MERGER: VeriFone Holdings, Inc. [PAY] and Lipman Electronic Engineering LTD [LPMA]

Issue:

Cause:

On November 1,2006, LPMA shareholders received approximately 0.308195 shares of PAY, plus approximately $18.467896 in cash for each share of LPMA stock owned. The exact exchange factors are not available as of this writing, but they are not necessary for the successful entry of this transaction.

This is completely taxable transaction, not a tax-free merger. LPMA shareholders will report the sale of the shares for the total consideration of the money received, plus the fair market value of the PAY stock received. PAY closed at $30.00 on November 1,2006. Cash was paid in lieu of any fractional shares to be issued.

This transaction and the income tax consequences are explained at

http://ccbn.10kwizard.com/cgi/convert/pdf/VeriFoneHoldingS4A.pdf?pdf=1&repo=tenk&ipage=4316711&num=-2&pdf=1&xml=1&odef=8&dn=2&dn=3

Resolution:

Compute the Total Consideration Received:

1. Number of whole shares of PAY received [do not include fractional shares] __________________________________

2. Market value per share on 11/1/06 was $30.00

3. Value of shares received [1] times [2] _________________________________________________

4. Cash received for the LPMA shares _________________________________________

5. Cash received in lieu of fractional shares ________________________________________

6. Total consideration [3] plus [4] plus [5] _____________________________________

7. Enter a sale of all LPMA shares held for the Total Consideration computed in [6], above.

8. Enter a purchase for number of PAY shares received, [1] above, for a total cost of [3] above.

You're done!