1 Strategic Alliance With:Strategic Alliance in the U.K.With: 1 November 8, 2006 Amir Aviv Managing Director, International Corporate Finance Poalim Capital Markets Going Public Abroad – Key Considerations

2 Strategic Alliance With:Strategic Alliance in the U.K.With: 2 Table of Content A.Introduction to Poalim Capital Markets (PCM) B.Where to List? C.Listing Profiles and Shareholders Liquidity D.Relative Valuations Across Markets E.Liquidity - Nasdaq Vs. AIM F.Market Efficiency – Case Studies G.Comparative Costs

3 Strategic Alliance With:Strategic Alliance in the U.K.With: 3 Introduction to Poalim Capital Markets Introduction to Poalim Capital Markets

4 Strategic Alliance With:Strategic Alliance in the U.K.With: 4 Poalim Capital Markets - Overview Private Equity Local Underwriting Research International Corporate Finance Bank Hapoalim Holdings and Investments Poalim Abus Poalim Real Estate Poalim Mezzanine* Strategic Alliance Strategic Alliance (UK) Poalim Medica Poalim THTF * * Funds in formation Poalim Ventures

5 Strategic Alliance With:Strategic Alliance in the U.K.With: 5 Poalim Capital Markets Public Offerings YTD November 2006 Initial Public Offering $47, (U.K.) (USA) $160,000,000 May 2006 Initial Public Offering $132,000,000 March 2006 Follow- On Offering $201,100,000 December 2005 Follow-On Offering $133,831,000 September 2004 Follow-On Offering $401,280,000 March 2005 Follow-On Offering $64,400,000 March 2005 Initial Public Offering $62,400,000 September 2005 Initial Public Offering $118,000,000 November 2005 Initial Public Offering $191,000,000 February 2006 Initial Public Offering $90,000,000 May 2006 Initial Public Offering October 2006 Initial Public Offering $290,000000

6 Strategic Alliance With:Strategic Alliance in the U.K.With: 6 Poalim Capital Markets Advisory Services YTD $7,000,000 April 2006 Invested in Has sold a majority interest to Fortissimo Capital and Kanir Investments $12,000,000 November 2005 Has acquired by Has agreed to be acquired by to York Capital Management and to Mivtach Shamir $67,851,000 July 2005 Selling of shares & debt in Inspair $2,300,000 May 2006 Invested in $159,000,000 July 2006 Has been acquired by $7,000,000 March 2006 Ziff Asset Management Invested in $7,000,000 July 2006 Sharatzky group Invested in $57,000,000 January 2005 Issued 11% of its shares capital to $54,000,000 January 2005 Sold 13% of to $90,000,000 March 2006 $230,000,000 November 2005 $60,500,000 April 2005 Has been acquired by $50,500,000 March 2005 Has been acquired by

7 Strategic Alliance With:Strategic Alliance in the U.K.With: 7 Where to List? Where to List?

8 Strategic Alliance With:Strategic Alliance in the U.K.With: 8  Valuation  Metric used – Profit, Revenue, EBITDA, DCF, Revenue Multiples  Forward Looking vs. Current Results  Current Market Sentiment  Sector Specific Sentiment  Sector Performance  Flavor of the Month  Flow of Capital into Relevant Funds  Research Following  Location of revenues- Product Market  Local  Europe  US  Competitive Landscape- Listing Location Key Considerations – Company Specific Approach

9 Strategic Alliance With:Strategic Alliance in the U.K.With: 9  Size and Critical Mass  Liquidity  Percentage Float  Sector Specific  Form of Liquidity – open market, block sales  Costs  Capital at Risk  Success Costs  Maintenance Costs  Regulation and Reporting Requirements  Quarterly (Nasdaq, TASE) vs. Semi Annually (London)  Dual-Listing Arrangements  Profile as a Public Company  Target Product Markets –Branding and Positioning  Disclosure Requirements (Transparency)  Location of Management and Operations Key Considerations – Company Specific Approach (cont’d)

10 Strategic Alliance With:Strategic Alliance in the U.K.With: 10 Listing Profiles and Shareholders Liquidity Listing Profiles and Shareholders Liquidity

11 Strategic Alliance With:Strategic Alliance in the U.K.With: 11 NASADQ IPOs Priced 2006 YTD * Columns represent stand-alone threshold data and are not interdependent Percentile Total Offering Size Market Value at pricing Ownership Dilution Secondary Shares as a % of Offering LTM Revenue LTM EBIT LTM EBIT Margin At Pricing P/E on Next Year’s Earnings 100% 2, , %100.0%7, %79.6x 90%481.61, %47.3% %25.9x 80% %26.0% %18.9x 70% %16.2% %16.0x 60% %0.0% %14.0x 50% %0.0% %12.5x 40% %0.0% %10.8x 30% %0.0%30.9(0.7)1.3%8.8x 20% %0.0%14.9(10.7)(1.7%)-4.0x 10% % 3.5(17.7)(47.5%)-13.5x ($ in millions) Source: Equidesk as of November 1, 2006; includes SEC registered IPOs; excludes REITs and closed-end funds.

