1. Alternative Financing for Entrepreneurs How Israeli Companies Can Access Alternative US Capital Sources from Strategic Buyers By Bruce Kobritz CALITC.ORG The Merage Foundation Presentation October 26, 2007

2. Do you Need an Intermediary? What is Investment Banking? Identification of RISK in all its forms. Ability to put a Price on RISK. Where you stand depends upon where you sit. The Goal of this Presentation is that you understand enough about the Merger & Acquisition Process to 1) At least, know if you need an Intermediary 2) At most, help you know if your capable of doing the deal yourself.

3. CASE STUDY What is the Best Way to Structure an M&A Deal? What is the Negotiating Process? What are the Key Deal Points to Negotiate with the Acquiring Company? What is the Optimal Way to Approach Valuation? How Do You Evaluate the Offer?

4. What is the Best Way to Structure an M&A Deal? What is your Company’s “Compelling Story”? Research your Target – Doing Due Diligence. Is this a ‘Financing Deal”- Is Debt or Equity Capital what you seek – At What Cost? Should this Really be a Licensing Deal? Financial vs. Strategic Buyer? Choosing the Right Partner – What do they bring to the table: capital, expertise, marketing?

5. What is the Negotiating Process? Non Disclosure Agreement –(Key Provision: Non-Solicitation). Preparing your “Book”: Business Plan, Financial Statement, Budget, Forecast, Capitalization Chart, Sources and Uses of Funds Nonbinding Indication of Interest / Auction. Site Visit. Letter of Intent (LOI).

6. What are the Key Deal Points to Negotiate with the Acquiring Company? Minority or Majority Acquisition? Governance - Change of Control? What Happens to the Management Team? Stock vs. Cash? Earnout? Indemnification?

7. What is the Optimal Way to Approach Valuation? Is there Revenue? Is there Cash Flow? EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization) Multiple? Documentable Contracts in Place? Management Experience “Doing it Before”. Value of the Intellectual Property? Real Options. Milestones

8. Know Minimum Acceptable Conditions (MAC) Strategic Competitive Advantage of Company being Acquired & Barriers to Entry What is the Value Added you bring to their table? How do you boost their Shareholder Value? Its not how much you think your Company is worth, Its how much its worth to the buyer. How Do You Evaluate the Offer?