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| Whereas: | The      Lender is a private company incorporated in Israel and the indirect owner      of the control of that company is Mr. Yossi  Maiman; |
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| And    Whereas: | New      Smile (through its founders: Merhav Ampal Energy Ltd.) has entered into an      agreement with 012 Smile Communications Ltd., Company Number: 512832742      (Old Smile) for      the purchase of the Old Smile communications activities through the      Purchase Agreement signed by them both (the Purchase      Agreement); |
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| And    Whereas: | The      parties have agreed that the Lender shall extend to the Borrower, a loan      to the sum of NIS 220,000,000 for the purposes of financing the purchase      of Old Smile activities as stated above (when NIS 20,000,000 from that      loan sum shall be deposited as a Safety Cushion as such is explained      below) subject to and in accordance with that stipulated in the provisions      to this Agreement; |
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| 1.      Preamble, Appendices, Headings andDefinitions |
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|   | 1.1.      The Preamble to this Agreement and the Appendices thereto constitute an      integral part thereof. |
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|   | 1.2.      Section headings in this Agreement and in the Appendices thereto, are      solely for the purposes of   convenience      and shall not serve for the purposes of interpreting this      Agreement. |
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|   | 1.3.      That stated in the masculine shall also refer to the feminine and vice      versa; that stated in the singular shall also refer to the plural and vice      versa. |
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|   | 1.4.      The terms listed below shall have the definitions given alongside those      terms, unless the context obligesotherwise. |
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| Ampal      American | Ampal      American Israel Corporation, EIN Number 13-0435685, is a limited share      company incorporated in accordance with the Laws of the State of New York.      The Company’s shares are listed for trading on the NASDAQ and dual listed      on the Tel Aviv Stock Exchange. The Company, which is controlled by Mr.      Yossi Maiman, has indirect, whole ownership of the    Borrower. |
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| Old Smile or the Vendor | As      such is defined in the Preamble to this  Agreement |
|-------------------------|------------------------------------------------------------|