12 Strategic Alliance With:Strategic Alliance in the U.K.With: 12 NASADQ - YTD Over 40% of IPO’s had a Secondary Share Component Source: Equidesk as of August 1, 2006; includes SEC registered IPOs; excludes REITs and closed-end funds.

13 Strategic Alliance With:Strategic Alliance in the U.K.With: 13 NASADQ - On Average < 30% of Shares Sold are Secondary Shares 33.6% 38.1% 26.6% 32.2% 23.2% 23.0% 38.1% 29.2% 21.0% Source: Equidesk as of November 1, 2006; includes SEC registered IPOs; excludes REITs and closed-end funds.

14 Strategic Alliance With:Strategic Alliance in the U.K.With: 14 AIM - Distribution of companies by equity market value Number of companies Market value range £m Source: LSE, as of November 2006

15 Strategic Alliance With:Strategic Alliance in the U.K.With: 15 Relative Valuations Across Markets Relative Valuations Across Markets

16 Strategic Alliance With:Strategic Alliance in the U.K.With: 16 Valuation Methodology Comment Relevance Preferred benchmark for IPOs reflecting investors’ preference for profitability Forward P/E      Method Historically the standard valuation tool where lack of profits Used to review valuation levels across the cycle Forward EV / EBITDA  Forward EV / sales  Significant sensitivity to a number of assumptions Overly dependent on terminal value Often used as a “sanity check” DCF analysis  Multiples DCF Not distorted by differences in capital structure Many technology companies still pre operating profit Key driver will be forward P/E

17 Strategic Alliance With:Strategic Alliance in the U.K.With: 17 Industry Benchmarking – Where are Your Competitors Trading? gross margin and growth rate support high value?

18 Strategic Alliance With:Strategic Alliance in the U.K.With: 18 LSE vs. NASDAQ Nasdaq Valuations are 20% Higher than AIM Across the Board *Sources – NASDAQ, LSE, CapitalIQ *Companies with market cap <1Bn USD as of September 2006

19 Strategic Alliance With:Strategic Alliance in the U.K.With: 19 LSE vs. NASDAQ - Healthcare Healthcare Companies Valuations on Nasdaq are 24% Higher than on AIM *Sources – NASDAQ, LSE, CapitalIQ *Companies with market cap <1Bn USD as of September 2006

20 Strategic Alliance With:Strategic Alliance in the U.K.With: 20 LSE vs. NASDAQ - IT IT Companies Valuations on Nasdaq are 28% Higher than on AIM *Sources – NASDAQ, LSE, CapitalIQ *Companies with market cap <1Bn USD as of September 2006

21 Strategic Alliance With:Strategic Alliance in the U.K.With: 21 LSE vs. NASDAQ – Industrial (%) Industrial Companies Valuations on Aim are 9% Higher than on Nasdaq *Sources – NASDAQ, LSE, CapitalIQ *Companies with market cap <1Bn USD as of September 2006

22 Strategic Alliance With:Strategic Alliance in the U.K.With: 22 Liquidity - NASDAQ Vs. AIM Liquidity - NASDAQ Vs. AIM

23 Strategic Alliance With:Strategic Alliance in the U.K.With: 23 Liquidity - NASDAQ vs. AIM Liquidity - NASDAQ vs. AIM Market Cap (mn USD) Number of Companies in Group - AIM Number of Companies in Group - Nasdaq AIM Avg. Daily Volume (USD – mn) Nasdaq Avg. Daily Volume (USD – mn) Liquidity on Nasdaq is better than on AIM across the board, however... Source: CapitalIQ

24 Strategic Alliance With:Strategic Alliance in the U.K.With: 24 Source: London Stock Exchange Liquidity on AIM is improving rapidly Liquidity - NASDAQ vs. AIM Liquidity - NASDAQ vs. AIM Average Daily Volume £mn

25 Strategic Alliance With:Strategic Alliance in the U.K.With: 25 Market Efficiency – Case Studies Market Efficiency – Case Studies

