April 15, 1999

                              EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement"),  made and entered into as of March
1, 1999 (the "Effective Date"), by and between Aeroflex Incorporated, a Delaware
corporation,  with  its  principal  office  located  at 35 South  Service  Road,
Plainview,  New York 11803  (together with its successors and assigns  permitted
under this Agreement,  "Aeroflex")  and Leonard Borow,  who resides at 125 Rodeo
Drive,  Oyster Bay Cove,  New York 11791  ("Borow"),  amends and restates in its
entirety the original agreement made and entered into as of July 1, 1994 between
Aeroflex and Borow,  as  subsequently  amended  through July 1, 1998 (the "Prior
Agreement").

                                   WITNESSETH:

     WHEREAS,  Aeroflex  has  determined  that it is in the  best  interests  of
Aeroflex  and its  stockholders  to continue to employ Borow and to set forth in
this Agreement the obligations and duties of both Aeroflex and Borow; and

     WHEREAS,  Aeroflex wishes to assure itself of the services of Borow for the
period hereinafter provided, and Borow is willing to be employed by Aeroflex for
said period, upon the terms and conditions provided in this Agreement;

     NOW,  THEREFORE,  in  consideration  of the premises  and mutual  covenants
contained herein and for other good and valuable  consideration,  the receipt of
which is mutually  acknowledged,  Aeroflex and Borow (individually a "Party" and
together the "Parties") agree as follows:

     1. DEFINITIONS.

     (a) "Beneficiary"  shall mean the person or persons named by Borow pursuant
to Section 17 below or, in the event that no such  person is named who  survives
Borow, his estate.

     (b) "Board" shall mean the Board of Directors of Aeroflex.

     (c) "Cause" shall mean:

     (i) Borow's  conviction of a felony  involving an act or acts of dishonesty
on his part and  resulting or intended to result  directly or indirectly in gain
or personal enrichment at the expense of Aeroflex;

     (ii)  willful and  continued  failure of Borow to perform  his  obligations
under this  Agreement,  resulting  in  demonstrable  material  economic  harm to
Aeroflex, or

     (iii) a material  breach by Borow of the  provisions  of  Sections 14 or 15
below to the demonstrable and material detriment of Aeroflex.

     Notwithstanding the foregoing, in no event shall Borow's failure to perform
the  duties  associated  with his  position  caused by his  mental  or  physical
disability constitute Cause for his termination.

     For purposes of this Section  1(c), no act or failure to act on the part of
Borow shall be considered "willful" unless it is done, or omitted to be done, by
him in bad faith or without reasonable belief that his action or omission was in
the best  interests of Aeroflex.  Any act or failure to act based upon authority
given pursuant to a resolution  adopted by the Board or based upon the advice of
counsel for Aeroflex shall be conclusively presumed to be done, or omitted to be
done, by Borow in good faith and in the best interests of Aeroflex.
<PAGE>
     (d) "Change in Control"  shall mean the  occurrence of any of the following
events:

     (i) the acquisition by any individual,  entity or group (within the meaning
of Section  13(d)(3)  or  14(d)(2)  of the  Securities  Exchange  Act of 1934 as
amended (the "Exchange  Act") (a "Person") of beneficial  ownership  (within the
meaning of Rule 13d- 3 promulgated  under the Exchange Act) of voting securities
of Aeroflex when such  acquisition  causes such Person to own 20 percent or more
of the  combined  voting  power of the then  outstanding  voting  securities  of
Aeroflex   entitled  to  vote  generally  in  the  election  of  directors  (the
"Outstanding Aeroflex Voting Securities");  provided, however, that for purposes
of this subsection (i), the following acquisitions shall not be deemed to result
in a Change in Control:  (A) any  acquisition  directly from  Aeroflex,  (B) any
acquisition by Aeroflex,  (C) any  acquisition by any employee  benefit plan (or
related trust) sponsored or maintained by Aeroflex or any corporation controlled
by Aeroflex or (D) any acquisition  pursuant to a transaction that complies with
clauses (A), (B) and (C) of subsection (iii) below; and provided,  further, that
if  any  Person's  beneficial  ownership  of  the  Outstanding  Aeroflex  Voting
Securities reaches or exceeds 20 percent as a result of a transaction  described
in clause (A) or (B) above,  and such Person  subsequently  acquires  beneficial
ownership  of  additional  voting   securities  of  Aeroflex,   such  subsequent
acquisition shall be treated as an acquisition that causes such Person to own 20
percent or more of the Outstanding Aeroflex Voting Securities; or

     (ii) individuals  who, as of the Effective Date,  constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided,  however, that any individual becoming a director subsequent to
the Effective  Date whose  election,  or  nomination  for election by Aeroflex's
stockholders,  was  approved by a vote of at least a majority  of the  directors
then  comprising  the  Incumbent  Board  shall  be  considered  as  though  such
individual were a member of the Incumbent  Board, but excluding for this purpose
any such individual whose initial  assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened  solicitation  of proxies or consents by
or on behalf of a Person other than the Board; or

