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MOORESTOWN, N.J. --- Lockheed Martin and Kongsberg Defence and Aerospace AS of Norway have signed a memorandum of agreement (MOA) to become partners on the Royal Norwegian Navy's New Frigate program and to establish a long-term business relationship between the two companies on other projects worldwide.

The MOA, signed late last week in Oslo, Norway, by representatives of the two companies, potentially could result in $250 million (U.S). in sales to Kongsberg over the life of the ten-year agreement.

"We are extremely pleased with the prospect of working with Kongsberg Defence and Aerospace as a full-fledged partner,'' said Joseph D. Antinucci, president of Lockheed Martin Naval Electronics & Surveillance Systems. "With its broad program experience and its extraordinary capability, Kongsberg is ideally suited to join Lockheed Martin in cooperative efforts in the global marketplace.''

Under the terms of the MOA, a workshare plan will be developed to enable Kongsberg to perform tasks in support of the Royal Norwegian Navy's New Frigate program. The Royal Navy has commenced contract negotiations with a team led by Spanish shipbuilder Empresa Nacional Bazan for the frigate program, and a contract signing is anticipated before the end of 1999. Lockheed Martin is providing the integrated weapon system for the Bazan frigate offering.

Prospectively, the workshare plan could involve Kongsberg in several aspects of the program, including development and integration of the ship's combat management system, work related to the frigate's anti-submarine warfare capability, and participation in training activities supporting the program, among other program tasks. The workshare plan to be developed is subject to the technical, cost and schedule constraints of the program, as well as final approval of Bazan, the Royal Norwegian Navy Materiel Command, and the Norwegian Ministry of Defence.

For the longer term, the MOA provides for the evaluation of potential roles for Kongsberg in other projects with Lockheed Martin, including tactical communications systems, software for airborne platforms and systems, and Norwegian space initiatives, among other areas.

Kongsberg Defence & Aerospace is part of Norway's premier high technology enterprise Kongsberg Gruppen ASA. In 1997, Kongsberg Gruppen was reorganized and divided into two main business areas, Kongsberg Marine AS and Kongsberg Defence & Aerospace AS.

Kongsberg Defence & Aerospace is Norway's leading defense enterprise, and accounted for over one third of the Group's 1998 operating revenue of approximately $620 million (U.S.). Core product areas are command and weapon control systems for surface combatants and submarines, anti-ship missiles, and communications. As Norway's largest supplier to the international defense industry, exports accounts for 86 percent of orders.

E.N. Bazan was established in 1742 as a shipyard devoted to the Royal Spanish Navy and is now fully dedicated to design and construction of vessels for both the Spanish Navy and the international market. E.N. Bazan employs more than 5,000 people in three facilities.

Lockheed Martin Naval Electronics & Surveillance Systems, headquartered in Moorestown, New Jersey, provides surface ship and submarine combat systems, antisubmarine warfare and ocean surveillance systems, missile launching systems, radar and sensor systems ship systems integration services, and other advanced systems and services to customers worldwide.