| The Purchased      Activities | All      the activities conducted by Old Smile in the field of communications,      including, inter      alia, internet services, international telephone calls and land      line communications, all subject to and as stipulated in the Purchase      Agreement. |
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| The      Collateral | All      the collateral pledged for the purposes of securing payment of the Loan,      including that stipulated in Section 4below. |
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| The Loan | The      Loan principal and interest, with added index differentials and any      additional payment imposed upon the Borrower in accordance with the      provisions to this Agreement and/or allLaw. |
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| The Bank      Accounts | The      SafetyCushion Account – The      bank account in the Borrower’s name, number 107361/26, at the Union Bank      of Israel Ltd., branch number 062 in Ramat Gan, into which the Security      Cushion shall be deposited and mortgaged to the Lender as stipulated in      Section 2.14 below; and the Designated Account,      which is the bank account in the Borrower’s name, number 107360/28 at the      Union Bank of Israel Ltd., branch number 062 in Ramat Gan, into which the      monies that shall be transferred to the Borrower from New Smile shall be      deposited as stipulated in Section 4.1.5below. |
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| TheIndex | The      Consumer Price Index including fruit and vegetables, published by the      Israeli Central Bureau of Statistics and Economic Research and including      that Index even if it is published by a different official body and any      official Index that shall come in its place either if such is based on the      same data on which the aforementioned Index is based or if not. If another      index replaces the aforementioned Index, the Central Bureau of Statistics      and Economic Research shall determine the relationship between the      aforementioned Index and the index that replaces it and if that      relationship is not determined by the Central Bureau of Statistics and      Economic Research, the relationship shall be determined by whomsoever      shall be appointed to fulfill that task by the State of      Israel. |
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| The Base      Index | The      Consumer Price Index for the month of December 2009 as published on      January 15, 2010 at 105.2 points. |
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| The Determining      Index | The      Consumer Price Index published immediately before the date for the      repayment of the Loan and/or any part thereof, but which shall be no lower      than the Base Index. |
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| Loan Extension      Date | The      date for the pledging of all the collateral stipulated in Section 4.1      below shall be January 31, 2010 and as stipulated in that Section as      follows: |
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|   |  To      remove doubt, the Loan shall be extended only along with and subject to      the completion of the purchase of the Purchased Activities in accordance      with the Purchase Agreement and the fulfillment of all the commitments      made by the parties therein. |
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| The    Lender | The      Loan shall be extended to the Borrower through a number of separate      sources of financing (the Lender Individuals) and      divided up as stipulated in Appendix 4.2 to      this Agreement and each Individual shall finance only that Individual’s      part in the Loan. However, Menora Mivtachim Insurance Ltd. shall represent      all Menora Individuals in the Lender Individuals and Harel Insurance      Company Ltd. shall represent all the Harel Individuals in the Lender      Individuals and to expedite that purpose, inter alia, Menora      Mivtachim Insurance Ltd. and Harel Insurance Company Ltd. shall be those      entitled to issue and receive the various notices to the Borrower by dint      of this Agreement and they shall be those entitled to notify of a demand      for the immediate repayment of the loan on behalf of all the Loan      Individuals and they are those who shall realize the collateral for all      the Loan Individuals and they are those who shall be authorized to release      the collateral with the repayment of the Loan on behalf of all the Loan      Individuals, they are those who shall be authorized to make any changes or      waiver in reference to the provisions to this Agreement and they are those      who shall be authorized to make any change, arrangement or compromise or      the like thereof in connection with the Loan that is the subject of this      Agreement. However, it is clarified that repayment of the Loan shall be      executed by the Lender to each of the Lender Individuals in accordance      with each Loan Individual’s relative part in the Loan as such is      stipulated in Section      4.2. |
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|   | Any      decision made by the Loan Individuals in any matter pertaining to and/or      arising from this Agreement shall be made unanimously, subject to that      stipulated in Sections 4.1.5 and 8.3 below in reference to the division of      the monies received on account for the early repayment of the Loan among      the Loan Individuals. |
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| Index    Linked | Any      sum, concerning which this Agreement determines shall be paid Index Linked      or with additional index differentials, shall be paid with additional      index differentials for the rise in the      Index, beginning with the Base Index and up to the Determining Index, but      such shall be no less than the Base Index, which is stipulated as follows:      On every payment date as aforementioned, if it becomes apparent that the      new Index is higher than the Base Index, every payment as aforementioned      shall be multiplied by the ratio between the New Index and the Base Index      (or in other words, the sum to be paid shall be multiplied by the New      Index and the figure received after that calculation shall be divided by      the Base Index). If it becomes apparent that the New Index is the same as      or lower than the Base Index, each payment as aforementioned shall be made      at its nominal value (or in other words, under all circumstances, no less      than the Base Index). |
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| The Loan      Principal | NIS      220,000,000 (two hundred and twenty million New Israeli      Shekels). |
|-------------------------|---------------------------------------------------------------------------------|

| Interest on the      Loan | The      annual interest linked to the Index at the rate stipulated in Appendix 5 – Payments      Appendix, as attached to thisAgreement. |
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| Late Payment      Interest | As      stipulated in the Payments Appendix |
|----------------------------|---------------------------------------------|

| Loan    Period | Twelve      (12) years, beginning on the date on which the Loan Principal was placed      at the Lender’s disposal. |
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| BLL | Bank      Leumi LeIsrael Ltd. and the Israel Discount Bank  Ltd. |
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| EMG | The      East Mediterranean Gas Company – a limited share private company      incorporated in accordance with the Laws of the State of Egypt, in which      the Lender has holdings, which reach 12.5 % of that Company’s issued and      allocated equity capital. |
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| EBITDA | Operating      profit (before interest and taxes), with additional depreciation and      deductions in accordance with the audited annual financial reports or the      reviewed quarterly reports for NewSmile. |
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| The Licenses or      the |   |
|--------------------------|--------|

| Significant      Licenses for the |   |
|-----------------------------------|--------|

| Company’s      Activities | The      general license granted to New Smile permitting the provision of      international telephone services, the general license for 012 Telecom Ltd.      permitting the provision of domestic land line telephony services in      Israel, the special license granted to New Smile permitting the provision      of internet access services, the special license granted to New Smile      permitting the provision of network termination services and any other      license, which shall come in their stead, or any other license, the      cancellation or suspension of which might have an adverse effect on New      Smile’s commercial activities, with the exception of a license, the      cancellation or suspension of which as aforementioned shall have a      negligible effect on New Smile’s commercial  activities. |
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| 2.      The  Declarations and Representations made by the      Borrower |
|-----------------------------------------------------------------------------------|