     (iii) consummation of a reorganization,  merger or consolidation or sale or
other  disposition of all or  subsequently  all of the assets of Aeroflex or the
acquisition of assets of another  entity  ("Business  Combination");  excluding,
however,  such a Business Combination pursuant to which (A) all or substantially
all of the  individuals  and  entities  who were the  beneficial  owners  of the
Outstanding  Aeroflex  Voting  Securities  immediately  prior  to such  Business
Combination  beneficially own, directly or indirectly,  more than 60 percent of,
respectively, the then outstanding shares of common stock or the combined voting
power of the then outstanding  voting  securities  entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Business Combination (including,  without limitation, a corporation that as
<PAGE>
a result  of such  transaction  owns  Aeroflex  or all or  substantially  all of
Aeroflex's  assets  either  directly  or through  one or more  subsidiaries)  in
substantially the same proportions as their ownership, immediately prior to such
Business  Combination of the  Outstanding  Aeroflex  Voting  Securities,  (B) no
Person  (excluding  any employee  benefit plan (or related trust) of Aeroflex or
such corporation  resulting from such Business  Combination)  beneficially owns,
directly  or  indirectly,  20  percent  or  more  of,  respectively,   the  then
outstanding  shares  of  common  stock of the  corporation  resulting  from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation  except to the extent that such ownership existed
prior to the Business  Combination and (C) at least a majority of the members of
the  board  of  directors  of  the  corporation  resulting  from  such  Business
Combination  were members of the Incumbent Board at the time of the execution of
the  initial  agreement,  or of the  action  of the  Board,  providing  for such
Business Combination; or

     (iv) approval by the stockholders of Aeroflex of a complete  liquidation or
dissolution of the Company.

     (e) "Code"  shall mean the Internal  Revenue Code of 1986,  as amended from
time to time.

     (f) "Committee" shall mean the Compensation Committee of the Board.

     (g) "Consulting Period" shall mean the period specified in Section 13 below
during which Borow serves as a consultant to Aeroflex.

     (h)  "Disability"  shall  mean the  illness  or other  mental  or  physical
disability of Borow,  as  determined  by a physician  acceptable to Aeroflex and
Borow,  resulting in his failure  during the  Employment  Term or the Consulting
Period, as the case may be, (i) to perform substantially his applicable material
duties under this Agreement for a period of nine consecutive  months and (ii) to
return to the performance of his duties within 30 days after  receiving  written
notice of termination.

     (i)  "Employment  Term"  shall mean the period  specified  in Section  2(b)
below.

     (j) "Fiscal  Year" shall mean the 12-month  period  beginning on July 1 and
ending on the next  subsequent  June 30, or such  other  12-month  period as may
constitute Aeroflex's fiscal year at any time hereafter.

     (k) "Good  Reason"  shall  mean,  at any time during the  Employment  Term,
without Borow's prior written consent or his acquiescence: 

     (i) reduction in his then current Salary;

     (ii)  diminution,  reduction  or  other  adverse  change  in the  bonus  or
incentive  compensation  opportunities  available to Borow (with  respect to the
level  of  bonus  or  incentive  compensation   opportunities,   the  applicable
performance  criteria and  otherwise  the manner in which  bonuses and incentive
compensation  are  determined) in the aggregate  from those  available as of the
Effective Date in accordance with Section 4(a) below;

     (iii) Aeroflex's  failure to pay Borow any amounts otherwise vested and due
him hereunder or under any plan or policy of Aeroflex;

     (iv)   diminution   of   Borow's   titles,    position,    authorities   or
responsibilities, including not serving on the Board;

     (v)  assignment  to Borow of duties  incompatible  with his  position  as a
senior executive officer;
<PAGE>
     (vi)  termination  by Borow of his  employment  within one year following a
Change in Control  other than (a) by mutual  agreement,  (b) for Cause or (c) by
reason of Retirement, death or Disability;

     (vii)  imposition of a requirement that Borow report other than directly to
Aeroflex's Chief Executive Officer or to the full Board;

     (viii) a material  breach of the  Agreement  by Aeroflex  that is not cured
within 10 business days after written  notification by Borow of such breach;  or


     (ix)  relocation of Aeroflex's  corporate  headquarters  to a location more
than 35 miles from the location first above described.

     (l) "Retirement" shall mean termination of Borow's  employment,  other than
due to  death,  with  eligibility  to  receive  a  benefit  under  the  terms of
Aeroflex's Supplemental Executive Retirement Plan as then in effect.
  
     (m) "Salary" shall mean the annual salary  provided for in Section 3 below,
as adjusted from time to time.

     (n) "Spouse"  shall mean,  during the  Employment  Term and the  Consulting
Period,  the woman who as of any  relevant  date is  legally  married  to Borow.


     (o)"Subsidiary" shall mean any corporation of which Aeroflex owns, directly
or indirectly, more than 50 percent of its voting stock.

     2. EMPLOYMENT TERM, POSITIONS AND DUTIES.

     (a) Employment of Borow.  Aeroflex  hereby  continues to employ Borow,  and
Borow hereby accepts  continued  employment with Aeroflex,  in the positions and
with the duties and  responsibilities  set forth below and upon such other terms
and  conditions  as are  hereinafter  stated.  Borow  shall  render  services to
Aeroflex principally at Aeroflex's corporate headquarters,  but he shall do such
traveling on behalf of Aeroflex as shall be reasonably required in the course of
the performance of his duties hereunder.

     (b) Employment  Term.  The Employment  Term shall commence on the Effective
Date and shall terminate on June 30, 2004. 

     (c) Titles and Duties.

     (i) Until the date of termination of his employment hereunder,  Borow shall
be employed as a senior  executive  officer of  Aeroflex,  reporting to the full
Board.  In his  capacity  as a senior  executive  officer,  Borow shall have the
customary powers,  responsibilities and authorities of senior executive officers
of  corporations  of the size,  type and nature of Aeroflex  including,  without
limitation, authority, in conjunction with the Board as appropriate, to hire and
terminate other employees of Aeroflex.
  

     (ii) During the  Employment  Term,  Aeroflex shall uses its best efforts to
secure the election of Borow to the Board.  During the  Employment  Term, if the
Board forms an executive or similar  committee,  Borow shall serve thereon.  (d)


     (d)Time and Effort.

