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<SEC-DOCUMENT>0001178913-07-001273.txt : 20070628
<SEC-HEADER>0001178913-07-001273.hdr.sgml : 20070628
<ACCEPTANCE-DATETIME>20070628060643
ACCESSION NUMBER:		0001178913-07-001273
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20070628
FILED AS OF DATE:		20070628
DATE AS OF CHANGE:		20070628

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BOS BETTER ONLINE SOLUTIONS LTD
		CENTRAL INDEX KEY:			0001005516
		STANDARD INDUSTRIAL CLASSIFICATION:	COMPUTER COMMUNICATIONS EQUIPMENT [3576]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-14184
		FILM NUMBER:		07945133

	BUSINESS ADDRESS:	
		STREET 1:		20 FREIMAN STREET
		CITY:			RISHON LEZION
		STATE:			L3
		ZIP:			75100
		BUSINESS PHONE:		011-972-3-954-1000

	MAIL ADDRESS:	
		STREET 1:		20 FREIMAN STREET
		CITY:			RISHON LEZION
		STATE:			L3
		ZIP:			75100
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>zk73907.htm
<TEXT>
<HTML>
<HEAD>
     <!-- Created by EDGAR Ease Plus (EDGAR Ease+) -->
     <!-- Project:        \\backup\office\EDGAR Filing\BOS better online solutions Ltd\73907\a73907.eep -->
     <!-- Control Number: 73907                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    BOS better online solutions Ltd                                  -->
     <!-- Project Name:   6-K                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>6-K</TITLE>
</HEAD>
<BODY>

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<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE STYLE="margin-top: -5px">
<HR ALIGN=LEFT WIDTH=100% SIZE=1 NOSHADE STYLE="margin-top: -10px">

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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="4"><B>FORM
6 &#150; K</B> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="4"><B>SECURITIES AND EXCHANGE
COMMISSION</B> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Washington, D.C. 20549 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Report of Foreign Issuer </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant to Rule 13a
&#150; 16 or 15d &#150; 16 <BR>
of the Securities Exchange Act of 1934 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the Month of June
2007 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Center Underline-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="5"><U><B>B.O.S. Better Online
Solutions Ltd.</B></U> </FONT> <BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Translation of
Registrant&#146;s Name into English) </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Center Underline-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>20 Freiman Street,
Rishon LeZion, 75100, Israel  </U><BR>
(Address of Principal
Corporate Offices) </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark whether the
registrant files or will file annual reports under cover Form 20-F or Form 40-F. </FONT></P>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Form 20-F <FONT size="3" face="Wingdings">x
</font> Form 40-F <FONT size="3" face="Wingdings">o
</font></FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate  by  check  mark if the
 registrant  is  submitting  the Form  6-K in  paper  as  permitted  by Regulation S-T
Rule 101(b)(1): ___________  </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate  by  check  mark if the
 registrant  is  submitting  the Form  6-K in  paper  as  permitted  by Regulation S-T
Rule 101(b)(7): ___________ </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark whether the
registrant by furnishing the information contained in this form is also thereby
furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.  </FONT></P>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Yes <FONT size="3" face="Wingdings">o
</font> No <FONT size="3" face="Wingdings">x</font></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">If &#147;Yes&#148; is marked,
indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): <U>N/A</U> </FONT> </P>

<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE PROXY STATEMENT ATTACHED TO THIS
FORM 6-K IS HEREBY INCORPORATED BY REFERENCE INTO THE REGISTRANT&#146;S REGISTRATION
STATEMENT ON FORM F-3 (NO. 333-130048) AND FORM S-8 (NOS. 333-136957, 333-110696,
333-100971 AND 333-11650), AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS
SUBMITTED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR
FURNISHED. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Attached hereto and incorporated by
reference herein is the Registrant&#146;s notice of meeting and proxy statement for the
annual general meeting of shareholders to be held on August 9, 2007. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Signature </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized. </FONT></P>










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<TABLE WIDTH=100% CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>B.O.S. Better Online Solutions Ltd.<BR>
(Registrant)<BR><BR>
<BR>By:   /s/  Shmuel Koren<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Shmuel Koren<BR>President and CEO</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dated: June 28, 2007 </FONT></P>

