EDO and Terma to Develop F-16 Smart-Weapon Ejector Rack

"Both companies have extensive experience with high-performancemilitary aircraft," said James M. Smith, EDO's chief executiveofficer. "We are combining our complementary capabilities and marketstrengths to address a substantial need among the worldwide F-16community."

The Royal Danish Air Force (RDAF) has already authorized testingof the ESTER capability for qualification on its F-16 Mid-Life Update(MLU). This includes system integration laboratory testing in October2006 followed by flight testing in November.

"In the light of our close relationship with the Royal Danish AirForce I am pleased that we have now entered into an agreement with EDOCorporation on development and marketing of the ESTER," said JensMaaloe, President and CEO, Terma.

The Triple Ejector Rack is a weapon-suspension unit that attachesto an aircraft's weapon pylons, enabling each pylon to carry threeweapons. The TER-9 version is suitable for supersonic under-wing F-16weapons stores.

ESTER will improve the capability to carry "smart"precision-guided weapons and individually target and release each one.These include the 500 pound-class JDAM (Joint Direct Attack Munition)and EGBU-12 (Paveway) weapons, and similar stores that operate on themilitary standard 1760 interface.

The F-16 "Fighting Falcon," which has been in production byLockheed Martin for more than 25 years, is used in at least 24countries. Over 4,000 aircraft have been produced, offering asubstantial potential market for upgrading to ESTER.

About EDO Corporation

EDO Corporation is the market leader in sophisticatedaircraft-armament carriage and release systems. For decades, EDO hasprovided such equipment for the world's dominant jet fighters,including the F-15, F-16, F/A-18, Tornado and Harrier. For the F/A-22,EDO has developed and produces the AMRAAM Vertical Eject Launcher(AVEL), which employs the company's state-of-the-art pneumaticejection technology.

EDO is developing a pneumatic launching system for the F-35 JointStrike Fighter. The company is also developing a launching system forthe Joint Common Missile.

In addition to aircraft armament systems, EDO Corporation has corecompetencies in a wide range of critical defense areas, including:

-- C4I - Command, Control, Communications, Computers, and Intelligence

-- Electronic Warfare

-- Undersea Warfare

-- Advanced Composite Structures

-- Professional and Engineering Services

With headquarters in New York, EDO Corporation (www.edocorp.com)employs 3,000 people worldwide. The company was founded in 1925 andhad revenues of $648 million in 2005.

About Terma A/S

Terma, a leading Denmark-based defense and aerospace company, is aproven developer of electronic warfare systems, reconnaissancesystems, and aeronautic structures for high-performance militaryaircraft. These systems include the ALQ-213 Electronic WarfareManagement system which is deployed on over 1,600 F-16's and otheraircraft, worldwide.

The business activities of Terma include products and systems fora number of civil and military applications including S/X-band radarsand radar systems, naval command and control systems, air defensesystems, communication systems and applications and services for spacepurposes and air traffic management.

Terma A/S is headquartered in Lystrup, Denmark and maintainssubsidiary facilities and operations in a number of European countriesand in the U.S., including the wholly owned subsidiary, Terma NorthAmerica, Inc. The company employs approximately 1,100 peopleworldwide, and realized 2005 revenues of approximately US $180million.

Forward-Looking Statements

Certain statements made in this release, including statementsabout future sales, are forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995. Thesestatements are based on current expectations, estimates andprojections about the company's business based, in part, onassumptions made by management. These statements are not guarantees offuture performance and involve risks, uncertainties and assumptionsthat are difficult to predict. Therefore, actual outcomes and resultsmay differ materially from what is expressed or forecasted in suchforward-looking statements due to numerous factors, including thosedescribed above and the following: changes in demand for the company'sproducts and services, product mix, the timing of customer orders anddeliveries, the impact of competitive products and services andpricing, and other risks discussed from time to time in the company'sSecurities and Exchange Commission filings and reports. In addition,such statements could be affected by general industry and marketconditions and growth rates, and general domestic and internationaleconomic conditions. Such forward-looking statements speak only as ofthe date on which they are made, and the company does not undertakeany obligation to update any forward-looking statement to reflectevents or circumstances after the date of this release.