News Release

Palomar Products Wins UK AWACS Audio Distribution Expansion Contract

Rancho Santa Margarita, CA - May 8, 2003 - Palomar Products, Inc. announced today that they have been awarded a multi-million dollar phased contract to expand the radio communications capabilities of the United Kingdom AWACS fleet. This upgrade program will significantly expand the number of direct radio access channels available to the AWACS crewmembers.

The first phase of the contract includes the engineering required for unit hardware and software modification and the generation of all the associated documentation. The second phase of the contract calls for modification and retesting of all affected units in the fleet. The UK operates seven AWACS airplanes.

Val Policky, Palomar Products' President, stated: "In this age of COTS and the associated challenging obsolescence problems, it's gratifying to know that our conservatively designed equipment has not only been reliably flying for 20 years, but can still be brought back and modified for expanded capabilities today."

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. Palomar Products has been the audio distribution system supplier for the U.S. Air Force, UK, French and Japanese AWACS fleets.

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