
provisions of the Delaware Constitution and reported judicial decisions




                                        -3-

interpreting the foregoing), the Delaware Limited Liability Company Act and the
Delaware Revised Uniform Limited Partnership Act.

         We hereby consent to the filing of this opinion letter as Exhibit 5 to
the Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus included in the Registration Statement.

                                           Very truly yours,

                                           /s/ Simpson Thacher & Bartlett LLP

                                           SIMPSON THACHER & BARTLETT LLP








                                   SCHEDULE I

DELAWARE GUARANTORS
- -------------------

Broadcast Sports Inc., a Delaware corporation
Henschel Inc., a Delaware corporation
Hygienetics Environmental Services, Inc., a Delaware corporation
KDI Precision Products, Inc., a Delaware corporation
L-3 Communications AIS GP Corporation, a Delaware corporation
L-3 Communications Avionics Systems, Inc., a Delaware corporation
L-3 Communications Aydin Corporation, a Delaware corporation
L-3 Communications CE Holdings, Inc., a Delaware corporation
L-3 Communications Electron Technologies, Inc., a Delaware corporation
L-3 Communications ESSCO, Inc., a Delaware corporation
L-3 Communications Flight Capital LLC, a Delaware limited liability company
L-3 Communications Flight International Aviation LLC, a Delaware limited
    liability company
L-3 Communications ILEX Systems, Inc., a Delaware corporation
L-3 Communications Integrated Systems L.P., a Delaware limited partnership
L-3 Communications Investments Inc., a Delaware corporation
L-3 Communications Klein Associates, Inc., a Delaware corporation
L-3 Communications MAS (US) Corporation, a Delaware corporation
L-3 Communications Security and Detection Systems, Inc., a Delaware corporation
L-3 Communications Titan Corporation, a Delaware corporation
L-3 Communications Vector International Aviation LLC, a Delaware limited
    liability company
L-3 Communications Vertex Aerospace, LLC, a Delaware limited liability company
Lincom Wireless, Inc., a Delaware corporation
MPRI, Inc., a Delaware corporation
Pac Ord Inc., a Delaware corporation
Power Paragon, Inc., a Delaware corporation
Shellco, Inc., a Delaware corporation
SPD Electrical Systems, Inc., a Delaware corporation
SPD Switchgear Inc., a Delaware corporation
Titan Scan Technologies Corporation, a Delaware corporation
Wescam Air Ops Inc., a Delaware corporation
Wescam Air Ops LLC, a Delaware limited liability company
Wescam Holdings (US) Inc., a Delaware corporation
Wescam LLC, a Delaware limited liability company






                                   SCHEDULE II

NON-DELAWARE GUARANTORS
- -----------------------
Apcom, Inc., a Maryland corporation
D.P. Associates Inc., a Virginia corporation
Electrodynamics, Inc., an Arizona corporation
Intelligence Data Systems, Inc., a Virginia corporation
International Systems, LLC, a California limited liability company
Interstate Electronics Corporation, a California corporation
L-3 Communications Advanced Laser Systems Technology, Inc., a Florida
    corporation
L-3 Communications Aeromet, Inc., an Oregon corporation
L-3 Communications Avisys Corporation, a Texas corporation
L-3 Communications Cincinnati Electronics Corporation, an Ohio corporation
L-3 Communications CSI, Inc., a California corporation
L-3 Communications EO/IR, Inc., a Florida corporation
L-3 Communications Government Services, Inc., a Virginia corporation
L-3 Communications InfraredVision Technology Corporation, a California
    corporation
L-3 Communications Mobile-Vision, Inc., a New Jersey corporation
L-3 Communications Sonoma EO, Inc., a California corporation
L-3 Communications Westwood Corporation, a Nevada corporation
MCTI Acquisition Corporation, a Maryland corporation
Microdyne Communications Technologies Incorporated, a Maryland corporation
Microdyne Corporation, a Maryland corporation
Microdyne Outsourcing Incorporated, a Maryland corporation
ProCom Services, Inc., a California corporation
SYColeman Corporation, a Florida corporation
Titan Facilities, Inc., a Virginia corporation
Troll Technology Corporation, a California corporation
Wolf Coach, Inc., a Massachusetts corporation

EX-21

                                                                      EXHIBIT 21

               L-3 COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES




NAME OF SUBSIDIARY                                                       STATE OF ORGANIZATION
- ------------------                                                       ---------------------

6292151 Canada Inc.                                                      Canada

ACSS - NZSC Limited                                                      New Zealand

Apcom, Inc.                                                              Maryland

Army Fleet Support, LLC                                                  Delaware

Aviation Communications & Surveillance Systems, LLC                      Delaware

Aydin Foreign Sales Limited                                              Guam

Aydin Yazilim ve Elektronik Sanayi A.S.                                  Turkey

Broadcast Sports Inc.                                                    Delaware

Canco, LLC                                                               Delaware

Cayenta, Inc.                                                            Delaware

Cayenta Operating LLC                                                    Delaware

Datron Transworld Communications International Ltd.                      U.S. Virgin Islands

D.P. Associates Inc.                                                     Virginia

ELAC Nautik Unterstutzungska(beta)e GmbH                                 Federal Republic of Germany

Electrodynamics, Inc.                                                    Arizona

Electronic Space Systems International Corp.                             U.S. Virgin Islands

ESSCO Collins Limited                                                    Republic of Ireland

EuroAtlas Gesellschaft fur Leistungselektronik mbH                       Federal Republic of Germany

FAST Holdings Limited                                                    United Kingdom

Forfeiture Support Associates, LLC                                       Delaware

Global Military Aircraft Systems, LLC                                    Delaware

Henschel Inc.                                                            Delaware




                                                                                                    2



Honeywell TCAS Inc.                                                      Delaware

Horizons Technology International, Ltd.                                  Barbados

Hygienetics Environmental Services, Inc.                                 Delaware

Intelligence Data Systems, Inc.                                          Virginia

International Systems LLC                                                California

Interstate Electronics Corporation                                       California

JovyAtlas Elektrische Umformtechnik GmbH                                 Federal Republic of Germany

KDI Precision Products, Inc.                                             Delaware

L-3 Canada Acquisition Inc.                                              Canada

L-3 Communications Advanced Laser Systems Technology, Inc.               Florida

L-3 Communications Aeromet, Inc.                                         Oregon

L-3 Communications AIS GP Corporation                                    Delaware

L3 Communications Australia Proprietary Limited                          Australia

L3 Communications Australia Pty Ltd                                      Australia

L-3 Communications Avionics Systems, Inc.                                Delaware

L-3 Communications Avisys Corporation                                    Texas

L-3 Communications Aydin Corporation                                     Delaware

L-3 Communications Canada Inc.                                           Canada

L-3 Communications CE Holdings, Inc.                                     Delaware

L-3 Communications Cincinnati Electronics Corporation                    Ohio

L-3 Communications Corporation                                           Delaware

L-3 Communications CSI, Inc.                                             California

L-3 Communications ELAC Nautik GmbH                                      Federal republic of Germany

L-3 Communications Electron Technologies, Inc.                           Delaware

L-3 Communications Electronic Systems Inc.                               Canada



                                                                                                    3




L-3 Communications EO/IR, Inc.                                           Florida

L-3 Communications ESSCO, Inc.                                           Delaware

L-3 Communications Flight Capital LLC                                    Delaware

L-3 Communications Flight International Aviation LLC                     Delaware

L-3 Communications Global Network Solutions U.K. Ltd.                    United Kingdom

L-3 Communications Government Services, Inc.                             Virginia

L-3 Communications Holding GmbH                                          Federal Republic of Germany

L-3 Communications Hong Kong Limited                                     Hong Kong

L-3 Communications ILEX Systems, Inc.                                    Delaware

L-3 Communications India Private Limited                                 India

L-3 Communications InfraredVision Technology Corporation                 California

L-3 Communications Integrated Systems L.P.                               Delaware

L-3 Communications Investments Inc.                                      Delaware

L-3 Communications Italy S.r.l.                                          Republic of Italy

L-3 Communications Klein Associates, Inc.                                Delaware

L-3 Communications Korea Corporation                                     South Korea

L-3 Communications Malaysia Sdn. Bhd.                                    Malaysia

L-3 Communications MAPPS Inc.                                            Canada

L-3 Communications MAPPS Investments, LLC                                Delaware

L-3 Communications MAPPS Malaysia Sdn.Bhd.                               Malaysia

L-3 Communications Marine Holdings AS                                    Norway

L-3 Communications Marine Systems UK Ltd.                                United Kingdom

L-3 Communications MAS (Canada) Inc.                                     Canada

L-3 Communications MAS (US) Corporation                                  Delaware

L-3 Communications Mobile-Vision, Inc.                                   New Jersey



                                                                                                    4




L-3 Communications Navigation AS                                         Norway

L-3 Communications Security and Detection Systems, Inc.                  Delaware

L-3 Communications Singapore Pte Ltd                                     Singapore

L-3 Communications Sonoma EO, Inc.                                       California

L-3 Communications Titan Corporation                                     Delaware

L-3 Communications U.K. Ltd.                                             United Kingdom

L-3 Communications Valmarine AS                                          Norway

L-3 Communications Vector International Aviation LLC                     Delaware

L-3 Communications Vertex Aerospace LLC                                  Delaware

L-3 Communications Westwood Corporation                                  Nevada

LinCom Wireless, Inc.                                                    Delaware

L-Tres Comunicaciones Costa Rica, S.A.                                   Costa Rica