<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>B.O.S Better Online
Solutions Ltd. <BR>
20 Freiman Street <BR>
Rishon Le Zion 75101 <BR>
Israel </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTICE OF ANNUAL
GENERAL MEETING OF SHAREHOLDERS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To Be Held on August
9, 2007 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To our Shareholders: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>You are invited to attend an Annual
Meeting of Shareholders of B.O.S Better Online Solutions Ltd. (the &#147;Company&#148;) to
be held in Israel at the Company&#146;s offices at 20 Freiman Street, Rishon Le Zion,
Israel, on August 9, 2007 at 9 a.m. local time, and thereafter as it may be adjourned from
time to time (the &#147;Meeting&#148;) for the following purposes: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
reelect Messrs. Edouard Cukierman, Joel Adler and Ronen Zavlik and to elect
                    Messrs. Amir Ohad, Joshua Zoller and Dan Hoz to the Company&#146;s
Board of                     Directors, to serve until the next annual general meeting of
shareholders and                     until their successors have been duly elected and
qualified. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
reappoint Kost, Forer, Gabbay &amp; Kasierer, a member of Ernst &amp; Young
                    International, Ltd. as the Company&#146;s Independent Auditors. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
approve an increase of options available for issuance under the
                    Company&#146;s 2003 Israeli Share Option Plan. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
receive the Auditor&#146;s Report and the Company&#146;s Consolidated
                    Financial Statements for the fiscal year ended December 31, 2006. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
transact such other business as may properly come before the Meeting or any
                    adjournments thereof. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant to the Company&#146;s
Articles of Association, the Board of Directors has fixed the close of business on July 3,
2007 as the date for determining the holders of record of Ordinary Shares entitled to
notice of and to vote at the Meeting and any adjournments thereof. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All the proposals are ordinary
resolutions, which require the affirmative vote of a majority of the Ordinary Shares of
the Company voted in person or by proxy at the Meeting on the matter presented for
passage. The votes of all shareholders voting on the matter will be counted. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board of Directors believes that
the shareholders of the Company should be represented as fully as possible at the Meeting
and encourages your attendance. Whether or not you plan to be present kindly complete,
date and sign the enclosed proxy exactly as your name appears on the envelope containing
this Notice of Annual General Meeting and mail it promptly so that your votes can be
recorded. No postage is required if mailed in the United States. Return of your proxy does
not deprive you of your right to attend the Meeting, to revoke the proxy or to vote your
shares in person. All proxy instruments and powers of attorney must be delivered to the
Company no later than 48 hours prior to the Meeting. The Company&#146;s Proxy Statement is
furnished herewith. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Joint holders of Ordinary Shares
should take note that, pursuant to Article 14.13 of the Articles of Association of the
Company, the vote of the senior of joint holders of any share who tenders a vote, whether
in person or by proxy, will be accepted to the exclusion of the vote(s) of the other joint
holder(s) of the share, and for this purpose seniority will be determined by the order in
which the names stand in the shareholders&#146; register. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By Order of the Board of
Directors, </FONT></P>






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<TR VALIGN=TOP>
<TD WIDTH="50%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Edouard Cukierman                  <BR>
Chairman of the Board of Directors
</FONT></TD>
<TD WIDTH="50%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Shmuel Koren<BR>
President and Chief Executive Officer
</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>June, 2007 </FONT></P>

<p align=center>
<font size=2>1</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>YOUR VOTE IS IMPORTANT. WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE DATE AND SIGN THE PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE FOR WHICH NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. YOU CAN LATER REVOKE YOUR PROXY, ATTEND THE MEETING AND VOTE YOUR SHARES IN
PERSON. ALL PROXY INSTRUMENTS AND POWERS OF ATTORNEY MUST BE DELIVERED TO THE
COMPANY&#146;S CORPORATE OFFICE NO LATER THAN 48 HOURS PRIOR TO THE MEETING.</B> </FONT></P>

<p align=center>
<font size=2>2</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>B.O.S Better Online
Solutions Ltd. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20 Freiman Street <BR>
Rishon Le Zion 75101 <BR>
Israel </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ANNUAL GENERAL MEETING
OF SHAREHOLDERS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Workstation" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To be held on August 9,
2007 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROXY STATEMENT </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This Proxy Statement is furnished to
the holders of Ordinary Shares, NIS 4.00 nominal value (the &#147;Ordinary Shares&#148;),
of B.O.S Better Online Solutions Ltd. (&#147;BOS&#148; or the &#147;Company&#148;) in
connection with the solicitation of proxies to be voted at the Annual Meeting (the
&#147;Meeting&#148;) of Shareholders of the Company to be held in Israel at the
Company&#146;s offices at 20 Freiman Street, Rishon Le Zion, on August 9, 2007 at 9 a.m.
local time, and thereafter as it may be adjourned from time to time. At the Meeting,
shareholders of the Company will be asked, to vote upon the following matters: </FONT></P>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
reelect Messrs. Edouard Cukierman, Joel Adler and Ronen Zavlik and to elect
                    Messrs. Amir Ohad, Joshua Zoller and Dan Hoz to the Company&#146;s
Board of                     Directors, to serve until the next annual general meeting of
shareholders and                     until their successors have been duly elected and
qualified. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
reappoint Kost, Forer, Gabbay &amp; Kasierer, a member of Ernst &amp; Young
                    International, Ltd. as the Company&#146;s Independent Auditors. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
approve an increase of options available for issuance under the
                    Company&#146;s 2003 Israeli Share Option Plan. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
receive the Auditor&#146;s Report and the Company&#146;s Consolidated
                    Financial Statements for the fiscal year ended December 31, 2006. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
transact such other business as may properly come before the Meeting or any
                    adjournments thereof. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
form of proxy for use at the Meeting and a return envelope for the proxy are also
enclosed. By appointing &#147;proxies,&#148; shareholders may vote their Ordinary Shares
at the Meeting whether or not they attend. Upon the receipt of a properly signed and dated
proxy in the form enclosed, the persons named as proxies therein will vote the Ordinary
Shares represented thereby in accordance with the instructions of the shareholder
indicated thereon, or, if no direction is indicated, in accordance with the
recommendations of the Board of Directors of the Company. The Company knows of no other
matters to be submitted at the Meeting other than as specified in the Notice of Annual
General Meeting of Shareholders enclosed with this Proxy Statement. If any other business
is properly brought before the Meeting, however, it is the intention of the persons named
as proxies to vote in respect thereof in accordance with their best judgment. Shares
represented by executed and unrevoked proxies will be voted. Beneficial owners who hold
their shares through members of the Tel Aviv Stock Exchange (&#147;TASE&#148;) may either
vote their shares in person at the Meeting by presenting a certificate signed by a member
of the TASE which complies with the Israeli Companies Regulations (Proof of Ownership for
Voting in General Meeting), 2000 as proof of ownership of the shares, or send such
certificate along with a duly executed proxy to the Company at 20 Freiman Street, Rishon
Le Zion, 75101 Israel,  Attention: Mr. Eyal Cohen. On all matters considered at the
Meeting, abstentions and broker non-votes will not be treated as either a vote
&#147;for&#148; or &#147;against&#148; the matter, although they will be counted to
determine if a quorum is present. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
proxy solicited hereby may be revoked at any time prior to its exercise by means of a
written notice delivered to the Company at its mailing address, which is, in Israel, 20
Freiman Street, Rishon Le Zion, 75101 Israel or in the U.S., c/o American Stock Transfer
&amp; Trust Company, 59 Maiden Lane &#150; Plaza Entrance, New York, New York 10038, USA,
by the substitution of a new proxy bearing a later date or by a request for the return of
the proxy at the Meeting. All proxy instruments and powers of attorney must be delivered
to the Company no later than 48 hours prior to the Meeting. </FONT></P>

