<PAGE>   1
                                  AN AGREEMENT


         Made and entered into in Tel-Aviv on the   day of       , 1999

                                 BY AND BETWEEN

           1.  BANK HAPOALIM B.M. (p.c.52-000011-8)
               (hereinafter "BHP")

           2.  ATAD INVESTMENTS COMPANY LTD. (p.c.51-089763-0)
               (hereinafter "ATAD")

           (BHP and ATAD shall be hereinafter referred to jointly and
           severally as "the BANK")

           3.  REVADIM (NECHASIM) LTD. (p.c.51-073528-5) (hereinafter "the
               BUYER")

           all of them of 63-65 Yehuda Halevi Street, Tel-Aviv
                                                              of the first part;

                                       AND

           1.  AMPAL-AMERICAN ISRAEL CORPORATION
               (c/o Ampal Israel)
               of 111 Arlozorov Street, Tel-Aviv
               (hereinafter "AMPAL")

           2.  AMPAL DEVELOPMENT (ISRAEL) LTD. (p.c.52-000238-7)
               of 111 Arlozorov Street, Tel-Aviv
               (hereinafter "AMPAL DEVELOPMENT")

           3.  AMPAL FINANCIAL SERVICES LTD. (p.c.52-002104-9)
               of 111 Arlozorov Street, Tel-Aviv
               (hereinafter "AMPAL FINANCING")

           4.  AMPAL (ISRAEL) LTD. (p.c.52-002622-0)
               of 111 Arlozorov Street, Tel-Aviv
               (hereinafter "AMPAL ISRAEL")

           (AMPAL, AMPAL DEVELOPMENT, AMPAL FINANCING, and AMPAL ISRAEL shall be
           hereinafter referred to jointly and severally as "the PURCHASERS")

           5.  NIR LTD. (p.c.52-000062-2)
               of 111 Arlozorov Street, Tel-Aviv
               (hereinafter "NIR")
                                                             of the second part;


WHEREAS     The BANK represents and warrants that ATAD is, and was at all times
            at which it held the Shares (as hereinafter defined), a wholly owned
            subsidiary of BHP; and
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                                     - 2 -


WHEREAS     The BANK represents and warrants that ATAD is the record owner
            and holder, and BHP through ATAD is the beneficial owner, of
            5,874,281 Ordinary Shares, as defined in the Shares Transfer
            Agreement, attached hereto as ANNEX "A" (hereinafter "the "Shares
            Transfer Agreement"), of 3,350 4% Preferred Shares (as defined in
            the Shares Transfer Agreement), and of 122,536 6.5% Preferred
            Shares (as defined in the Shares Transfer Agreement) (the
            Ordinary Shares, the 4% Preferred Shares, and the 6.5% Preferred
            Shares are collectively referred to herein as "the Shares"), and
            that the Shares and ATAD's holding therein are free and clear of
            any Third Party Right (as hereinafter defined); and


WHEREAS     BHP is interested in transferring and selling the Shares to the
            PURCHASERS, and the PURCHASERS are interested in purchasing the
            Shares on the terms and conditions and for the consideration as set
            out in the Shares Transfer Agreement; and


WHEREAS     Each one of the PURCHASERS is an owner of rights in certain real
            estate (hereinafter "the Real Estate Rights") as specified in the
            Real Estate Agreements, copies of which are attached hereto as
            ANNEXES "B", "C", "D" and "E" (hereinafter "the Real Estate
            Agreements"); and


WHEREAS     Each of the PURCHASERS is interested in selling to the BUYER, and
            the BUYER is interested in buying from each of the respective
            PURCHASERS, the Real Estate Rights owned by it, on the terms and
            conditions and for the consideration as set out in the relevant Real
            Estate Agreement; and


WHEREAS     NIR has the right to be registered as the owner of the Bnei Brak
            Branch of BHP, as defined in the Lease Agreement, copy of which is
            attached hereto as ANNEX "F" (hereinafter "the Lease Agreement"),
            and NIR and BHP are interested in entering into the Lease Agreement;



NOW, THEREFORE, it has been declared, agreed and warranted between the parties
as follows:


1.   PREAMBLE, CAPTIONS, DEFINITIONS, AND ANNEXES

1.1     The preamble to this Agreement and the Annexes hereto, including their
        annexes, form an integral part hereof.

1.2     Captions used in this Agreement are solely for convenience of reading
        and shall not be used for the interpretation or determination of the
        validity of this Agreement or any provision hereof.

1.3     In this agreement the following terms shall have the meanings ascribed
        to them:

1.3.1   "This Agreement" or "the Agreement" - this Agreement and all the
        Annexes, amendments or additions to it, as well as any document to be
        furnished in accordance with the provisions hereof.
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1.3.2   "Third Party Right" - Any lien, pledge, mortgage, suit, demand, claim,
        attachment and/or debt or obligation towards whatsoever third party
        and/or whatsoever other third party right.

1.3.3   "Amount of the Deposit" - As defined in the Shares Transfer Agreement.

1.3.4   "Dollar" - U.S. Dollar.

1.3.5   "The PURCHASERS' Attorney" - Any of the attorneys from the office of
        Firon, Karni, Sarov & Firon, Advs., of 111 Arlozorov Street, Tel-Aviv,
        alone and/or in any combination.

1.3.6   "The BANK's Attorney" - Advs. Moriah Hoftman Doron and Avraham Hirsch of
        63 Yehuda Halevi Street, Tel-Aviv, alone and/or in any combination.

1.3.7   "The Closing Date" - As defined in Section 8. hereinafter.

1.3.8   "The Latest Date" - 120 days from the date of signing this Agreement or
        such later date to be agreed upon by the parties in writing.

1.4     The following Annexes are attached to this Agreement and form an
        integral part thereof:

1.4.1   Annex "A" - The Shares Transfer Agreement

1.4.2   Annex "B" - The Arlozorov A Real Estate Agreement

1.4.3   Annex "C" - The Holon, Panorama and Allenby Real Estate Agreement

1.4.4   Annex "D" - The Rosh Pina and Ramat Hasharon Real Estate Agreement

1.4.5   Annex "E" - The Arlozorov B Real Estate Agreement

1.4.6   Annex "F" - The Lease Agreement

1.4.7   Annex "G" - Form of Agreement by and among the BANK, Rebar
        Financial Corp., Daniel Steinmetz and Raz Steinmetz

2.      REPRESENTATIONS AND WARRANTIES OF THE PARTIES

2.1     Representations and Warranties of the BANK and of the BUYER 
        -----------------------------------------------------------
        The BANK and the BUYER represent, warrant, covenant and undertake, all
        as relevant to each and every one of them respectively, the following to
        be true and correct on the date hereof and that the following will be
        true and correct on the Closing Date, and are aware and acknowledge that
        the PURCHASERS and NIR have agreed to enter into this Agreement and the
        transactions contemplated therein in reliance on these representations,
        warranties, covenants and undertakings of the BANK:

2.1.1   ATAD is a private company duly registered in Israel; its registration
        number with the Registrar of Companies is 51-089763-0; it is wholly
        owned and controlled by BHP; and it is an active company lawfully
        conducting its business and it has all the powers and authorities to
        enter into this Agreement and to fulfill all its undertakings hereunder.

2.1.2   The BUYER is a private company duly registered in Israel; its
        registration number with the Registrar of Companies is 51-073528-5, it
        is wholly owned and controlled by BHP;
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                                     - 4 -


        and it is an active company lawfully conducting its business and it has
        all the powers and authorities to enter into this Agreement and to
        fulfill all its undertakings hereunder.

2.1.3   BHP is a public company duly registered as a bank in Israel; its
        registration number with the Registrar of Companies is 52-000011-8, and
        it is an active company lawfully conducting its business and it has all
        the powers and authorities to enter into this Agreement and to fulfill
        all its undertakings hereunder.

2.1.4   Save as set out in Section 7.1 hereunder, each of BHP and ATAD and the
        BUYER have completed all such corporate acts and proceedings required
        under their incorporation documents and under law for entering into this
        Agreement and the fulfillment of its undertakings hereunder.

2.1.5   ATAD is the record owner and holder of the Shares; the Shares and ATAD's
        rights therein are free and clear of any Third Party Right, and there is
        nothing to prevent the sale and transfer of the Shares to the PURCHASERS
        as set out hereinafter in this Agreement and the Shares Transfer
        Agreement.

2.1.6   On October 30, 1985, and at all times thereafter until the Closing Date,
        BHP was, is, and will be the "Beneficial Owner" (as the term is defined
        in Section 912 of the New York Business Corporation Law), directly or
        through ATAD (which is and always was a wholly owned subsidiary of BHP),
        of not less than 20% of the outstanding voting stock of AMPAL.

2.1.7   On October 30, 1985, and at all times thereafter until the day of
        transfer of the Shares to the PURCHASERS, BHP was, is, and will be an
        "Interested Shareholder" for the purposes stated in Section 912 of the
        New York Business Corporation Law.

2.1.8   On the Closing Date, BHP will be the sole record and Beneficial Owner
        and holder of the Shares and will transfer the Shares to the PURCHASERS
        free and clear of any Third Party Right.

2.2     Representations and Warranties of the PURCHASERS 
        ------------------------------------------------
        Each of the PURCHASERS and NIR hereby represent, warrant, covenant and
        undertake, all as relevant to each and every one of them respectively,
        the following to be true and correct on the date hereof and that the
        following will be true and correct on the Closing Date, and is aware and
        acknowledges that the BANK and the BUYER have agreed to enter into this
        Agreement and the transactions contemplated therein in reliance on these
        representations, warranties, covenants and undertakings of the
        PURCHASERS:

2.2.1   AMPAL is a corporation duly organized in the State of New York, U.S.A.,
        whose Ordinary Shares are traded on the AMEX; it is an active company
        lawfully conducting its business, and has all the powers and authorities
        to enter into this Agreement and to fulfill all its undertakings
        hereunder.

2.2.2   AMPAL DEVELOPMENT is a public company duly registered in Israel; its
        registration number with the Registrar of Companies is 52-000238-7; and
        it is an active company lawfully conducting its business and it has all
        the powers and authorities to enter into this Agreement and to fulfill
        all its undertakings hereunder.
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                                     - 5 -


2.2.3   AMPAL FINANCING is a public company duly registered in Israel; its
        registration number with the Registrar of Companies is 52-002104-9; and
        it is an active company lawfully conducting its business and it has all
        the powers and authorities to enter into this Agreement and to fulfill
        all its undertakings hereunder.

2.2.4   AMPAL ISRAEL is a public company duly registered in Israel; its
        registration number with the Registrar of Companies is 52-002622-0; and
        it is an active company lawfully conducting its business and it has all
        the powers and authorities to enter into this Agreement and to fulfill
        all its undertakings hereunder.

2.2.5   NIR is a public company duly registered in Israel; its registration
        number with the Registrar of Companies is 52-000062-2; and it is an
        active company lawfully conducting its business and it has all the
        powers and authorities to enter into this Agreement and to fulfill all
        its undertakings hereunder.

2.2.6   Save as set out in Section 7.1 hereinafter, each of the PURCHASERS and
        NIR has completed all such corporate acts and proceedings required under
        its incorporation documents and any law for entering into this Agreement
        and the fulfillment of all its undertakings hereunder.

2.2.7   The PURCHASERS are aware of AMPAL's condition, rights and obligations,
        and the rights attached to the Shares under AMPAL's Certificate of
        Incorporation and Bylaws and they purchase the Shares by virtue of
        this Agreement and the Shares Transfer Agreement based on AMPAL's
        condition, rights and obligations, and the said rights as they are,
        without any reliance on any representations and/or warranties of the
        BANK regarding AMPAL's condition, rights and obligations, and the said
        rights.

3.      THE SHARES TRANSFER AGREEMENT

3.1     Simultaneously with the signing of this Agreement, the BANK and the
        PURCHASERS are signing the Shares Transfer Agreement under which BHP
        undertakes to sell and transfer the Shares to the PURCHASERS on the
        Closing Date in the apportionment set out therein, all on the terms and
        for the consideration as set out in the Shares Transfer Agreement.

3.2     ATAD undertakes to do everything required in order to enable BHP to
        fulfill its undertakings under Section 3.1 above and under the Shares
        Transfer Agreement. Without derogating from the generality of the
        aforesaid, ATAD and BHP undertake that ATAD will transfer the Shares to
        BHP and complete the transfer prior to the Closing Date, in order to
        enable their transfer by BHP to the PURCHASERS in accordance with the
        provisions of the Shares Transfer Agreement.

3.3     The Shares will be sold and transferred to the PURCHASERS in the
        portions and for the consideration as follows:

3.3.1   To AMPAL - 3,517,683 Ordinary Shares, 3,350 4% Preferred Shares, and
        122,536 6.5% Preferred Shares in consideration for:

        3.3.1.1 The transfer of the Amount of the Deposit; and

        3.3.1.2 $3,420,000 (plus interest in the rate of LIBOR + 0.75% per annum
                from April 12, 1999 until the date of actual payment); and
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                                     - 6 -


        3.3.1.3 $3,210,208

        All as set out and detailed in Sections 3.3.1 and 4 of the Shares
        Transfer Agreement.

3.3.2   To AMPAL DEVELOPMENT - 1,560,450 Ordinary Shares in consideration of
        $7,802,248, all as set out and detailed in Sections 3.3.2 and 5 of the
        Shares Transfer Agreement.