MCTI Acquisition Corporation                                             Maryland

Medical Education Technologies, Inc.                                     Delaware

Microdyne Communications Technologies Incorporated                       Maryland

Microdyne Corporation                                                    Maryland

Microdyne Ltd.                                                           U.S. Virgin Islands

Microdyne Outsourcing Incorporated                                       Maryland

MPRI, Inc.                                                               Delaware

MPRI International Services, Ltd.                                        Bermuda

MVT Equity LLC                                                           Delaware

Narda Safety Test Solutions GmbH                                         Federal Republic of Germany

Pac Ord Inc.                                                             Delaware

PMM Costruzioni Electtroniche Centro Misure Radioelettriche S.r.l.       Republic of Italy

Power Paragon (Deutschland) Holding GmbH                                 Federal Republic of Germany



                                                                                                    5



Power Paragon, Inc.                                                      Delaware

Procom Services, Inc.                                                    California

Shellco, Inc.                                                            Delaware

Spar Aerospace Limited                                                   Canada

SPD Electrical Systems, Inc.                                             Delaware

SPD Switchgear Inc.                                                      Delaware

Storm Control Systems Limited                                            United Kingdom

SYColeman Corporation                                                    Florida

Titan Africa, Inc.                                                       Delaware

Titan Deutschland GmbH                                                   Germany

Titan Facilities, Inc.                                                   Virginia

Titan Italia Srl                                                         Republic of Italy

Titan Scan Technologies Corporation                                      Delaware

Titan Systems Solutions UK Ltd.                                          United Kingdom

Titan Wireless Afripa Holding, Inc.                                      Delaware

Titan Wireless, Inc.                                                     Delaware

Troll Technology Corporation                                             California

Wescam Air Ops Inc.                                                      Delaware

Wescam Air Ops LLC                                                       Delaware

Wescam Asia PTE Ltd.                                                     Singapore

Wescam Europe Limited                                                    United Kingdom

Wescam Financial (U.S.A.) LLC                                            Delaware

Wescam Holdings (US) Inc.                                                Delaware

Wescam Inc.                                                              Canada

Wescam LLC                                                               Delaware



                                                                                                    6



Wolf Coach, Inc.                                                         Massachusetts

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the use in this Registration Statement on Form S-4 of L-3 Communications Corporation and subsidiaries of our report dated March 15, 2005, except for Notes 1 and 18, as to which the date is November 1, 2005, relating to the consolidated financial statements, management's assessments of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting of L-3 Communications Holdings, Inc. and L-3 Communications Corporation and subsidiaries, which appears in such Registration Statement. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
New York, New York
November 23, 2005

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the use of our report dated March 16, 2005 with respect to the consolidated balance sheets of The Titan Corporation as of December 31, 2004 and 2003, and the related consolidated statements of operations, stockholders' equity, cash flows and financial statement schedule for each of the years in the three-year period ended December 31, 2004, included herein and to the reference to our firm under the heading "Experts" in the Form S-4 registration statement of L-3 Communications Corporation.

Our report on the consolidated financial statements states that on January 1, 2002, the Company changed its method of accounting for goodwill.

/s/ KPMG LLP

San Diego, California

November 21, 2005

EX-25.1

                                                                      Exhibit 25
================================================================================

                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|

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

                              THE BANK OF NEW YORK

               (Exact name of trustee as specified in its charter)

New York                                                     13-5160382
(State of incorporation                                      (I.R.S. employer
if not a U.S. national bank)                                 identification no.)

One Wall Street, New York, N.Y.                              10286
(Address of principal executive offices)                     (Zip code)

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

                         L-3 COMMUNICATIONS CORPORATION
               (Exact name of obligor as specified in its charter)

Delaware                                                     13-3937436
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                                   Apcom, Inc.
               (Exact name of obligor as specified in its charter)

Maryland                                                     52-1291447
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)





                              Broadcast Sports Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     52-1977327
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                              D.P. Associates Inc.
                     (Exact name of obligor as specified in
                                  its charter)

Virginia                                                     54-1389520
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                              Electrodynamics, Inc.
               (Exact name of obligor as specified in its charter)

Arizona                                                      36-3140903
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                                 Henschel, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     23-2554418
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                    Hygienetics Environmental Services, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     13-3992505
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                                      -2-




                         Intelligence Data Systems, Inc.
               (Exact name of obligor as specified in its charter)

Virginia                                                     54-1867272
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                           International Systems, LLC
               (Exact name of obligor as specified in its charter)

California                                                   33-0700074
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                       Interstate Electronics Corporation
               (Exact name of obligor as specified in its charter)

California                                                   5-1912832
(State or other jurisdiction of                              I.R.S. employer
incorporation or organization)                               dentification no.)


                          KDI Precision Products, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     31-0740721
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                        L-3 Communications Aeromet, Inc.
               (Exact name of obligor as specified in its charter)

Oregon                                                       73-1291165
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                                      -3-



                      L-3 Communications AIS GP Corporation
               (Exact name of obligor as specified in its charter)

Delaware                                                     13-4137187
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


           L-3 Communications Advanced Laser Systems Technology, Inc.
               (Exact name of obligor as specified in its charter)

Florida                                                      59-2808669
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                    L-3 Communications Avionics Systems, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     38-1865601
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                      L-3 Communications Avysis Corporation
               (Exact name of obligor as specified in its charter)

Texas                                                        74-2616165
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                      L-3 Communications Aydin Corporation
               (Exact name of obligor as specified in its charter)

Delaware                                                     23-1686808
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                                      -4-


                      L-3 Communications CE Holdings, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     54-1098648
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


              L-3 Communications Cincinnati Electronics Corporation
               (Exact name of obligor as specified in its charter)

Ohio                                                         31-0826926
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                          L-3 Communications CSI, Inc.
               (Exact name of obligor as specified in its charter)

California                                                   77-0365380
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                         L-3 Communications EO/IR, Inc.
               (Exact name of obligor as specified in its charter)

Florida                                                      59-3316817
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                 L-3 Communications Electron Technologies, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     91-2046609
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                                      -5-



                         L-3 Communications ESSCO, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     04-2281486
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                      L-3 Communications Flight Capital LLC
               Exact name of obligor as specified in its charter)

Delaware                                                     75-3089735
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


              L-3 Communications Flight International Aviation LLC
               (Exact name of obligor as specified in its charter)

Delaware                                                     02-0654591
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                  L-3 Communications Government Services, Inc.
               (Exact name of obligor as specified in its charter)

Virginia                                                     54-1349668
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                      L-3 Communications ILEX Systems, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     13-3992952
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                                      -6-



            L-3 Communications InfraredVision Technology Corporation
               (Exact name of obligor as specified in its charter)

California                                                   77-0534649
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                   L-3 Communications Integrated Systems L.P.
               (Exact name of obligor as specified in its charter)

Delaware                                                     03-0391841
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                       L-3 Communications Investments Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     51-0260723
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                    L-3 Communications Klein Associates, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     02-0277515
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                     L-3 Communications MAS (US) Corporation
               (Exact name of obligor as specified in its charter)

Delaware                                                     55-0765280
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                                      -7-



                     L-3 Communications Mobile-Vision, Inc.
               (Exact name of obligor as specified in its charter)

New Jersey                                                   22-2893537
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


             L-3 Communications Security and Detection Systems, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     04-3054475
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                       L-3 Communications Sonoma EO, Inc.
               (Exact name of obligor as specified in its charter)

California                                                   68-0439616
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                      L-3 Communications Titan Corporation
               (Exact name of obligor as specified in its charter)

Delaware                                                     95-2588754
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


              L-3 Communications Vector International Aviation LLC
               (Exact name of obligor as specified in its charter)

Delaware                                                     42-1569647
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                                      -8-



                     L-3 Communications Vertex Aerospace LLC
               (Exact name of obligor as specified in its charter)

Delaware                                                     64-0941176
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                     L-3 Communications Westwood Corporation
               (Exact name of obligor as specified in its charter)

Nevada                                                       87-0430944
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                              Lincom Wireless, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     95-4832760
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                          MCTI Acquisition Corporation
               (Exact name of obligor as specified in its charter)

Maryland                                                     13-4109777
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


               Microdyne Communications Technologies Incorporated
               (Exact name of obligor as specified in its charter)

Maryland                                                     59-3500774
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                                      -9-



                              Microdyne Corporation
               (Exact name of obligor as specified in its charter)

Maryland                                                     52-0856493
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                       Microdyne Outsourcing Incorporated
               (Exact name of obligor as specified in its charter)

Maryland                                                     33-0797639
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                                   MPRI, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     54-1439937
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                                  Pac Ord Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     23-2523436
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                               Power Paragon, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     33-0638510
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                                      -10-



                              ProCom Services, Inc.
               (Exact name of obligor as specified in its charter)

California                                                   33-0427938
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                                  Shellco, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     33-0931737
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                          SPD Electrical Systems, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     23-2457758
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                              SPD Switchgear, Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     23-2510039
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                              SYColeman Corporation
               (Exact name of obligor as specified in its charter)

Florida                                                      59-2039476
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                                      -11-




                             Titan Facilities, Inc.
               (Exact name of obligor as specified in its charter)

Virginia                                                     54-0918681
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                       Titan Scan Technologies Corporation
               (Exact name of obligor as specified in its charter)

Delaware                                                     33-0937905
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                          Troll Technology Corporation
               (Exact name of obligor as specified in its charter)

California                                                   95-4552257
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                               Wescam Air Ops Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     52-2304424
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                               Wescam Air Ops LLC
               (Exact name of obligor as specified in its charter)

Delaware                                                     52-2295476
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)



                                      -12-



                            Wescam Holdings (US) Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                     51-0376332
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                                   Wescam LLC
               (Exact name of obligor as specified in its charter)

Delaware                                                     91-2077866
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


                                Wolf Coach, Inc.
               (Exact name of obligor as specified in its charter)

Massachusetts                                                04-2482502
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


600 Third Avenue
New York, New York                                           10016
(Address of principal executive offices)                     (Zip code)

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

               6 3/8% Series B Senior Subordinated Notes due 2015
                       (Title of the indenture securities)

================================================================================


                                      -13-



1.   GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

     (A)   NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
           IT IS SUBJECT.