<p align=center>
<font size=2>3</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company expects to mail this Proxy Statement and the enclosed form of proxy to
shareholders on or about July 6, 2007. All expenses of this solicitation will be borne by
the Company. In addition to the solicitation of proxies by mail, directors, officers and
employees of the Company, without receiving additional compensation therefore, may solicit
proxies by telephone, telegraph, in person or by other means. Brokerage firms, nominees,
fiduciaries and other custodians have been requested to forward proxy solicitation
materials to the beneficial owners of Ordinary Shares of the Company held of record by
such persons, and the Company will reimburse such brokerage firms, nominees, fiduciaries
and other custodians for reasonable out-of-pocket expenses incurred by them in connection
therewith. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Shareholders
Entitled to Vote</B>. Only holders of record of Ordinary Shares at the close of business
on July 3, 2007 are entitled to notice of and to vote at the Meeting. The Company had
9,601,033 Ordinary Shares issued and outstanding on June 27, 2007, each of which is
entitled to one vote on each matter to be voted on at the Meeting. The Articles of
Association of the Company do not provide for cumulative voting for the election of the
directors or for any other purpose. The presence, in person or by proxy, of at least two
shareholders holding at least 33<SUP>1</SUP>/<SUB>3</SUB>% of the voting rights, will constitute a quorum
at the Meeting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Votes
Required</B>. All the proposals are ordinary resolutions, which require the affirmative
vote of a majority of the Ordinary Shares of the Company voted in person or by proxy at
the Meeting on the matter presented for passage. The votes of all shareholders voting on
the matter will be counted. </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>&nbsp;</B> </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>I.</B> </FONT> </TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><U>PRINCIPAL
SHAREHOLDERS</U></B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth, as of June 27, 2007, information to the best of the
Company&#146;s knowledge, as to each person known to the Company to be the beneficial
owner of more than five percent (5%) of the Company&#146;s outstanding Ordinary Shares and
as to all directors and officers of the Company as a group. Except where indicated, to the
best of the Company&#146;s knowledge based on information provided by the owners, the
beneficial owners of the Ordinary Shares listed below have sole investment and voting
power with respect to those shares. Applicable percentage ownership in the following table
is based on 9,601,033 shares outstanding as of June 27, 2007. </FONT></P>






<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN="3" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=1>Name and Address</FONT><HR WIDTH="95%" SIZE="1" COLOR="BLACK" NOSHADE ALIGN="LEFT"></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman" SIZE=1>Shares Beneficially Owned</FONT><HR WIDTH=95% SIZE=1 COLOR="WHITE" NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Number</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Percent</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>&nbsp;</FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD WIDTH="69%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Catalyst Fund, LP(1)(2)</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>3 Daniel Frisch Street,<BR>
Tel-Aviv 64731, Israel</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>1,675,459</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>17.45</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>D.S Apex Holdings Ltd.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>2 Kaufman St. Tel-Aviv</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>68012 Israel(3)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>752,979</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>7.84</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Officers and Directors as a group (4)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>101,090</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>1.05</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
</TABLE>
<BR>
















