Globalization of Israeli Economy and Haredi Employment

1. Globalization of Israeli Economy and Haredi Employment CityBook Services, Ltd. Turnkey Outsourcing Solutions in Israel April, 2008

2. Global Outsourcing - $300 Billion Market © CityBook Services, Ltd.

3. Introduction • CityBook Services, Ltd. (2003) is an emerging Israeli outsourcing provider • The vast majority of its work is title insurance and lease abstracting • Is partner of NJ-based Madison Commercial Real Estate Services, targeted to the US real estate market • We serve as an outsourcingsolution for US companies who want to set up a back-office in Israel • We employ over 180 people, mostly Haredi English-speaking women • Our successful model of work can and should be replicated • At least 9 other companies have followed our lead in this sector and 2 more are in development: • Matrix, EDS, Malam, ImageStore, etc. © CityBook Services, Ltd.

4. An example of the changing trends in Haredi Employment (1) Modi’in Illit was designed and built for the Haredi Community • 7,500 families and growing • Many schools, synagogues and communal buildings • No Industrial Zone • No Office Buildings 2003: No significant employment within business sector • 2007: • Modi’in Illit is now home to 9 expanding companies, employing over 900 local women. • An additional 100 women are employed in Beitar Illit © CityBook Services, Ltd.

5. Govt’s 2003 Economic Plan Significantly reduced child support benefits Budget for Yeshivot slashed by 40-50% Govt. and the Joint establish Haredi employment projects and incentives Business sector increasingly experiencing benefits and value of Haredi employees Between 2002 and 2004: Men looking for work increased by 4.4% 5% of women moved from part-time to full-time work 8.5% of women left work in education for other fields Employment of men in fields other than education rose by 5.6% What has changed in the Haredi sector? Changes in the Environment Changes in the Community © CityBook Services, Ltd.

6. An example of the changing trends in Haredi Employment (2) Haredi seminaries have traditionally geared all their female students to the education field Today, seminaries in Jerusalem, Bnei Brak and Petach Tikva are intensively promoting new skills training. Courses include: • Accounting • Bookkeeping • Database Management • Graphic Design • Software Development 2005 25% 2006 50% Beit Yaakov’s (Bnei Brak) target for new skills courses as a proportion of total students: © CityBook Services, Ltd.

7. 10 Benefits of hiring from the Haredi sector • Exceptional work ethic • Far lower levels of employee turnover • Quick to learn • Many languages spoken (often as mother tongue) • Located in Urban centers (60% in Jerusalem/Tel Aviv corridor) • Located in areas with low rents and municipal taxes • Plentiful labor pool (25% of Haredi population will become of working age in the next 10 years) • Generous Government incentives for Haredi sector employment • Training grants available • Salaries in Israel are lower than in the US and Europe © CityBook Services, Ltd.

8. The key to success – a tailored approach This step-change stems from: • bringing companies to Haredi communities • developing tailor-made solutions in accordance with the religious sensibilities of the community • Separate seating facilities for men and women • Appropriate work content • Religious dress code • Incidences of Haredim in the general (secular) workplace are nothing new • Recent success is in mobilizing the strengths of this workforce en masse © CityBook Services, Ltd.

9. Case Study 1: CityBook Services, Ltd. “The success of our operation has been better than we imagined possible, and we expect to continue growing within the Haredi community in the months and years to come!” Joseph Rosenbaum, Chairman • Location: Modi’in Illit, Beitar Illit, Jerusalem • Type of Work: Title insurance, Lease abstracting, On-line foreign currency exchange, Equipment leasing, Financial services • Project Start Date: 2003 • Employees 2003: 8 • Employees Q1 2008: 180 • Employee Turnover: 22 in 4 years • Additional Information: • Stimulated expansion of core US business • Led to opening of Beitar Illit and Jerusalem facility © CityBook Services, Ltd.

10. Case Study 2: Matrix - Talpiot “The Matrix group employs 2000 people in Israel. The commitment and work ethic demonstrated by our 300+ Haredi staff is quite simply unparalleled.” Ronen Engler, CEO • Location: Modiin Illit • Type of Work: Software Development, QA • Project Start Date: 2004 • Employees 2004: 30 • Employees 2007: over 300 • Employee Turnover: fewer than 20 in 3 years • Additional Information: • Recently opened new facility in Beit Shemesh; 60 employees • Soon opening facility in Haifa • Customers include SAP, Retalix, Motorola & Partner © CityBook Services, Ltd.

11. Case Study 3: Imagestore Ltd. “The Haredi employees are very smart and extremely reliable. No one had opened the right doors for them. This is a revolution in religious working practices.” Ephraim Reich, Founder • Location: Modiin Illit • Type of Work: Digital Document Archival Service • Project Start Date: 2005 • Employees 2005: 32 • Employees 2007: 120 • Employee Turnover: 30 in 2 years © CityBook Services, Ltd.

12. Future: Cutting Costs without Compromising on Quality • Accounting • Bookkeeping • Custom Publishing & Graphic Design • High-end Call Centers • Legal Transcriptions • Medical Billing • Medical Transcriptions • Paralegal Services • Translations CityBook Services, Ltd. can offer a turnkey outsourcing solution for all these services, and others © CityBook Services, Ltd.

13. Conclusions • The Haredi community is more willing than ever before to take a full part in the Israeli workforce. • Significant financial upside is being realized by companies who have set up operations in Haredi environments. • Haredi employment is an integral part of the globalization of Israel’s economy. © CityBook Services, Ltd.

14. THANK YOU! © CityBook Services, Ltd.