1. Hi-Tech in Israel

2. Venture-backed Investment trends

3. Kesselman & Kesselman 22/11/003 Venture Capital Investment Level SOURCE : Money Tree

4. Kesselman & Kesselman 22/11/004 Average Investments by round SOURCE : Money Tree $ million # of deals 1999 # of deals (Q1-Q3)00 53 61 78 93 35 62 85 81 84 58

5. Kesselman & Kesselman 22/11/005 Average deal size SOURCE : Money Tree 1999 Avg. YTD Q3 Avg. Israel2.95.96 US8.9 13.2 Europe1.9 N/A

6. Kesselman & Kesselman 22/11/006 Average Investments by the main Industries source: Money Tree $ million # of deals 1999 # of deals (Q1-Q3)00 31 27 63 50 10 59 87 92 64 79

7. Kesselman & Kesselman 22/11/007 Average Deal Size - Total, Internet-Related & Non-Internet-Related SOURCE : Money Tree $ million

8. Kesselman & Kesselman 22/11/008 Average Deal Size - Total, Software, Telecommunication-comparison SOURCE : Money Tree $ million

9. VC Funds Kesselman & Kesselman

10. 22/11/0010 $ million Venture Capital Raised SOURCE : Zinook research & data center

11. Kesselman & Kesselman 22/11/0011 Total Amount raised by Israeli Hi-Tech companies SOURCE : Money Tree

12. Kesselman & Kesselman 22/11/0012 Venture Capital fund SOURCE: Zinook research & data center  Initial analysis indicates that capital raisings by Israeli VC funds during 2000 exceeds $2 billion.  Total capital raised by venture capital funds from 1991- 2000 exceeds $6.5 billion.  According to Zinook’s analysis, more than $3 billion are available for investment.

13. Kesselman & Kesselman 22/11/0013 Leading Israeli VC funds SOURCE: FACTS. (D&A) Fund nameTotal capital managed ($ in M) # of investments # of exits % exits Polaris Venture Capital 700 601220% Star Venture Enterprises 594 12444 35% Genesis Partners L.P. 349 37 924% Gemini Capital Fund 296 481225% Formula Ventures Ltd. 290 17 1 6% Israel Seed L.P. 258 42 3 7% Concord Venture Management 255 33 412% Jerusalem Ventures Partners 25530 930% Giza Venture Capital Fund 255 431228% Tamir Fishman Ventures 225 The Challenge funds 195 47 1 2% Eurpean Venture Partners 150 10 AIG Orion Venture Capital Advisors 110 10 Zinook 100 2 Acend Technology Ventures 85 8 112.5% Israel Infinity Venture Capital Fund 85 21 Total 4,202 532 108 20% 16.

14. Israel-comparison Kesselman & Kesselman

15. 22/11/0015 Money Tree Total Investments 1997 to Q 3 00 NASDAQ Index

16. Internet-Related Investments by Sub- Category % of Total

17. Kesselman & Kesselman 22/11/0017 With U.S. States - (Q 1 -Q 3 ) 00 ($ Million) SOURCE : Money Tree $ million 1999 16,873 1,306 1,206 777 6,913 1,852 1,010 1,520 3,657 740 Total U.S. Investment= $54,394 Billion 751

18. Kesselman & Kesselman 22/11/0018 With U.S. States - (Q 1 -Q 3 ) 00 (# Deals) SOURCE : Money Tree 1999 OF DEALS# 1525 135 138 99 896 111 211 228 347 443 Total U.S.= 4,137 Deals 95

19. Kesselman & Kesselman 22/11/0019 Europe - Investments by Country 1999 ($ Million) SOURCE : Money Tree $ million 1998 1,988 122 124 108 270 189 567 756 112 161 544 45 38 27 6 15 10 0

20. Mergers & Acquisitions Kesselman & Kesselman

21. Israeli Company Acquiring Company Details of Acquisition 2000 Chromatis ( PwC ) Lucent Valued at $4,800 million MMC (PwC ) AMCC Valued at $4,500 million Galileo Marvell Valued at $2,700 Million Scitex (PwC ) Creo Valued at $500 million Tradum VerticalNet Valued at $480 million InfoGear Cisco Systems Valued at $301 million HyNex Cisco Systems Valued at $127 million PentaCom Cisco Systems Valued at $118 million Indigo (PwC ) HP Valued at $100 million1999 DSP Communications (PwC ) Intel Valued at $1,600 million New Dimension BMC Valued at $650 million Libit (PwC ) Texas Instruments Valued at $357 million OshapSunGard Data Systems Valued at $210 million TelegateTerayon Valued at $100 million ButterflyTexas Instruments Valued at $50 million Acquisitions of Israeli related Hi-Tech Companies by foreign Investors, 1998-Q 3 00 - selected list SOURCE : Investors, 1998-Q 3 00 - selected list SOURCE : Zinook research & data center

22. Acquisitions of Israeli related Hi-Tech Companies by foreign Investors, 1998-Q 3 00 - selected list (CONTINUED ( Investors, 1998-Q 3 00 - selected list (CONTINUED Israeli Company Acquiring Company Details of Acquisition 1998 Memco Platinum /(CA) 100% for $412 million Mirabilis (PwC ) America Online 100% for $407 million Elbit Ultrasound GE Medical Systems Valued at $230 million Teledata TelecomADC Telecom 100% for $200 million Lannet (PwC ) Lucent 100% for $117 million Elscint GE Medical Systems Valued at $100 million Wave AccessLucent 100% for $56 million ( CLASS Data Systems (PwC ) Cisco Systems 100% for $50 million Picture VisionEastman Kodak 51% 1998 1999 (Q 1 -Q 3 )00 Total amount : 1.57 billion 2.967 billion 13.626 billion # 0f deals 9 69 Average deal size0.17 billion 0.495 billion 1.514 billion

23. Kesselman & Kesselman 22/11/0023 Capital raised in public offering of Israeli companies in the U.S. & Europe (1993-Q300) SOURCE: 1993-1999, Zinook research & data center $ million

24. IPO,Follow on Offerings (of Venture Capital- backed companies), M&A-comparison SOURCE: 1995-1999, Zinook research & data center

25. Kesselman & Kesselman The land of Milk and Honey has become the land of Tech and Money Joseph Fellus Senior Partner and High-Tech Practice Leader PricewaterhouseCoopers Israel