Sale of PSInet Europe Given Go-Ahead by European Commission

Business Wire, July 1, 2002

Business Editors

ClearBlue Technologies and Israel Corporation today confirmed that the proposed purchase of PSINet Europe BV has been approved and cleared by the European Commission.

PSINet Europe's new Chairman, Andy Ruhan, who is also chairman of Clear Blue Technologies, commented, "PSINet Europe BV represents one of the strongest brands in Europe not least because of its some 7,000 customer base and highly regarded robust network. We have a great opportunity to build on PSINet's European ambition to become the partner of choice in the web services, hosting and professional services outsourcing market."

Gilad Shavit, the CEO of the telecom arm of Israel Corporation (Kol 1) commented, "Together with ClearBlue Technologies, we believe that we will bolster PSINet Europe's position as market leader in delivering world-class managed IP solutions. Because the market is in a state of flux, customers are naturally gravitating towards the companies that can provide stability coupled with a compelling solutions mix on which they can deliver their business strategy. This acquisition is most timely because it fulfils the needs of our existing customers as well as our prospects because we can offer a robust services portfolio."

Shavit continued, "The challenge facing customers today is to identify the most credible and stable partner in this area. In addition, more and more CFOs and CTOs are focusing on issues such as cost and productivity which are the key drivers behind a successful outsourcing strategy. The acquisition of PSINet Europe is testament to our continued commitment to support this area of the business and inject a level of confidence back in to the market. It will also kick start a vital but still embryonic industry in Europe."

PSINet Europe today is already one the largest and most experienced providers of managed IP services in Europe with revenues of approximately EUR 180m for the year ending 31 December 2001. Its operations extend across 12 European countries.

R.Scott Arnell, President and Chief Operating Officer of PSINet Europe is to step down and will be replaced by Richard E. Williams as PSINet Europe's new CEO. Williams has worked in the telecommunications, computer and software industry for over 34 years and is the former founder, President and CEO of RSLCOM Europe Limited, part of Israel Corporation.

Commenting on Williams' appointment, Ruhan said, "Richard's expertise in the technology sector makes him an excellent choice to lead the company forward. We would like to thank Scott for his significant achievement in managing the business over the last year during the restructuring of PSINet and enabling our successful acquisition of the company. We wish him well in his future endeavours. The time is now ripe for PSINet Europe to realise its potential and I have every confidence that Richard will guide and lead the company to its deserved leadership position in the market."

Williams is already in the process of appointing a senior team to support him in implementing the new commercial vision of the business and added: "We stand on the threshold of a new and exciting era for PSINet Europe. Not only can we offer our existing customers the financial stability and assurance of quality services during these unstable economic times, we also maintain our vision of providing outstanding network and hosting infrastructure, aided by the industry expertise and investment from our new partners."

About Richard E. Williams:

Richard E. Williams, CEO of PSINet Europe, has worked in the telecommunications, computer and software industry for over 34 years. He is the former founder, President and CEO of RSLCOM Europe Limited. Williams built this company from start up to an EBITDA positive business with over pound sterling500 million turnover in fifteen countries, taking the company public on the NASDAQ in 1997. From 1992 to 1995, Richard served as a founding Director of WorldCom (UK) with responsibility for sales and marketing.

About PSINet Europe:

PSINet Europe was established in 1997 and is headquartered in Geneva, Switzerland. The company is a leading provider of Internet and IT solutions offering hosting solutions, global eCommerce infrastructure, end-to-end IT solutions and a full suite of retail and wholesale Internet services. Services are provided on PSINet-owned and operated fibre, web hosting and switching facilities in Austria, Belgium, France, Germany, Hungary, Ireland, Italy, Luxembourg, Netherlands, Spain, Switzerland and the UK.

PSINet is a wholly owned joint venture comprising of ClearBlue Technologies Inc (www.clearblue.com) and Israel Corporation (www.israelcorp.com).

For more information about PSINet, visit www.europe.psi.com

About ClearBlue Technologies:

ClearBlue Technologies Inc (www.clearblue.com) is a privately-held firm based in San Francisco, California. ClearBlue manages approximately 450,000 square feet of collocation space at 21 carrier-neutral data centres throughout the United States including one operating facility in London.