3.3.3   To AMPAL FINANCING - 660,803 Ordinary Shares in consideration of
        $3,304,013, as set out and detailed in Sections 3.3.4 and 6 of the
        Shares Transfer Agreement.

3.3.4   To AMPAL ISRAEL - 135,345 Ordinary Shares in consideration of $76,726,
        all as set out and detailed in Sections 3.3.4 and 7 of the Shares
        Transfer Agreement.

4.      THE REAL ESTATE AGREEMENTS
        Simultaneously with signing this Agreement and the Shares Transfer
        Agreement, the BUYER and each of the PURCHASERS, respectively, are
        signing the following Real Estate Agreements:

4.1     The Real Estate Agreement ANNEX "B" hereto between AMPAL and the BUYER
        regarding the sale of the "Arlozorov A Property", as defined therein, to
        the BUYER.

4.2     The Real Estate Agreement ANNEX "C" hereto between AMPAL DEVELOPMENT and
        the BUYER regarding the sale of the "Holon Property", "Panorama
        Property" and "Allenby Property", all as defined therein, to the BUYER.

4.3     The Real Estate Agreement ANNEX "D" hereto between AMPAL FINANCING and
        the BUYER regarding the sale of the "Rosh Pina Property" and "Ramat
        Hasharon Property", all as defined therein, to the BUYER.

4.4     The Real Estate Agreement ANNEX "E" hereto between AMPAL ISRAEL and the
        BUYER regarding the sale of the "Arlozorov B Property", as defined
        therein, to the BUYER.

4.5     The PURCHASERS undertake to support and assist the BUYER in all
        necessary acts required to register the rights in the various Properties
        that are subject of the Real Estate Agreements ANNEXES "B", "C", "D" and
        "E" hereto in the name of the BUYER in the Land Registry Offices, after
        the Determining Date, as defined in each Real Estate Agreement,
        including, subject to the provisions of each relevant Real Estate
        Agreement, by signing any necessary document and submitting any
        necessary document which is in the relevant PURCHASER's possession;
        provided however, but without derogating from the respective provisions
        of the respective Real Estate Agreement, that all the expenses and/or
        any financial obligations incurred due to any such support and
        assistance will be borne and paid solely by the BUYER.

5.      THE LEASE AGREEMENT
        Simultaneously with the signing of this Agreement, NIR and BHP will sign
        the Lease Agreement ANNEX "F" hereto.
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                                     - 7 -


6.      Simultaneously with the signing of this Agreement the BANK, Rebar
        Financial Corp., Daniel Steinmetz and Raz Steinmetz are signing an
        agreement in the form of Annex "G" hereto, in connection with the
        agreement among them of May 12, 1996, and in connection with the
        transfer of the Shares according to the Shares Transfer Agreement.

7.      CONDITIONS PRECEDENT

7.1     The sale and transfer of the Shares and the payment of the consideration
        therefor under the Shares Transfer Agreement, the sale of the Real
        Estate Rights under the Real Estate Agreements and the payment of the
        consideration therefor, and the start of the lease under the Lease
        Agreement are subject to the fulfillment of all the following conditions
        precedent (hereinafter "the Conditions Precedent"):

7.1.1   The receipt of unconditional and unreserved approval of the Director of
        Restrictive Trade Practices (hereinafter "the Director") under the
        Restrictive Trade Practices Law, 5748-1988) for the transfer of the
        Shares.

7.1.2   The approval of this Agreement by AMPAL's Related Parties Transactions
        Committee.

7.1.3   The approval of the transactions which are the subject of this Agreement
        and the Annexes thereto and the execution thereof, by AMPAL's Board of
        Directors.

7.1.4   The approval of the transactions which are the subject of this Agreement
        and the Annexes thereto and the execution thereof, by a majority of
        AMPAL's Shareholders participating in the voting thereon at a
        shareholders meeting.

7.1.5   The approval of this Agreement, its Annexes and the transactions
        contemplated thereunder by the Audit Committee of AMPAL DEVELOPMENT and
        by the boards of directors and the general shareholders meetings of each
        one of AMPAL DEVELOPMENT, AMPAL FINANCING, AMPAL ISRAEL, and NIR.

7.1.6   The approval of this Agreement, its Annexes and the transactions
        contemplated thereunder by BHP's Audit Committee and Related Parties
        Transactions Committee, and BHP's Board of Directors, and by the Board
        of Directors and the general shareholders meetings of each of ATAD and
        the BUYER.

7.1.7   All representations and warranties are true and correct and all
        covenants and undertakings have been performed as of the Closing Date.

7.1.8   Officers' Certificates will be submitted to the effect that all
        representations and warranties are true and correct, all covenants and
        undertakings have been performed and all necessary approvals have been
        obtained as of the Closing Date.

7.2     The parties will cooperate as required for the purpose of obtaining the
        approval of the Director as aforesaid in Section 7.1.1 above, and inter
        alia, will file within 14 days from the date of signing the Agreement a
        proper application to the Director, and thereafter will furnish the
        Restrictive Trade Practices Authority any document or information
        required by it for the purpose of giving the said approval.

7.3     Each party will bear all of its expenses incurred with respect to the
        fulfillment of the Conditions Precedent.
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                                     - 8 -


7.4     If any of the Conditions Precedent is not fulfilled by the Latest Date
        this Agreement, including, to avoid any doubt, all its Annexes, will
        terminate, automatically, at the end of 14 days from the Latest Date,
        unless all the Conditions Precedent have been fulfilled prior to the end
        of the said period of 14 days. In the event of such termination none of
        the parties hereto will have any claim of whatsoever sort against any
        other party hereto in connection with this Agreement and/or any of its
        Annexes and/or the process that led to the execution thereof and/or the
        failure to fulfill the Conditions Precedent and/or the termination of
        this Agreement and its Annexes, except for any amount due under Section
        7.3 above and 14.1 hereunder; and except that each of the parties will
        have a claim against any other party if such other party does not pursue
        in good faith the fulfillment of the Conditions Precedent.

7.5     The parties recognize that the PURCHASERS will request a Fairness
        Opinion from Lehman Brothers or any other investment banker selected by
        AMPAL, and that the PURCHASERS' various committees, boards of directors
        and shareholders' meetings will rely on such Fairness Opinion in
        deciding whether or not to approve the transactions which are the
        subject of this Agreement and of the Annexes thereto, and the execution
        thereof.

8.      THE CLOSING DATE 
        After the fulfillment of all Conditions Precedent, BHP and AMPAL shall
        determine the date (the "Closing Date") which will not be later than 14
        days from the date on which all the Conditions Precedent are fulfilled
        and which will be the "Determining Date" for the purpose of the Shares
        Transfer Agreement, each of the Real Estate Agreements and the Lease
        Agreement.

        To remove doubt, it is declared and clarified that the Closings of the
        Shares Transfer Agreement, each one of the Real Estate Agreements, and
        the Lease Agreement will be held simultaneously, and no such closing
        will be considered complete unless all the said closings are completed
        in accordance with each relevant agreement. On the Closing Date,
        authorized representatives of all parties will convene at the place(s)
        to be determined by AMPAL and BHP, and all actions that are required
        under this Agreement and/or any of its Annexes to be done on the Closing
        Date and/or Determining Date and/or at the Closing will be done
        simultaneously.

9.      If, prior to the Closing Date any shareholder of AMPAL (other than Rebar
        Financial Corp. (hereinafter "Rebar") and any of Rebar's shareholders,
        directors and office holders) makes a written demand or claim, against
        AMPAL and/or any of its directors and/or office holders and/or other
        shareholders, with respect to this Agreement and/or any of the
        transactions contemplated thereunder, and if AMPAL provides the legal
        opinion of its US Attorneys, under which such claim and/or demand is
        reasonably likely to result in a judgment imposing payment on the
        parties hereto or any of them in an amount exceeding $5,000,000 or may
        delay the Closing Date by six months or more, then AMPAL shall have the
        right to terminate this Agreement and all of its Annexes by giving
        written notice of such termination to the other parties hereto. In the
        event of such termination, none of the parties hereto will have any
        claim of whatsoever sort against any other party hereto in connection
        with this Agreement and/or any of its Annexes and/or the process that
        led to the execution thereof and/or their termination and/or the failure
        to fulfill the Conditions Precedent, except for any amount due under
        Section 14.1 hereunder.
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                                     - 9 -


10.     INDEMNIFICATION

10.1    The Bank agrees to indemnify and hold harmless the PURCHASERS and their
        officers, directors, employees, agents and attorneys (each, an
        "Indemnitee") from and against 22.7% of any and all liabilities, losses,
        damages, penalties, actions, judgments, suits, claims, costs and
        expenses (including but not limited to attorneys' fees, disbursements
        and expenses) of any kind whatsoever (collectively, "Losses") arising
        out of, based upon or relating to this Agreement and/or any of its
        annexes or any of the transactions contemplated thereby, suffered or
        incurred by any of them in connection with any (i) suit, action
        proceedings, claim and/or demand (including, without limitation, class
        action and derivative claims by the holders of any securities issued by
        any of the Purchasers, (ii) any suit, action proceedings, claim,
        investigation or demand by the United States Securities and Exchange
        Commission or the Israeli Securities Authority or any other United
        States or Israeli governmental or regulatory agency or authority, but
        always after deducting from the Losses all sums received by the relevant
        Indemnitee from its insurance company or any other third party which is
        not an Indemnitee, as indemnification of such Losses, and provided
        however that in no event shall the Bank be liable to pay the Indemnitee,
        under this Section 10.1, more than $1,000,000. However, the Bank shall
        not indemnify an Indemnitee for any amount to be borne by said
        Indemnitee in satisfaction of that Indemnitee's deductible ("hishtatfut
        atsmit") under the said Indemnitee's Insurance Policies.

10.2    Promptly after receipt by any Indemnitee of notice of any claim, suit
        action or proceeding (any of the foregoing, an "Action") from any Person
        who is not a party to this Agreement or to its respective Annex, which
        Action may give rise to a claim for indemnification hereunder, the
        Indemnitee shall give reasonable written notice thereof to the Bank; but
        the failure to give such notice in a timely fashion shall not relieve
        the Bank from any liability hereunder except to the extent, if any, that
        the Bank is materially prejudiced by such delay. In case any Action is
        brought against any Indemnitee, the Bank shall be entitled to
        participate in such defense after giving a written notice to the
        Indemnitee, stating its desire to do so, within fourteen days after the
        Bank was given notice of the Action. In the event that the Bank does not
        give the Indemnitee such timely notice of its desire to participate in
        any defense of any such Action, the Indemnitee shall be free to conduct
        the defense as it deems fit without the participation of the Bank. In
        any event, the defense of any such Action shall be controlled by the
        Indemnitee. The Bank shall not have any power or authority to settle
        such Action without the written consent of the affected Indemnitees. The
        affected Indemnitees in any Action shall have the right and power to
        settle such Action but the Bank will be exempt from its indemnification
        obligations under Sections 10.1 and 10.2 above, if such settlement is
        not coordinated with the Bank in advance.

10.3    To remove doubt it is declared and clarified that the provisions of
        Sections 10.1 and 10.2 above shall in no way prejudice any party's right
        to full and prompt compensation and indemnification for 100% of its
        Losses which result from a breach by any of the other parties of any of
        its representations, warranties or obligations under this Agreement
        and/or any of its annexes and/or any applicable law.

11.     SETTLEMENT OF DISPUTES
        Any disagreement, dispute, or difference of opinion arising among the
        parties concerning this Agreement and/or any of its Annexes or any of
        their terms (including a question of their validity), the signing,
        implementation, interpretation and/or application thereof, will be
<PAGE>   10
                                     - 10 -


        brought for determination by a single arbitrator to be agreed upon by
        the parties within 14 days of the date on which any of the parties
        requests such arbitration. In the absence of agreement among the parties
        on the identity of the arbitrator, the arbitrator's identity shall be
        determined, at the written request of any of the parties, by the
        Chairman of the Board of Management of BHP and the Chairman of the Board
        of Directors of AMPAL within 7 days of such request, and failing such
        determination, by the District Court of Tel-Aviv at the request of any
        of the parties hereto, provided that such party notifies the other
        parties to this Agreement or its relevant Annex in writing of its
        intention to do so at least ten (10) days in advance.

        The arbitrator will not be bound by the rules of evidence and procedure,
        however he shall be obliged to make his award according to the
        provisions of the substantive law and the provisions of this Agreement
        and/or its relevant Annex, to substantiate his award as well as any
        decision, and his decision will be final and binding upon all the
        respective parties.

        The arbitration will take place in Israel.

12.     NO WAIVER OF RIGHTS 
        No waiver, extension, reduction, or abstention from acting by any of the
        parties is to be considered a waiver of its rights under this Agreement
        or its relevant Annex or under any law and shall not prevent any claim
        whatsoever.

13.     WITHHOLDING TAX

        To remove doubt, it is declared and agreed that each payment under any
        of the Real Estate Agreements and under the Shares Transfer Agreement is
        subject to withholding tax, as such duty exists under any applicable
        law, and unless a proper exemption authorization is submitted prior to
        such payment, the proper tax will be withheld from any such payment.

14.     STAMP DUTY, ATTORNEY'S FEES AND EXPENSES

14.1    Stamp duty with respect to this Agreement, the Shares Transfer
        Agreement, and the Lease Agreement, if any, will be borne by the parties
        in equal portions, i.e., half by the BANK and half by the PURCHASERS.

