In addition, a wholly owned subsidiary of Elscint signed today an agreement with Marina Herzlia Limited Partnership 1988, a partnership controlled by Control Centers Ltd., a private company controlled by Mr. Motti Zisser which is the parent company of EIL, pursuant to which Elscint shall acquire the entertainment and commercial center which the partnership is constructing at the Marina in Herzlia, in consideration for a cash payment of approximately US $35 million and an undertaking to complete certain construction works relating to the
development of the site for the benefit of the partnership in an additional amount of approximately US $7 million.

Elscint has also announced its intention to acquire from Marina Ashkelon Limited Partnership (of which Control Centers Ltd. is a partner), the entertainment and commercial center which the partnership is developing at the Marina in Ashkelon, or Control Center�s share in the partnership, but the transaction in respect of this asset has not yet been finalized.

The Hotels Division

The activities of the hotels division of EIL were commenced in 1993 by the Control Centers Group, and in 1998 were injected into EIL. Today the division owns (in most instances in partnership with the Red Sea Hotels Group and/or other partners) five active hotels in the following countries: England, Netherlands, Belgium and South Africa, a hotel under construction in London, another hotel in London in the final acquisition stages, and the National Ballet Institute building in Budapest, Hungary which is designated to be converted into an hotel. In addition, the division is at advanced stages of examination of the acquisition of a number of additional hotels in Europe and in other countries. The division currently owns a total of approximately 1,100 rooms, and it will reach a total of approximately 2,000 rooms by the year 2001, without taking into account possible additional increases due to the acquisition of more hotels.

The following is a table that sets forth the hotel division�s share of the revenues generated by the hotels in its ownership (actual and anticipated) in the years 1996 to 2001 (in thousands of US Dollars): 
 

Entertainment and Commercial Center, Marina Herzlia

The entertainment and commercial center which is planned at the Marina in Herzlia which is being acquired by a subsidiary of Elscint, is at the construction stage which is scheduled for completion in 30 months. Upon completion, the center will be comprised of approximately 70,000 square meters, of which 32,000 are letable.

As part of the transaction, certain existing contracts signed by Marina Herzlia Limited Partnership for the leasing of �anchor� areas in the center to bodies such as Supersol, Superpharm, Israel Theaters and others, will be assigned to Elscint, as well as contracts with
construction companies for the construction of the center. Subject to market conditions and in accordance with present presumptions, upon completion, the center is anticipated to generate minimal revenues of approximately US $15 million per annum.

The decisions to enter into the said transactions, which were adopted by the Board of Directors (excluding those Directors with a potential conflict of interests), were adopted after a long and complex process, during which the Boards of Directors held extensive deliberations, in consultation with financial, accounting and legal experts, and examined at length the possibilities available to the Company for the creation of long term value for its shareholders.

The conclusions reached at the end of this process are that the Company should focus upon a principal area of activity in which it may achieve attractive yields on its resources. The Board of Directors preferred to concentrate upon areas in which the Europe Israel Group has know-how, expertise and established activities which have good chances of producing the sought after yields. Amongst the various fields which fulfill these criteria, the Board of Directors chose to focus on the hotels and leisure fields.

The Board of Directors was assisted by valuations prepared by international appraisers of good reputation for the purpose of determining the value of the acquired hotel activities. The value of the commercial and entertainment center at Marina Herzlia was determined on the basis of valuations prepared by Israeli appraisers of good reputation.

Abraham (Rami) Goren, the Chairman of the Board of Directors of Elscint, stated that Elscint�s Board is pleased with the completion of the contemplation and planning process, and the advance to the execution stage. �Especially after it has become clear that the possibility of a tender offer is no longer relevant, it is important to take decisive steps in order to start with the generation of attractive yields from the resources which are available to the Company. We believe that the investments which we have today resolved to concentrate upon, are those which will bring that about. This is the beginning of a new road for Elscint, and we believe that we will be successful in bringing value to all our shareholders.�

Also today, Elbit Medical Imaging Ltd. (�EMI�) and EIL have announced their intention to conclude transactions within the framework of which EMI shall acquire from EIL then latter�s shopping mall division in central and eastern Europe. Further details may be obtained from the Press Releases issued by EIL and EMI.

Motti Zisser, the Chairman of the Boards of Directors of EIL and EMI, stated that the Europe Israel Group is characterized by the ability to expediently transform ideas and complex businesses from conception to reality. The management of the Group companies are comprised of dynamic and talented individuals, the majority of whom have grown and developed from within the Company. Openness and revitalization have always been the corner stones of the Group, and the Group intends in the future to remain alert and to identify
suitable business opportunities to develop its business activities, as it has done with considerable success in the past.

�We believe that the focusing of each of the Companies on a specific principal area of activity: EIL�investments in technology and holdings in various areas; EMI shopping malls in central and eastern Europe; and Elscint�hotels and leisure oriented activities; will enable the realization of the substantial expertise and know-how which have been acquired by the Group in each of the areas, thereby creating long-term value for the shareholders of each of the companies.�

This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the Company�s control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company�s periodic filings with the Securities and Exchange Commission.