     (i) Borow  agrees to devote his best  efforts  and  abilities  and his full
business time and attention to the affairs of Aeroflex in order to carry out his
duties and responsibilities under this Agreement.

     (ii)  Notwithstanding the foregoing,  nothing shall preclude Borow from (A)
serving on the boards of a reasonable number of trade  associations,  charitable
organizations  and/or businesses not in competition with Aeroflex,  (B) engaging
in charitable  activities  and  community  affairs and (C) managing his personal
investments  and  affairs;  provided,  however,  that,  such  activities  do not
materially   interfere   with  the   proper   performance   of  his  duties  and
responsibilities specified in Section 2 (c) above.
<PAGE>
     3. SALARY.

     (a) Initial Salary. Borow shall receive from Aeroflex a Salary,  payable in
accordance with the regular payroll  practices of Aeroflex,  in a minimum amount
of $350,000.


     (b)  Cost-of-Living  Increase.  During the Employment Term,  Borow's Salary
shall be increased  semiannually  by an amount equal to the increase in the cost
of living for the immediately  preceding calendar half-year,  as reported in the
"Consumer  Price  Index,  New York and  Northeastern  New  Jersey,  All  Items,"
published by the United States  Department of Labor,  Bureau of Labor Statistics
(or, if such index is no longer published,  a successor or comparable index that
is published). Such amount shall be calculated and paid to Borow in a single sum
on or before the first day of the second month following the applicable calendar
half year,  and  thereafter  his Salary shall be deemed to include the amount of
any such increase.  The first calculation and payment shall be made on or before
August 1, 1999 with respect to the period July 1, 1998 through June 30, 1999. If
Borow's  employment  shall  terminate  during  any such  six-month  period,  the
cost-of-living  increase  provided  in  this  Section  3(b)  shall  be  prorated
accordingly.
  

     (c) Salary  Increase.  Any amount to which Borow's Salary is increased,  as
provided in Section 3(b) above or  otherwise,  shall not  thereafter  be reduced
without his consent, and the term "Salary" as used in this Agreement shall refer
to his Salary as thus increased.

     4. BONUSES.

     (a) Annual  Bonus.  For each Fiscal Year during the  Employment  Term Borow
shall be  eligible to receive an annual  bonus equal to 3 percent of  Aeroflex's
consolidated  pre-tax earnings for such Fiscal Year,  computed without regard to
any amount due under this Section 4(a). Any such bonus payable with respect to a
portion of a Fiscal Year shall be prorated accordingly.  Borow shall be entitled
to elect to defer,  under the terms of any  deferred  compensation  agreement or
annual  incentive  compensation  plan applicable to him and then in effect,  any
portion of his annual bonus that is not already subject to deferral thereunder.


     (b) Special Bonus.  Borow shall be eligible to receive  additional  bonuses
during the Employment  Term. The Committee shall  determine,  in its discretion,
the occasion for payment, and the amount, of any such bonus.

     5. LONG-TERM INCENTIVE.

     During the Employment  Term, Borow shall be eligible for an award under any
long-term incentive compensation plan established by Aeroflex for the benefit of
Borow or, in the  absence  thereof,  under  any such  plan  established  for the
benefit of members of the senior management of Aeroflex.
<PAGE>
    6.   EQUITY OPPORTUNITY.

     During the  Employment  Term,  Borow shall be eligible to receive grants of
options  to  purchase  shares  of  Aeroflex's  stock  and  awards  of  shares of
Aeroflex's  stock,  either or both as determined by the Committee,  under and in
accordance with the terms of applicable plans of Aeroflex and related option and
award  agreements.  It is the  intention  of Aeroflex to grant stock  options to
Borow during the  Employment  Term.  Also,  to the extent  permitted by any such
plan, Borow shall be eligible during any Consulting  Period to receive grants of
options and awards of shares of Aeroflex's stock in the same manner.

     7. EXPENSE REIMBURSEMENT; CERTAIN OTHER COSTS.

     During  the  Employment  Term and any  Consulting  Period,  Borow  shall be
entitled to prompt  reimbursement  by Aeroflex for all reasonable  out-of-pocket
expenses incurred by him in performing  services under this Agreement,  upon his
submission  of such  accounts  and  records  as may be  reasonably  required  by
Aeroflex.  In  addition,  Borow  shall be entitled to payment by Aeroflex of all
reasonable costs and expenses,  including  attorneys' and consultants'  fees and
disbursements, incurred by him in connection with adoption of this Agreement and
any  related  compensatory  arrangements  that  Aeroflex  adopts  solely for his
benefit.

     8. PERQUISITES.

     During the Employment Term and, and any Consulting  Period,  Aeroflex shall
provide Borow with the following perquisites:

     (a) an office of a size and with  furnishings and other  appointments,  and
exclusive  personal  secretarial  and other  assistance,  at least equal to that
provided to Borow by Aeroflex as of the Effective Date; and

     (b) the use of an  automobile  and payment of related  expenses on the same
terms as are in effect on the Effective Date or, if more favorable to Borow,  as
are made available generally to other executive officers of Aeroflex at any time
thereafter.

     9. EMPLOYEE BENEFIT PLANS.

     (a)  General.  During the  Employment  Term,  Borow  shall be  entitled  to
participate  in all employee  benefit plans and programs that are made available
to Aeroflex's senior executives or to its employees generally,  as such plans or
programs  may be in effect  from time to time,  including,  without  limitation,
pension and other retirement plans,  profit-sharing  plans,  savings and similar
plans,  group life  insurance,  accidental  death and  dismemberment  insurance,
travel accident insurance,  hospitalization insurance, surgical insurance, major
and excess major medical insurance,  dental insurance,  short-term and long-term
disability insurance,  sick leave (including salary continuation  arrangements),
holidays, vacation (not less than four weeks in any calendar year) and any other
employee  benefit  plans or programs that may be sponsored by Aeroflex from time
to time,  including  plans  that  supplement  the  above-listed  types of plans,
whether funded or unfunded.