14.2    Subject to the provisions of Section 14.1 above, each party shall bear
        its own expenses and attorney's fees in connection with this Agreement
        and its implementation.

15.     MISCELLANEOUS

15.1    Without derogating from their undertakings under this Agreement and/or
        any of its Annexes, each of the parties undertakes and agrees to perform
        such further and additional acts and sign or furnish such further and
        additional documents as shall be necessary or required for the
        implementation of this Agreement and its Annexes.

15.2    The provisions of this Agreement and its relevant annexes shall
        supersede and replace all previous representations, agreements,
        undertakings, and understandings made between the parties in anything
        concerning the sale and purchase of the Shares and/or the Real Estate
        Rights. It is clarified, to avoid doubt, that all agreements regarding
        credit facilities and other banking services between BHP and any of the
        other parties and the rights attributed to the Shares held by BHP in
        AMPAL ISRAEL in accordance with the Articles of Association of AMPAL
        ISRAEL are not affected by this Agreement.
<PAGE>   11
                                     - 11 -


15.3    This Agreement (including its Annexes) constitutes the entire agreement
        between the parties in the matters set out therein, and no amendment or
        modification therein will be valid unless in writing signed by the
        relevant parties.

15.4    Subject to the provisions of Section 11 above, each of the parties
        hereto irrevocably submits to the exclusive jurisdiction of the
        competent courts of the District of Tel-Aviv-Yafo in all matters
        connected with this Agreement and all its Annexes or arising therefrom.

15.5    Subject to Section 11 of the Shares Transfer Agreement, the rights and
        obligations of the parties under this Agreement or pursuant thereto will
        be governed by and construed in accordance with the laws of the State of
        Israel, including, to avoid doubt, such rules applying foreign laws, if
        and to the extent such rules are applicable.

15.6    Any amount due by one party to another under ANNEXES "A", "B", "C", "D",
        or "E", which is denominated in such Annex in U.S. Dollars, is to be
        paid in U.S. Dollars.

15.7    The addresses of the parties for the purpose of this Agreement are as
        set out in the preamble hereto. Any notice, direction or other
        instrument required or permitted to be given by a party hereunder shall
        be made in writing and may be given by mailing the same registered mail,
        postage pre-paid, or by delivering the same addressed to such other
        party at their address aforesaid. Any notice, direction or other
        instrument if delivered shall be deemed to have been given or made on
        the date on which it was actually delivered; or if mailed shall be
        deemed to have been given or made on the seventh business day following
        the day on which it was mailed.
 
        The parties hereto may change their address for service hereunder from
        time to time by notice given in accordance with the foregoing.



IN WITNESS WHEREOF the parties have executed this Agreement:


-----------------------------------          ----------------------------------
BANK HAPOALIM B.M.                           ATAD INVESTMENTS COMPANY LTD.


-----------------------------------          ----------------------------------
REVADIM (NECHASIM) LTD.                      AMPAL-AMERICAN ISRAEL CORPORATION


-----------------------------------          ----------------------------------
AMPAL DEVELOPMENT (ISRAEL) LTD.              AMPAL FINANCIAL SERVICES LTD.


-----------------------------------          ----------------------------------
NIR LTD.                                     AMPAL (ISRAEL) LTD.
<PAGE>   12
                                    ANNEX "A"

                            SHARES TRANSFER AGREEMENT

         Made and entered into in Tel-Aviv on the   day of       , 1999

                                 BY AND BETWEEN

              1.     BANK HAPOALIM B.M. (p.c.52-000011-8)
                     (hereinafter "BHP")

              2.     ATAD INVESTMENTS COMPANY LTD. (p.c.51-089763-0)
                     (hereinafter "ATAD")

              both of 63-65 Yehuda Halevi Street, Tel-Aviv
              (BHP and ATAD shall be hereinafter referred to jointly and
              severally as "the BANK")
                                                              of the first part;
                                       AND

              1.     AMPAL-AMERICAN ISRAEL CORPORATION
                     (c/o Ampal Israel)
                     of 111 Arlozorov Street, Tel-Aviv
                     (hereinafter "AMPAL")

              2.     AMPAL DEVELOPMENT (ISRAEL) LTD. (p.c.52-000238-7)
                     of 111 Arlozorov Street, Tel-Aviv
                     (hereinafter "AMPAL DEVELOPMENT")

              3.     AMPAL FINANCIAL SERVICES LTD. (p.c.52-002104-9)
                     of 111 Arlozorov Street, Tel-Aviv
                     (hereinafter "AMPAL FINANCING")

              4.     AMPAL (ISRAEL) LTD. (p.c.52-002622-0)
                     of 111 Arlozorov Street, Tel-Aviv
                     (hereinafter "AMPAL ISRAEL")

              (AMPAL, AMPAL DEVELOPMENT, AMPAL FINANCING, and AMPAL ISRAEL shall
              be hereinafter referred to jointly and severally as "the
              PURCHASERS")
                                                             of the second part;


WHEREAS           The BANK represents and warrants that ATAD is, and was at all
                  times at which it held the Shares (as hereinafter defined), a
                  wholly owned subsidiary of BHP; and


WHEREAS           The BANK represents and warrants that ATAD is the record owner
                  and holder, and BHP through ATAD is the beneficial owner, of
                  5,874,281 Ordinary Shares (as hereinafter defined), of 3,350
                  4% Preferred Shares (as hereinafter defined), and of 122,536
                  6.5% Preferred Shares (as hereinafter defined)) (the Ordinary
                  Shares, the 4% Preferred Shares, and the 6.5% Preferred Shares
                  are collectively referred
<PAGE>   13
                                     - 2 -


                  to herein as "the Shares"), and that the Shares and ATAD's
                  holding therein are free and clear of any Third Party Right
                  (as hereinafter defined); and


WHEREAS           BHP is interested in transferring and selling the Shares to
                  the PURCHASERS, and the PURCHASERS are interested in
                  purchasing the Shares, all on the terms and conditions and for
                  the consideration as set out hereinafter in this Agreement;
                  and


WHEREAS           Simultaneously with signing this Agreement the BANK, the
                  PURCHASERS and others are also signing the agreement
                  (hereinafter the "Main Agreement") to which this Agreement is
                  attached as Annex "A" and other agreements which are attached
                  to the Main Agreement as Annexes "B", "C", "D", "E", "F" and
                  "G" thereto (hereinafter the "Other Agreements").



NOW, THEREFORE, it has been declared, agreed and warranted between the parties
as follows:



1.       PREAMBLE, CAPTIONS, DEFINITIONS, AND ANNEXES

1.1      The preamble to this Agreement and the Annexes hereto form an integral
         part hereof.

1.2      Captions used in this Agreement are solely for convenience of reading
         and shall not be used for the interpretation or determination of the
         validity of this Agreement or any provision hereof.

1.3      In this Agreement the following terms shall have the meanings ascribed
         to them:.

1.3.1    "This Agreement" or "the Agreement" - this Agreement and all the
         Annexes, amendments or additions to it, as well as any document to be
         furnished in accordance with the provisions hereof.

1.3.2    "Ordinary Shares" - Class A Stock of $1 (one dollar) par value each in
         AMPAL.

1.3.3    "4% Preferred Shares" - 4% Cumulative Convertible Preferred Stock of $5
         par value each in AMPAL.

1.3.4    "6.5% Preferred Shares" - 6.5% Cumulative Convertible Preferred Stock
         of $5 par value each in AMPAL.

1.3.5    The "Shares" - As defined in the preamble to this Agreement.

1.3.6    "Third Party Right" - Any lien, pledge, mortgage, suit, demand, claim,
         attachment and/or debt or obligation towards whatsoever third party
         and/or whatsoever other third party right.

1.3.7    "Amount of the Deposit" - A sum of 12,880,000 dollars deposited by
         AMPAL on April 13, 1999 as a dollar deposit in Account No.370959 in the
         name of AMPAL at the BHP Branch (No. 608) at 111 Arlozorov Street,
         together with interest thereon which was actually accrued in said
         deposit from the day of deposit until the time of its transfer to BHP
         according to the provisions of this Agreement.
<PAGE>   14
                                     - 3 -


1.3.8    "Dollar" - U.S. Dollar.

1.3.9    "The PURCHASERS' Attorney" - Any of the attorneys from the office of
         Firon, Karni, Sarov & Firon, Advs., of 111 Arlozorov Street, Tel-Aviv,
         alone and/or in any combination.

1.3.10   "The BANK's Attorney" - Advs. Moriah Hoftman Doron and Avraham Hirsch
         of 63 Yehuda Halevi Street, Tel-Aviv, alone and/or in any combination.

1.3.11   "The Determining Date" - The date which BHP and AMPAL will determine as
         the Closing Date in accordance with the provisions of Section 8 of the
         Main Agreement.

2.       REPRESENTATIONS AND WARRANTIES OF THE PARTIES

2.1      Representations and Warranties of the BANK

         The BANK represents, warrants, covenants and undertakes the following
         to be true and correct as of the date hereof and that the following
         will be true and correct on the Determining Date and is aware and
         acknowledges that the PURCHASERS have agreed to enter into this
         Agreement and the transactions contemplated herein in reliance on these
         representations, warranties, covenants and undertakings of the BANK:

2.1.1    ATAD is a private company duly registered in Israel; its registration
         number with the Registrar of Companies is 51-089763-0; it is wholly
         owned and controlled by BHP; and it is an active company lawfully
         conducting its business and it has all the powers and authorities to
         enter into this Agreement and to fulfill all its undertakings
         hereunder.

2.1.2    BHP is a public company duly registered as a bank in Israel; its
         registration number with the Registrar of Companies is 52-000011-8, and
         it is an active company lawfully conducting its business and it has all
         the powers and authorities to enter into this Agreement and to fulfill
         all its undertakings hereunder.

2.1.3    Save as set out in Section 7.1 of the Main Agreement each of BHP and
         ATAD have completed all such corporate acts and proceedings required
         under their incorporation documents and under law for entering into
         this Agreement and the fulfillment of their undertakings hereunder.

2.1.4    ATAD is the record owner and holder of the Shares; the Shares and
         ATAD's rights therein are free and clear of any Third Party Right, and
         there is nothing to prevent the sale and transfer of the Shares to the
         PURCHASERS as set out hereinafter in this Agreement.

2.1.5    On October 30, 1985, and at all times thereafter until the Determining
         Date, BHP was, is, and will be the "Beneficial Owner" (as the term is
         defined in Section 912 of the New York Business Corporation Law),
         directly or through ATAD (which is and always was a wholly owned
         subsidiary of BHP), of not less than 20% of the outstanding voting
         stock of AMPAL.

2.1.6    On October 30, 1985, and at all times thereafter until the day of
         transfer of the Shares to the PURCHASERS, BHP was, is, and will be an
         "Interested Shareholder" for the purposes stated in Section 912 of the
         New York Business Corporation Law.
<PAGE>   15
                                     - 4 -

2.1.7    On the Determining Date, BHP will be the sole record and Beneficial
         Owner and holder of the Shares and will transfer the Shares to the
         PURCHASERS free and clear of any Third Party Right.

2.2      Representations and Warranties of the PURCHASERS

         Each of the PURCHASERS hereby represents, warrants, covenants and
         undertakes, all as relevant to each and every one of them respectively,
         the following to be true and correct on the date hereof and that the
         following will be true and correct on the Determining Date, and is
         aware and acknowledges that the BANK has agreed to enter into this
         Agreement and the transactions contemplated therein in reliance on
         these representations, warranties, covenants and undertakings of the
         PURCHASERS:

2.2.1    AMPAL is a corporation duly organized in the State of New York, U.S.A.,
         whose Ordinary Shares are traded on the AMEX; it is an active company
         lawfully conducting its business, and has all the powers and
         authorities to enter into this Agreement and to fulfill all its
         undertakings hereunder.

2.2.2    AMPAL DEVELOPMENT is a public company duly registered in Israel; its
         registration number with the Registrar of Companies is 52-000238-7; and
         it is an active company lawfully conducting its business and it has all
         the powers and authorities to enter into this Agreement and to fulfil
         all its undertakings hereunder.

2.2.3    AMPAL FINANCING is a public company duly registered in Israel; its
         registration number with the Registrar of Companies is 52-002104-9; and
         it is an active company lawfully conducting its business and it has all
         the powers and authorities to enter into this Agreement and to fulfill
         all its undertakings hereunder.

2.2.4    AMPAL ISRAEL is a public company duly registered in Israel; its
         registration number with the Registrar of Companies is 52-002622-0; and
         it is an active company lawfully conducting its business and it has all
         the powers and authorities to enter into this Agreement and to fulfil
         all its undertakings hereunder.

2.2.5    Save as set out in Section 7.1 of the Main Agreement, each of the
         PURCHASERS has completed all such corporate acts and proceedings
         required under its incorporation documents and any law for entering
         into this Agreement and the fulfillment of all its undertakings
         hereunder.

2.2.6      The PURCHASERS are fully aware of AMPAL's condition, rights and
           obligations, and of the rights attached to the Shares under AMPAL's
           Certificate of Incorporation and Bylaws and they purchase the Shares
           by virtue of this Agreement based on AMPAL's condition, rights and
           obligations, and the said rights as they are, without any reliance on
           any representations and/or warranties of the BANK regarding AMPAL's
           condition, rights and obligations, and the said rights.