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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)
          &#147;Catalyst Fund&#148; refers collectively to Catalyst Fund L.P., Catalyst
          Fund II L.P. and Catalyst Fund III, L.P., all of which are limited partnerships
          organized and existing under the laws of the State of Israel, and which share
          the same general partner, Catalyst Investments L.P. Mr. Edouard Cukierman may be
          deemed to have sole voting and dispositive power with respect to the shares held
          by Catalyst. Mr. Cukierman disclaims beneficial ownership in such shares, except
          to the extent of his proportionate interest in them as an indirect shareholder
          in the general partner of Catalyst Fund. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)
          Does not include 207,000 warrants to purchase Ordinary Shares of the Company. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)
          Refers to the holdings of D.S Apex Holdings Ltd. and its subsidiaries. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)
          Does not include 1,085,637 options to purchase Ordinary Shares of the Company
          granted and currently held by Officers and/or Directors of the Company. Does not
          include 65,217 options of Brada Investments Limited, a shareholder of the
          Company owned by a discretionary trust of which Mr. Joel Adler, a director of
          the Company, is one of the beneficiaries. </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>II.</B> </FONT> </TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><U>RESOLUTIONS</U></B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>1.</B> </FONT> </TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>ELECTION
OF DIRECTORS</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>At the Meeting, three directors
currently serving on the Board of Directors will be nominated for reelection.
Additionally, the Board of Directors is nominating three additional directors: Messrs.
Amir Ohad, Joshua Zoller and Dan Hoz. </FONT></P>

<p align=center>
<font size=2>4</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
239 of the Israeli Companies Law, 1999, requires that companies whose shares are publicly
traded have at least two external directors on the board of directors. Their term of
service is three years, and they may be elected to serve for up to two terms. Dr. Yael
Ilan and Prof. Adi Raveh currently serve as external directors and their term of service
shall expire in November 2008 and February 2009, respectively. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
rest of the directors are elected at the annual general meeting of shareholders to serve
until the next annual general meeting of shareholders and until their respective
successors are duly elected and qualified. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the Company&#146;s Articles of Association, the number of directors in the Company
(including external directors) shall be determined from time to time by the annual general
meeting, provided that it shall not be less than four nor more than eleven. If at a
general meeting of the Company new directors in the minimum amount specified pursuant to
the Articles are not elected, the directors who held office until such time shall continue
to hold office, until they are replaced by the Company&#146;s general meeting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It
is the intention of the persons named in the proxy to vote for the election of the six
nominees named below, each to hold office until the next annual general meeting of
shareholders and until their respective successors are duly elected and qualified, unless
any office is vacated earlier pursuant to the relevant provisions of the Articles of
Association of the Company. The Company is unaware of any reason why any nominee, if
elected, should be unable to serve as a director. If any of the nominees are unable to
serve, the persons named in the proxy will vote the shares for the election of such other
nominees as the Board of Directors may propose. All nominees listed below have advised the
Board of Directors that they intend to serve as directors if elected. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Nominees for the Board
of Directors </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certain information concerning the
nominees: </FONT></P>








<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Name</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Age</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Position</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Ordinary Shares<BR>
beneficially owned*</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Percentage of<BR>
beneficial holdings</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>&nbsp;</FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD WIDTH="25%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Mr. Edouard Cukierman**</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>42</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="30%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Chairman of the Board of Directors</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>28,090</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Mr. Joel Adler</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>53</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>***</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Ronen Zavlik</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>46</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Director</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Mr. Amir Ohad</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>44</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Mr. Joshua Zoller</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>58</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Mr. Dan Hoz</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>37</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>------</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>



<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>*   does not include options held by the directors.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>** Mr. Edouard Cukierman holds 21,666
ordinary shares directly and an additional 6,424 ordinary shares through a wholly owned
company, E.D.I European Development and Investments Ltd. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>***Does not include 65,217 options of
Brada Investments Limited, a shareholder of the Company owned by a discretionary trust of
which Mr. Joel Adler, a director of the Company, is one of the beneficiaries. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Mr.           Edouard Cukierman,</B>
42, has been a director since May 2003, and Chairman of           the Company since June
2003. Mr. Cukierman is the founder and CEO of Catalyst           Investments and Chairman
of Cukierman &amp; Co. Investment House. Since 1993,           Cukierman &amp; Co.,
Investment House realized &#128; 1.7 Billion of Corporate           Finance transactions.
Mr. Cukierman is a former Board member of Orex, MTI           Wireless and other
technology companies. He was the President and CEO of the           Astra Fund. He served
as a Board member of Otto Capital, a Singapore based VC           fund. He was the former
President of the Supervisory Board of Citec-Environment           and Services in Paris.
He is currently a Board member of Lamina Technologies in           Switzerland. He is
also on the Board of Sar-El, an Israeli Defense Forces           volunteer organization.
He serves as an Officer of the IDF Spokesman Unit, and           is part of the Hostage
&amp; Crisis Negotiation Team (Reserves). Mr. Cukierman           holds an MBA from
INSEAD, Fontainebleau, France and a B.Sc from the Technion           &#150; Israel
Institute of Technology.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Mr.           Joel Adler,</B> 53,
has been a director since June 2005. Mr. Adler is a partner           in Mishcon de Reya,
a leading law firm in London. He specializes in mergers           &amp; acquisitions and
corporate finance work, in particular international           corporate transactions.
Joel advises a number of major Israel based companies on           their business
activities in the UK and Europe and on IPO of foreign companies           on the London
Stock Exchange (AIM). Mr. Adler joined Mishcon de Reya as a           partner in 2006,
from the London law firm of Speechly Bircham, where he was a           partner from 1999.
Previously, Mr. Adler was head of the corporate department of           Rakisons (now
part of US law firm Steptoe &amp; Johnson). He gained his           experience with other
leading law firms in London: Herbert Oppenheimer Nathan           &amp; Vandyck (now
Denton Wilde Sapte) and DJ Freeman. He is a member of the           Israeli Bar and
worked for the Israeli law firm Caspi &amp; Co. for two years.           Mr. Adler holds
a law degree from Bar Ilan University in Israel, and an LLM from           London
University. He was born and educated in Vienna.  </FONT></P>

