Common use of Prohibition on the use of inside information Clause in Contracts

Prohibition on the use of inside information. Inside information is “information on developments in the company, changes in its condition, expected developments or changes, or other information about the company, which is unknown to the public and which, were it to become known to the public, would result in a material change in the price of the Company’s security or the price of another security of which the Company’s security is a basic asset.” It was determined in the legislation that the use of inside information for the purpose of a securities transaction or its transmission to another, are prohibited by law. Each corporation is required to adopt rules and guidelines in order to fulfill Chapter H1 of the Securities Law including all of its provisions, as well as the U.S. laws which relate to such issue, all in order to prevent the use of inside information by the Company’s employees and other bodies. It is necessary to put in place a process to cover the identification of the sensitive information, clarify the prohibition to use the same and assimilate it among any and all persons who come into contact with such information. Establishing an internal procedure regarding the use of inside information will assist the Company in minimizing the risks related to the deadline for and appropriateness of the periodic reporting, and the fulfillment and enforcement thereof will assist in the prevention of failures on the part of employees and officers with regard to the subject, directly or indirectly.