ECI Telecom Ltd. Signs Memorandum of Understanding With Lipman Electronic Engineering Ltd. to Transfer Transaction Transmission Business for 16% Share in Lipman

Business Wire, June 16, 1999

PETAH TIKVA, ISRAEL--(BUSINESS WIRE)--June 16, 1999--

ECI Telecom Ltd. (NASDAQ/NM symbol:ECILF) announced today the signing of a Memorandum of Understanding (MOU) with Israel-based Lipman Electronic Engineering Ltd.("Lipman"), to consolidate the transaction activities of the two companies.

Under the terms of the MOU, ECI Telecom will receive 16% of Lipman shares, in exchange for ECI Telecom's transaction transmission business, located primarily in Calabasas, California, USA. The MOU includes an option for ECI Telecom to purchase up to 8.9% additional shares from Lipman upon execution of a definitive agreement by the Companies, targeted 30 days from the date of this release.

"The consolidation of ECI Telecom's transaction transmission activities with Lipman's resources will give additional focus to this market segment, which is not the main line of our business", said Mr. David Rubner, ECI Telecom's President and CEO.

Mr. Aharon Lipman, President of Lipman commented: "This agreement presents Lipman with an opportunity to offer customers a more complete and comprehensive solution in the transaction area, and widens our global support channels around the world."

According to the terms of the MOU, ECI Telecom will have 2 seats out of a total of 8 seats on Lipman's Board of Directors.

The companies will agree on ways and means of allowing Lipman to have use of ECI Telecom's worldwide offices and facilities in order to facilitate Lipman's marketing of its products.

The agreement is contingent on completion of due diligence by both parties and the receipt of approvals from relevant authorities.

About Lipman Electronic Engineering Ltd:

Lipman Electronic Engineering Ltd. is a high technology publicly-held company, with its shares traded on the Tel-Aviv Stock Exchange (TASE). Lipman focuses its main business activities in two areas: electronic payment systems and solutions at the point-of-sale (POS), and innovative and highly-technological products outside of the electronic payment/commerce line. Lipman is a leading global provider of advanced wireless and tel-line POS terminals, cash registers, thermal and impact printers, PIN pads, smart-card readers, credit/debit/smart-chip card controllers for integration into vending machine, commercial washer/dryer payment systems or other card-type payment applications, including "electronic purse". Among Lipman's innovative developments is the Quicktionary - a hand-held scanner/dictionary, now sold and further developed by its subsidiary - Wizcom Technologies Ltd. Lipman's corporate headquarters are based in Israel with subsidiaries and local offices in the USA, CIS, Turkey, Spain and China. Additional information: http:\\www.lipman.co.il

About ECI Telecom Ltd.:

ECI Telecom Ltd. is a provider of integrated network solutions for digital communications and data transmission systems. The Company designs, develops, manufactures, markets and supports end-to-end digital telecommunications solutions for today's new services and converging networks. The Company's products create bandwidth, maximize revenues for network operators, expand capacity, improve performance and enable new revenue-producing services. In doing so, they enhance the capabilities of existing networks to support voice, data, video and multimedia services. ECI Telecom's equipment supports traffic in more than 300 service networks in over 145 countries.

This press release and additional information about the Company, is now available on ECI TELECOM's site on the World Wide Web: http://www.ecitele.com.

If you would like to receive future news releases electronically, please forward your email address to eci.enews@inc.ecitele.com

Certain statements contained in this release may contain forward-looking information with respect to plans, projections or future performance of the Company. By their nature, forward-looking statements involve certain risks and uncertainties including, but not limited to, product and market acceptance risks, the impact of competitive pricing, product development, commercialization and technological difficulties and other risks detailed in the Company's filings with the Securities and Exchange Commission.