<p align=center>
<font size=2>5</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Mr.
          Ronen Zavlik,</B> 46, has been a director since May 2003. He is a partner in the
          CPA firm of Grinberg-Zavlik, which he founded in 1987. His firm provides a wide
          range of audit, tax consultancy and CFO services to a wide variety of companies.
          Mr. Zavlik provides internal auditing services to a number of large companies
          whose shares are traded on the Tel Aviv Stock Exchange, including Ma&#146;ariv
          Holdings Ltd., Extra Plastic Ltd., Rapid Vision Ltd., and Optima Management and
          Investments 66 Ltd. Mr. Zavlik is the Chairman of the audit committee of the
          Israel Handball Association. Mr. Zavlik holds a B.A. in Accountancy and Business
          Management from the College of Management in Tel-Aviv. Mr. Zavlik is a licensed
          CPA in Israel and a member of the Institute of Certified Public Accountants in
          Israel. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Mr.
          Amir Ohad,</B> 44, has been the CEO and President of Kafrit Industries Ltd. in
          Israel and its subsidiaries in the UK and Germany, since 2005 and until January
          2007. Kafrit is traded on the Tel-Aviv Stock Exchange and produces additives and
          master batches to the plastic industry. Previously, between the years 2000-2005,
          Mr. Ohad served as the CFO of Scitex Vision Ltd., that was sold to
          Hewlett-Packard in 2005 and as a member of the Executive Committee of a
          subsidiary of a corporation traded in NASDAQ. From 1997-2000, Mr. Ohad served as
          CFO of Giltek Telecommunications Ltd., a company traded on the Tel-Aviv Stock
          Exchange. Mr. Ohad holds a B.A. in Business Administration and Economics, an
          MBA in Finance and an M.A. in Economics (Public Economics), all from the Hebrew
          University in Jerusalem. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Mr.
          Joshua Zoller,</B> 58, has been serving as Finance Manager of Federman &amp;
          Sons (Holdings) Ltd., an importer and marketer of coffee and manufacturer and
          marketer of Liquid fertilizer for the last twenty years. Mr. Zoller currently
          serves as a director in Epsilon Provident Funds&#146; Management Ltd., Ubank
          Fund&#146;s Management Ltd., Yachad Physicians Consumer Club Ltd., Apex
          Investments Ltd. and DS Apex Holdings D.A (1998) Ltd. Mr. Zoller holds a B.A. in
          Accounting and Economics from the University of Haifa. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Mr.
          Dan Hoz,</B> 37, has been serving as the CFO of Valor Computerized System Ltd.,
          a provider of vertically integrated manufacturing productivity solutions to the
          PCB industry since 2002. Previously, Mr. Hoz was the Vice President of
          Operations and Finance of CAM Division (Frontline), in Orbotech-Valor. Mr. Hoz
          is also a former Senior Auditor in the High Tech group of Deloitte Touche
          Tohmatsu. Mr. Hoz holds a B.A. in Accounting and Economics and an MBA (major in
          Finance) from Ben Gurion University of the Negev, and is a certified CPA. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Information regarding the incumbent
external directors: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Dr.
          Yael Ilan,</B> 58, has been an external director since November 2002. Dr. Ilan
          is the president of Yedatel Ltd., an economic consulting company, and serves as
          a director of CI Systems in the technology sector. Until 1998 she served on the
          board of Bezeq &#150; Israel&#146;s Telecommunication Company in which she
          headed the committee of technological policy and infrastructure and was a member
          of the audit committee and the committee for strategic planning and investment.
          From 1998 through 2000 she served as an external director of Elron Industries.
          In 2000-01 she founded and managed Optichrom, an optical component start-up.
          From 1995 through 2000 Dr. Ilan served as the head of the program of the Broad
          Band Communication, a consortium of MAGNET &#150; the Israeli Government hi-tech
          cooperation initiative. From 2002, Dr. Ilan serves as the industrial coordinator
          in the Electrical Engineering Department of the Technion. Dr. Ilan holds a Ph.D.
          in industrial engineering from Stanford University, a Ph.D. in physical
          chemistry from the Hebrew University and a Masters degree in business
          administration from the Hebrew University, and is a member of the Institute of
          Certified Public Accountants in Israel. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Prof.
          Adi Raveh,</B> 59, has been an external director since February 2003. Prof.
          Raveh is a professor and head of the B.A. Program at the School of Business
          Administration, Hebrew University, Jerusalem. Since 1998 he has been serving as
          an external director at Clal Insurance Company Ltd. Since 2002 he has been
          serving as the Chairman of the Board of Jerusalem Capital Markets Underwriting
          limited. He also serves as a director of Meitav &#150; a Mutual Funds Management
          company (since 1995), and as a director of Peilim &#150; a Portfolio Management
          company &#150; part of Bank Hapoalim Group (since 1996). Since 1992 he is a
          director who represents the Hebrew University at Hi-Tech &#150; a Technology
          Entrepreneurship located at Har-Hahotzvim, Jerusalem. Prof. Raveh also serves as
          a director of two start-up companies: A.D.M (Advanced Dialysis Methods Ltd.) and
          Virtouch Ltd. Between 1994-1999 he served as a director and a member of the
          executive committee of the Bank of Jerusalem, Ltd. Between 1996-1998 he served
          as a member of an ad-hoc committee of the Council of Higher Education. In 1999
          he served as a member of the Budget Committee for Research at the Israel Science
          Foundation. Prof. Raveh holds a Ph.D. from the Hebrew University. He is the
          author of about 50 professional publications, was a visiting professor at
          Stanford University, Columbia University and Baruch College, N.Y., and has
          received a number of grants and honors. </FONT></P>