     (b) Medical Care  Reimbursement  and Insurance.  During the Employment Term
and Consulting  Period,  Aeroflex shall  reimburse  Borow for 100 percent of any
medical  expenses  incurred  by him for  himself  and his  Spouse  that  are not
reimbursed  by  insurance  or   otherwise,   offset  by  any  amounts  that  are
reimbursable  by Medicare if Borow and his Spouse,  when  eligible,  elect to be
covered by Medicare.  Aeroflex  shall  provide  Borow and his Spouse  during his
lifetime with hospitalization  insurance,  surgical insurance,  major and excess
major  medical  insurance  and  dental  insurance  in  accordance  with the most
favorable  plans,   policies,   programs  and  practices  of  Aeroflex  and  its
Subsidiaries  made  available  generally to other senior  executive  officers of
Aeroflex and its Subsidiaries as in effect from time to time.
<PAGE>
     (c) Life  Insurance  Benefit.  In  addition  to the  group  life  insurance
available  to  employees  generally,   Aeroflex  shall  provide  Borow  with  an
individual  permanent  life  insurance  benefit in an initial amount of not less
than  approximately  $1,000,000,  the terms and conditions of such benefit to be
more fully  described  in an insurance  ownership  agreement  between  Borow and
Aeroflex.

     (d) Disability Benefit. In consideration of the benefit payable to Borow in
the event of termination  of his  employment  due to Disability,  as provided in
Section 10(e) below,  or, if applicable,  in the event of termination of Borow's
consulting  services due to Disability during the Consulting Period, as provided
in Section  13(d) below,  Aeroflex  shall not be obligated to provide Borow with
long-term disability insurance.  Notwithstanding the foregoing, if Aeroflex does
provide  Borow  with such  insurance,  he shall be the  owner of any  individual
policies obtained and shall pay the premiums thereon.

     (e) Retirement  Benefit.  Borow shall be entitled to the benefits  provided
under the Aeroflex  Incorporated  Supplemental  Executive  Retirement  Plan (the
"SERP"); provided, however, that if Aeroflex fails to maintain the SERP, Borow's
retirement  benefit  shall be  determined  as if the SERP had remained in effect
until termination of his employment with Aeroflex by retirement.  These benefits
are  in  addition  to  the  benefits  provided  under  this  Agreement,  and  no
modification,  amendment or termination  of this Agreement  shall affect Borow's
rights under the SERP as in effect on the Effective  Date or, if more  favorable
to Borow, as in effect at any time thereafter.

     10. TERMINATION OF EMPLOYMENT.

     (a)  Termination  by Mutual  Agreement.  The  Parties  may  terminate  this
Agreement by mutual  agreement at any time. If they do so, Borow's  entitlements
shall be as the Parties mutually agree.

     (b) General.  Notwithstanding anything to the contrary herein, in the event
of  termination  of  Borow's   employment  under  this  Agreement,   he  or  his
Beneficiary,  as the case may be,  shall be entitled to receive (in  addition to
payments and benefits under, and except as specifically provided in, subsections
(c) through (h) below, as applicable):

     (i) his Salary through the date of termination;

     (ii) any unused vacation from prior years;

     (iii) any annual bonus for the current Fiscal Year, prorated to the date of
termination;

     (iv) any annual or special  bonus  previously  awarded  but not yet paid to
him;

     (v) any deferred  compensation  under any  incentive  compensation  plan of
Aeroflex or any deferred compensation agreement then in effect;
<PAGE>
     (vi) any other  compensation  or  benefits,  including  without  limitation
long-term incentive  compensation  described in Section 5 above,  benefits under
equity  grants and awards  described  in Section 6 above and  employee  benefits
under plans  described in Section 9 above,  that have vested through the date of
termination  or to  which  he may  then  be  entitled  in  accordance  with  the
applicable terms and conditions of each grant, award or plan; and

     (vii)  reimbursement  in accordance with Sections 9(a) and (b) above of any
business and medical  expenses  incurred by Borow or his Spouse,  as applicable,
through the date of termination but not yet paid to him.

     (c)  Termination  due to Retirement.  In the event that Borow's  employment
terminates  due  to  Retirement,  he  shall  be  entitled,  in  addition  to the
compensation and benefits  specified in Section 10(b), to the benefits  provided
under the SERP, as provided in Section 9(e) above.  The Consulting  Period shall
begin on the day following termination of Borow's employment by Retirement.

     (d)  Termination  due  to  Death.  In the  event  that  Borow's  employment
terminates due to his death, his Beneficiary  shall be entitled,  in addition to
the compensation and benefits  specified in Section 10(b), to his Salary payable
for the  remainder  of the  Employment  Term at the rate in  effect  immediately
before such termination.

     (e) Termination due to Disability. In the event of Disability,  Aeroflex or
Borow may terminate Borow's employment.  If Borow's employment terminates due to
Disability,  he shall be entitled,  in addition to the compensation and benefits
specified  in Section  10(b),  to his Salary  payable for the  remainder  of the
Employment  Term at the rate in  effect  immediately  before  such  termination,
offset by any long-term  disability insurance benefit that Aeroflex has provided
for him and for which it has paid the applicable  group or individual  insurance
premiums.