|   | 2.1.1. | The      Borrower is a limited share, private company incorporated in accordance      with the Laws of the State ofIsrael. |
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|   | 2.1.2. | The      Borrower’s issued and allocated share capital is controlled through      holdings linkages by Mr. Yossi Maiman, as explained in detail in Appendix 2.1.2 to this      Agreement. |
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|   | 2.2.1. | New      Smile is a limited share, private company incorporated in accordance with      the Laws of the State of Israel. |
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|   | 2.2.2. | The      Borrower is the owner and sole holder of the 1,000 regular shares, each      with a nominal value of NIS 1.00, in New Smile, which constitutes the      entire equity capital issued and allocated for New Smile (hereinafter:      The New Smile      Shares). |
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|   | 2.2.3. | New      Smile is a designated company established specifically for the purposes of      the purchase of the Purchased Activities and apart from the Purchased      Activities, the receipt of financing from BLL (for the payment of some of      the compensation to Old Smile for the purchase of the Purchased      Activities) and the licenses from the Ministry of Communications required      for the activities, New Smile has no other assets or      obligations. |
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|   | 2.2.4. | The      Borrower’s rights to the New Smile Shares are clear of any debt,      obligation, lien, mortgage and/or third party rights of any type      whatsoever, with the exception of the rights accruing to BLL as stipulated      in this Agreement below. Without      derogation from the generality of that stated, the Borrower has not      undertaken to transfer and/or sell and/or use as collateral and/or      mortgage the Borrower’s rights to the New Smile Shares and/or any part      thereof and/or to grant any rights to purchase the rights to the New Smile      Shares, to any person and/or corporation whatsoever and no person and/or      corporation has any right to first refusal in connection with the      Borrower’s rights to the New Smile Shares, with the exception of a fixed,      second mortgage on New Smile Shares to the benefit of  BLL. |
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|   | 2.2.5. | There      is no restriction and/or prohibition and/or preclusion in accordance with      the provisions to all Law and/or any agreement whatsoever, either written      or verbal and no agreement from a third party whatsoever is required in      order to create a first mortgage to the benefit of the Lender covering the      Borrower’s entire rights to New Smile Shares, with the exception of that      which is by dint of the relevant licenses for the Purchased Activities,      which to the best of the Borrower’s knowledge, make the realization of the      mortgage on New Smile Shares conditional upon the receipt of prior      permission from the Minister ofCommunications. |
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|   | 2.3.1. | EMG      is a limited share, private company incorporated in accordance with the      Laws of the State of Egypt and the Borrower holds 12.5% of EMG”s issued      share capital. |
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|   | 2.3.2. | The      Borrower’s rights to EMG shares are clear of any debt, commitment, lien,      mortgage and/or third party rights of any type whatsoever, with the      exception of a conditional commitment made as part of the partnership      agreement and the shareholders agreement (which are part of the series of      agreements signed by the EMG shareholders either directly or indirectly      during 2007 (the EMG      Agreements). Without      any derogation from the generality of that stated, the Borrower has not      undertaken to transfer and/or sell and/or use as collateral and/or      mortgage the rights to the EMG Shares and/or any part thereof and/or to      grant rights for the purchase of the rights to the EMG shares to any      person and/or corporation whatsoever and no person and/or corporation has      a right to first refusal in connection with the EMG Shares, with the      exception of that which is part of the EMG  Agreements. |
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|   | 2.3.3. | There      is no restriction and/or prohibition and/or preclusion in accordance with      the provisions to all Law and/or any agreement whatsoever, either written      or verbal and no agreement from a third party whatsoever is required in      order to create negative mortgage to the benefit of the Lender on all the      Borrower’s rights to EMG Shares. |
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|   | 2.4. | Ampal      American, the Borrower and New Smile have the power and theauthority to      enter into this Agreement and fulfill the commitments stipulated therein      and they have undertaken all the steps and activities required in order to      lawfully approve the arrangements made through this Agreement and the      fulfillment of all the commitments stipulated therein, including the      taking of all the required decisions, to the extent that such are required      in accordance with their articles of incorporation and the receipt of all      the required approvals from their authorized  bodies. |
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|   | 2.5. | All      the commitments imposed upon the Borrower and upon New Smile in accordance      with this Agreement are legal commitments and have the validity that      obliges the Borrower and New Smile in accordance with the conditions      thereto. |
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|   | 2.6. | The      Borrower’s and New Smile’s entry into this Agreement and the fulfillment      of their obligations as stated therein, do not contradict and shall not      contradict: (a) their articles of incorporation; (b) any Law, regulation,      order, license or official instruction whatsoever applicable to them or      obliging them and/or (c) the agreements between their shareholders and/or      (d) any agreement, mortgage, letter or other document to which they are      party or which oblige them. |
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|   | 2.7. | The      Borrower and New Smile have the fitness to repay all their      commitments. |
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|   | 2.8. | True      as of the reviewed financial reports for Ampal American dated September      30, 2009, Ampal American’s equity capital stood at some USD      223,000,000. |
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|   | 2.9. | The      financial reports for Ampal American dated September 30, 2009 and      published on the Israel Securities Authority’s Magna2 Distribution Site      are an accurate reflection of Ampal American’s status, its rights and      commitments for the period or date as appropriate, to which they refer and      they were drawn up in accordance with standard accounting practices. From      September 30, 2009 to the date on which this Agreement is signed, there      has been no significant change for the worse in Ampal American’s status,      in comparison with the aforementioned financial  reports. |
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|   | 2.10. | No      significant legal processes and/or quasi legal processes and/or      administrative processes are pending against the Borrower and/or against      New Smile and/or against Ampal American and the Borrower and/or New Smile      and/or Ampal American are not aware of any significant investigations      whatsoever against the Borrower and/or New Smile and/or Ampal American,      and/or of any significant legal processes (including mediation processes,      regulatory processes and/or investigations known to the Borrower and/or to      New Smile) pertaining to the Borrower and/or New Smile and/or Ampal      American, through which any of them or all of them together might have a      negative effect on the Borrower’s ability to fulfill this Agreement, with      the exception of in reference to New Smile – as stipulated in the      financial reports for Old Smile dated December 31, 2008 and September 30,      2009, as stipulated in Appendix 7.3 to the Purchase Agreement, which for      the sake of convenience is hereby attached as Appendix 10.2a to this      Agreement and as such is stipulated in Appendix 10.2b to this Agreement,      with the exception of the references to Ampal American – as stipulated in      the financial reports for Ampal American dated September 30, 2009 and the      reports to the public issued by Ampal American after that      date. |
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|   | 2.11. | In      reference to the Borrower and/or New Smile and/or Ampal American and/or      their commercial interests there has been no submission of any petition      for bankruptcy and/or the appointment of a receiver and/or a trustee      and/or a special manager and/or a provisional liquidator and/or      preliminary liquidator and/or a permanent liquidator and the Borrower      and/or New Smile and/or Ampal American have no knowledge of any cause to      submit any such petition asaforementioned. |
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|   | 2.12. |
|--------|-------|