3.       THE TRANSACTION - GENERAL

3.1      BHP hereby undertakes, for the Consideration as set out hereinafter, to
         sell and transfer on the Determining Date the Shares to the PURCHASERS
         in the apportionment set out hereinafter, and that at the time of
         transferring the Shares to the PURCHASERS as provided hereunder, the
         Shares and the rights of BHP therein will be free and clear of any
         Third Party Right whatsoever.
<PAGE>   16
                                     - 5 -


3.2      ATAD hereby undertakes to do everything required in order to enable BHP
         to fulfill its undertakings under Section 3.1 above. Without derogating
         from the generality of the aforesaid, ATAD and BHP undertake that BHP
         will be the record owner and holder of the Shares and ATAD's rights
         thereunder and that ATAD will transfer the Shares to BHP, the Shares
         and ATAD's rights therein being free and clear of any Third Party Right
         whatsoever and complete the transfer prior to the Determining Date, in
         order to enable their transfer by BHP to the PURCHASERS as provided
         hereunder.

3.3      The Shares will be sold and transferred to the PURCHASERS in the
         portions and for the consideration as follows:

3.3.1    To AMPAL - 3,517,683 Ordinary Shares, 3,350 4% Preferred Shares, and
         122,536 6.5% Preferred Shares (hereinafter "the AMPAL Shares") in
         consideration of:

         3.3.1.1  The transfer of the Amount of the Deposit; and

         3.3.1.2  $3,420,000 plus interest in the rate of LIBOR plus 0.75% per
                  annum from April 12, 1999 until the date of actual payment
                  (herein the "Interest"); and

         3.3.1.3  $3,210,208;

         All as set out in Section 4 hereinafter.

3.3.2    To AMPAL DEVELOPMENT - 1,560,450 Ordinary Shares (hereinafter "the
         AMPAL DEVELOPMENT Shares") in consideration of $7,802,248, as set out
         in Section 5 hereinafter.

3.3.3    To AMPAL FINANCING - 660,803 Ordinary Shares (hereinafter "the AMPAL
         FINANCING Shares")in consideration of $3,304,013, as set out in Section
         6 hereinafter.

3.3.4    To AMPAL ISRAEL - 135,345 Ordinary Shares (hereinafter "the AMPAL
         ISRAEL Shares") in consideration of $676,726, as set out in Section 7
         hereinafter.

3.4      To avoid doubt, the completion of the transfer and sale of the Shares
         to the PURCHASERS and the payment of the consideration therefor ("the
         Closing") will take place simultaneously so that none of the Shares
         will be transferred and sold to any of the PURCHASERS and no part of
         the consideration therefor will be paid by the PURCHASERS unless all
         the Shares are transferred and sold to the PURCHASERS and all the
         consideration therefor is paid by the PURCHASERS as provided hereunder.

3.5      All documents required to be signed and delivered on the Determining
         Date (the "Closing") will be completed as required to effect the
         transfer of the Shares to the PURCHASERS.

4.       THE SALE AND TRANSFER TO AMPAL

4.1      On the Determining Date BHP will sell and transfer the AMPAL Shares to
         AMPAL, and for that purpose BHP will sign and deliver to AMPAL the
         following documents: (1) Original Stock Certificates Issued to BHP for
         3,517,683 Ordinary Shares, 3,350 4% Preferred Shares and 122,536 6.5%
         Preferred Shares of AMPAL, and (2) The BANK's Representation Letter,
         and (3) BHP's Stock Power, bearing a medallion signature guaranteed by
         a bank or a brokerage firm, and (4) BHP's Secretary's Certificate, and
<PAGE>   17
                                     - 6 -


         (5) AMPAL's Opinion of Counsel, all in the forms attached as ANNEXES
         4.1.1-4.1.5 hereto in respect of the AMPAL Shares.

4.2      On the Determining Date and against delivery of all signed documents
         required to be delivered by BHP to the PURCHASERS:

4.2.1    AMPAL will transfer to BHP the Amount of the Deposit by signing the
         irrevocable instruction attached hereto AS ANNEX 4.2.1 and delivering
         it to BHP.

4.2.2    AMPAL will pay BHP the sum of $3,420,000 plus the Interest, plus
         $3,210,208 by bank check or bank transfer.

5.       THE SALE AND TRANSFER TO AMPAL DEVELOPMENT

5.1      On the Determining Date BHP will sell and transfer the AMPAL
         DEVELOPMENT Shares to AMPAL DEVELOPMENT, and for that purpose BHP will
         sign and deliver to AMPAL DEVELOPMENT the following documents: (1)
         Original Stock Certificate issued to BHP for 1,560,450 Ordinary Shares
         of AMPAL, and (2) The BANK's Representation Letter, and (3) BHP's Stock
         Power bearing a medallion signature guaranteed by a bank or a brokerage
         firm, and (4) BHP's Secretary's Certificate, and (5) AMPAL's Opinion of
         Counsel, all in the forms attached as ANNEXES 5.1.1-5.1.5 hereto in
         respect of the AMPAL DEVELOPMENT Shares and AMPAL DEVELOPMENT will
         furnish the AMPAL DEVELOPMENT's Representation Letter ANNEX 5.1.6
         hereto.

5.2      On the Determining Date and against delivery of all signed documents
         required to be delivered by BHP to the PURCHASERS, AMPAL DEVELOPMENT
         will pay BHP a sum of $7,802,248 by bank check or bank transfer.

6.       THE SALE AND TRANSFER TO AMPAL FINANCING

6.1      On the Determining Date BHP will sell and transfer the AMPAL FINANCING
         Shares to AMPAL FINANCING, and for that purpose BHP will sign and
         deliver to AMPAL FINANCING the following documents: (1) Original Stock
         Certificate issued to BHP for 660,803 Ordinary Shares of AMPAL, and (2)
         The BANK's Representation Letter, and (3) BHP's Stock Power bearing a
         medallion signature guaranteed by a bank or a brokerage firm, and (4)
         BHP's Secretary's Certificate, and (5) AMPAL's Opinion of Counsel, all
         in the forms attached as ANNEXES 6.1.1-6.1.5 hereto in respect of AMPAL
         FINANCING Shares and AMPAL FINANCING will furnish the AMPAL FINANCING
         Representation Letter, ANNEX 6.1.6 hereto.

6.2      On the Determining Date and against delivery of all signed documents
         required to be delivered by BHP to the PURCHASERS, AMPAL FINANCING will
         pay BHP a sum of $3,304,013 by a bank check or by a bank transfer.

7.       THE SALE AND TRANSFER TO AMPAL ISRAEL

7.1      On the Determining Date BHP will sell and transfer the AMPAL ISRAEL
         Shares to AMPAL ISRAEL, and for that purpose BHP will sign and deliver
         to AMPAL ISRAEL the following documents: (1) Original Stock Certificate
         issued to BHP for 135,345 Ordinary Shares of AMPAL, and (2) The BANK's
         Representation Letter, and (3) BHP's Stock Power bearing a medallion
         signature guaranteed by a bank or brokerage firm, and (4) BHP's
         Secretary's Certificate, and (5) AMPAL's Opinion of Counsel, all in the
         forms attached as
<PAGE>   18
                                     - 7 -


         ANNEXES 7.1.1-7.1.5 hereto in respect of the AMPAL ISRAEL Shares and
         AMPAL ISRAEL will furnish the AMPAL ISRAEL's Representation Letter
         ANNEX 7.1.6 hereto.

7.2      On the Determining Date and against delivery of all signed documents
         required to be delivered by BHP to the PURCHASERS, AMPAL ISRAEL will
         pay BHP a sum of $676,726 by bank check or bank transfer.

8.       RESIGNATION OF DIRECTORS

         At the Determining Date, and against the payment by the PURCHASERS to
         BHP of the consideration for the Shares as provided in Sections 4, 5,
         6, and 7 above, BHP shall deliver to AMPAL notices of resignation from
         AMPAL's Board of Directors signed by Messrs. Yaakov Elinav and Shimon
         Ravid, to become effective immediately upon delivery to AMPAL. The
         notices will be in the form attached as ANNEX 8 to this Agreement.

9.       This Agreement is subject to the fulfillment of all the Conditions
         Precedent as defined and provided for in Section 7 of the Main
         Agreement.

10.      TAXES AND OTHER COMPULSORY PAYMENTS

         Capital Gains Tax and/or Income Tax and New York Stamp and Transfer
         Taxes (if applicable) on the sale of the Shares to the PURCHASERS will
         be borne and paid by the BANK.

11.      REGISTRATION OF SHARES

         After the Determining Date, if requested by the PURCHASERS, BHP will
         sign any document and take whatever action that is necessary in order
         to complete the registration of the Shares in the name of each relevant
         PURCHASER.


12.      MISCELLANEOUS

         To remove any doubt, it is declared and agreed that all the provisions
         of Sections 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the Main Agreement
         shall apply herein mutatis mutandis. However, it is specifically
         declared and agreed that this Agreement and the rights and obligations
         of the parties hereunder or pursuant hereto shall be governed by and
         construed in accordance with the laws of the State of New York, U.S.A.,
         including, to avoid doubt, such rules applying foreign laws, if and to
         the extent such rules are applicable.

IN WITNESS WHEREOF the parties have signed:


-----------------                                  -----------------------------
BANK HAPOALIM B.M.                                 ATAD INVESTMENTS COMPANY LTD.



---------------------------------                -------------------------------
AMPAL-AMERICAN ISRAEL CORPORATION                AMPAL DEVELOPMENT (ISRAEL) LTD.



-----------------------------                                -------------------
AMPAL FINANCIAL SERVICES LTD.                                AMPAL (ISRAEL) LTD.
<PAGE>   19
                                    ANNEX "B"

                              REAL ESTATE AGREEMENT


         Made and entered into in Tel-Aviv on the   day of       , 1999

                                 BY AND BETWEEN

                  REVADIM (NECHASIM) LTD. (p.c. 51-073528-5)
                     of 63-65 Yehuda Halevi Street, Tel-Aviv
                            (hereinafter "the BUYER")
                                                              of the first part;

                                       AND

                        AMPAL-AMERICAN ISRAEL CORPORATION
                            (c/o Ampal (Israel) Ltd.)
                        of 111 Arlozorov Street, Tel-Aviv
                              (hereinafter "AMPAL")
                                                             of the second part;

WHEREAS     AMPAL is an owner of rights in the Arlozorov A Property, as
            specified hereinafter in this agreement; and


WHEREAS     AMPAL is interested in selling to the BUYER and the BUYER is
            interested in buying from AMPAL its rights in the Arlozorov A
            Property as defined hereinafter, all on the terms and conditions and
            for the consideration specified herein; and


WHEREAS     Simultaneously with signing this Agreement, the BUYER, AMPAL and
            others are signing also the Agreement (hereinafter the "Main
            Agreement") to which this Agreement is attached as ANNEX "B" and
            other agreements which are attached to the Main Agreement as ANNEXES
            "A", "C", "D", "E", "F" and "G" thereto (hereinafter the "Other
            Agreements");


NOW, THEREFORE, it has been declared, agreed and warranted between the parties
as follows:
<PAGE>   20
                                     - 2 -



1.      PREAMBLE, CAPTIONS, DEFINITIONS, AND ANNEXES

1.1     The preamble to this agreement and the annexes hereto form an integral
        part hereof.

1.2     Captions used in this Agreement are solely for convenience of reading
        and shall not be used for the interpretation or determination of the
        validity of this Agreement or any provision hereof.

1.3     In this agreement the following terms shall have the meanings ascribed
        to them:.

1.3.1   "This Agreement" or "the Agreement" - this agreement and all the
        annexes, amendments or additions to it, as well as any document to be
        furnished in accordance with the provisions hereof.

1.3.2   "Third Party Right" - Any lien, pledge, mortgage, suit, demand, claim,
        attachment and/or debt or obligation towards whatsoever third party
        and/or whatsoever other third party right.

1.3.3   "Arlozorov A Property" or the "Real Estate"- The real estate property
        known as Block 6213 Parcel 661/5 at 105 Arlozorov Street, Tel-Aviv, of
        which AMPAL is entitled to be registered as owner and of which today BHP
        is registered as owner in its entirety, as specified in the extract,
        copy of which is attached hereto as ANNEX 1.3.3.

1.3.4   "Dollar" - U.S. Dollar.

1.3.5   "AMPAL's Attorney" - Any of the attorneys from the office of Firon,
        Karni, Sarov & Firon, Advs., of 111 Arlozorov Street, Tel-Aviv, alone
        and/or in any combination.

1.3.6   "The BUYER's Attorney" - Advs. Moriah Hoftman Doron and Avraham Hirschof
        63 Yehuda Halevi Street, Tel-Aviv, alone and/or in any combination.

1.3.7   "The Determining Date" - The date which BHP and AMPAL will determine as
        the Closing Date in accordance with the provisions of Section 8 to the
        Main Agreement.