     (f)  Termination  by Aeroflex  for Cause.  Aeroflex may  terminate  Borow's
employment  hereunder for Cause only upon written  notice to Borow not less than
30 days prior to any  intended  termination,  which  notice  shall  specify  the
grounds for such  termination in reasonable  detail.  Cause shall in no event be
deemed to exist except upon a finding  reflected  in a resolution  approved by a
majority (excluding Borow) of the members of the Board (whose findings shall not
be binding upon or entitled to any  deference by any court,  arbitrator or other
decision-maker  ruling on this Agreement) at a meeting of which Borow shall have
been given  proper  notice and at which  Borow  (and his  counsel)  shall have a
reasonable opportunity to present his case.

     In the event that Borow's  employment is terminated for Cause,  he shall be
entitled only to the compensation and benefits specified in Section 10(b).

     (g) Termination Without Cause or by Borow for Good Reason.

     (i) Termination  without Cause shall mean termination of Borow's employment
by  Aeroflex  and  shall  exclude  termination  (A)  due to  Retirement,  death,
Disability or Cause or (B) by mutual  agreement of Borow and Aeroflex.  Aeroflex
shall provide Borow 15 days' prior written  notice of  termination by it without
Cause,  and Borow shall provide  Aeroflex 15 days' prior  written  notice of his
termination for Good Reason.

     (ii) In the event of termination by Aeroflex of Borow's  employment without
Cause or of termination by Borow of his employment for Good Reason,  he shall be
entitled,  in addition to the  compensation  and  benefits  specified in Section
10(b), to:
<PAGE>
     (A) his Salary,  payable for the  remainder of the  Employment  Term at the
rate in effect immediately before such termination;

     (B) annual  bonuses for the remainder of the Employment  Term  (including a
prorated  bonus for any partial  Fiscal  Year) equal to the average of the three
highest annual bonuses  awarded to him during the ten Fiscal Years preceding the
Fiscal  Year of  termination,  such  bonuses to be paid at the same time  annual
bonuses are regularly paid by Aeroflex to Borow;


     (C) continued  medical  reimbursement  for the remainder of the  Employment
Term and  thereafter  the lifetime  medical  benefits  described in Section 9(b)
above;
 
     (D) a lump-sum  payment equal to the then present  value of the excess,  if
any, of (x) the retirement benefit to which Borow would have been entitled if he
had  remained  employed  under  this  Agreement  until age 70 over (y) the early
retirement benefit actually payable to him, both as calculated and payable under
the SERP; and

     (E)  continued  participation  in all  employee  benefit  plans or programs
available to Aeroflex  employees  generally in which Borow was  participating on
the date of termination of his employment  until the end of the Employment Term;
provided;   however,  that  (x)  if  Borow  is  precluded  from  continuing  his
participation in any employee benefit plan or program as provided in this clause
(E), he shall be entitled to the after-tax  economic  equivalent of the benefits
under the plan or program in which he is unable to participate  until the end of
the  Employment  Term, and (y) the economic  equivalent of any benefit  foregone
shall be deemed to be the lowest cost that Borow would incur in  obtaining  such
benefit on an individual basis; and

     (F) other benefits in accordance with applicable  plans and programs of the
Company.

     (iii)  Prior  written  consent by Borow to any of the events  described  in
Section 1(k) above shall be deemed a waiver by him of his right to terminate for
Good Reason under this Section 10(g) solely by reason of the events set forth in
such waiver.

     (h) Change in Control.  Notwithstanding  anything  to the  contrary in this
Section  10,  termination  of  Borow's  employment  within the  one-year  period
following a Change in Control for any reason other than Cause, Retirement, death
or  Disability,  shall be  governed by Section  10(g).  In the event of any such
termination,  Borow shall be entitled to compensation and benefits in accordance
with the provisions of Section 10(g)(ii).

     11. NO DUTY TO MITIGATE; NO OFFSET.

     Borow  shall not be  required  to  mitigate  damages  or the  amount of any
payment  provided  for under this  Agreement  by  seeking  other  employment  or
otherwise,  nor will any  payment  hereunder  be  subject to offset in the event
Borow does receive compensation for services from any other source.
<PAGE>
     12. PARACHUTES.

     (a)  Application.  If all, or any portion,  of the payments  provided under
this Agreement, and/or any other payments and benefits that Borow receives or is
entitled  to receive  from  Aeroflex  or a  Subsidiary,  whether or not under an
existing plan, arrangement or other agreement,  constitutes an "excess parachute
payment"  within the meaning of Section 280G(b) of the Code (each such parachute
payment, a "Parachute Payment") and will result in the imposition on Borow of an
excise  tax under  Section  4999 of the Code,  then,  in  addition  to any other
benefits to which Borow is entitled under this Agreement, Aeroflex shall pay him
an amount in cash equal to the sum of the excise taxes  payable by him by reason
of receiving  Parachute  Payments,  plus the amount  necessary to put him in the
same after-tax  position  (taking into account any and all  applicable  federal,
state and local excise, income or other taxes at the highest possible applicable
rates on such  Parachute  Payments  (including  without  limitation any payments
under this  Section 12) as if no excise  taxes had been  imposed with respect to
Parachute Payments (the "Parachute Gross-up").
   
     (b)  Computation.  The amount of any payment under this Section 12 shall be
computed by a certified public accounting firm of national  reputation  selected
by  Aeroflex  and  acceptable  to  Borow.  If  Aeroflex  or Borow  disputes  the
computation   rendered  by  such  accounting  firm,  Aeroflex  shall  select  an
alternative  certified public accounting firm of national  reputation to perform
the applicable  computation.  If the two accounting  firms cannot agree upon the
computations,  Borow and Aeroflex shall jointly appoint a third certified public
accounting  firm of national  reputation  within 10 calendar  days after the two
conflicting computations have been rendered. Such third accounting firm shall be
asked to determine  within 30 calendar  days the  computation  of the  Parachute
Gross-up to be paid to Borow, and payments shall be made accordingly.

