Leonard's Metal, Inc./Lockheed Martin Aeronautics Company
                         Business Reformation Agreement

Pursuant to discussions (telecom) conducted between Leonard's Metal, Inc. (Marie
Edmondson/Elmer   Long)  and  Lockheed  Martin   Aeronautics   Company  (William
Krajewski) on 21 September 2001 the following business reformation  agreement is
hereby agreed to and in effect:

                              Settlement Agreement:

Applicable Lockheed Martin Purchase orders (as amended): # 4411009, # 4410964, #
4411010,  # 4411011,  # 4411012,  # 4411013,  # 4411016, # 4411017, # 4411018, #
44111022, # 4411020, # 4411623 and # 4411626

Leonard's  Metal  Inc.  claim for the T50  Program  Leading  Edge Wing Seals (40
P/N's) [Leonard's Letter dated 17 September 2001]

     o    Leonard's Metal, Inc. agrees to deliver to Lockheed Martin Aeronautics
          Company (Fort Worth, TX) ship sets # 4 -- # 7 (40 P/N's each ship set)
          in accordance with the following  schedule:

          Ship Set # 4 = 31 October 2001 (on or  before)
          Ship Set # 5 = 21  November  2001 (on or before)
          Ship  Set # 6 = 02  January  2001  (on or  before)
          Ship  Set # 7 = 06 February 2001 (on or before)

     o    Lockheed Martin agrees to pay to Leonard's  Metal,  Inc. the following
          lump  sum  payments  per  discussion  w/Krajewski  9/26/01

          Settlement Payment  for  Ship Set # 1  Payable  Upon  Receipt  of
          Invoice
          Total Settlement = **********

     o    Lockheed Martin agrees to enter a business  agreement whereby Lockheed
          Martin  agrees to purchase  from  Leonard's  Metal,  Inc.  "follow on"
          production  of T50  Program  Leading  Edge Wing Seals (40  P/N's,  see
          "Attachment  A" -  incorporated  herein) at a "not to exceed" ship set
          price of **********  each. This ship set price will be in effect until
          31 December  2010,  providing that Leonard's  Metal,  Inc.  maintain a
          Lockheed Martin acceptable level of delivery and quality performance.

                                 OTHER MATTERS:

Lockheed  Martin agrees "in good faith" to attempt to maintain  (current  Master
Agreements to be extended  through 31 December 2007) its existing  business with
Leonard's Metals, Inc. (see "Attachment B" - incorporated  herein) and agrees to
provide Leonard's Metal, Inc. with continued business  opportunity to compete on
additional  sheet metal  projects  (providing  adequate  capability and capacity
exists within Leonard's Metal, Inc) as they may arise within the Lockheed Martin
Aeronautics  Company  (specifically - F16, C130 and F22 programs) providing that
Leonard's Metal,  Inc.  maintain a Lockheed Martin  acceptable level of delivery
and quality performance.

Lockheed  Martin also agrees to consider  Leonard's  Metal,  Inc. for additional
commodity work scope  providing  Leonard's  Metal,  Inc.  meets Lockheed  Martin
necessary  and  required  technical  capability,  quality,  delivery  and  price
requirements. This additional commodity work scope consideration consists of:

Subcontract   type  tooling   (design   and/or  build)   Subcontract   Machining
(specifically with Leonard's Precise (TX) and Tempco (CA) facilities)



/s/ Elmer Long       (date) 9/27/01 /s/ William N. Krajewski    (date) 9/24/01
----------------------------------- --------------------------------------------
Elmer Long                          William N. Krajewski
Director, Marketing                 Senior Manager, Airfinance
& Sales                             Components & Outsourcing
LMI Aerospace                       Lockheed Martin Aeronautics Company


*    The text noted by asterisks  has been  redacted in  connection  with a
     request to the  Securities and Exchange  commission  for  Confidential
     Treatment of such text.