<p align=center>
<font size=2>6</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Workstation" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Compensation of
Directors and Officers </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth the aggregate compensation paid to or accrued on behalf of all
directors and officers of the Company as a group for the year ended December 31, 2006: </FONT></P>






<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Salaries, Directors' Fees, Service<BR>
Fees, Commissions and Bonuses</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Pension, Retirement and<BR>
Similar Benefits</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>&nbsp;</FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=54% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>All directors and officers as a</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH=16% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH=16% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>group (then 16 persons)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 1,732,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>   114,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such
remuneration does not include amounts expended by the Company for expenses, including
business association dues and expenses, reimbursed to said officers, and other fringe
benefits commonly reimbursed or paid by companies in the location at which the particular
executive officer of the Company is located, as the case may be. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>At the Meeting, the Board of
Directors proposes that the following resolution be adopted: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>RESOLVED</B>, to elect the
following persons to serve as members of the Board of Directors of the Company: Edouard
Cukierman, Joel Adler,<B> </B>Ronen Zavlik, Amir Ohad, Joshua Zoller and Dan Hoz, to serve
until the next Annual General Meeting of Shareholders and until their successors have been
duly elected and qualified.&#148; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board of Directors, recommends
voting FOR the election of the aforementioned six nominees. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Upon the receipt of a properly signed
and dated proxy and unless otherwise instructed in the proxy, the persons named in the
enclosed proxy will vote the shares represented thereby FOR the above-mentioned proposal. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>2.</B> </FONT> </TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>REAPPOINTMENT
OF INDEPENDENT AUDITORS</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors recommends that the shareholders reappoint Kost, Forer, Gabbay &amp;
Kasierer, a member of Ernst &amp; Young International, Ltd., as the independent auditors
of the Company, until the next annual general meeting of shareholders. Kost, Forer, Gabbay
&amp; Kasierer have served as the Company&#146;s independent auditors since the first
quarter of 2002. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
table below summarizes the audit and other fees paid and accrued by the Company and its
consolidated subsidiaries to Kost Forer Gabbay &amp; Kasierer, during each of 2005 and
2006:  </FONT></P>







<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman" SIZE=1>Year Ended December 31, 2006</FONT><HR WIDTH=98% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=6><FONT FACE="Times New Roman" SIZE=1>Year Ended December 31, 2005</FONT><HR WIDTH=98% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Amount</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Percentage</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Amount</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Percentage</FONT><HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>&nbsp;</FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD WIDTH="44%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Audit Fees</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>62,000</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>76</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>64,000</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>50</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Audit-Related Fees (1)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>20,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>24</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>25,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>20</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Tax Fees (2)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>-</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>16,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>13</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>All Other Fees (3)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>22,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>17</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Total</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>82,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>100</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>127,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>100</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD></TR>
</TABLE>
<BR>