26 Strategic Alliance With:Strategic Alliance in the U.K.With: 26 Summary Ituran  NASDAQ IPO completion date: September 27 th, 2005  Total funds raised at IPO and green-shoe: $71,760,000  At IPO: Net proceeds to selling shareholders: $11.7mn  Green-shoe: Net proceeds to selling shareholders: $1.8mn  Total funds to selling shareholders: $13.5mn  5 foreign I-banks cover Ituran with research Stock Price Performance on TASE 12 months before IPO to 3 months after Relative Price Appreciation 12 months prior to IPO to 3 months after Premium Analysis ITRN TA100 Nasdaq  3 months prior to IPO: 40.0%  6 months prior to IPO: 29.2%  9 months prior to IPO: 52.4%  12 months prior to IPO: 101.0%  3 months after the IPO to IPO price: 20.8%

27 Strategic Alliance With:Strategic Alliance in the U.K.With: 27 Summary Lipman  NASDAQ IPO completion date: February 3 rd, 2004  Total capital raised at IPO and green-shoe: $142,395,000  At IPO: Net proceeds to selling shareholders: $29.3mn  Green-shoe: Net proceeds to selling shareholders: $0mn  Total funds to selling shareholders: $29.3mn  4 foreign I-banks cover Lipman with research Stock Price Performance on TASE 12 months before IPO to 3 months after Relative Price Appreciation 12 months prior to IPO to 3 months after Premium Analysis  3 months prior to IPO: 24.0%  6 months prior to IPO: 51.1%  9 months prior to IPO: 73.6%  12 months prior to IPO: 123.2%  3 months after the IPO to IPO price: 11% LPMA TA100 Nasdaq

28 Strategic Alliance With:Strategic Alliance in the U.K.With: 28 Summary Frutarom  LSE IPO completion date: February 3 rd, 2005  Total funds raised at IPO and green-shoe: $100,716,000  At IPO: Net proceeds to selling shareholders: $15.3mn  Green-shoe: Net proceeds to selling shareholders: $4.6mn  Total funds to selling shareholders: $19.9mn  2 foreign I-banks provide Frutarom with research Stock Price Performance on TASE 12 months before IPO to 3 months after Relative Price Appreciation 12 months prior to IPO to 3 months after Premium Analysis LPMA TA100 Nasdaq  3 months prior to IPO: 30.3%  6 months prior to IPO: 31.3%  9 months prior to IPO: 59.2%  12 months prior to IPO: 82.3%  3 months after the IPO to IPO price: -3.4% FRUT TA100 Nasdaq

29 Strategic Alliance With:Strategic Alliance in the U.K.With: 29 Comparative Costs Comparative Costs

30 Strategic Alliance With:Strategic Alliance in the U.K.With: 30 Cost of Going Public ($US)NasdaqAIM Registration Fee~$5,500~$20,000 Listing Fee~$100,000~$6,000 Printing Expenses~$200,000~$60,000 Legal Fees~$500,000~$400,000 Accounting Fees~$500,000~$350,000 Transfer Agent & Registrar Fees ~$10,000~$15,000 Nomad/I-Bank Fee N/A~$300,000 Underwriting Discount*~$3,500,000 (~7%)~$2,500,000 (~5%) Miscellaneous~$100,000~$70,000 Total Approximate Cost~$4,915,500~$3,721,000 * Assumes a $50m dollar raise ** Capital at risk is approximately $400k, $220k on NASDAQ and AIM respectively

31 Strategic Alliance With:Strategic Alliance in the U.K.With: 31 Public Company Ongoing Costs ($US)NasdaqAIM Directors & Officers Insurance ~$200,000~$100,000 Directors Fees & Expenses~$150,000~$100,000 Annual Audit Accounting Fees ~$100,000~$80, Compliance*~$400,000N/A Legal Fees~$150,000 SEC & Exchange Compliance~$100,000N/A Listing Fees~$25,000~$20,000 Nomad ExpensesN/A~$90,000 Other (Investor Relations, Mailing, Printing, Trvl, etc.) ~$100,000 Total Approximate Cost$1,225,000$640,000 * 404 not applicable to foreign issuers until Varies depending on company size. ** Nasdaq incremental cost for TASE listed companies approx. $400-$600k based on survey of dual listed companies

32 Strategic Alliance With:Strategic Alliance in the U.K.With: 32 Thank You Contact Details: Amir Aviv Managing Director, International Corporate Finance Poalim Capital Markets Tel: (03)