1.3.8   "BHP" - Bank Hapoalim B.M.
<PAGE>   21
                                     - 3 -


2.      REPRESENTATIONS AND WARRANTIES OF THE PARTIES 

2.1     Representations and Warranties of the BUYER The BUYER represents,
        warrants, covenants, and undertakes the following to be true and correct
        on the date hereof and that the following will be true and correct on
        the Determining Date, and is aware and acknowledges that AMPAL has
        agreed to enter into this Agreement and the transactions contemplated
        therein in reliance on these representations, warranties, covenants, and
        undertakings of the BUYER:

2.1.1   The BUYER is a private company duly registered in Israel; its
        registration number with the Registrar of Companies is 51-073528-5; it
        is wholly owned and controlled by BHP; and it is an active company
        lawfully conducting its business and it has all the powers and
        authorities to enter into this Agreement and to fulfil all its
        undertakings hereunder.

2.1.2   BHP is a public company duly registered as a bank in Israel; its
        registration number with the Registrar of Companies is 52-000011-8, and
        it is an active company lawfully conducting its business and it has all
        the powers and authorities to enter into this Agreement and to fulfil
        all its undertakings hereunder.

2.1.3   Save as set out in Section 7.1 of the Main Agreement, the BUYER has
        completed all corporate acts and proceedings required under its
        incorporation documents and under law for the entering into this
        Agreement and the fulfillment of its undertakings hereunder.

2.1.4   BHP is the lessee and actual holder, for many years, of the Real Estate
        according to a lease agreement between BHP and AMPAL.

2.1.5   The BUYER has examined independently, to its full satisfaction, and
        knows well the Real Estate and AMPAL's rights in it from all aspects,
        physical, planning, factual, and legal, the BUYER was given every
        opportunity to make any examination, and the BUYER has found the Real
        Estate suited to its purposes and is acquiring the rights therein "as
        is", being fully aware of its condition and age, and it waives
        absolutely and 
<PAGE>   22
                                     - 4 -


        finally any demand and/or claim against AMPAL, including in the matter
        of any unsuitability and/or defect in respect of the Real Estate,
        whether disclosed or concealed, existing or future.

2.2     REPRESENTATIONS AND WARRANTIES OF AMPAL 
        AMPAL hereby represents, warrants, covenants and undertakes the
        following to be true and correct on the date hereof, and the following
        will be true and correct on the Determining Date, and is aware and
        acknowledges that the BUYER has agreed to enter into this Agreement and
        the transactions contemplated therein in reliance on these
        representations, warranties, covenants and undertakings of AMPAL:

2.2.1   AMPAL is a corporation duly organized in the State of New York, U.S.A.,
        it is an active company lawfully conducting its business, and has all
        the powers and authorities to enter into this Agreement and to fulfil
        all its undertakings hereunder.

2.2.2   Save as set out in Section 7.1 of the Main Agreement, AMPAL has
        completed all such corporate acts and proceedings required under its
        incorporation documents and any law for entering into this Agreement and
        the fulfillment of all its undertakings hereunder.

2.2.3   AMPAL is entitled to be registered as the owner of the Arlozorov A
        Property, and its rights therein are free and clear of any Third Party
        Right whatsoever, as set out in Annex 1.3.3, and they can be sold and
        transferred to the BUYER.

3.      THE TRANSACTION - GENERAL
        AMPAL hereby undertakes to sell and transfer to the BUYER on the
        Determining Date, the Real Estate and all of AMPAL's rights therein, the
        Real Estate and AMPAL's rights therein being free and clear of any Third
        Party Right whatsoever, for the consideration in the sum of $2,919,208
        plus V.A.T. (hereinafter the "Consideration"), to be paid to it by the
        BUYER as set out hereinafter.
<PAGE>   23
                                     - 5 -


4.      THE SALE AND TRANSFER

4.1     On the Determining Date ("the Closing") the BUYER will pay AMPAL the
        Consideration by bank check or bank transfer.

4.2     Against receipt of the Consideration in full, AMPAL will sign and submit
        to the BUYER an irrevocable power of attorney in the form attached
        hereto as ANNEX "4.2" which will enable the BUYER to do any act in
        connection with transferring AMPAL's rights in the Arlozorov A Property
        to the BUYER, including, inter alia, registering the transfer of these
        rights at the Land Registry Office, signing any document for the purpose
        of transferring the said rights and/or obtaining whatsoever approval
        which is required for the transfer of the said rights as aforesaid, as
        well as to appear before any competent authority in connection with the
        abovementioned activities.

4.3     Immediately upon completion of full payment of the Consideration to
        AMPAL, the validity of the lease agreement between AMPAL and BHP in
        connection with the Arlozorov A Property will expire without any of the
        parties thereto having any demand and/or claim whatsoever towards the
        other, except in connection with rental fees and other payments due to
        AMPAL, or prepaid by BHP, in connection with the period up to the
        Determining Date, exclusive possession in the Arlozorov A Property will
        pass to the BUYER, and the BUYER will be permitted to register a caveat
        in connection with acquisition of AMPAL's rights in the Arlozorov A
        Property.

4.4     After the full payment of the Consideration to AMPAL, AMPAL will act to
        furnish the BUYER an authorization of Mas Shevach (Land Betterment Tax)
        for the registration of the rights in the Arlozorov A Property in the
        name of the BUYER at the Land Registry Office. It is agreed that the
        BUYER will be responsible for the performance of all acts required for
        the purpose of registering the rights in the Arlozorov A Property in its
        name according to this Agreement, and will bear all payments involved
        therewith. AMPAL, on its part, undertakes to cooperate with the BUYER
        and/or the BUYER's Attorney and use its best effort to assist the BUYER
        and/or the BUYER's attorney in this
<PAGE>   24
                                     - 6 -


        matter and sign the documents and authorizations required for the
        purpose of completing the registration of the said rights in the BUYER's
        name at the Land Registry Office as aforesaid.

        If the authorization of Mas Shevach (Land Betterment Tax) is not
        furnished to the BUYER within 180 (one hundred eighty) days of the date
        on which the parties shall file the Land Betterment Tax forms and
        affidavits as provided in Section 6.5 hereunder, then as soon as the Mas
        Shevach Authorities determine the Mas Shevach with respect to this
        transaction, AMPAL will either pay and/or provide the Mas Shevach
        Authorities with guarantees covering, together, the entire Mas Shevach
        determined by the Mas Shevach Authorities with respect to this
        transaction, so that the Mas Shevach Authorization is furnished. It is
        agreed that should AMPAL decide to contest and/or appeal the Mas Shevach
        Authorities' determinations, the BUYER will not have to join such
        contest and/or appeal, but will support and assist AMPAL's contest
        and/or appeal.

5.      This Agreement is subject to the fulfillment of all Conditions Precedent
        as defined and provided for in Section 7 of the Main Agreement.

6.      TAXES AND OTHER COMPULSORY PAYMENTS

6.1     Value Added Tax in respect of the transfers of AMPAL's rights in the
        Real Estate as aforesaid in Section 4 above, will be borne and paid by
        the BUYER. The BUYER will transfer the V.A.T. to the V.A.T. Authorities
        directly and will issue a "Cheshbonit Mas Azmit" (Self Tax Invoice), as
        provided by law.

6.2     Subject to the provisions of Sections 6.3 and 6.4 hereunder, all the
        taxes, levies and fees, governmental and municipal, of any kind and
        type, except for improvement levies, in respect of the period up to the
        Determining Date, will be borne and paid by AMPAL or by BHP - in
        accordance with the provisions of the lease agreement between AMPAL and
        BHP in connection with the Real Estate, and in respect of the period
        from the Determining Date - will be borne and paid by the BUYER alone.
        In addition, any betterment levies, if any, which have not yet actually
        been paid in 
<PAGE>   25
                                     - 7 -


        respect of the Real Estate, will be borne and paid by the BUYER.

6.3     Land Betterment Tax or Capital Gains Tax or Income Tax on the transfer
        of AMPAL's rights in the Real Estate to the BUYER will be borne and paid
        by AMPAL.

6.4     Acquisition Tax (Purchase Tax) on the transfer of AMPAL's rights in the
        Real Estate to the BUYER will be borne and paid by the BUYER.

6.5     The BUYER and AMPAL will sign and file at the times set by law, Land
        Betterment Tax forms and affidavits in connection with the transfer and
        sale of AMPAL's rights in the Real Estate.

7.      MISCELLANEOUS 
        To remove any doubt, it is declared and agreed that all the provisions
        of Sections 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the Main Agreement
        shall apply herein mutatis mutandis. However, it is specifically
        declared and agreed that this Agreement and the rights and obligations
        of the parties and BHP hereunder or pursuant hereto shall be governed by
        and construed in accordance with the laws of the State of Israel.

IN WITNESS WHEREOF the parties have signed:



---------------------------------                            --------------
AMPAL-AMERICAN ISRAEL CORPORATION                               THE BUYER



We, Bank Hapoalim B.M., hereby irrevocably agree to all the abovementioned
provisions regarding ourselves and/or having any bearing on us. We also hereby
irrevocably guarantee the full and prompt fulfillment of all the BUYER's
undertakings under the above Agreement. We hereby waive any demand of prior
request from the BUYER under Section 8 of the Guarantee Law, 5727-1967. This
guarantee shall remain in full force in spite of any stay, postponement, waiver,
or change in a guaranteed obligation of the BUYER.


                            ---------------------------
                               Bank Hapoalim B.M.


<PAGE>   26
                                    ANNEX "C"

                              REAL ESTATE AGREEMENT


         Made and entered into in Tel-Aviv on the   day of      , 1999

                                 BY AND BETWEEN

                   REVADIM (NECHASIM) LTD. (p.c. 51-073528-5)
                            (hereinafter the "BUYER")
                     of 63-65 Yehuda Halevi Street, Tel-Aviv

                                                              of the first part;

                                       AND

               AMPAL DEVELOPMENT (ISRAEL) LTD. (p.c. 52-000238-7)
                        of 111 Arlozorov Street, Tel-Aviv
                              (hereinafter "AMPAL")

                                                             of the second part;

WHEREAS           AMPAL is an owner of rights in the Real Estate defined herein
                  as "Holon Property", "Panorama Property" and "Allenby
                  Property", as specified hereinafter in this agreement; and


WHEREAS           AMPAL is interested in selling to the BUYER and the BUYER is
                  interested in buying from AMPAL its rights in the Real Estate
                  as defined hereinafter, all on the terms and conditions and
                  for the consideration specified herein; and


WHEREAS           Simultaneously with signing this Agreement, the BUYER, AMPAL
                  and others are signing also the Agreement (hereinafter the
                  "Main Agreement") to which this Agreement is attached as ANNEX
                  "C" and other agreements which are attached to the Main
                  Agreement as ANNEXES "A", "B", "D", "E", "F" and "G" thereto
                  (hereinafter the "Other Agreements");


NOW, THEREFORE, it has been declared, agreed and warranted between the parties
as follows:



1.     PREAMBLE, CAPTIONS, DEFINITIONS, AND ANNEXES

1.1      The preamble to this agreement and the annexes hereto form an integral
         part hereof.

1.2      Captions used in this Agreement are solely for convenience of reading
         and shall not be used for the interpretation or determination of the
         validity of this Agreement or any provision hereof.

1.3      In this agreement the following terms shall have the meanings ascribed
         to them:
<PAGE>   27
                                      -2-






1.3.1    "This Agreement" or "the Agreement" - this agreement and all the
         annexes, amendments or additions to it, as well as any document to be
         furnished in accordance with the provisions hereof.

1.3.2    "Third Party Right" - Any lien, pledge, mortgage, suit, demand, claim,
         attachment and/or debt or obligation towards whatsoever third party
         and/or whatsoever other third party right.

1.3.3    "Holon Property" - The real estate property known as Block 7168 in
         Parcel 159/2 at 39 Shenkar Street, Holon, in the ownership of AMPAL
         DEVELOPMENT as specified in the extract, copy of which is attached
         hereto as ANNEX 1.3.3.

1.3.4    "Panorama Property" - The real estate property known as part of Parcels
         97 and 132 in Block 10812 at Panorama Center, 105 Hanassi Boulevard,
         Haifa, of which AMPAL DEVELOPMENT is entitled to be registered as the
         owner/perpetual lessee, and in respect of which two caveats are
         recorded in favor of AMPAL DEVELOPMENT [under its former name - Bank
         Lecharoshet B.M.] as specified in the extract, copy of which is
         attached hereto as ANNEX 1.3.4.

1.3.5    "Allenby Property" - The real estate property known as Block 6933
         Parcel 116 with all its sub-parcels, at 65 Allenby Street, Tel-Aviv, in
         the ownership of AMPAL DEVELOPMENT as specified in the extract, copy of
         which is attached hereto as ANNEX 1.3.5.

1.3.6    "The Real Estate" - The Holon Property, Panorama Property and Allenby
         Property, jointly or severally, as the case may be.

1.3.7    "Dollar" - U.S. Dollar.

1.3.8    "AMPAL's Attorney" - Any of the attorneys from the office of Firon,
         Karni, Sarov & Firon, Advs., of 111 Arlozorov Street, Tel-Aviv, alone
         and/or in any combination.

1.3.9    "The BUYER's Attorney" - Advs. Moriah Hoftman Doron and Avraham Hirsch
         of 63 Yehuda Halevi Street, Tel-Aviv, alone and/or in any combination.

1.3.10   "The Determining Date" - The date which BHP and AMPAL will determine as
         the Closing Date in accordance with the provisions of Section 7 to the
         Main Agreement.

1.3.11   "BHP" - Bank Hapoalim B.M.