<p align=center>
<font size=2>7</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;Audit-related
fees&#148; are fees related to assurance and associated                services that
traditionally are performed by the independent auditor, including
               consultation concerning reporting standards. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;Tax
fees&#148; are fees for professional services rendered by the                Company&#146;s
auditors with respect to tax advice related to acquisitions and                tax
compliance with the Israeli law for encouragement of investment, and
               issuance of annual tax reports. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;All
Other Fees&#148; are fees for consulting services rendered by the                Company&#146;s
auditors with respect to government
incentives.</FONT></TD>
</TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Meeting, the Board of Directors will propose that the following resolution be adopted: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&#147;RESOLVED</B>, that Kost,
Forer, Gabbay &amp; Kasierer be, and they hereby are, reappointed as independent auditors
of the Company, until the next Annual General Meeting of shareholders.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the receipt of a properly signed and dated proxy and unless otherwise instructed in the
proxy, the persons named in the enclosed proxy will vote the shares represented thereby
FOR the above-mentioned proposal. </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>3.</B> </FONT> </TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>INCREASE
OF 2003 ISRAELI SHARE OPTION PLAN</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the 2003 Israeli Share Option Plan,<B> </B>employees, directors, consultants and service
providers of the Company or its subsidiaries may be offered an opportunity to acquire
ordinary shares of the Company. The Board of Directors has approved (subject to
shareholders approval) to increase the number of options available for issuance under the
Company&#146;s 2003 Israeli Share Option Plan, from 1.5 million to 2.6 million, as the
current option pool has nearly depleted. This 2003 Plan is currently the only active Plan
from which options are being granted. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Meeting, the Board of Directors will propose that the following resolution be adopted: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&#147;RESOLVED</B>, to
approve&nbsp;an increase of the number of options available for issuance under the
Company&#146;s 2003 Israeli Share Option Plan, from 1.5 million to 2.6 million.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the receipt of a properly signed and dated proxy and unless otherwise instructed in the
proxy, the persons named in the enclosed proxy will vote the shares represented thereby
FOR the above-mentioned proposal. </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>4.</B> </FONT> </TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>RECEIPT
OF AUDITOR&#146;S REPORT AND FINANCIAL STATEMENTS</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Meeting the shareholders shall receive and consider the Auditor&#146;s Report and the
Consolidated Financial Statements of the Company for the fiscal year ended December 31,
2006. The Company&#146;s Audited Consolidated Financial Statements were filed by the
Company under Form 20-F with the US Securities and Exchange Commission and with the
Israeli Securities Authority on June 5, 2007, and they appear on their respective
websites: www.sec.gov and www.magna.isa.gov.il, as well as on the Tel&#150;Aviv Stock
Exchange website: maya.tase.co.il. </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>5.</B> </FONT> </TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>OTHER
BUSINESS</B> </FONT> </TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Meeting is called for the purposes set forth in the Notice accompanying this Proxy
Statement. As of the date of the Notice, the Board of Directors knows of no business which
will be presented for consideration at the Meeting other than the foregoing matters. If
other matters not now known properly come before the Meeting, however, it is intended that
the persons named as proxies or their substitutes will vote the Ordinary Shares in
accordance with their best judgment with respect to such matters. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By Order of the Board of
Directors, </FONT></P>






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<TR VALIGN=TOP>
<TD WIDTH="50%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Edouard Cukierman                 <BR>
Chairman of the Board of Directors
</FONT></TD>
<TD WIDTH="50%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Shmuel Koren<BR>
President and Chief Executive Officer
</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>June, 2007 </FONT></P>

<p align=center>
<font size=2>8</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>





<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>B.O.S. BETTER ONLINE SOLUTIONS LTD.<BR>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS<BR>
FOR THE ANNUAL GENERAL MEETING TO BE HELD ON AUGUST 9, 2007</B> </FONT>
</P>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The undersigned, revoking previous proxies, hereby appoint(s) Edouard Cukierman and Shmuel
Koren, or any one of them, proxies, with full power of substitution, to act for and in the name of the
undersigned to vote all ordinary shares of B.O.S. Better Online Solutions Ltd. which the undersigned
is entitled to vote at the Annual General Meeting of Shareholders of the Company which will
be held in Israel at the offices of the Company, at 20 Freiman Street, Rishon LeZion, Israel, on
August 9, 2007 at 9 a.m. (local time) and at any adjournments thereof, for the purposes described
in the accompanying Notice of the Meeting and Proxy Statement, for which receipt is hereby
acknowledged.
</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Upon being returned, signed and dated, all shares represented by this Proxy will be voted as
indicated by the shareholder below. IN THE ABSENCE OF SUCH INDICATION, THIS PROXY
WILL BE VOTED "FOR" EACH OF THE MATTERS SET FORTH ON THE REVERSE SIDE. As to
any other matter, said proxies shall vote in accordance with their best judgement.</B> </FONT>
</P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Return of your proxy does not deprive you of your right to attend the Meeting, to revoke the
proxy or to vote your shares in person. All proxy instruments and powers of attorney must
be delivered to the Company no later than 48 hours prior to the meeting.</B> </FONT>
</P>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>(Continued and to be signed on the reverse side.)</B> </FONT></P>



<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ANNUAL GENERAL MEETING OF SHAREHOLDERS OF</B> </FONT></P>


<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="4"><B>B.O.S. BETTER ONLINE SOLUTIONS LTD.</B> </FONT></P>


<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>August 9, 2007</B> </FONT></P>


<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please date, sign and mail<BR>
your proxy card in the<BR>
envelope provided as soon<BR>
as possible.
</FONT></P>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2><FONT size="3" face="Wingdings 3"><B>&#156;</B></font> Please detach along perforated line and mail in the envelope provided. <FONT size="3" face="Wingdings 3">&#156;</font></FONT></P>



