News Release

Boeing Selects Palomar Intercommunication System for 737 AEW&C Program

Rancho Santa Margarita, CA -- June 17, 2002 -Palomar Products, Inc. announced today that The Boeing Company has selected them to provide the Mission Intercommunications Systems for the Australian Wedgetail 737 Airborne Early Warning & Control (AEW&C) program.

In anticipation of the Boeing 737 AEW&C and future AEW&C systems requiring sophisticated communications capabilities, Palomar Products has developed a state-of-the-art audio / data distribution system - using the latest digital signal processing and networking technology. Val Policky, Palomar Products' President, stated: "This is a very important program for our company. The future production potential for this platform is significant."

The Australian Defence Force was the first to select the new 737 AEW&C system. Delivery of the first two aircraft is expected in 2006. The Republic of Turkey has signed a contract with Boeing for the acquisition and development of a new AEW&C system, which includes four 737 AEW&C aircraft and an option for two more.

Palomar Products, Inc. is a leading developer and manufacturer of secure audio and data distribution systems for military airborne and ground-based applications. Located in Rancho Santa Margarita, California, Palomar has provided TEMPEST qualified systems to customers throughout the world for over 30 years.

The Boeing Company is the world's largest manufacturer of satellites, commercial jetliners and military aircraft. In terms of sales, Boeing is the largest exporter in the United States. Total company revenues for 2001 were $58 billion.

Contact:
Palomar Products
Bob Lawson
Marketing Director
Voice (949) 766-5434
FAX (949) 766-5353
email: rlawson@palpro.com