- --------------------------------------------------------------------------------
                       Name                                    Address
- --------------------------------------------------------------------------------

     Superintendent of Banks of the State     One State Street, New York, N.Y.
     of New York                              10004-1417, and Albany, N.Y. 12223

     Federal Reserve Bank of New York         33 Liberty Street, New York, N.Y.
                                              10045

     Federal Deposit Insurance Corporation    Washington, D.C. 20429

     New York Clearing House Association      New York, New York 10005


     (B)   WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

     Yes.

2.   AFFILIATIONS WITH OBLIGOR.

     IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
     AFFILIATION.

     None.

16.  LIST OF EXHIBITS.

     EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
     INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
     7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
     229.10(D).

     1.    A copy of the Organization Certificate of The Bank of New York
           (formerly Irving Trust Company) as now in effect, which contains the
           authority to commence business and a grant of powers to exercise
           corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
           filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
           Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to
           Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1
           to Form T-1 filed with Registration Statement No. 333-121195.)

     4.    A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
           filed with Registration Statement No. 333-121195.)


                                      -14-


     6.    The consent of the Trustee required by Section 321(b) of the Act.
           (Exhibit 6 to Form T-1 filed with Registration Statement No.
           333-106702.)

     7.    A copy of the latest report of condition of the Trustee published
           pursuant to law or to the requirements of its supervising or
           examining authority.






                                      -15-



                                    SIGNATURE

         Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 11th day of November, 2005.


                                                THE BANK OF NEW YORK


                                                By: /S/    VAN K. BROWN
                                                    ----------------------------
                                                    Name:  VAN K. BROWN
                                                    Title: VICE PRESIDENT




                                      -16-




                                                                       EXHIBIT 7
                                                                       ---------

- --------------------------------------------------------------------------------
                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 2005,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.

                                                               Dollar Amounts
ASSETS                                                           In Thousands

Cash and balances due from depository institutions:
   Noninterest-bearing balances and currency and coin.             $2,753,000
   Interest-bearing balances..........................              6,045,000
Securities:
   Held-to-maturity securities........................              2,183,000
   Available-for-sale securities......................             21,741,000
Federal funds sold and securities purchased under
   agreements to resell
   Federal funds sold in domestic offices.............              5,486,000
   Securities purchased under agreements to resell....                192,000
Loans and lease financing receivables:
   Loans and leases held for sale.....................                      0
   Loans and leases, net of unearned income...........             32,953,000
   LESS: Allowance for loan and lease losses..........                558,000
   Loans and leases, net of unearned income and
      allowance.......................................             32,395,000
Trading Assets........................................              6,114,000
Premises and fixed assets (including capitalized
   leases)............................................                812,000
Other real estate owned...............................                      0
Investments in unconsolidated subsidiaries and
   associated companies...............................                278,000
Customers' liability to this bank on acceptances
   outstanding........................................                 68,000
Intangible assets:
   Goodwill...........................................              2,039,000
   Other intangible assets............................                736,000




Other assets..........................................              5,237,000
                                                                  -----------
Total assets..........................................            $86,079,000
                                                                  ===========
LIABILITIES
Deposits:
   In domestic offices................................            $38,768,000
   Noninterest-bearing................................             18,417,000
   Interest-bearing...................................             20,351,000
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs...........................             26,246,000
   Noninterest-bearing................................                462,000
   Interest-bearing...................................             25,784,000
Federal funds purchased and securities sold under
     agreements to repurchase
   Federal funds purchased in domestic offices........              1,224,000
   Securities sold under agreements to repurchase.....                126,000
Trading liabilities...................................              2,927,000
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases)..........................              1,245,000
Not applicable
Bank's liability on acceptances executed and
   outstanding........................................                 69,000
Subordinated notes and debentures.....................              1,440,000
Other liabilities.....................................              5,976,000
                                                                  -----------
Total liabilities.....................................            $78,021,000
                                                                  ===========
Minority interest in consolidated subsidiaries........                139,000

EQUITY CAPITAL
Perpetual preferred stock and related surplus.........                      0
Common stock..........................................              1,135,000
Surplus (exclude all surplus related to preferred
   stock).............................................              2,089,000
Retained earnings.....................................              4,716,000
Accumulated other comprehensive income................                -21,000
Other equity capital components.......................                      0
Total equity capital..................................              7,919,000
                                                                  -----------





Total liabilities, minority interest, and equity
   capital............................................            $86,079,000
                                                                  ===========


         I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.

                                                        Thomas J. Mastro,
                                           Senior Vice President and Comptroller

         We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has been examined by
us, and to the best of our knowledge and belief has been prepared in conformance
with the instructions and is true and correct.


Thomas A. Renyi
Gerald L. Hassell
Alan R. Griffith                                                  Directors


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

EX-99.1

Exhibit 99.1

LETTER OF TRANSMITTAL
for
$1,000,000,000
6 3/8% Senior Subordinated Notes Due 2015
of
L-3 COMMUNICATIONS CORPORATION

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON                                     , 2005 (THE ‘‘EXPIRATION DATE’’)
UNLESS EXTENDED BY
L-3 COMMUNICATIONS CORPORATION

The Exchange Agent Is:

THE BANK OF NEW YORK

By Mail: The Bank of New York Reorganization Unit 101 Barclay Street-7 East New York, NY 10286 Attention:				By Facsimile: The Bank of New York Attention:				By Hand or Overight Delivery: The Bank of New York Reorganization Unit 101 Barclay Street Lobby Level-Corp. Trust Window New York, NY 10286 Attention:
				Confirm Receipt of Facsimile by telephone

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

The undersigned acknowledges receipt of the Prospectus dated                                , 2005 (the ‘‘Prospectus’’) of L-3 Communications Corporation (the ‘‘Company’’), and this Letter of Transmittal (the ‘‘Letter of Transmittal’’), which together describe the Company’s offer (the ‘‘Exchange Offer’’) to exchange its 6 3/8% Series B Senior Subordinated Notes due 2015, which have been registered under the Securities Act of 1933, as amended (the ‘‘Securities Act’’) (the ‘‘Exchange Notes’’), for each of its 6 3/8% Senior Subordinated Notes due 2015 (the ‘‘Outstanding Notes’’ and, together with the Exchange Notes, the ‘‘Notes’’) from the holders thereof.

The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Outstanding Notes for which they may be exchanged pursuant to the Exchange Offer, except that the Exchange Notes are freely transferable by holders thereof (except as provided herein or in the Prospectus) and are not subject to any covenant regarding registration under the Securities Act.

YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.

The undersigned has checked the appropriate boxes below and signed this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer.

PLEASE READ THE ENTIRE
LETTER OF TRANSMITTAL AND THE PROSPECTUS
CAREFULLY BEFORE CHECKING ANY BOX BELOW.

List below the Outstanding Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers and aggregate principal amounts should be listed on a separate signed schedule affixed hereto.

DESCRIPTION OF OUTSTANDING NOTES TENDERED HEREWITH

Name(s) and Address(es) of Registered Holder(s) (Please fill in)

Certificate Number(s)*

Aggregate Principal Amount Represented by Outstanding Notes*

Principal Amount Tendered**

Total

*	Need not be completed by book-entry holders.

**	Unless otherwise indicated, the holder will be deemed to have tendered the full aggregate principal amount represented by such Outstanding Notes. See Instruction 2.

Holders of Outstanding Notes whose Outstanding Notes are not immediately available or who cannot deliver all other required documents to the Exchange Agent on or prior to the Expiration Date or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Outstanding Notes according to the guaranteed delivery procedures set forth in the Prospectus.

Unless the context otherwise requires, the term ‘‘holder’’ for purposes of this Letter of Transmittal means any person in whose name Outstanding Notes are registered or any other person who has obtained a properly completed bond power from the registered holder or any person whose Outstanding Notes are held of record by The Depository Trust Company (‘‘DTC’’).

□	CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:

	Name of Registered Holder(s): ______________________________________________________

	Name of Eligible Institution that Guaranteed Delivery: ____________________________________

	Date of Execution of Notice of Guaranteed Delivery: ______________________________________

	If Delivered by Book-Entry Transfer: __________________________________________________

	Name of Tendering Institution: ______________________________________________________

	Account Number: ________________________________________________________________

	Transaction Code Number: __________________________________________________________

□	CHECK HERE IF EXCHANGE NOTES ARE TO BE DELIVERED TO A PERSON OTHER THAN THE PERSON SIGNING THIS LETTER OF TRANSMITTAL:

	Name: ____________________________________________________________________

	Address: ____________________________________________________________________

2

□	CHECK HERE IF EXCHANGE NOTES ARE TO BE DELIVERED TO AN ADDRESS DIFFERENT FROM THAT LISTED ELSEWHERE IN THIS LETTER OF TRANSMITTAL:

	Name: ____________________________________________________________________

	Address: ____________________________________________________________________

□	CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED OUTSTANDING NOTES FOR YOUR OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO:

	Name: ____________________________________________________________________

	Address: ____________________________________________________________________

If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an ‘‘underwriter’’ within the meaning of the Securities Act. A broker-dealer may not participate in the Exchange Offer with respect to Outstanding Notes acquired other than as a result of market-making activities or other trading activities. Any holder who is an ‘‘affiliate’’ of the Company or who has an arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offer, or any broker-dealer who purchased Outstanding Notes from the Company to resell pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act must comply with the registration and prospectus delivery requirements under the Securities Act.

