Nova Ltd. — M&A Activity 2006

Aug 9, 2006

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Company Contact:

Investor relations Contacts:

Dror David, Chief Financial Officer Nova Measuring Instruments Ltd. Tel: 972-8-938-7505 E-mail: info@nova.co.il http://www.nova.co.il

Ehud Helft / Kenny Green GK Investor Relations Tel: +1-866-704-6710 E-mail : Ehud@gkir.com Kenny@gkir.com

NOVA MEASURING INSTRUMENTS COMPLETES HYPERNEX ACQUISITION

Acquisition Expands Nova’s Addressable Market to Include Rapidly Growing X-ray Diffraction Metrology

Rehovoth, Israel – August 9, 2006 - Nova Measuring Instruments, Ltd. (Nasdaq: NVMI), the market leader in integrated metrology and process control for the semiconductor industry, today announced that it has completed the purchase of substantially all the assets of HyperNex, Inc. for 1.6 million shares of Nova and has assumed certain liabilities, including those accruing after the closing which relate to contracts assumed by Nova. Prior to the closing, Nova and HyperNex amended and restated the original asset purchase agreement to reduce the amount of shares to be issued by Nova from 1.8 million to 1.6 million to reflect the assumption of certain additional liabilities. Based on the closing price of Nova’s stock on August 7, 2006 and the assumed liabilities, the transaction is valued at approximately $4.5 million.

The HyperNex acquisition will expand Nova’s addressable market to include wide-angle X-ray diffraction (“XRD”), an estimated $50 million potential market, which is expected to double in size over the next two to three years. HyperNex has developed and manufactures a unique wide-angle XRD stand-alone metrology system for advanced semiconductor fabs. Its wide-angle XRD tool has very high throughput compared to other XRD tools presently in the market. It utilizes patented technology and has been used in semiconductor production since 2004. When used in high volume manufacturing, XRD can provide the needed measurement for characterizing microstructures based on multiple parameter capabilities. This capability is enabling the control of the quality of thin metal layers such as copper, tungsten, silicides, seed and barrier layers at the technology nodes of 65nm, 45nm and below.

As a result of the delay in closing, which was originally anticipated in May, the transaction is expected to be dilutive to 2006 earnings, mainly due to acquisition-related expenses, and accretive in 2007 because of the advanced sales cycle which HyperNex had begun prior to the acquisition.

“We believe this acquisition will enable us to leverage our sales and support organization and capitalize on our technical expertise to expand into an important high-growth

segment of the market,” said Dr. Giora Dishon, President and CEO of Nova. “HyperNex will compliment our offering in the high-end stand-alone metrology market and complement our Spectrophotometry and Scatterometry based solutions, which will enable us to provide complete metrology solutions for critical steps such as gate structures and copper interconnect. HyperNex has an outstanding team and a wide-angle XRD technology that is field-proven in a high volume production environment and is very ready for widespread deployment in the global semiconductor market.”

About Nova

Nova Measuring Instruments Ltd. develops, designs and produces integrated process control systems in the semiconductor manufacturing industry. Nova provides a broad range of integrated process control solutions that link between different semiconductor processes and process equipment. The Company's website is www.nova.co.il.

This press release contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future performance, such as statements regarding expected revenue contributions of HyperNex, our ability to leverage our sales and support organization and capitalize on our technical expertise to expand our business, and the impact the transaction is expected to have on our product offerings. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in those forward-looking statements. These risks and other factors include but are not limited to: our ability to successfully complete our integration of HyperNex, our ability to leverage our existing channels to expand into the market for X-Ray diffraction metrology, changes in customer demands for our products, new product offerings from our competitors, changes in or an inability to execute our business strategy, unanticipated manufacturing or supply problems, changes in tax requirements and changes in customer demand for our products. We cannot guarantee future results, levels of activity, performance or achievements. The matters discussed in this press release also involve risks and uncertainties summarized under the heading ``Risk Factors'' in Nova’s Annual Report on Form 20-F for the year ended December 31, 2005 filed with the Securities and Exchange Commission on June 29, 2006. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. Nova Measuring Instruments Ltd. does not assume any obligation to update the forward-looking information contained in this press release.

Summary of Certain Material Terms of the Amended and Restated Asset Purchase Agreement Among Nova Measuring Instruments Ltd., HyperNex, Inc. and its Shareholders

On August 8, 2006, Nova Measuring Instruments, Ltd. ("Nova") entered into an Amended and Restated Asset Purchase Agreement (the “Restated Agreement”) with HyperNex, Inc. ("HyperNex") and its shareholders providing for Nova's acquisition of substantially all the assets of HyperNex and Nova's assumption of certain specified liabilities, including certain liabilities accruing after the closing relating to contracts assumed by Nova. The Restated Agreement replaced and superseded the Asset Purchase Agreement dated April 24, 2006 among the same parties.

Under the terms of the Restated Agreement, at the closing of the transaction contemplated by the Restated Agreement, Nova issued 1.6 million ordinary shares as follows: 1,208,000 ordinary shares to HyperNex and 392,000 ordinary shares to HyperNex employees. The Restated Agreement also provides that the recipients of Nova's ordinary shares with certain limited piggyback registration rights with respect to the Nova ordinary shares they receive. These piggy-back registration rights are subject to certain customary carve-outs and limitations as well as other limitations set forth in the Restated Agreement.

Pursuant to the Restated Agreement, in connection with the closing, each HyperNex employee who received shares entered into a restricted stock agreement with respect to the Nova ordinary shares received and to be received by the employee, an employment agreement and a noncompete agreement. In addition, so long as either HyperNex or its shareholders own at least 7.1% of Nova's outstanding capital stock, they will be entitled to appoint an observer to Nova's Board of Directors.

The Restated Agreement contains customary representations, warranties and covenants and generally provides that the parties' shall have no liability for breaches of the representations and warranties, other than in the case of (i) breaches of certain representations and warranties relating with respect to HyperNex to due authorization, title to the assets sold and taxation matters and with respect to Nova, to corporate status and authority and (ii) certain knowing breaches in which cases the liability will be limited to 100% of the stock issued or its monetary value at closing. Under certain circumstances, a party's liability for a knowing breach of a representation or a warranty may also be unlimited.

Except for its status as a contractual document between the parties with respect to the transactions described therein, the Restated Agreement is not intended to provide factual information about the parties. The representations and warranties contained in the Restated Agreement were made only for the purposes of the Restated Agreement and as of specific dates, were solely for the benefit of the parties to the Restated Agreement, and may be subject to limitations agreed to by the parties, including being qualified by disclosures between the parties. These representations and warranties may have been made for the purpose of allocating contractual risk between the parties to the Restated Agreement instead of establishing matters set forth in the representations and warranties as facts, and may be subject to standards of materiality

applicable to the parties that differ from those applicable to investors. Accordingly, they should not be relied upon by investors or any other person not a party to the Restated Agreement as statements of factual information.

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