1 Project & Trade Finance In Netafim around the world

2  Largest low volume irrigation company in the world  2005 revenues - $359M  2006 forecast > $400M  Employees worldwide – 2100  Doing Business in 112 countries on 5 continents   35 subsidiaries  11 manufacturing plants NETAFIM - Overview 12 billion meters of Netafim drip lines can circle the earth’s circumference 280 times or travel to the moon and back 22 times Facts and Figures

3 Revenues In millions of USD NETAFIM - Overview

4 International Presence Subsidiaries 11 plants worldwide: Israel. (3 plants), USA, India, Australia, South Africa, Brazil, China, France, Chile. Manufacturing plants NETAFIM - Overview

5 Future Growth Engines  New crops (Energy Crops)  New Markets  Gaining market share in existing countries  New products ( develop or acquire )  M&A’s ( markets and technologies )  Operational excellence  Project financing solutions NETAFIM - Overview

6 Financial sources  Shareholders / Owners Capital  Vendor financing  Third party financing  Bank Loans (Buyers Credit)  Leasing  Governmental institutes (Municipality, State, Federal)  World bank institutes (World bank, IFC, MIGA, EBRD, EIB, IADB) NETAFIM – Project Financing Solutions

7 Letter of Credit The buyer asks his bank (the Issuing) to issue the L/C. The L/C is to be advised by the Supplier bank (the Advising bank). Buyer Issuing bank. L/C Supply agreement Netafim Advising bank. NETAFIM – Project Financing Solutions

8 Promissory Notes The buyer is giving the Supplier P/N. On due date the Supplier presents the P/N in the bank for collection. Customer Netafim Bank Collection P/N Presentation Supply NETAFIM – Project Financing Solutions

9 Buyers Credit A Bank approved by the buyer and Netafim grants a loan to the Customer to finance the purchase of Netafim equipment. Customer Netafim Bank Loan Supply Payment NETAFIM – Project Financing Solutions

10 Crates payments (1)  Netafim and the customer sign a supply agreement.  The distributor commits to support the customer.  Customer signs P/N to support its commitment and installments. The Bank provides ICL. Customer Netafim Bank Irrevocable payment commitment letter per crate Supply agreement Distributor in Other country Irrevocable commitment letter NETAFIM – Project Financing Solutions

11 Crates payments (2) After the harvest, the Customer supplies the products to the Distributor according to their agreement. Customer Netafim Bank Deliveries Distributor in Europe NETAFIM – Project Financing Solutions

12 Crates payments (3) The Distributor transfers payments – the payment is divided by the Distributor or by the bank. Customer Netafim Bank Payment 70% Distributor in Other country Escrow account 30% NETAFIM – Project Financing Solutions

13 Umbrella guarantee (1) Netafim signs a supply agreement with the customer. Payment terms – open account. Customer Netafim Bank Distributor in Other country NETAFIM – Project Financing Solutions

14 Umbrella guarantee (2) The Distributor and / or the bank issue a “Payment guarantee” to support the credit. Customer Netafim Bank Distributor in Other country NETAFIM – Project Financing Solutions

15 Umbrella guarantee (3) If the customer does not pay – Netafim utilizes the guarantee. Customer Netafim Bank Non payment Distributor in Other country NETAFIM – Project Financing Solutions

16 Payment schemes Umbrella guarantee Crates payments Buyers Credit Prom. Notes L/CScheme Bank Guarantee Harvest and others To be agreed with the bank Bank AvalN/A Securities 15%20%-25%15% No need Advance Payment Up to 3 years Up to 5 years Up to 3 years Up to 5 years Total credit period Up to 6 months Up to 12 months Up to 6 months Up to 9 Months Grace Period Quarterly or S.A. Quarterly and current Quarterly or S.A. Semi- Annual Installments LIBOR + 3.5%-5% LIBOR + 2.5%-4% LIBOR + 2%-3% LIBOR + 3.5%-4% LIBOR + 2% Interest NETAFIM – Project Financing Solutions

17 Rolling the Financing – the Distributor solution  In Brazil, we are working with many Distributors.  The Distributor would like to use our Financing capabilities to promote his sales of our products.  We found a solution based on few critical items: 1. The Distributor must be strong financially. 2. Our sales to the Distributor must be final and not B2B. 3. The Distributor must present list of customers, contracts amounts and credit terms. 4. The Distributor needs to provide acceptable collateral. NETAFIM – Project Financing Solutions

18 Rolling the Financing Netafim signs with the Distributor, the Distributor signs with the customers. Netafim Distributor Farmer Financing Agreements  Financing Agreement Farmer Customer NETAFIM – Project Financing Solutions