|   | 2.12.1. | At      the same time and as a condition to the extension of the Loan, New Smile      shall complete the execution of the purchase of all the Purchased      Activities as such are defined above and shall fulfill all its commitments      to the Vendor made as part of the purchasing transaction for the Purchased      Activities. The Borrower and New Smile have no knowledge of any demand      and/or claim and/or cause by the Vendor against them for non-fulfillment      of their commitments in full and ontime. |
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|   | 2.12.2. | True      as of the date on which this Agreement is signed, all the conditions to      the Purchase Agreement have been met and an order has been handed down by      the Tel Aviv District Court in accordance with Section 350 to the      Companies Law, which approves the transfer of the agreements made with Old      Smile’s customers and suppliers to NewSmile. |
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|   | 2.12.3. | To      ensure the closing of the transaction in accordance with the Purchase      Agreement, no further action or fulfillment of any additional condition is      required, with the exception of the payment of that due for the receipt of      the assets, which are the subject of the Purchase    Agreement. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.12.4. | The      rights and assets accruing to New Smile (immediately upon the closure of      the transaction for the purchase of the Purchased Activities), including      the rights to Purchased Activities shall be clear of all debt, commitment,      lien, mortgage and/or third party rights of any type whatsoever, with the      exception of: (a) Permitted Liens as that term is defined in the Purchase      Agreement and (b) the mortgages and collateral pledged to BLL and the      Lender as stipulated explicitly in this  Agreement. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.12.5. | Without      derogation from the generality of that stated, New Smile has not      undertaken and shall not undertake to transfer and/or to sell not within      the usual business framework and/or use as collateral and/or to mortgage      its rights to the Purchased Activities and/or any part thereof and/or to      grant rights not through a normal business framework for the purchase of      the rights to the Purchased Activities to any person and/or corporation      whatsoever, and no person and/or corporation has a right to first refusal      in connection with the rights to the Purchased Activities, with the      exception of the mortgages to BLL as such are stipulated in this      Agreement. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.12.6. | There      is no restriction and/or prohibition and/or preclusion in accordance with      the provisions to all Law and/or any agreement whatsoever, either written      or verbal and no agreement from a third party whatsoever is required in      order to create a current second mortgage to the benefit of the Lender      covering all the assets of New Smile, with the exception of agreement from      BLL, which was given as stipulated in Section 4.1.2 below and with the      exception of the need for approval from the Minister of Communications. It      must also be noted that to the best of the Borrower’s knowledge,      realization of the floating mortgage is conditoinal upon the fact that it      will not cause any damage whatsoever to the provision of services by New      Smile, including as pertains to the level of services, their scope,      availability and quality. |
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|   | 2.12.7. | The      Purchased Activities are the only activities undertaken by New Smile. New      Smile shall have no other significant activities beyond the activities in      the field of communications, unless prior, written permission for such is      received from the Lender. |
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|   | 2.12.8. | With      the closure of the transaction for the purchase of the Purchased      Activities, New Smile shall hold all the licenses and permits required for      the purposes of its activities and interests pertaining to the Purchased      Activities and New Smile is not aware of any cause for the non-renewal of      the licenses and/or permits – to the extent that their periods are limited      – at the end of those periods. |
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|   | 2.13. |
|--------|-------|