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

3

Ladies and Gentlemen:

Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the principal amount of the Outstanding Notes indicated above. Subject to, and effective upon, the acceptance for exchange of all or any portion of the Outstanding Notes tendered herewith in accordance with the terms and conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Outstanding Notes as are being tendered herewith. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its true and lawful agent and attorney in-fact of the undersigned (with full knowledge that the Exchange Agent also acts as the agent of the Company, in connection with the Exchange Offer) to cause the Outstanding Notes to be assigned, transferred and exchanged.

The undersigned represents and warrants that it has full power and authority to tender, exchange, assign and transfer the Outstanding Notes and to acquire Exchange Notes issuable upon the exchange of such tendered Outstanding Notes, and that, when the same are accepted for exchange, the Company will acquire good and unencumbered title to the tendered Outstanding Notes, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The undersigned also warrants that it will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the exchange, assignment and transfer of the tendered Outstanding Notes or transfer ownership of such Outstanding Notes on the account books maintained by the book-entry transfer facility. The undersigned further agrees that acceptance of any and all validly tendered Outstanding Notes by the Company and the issuance of Exchange Notes in exchange therefor shall constitute performance in full by the Company of its obligations under the Registration Rights Agreement, dated as of July 29, 2005 (the ‘‘Registration Rights Agreement’’), by and among the Company, the guarantors named therein, and Lehman Brothers Inc., Banc of America Seurities LLC, Bear, Stearns & Co. Inc. and Credit Suisse First Boston LLC, as representatives of the initial purchasers named therein, and that the Company shall have no further obligations or liabilities thereunder except as provided in the first paragraph of Section 4 of such agreement. The undersigned will comply with its obligations under the Registration Rights Agreement. The undersigned has read and agrees to all terms of the Exchange Offer. The Exchange Offer is subject to certain conditions as set forth in the Prospectus under the caption ‘‘The Exchange Offer—Certain Conditions to the Exchange Offer.’’ The undersigned recognizes that as a result of these conditions (which may be waived, in whole or in part, by the Company), as more particularly set forth in the Prospectus, the Company may not be required to exchange any of the Outstanding Notes tendered hereby and, in such event, the Outstanding Notes not exchanged will be returned to the undersigned at the address shown below unless indicated otherwise above, promptly following the expiration or termination of the Exchange Offer. In addition, the Company may amend the Exchange Offer at any time prior to the Expiration Date if any of the conditions set under ‘‘The Exchange Offer—Certain Conditions to the Exchange Offer’’ occur.

The undersigned understands that tenders of Outstanding Notes pursuant to any one of the procedures described in the Prospectus and in the instructions attached hereto will, upon the Company’s acceptance for exchange of such tendered Outstanding Notes, constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. The undersigned recognizes that, under circumstances set forth in the Prospectus, the Company may not be required to accept for exchange any of the Outstanding Notes.

By tendering Outstanding Notes and executing this Letter of Transmittal, the undersigned represents that Exchange Notes acquired in the exchange will be obtained in the ordinary course of business of the undersigned, that the undersigned has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of such Exchange Notes, that the undersigned is not an ‘‘affiliate’’ of the Company within the meaning of Rule 405 under the Securities Act and that if the undersigned or the person receiving such Exchange Notes, whether or not such person is the undersigned, is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes. If the undersigned or the person receiving such Exchange Notes, whether or not such person is the undersigned, is a broker-dealer that will receive Exchange Notes for its

4

own account in exchange for Outstanding Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an ‘‘underwriter’’ within the meaning of the Securities Act. If the undersigned is a person in the United Kingdom, the undersigned represents that its ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business.

Any holder of Outstanding Notes using the Exchange Offer to participate in a distribution of the Exchange Notes (i) cannot rely on the position of the staff of the Securities and Exchange Commission enunciated in its interpretive letter with respect to Exxon Capital Holdings Corporation (available April 13, 1989) or similar interpretive letters and (ii) must comply with the registration and prospectus requirements of the Securities Act in connection with a secondary resale transaction.

All authority herein conferred or agreed to be conferred shall survive the death, bankruptcy or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Tendered Outstanding Notes may be withdrawn at any time prior to the Expiration Date in accordance with the terms of this Letter of Transmittal. Except as stated in the Prospectus, this tender is irrevocable.

Certificates for all Exchange Notes delivered in exchange for tendered Outstanding Notes and any Outstanding Notes delivered herewith but not exchanged, and registered in the name of the undersigned, shall be delivered to the undersigned at the address shown below the signature of the undersigned.

The undersigned, by completing the box entitled ‘‘Description of Outstanding Notes Tendered Herewith’’ above and signing this letter, will be deemed to have tendered the Outstanding Notes as set forth in such box.

5

TENDERING HOLDER(S) SIGN HERE
(Complete accompanying substitute Form W-9)

 

MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S) FOR OUTSTANDING NOTES HEREBY TENDERED OR IN WHOSE NAME OUTSTANDING NOTES ARE REGISTERED ON THE BOOKS OF DTC OR ONE OF ITS PARTICIPANTS, OR BY ANY PERSON(S) AUTHORIZED TO BECOME THE REGISTERED HOLDER(S) BY ENDORSEMENTS AND DOCUMENTS TRANSMITTED HEREWITH. IF SIGNATURE IS BY A TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT, OFFICER OF A CORPORATION OR OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY, PLEASE SET FORTH THE FULL TITLE OF SUCH PERSON. SEE INSTRUCTION 3.

(Signature(s) of Holder(s))

Date:____________________________________________________________________________

Name(s):__________________________________________________________________________

(Please Print)

Capacity (full title):__________________________________________________________________

Address:__________________________________________________________________________

(Including Zip Code)

Daytime Area Code and Telephone No.:__________________________________________________

Taxpayer Identification No.:____________________________________________________________

GUARANTEE OF SIGNATURE(S)
(IF REQUIRED—SEE INSTRUCTION 3)

Authorized Signature:________________________________________________________________

Date:____________________________________________________________________________

Name(s):__________________________________________________________________________

Title:____________________________________________________________________________

Name of Firm:______________________________________________________________________

Address:__________________________________________________________________________

(Include Zip Code)

Area Code and Telephone No.:________________________________________________________

6

SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 3 and 4)

To be completed ONLY if Exchange Notes or Outstanding Notes not tendered are to be issued in the name of someone other than the registered holder of the Outstanding Notes whose name(s) appear(s) above.

Issue:	Outstanding Notes not tendered to: Exchange Notes to:

Name(s): ______________________________

(Please Print)

Address: ________________________________

(Include Zip Code)

Daytime Area Code and
Telephone No.: __________________________

Tax Identification
No.: __________________________________

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3 and 4)

To be completed ONLY if Exchange Notes or Outstanding Notes not tendered are to be sent to someone other than the registered holder of the Outstanding Notes whose name(s) appear(s) above, or such registered holder(s) at an address other than that shown above.

Mail:	Outstanding Notes not tendered to: Exchange Notes to:

Name(s): ______________________________

(Please Print)

Address: ________________________________

(Include Zip Code)

Area Code and
Telephone No.: __________________________

7

INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer

1.    Delivery of this Letter of Transmittal and Certificates; Guaranteed Delivery Procedures.    A holder of Outstanding Notes may tender the same by (i) properly completing and signing this Letter of Transmittal or a facsimile hereof (all references in the Prospectus to the Letter of Transmittal shall be deemed to include a facsimile thereof) and delivering the same, together with the certificate or certificates, if applicable, representing the Outstanding Notes being tendered and any required signature guarantees and any other documents required by this Letter of Transmittal, to the Exchange Agent at its address set forth above on or prior to the Expiration Date, or (ii) complying with the procedure for book-entry transfer described below, or (iii) complying with the guaranteed delivery procedures described below.

Holders of Outstanding Notes may tender Outstanding Notes by book-entry transfer by crediting the Outstanding Notes to the Exchange Agent’s account at DTC in accordance with DTC’s Automated Tender Offer Program (‘‘ATOP’’) and by complying with applicable ATOP procedures with respect to the Exchange Offer. DTC participants that are accepting the Exchange Offer should transmit their acceptance to DTC, which will edit and verify the acceptance and execute a book-entry delivery to the Exchange Agent’s account at DTC. DTC will then send a computer-generated message (an ‘‘Agent’s Message’’) to the Exchange Agent for its acceptance in which the holder of the Outstanding Notes acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, this Letter of Transmittal, the DTC participant confirms on behalf of itself and the beneficial owners of such Outstanding Notes all provisions of this Letter of Transmittal (including any representations and warranties) applicable to it and such beneficial owner as fully as if it had completed the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent.