     (c) Payment. In any event, Aeroflex shall pay to Borow or pay on his behalf
the Parachute  Gross-up as computed by the accounting firm initially selected by
Borow by the time any taxes payable by him as a result of the Parachute Payments
become due, with Borow agreeing to return the excess amount of such payment over
the final  computation  rendered  from the process  described in Section  12(b).
Borow and Aeroflex shall provide the accounting  firms with all information that
any of them  reasonably  deems  necessary  in order  to  compute  the  Parachute
Gross-up.  The cost and expenses of all the accounting firms retained to perform
the computations described above shall be borne by Aeroflex.

     In the event that the Internal  Revenue  Service  ("IRS") or the accounting
firm  computing the Parachute  Gross-up  finally  determines  that the amount of
excise taxes thereon initially paid was insufficient to discharge Borow's excise
tax  liability,  Aeroflex  shall  make  additional  payments  to  him  as may be
necessary to reimburse him for discharging the full liability.

     Borow  shall  apply to the IRS for a refund of any  excise  taxes  paid and
remit to Aeroflex the amount of any such refund that he receives. Aeroflex shall
reimburse Borow for his expenses in seeking a refund of excise taxes and for any
interest and penalties imposed on excise taxes that he is required to pay.
<PAGE>
     13. CONSULTING PERIOD.

     (a) General. Effective upon the end of the Employment Term (but only if the
Employment  Term  ends  by  reason  of  its  expiration  or,  if  earlier,  upon
termination  of  Borow's   employment  (i)  by  mutual   agreement  or  (ii)  by
Retirement),  Borow shall become a consultant to Aeroflex, in recognition of the
continued  value to Aeroflex of his extensive  knowledge and  expertise.  Unless
earlier  terminated,  as provided in Section 13(e), the Consulting  Period shall
continue for three years.

     (b) Duties and Extent of Services.

     (i) During the Consulting Period, Borow shall consult with Aeroflex and its
senior executive  officers  regarding its respective  businesses and operations.
Such  consulting  services  shall not require  more than 50 days in any calendar
year,  nor more than one day in any week,  it being  understood  and agreed that
during the  Consulting  Period Borow shall have the right,  consistent  with the
prohibitions  of Sections 14 and 15 below,  to engage in  full-time or part-time
employment with any business enterprise that is not a competitor of Aeroflex.

     (ii) Borow's  service as a consultant  shall only be required at such times
and such  places  as shall  not  result in  unreasonable  inconvenience  to him,
recognizing his other business  commitments  that he may have to accord priority
over the performance of services for Aeroflex. In order to minimize interference
with  Borow's  other  commitments,  his  consulting  services may be rendered by
personal  consultation  at his residence or office  wherever  maintained,  or by
correspondence   through  mail,   telephone,   fax  or  other  similar  mode  of
communication at times, including weekends and evenings, most convenient to him.

     (iii) During the Consulting  Period,  Borow shall not be obligated to serve
as a member of the Board or to occupy any office on behalf of Aeroflex or any of
its Subsidiaries.

     (c) Compensation.  During the Consulting  Period,  Borow shall receive from
Aeroflex  each year an amount  equivalent to two-thirds of his Salary at the end
of the Employment  Term,  payable and subject to annual  increase as provided in
Section 3 above.

     (d) Disability.  In the event of Disability  during the Consulting  Period,
Aeroflex  or  Borow  may  terminate  Borow's  consulting  services.  If  Borow's
consulting  services are terminated  due to Disability,  he shall be entitled to
compensation,  in  accordance  with  Section  13(c),  for the  remainder  of the
Consulting Period.

     (e)  Termination.  The Consulting  Period shall terminate after three years
or, if earlier,  upon  Borow's  death or upon his failure to perform  consulting
services as provided in Section  13(b),  pursuant to 30 days' written  notice by
Aeroflex  to Borow of the  grounds  constituting  such  failure  and  reasonable
opportunity  afforded  Borow  to  cure  the  alleged  failure.   Upon  any  such
termination,  payment of  consulting  fees and benefits  (with the  exception of
lifetime medical benefits under Section 9(b) above) shall cease.

     (f) Other. During the Consulting Period, Borow shall be entitled to expense
reimbursement  (including  secretarial,  telephone and similar support services)
and perquisites and medical benefits, pursuant to the terms of Sections 7, 8 and
9(b), respectively.
<PAGE>
     14. CONFIDENTIAL INFORMATION.

     (a) General.

     (i)  Borow  understands  and  hereby  acknowledges  that as a result of his
employment with Aeroflex he will necessarily  become informed of and have access
to certain  valuable  and  confidential  information  of Aeroflex and any of its
Subsidiaries,  joint ventures and  affiliates,  including,  without  limitation,
inventions,   trade  secrets,  technical  information,   computer  software  and
programs,  know-how and plans  ("Confidential  Information"),  and that any such
Confidential Information,  even though it may be developed or otherwise acquired
by Borow,  is the  exclusive  property  of  Aeroflex  to be held by him in trust
solely for Aeroflex's benefit.

     (ii) Accordingly,  Borow hereby agrees that, during the Employment Term and
the Consulting  Period and subsequent to both, he shall not, and shall not cause
others to, use, reveal, report,  publish,  transfer or otherwise disclose to any
person,  corporation or other entity any Confidential  Information without prior
written consent of the Board,  except to (A) responsible  officers and employees
of Aeroflex or  (B)_responsible  persons who are in a  contractual  or fiduciary
relationship  with  Aeroflex or who need such  information  for  purposes in the
interest of Aeroflex.  Notwithstanding  the foregoing,  the prohibitions of this
clause  (ii) shall not apply to any  Confidential  Information  that  becomes of
general public  knowledge other than from Borow or is required to be divulged by
court order or administrative process.

