James H. Morgan, Esq.
5OO Main Street
Suite l005
Fort Worth, Texas 76lO2

Re: U.S. ex rel. Ballew v. Aerospatiale Helicopter Corporation and Textron Lycoming

Dear Mr. Morgan,

This confirms our telephone conversation of today concerning our settlement discussions with Textron Lycoming and other matters. As you know, in connection with the above-referenced lawsuit, the Government is attempting to negotiate an agreement with Textron Lycoming under which Lycoming would pay the Government a fixed amount in settlement of the Government's claims for past damages, and Lycoming would provide the Government with future cost reductions to insure that the Government suffers no further damages from Lycoming's manufacture of nonconforming equipment.

In our conversation I agreed to recommend to the appropriate Department of Justice officials that your client be awarded, pursuant to 31 U.S.C. 3730(d)(1), fifteen percent (15%) of the Government's recovery for past damages arising out of the above- referenced lawsuit; in return, you agreed that you would recommend to your client that he accept the same, It was our further understanding that, in the event there is litigation within the scope of the qui tam complaint, your client would not be precluded by the above agreement from recovering whatever sums he may be entitled to.

Once again, thank you for your cooperation. If you have any questions regarding these matters, please feel free to call me.