Delivery of the Agent’s Message by DTC will satisfy the terms of the Exchange Offer as to execution and delivery of a Letter of Transmittal by the participant identified in the Agent’s Message. DTC participants may also accept the Exchange Offer by submitting a Notice of Guaranteed Delivery through ATOP.

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE OUTSTANDING NOTES AND ANY OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDER, AND EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF SUCH DELIVERY IS BY MAIL, IT IS SUGGESTED THAT REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, BE USED. IN ALL CASES SUFFICIENT TIME SHOULD BE ALLOWED TO PERMIT TIMELY DELIVERY. NO OUTSTANDING NOTES OR LETTERS OF TRANSMITTAL SHOULD BE SENT TO THE COMPANY.

Holders whose Outstanding Notes are not immediately available or who cannot deliver their Outstanding Notes and all other required documents to the Exchange Agent on or prior to the Expiration Date or comply with book-entry transfer procedures on a timely basis must tender their Outstanding Notes pursuant to the guaranteed delivery procedure set forth in the Prospectus. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution (as defined below); (ii) on or prior to the Expiration Date, the Exchange Agent must have received from such Eligible Institution a letter, telegram or facsimile transmission (receipt confirmed by telephone and an original delivered by guaranteed overnight courier) setting forth the name and address of the tendering holder, the names in which such Outstanding Notes are registered, and, if applicable, the certificate numbers of the Outstanding Notes to be tendered; and (iii) all tendered Outstanding Notes (or a confirmation of any book-entry transfer of such Outstanding Notes into the Exchange Agent’s account at a book-entry transfer facility) as well as this Letter of Transmittal and all other documents required by this Letter of Transmittal, must be received by the Exchange Agent within three New York Stock Exchange trading days after the date of execution of such letter, telegram or facsimile transmission, all as provided in the Prospectus.

No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders, by execution of this Letter of Transmittal (or facsimile thereof), shall waive any right to receive notice of the acceptance of the Outstanding Notes for exchange.

8

2.    Partial Tenders; Withdrawals.    If less than the entire principal amount of Outstanding Notes evidenced by a submitted certificate is tendered, the tendering holder must fill in the aggregate principal amount of Outstanding Notes tendered in the box entitled ‘‘Description of Outstanding Notes Tendered Herewith.’’ A newly issued certificate for the Outstanding Notes submitted but not tendered will be sent to such holder as soon as practicable after the Expiration Date. All Outstanding Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise clearly indicated.

If not yet accepted, a tender pursuant to the Exchange Offer may be withdrawn prior to the Expiration Date.

To be effective with respect to the tender of Outstanding Notes, a written notice of withdrawal must: (i) be received by the Exchange Agent at one of the addresses for the Exchange Agent set forth above before the Company notifies the Exchange Agent that it has accepted the tender of Outstanding Notes Pursuant to the Exchange Offer, (ii) specify the name of the person who tendered the Outstanding Notes to be withdrawn; (iii) identify the Outstanding Notes to be withdrawn (including the principal amount of such Outstanding Notes, or, if applicable, the certificate numbers shown on the particular certificates evidencing such Outstanding Notes and the principal amount of Outstanding Notes represented by such certificates); (iv) include a statement that such holder is withdrawing its election to have such Outstanding Notes exchanged; and (v) be signed by the holder in the same manner as the original signature on this Letter of Transmittal (including any required signature guarantee). The Exchange Agent will return the properly withdrawn Outstanding Notes promptly following receipt of a notice of withdrawal. If Outstanding Notes have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn Outstanding Notes or otherwise comply with the book-entry transfer facility’s procedures. All questions as to the validity of notices of withdrawals, including time of receipt, will be determined by the Company, and such determination will be final and binding on all parties.

Any Outstanding Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Outstanding Notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the holder thereof without cost to such holder (or, in the case of Outstanding Notes tendered by book-entry transfer into the Exchange Agent’s account at the book-entry transfer facility pursuant to the book-entry transfer procedures described above, such Outstanding Notes will be credited to an account with such book-entry transfer facility specified by the holder) as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Outstanding Notes may be retendered by following one of the procedures described under the caption ‘‘The Exchange Offer — Procedures for Tendering’’ in the Prospectus at any time prior to the Expiration Date.

3.    Signatures on this Letter of Transmittal; Written Instruments and Endorsements; Guarantees of Signatures.    If this Letter of Transmittal is signed by the registered holder(s) of the Outstanding Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever.

If any of the Outstanding Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

If a number of Outstanding Notes registered in different names are tendered, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of Outstanding Notes.

When this Letter of Transmittal is signed by the registered holder or holders (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Outstanding Notes) of Outstanding Notes listed and tendered hereby, no endorsements of certificates or separate written instruments of transfer or exchange are required.

If this Letter of Transmittal is signed by a person other than the registered holder or holders of the Outstanding Notes listed, such Outstanding Notes must be endorsed or accompanied by separate written instruments of transfer or exchange in form satisfactory to the Company and duly executed by the registered holder, in either case signed exactly as the name or names of the registered holder or holders appear(s) on the Outstanding Notes.

9

If this Letter of Transmittal, any certificates or separate written instruments of transfer or exchange are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when, signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority so to act must be submitted.

Endorsements on certificates or signatures on separate written instruments of transfer or exchange required by this Instruction 3 must be guaranteed by an Eligible Institution.

Signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution, unless Outstanding Notes are tendered: (i) by a holder who has not completed the box entitled ‘‘Special Issuance Instructions’’ or ‘‘Special Delivery Instructions’’ on this Letter of Transmittal; or (ii) for the account of an Eligible Institution (as defined below). In the event that the signatures in this Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantees must be by an eligible guarantor institution which is a member of a firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or another ‘‘eligible institution’’ within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (an ‘‘Eligible Institution’’). If Outstanding Notes are registered in the name of a person other than the signer of this Letter of Transmittal, the Outstanding Notes surrendered for exchange must be endorsed by, or be accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by the Company, in its sole discretion, duly executed by the registered holder with the signature thereon guaranteed by an Eligible Institution.

4.    Special Issuance and Delivery Instructions.    Tendering holders should indicate, as applicable, the name and address to which the Exchange Notes or certificates for Outstanding Notes not exchanged are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the tax identification number of the person named must also be indicated. Holders tendering Outstanding Notes by book-entry transfer may request that Outstanding Notes not exchanged be credited to such account maintained at the book-entry transfer facility as such holder may designate.

5.    Transfer Taxes.    The Company shall pay all transfer taxes, if any, applicable to the transfer and exchange of Outstanding Notes to it or its order pursuant to the Exchange Offer, except in the case of deliveries of certificates for Outstanding Notes for Exchange Notes that are to be registered or issued in the name of any person other than the holder of Outstanding Notes tendered thereby. If a transfer tax is imposed for any reason other than the transfer and exchange of Outstanding Notes to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exception therefrom is not submitted herewith the amount of such transfer taxes will be billed directly to such tendering holder.

6.    Waiver of Conditions.    The Company reserves the absolute right to waive, in whole or in part, any of the conditions to the Exchange Offer set forth in the Prospectus.

7.    Mutilated, Lost, Stolen or Destroyed Securities.    Any holder whose Outstanding Notes have been mutilated, lost, stolen or destroyed, should contact the Exchange Agent at the address indicated below for further instructions.

8.    Requests for Assistance or Additional Copies.    Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number set forth above. In addition, all questions relating to the Exchange Offer, as well as requests for assistance or additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number indicated above.

If backup withholding applies, the Exchange Agent is required to withhold 28% of any payments to be made to the holder of Outstanding Notes. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If

10

withholding results in an overpayment of taxes, a refund may be obtained by filing a tax return with the Internal Revenue Service. The Exchange Agent cannot refund amounts withheld by reason of backup withholding.

9.    Irregularities.    All questions as to the validity, form, eligibility (including time of receipt), and acceptance of Letters of Transmittal or Outstanding Notes will be resolved by the Company, whose determination will be final and binding. The Company reserves the absolute right to reject any or all Letters of Transmittal or tenders that are not in proper form or the acceptance of which would, in the opinion of the Company’s counsel, be unlawful. The Company also reserves the right to waive any irregularities or conditions of tender as to the particular Outstanding Notes covered by any Letter of Transmittal or tendered pursuant to such Letter of Transmittal. Neither the Company, the Exchange Agent nor any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The Company’s interpretation of the terms and conditions of the Exchange Offer shall be final and binding.

IMPORTANT: This Letter of Transmittal or a facsimile or copy thereof (together with certificates of Outstanding Notes or conformation of book-entry transfer and all other required documents) or a Notice of Guaranteed Delivery must be received by the Exchange Agent prior to the Expiration Date.

IMPORTANT TAX INFORMATION

Under U.S. federal income tax law, a holder of Outstanding Notes whose Outstanding Notes are accepted for exchange may be subject to backup withholding unless the holder provides The Bank of New York, as Paying Agent (the ‘‘Paying Agent’’), through the Exchange Agent, with either (i) such holder’s correct taxpayer identification number (‘‘TIN’’) on Substitute Form W-9 attached hereto, certifying (A) that the TIN provided on Substitute Form W-9 is correct (or that such holder of Outstanding Notes is awaiting a TIN), (B) that the holder of Outstanding Notes is not subject to backup withholding because (x) such holder of Outstanding Notes is exempt from backup withholding, (y) such holder of Outstanding Notes has not been notified by the Internal Revenue Service that he or she is subject to backup withholding as a result of a failure to report all interest or dividends or (z) the Internal Revenue Service has notified the holder of Outstanding Notes that he or she is no longer subject to backup withholding and (C) that the holder of Outstanding Notes is a U.S. person (including a U.S. resident alien); or (ii) an adequate basis for exemption from backup withholding. If such holder of Outstanding Notes is an individual, the TIN is such holder’s social security number. If the Paying Agent is not provided with the correct TIN, the holder of Outstanding Notes may also be subject to certain penalties imposed by the Internal Revenue Service.