     (b) Return of Documents.  Upon  termination of his employment with Aeroflex
for any reason or, if  applicable,  upon  expiration of the  Consulting  Period,
Borow shall promptly deliver to Aeroflex all plans, drawings,  manuals, letters,
notes,  notebooks,  reports,  computer programs and copies thereof and all other
materials,  including  without  limitation  those  of a secret  or  confidential
nature,  relating to  Aeroflex's  business  that are then in his  possession  or
control.

     (c)  Remedies  and  Sanctions.  In the event  that  Borow is found to be in
violation of Section 14(a) or (b) above, Aeroflex shall be entitled to relief as
provided in Section 16 below.

     15. NONCOMPETITION/NONSOLICITATION.

     (a)  Prohibitions.  During the  Employment  Term and,  if  applicable,  the
Consulting Period,  Borow shall not, without prior written  authorization of the
Board, directly or indirectly, through any other individual or entity:

     (i) become on officer or employee  of, or render any service to, any direct
competitor of Aeroflex;

     (ii) solicit or induce any customer of Aeroflex to cease  purchasing  goods
or services from Aeroflex or to become a customer of any competitor of Aeroflex;
or

     (iii) solicit or induce any employee of Aeroflex to become  employed by any
competitor of Aeroflex.

     (b)  Remedies  and  Sanctions.  In the event  that  Borow is found to be in
violation  of Section  15(a)  above,  Aeroflex  shall be  entitled  to relief as
provided in Section 16 below.

     (c) Exceptions.  Notwithstanding  anything to the contrary in Section 15(a)
above, its provisions shall not:
<PAGE>
     (i) apply if Aeroflex  terminates Borow's employment without Cause or Borow
terminates  his  employment  for Good Reason,  each as provided in Section 10(g)
above; or

     (ii) be  construed as  preventing  Borow from  investing  his assets in any
business that is not a direct competitor of Aeroflex.

     16. REMEDIES/SANCTIONS.

     Borow  acknowledges  that the services he is to render under this Agreement
are of a unique and  special  nature,  the loss of which  cannot  reasonably  or
adequately be compensated for in monetary damages,  and that irreparable  injury
and damage may result to Aeroflex  in the event of any breach of this  Agreement
or  default  by  Borow.  Because  of  the  unique  nature  of  the  Confidential
Information  and the  importance of the  prohibitions  against  competition  and
solicitation,  Borow further  acknowledges  and agrees that Aeroflex will suffer
irreparable harm if he fails to comply with his obligations  under Section 14(a)
or (b)  above  or  Section  15(a)  above  and  that  monetary  damages  would be
inadequate to compensate Aeroflex for any such breach. Accordingly, Borow agrees
that,  in addition to any other  remedies  available  to either Party at law, in
equity or  otherwise,  Aeroflex  will be entitled to seek  injunctive  relief or
specific  performance to enforce the terms,  or prevent or remedy the violation,
of any provisions of this Agreement.

     17. BENEFICIARIES/REFERENCES.

     Borow  shall be entitled to select  (and  change,  to the extent  permitted
under  any  applicable  law) a  beneficiary  or  beneficiaries  to  receive  any
compensation  or benefit  payable  under this  Agreement  following his death by
giving Aeroflex written notice thereof; provided,  however, that absent any then
effective contrary notice, his beneficiary shall be his surviving Spouse. In the
event of Borow's  death,  or of a judicial  determination  of his  incompetence,
reference in this Agreement to Borow shall be deemed to refer,  as  appropriate,
to his beneficiary, estate or other legal representative.

     18. WITHHOLDING TAXES.

     All  payments to Borow or his  Beneficiary  under this  Agreement  shall be
subject to withholding on account of federal,  state and local taxes as required
by law.

     19. INDEMNIFICATION AND LIABILITY INSURANCE.

     Nothing herein is intended to limit  Aeroflex's  indemnification  of Borow,
and Aeroflex shall  indemnify him to the fullest extent  permitted by applicable
law consistent with Aeroflex's  Certificate of  Incorporation  and By-Laws as in
effect on the  Effective  Date,  with respect to any action or failure to act on
his part  while he is an  officer,  director  or  employee  of  Aeroflex  or any
Subsidiary.  Aeroflex shall cause Borow to be covered at all times by directors'
and officers' liability insurance on terms no less favorable than the directors'
and  officers'  liability  insurance  maintained by Aeroflex as in effect on the
Effective  Date in terms of coverage and  amounts.  Aeroflex  shall  continue to
indemnify Borow as provided above and maintain such liability insurance coverage
for him after the Employment Term and, if applicable,  the Consulting Period for
any  claims  that may be made  against  him with  respect  to his  service  as a
director or officer of Aeroflex or a consultant to Aeroflex.
<PAGE>
     20. EFFECT OF AGREEMENT ON OTHER BENEFITS.

     The  existence of this  Agreement  shall not  prohibit or restrict  Borow's
entitlement to participate  fully in  compensation,  employee  benefit and other
plans of Aeroflex in which senior executives are eligible to participate.

