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

- 2 - 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

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

- 4 - 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)

- 5 - 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

- 6 - 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.

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. Dual Listing

- 8 - 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 The Benefits of Dual Listing From the companies’ point of view:

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

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

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

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/ %293 Given Imaging 3/ %444 Alvarion 7/ %454 Audiocodes 10/ %432 Radware 5/ %228 Aladin 7/ %212 Shamir Optical 5/ %62 XTL (London) 7/ %202

Dual Listing – Harmonized Rules 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) Which companies can dual list?

Dual Listing – Harmonized Rules 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 How does a company dual list?

Dual Listing – Harmonized Rules All financial statements submitted and 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 What are the reporting requirements?

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

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.

IPO Costs (1) ($K) USAUKISRAEL Fixed costs (2) 1,4751, Variable costs: Underwriting, distribution 3,5002,500 Total 4,9753,8652,655 (1) $ 50 mil offering (2), Lawyers, CPA, printing, fees, PR, etc.

Annual Costs ($K) USA (1) UK (1) ISRAEL General costs (2) 1, D&O insurance Class actions (estimate) Total 2,300 ~~ (1) Source: canaccordAsams, June, 2006 (2) Lawyers, CPA, IR, PR, fees, shareholders meetings, payments and options for directors