Certain holders of Outstanding Notes (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. However, exempt holders of Outstanding Notes should indicate their exempt status on Substitute Form W-9. For example, a corporation should complete the Substitute Form W-9, providing its TIN and indicating that it is exempt from backup withholding. In order for a foreign individual to qualify as an exempt recipient, the holder must submit a Form W-8BEN, signed under penalties of perjury, attesting to that individual’s exempt status. A Form W-8BEN can be obtained from the Paying Agent. See the enclosed ‘‘Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9’’ for more instructions.

If backup withholding applies, the Paying Agent is required to withhold 28% of any payments made to the holder of Outstanding Notes or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service, provided the required information is furnished.

The box in Part 3 of the Substitute Form W-9 may be checked if the surrendering holder of Outstanding Notes has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the holder of Outstanding Notes or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Paying Agent will withhold 28% of all payments made prior to the time a properly certified TIN is provided to the Paying Agent.

11

The holder of Outstanding Notes is required to give the Paying Agent the TIN (e.g., social security number or employer identification number) of the record owner of the Outstanding Notes. If the Outstanding Notes are in more than one name or are not in the name of the actual owner, consult the enclosed ‘‘Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9’’ for additional guidance on which number to report.

12

PAYER’S NAME: THE BANK OF NEW YORK

SUBSTITUTE Form W-9      Department of the Treasury Internal Revenue Service      Payer’s Request for Taxpayer Identification Number (TIN)

Part 1 — PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.

__________________________ Name __________________________ Social Security Number OR __________________________ Employer Identification Number

Part 3 — □  Awaiting TIN

Part 2 — Certification — Under the penalties of perjury, I certify that:

(1)

The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and

(2)

I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the ‘‘IRS’’) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and

(3)

I am a U.S. person (including a U.S. resident alien).

Certificate Instructions — You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2).

The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.

Sign Here    →

Signature__________________________________        Date______________, 2005

NOTE:	FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 28% of all reportable payments made to me will be withheld.

Signature ____________________________________________         Date __________________________, 2005

13

EX-99.2

Exhibit 99.2

NOTICE OF GUARANTEED DELIVERY
for
Tender of all Outstanding
$1,000,000,000 6 3/8% Senior Subordinated Notes Due 2015
in exchange for
new $1,000,000,000 6 3/8% Series B Senior Subordinated Notes Due 2015
of
L-3 COMMUNICATIONS CORPORATION

Registered holders of outstanding 6 3/8% Senior Subordinated Notes due 2015 (the ‘‘Outstanding Notes’’) who wish to tender their Outstanding Notes in exchange for a like principal amount of new 6 3/8% Series B Senior Subordinated Notes due 2015 (the ‘‘Exchange Notes’’) and whose Outstanding Notes are not immediately available or who cannot deliver their Outstanding Notes and Letter of Transmittal (and any other documents required by the Letter of Transmittal) to The Bank of New York (the ‘‘Exchange Agent’’) prior to the Expiration Date, may use this Notice of Guaranteed Delivery or one substantially equivalent hereto. This Notice of Guaranteed Delivery may be delivered by hand or sent by facsimile transmission (receipt confirmed by telephone and an original delivered by guaranteed overnight courier) or mail to the Exchange Agent. See ‘‘The Exchange Offer — Procedures for Tendering’’ in the Prospectus.

The Exchange Agent for the Exchange Offer is:

THE BANK OF NEW YORK

By Mail:				By Facsimile:				By Hand or Overnight Delivery:
The Bank of New York				The Bank of New York				The Bank of New York
Reorganization Unit 101 Barclay Street - 7 East New York, NY 10286 Attention:				Attention:                                               Confirm Receipt of Facsimile by telephone				Reorganization Unit 101 Barclay Street Lobby Level - Corp. Trust Window New York, NY 10286 Attention:

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an eligible institution (as defined in the Letter of Transmittal), such signature guarantee must appear in the applicable space provided on the Letter of Transmittal for Guarantee of Signatures.

Ladies and Gentlemen:

The undersigned hereby tenders the principal amount of Outstanding Notes indicated below, upon the terms and subject to the conditions contained in the Prospectus dated                                  2005 of L-3 Communications Corporation (the ‘‘Prospectus’’), receipt of which is hereby acknowledged.

Description of Outstanding Notes Tendered

Name of Tendering Holder

Name and Address of Registered Holder as it Appears on the Outstanding Notes (Please print)

Certificate Number(s) of Outstanding Notes Tendered (or Account Number at Book-Entry Facility)

Principal Amount Outstanding Notes Tendered

SIGN HERE

Name of Registered or Acting Holder: ______________________________________________________

Signature(s): ________________________________________________________________________

Name(s) (Please Print): ________________________________________________________________

Address: ____________________________________________________________________________

Telephone Number: __________________________________________________________________

Date: ______________________________________________________________________________

IF OUTSTANDING NOTES WILL BE TENDERED BY BOOK-ENTRY TRANSFER, PROVIDE THE FOLLOWING INFORMATION:

DTC Account Number: ________________________________________________________________

Date: ______________________________________________________________________________

2

THE FOLLOWING GUARANTEE MUST BE COMPLETED
GUARANTEE OF DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)

The undersigned, a member of a recognized signature guarantee medallion program within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby guarantees to deliver to the Exchange Agent at one of its addresses set forth on the reverse hereof, the certificates representing the Outstanding Notes (or a confirmation of book-entry transfer of such Outstanding Notes into the Exchange Agent’s account at the book-entry transfer facility), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, and any other documents required by the Letter of Transmittal within three New York Stock Exchange trading days after the Expiration date (as defined in the Letter of Transmittal).

Name of Firm: __________________________				______________________________________ (authorized signature)
Address: ________________________________				Title: __________________________________
______________________________________ (zip code)				Name: ________________________________ (please type or print)
Area Code and Telephone No.: __________________________				Date: __________________________________

	NOTE:	DO NOT SEND OUTSTANDING NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. OUTSTANDING NOTES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

3

EX-99.3

Exhibit 99.3

Offer to Exchange
6 3/8% Series B Senior Subordinated Notes Due 2015
For any and all Outstanding
6 3/8% Senior Subordinated Notes Due 2015
of
L-3 COMMUNICATIONS CORPORATION

                   , 2005

To Securities Dealers, Commercial Banks,
    Trust Companies and Other Nominees:

L-3 Communications Corporation (the ‘‘Company’’) and the subsidiaries of the Company named in Schedule I hereto (the ‘‘Guarantors’’) are offering (the ‘‘Exchange Offer’’) to exchange $100,000 in principal amount of the Company’s new 6 3/8% Series B Senior Subordinated Notes due 2015 (the ‘‘Exchange Notes’’), for each $100,000, and in integral multiples of $1,000 thereafter, in principal amount of outstanding 6 3/8% Senior Subordinated Notes due 2015 (the ‘‘Old Notes’’). The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Old Notes for which they may be exchanged pursuant to the Exchange Offer, except that the Exchange Notes are freely transferable by holders thereof, upon the terms and subject to the conditions of the enclosed Prospectus, dated                                , 2005 (as the same may be amended or supplemented from time to time, the ‘‘Prospectus’’), and the enclosed Letter of Transmittal (the ‘‘Letter of Transmittal’’). The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Old Notes for which they may be exchanged pursuant to the Exchange Offer, except that the Exchange Notes are freely transferable by holders thereof (except as to the Exchange Offer, except that the Exchange Notes are freely transferable by holders thereof (except as provided herein or in the Prospectus) and are not subject to any covenant regarding registration under the Securities Act of 1933, as amended (the ‘‘Securities Act’’). The Old Notes are unconditionally guaranteed (the ‘‘Old Guarantees’’) by the Guarantors on a senior subordinated basis, and the Exchange Notes will be unconditionally guaranteed (the ‘‘New Guarantees’’) by the Guarantors on a senior subordinated basis. Upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, the Guarantors offer to issue the New Guarantees with respect to all Exchange Notes issued in the Exchange Offer in exchange for the outstanding Old Guarantees of the Old Notes for which such Exchange Notes are issued in exchange.

Throughout this letter, unless the context otherwise requires and whether so expressed or not, references to the ‘‘Exchange Offer’’ include the Guarantors’ offer to exchange the New Guarantees for the Old Guarantees, references to the ‘‘Company’’ include the Guarantors as issuers of the New Guarantees and the Old Guarantees, references to the ‘‘Exchange Notes’’ include the related New Guarantees and references to the ‘‘Old Notes’’ include the related Old Guarantees.

The Company will accept for exchange any and all Old Notes properly tendered according to the terms of the Prospectus and the Letter of Transmittal. Consummation of the Exchange Offer is subject to certain conditions described in the Prospectus.

WE ARE ASKING YOU TO CONTACT YOUR CLIENTS FOR WHOM YOU HOLD OLD NOTES REGISTERED IN YOUR NAME OR IN THE NAME OF YOUR NOMINEE OR WHO HOLD OLD NOTES REGISTERED IN THEIR OWN NAMES.