     21. ASSIGNABILITY; BINDING NATURE.

     This  Agreement  shall be  binding  upon and  inure to the  benefit  of the
Parties  and their  respective  successors,  heirs  (in the case of  Borow)  and
assigns.  No rights or  obligations  of  Aeroflex  under this  Agreement  may be
assigned  or  transferred  by  Aeroflex  except  pursuant  to  (a) a  merger  or
consolidation  in which  Aeroflex  is not the  continuing  entity or (b) sale or
liquidation of all or substantially all of the assets of Aeroflex, provided that
the  surviving  entity or  assignee or  transferee  is the  successor  to all or
substantially  all of the  assets  of  Aeroflex  and such  surviving  entity  or
assignee  or  transferee  assumes  the  liabilities,  obligations  and duties of
Aeroflex under this Agreement, either contractually or as a matter of law.

     Aeroflex  further  agrees  that,  in the  event  of a  sale  of  assets  or
liquidation  as  described  in the  preceding  sentence,  it shall  use its best
efforts  to have such  assignee  or  transferee  expressly  agree to assume  the
liabilities,  obligations and duties of Aeroflex hereunder;  provided,  however,
that  notwithstanding   such  assumption,   Aeroflex  shall  remain  liable  and
responsible for  fulfillment of the terms and conditions of this Agreement;  and
provided, further, that in no event shall such assignment and assumption of this
Agreement  adversely affect Borow's right upon a Change in Control,  as provided
in Section 10(h) above.  No rights or  obligations of Borow under this Agreement
may be assigned or transferred by him.

     22. REPRESENTATIONS.

     The  Parties  respectively   represent  and  warrant  that  each  is  fully
authorized and empowered to enter into this  Agreement and that the  performance
of its or his  obligations,  as the case may be, under this  Agreement  will not
violate  any  agreement  between  such  Party  and  any  other  person,  firm or
organization. Aeroflex represents and warrants that this Agreement has been duly
authorized  by  all  necessary  corporate  action  and  is  valid,  binding  and
enforceable in accordance with its terms.

     23. ENTIRE AGREEMENT.

     Except to the extent otherwise provided herein, this Agreement contains the
entire  understanding and agreement  between the Parties  concerning the subject
matter hereof and  supersedes  any prior  agreements,  whether  written or oral,
between the Parties  concerning  the subject matter  hereof,  including  without
limitation  the Prior  Agreement.  Payments  and  benefits  provided  under this
Agreement  are in lieu of any  payments or other  benefits  under any  severance
program or policy of Aeroflex to which Borow would otherwise be entitled.
<PAGE>
     24. AMENDMENT OR WAIVER.

     No  provision in this  Agreement  may be amended  unless such  amendment is
agreed to in  writing  and  signed by both  Borow and an  authorized  officer of
Aeroflex.  No  waiver by either  Party of any  breach by the other  Party of any
condition or provision contained in this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent  time.  Any waiver must be in writing and
signed by the Party to be charged  with the waiver.  No delay by either Party in
exercising  any right,  power or privilege  hereunder  shall operate as a waiver
thereof.

     25. SEVERABILITY.

     In the event  that any  provision  or portion  of this  Agreement  shall be
determined to be invalid or unenforceable  for any reason,  in whole or in part,
the remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.

     26. SURVIVAL.

     The respective  rights and  obligations of the Parties under this Agreement
shall survive any termination of Borow's employment with Aeroflex.

     27. GOVERNING LAW/JURISDICTION.

     This  Agreement  shall be  governed by and  construed  and  interpreted  in
accordance  with  the laws of New  York,  without  reference  to  principles  of
conflict of laws.

     28. COSTS OF DISPUTES.

     Aeroflex  shall pay, at least  monthly,  all costs and expenses,  including
attorneys' fees and  disbursements,  of Borow in connection with any proceeding,
whether or not  instituted  by Aeroflex or Borow,  relating to any  provision of
this Agreement, including but not limited to the interpretation,  enforcement or
reasonableness  thereof;  provided,  however,  that,  if  Borow  institutes  the
proceeding and the judge or other  decision-maker  presiding over the proceeding
affirmatively finds that his claims were frivolous or were made in bad faith, he
shall pay his own costs and  expenses  and,  if  applicable,  return any amounts
theretofore  paid to him or on his behalf  under this  Section  28.  Pending the
outcome  of any  proceeding,  Aeroflex  shall pay Borow all  amounts  due to him
without regard to the dispute; provided,  however, that if Aeroflex shall be the
prevailing  party in such a proceeding,  Borow shall  promptly repay all amounts
that he received during pendency of the proceeding.
<PAGE>
    29.  NOTICES.

     Any notice given to either Party shall be in writing and shall be deemed to
have been given when delivered either personally,  by fax, by overnight delivery
service  (such as Federal  Express)  or sent by  certified  or  registered  mail
postage prepaid, return receipt requested, duly addressed to the Party concerned
at the  address  indicated  below or to such  changed  address  as the Party may
subsequently give notice of.

  If to Aeroflex or the Board: 
      Aeroflex Incorporated
      35 South Service Road
      Plainview, NY 11803
      Attention: Harvey Blau
      FAX: (516) 694-4823



  If to Borow:

      Leonard Borow
      at 125 Rodeo Drive
      Oyster Bay Cove, New York 11791




     30. HEADINGS.

     The  headings  of  the  sections   contained  in  this  Agreement  are  for
convenience  only and shall not be deemed to control  or affect  the  meaning or
construction of any provision of this Agreement.
<PAGE>
    31.  COUNTERPARTS. 

     This  Agreement  may be  executed  in  counterparts,  each of which when so
executed and delivered shall be an original,  but all such counterparts together
shall constitute one and the same instrument.

     IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of the
date first written above.

                                         Aeroflex Incorporated


  Attest: /s/ Charles Badlato            By: /s/ Michael Gorin
          -------------------                ------------------- 





  Witness:/s/ Nancy D. Lieberman             /s/ Leonard Borow
          ----------------------             -------------------
                                                 Leonard Borow