2.       REPRESENTATIONS AND WARRANTIES OF THE PARTIES

2.1      Representations and Warranties of the BUYER 
         -------------------------------------------
         The BUYER represents, warrants, covenants, and undertakes the following
         to be true and correct on the date hereof and that the following will
         be true and correct on the Determining Date, and is aware and
         acknowledges that AMPAL has agreed to enter into this Agreement and the
         transactions contemplated therein in reliance on these representations,
         warranties, covenants, and undertakings of the BUYER:

2.1.1    The BUYER is a private company duly registered in Israel; its
         registration number with the Registrar of Companies is 51-073528-5; it
         is wholly owned and controlled by BHP; and it is an active company
         lawfully conducting its business and it has all
<PAGE>   28
                                      -3-




         the powers and authorities to enter into this Agreement and fulfill all
         its undertakings hereunder.

2.1.2    BHP is a public company duly registered as a bank in Israel; its
         registration number with the Registrar of Companies is 52-000011-8, and
         it is an active company lawfully conducting its business and it has all
         the powers and authorities to enter into this Agreement and fulfill all
         its undertakings hereunder.

2.1.3    Save as set out in Section 7.1 of the Main Agreement, the BUYER has
         completed all corporate acts and proceedings required under its
         incorporation documents and under law for the entering into this
         Agreement and for the fulfillment of its undertakings hereunder.

2.1.4    BHP is the lessee and actual holder, for many years, of all the Real
         Estate according to lease agreements between BHP and AMPAL.

2.1.5    The BUYER has examined independently to its full satisfaction and knows
         well all of the Real Estate and AMPAL's' rights in it from all aspects,
         physical, planning, factual, and legal, the BUYER was given every
         opportunity to make any examination, and the BUYER has found the Real
         Estate suited to its purposes and is acquiring the rights therein "as
         is", being fully aware of its condition and age, and it waives
         absolutely and finally any demand and/or suit and/or claim against
         AMPAL, including in the matter of any unsuitability and/or defect in
         respect of the Real Estate, whether disclosed or concealed, existing or
         future.

2.2      Representations and Warranties of AMPAL 
         ---------------------------------------
         AMPAL hereby represents, warrants, covenants and undertakes the
         following to be true and correct on the date hereof, and the following
         will be true and correct on the Determining Date, and is aware and
         acknowledges that the BUYER has agreed to enter into this Agreement and
         the transactions contemplated therein in reliance on these
         representations, warranties, covenants and undertakings of AMPAL:

2.2.1    AMPAL is a public company duly registered in Israel; its registration
         number with the Registrar of Companies is 52-000238-7; and it is an
         active company lawfully conducting its business and it has all the
         powers and authorities to enter into this Agreement and fulfill all its
         undertakings hereunder.

2.2.2    Save as set out in Section 7.1 of the Main Agreement, AMPAL has
         received from its organs so empowered under its incorporation documents
         and any law, all the resolutions required in order to be authorized to
         duly enter into this Agreement and fulfill all its undertakings
         hereunder.

2.2.3    AMPAL is the registered owner of the Holon Property and the Allenby
         Property, is entitled to be registered as the owner of the Panorama
         Property, and its rights in these Properties are free and clear of any
         Third Party Right whatsoever, as set out in ANNEXES 1.3.3, 1.3.4, and
         1.3.5, and they can be sold and transferred to the BUYER.

3.       THE TRANSACTION - GENERAL 
         -------------------------
         AMPAL hereby undertakes to sell and transfer to the BUYER on the
         Determining Date, the Real Estate and all of AMPAL's rights
<PAGE>   29
                                      -4-


         therein being free and clear of any Third Party Right whatsoever, for
         the following consideration:

         In consideration for AMPAL's rights in the Holon Property - $1,273,836
         plus v.a.t. 

         In consideration for AMPAL's rights in the Panorama Property -
         $3,078,438 plus v.a.t.

         In consideration for AMPAL's rights in the Allenby Property -
         $3,449,974 plus v.a.t.

         Total consideration - $7,802,248 plus v.a.t. (hereinafter the
         "Consideration") to be paid to it by the BUYER as set out hereinafter.

4.       THE SALE AND TRANSFER

4.1      On the Determining Date the BUYER will pay AMPAL the Consideration by
         bank check or bank transfer.

4.2      Against receipt of the Consideration in full, AMPAL will sign and
         submit to the BUYER an irrevocable power of attorney in the form
         attached hereto as ANNEX "4.2" which will enable the BUYER to do any
         act in connection with transferring AMPAL's rights in the Real Estate,
         including, inter alia, registering the transfer of these rights at the
         Land Registry Offices, signing any document for the purpose of
         transferring the said rights and/or obtaining whatsoever approval which
         is required for the transfer of the said rights as aforesaid, as well
         as to appear before any competent authority in connection with the
         above mentioned activities.

4.3      Immediately upon completion of full payment of the Consideration to
         AMPAL, the validity of the lease agreements between AMPAL and BHP in
         connection with all the Real Estate will expire without any of the
         parties having any demand and/or claim whatsoever towards the other,
         except in connection with rental fees and other payments due to AMPAL
         or prepaid by BHP in connection with the period up to the Determining
         Date, exclusive possession in the Real Estate will pass to the BUYER,
         and the BUYER will be permitted to register a caveat in connection with
         acquisition of AMPAL's rights in the Real Estate.

4.4      After the full payment of the Consideration to AMPAL, AMPAL will act to
         furnish the BUYER authorizations of Mas Shevach (Land Betterment Tax)
         for the registration of the rights in all the Real Estate in the name
         of the BUYER at the Land Registry Offices, and certificates or
         authenticated copies of certificates from the Registrar of Companies in
         Israel or affidavits or any other documents required by the relevant
         Land Registry Office, for the purpose of verifying the various changes
         in AMPAL's name from its former names to its present name. It is agreed
         that the BUYER will be responsible for the performance of all acts
         required for the purpose of registering the rights in all the Real
         Estate in its name according to this Agreement, and will bear all
         payments involved therewith. AMPAL, on its part, undertakes to
         cooperate with the BUYER and/or the BUYER's Attorney and use its best
         effort to assist the BUYER and/or the BUYER's attorney in this matter
         and sign the documents and authorizations required for the purpose of
         completing the registration of the said rights in the BUYER's name at
         the Land Registry Offices as aforesaid.

         If the authorizations of Mas Shevach (Land Betterment Tax) are not
         furnished to the BUYER within 180 (one hundred eighty) days of the date
         on which the parties shall file the Land Betterment Tax forms and
         affidavits as provided in Section 6.5 hereunder, then as soon as the
         Mas Shevach Authorities determine the Mas Shevach
<PAGE>   30
                                      -5-


         with respect to these transactions, AMPAL will either pay and/or
         provide the Mas Shevach Authorities with guarantees covering, together,
         the entire Mas Shevach determined by the Mas Shevach Authorities with
         respect to these transactions, so that the Mas Shevach Authorizations
         are furnished. It is agreed that should AMPAL decide to contest and/or
         appeal the Mas Shevach Authorities' determinations, the BUYER will not
         have to join such contest and/or appeal, but will support and assist
         AMPAL's contest and/or appeal.

5.       This Agreement is subject to the fulfillment of all Conditions
         Precedent as defined and provided for in Section 7 of the Main
         Agreement.

6.       TAXES AND OTHER COMPULSORY PAYMENTS

6.1      The Value Added Tax will be paid by the BUYER to AMPAL as part of the
         Consideration. As AMPAL is a "MOSAD CASPI" ("Financial Institution"),
         AMPAL will pay the V.A.T. to the V.A.T. authorities and will file a
         Teudat Iskat Akrai in accordance with Section 15A of the Value Added
         Tax (Registration) Regulations (1976-5736), and will provide the BUYER
         with said Teudat Iskat Akrai immediately after its filing as aforesaid.

6.2      Subject to the provisions of Sections 6.3 and 6.4 hereunder, all the
         taxes, levies and fees, governmental and municipal, of any kind and
         type, except for improvement levies, in respect of the period up to the
         Determining Date, will be borne and paid by AMPAL or by BHP - in
         accordance with the provisions of the lease agreement between AMPAL and
         BHP in connection with the Real Estate, and in respect of the period
         from the Determining Date - will be borne and paid by the BUYER alone.
         In addition, any improvement levies, if any, which have not yet
         actually been paid in respect of the Real Estate, will be borne and
         paid by the BUYER.

6.3      Land Betterment Tax or Capital Gains Tax or Income Tax on the transfer
         of AMPAL's rights in the Real Estate to the BUYER will be borne and
         paid by AMPAL.

6.4      Acquisition Tax on the transfer of AMPAL's rights in the Real Estate to
         the BUYER will be borne and paid by the BUYER.

6.5      The BUYER and AMPAL will sign and file at the times set by law, Land
         Betterment Tax forms and affidavits in connection with the transfer and
         sale of AMPAL's rights in the Real Estate.

7.       MISCELLANEOUS

         To remove any doubt, it is declared and agreed that all the provisions
         of Sections 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the Main Agreement
         shall apply herein mutatis mutandis. However, it is specifically
         declared and agreed that this Agreement and the rights and obligations
         of the parties and BHP hereunder or pursuant hereto shall be governed
         by and construed in accordance with the laws of the State of Israel.
<PAGE>   31
                                      -6-



IN WITNESS WHEREOF the parties have signed:


-------------------------------                            ---------------------
AMPAL DEVELOPMENT (ISRAEL) LTD.                                        THE BUYER



We, Bank Hapoalim B.M., hereby irrevocably agree to all the abovementioned
provisions regarding ourselves and/or having any bearing on us. We also hereby
irrevocably guarantee the full and prompt fulfillment of all the BUYER's
undertakings under the above Agreement. We hereby waive any demand of prior
request from the BUYER under Section 8 of the Guarantee Law, 5727-1967. This
guarantee shall remain in full force in spite of any stay, postponement, waiver,
or change in a guaranteed obligation of the BUYER.


                       -----------------------------------
                               Bank Hapoalim B.M.
<PAGE>   32
                                    ANNEX "D"

                              REAL ESTATE AGREEMENT

         Made and entered into in Tel-Aviv on the   day of      , 1999

                                 BY AND BETWEEN

                   REVADIM (NECHASIM) LTD. (p.c. 51-073528-5)
                     of 63-65 Yehuda Halevi Street, Tel-Aviv
                            (hereinafter the "BUYER")
                                                              of the first part;

                                       AND

                 AMPAL FINANCIAL SERVICES LTD. (p.c.52-002104-9)
                        of 111 Arlozorov Street, Tel-Aviv
                              (hereinafter "AMPAL")
                                                             of the second part;


WHEREAS  AMPAL is an owner of rights in the Real Estate defined herein as Rosh
         Pina Property and Ramat Hasharon Property, as specified hereinafter in
         this agreement; and


WHEREAS  AMPAL is interested in selling to the BUYER and the BUYER is interested
         in buying from AMPAL its rights in the Real Estate as defined
         hereinafter, all on the terms and conditions and for the consideration
         specified herein; and


WHEREAS  Simultaneously with signing this Agreement, the BUYER, AMPAL and others
         are signing also the Main Agreement (hereinafter the "Main Agreement")
         to which this Agreement is attached as ANNEX "D" and other agreements
         which are attached to the Frame Agreement as ANNEXES "A", "B", "C",
         "E", "F" and "G" thereto (hereinafter the "Other Agreements");


NOW, THEREFORE, it has been declared, agreed and warranted between the parties
as follows:



1.       PREAMBLE, CAPTIONS, DEFINITIONS, AND ANNEXES

1.1      The preamble to this agreement and the annexes hereto form an integral
         part hereof.

1.2      Captions used in this Agreement are solely for convenience of reading
         and shall not be used for the interpretation or determination of the
         validity of this Agreement or any provision hereof.

1.3      In this agreement the following terms shall have the meanings ascribed
         to them:.

1.3.1    "This Agreement" or "the Agreement" - this agreement and all the
         annexes, amendments or additions to it, as well as any document to be
         furnished in accordance with the provisions hereof.
<PAGE>   33
                                      -2-


1.3.2    "Third Party Right" - Any lien, pledge, mortgage, suit, demand, claim,
         attachment and/or debt or obligation towards whatsoever third party
         and/or whatsoever other third party right.

1.3.3    "Rosh Pina Property" - The real estate property known as Block 13940
         Parcel 39/6 at Hachalutzim Street, Rosh Pina, in the ownership of AMPAL
         [(under its former name - Bank Ampal Lepituach Hataasiya Be-Israel
         B.M.] as specified in the extract, copy of which is attached hereto as
         ANNEX 1.3.3.

1.3.4    "Ramat Hasharon Property" - The real estate property known as part of
         Parcel 83 in Block 6415 at 90 Sokolov Street, Ramat Hasharon, of which
         AMPAL is entitled to be registered as owner, and in respect of which a
         caveat is recorded in favor of AMPAL [(under its former name - - Bank
         Ampal Lepituach Hataasiya Be-Israel B.M.] as specified in the extract,
         copy of which is attached hereto as ANNEX 1.3.4.

1.3.5    "The Real Estate" - The Rosh Pina Property and Ramat Hasharon Property,
         jointly or severally, as the case may be.

1.3.6    "Dollar" - U.S. Dollar.

1.3.7    "AMPAL's Attorney" - Any of the attorneys from the office of Firon,
         Karni, Sarov & Firon, Advs., of 111 Arlozorov Street, Tel-Aviv, alone
         and/or in any combination.

