Dual Listing Combining the advantages of local and

Dual Listing Combining the advantages of local and global markets Ester Levanon, CEO January 2007 - 1 -

Enjoying the Best of Both Worlds • Exposure in 2 markets • Home market • Big U. S market • 13 -hour continuous trading from 10 am to 11 pm, local time • Raising money in both markets • Reporting in English, according to SEC rules - 2 -

The Equity Market - Prices & Volumes US $ Terms TA-25 Index Peak 947 Daily Trading Volume (US$ Millions) TA-25 Index - 3 -

Two Alternatives for Dual Listing • IPO on the TASE – the first step before offering abroad • Dual listing on the TASE – after the IPO on U. S. Markets or LSE (main market) - 4 -

IPO on the TASE • A jumping board to offering abroad • Timing – raise when you can (exiting in stages) • Low costs and a quick process • Special rules for R&D companies • Tel-Tech Index, Bio-Med (in process) and other TASE indices • Dual listing law – after listing on U. S markets - 5 -

Special Rules for R&D Companies* • Post-IPO equity: at least NIS 8 million • Minimal distribution of public float: 35 shareholders • Public float: The public float must be at least When the value of the public float is… 10. 0% From NIS 16 million 7. 5% From NIS 50 million * R&D company: one that has invested at least NIS 3 million in R&D in the last three years, including grants received from the Chief Scientist. - 6 -

Dual Listing • 39 Israeli companies have dual listed on the TASE since the dual listing law was enacted • 3 companies-Verifone, Partner and Perrigo, are included in the TA-25 Index • 10 companies are included in the Tel-Tech 15 Index • 12 companies are included in the TA-100 index • 11 additional companies are traded both in Tel Aviv and the U. S. - 7 -

The Benefits of Dual Listing From the companies’ point of view: • More Israeli investors - institutional and individual • Index funds (TA 25, TA 100 and Tel-Tech funds) • TA-25 companies may benefit from index-options trading • Raising money on TASE (Partner) • The home market benefit • Blue-chip prominence on the TASE • Greater familiarity and exposure • 13 -hour continuous trading from 10: 00 am to 11 pm, local time • Options can be exercised by employees easily and at low cost - 8 -

The Benefits of Dual Listing From the investor’s point of view: • More convenient trading hours. • Lower transaction costs • Easier access to trading • Availability of new shares in TASE portfolio - 9 -

New Companies 17 Hi-Tech US$ billions Number OF IPOs Capital Raised Number of IPOs -10 -

New Companies (Money Raised in US $ millions) 2004 2005 2006 R&D and Hi-Tech companies -- 7 (78) 17 (97) Biomed - Out of the above -- 5 10 (40) (63) Other Companies 20 (371) 17 (450) 20 (665) Total 20 (371) 24 (528) 37 (762) -11 -

Some More Figures Market Capitalization (US $ Millions) December 31, 2006 Portion of TASE Trading Volume 1 -12/2006 Average Daily Trading Volume on TASE (US $ Thousands) 1 -12/2006 Blue Square Israel 11/2000 575 93% 293 Given Imaging 3/2004 522 25% 444 Alvarion 7/2001 391 17% 454 Audiocodes 10/2001 367 20% 432 Radware 5/2004 298 13% 228 Aladin 7/2004 276 20% 212 Shamir Optical 5/2005 127 47% 62 XTL (London) 7/2005 54 62% 202 -12 -

Dual Listing – Harmonized Rules Which companies can dual list? • Companies that have been traded on the NYSE, the NASDAQ Global Market or the AMEX for at least one year, or companies with market capitalization exceeding US$ 150 million (regardless of how long they have been listed) • Companies that have been traded on the NASDAQ Capital Market for at least one year with market capitalization exceeding US $30 million • Companies that have been traded on the London Stock Exchange Main Market (not AIM) -13 -

Dual Listing – Harmonized Rules How does a company dual list? • File a short, technical, registration form • Companies traded in U. S. markets have to enclose the latest 20 -F report filed in the U. S. • Companies traded in London have to enclose the last prospectus which was approved by the U. K. Listing Authority or the last annual (periodical) report published in the U. K. • Copies of the announcements the company has made since the publication of the latest annual report or prospectus have to be enclosed • No listing fees • Trading opens two days after the registration form is publicized -14 -

Dual Listing – Harmonized Rules What are the reporting requirements? • All financial statements submitted announcements published in the U. S. or in the U. K. (No translation to Hebrew is required) • Financial statements should be submitted according to the U. S / U. K. time schedule while corporate announcements for immediate release should be published according to Israel’s time schedule -15 -

Dual Listing – Harmonized Rules • How are private placements to employees (and others) handled? • Employees: according to U. S. / U. K. regulations. • Other: reports published in the U. S. / U. K. will be submitted in Israel -16 -

Thank You Nothing contained in this presentation should be construed as investment advice, either on behalf of particular securities or overall investment strategies, and nothing contained in this presentation shall be deemed to constitute an offer, or solicitation of an offer, to buy or sell any securities. While the information contained in this presentation was obtained from sources believed to be accurate and reliable, the TASE does not represent that such information is accurate or complete, and is not responsible for any errors or omissions. -17 -

IPO Costs (1) ($K) USA UK ISRAEL Fixed costs (2) 1, 475 1, 365 155 Variable costs: Underwriting, distribution 3, 500 2, 500 Total 4, 975 3, 865 2, 655 $ 50 mil offering (2) , Lawyers, CPA, printing, fees, PR, etc. (1) -18 -

Annual Costs ($K) USA(1) UK(1) ISRAEL General costs (2) 1, 800 822 260 D&O insurance 250 50 -60 20 Class actions 250 -- -- 2, 300 ~ ~900 280 (estimate) Total (1) Source: canaccord. Asams, June, 2006 (2) Lawyers, CPA, IR, PR, fees, shareholders meetings , payments and options for directors -19 -