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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD ALIGN="Center" STYLE="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please
refer to the Proxy Statement discussion of each of these matters. <BR>
<B>THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" EACH OF THE LISTED PROPOSALS: <BR>
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR <BR>
VOTE IN BLUE OR BLACK INK AS SHOWN HERE</B> <FONT size="3" face="Wingdings">x</font> </FONT></TD>
</TR>
</TABLE>



<TABLE WIDTH="100%" BORDER="0" CELLPADDING="5" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD WIDTH="5%" STYLE="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="17%" STYLE="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="5%" STYLE="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="14%" STYLE="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="5%" STYLE="border:SOLID BLACK 0.5PT; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="5%" STYLE="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="10%" STYLE="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="24%" STYLE="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="5%" STYLE="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE; border-bottom:NONE;" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">FOR
</FONT></TD>
     <TD WIDTH="5%" STYLE="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE; border-bottom:NONE;" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">AGAINST
</FONT></TD>
     <TD WIDTH="5%" STYLE="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE; border-bottom:NONE;" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">ABSTAIN
</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">1.
</FONT></TD>
     <TD COLSPAN="4" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">To elect the six nominees specified below as directors:
</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">2.
</FONT></TD>
     <TD COLSPAN="2" ROWSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">To reappoint Kost, Forer, Gabbay &amp; Kasierer (EY Israel) as
independent auditors of the Company
</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><FONT size="3" face="Wingdings">o
</font> </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><FONT size="3" face="Wingdings">o
</font> </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><FONT size="3" face="Wingdings">o
</font> </FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="3" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>NOMINEES:</B> </FONT>
</TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><FONT size="3" face="Wingdings">o
</font> </FONT></TD>
     <TD COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">FOR ALL NOMINEES
</FONT></TD>
     <TD COLSPAN="2" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Edouard Cukierman
</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">3.
</FONT></TD>
     <TD COLSPAN="2" ROWSPAN="3"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">To approve an increase of options available for issuance under
the Company's 2003 Israeli Share Option Plan
</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><FONT size="3" face="Wingdings">o
</font> </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><FONT size="3" face="Wingdings">o
</font> </FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><FONT size="3" face="Wingdings">o
</font> </FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="2" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Joel Adler
</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><FONT size="3" face="Wingdings">o
</font> </FONT></TD>
     <TD COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">WITHHOLD AUTHORITY
</FONT></TD>
     <TD COLSPAN="2" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Ronen Zavlik
</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">FOR ALL NOMINEES
</FONT></TD>
     <TD COLSPAN="2" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Amir Ohad
</FONT></TD>
     <TD COLSPAN="6" ROWSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">In their discretion, the proxies are authorized to vote upon such other business as
may properly come before the general meeting and any adjournments thereof.
</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="2" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Joshua Zoller
</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="2" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Dan Hoz
</FONT></TD>
     <TD COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD COLSPAN="5" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD COLSPAN="5" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD IN THE
ENCLOSED PREPAID ENVELOPE.</B> </FONT>
</TD></TR>
<TR VALIGN="TOP">
     <TD COLSPAN="5" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD COLSPAN="5" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD COLSPAN="5" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD COLSPAN="5" STYLE="border:SOLID BLACK 0.5PT; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD COLSPAN="5" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD COLSPAN="5" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD COLSPAN="5" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD COLSPAN="6"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD COLSPAN="5" STYLE="border:SOLID BLACK 0.5PT; border-top:NONE; border-left:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Check here if you plan to attend
the Annual General Meeting?</B> </FONT>
</TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><FONT size="3" face="Wingdings">o
</font> </FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD COLSPAN="4" STYLE="border:SOLID BLACK 0.5PT; border-left:NONE; border-right:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method.
</FONT></TD>
     <TD ALIGN="CENTER" STYLE="border:SOLID BLACK 0.5PT; border-left:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><FONT size="5" face="Wingdings">o
</font> </FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>


<BR>





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<TR VALIGN="TOP">
     <TD WIDTH="20%" VALIGN="BOTTOM"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Signature of Shareholder</FONT></TD>
     <TD WIDTH="13%" STYLE="border:SOLID BLACK 0.5PT;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="7%" VALIGN="BOTTOM"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date:</FONT></TD>
     <TD WIDTH="10%" STYLE="border:SOLID BLACK 0.5PT;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="20%" VALIGN="BOTTOM"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Signature of Shareholder</FONT></TD>
     <TD WIDTH="13%" STYLE="border:SOLID BLACK 0.5PT;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="7%" VALIGN="BOTTOM"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date:</FONT></TD>
     <TD WIDTH="10%" STYLE="border:SOLID BLACK 0.5PT;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>
<BR>


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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Note:</B> </FONT> </TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please
sign exactly as your name or names appear on this Proxy. When shares are held jointly,
each holder should sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a corporation, please sign
full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.</FONT></TD>
</TR>
</TABLE>
<BR>







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