Charles Watson
ELSA, Inc.
408-919-9100 ext. 116
cwatson@elsa.com

ELSA Terminates the Announced Hercules Acquisition

Shareholder Interest Protected

November 7, 1998 -- ELSA AG, Aachen, a leading supplier of PC peripheral products for computer graphics and data communications, had announced its plans to acquire Hercules Computer Technology, Inc. on August, 21st, 1998. Today ELSA announced that the negotiations have been terminated.

Theo Beisch, President and CEO of ELSA AG, commented: "The results of ELSA's own due diligence as well as the examination of our outside auditor, Arthur Andersen, did not confirm the company's expectations so that finally within the given timeframe the parties were unable to reach agreement. Despite still being convinced of the Hercules brand, the final conclusion was that it was in the best interest of ELSA and our shareholders, not to proceed with the acquisition. Accordingly, ELSA exercised its right to terminate the transaction."

Beisch further added that ELSA will continue to focus on the PC and data communications markets. Also the international expansion strategy, including the search for attractive investment opportunities in Europe, the US and in Asia, as well as the further expansion of ELSA's international sales channels will be continued.

ELSA Information

ELSA, Inc. is a subsidiary of ELSA AG, a Germany based publicly listed company, trading on the 'Neuer Markt' trading segment of the Frankfurt stock exchange. Founded in 1980, ELSA has built a world-class reputation in high-performance 2D and 3D graphics solutions for professional workstations, commercial desktop and consumer PCs. In addition ELSA offers a wide range of communications products such as Modems, ISDN-internet access solutions and PC based videoconferencing products.

The ELSA logo is a registered trademark of ELSA AG. All names mentioned may be trademarks or registered trademarks of their respective owners.