Court Approves Condor Systems, EDO Deal.

Business Editors

The United States Bankruptcy Court for Northern California has approved the sale of Condor Systems Inc., a leading supplier of electronic intelligence equipment to the military and private industry, to EDO Corporation of New York.

The court's approval clears the way for EDO to acquire the Morgan Hill-based company in July. Condor, more than $140 million in debt, filed for bankruptcy protection in November 2001.

Under terms of the proposal, EDO will acquire nearly all of Condor's assets and businesses for approximately $112.3 million in cash and assumption of certain liabilities, including selected accounts payable, certain obligations relating to employees and standby letters of credit. In a conference call with analysts, EDO announced that it expects to combine its ANC Division into Condor's division based in Simi Valley. Additionally, EDO has entered into discussions with Condor's Morgan Hill location landlord to renegotiate certain terms of Condor's lease. No layoffs are expected as a result of the acquisition.

Condor was progressing with its own reorganization plans when EDO approached the company with its offer this spring.

The boards and senior management of both companies previously approved the proposed acquisition, although other companies were invited to bid for Condor's assets. Ultimately there were no other bidders and the court's approval was the last hurdle for the deal.

Under terms of the acquisition agreement senior secured lenders will be paid off. An amended reorganization plan will be developed to distribute any remaining sale proceeds to remaining creditors.

Condor, founded in 1980, is privately held and employs about 420 employees. EDO is publicly traded (NYSE:EDO) with 2001 annual revenues of $260 million and about 1,400 employees. The defense electronics company supplies highly advanced electronic, electromechanical and information systems and engineered materials to governments and private industry customers worldwide.

Nightingale & Associates LLC, based in Stamford, Conn., were the financial advisors to Condor. Leading the Nightingale team were Michael D'Appolonia, principal, Timothy Hassenger and Reece Fulgham, managing directors, and Larry Perkins, associate.

Patrick A. Murphy and Eric E. Sagerman, shareholders of Murphy Sheneman Julian & Rogers, with offices in San Francisco and Los Angeles, represent Condor. Jean B. LeBlanc, shareholder, and Justin Rawlins, associate, assisted in the sale.