Going Public – Where and When The Semi-Annual Financial Conference The Association of Publicly Traded Companies and DC Finance Going Public – Where and When Ronit Harel Ben-Ze’ev, Senior Vice President Tel-Aviv Stock Exchange November 2006

TASE – No. of New Companies (Equity raised in NIS millions) 1-9/2006 2005 2004 13 (355) 7 (349) -- R&D and Hi-Tech companies 8 (259) 5 (179) Biomed (Out of the above) (1,594) 17 (2,021) 20 (1,661) Other Companies 26 (1,949) 24 (2,370) Total

The Home Market – 2 Alternatives: IPO on the TASE Dual Listing on the TASE – Following an IPO on U.S. Markets or LSE (official list).

1. IPO on the TASE A leverage towards an offering abroad. Timing – raise when you can (exiting in stages) Low costs and a quick process.

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

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

1. 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.

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 (percent) must be at least When the value of the public float is… 10.0 From 16 7.5 From 50 R&D company: one that has invested at least NIS 3 million in R&D in the last three years, including funds raised from the Chief Scientist.

Listing Procedures (excluding R&D companies) -- 35 25 Shareholders' equity after listing 80 30 20 Public-float value 12 months Period of activity 4 Added value in the 12 months preceding listing Value of issue 200 Value of the company's shares

1. 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 – following listing on U.S markets.

2. Dual Listing 36 Israeli companies have dual-listed on the TASE since the dual-listing law was enacted 2 companies, Partner and Perrigo, are included in the TA-25 Index 9 companies are included in the Tel-Tech 15 Index 14 companies are included in the TA-100 index 12 additional companies are traded both in Tel Aviv and the U.S.

The Benefits of Dual Listing More Israeli investors - institutional and individual. Index funds (TA 25, TA 100 and Tel-Tech funds). TA-25 companies may benefit from trading in index-options. 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 a.m. to 11:00 p.m., local time Options can be exercised by employees easily and at low cost

Some Figures Market Capitalization (Millions of Shekels) September 30, 2006 Portion of TASE Trading Volume 1-9/2006 Average Daily Trading Volume on TASE – 1-9/2006 (Thousands of Shekels) Perrigo 3/2005 6,951 29% 7,458 Partner Communication 7/2001 6,567 88% 13,777 Given Imaging 3/2004 2,272 24% 1,922 Blue Square Israel 11/2000 1,982 93% 1,214 Alvarion 7/2001 1,663 16% 2,132 AudioCodes 10/2001 1,643 20% 1,954 Radware 5/2004 1,158 14% 1,174 Aladdin 7/2004 1,072 1,129 Shamir Optical 5/2005 663 41% 250 XTL (London) 7/2005 228 63% 844

New Website: www.tase.co.il Thanks Ronit Harel Ben-Ze’ev, Senior VP Listing and Economic Department E-mail: harel@tase.co.il Phone: 5677424 – 03 New Website: www.tase.co.il