1.3.8    "The BUYER's Attorney" - Advs. Moriah Hoftman Doron and Avraham Hirsch
         of 63 Yehuda Halevi Street, Tel-Aviv, alone and/or in any combination.

1.3.9    "The Determining Date" - The date which BHP and AMPAL will determine as
         the Closing Date in accordance with the provisions of Section 7 to the
         Main Agreement.

1.3.10   "BHP" - Bank Hapoalim B.M.

2.       REPRESENTATIONS AND WARRANTIES OF THE PARTIES

2.1      Representations and Warranties of the BUYER 
         -------------------------------------------
         The BUYER represents, warrants, covenants, and undertakes the following
         to be true and correct on the date hereof and that the following will
         be true and correct on the Determining Date, and is aware and
         acknowledges that AMPAL has agreed to enter into this Agreement and the
         transactions contemplated therein in reliance on these representations,
         warranties, covenants, and undertakings of the BUYER:

2.1.1    The BUYER is a private company duly registered in Israel; its
         registration number with the Registrar of Companies is 51-073528-5; it
         is wholly owned and controlled by BHP; and it is an active company
         lawfully conducting its business and it has all the powers and
         authorities to enter into this Agreement and fulfill all its
         undertakings hereunder.

2.1.2    BHP is a public company duly registered as a bank in Israel; its
         registration number with the Registrar of Companies is 52-000011-8, and
         it is an active company lawfully conducting its business and it has all
         the powers and authorities to enter into this Agreement and fulfill all
         its undertakings hereunder.

2.1.3    Save as set out in Section 7.1 of the Main Agreement, the BUYER has
         completed all corporate acts and proceedings required under its
         incorporation documents and
<PAGE>   34
                                      -3-


         under law for the entering into this Agreement and for the fulfillment
         of its undertakings hereunder.

2.1.4    BHP is the lessee and actual holder, for many years, of all the Real
         Estate according to lease agreements between BHP and AMPAL.

2.1.5    The BUYER has examined independently to its full satisfaction and knows
         well all of the Real Estate and AMPAL's rights in it from all aspects,
         physical, planning, factual, and legal, the BUYER was given every
         opportunity to make any examination, and the BUYER has found the Real
         Estate suited to its purposes and is acquiring the rights therein "as
         is", being fully aware of its condition and age, and it waives
         absolutely and finally any demand and/or suit and/or claim against
         AMPAL, including in the matter of any unsuitability and/or defect in
         respect of the Real Estate, whether disclosed or concealed, existing or
         future.

2.2      Representations and Warranties of AMPAL 
         ---------------------------------------
         AMPAL hereby represents, warrants, covenants and undertakes the
         following to be true and correct on the date hereof, and the following
         will be true and correct on the Determining Date, and is aware and
         acknowledges that the BUYER has agreed to enter into this Agreement and
         the transactions contemplated therein in reliance on these
         representations, warranties, covenants and undertakings of AMPAL:

2.2.1    AMPAL is a public company duly registered in Israel; its registration
         number with the Registrar of Companies is 52-002104-9; and it is an
         active company lawfully conducting its business and it has all the
         powers and authorities to enter into this Agreement and fulfill all its
         undertakings hereunder.

2.2.2    Save as set out in Section 7.1 of the Main Agreement, AMPAL has
         received from its organs so empowered under its incorporation documents
         and any law, all the resolutions required in order to be authorized to
         duly enter into this Agreement and fulfill all its undertakings
         hereunder.

2.2.3    AMPAL is the registered owner of the Rosh Pina Property, is entitled to
         be registered as the owner of the Ramat Hasharon Property, and its
         rights in these Properties are free and clear of any Third Party Right
         whatsoever, as set out in Annexes 1.3.3 and 1.3.4, and they can be sold
         and transferred to the BUYER.

3.       THE TRANSACTION - GENERAL 
         -------------------------
         AMPAL hereby undertakes to sell and transfer to the BUYER on the
         Determining Date, the Real Estate and all of AMPAL's rights therein,
         the Real Estate and AMPAL's rights therein being free and clear of any
         Third Party Right whatsoever, for the following consideration:

<TABLE>
<S>                                                 <C>
  In consideration for AMPAL's rights in the
  Rosh Pina Property -                                $484,323 plus V.A.T.

  In  consideration  for  AMPAL's  rights in the
  Ramat Hasharon  Property -                        $2,819,690 plus V.A.T.

  Total consideration -                             $3,304,013 plus V.A.T.
                                                    (hereinafter the "Consideration")
</TABLE>

  to be paid to it by the BUYER as set out hereinafter.
<PAGE>   35
                                      -4-


4.       THE SALE AND TRANSFER

4.1      On the Determining Date the BUYER will pay AMPAL the Consideration by
         bank check or bank transfer.

4.2      Against receipt of the Consideration in full, AMPAL will sign and
         submit to the BUYER an irrevocable power of attorney in the form
         attached hereto as ANNEX "4.2" which will enable the BUYER to do any
         act in connection with transferring AMPAL's rights in the Real Estate,
         including, inter alia, registering the transfer of these rights at the
         Land Registry Offices, signing any document for the purpose of
         transferring the said rights and/or obtaining whatsoever approval which
         is required for the transfer of the said rights as aforesaid, as well
         as to appear before any competent authority in connection with the
         abovementioned activities.

4.3      Immediately upon completion of full payment of the Consideration to
         AMPAL, the validity of the lease agreements between AMPAL and BHP in
         connection with all of the Real Estate will expire without any of the
         parties having any demand and/or claim whatsoever towards the other,
         except in connection with rental fees and other payments due to AMPAL
         or prepaid by BHP in connection with the period up to the Determining
         Date, exclusive possession in the Real Estate will pass to the BUYER,
         and the BUYER will be permitted to register a caveat in connection with
         acquisition of AMPAL's rights in the Real Estate.

4.4      After the full payment of the Consideration to AMPAL, AMPAL will act to
         furnish the BUYER authorizations of Mas Shevach (Land Betterment Tax)
         for the registration of the rights in all the Real Estate in the name
         of the BUYER at the Land Registry Offices, and certificates or
         authenticated copies of certificates from the Registrar of Companies in
         Israel or affidavits or any other documents required by the relevant
         Land Registry Office, for the purpose of verifying the various changes
         in AMPAL's name from its former names to its present name. It is agreed
         that the BUYER will be responsible for the performance of all acts
         required for the purpose of registering the rights in all the Real
         Estate in its name according to this Agreement, and will bear all
         payments involved therewith. AMPAL, on its part, undertakes to
         cooperate with the BUYER and/or the BUYER's Attorney and to use its
         best effort to assist the BUYER and/or the BUYER's Attorney in this
         matter and sign the documents and authorizations required for the
         purpose of completing the registration of the said rights in the
         BUYER's name at the Land Registry Offices as aforesaid.

         If the authorizations of Mas Shevach (Land Betterment Tax) are not
         furnished to the BUYER within 180 (one hundred eighty) days of the date
         on which the parties shall file the Land Betterment Tax forms and
         affidavits as provided in Section 6.5 hereunder, then as soon as the
         Mas Shevach Authorities determine the Mas Shevach with respect to these
         transactions, AMPAL will either pay and/or provide the Mas Shevach
         Authorities with guarantees covering, together, the entire Mas Shevach
         determined by the Mas Shevach Authorities with respect to these
         transactions, so that the Mas Shevach Authorizations are furnished. It
         is agreed that should AMPAL decide to contest and/or appeal the Mas
         Shevach Authorities' determinations, the BUYER will not have to join
         such contest and/or appeal, but will support and assist AMPAL's contest
         and/or appeal.

5.       This Agreement is subject to the fulfillment of all Conditions
         Precedent as defined and provided for in Section 7 of the Main
         Agreement.
<PAGE>   36
                                      -5-


6.       TAXES AND OTHER COMPULSORY PAYMENTS

6.1      The Value Added Tax will be paid by the BUYER to AMPAL as part of the
         Consideration. As AMPAL is a "Mosad Caspi" ("Financial Institution"),
         AMPAL will pay the V.A.T. to the V.A.T. authorities and will file a
         Teudat Iskat Akrai in accordance with Section 15A of the Value Added
         Tax (Registration) Regulations (1976-5736), and will provide the BUYER
         with said Teudat Iskat Akrai immediately after its filing as aforesaid.

6.2      Subject to the provisions of Sections 6.3 and 6.4 hereunder all the
         taxes, levies and fees, governmental and municipal, of any kind and
         type, except for improvement levies, in respect of the period up to the
         Determining Date, will be borne and paid by AMPAL or by BHP - in
         accordance with the provisions of the lease agreement between AMPAL and
         BHP in connection with the Real Estate, and in respect of the period
         from the Determining Date - will be borne and paid by the BUYER alone.
         In addition, any improvement levies, if any, which have not yet
         actually been paid in respect of the Real Estate, will be borne and
         paid by the BUYER.

6.3      Land Betterment Tax or Capital Gains Tax or Income Tax on the transfer
         of AMPAL's rights in the Real Estate to the BUYER will be borne and
         paid by AMPAL.

6.4      Acquisition Tax on the transfer of AMPAL's rights in the Real Estate to
         the BUYER will be borne and paid by the BUYER.

6.5      The BUYER and AMPAL will sign and file at the times set by law, Land
         Betterment Tax, forms and affidavits in connection with the transfer
         and sale of AMPAL's rights in the Real Estate.

7.       MISCELLANEOUS

         To remove any doubt, it is declared and agreed that all the provisions
         of Sections 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the Main Agreement
         shall apply herein mutatis mutandis. . However, it is specifically
         declared and agreed that this Agreement and the rights and obligations
         of the parties and BHP hereunder or pursuant hereto shall be governed
         by and construed in accordance with the laws of the State of Israel.

IN WITNESS WHEREOF the parties have signed:


------------------------------                                ------------------
AMPAL FINANCIAL SERVICES LTD.                                          the BUYER



We, Bank Hapoalim B.M., hereby irrevocably agree to all the abovementioned
provisions regarding ourselves and/or having any bearing on us. We also hereby
irrevocably guarantee the full and prompt fulfillment of all the BUYER's
undertakings under the above Agreement. We hereby waive any demand of prior
request from the BUYER under Section 8 of the Guarantee Law, 5727-1967. This
guarantee shall remain in full force in spite of any stay, postponement, waiver,
or change in a guaranteed obligation of the BUYER.


                             ----------------------
                               Bank Hapoalim B.M.





<PAGE>   37
                                    ANNEX "E"

                              REAL ESTATE AGREEMENT


        Made and entered into in Tel-Aviv on the   day of         , 1999

                                 BY AND BETWEEN

                   REVADIM (NECHASIM) LTD. (p.c. 51-073528-5)
                     of 63-65 Yehuda Halevi Street, Tel-Aviv
                            (hereinafter the "BUYER")
                                                              of the first part;

                                       AND

                     AMPAL (ISRAEL) LTD. (p.c. 52-002622-0)
                        of 111 Arlozorov Street, Tel-Aviv
                              (hereinafter "AMPAL")
                                                             of the second part;

WHEREAS           AMPAL is an owner of rights in the Real Estate, as specified
                  hereinafter in this agreement; and


WHEREAS           AMPAL is interested in selling to the BUYER and the BUYER is
                  interested in buying from AMPAL its rights in the Real Estate
                  as defined hereinafter, all on the terms and conditions and
                  for the consideration specified herein; and


WHEREAS           Simultaneously with signing this Agreement, the BUYER, AMPAL
                  and others are signing also the Main Agreement (hereinafter
                  the "Main Agreement") to which this Agreement is attached as
                  ANNEX "E" and other agreements which are attached to the Main
                  Agreement as ANNEXES "A", "B", "C", "D", "F" and "G" thereto
                  (hereinafter the "Other Agreements");



NOW, THEREFORE, it has been declared, agreed and warranted between the parties
as follows:



1.       PREAMBLE, CAPTIONS, DEFINITIONS, AND ANNEXES

1.1        The preamble to this agreement and the annexes hereto form an
           integral part hereof.

1.2        Captions used in this Agreement are solely for convenience of reading
           and shall not be used for the interpretation or determination of the
           validity of this Agreement or any provision hereof.

1.3        In this agreement the following terms shall have the meanings
           ascribed to them:.

1.3.1      "This Agreement" or "the Agreement" - this agreement and all the
           annexes, amendments or additions to it, as well as any document to be
           furnished in accordance with the provisions hereof.
<PAGE>   38
                                      - 2 -


1.3.2      "Third Party Right" - Any lien, pledge, mortgage, suit, demand,
           claim, attachment and/or debt or obligation towards whatsoever third
           party and/or whatsoever other third party right.

1.3.3      "Arlozorov B Property" or the "Real Estate"- The real estate property
           known as Block 6213 Parcels 661/4 and 661/3, of which AMPAL is
           registered as owner, as specified in the extracts, copies of which
           are attached hereto as ANNEXES 1.3.3A and 1.3.3B.

1.3.4      "Dollar" - U.S. Dollar.

1.3.5      "AMPAL's Attorney" - Any of the attorneys from the office of Firon,
           Karni, Sarov & Firon, Advs., of 111 Arlozorov Street, Tel-Aviv, alone
           and/or in any combination.

