Win of Tender in England for the Supply of Integrated Water Meters with Wireless Meter-Reading Systems (AMR) in a Total Scope of £36 Mil

The Company is pleased to announce that on January 15, 2010, the English water corporation, Southern Water (one of the largest Water Corporations in England) (hereinafter: “SW”) has notified Arad of its win of the tender for the supply of integrated water meters with wireless meter-reading systems (AMR) in a total scope of £36 Mil.

This is the biggest tender the Company has ever been awarded from a financial stand point.

To the Company's best knowledge, this tender is the first in England for the supply of integrated water meters with wireless meter-reading systems (AMR) for all customers, and is amongst the world's largest tenders for the supply of integrated water meters with wireless meter-reading systems (AMR) in the past years.

In accordance with the terms of the tender and based on information received by the Company from SW, the supply of water meters by the Company is expected to lapse over a period of 5 years (hereinafter: the "Supply Period"), such that the Company is expected to provide the SW water meters every year in a scope of £7.1 Mil. SW has an option to order additional integrated water meters with wireless meter-reading systems (AMR) at the end of the Supply Period for an additional period of 5 years and under similar terms.

The formal signing of an agreement for the supply of the water meters took place on 1 February 2010.

The award of the tender is the result of intense marketing activity performed by the Company in England in the last few years, in accordance with the Group's strategic plan. Such activity included the development of unique measures which adhere to English standardization in combination with sophisticated AMR solutions, which were developed by the subsidiary, Arad Measuring Technologies Ltd., and while taking advantage of the experience accumulated by the subsidiary, Master Meter, in the AMR field in the United States.