The Company will not pay any fees or commissions to any broker or dealer or other person for soliciting tenders of Old Notes pursuant to the Exchange Offer. You will, however, be reimbursed by the Company for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Company will pay all transfer taxes, if any, applicable to the tender of Old Notes to them or their order, except as otherwise provided in the Prospectus and the

Letter of Transmittal.

2

Enclosed are copies of the following documents:

1.	A form of letter which you may send, as a cover letter to accompany the Prospectus and related materials, to your clients for whose accounts you hold Old Notes registered in your name or the name of your nominee, with space provided for obtaining the client’s instructions with regard to the Exchange Offer.

2.	The Prospectus.

3.	The Letter of Transmittal for your use in connection with the tender of Old Notes and for the information of your clients.

4.	A form of Notice of Guaranteed Delivery.

5.	Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.

Your prompt action is requested. The Exchange Offer will expire at 5:00 P.M., New York City time, on                                  , 2005 unless the Exchange Offer is extended by the Company. The time at which the Exchange Offer expires is referred to as the ‘‘Expiration Date.’’ Tendered Old Notes may be withdrawn, subject to the procedures described in the Prospectus, at any time prior to 5:00 P.M. on the Expiration Date.

To participate in the Exchange Offer, certificates for Old Notes, or a timely confirmation of a book-entry transfer of such Old Notes into the Exchange Agent’s account at The Depository Trust Company, together with a duly executed and properly completed Letter of Transmittal or facsimile thereof, with any required signature guarantees, and any other required documents, must be received by the Exchange Agent by the Expiration Date as indicated in the Letter of Transmittal and the Prospectus.

If holders of the Old Notes wish to tender, but it is impracticable for them to forward their Old Notes prior to the Expiration Date or to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus under ‘‘The Exchange Offer — Guaranteed Delivery Procedures’’ and the Letter of Transmittal.

Additional copies of the enclosed materials may be obtained from the Exchange Agent, The Bank of New York, by calling                      and directing your inquiries to                                                               .

Very truly yours,

L-3 COMMUNICATIONS CORPORATION

NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS AND THE LETTER OF TRANSMITTAL.

3

SCHEDULE I

APCOM, INC., a Maryland corporation
BROADCAST SPORTS INC., a Delaware corporation
D.P. ASSOCIATES INC., a Virginia Corporation
ELECTRODYNAMICS, INC., an Arizona corporation
HENSCHEL INC., a Delaware corporation
HYGIENETICS ENVIRONMENTAL SERVICES, INC., a Delaware corporation
INTELLIGENCE DATA SYSTEMS, INC., a Virginia corporation
INTERNATIONAL SYSTEMS, LLC, a California limited liability company
INTERSTATE ELECTRONICS CORPORATION, a California corporation
KDI PRECISION PRODUCTS, INC., a Delaware corporation
L-3 COMMUNICATIONS AEROMET, INC., an Oregon corporation
L-3 COMMUNICATIONS AIS GP CORPORATION, a Delaware corporation
L-3 COMMUNICATIONS ADVANCED LASER SYSTEMS TECHNOLOGY, INC., a Florida corporation
L-3 COMMUNICATIONS AVIONICS SYSTEMS, INC., a Delaware corporation
L-3 COMMUNICATIONS AVYSIS CORPORATION, a Texas Corporation
L-3 COMMUNICATIONS AYDIN CORPORATION, a Delaware corporation
L-3 COMMUNICATIONS CE HOLDINGS, INC.
L-3 COMMUNICATIONS CINCINNATI ELECTRONICS CORPORATION
L-3 COMMUNICATIONS CSI, INC., a California corporation
L-3 COMMUNICATIONS EO/IR, Inc., a Florida corporation
L-3 COMMUNICATIONS ELECTRON TECHNOLOGIES, INC., a Delaware corporation
L-3 COMMUNICATIONS ESSCO, INC., a Delaware corporation
L-3 COMMUNICATIONS FLIGHT CAPITAL LLC, a Delaware limited liability company
L-3 COMMUNICATIONS FLIGHT INTERNATIONAL AVIATION LLC, a Delaware limited liability company
L-3 COMMUNICATIONS GOVERNMENT SERVICES, INC., a Virginia corporation
L-3 COMMUNICATIONS ILEX SYSTEMS, INC., a Delaware corporation
L-3 COMMUNICATIONS INFRARED VISION TECHNOLOGY CORPORATION, a California corporation
L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P., a Delaware limited partnership
L-3 COMMUNICATIONS INVESTMENTS INC., a Delaware corporation
L-3 COMMUNICATIONS KLEIN ASSOCIATES, INC., a Delaware corporation
L-3 COMMUNICATIONS MOBILE-VISION, INC., a New Jersey corporation
L-3 COMMUNICATIONS MAS (US) CORPORATION, a Delaware corporation
L-3 COMMUNICATIONS SECURITY AND DETECTION SYSTEMS, INC., a Delaware corporation
L-3 COMMUNICATIONS SONOMO EO, INC., a California corporation
L-3 COMMUNICATIONS TITAN CORPORATION, a Delaware corporation
L-3 COMMUNICATIONS VECTOR INTERNATIONAL AVIATION LLC, a Delaware limited liability company
L-3 COMMUNICATIONS VERTEX AEROSPACE LLC, a Delaware limited liability company
L-3 COMMUNICATIONS WESTWOOD CORPORATION, a Nevada corporation
LINCOM WIRELESS, INC., a Delaware corporation
MCTI ACQUISITION CORPORATION, a Maryland corporation
MICRODYNE COMMUNICATIONS TECHNOLOGIES INCORPORATED, a Maryland corporation
MICRODYNE CORPORATION, a Maryland corporation
MICRODYNE OUTSOURCING INCORPORATED, a Maryland corporation
MPRI, INC., a Delaware corporation PAC ORD INC., a Delaware corporation
PAC ORD INC., a Delaware corporation
POWER PARAGON, INC., a Delaware corporation
PROCOM SERVICES, INC., a California corporation
SHELLCO, INC., a Delaware corporation

4

SYCOLEMAN CORPORATION, a Florida corporation
SPD ELECTRICAL SYSTEMS, INC., a Delaware corporation
SPD SWITCHGEAR INC., a Delaware corporation
TITAN FACILITIES, INC., a Virginia corporation
TITAN SCAN TECHNOLOGIES CORPORATION, a Delaware corporation
TROLL TECHNOLOGY CORPORATION, a California corporation
WESCAM AIR OPS INC., a Delaware corporation
WESCAM AIR OPS LLC, a Delaware limited liability company
WESCAM HOLDINGS (US) INC., a Delaware corporation
WESCAM LLC, a Delaware limited liability company
WOLF COACH, INC., a Massachusetts corporation

5

EX-99.4

Exhibit 99.4

Offer to Exchange

6 3/8% Series B Senior Subordinated Notes Due 2015
For any and all Outstanding
6 3/8% Senior Subordinated Notes Due 2015

of

L-3 COMMUNICATIONS CORPORATION

                   , 2005

To Our Clients:

Enclosed for your consideration is a Prospectus, dated                        , 2005 (as the same may be amended or supplemented from time to time, the ‘‘Prospectus’’), and a Letter of Transmittal (the ‘‘Letter of Transmittal’’), relating to the offer (the ‘‘Exchange Offer’’) by L-3 Communications Corporation (the ‘‘Company’’) and the subsidiaries of the Company named in Schedule I hereto (‘‘the Guarantors’’), to exchange $100,000 in principal amount of the Company’s new 6 3/8% Series B Senior Subordinated Notes due 2015 (the ‘‘Exchange Notes’’), for each $100,000, and in integral multiples of $1,000 thereafter, in principal amount of outstanding 6 3/8% Senior Subordinated Notes due 2015 (the ‘‘Old Notes’’), upon the terms and subject to the conditions set forth in the Prospectus and Letter of Transmittal. The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Old Notes for which they may be exchanged pursuant to the Exchange Offer, except that the Exchange Notes are freely transferable by holders thereof (except as provided herein or in the Prospectus) and are not subject to any convenant regarding registration under the Securities Act of 1933, as amended (the ‘‘Securities Act’’). The Old Notes are unconditionally guaranteed (the ‘‘Old Guarantees’’) by the Guarantors on a senior subordinated basis, and the Exchange Notes will be unconditionally guaranteed (the ‘‘New Guarantees’’) by the Guarantors on a senior subordinated basis. Upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, the Guarantors offer to issue the New Guarantees with respect to all Exchange Notes issued in the Exchange Offer in exchange for the outstanding Old Guarantees of the Old Notes for which such Exchange Notes are issued in exchange.

Throughout this letter, unless the context otherwise requires and whether so expressed or not, references to the ‘‘Exchange Offer’’ include the Guarantors’ offer to exchange the New Guarantees for the Old Guarantees, references to the ‘‘Company’’ include the Guarantors as issuers of the New Guarantees and the Old Guarantees, references to the ‘‘Exchange Notes’’ include the related New Guarantees and references to the ‘‘Old Notes’’ include the related Old Guarantees.

The Company will accept for exchange any and all Old Notes properly tendered according to the terms of the Prospectus and the Letter of Transmittal. Consummation of the Exchange Offer is subject to certain conditions described in the Prospectus.

This material is being forwarded to you as the beneficial owner of Old Notes carried by us for your account or benefit but not registered in your name. A tender of such Old Notes may only be made by us as the registered holder and pursuant to your instructions. Therefore, the Company urges beneficial owners of Old Notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee to contact such registered holder promptly if such beneficial owners wish to tender Old Notes in the Exchange Offer.