1.3.6      "The BUYER's Attorney" - Advs. Advs. Moriah Hoftman Doron and Avraham
           Hirsch of 63 Yehuda Halevi Street, Tel-Aviv, alone and/or in any
           combination.

1.3.7      "The Determining Date" - The date which BHP and AMPAL will determine
           as the Closing Date in accordance with the provisions of Section 7 to
           the Main Agreement.

1.3.8      "BHP" - Bank Hapoalim B.M.

2.         REPRESENTATIONS AND WARRANTIES OF THE PARTIES

2.1        Representations and Warranties of the BUYER
           -------------------------------------------
           The BUYER represents, warrants, covenants, and undertakes the
           following to be true and correct on the date hereof and that the
           following will be true and correct on the Determining Date, and is
           aware and acknowledges that AMPAL has agreed to enter into this
           Agreement and the transactions contemplated therein in reliance on
           these representations, warranties, covenants, and undertakings of the
           BUYER:

2.1.1      The BUYER is a private company duly registered in Israel; its
           registration number with the Registrar of Companies is 51-073528-5;
           it is wholly owned and controlled by BHP; and it is an active company
           lawfully conducting its business and it has all the powers and
           authorities to enter into this Agreement and fulfill all its
           undertakings hereunder.

2.1.2      BHP is a public company duly registered as a bank in Israel; its
           registration number with the Registrar of Companies is 52-000011-8,
           and it is an active company lawfully conducting its business and it
           has all the powers and authorities to enter into this Agreement and
           fulfill all its undertakings hereunder.

2.1.3      Save as set out in Section 7.1 of the Main Agreement, the BUYER has
           completed all corporate acts and proceedings required under its
           incorporation documents and under law for the entering into this
           Agreement and for the fulfillment of its undertakings hereunder.

2.1.4      BHP is the lessee and actual holder, for many years, of the Real
           Estate according to a lease agreement between BHP and AMPAL.

2.1.5      The BUYER has examined independently to its full satisfaction and
           knows well the Real Estate and AMPAL's rights in it from all aspects,
           physical, planning, factual, and legal, the BUYER was given every
           opportunity to make any examination, and the BUYER has found the Real
           Estate suited to its purposes and is acquiring the
<PAGE>   39
                                     - 3 -


           rights therein "as is", being fully aware of its condition and age,
           and it waives absolutely and finally any demand and/or suit and/or
           claim against AMPAL, including in the matter of any unsuitability
           and/or defect in respect of the Real Estate, whether disclosed or
           concealed, existing or future.

2.2        Representations and Warranties of AMPAL
           ---------------------------------------
           AMPAL hereby represents, warrants, covenants and undertakes the
           following to be true and correct on the date hereof, and the
           following will be true and correct on the Determining Date, and is
           aware and acknowledges that the BUYER has agreed to enter into this
           Agreement and the transactions contemplated therein in reliance on
           these representations, warranties, covenants and undertakings of
           AMPAL:

2.2.1      AMPAL is a public company duly registered in Israel; its registration
           number with the Registrar of Companies is 52-002622-0; and it is an
           active company lawfully conducting its business and it has all the
           powers and authorities to enter into this Agreement and fulfill all
           its undertakings hereunder.

2.2.2      Save as set out in Section 7.1 of the Main Agreement, AMPAL has
           received from its organs so empowered under its incorporation
           documents and any law, all the resolutions required in order to be
           authorized to duly enter into this Agreement and fulfill all its
           undertakings hereunder.

2.2.3      AMPAL is the registered owner of the Arlozorov B Property, its rights
           in these Properties are free and clear of any Third Party Right
           whatsoever, as set out in Annexes 1.3.3A and 1.3.3B, and they can be
           sold and transferred to the BUYER.

3.         THE TRANSACTION - GENERAL

           AMPAL hereby undertakes to sell and transfer to the BUYER on the
           Determining Date, the Real Estate and all of AMPAL's rights therein,
           the Real Estate and AMPAL's rights therein being free and clear of
           any Third Party Right whatsoever, for the consideration in the sum of
           $676,726(plus V.A.T. (hereinafter the "Consideration"), to be paid to
           it by the BUYER as set out hereinafter.

4.         THE SALE AND TRANSFER

4.1        On the Determining Date the BUYER will pay AMPAL the Consideration by
           bank check or bank transfer.

4.2        Against receipt of the Consideration in full, AMPAL will sign and
           submit to the BUYER an irrevocable power of attorney in the form
           attached hereto as ANNEX "4.2" which will enable the BUYER to do any
           act in connection with transferring AMPAL's rights in the Real
           Estate, including, inter alia, registering the transfer of these
           rights at the Land Registry Office, signing any document for the
           purpose of transferring the said rights and/or obtaining whatsoever
           approval which is required for the transfer of the said rights as
           aforesaid, as well as to appear before any competent authority in
           connection with the abovementioned activities.

4.3        Immediately upon completion of full payment of the Consideration to
           AMPAL, the validity of the lease agreements between AMPAL and BHP in
           connection with the Real Estate will expire without any of the
           parties having any demand and/or claim whatsoever towards the other,
           except in connection with rental fees and other payments due to AMPAL
           or prepaid by BHP in connection with the period up to the Determining
           Date, the provisions set out in Annex 4.3 regarding six parking
           spaces shall come into force, exclusive possession in the Real Estate
           will pass to the BUYER, and the BUYER
<PAGE>   40
                                     - 4 -


           will be permitted to register a caveat in connection with acquisition
           of AMPAL's rights in the Real Estate.

4.4        After the full payment of the Consideration to AMPAL, AMPAL will act
           to furnish the BUYER an authorization of Mas Shevach (Land Betterment
           Tax) for the registration of the rights in all the Real Estate in the
           name of the BUYER at the Land Registry Offices, and certificates or
           authenticated copies of certificates from the Registrar of Companies
           in Israel or affidavits or any other documents required by the
           relevant Land Registry Office, for the purpose of verifying the
           various changes in AMPAL's name from its former names to its present
           name. It is agreed that the BUYER will be responsible for the
           performance of all acts required for the purpose of registering the
           rights in all the Real Estate in its name according to this
           Agreement, and will bear all payments involved therewith. AMPAL, on
           its part, undertakes to cooperate with the BUYER and/or the BUYER's
           Attorney and use its best efforts to assist the BUYER and/or the
           BUYER's Attorney in this matter and sign the documents and
           authorizations required for the purpose of completing the
           registration of the said rights in the BUYER's name at the Land
           Registry Offices as aforesaid. If the authorization of Mas Shevach
           (Land Betterment Tax) is not furnished to the BUYER within 180 (one
           hundred eighty) days of the date on which the parties shall file the
           Land Betterment Tax forms and affidavits as provided in Section 6.5
           hereunder, then as soon as the Mas Shevach Authorities determine the
           Mas Shevach with respect to this transaction, AMPAL will either pay
           and/or provide the Mas Shevach Authorities with guarantees covering,
           together, the entire Mas Shevach determined by the Mas Shevach
           Authorities with respect to this transaction, so that the Mas Shevach
           Authorization is furnished.

           It is agreed that should AMPAL decide to contest and/or appeal the
           Mas Shevach Authorities' determinations, the BUYER will not have to
           join such contest and/or appeal, but will support and assist AMPAL's
           contest and/or appeal.

5.         This Agreement is subject to the fulfillment of all Conditions
           Precedent as defined and provided for in Section 7 of the Main
           Agreement.

6.         TAXES AND OTHER COMPULSORY PAYMENTS

6.1        The Value Added Tax will be paid by the BUYER to AMPAL as part of the
           Consideration. As AMPAL is a "Mosad Caspi" ("Financial Institution"),
           AMPAL will pay the V.A.T. to the V.A.T. authorities and will file a
           Teudat Iskat Akrai in accordance with Section 15A of the Value Added
           Tax (Registration) Regulations (1976-5736), and will provide the
           BUYER with said Teudat Iskat Akrai immediately after its filing as
           aforesaid.

6.2        Subject to the provisions of Sections 6.3 and 6.4 hereunder, all the
           taxes, levies and fees, governmental and municipal, of any kind and
           type, except for improvement levies, in respect of the period up to
           the Determining Date, will be borne and paid by AMPAL or by BHP - in
           accordance with the provisions of the lease agreement between AMPAL
           and BHP in connection with the Real Estate, and in respect of the
           period from the Determining Date - will be borne and paid by the
           BUYER alone. In addition, any improvement levies, if any, which have
           not yet actually been paid in respect of the Real Estate, will be
           borne and paid by the BUYER.

6.3        Land Betterment Tax or Capital Gains Tax or Income Tax on the
           transfer of AMPAL's rights in the Real Estate to the BUYER will be
           borne and paid by AMPAL.
<PAGE>   41
                                     - 5 -


6.4        Acquisition Tax on the transfer of AMPAL's rights in the Real Estate
           to the BUYER will be borne and paid by the BUYER.

6.5        The BUYER and AMPAL will sign and file at the times set by law, Land
           Betterment Tax forms and affidavits in connection with the transfer
           and sale of AMPAL's rights in the Real Estate.

7.         MISCELLANEOUS

           To remove any doubt, it is declared and agreed that all the
           provisions of Sections 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the Main
           Agreement shall apply herein mutatis mutandis. However, it is
           specifically declared and agreed that this Agreement and the rights
           and obligations of the parties and BHP hereunder or pursuant hereto
           shall be governed by and construed in accordance with the laws of the
           State of Israel.

IN WITNESS WHEREOF the parties have signed:


-------------------                                                   ----------
AMPAL (ISRAEL) LTD.                                                    THE BUYER


We, Bank Hapoalim B.M., hereby irrevocably agree to all the abovementioned
provisions regarding ourselves and/or having any bearing on us. We also hereby
irrevocably guarantee the full and prompt fulfillment of all the BUYER's
undertakings under the above Agreement.

We hereby waive any demand of prior request from the BUYER under Section 8 of
the Guarantee Law, 5727-1967. This guarantee shall remain in full force in spite
of any stay, postponement, waiver, or change in a guaranteed obligation of the
BUYER.


                             ---------------------
                               Bank Hapoalim B.M.
<PAGE>   42
                            SHARES TRANSFER AGREEMENT
                                    ANNEX "A"

                                 LIST OF ANNEXES

<TABLE>
<S>            <C>                                                        
Annex 4.1.1    Form of Original Stock Certificates Issued to BHP for
               3,517,683 Ordinary Shares, 3,350 4% Preferred Shares and 122,536
               6.5% Preferred Shares of AMPAL

Annex 4.1.2    Form of the BANK's Representation Letter in respect of the
               AMPAL Shares

Annex 4.1.3    Form of BHP's Stock Power in respect of the AMPAL Shares

Annex 4.1.4    Form of BHP's Secretary's Certificate in respect of the AMPAL
               Shares

Annex 4.1.5    Form of AMPAL's Opinion of Counsel in respect of the AMPAL
               Shares.

Annex 4.2.1    Form of AMPAL's irrevocable instruction to BHP regarding
               the Amount of the Deposit.

Annex 5.1.1    Form of Original Stock Certificate issued to BHP for
               1,560,450 Ordinary Shares of AMPAL in respect of the AMPAL
               DEVELOPMENT Shares.

Annex 5.1.2    Form of the BANK's Representation Letter in respect of the
               AMPAL DEVELOPMENT Shares

Annex 5.1.3    Form of BHP's Stock Power in respect of the AMPAL DEVELOPMENT
               Shares

Annex 5.1.4    Form of BHP's Secretary's Certificate in respect of the AMPAL
               DEVELOPMENT Shares

Annex 5.1.5    Form of AMPAL's Opinion of Counsel in respect of the AMPAL
               DEVELOPMENT Shares

Annex 5.1.6    Form of the AMPAL DEVELOPMENT's Representation Letter.

Annex 6.1.1    Form of Original Stock Certificate issued to BHP for
               660,803 Ordinary Shares of AMPAL in respect of AMPAL FINANCING
               Shares

Annex 6.1.2    Form of The BANK's Representation Letter in respect of AMPAL
               FINANCING Shares

Annex 6.1.3    Form of BHP's Stock Power in respect of AMPAL FINANCING Shares

Annex 6.1.4    Form of BHP's Secretary's Certificate in respect of AMPAL
               FINANCING Shares

Annex 6.1.5    Form of AMPAL's Opinion of Counsel in respect of AMPAL
               FINANCING Shares

Annex 6.1.6    Form of the AMPAL FINANCING Representation Letter

Annex 7.1.1    Form of Original Stock Certificate issued to BHP for
               135,345 Ordinary Shares of AMPAL in respect of the AMPAL ISRAEL
               Shares
</TABLE>
<PAGE>   43
                                     - 2 -


<TABLE>
<S>            <C>                                                                
Annex 7.1.2    Form of the BANK's Representation Letter in respect of the
               AMPAL ISRAEL Shares

Annex 7.1.3    Form of BHP's Stock Power in respect of the AMPAL ISRAEL Shares

Annex 7.1.4    Form of BHP's Secretary's Certificate in respect of the AMPAL
               ISRAEL Shares

Annex 7.1.5    Form of AMPAL's Opinion of Counsel in respect of the AMPAL
               ISRAEL Shares

Annex 7.1.6    AMPAL ISRAEL's Representation Letter

Annex 8        Form of notices of resignation from AMPAL's Board of Directors
               to be signed by Messrs. Yaakov Elinav and Shimon Ravid
</TABLE>