Accordingly, we request instructions as to whether you wish to tender any or all such Old Notes held by us for your account, pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal. However, we urge you to read the Prospectus carefully before instructing us as to whether or not to tender your Old Notes.

Your instructions to us should be forwarded as promptly as possible in order to permit us to tender Old Notes on your behalf in accordance with the provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 P.M., New York City Time, on                                  , 2005, unless the Exchange Offer is extended by the Company. The time the Exchange Offer expires is referred to as the ‘‘Expiration Date.’’ Tenders of Old Notes may be withdrawn at any time prior to the Expiration Date.

IF YOU WISH TO HAVE US TENDER ANY OR ALL OF YOUR OLD NOTES, PLEASE SO INSTRUCT US BY COMPLETING, EXECUTING AND RETURNING TO US THE INSTRUCTION FORM ON THE REVERSE HEREOF.

The accompanying Letter of Transmittal is furnished to you for your information only and may not be used by you to tender Old Notes held by us and registered in our name for your account or benefit.

If we do not receive written instructions in accordance with the procedures presented in the Prospectus and the Letter of Transmittal, we will not tender any of the Old Notes on your account.

Please carefully review the enclosed material as you consider the Exchange Offer.

2

INSTRUCTIONS TO REGISTERED HOLDER
FROM BENEFICIAL OWNER
OF
6 3/8% Senior Subordinated Notes Due 2015

The undersigned hereby acknowledges receipt of the Prospectus dated                             2005 (as the same may be amended or supplemented from time to time, the ‘‘Prospectus’’), and a Letter of Transmittal (the ‘‘Letter of Transmittal’’), relating to the offer (the ‘‘Exchange Offer’’) by L-3 Communications Corporation (the ‘‘Company’’), and the subsidiaries of the Company named in Schedule I hereto (‘‘the Guarantors’’) to exchange $100,000 in principal amount of the Company’s new 6 3/8% Series B Senior Subordinated Notes due 2015 (the ‘‘Exchange Notes’’), for each $100,000, and in integral multiples of $1,000 thereafter, in principal amount of outstanding 6 3/8% Senior Subordinated Notes due 2015 (the ‘‘Old Notes’’), upon the terms and subject to the conditions set forth in the Prospectus and Letter of Transmittal. Capitalized terms used buy not defined herein have the meanings ascribed to them in the Prospectus.

This will instruct you, the registered holder, as to the action to be taken by you relating to the Exchange Offer with respect to the Old Notes held by you for the account of the undersigned.

The aggregate face amount of the Old Notes held by you for the account of the undersigned is (fill in amount):

$             of the Old Notes.

With respect to the Exchange Offer, the undersigned hereby instructs you (check appropriate box):

	To TENDER the following Old Notes held by you for the account of the undersigned (insert principal amount of Old Notes to be tendered, if any):

$             of the Old Notes.

	NOT to TENDER any Old Notes held by you for the account of the undersigned.

If the undersigned instructs you to tender the Old Notes held by you for the account of the undersigned, it is understood that you are authorized (a) to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner of the Old Notes, including but not limited to the representations that (i) the undersigned is acquiring the Exchange Notes in the ordinary course of business of the undersigned, (ii) the undersigned is not participating, does not intend to participate, and has no arrangement of understanding with any person to participate, in the distribution of Exchange Notes, (iii) the undersigned acknowledges that any person participating in the Exchange Offer for the purpose of distributing the Exchange Notes must comply with the registration and prospectus delivery requirements of the Securities Act of 1933, as amended, in connection with any resale transaction of the Exchange Notes acquired by such person and cannot rely on the position of the Staff of the Securities and Exchange Commission set forth in certain no-action letters (see the section of the Prospectus entitled ‘‘The Exchange Offer — Resale of Exchange Notes’’), (iv) the undersigned understands that a secondary resale transaction described in clause (iii) above should be covered by an effective registration statement containing the selling securityholder information required by Item 507 of Regulation S-K of the Commission, (v) the undersigned is not an ‘‘affiliate,’’ as defined in Rule 405 under the Securities Act, of the Company, (vi) if the undersigned is not a broker-dealer, that it is not participating in, does not intend to participate in, and has no arrangement or understanding with any person to participate in, the distribution of Exchange Notes and (vii) if the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes received in respect of such Old Notes pursuant to the Exchange Offer,

3

however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an ‘‘underwriter’’ within the meaning of the Securities Act; (b) to agree, on behalf of the undersigned, as set forth in the Letter of Transmittal; and (c) to take such other action as necessary under the Prospectus or the Letter of Transmittal to effect the valid tender of Old Notes.

    
SIGN HERE

Name of Beneficial Owner(s):

Signature(s):

Name(s) (please print):

Address:

Telephone Number:

Taxpayer Identification or Social Security Number:

Date:

4

SCHEDULE I

APCOM, INC., a Maryland corporation
BROADCAST SPORTS INC., a Delaware corporation
D.P. ASSOCIATES INC., a Virginia Corporation
ELECTRODYNAMICS, INC., an Arizona corporation
HENSCHEL INC., a Delaware corporation
HYGIENETICS ENVIRONMENTAL SERVICES, INC., a Delaware corporation
INTELLIGENCE DATA SYSTEMS, INC., a Virginia corporation
INTERNATIONAL SYSTEMS, LLC, a California limited liability company
INTERSTATE ELECTRONICS CORPORATION, a California corporation
KDI PRECISION PRODUCTS, INC., a Delaware corporation
L-3 COMMUNICATIONS AEROMET, INC., an Oregon corporation
L-3 COMMUNICATIONS AIS GP CORPORATION, a Delaware corporation
L-3 COMMUNICATIONS ADVANCED LASER SYSTEMS TECHNOLOGY, INC., a Florida corporation
L-3 COMMUNICATIONS AVIONICS SYSTEMS, INC., a Delaware corporation
L-3 COMMUNICATIONS AVYSIS CORPORATION, a Texas Corporation
L-3 COMMUNICATIONS AYDIN CORPORATION, a Delaware corporation
L-3 COMMUNICATIONS CE HOLDINGS, INC.
L-3 COMMUNICATIONS CINCINNATI ELECTRONICS CORPORATION
L-3 COMMUNICATIONS CSI, INC., a California corporation
L-3 COMMUNICATIONS EO/IR Inc., a Florida corporation
L-3 COMMUNICATIONS ELECTRON TECHNOLOGIES, INC., a Delaware corporation
L-3 COMMUNICATIONS ESSCO, INC., a Delaware corporation
L-3 COMMUNICATIONS FLIGHT CAPITAL LLC, a Delaware limited liability company
L-3 COMMUNICATIONS FLIGHT INTERNATIONAL AVIATION LLC, a Delaware limited liability company
L-3 COMMUNICATIONS GOVERNMENT SERVICES, INC., a Virginia corporation
L-3 COMMUNICATIONS ILEX SYSTEMS, INC., a Delaware corporation
L-3 COMMUNICATIONS INFRARED VISION TECHNOLOGY CORPORATION, a California corporation
L-3 COMMUNICATIONS INTEGRATED SYSTEMS L.P., a Delaware limited partnership
L-3 COMMUNICATIONS INVESTMENTS INC., a Delaware corporation
L-3 COMMUNICATIONS KLEIN ASSOCIATES, INC., a Delaware corporation
L-3 COMMUNICATIONS MOBILE-VISION, INC., a New Jersey corporation
L-3 COMMUNICATIONS MAS (US) CORPORATION, a Delaware corporation
L-3 COMMUNICATIONS SECURITY AND DETECTION SYSTEMS, INC., a Delaware corporation
L-3 COMMUNICATIONS SONOMO EO, INC., a California corporation
L-3 COMMUNICATIONS TITAN CORPORATION, a Delaware corporation
L-3 COMMUNICATIONS VECTOR INTERNATIONAL AVIATION LLC, a Delaware limited liability company
L-3 COMMUNICATIONS VERTEX AEROSPACE LLC, a Delaware limited liability company
L-3 COMMUNICATIONS WESTWOOD CORPORATION, a Nevada corporation
LINCOM WIRELESS, INC., a Delaware corporation
MCTI ACQUISITION CORPORATION, a Maryland corporation
MICRODYNE COMMUNICATIONS TECHNOLOGIES INCORPORATED, a Maryland corporation
MICRODYNE CORPORATION, a Maryland corporation
MICRODYNE OUTSOURCING INCORPORATED, a Maryland corporation
MPRI, INC., a Delaware corporation PAC ORD INC., a Delaware corporation
PAC ORD INC., a Delaware corporation
POWER PARAGON, INC., a Delaware corporation
PROCOM SERVICES, INC., a California corporation

SHELLCO, INC., a Delaware corporation
SYCOLEMAN CORPORATION, a Florida corporation
SPD ELECTRICAL SYSTEMS, INC., a Delaware corporation
SPD SWITCHGEAR INC., a Delaware corporation
TITAN FACILITIES, INC., a Virginia corporation
TITAN SCAN TECHNOLOGIES CORPORATION, a Delaware corporation
TROLL TECHNOLOGY CORPORATION, a California corporation
WESCAM AIR OPS INC., a Delaware corporation
WESCAM AIR OPS LLC, a Delaware limited liability company
WESCAM HOLDINGS (US) INC., a Delaware corporation
WESCAM LLC, a Delaware limited liability company
WOLF COACH, INC., a Massachusetts corporation