|   | 2.13.1. | New      Smile has received or shall receive financing for the purchase of the      Purchased Activities from BLL to the overall sum of NIS      800,000,000. |
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|   | 2.13.2. | To      secure the financing it shall receive from BLL, the Borrower and New      Smile, as appropriate, have undertaken to pledge collateral to the benefit      of BLL as such is stipulated below and all such is subject to and is      stipulated in the Agreement to the benefit of BLL attached to this      Agreement as Appendix      2.13.2(the BLL      Agreement). |
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|   | 2.13.2.1. | First, floating mortgage to an unlimited sum, on all the assets and      rights held by New Smile, including all the fruitsthereof. |
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|   | 2.13.2.2. | Second,      fixed mortgage on the Borrower’s shares in New  Smile. |
|--------|-----------|---------------------------------------------------------------------------|

|   | 2.13.2.3. | First,      fixed mortgage on the Borrower’s rights to the owners’ loans placed at and      which shall be placed at New Smile’sdisposal. |
|--------|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.13.2.4. | Mortgage      on the bank account managed by New Smile at BLL, in which specified sums      shall be deposited and all such as stipulated in the Agreement made with      BLL. |
|--------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.13.2.5. | Guarantee      for the loan to the benefit of BLL against the debts owed by New      Smile. |
|--------|-----------|---------------------------------------------------------------------------------------------|

|   | 2.13.2.6. | Guarantee      provided by Ampal American to BLL, against the debts owed by New      Smile. |
|--------|-----------|---------------------------------------------------------------------------------------------|

|   | 2.13.2.7. | First,      fixed mortgage, for the receipt of specified payments from the Vendor in      accordance with the PurchaseAgreement. |
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|   | 2.13.2.8. | First,      fixed mortgage on the shares held by New Smile in the 012 Telecom Ltd.,      Private Company Number 513701169 – a subsidiary company wholly owned by      New Smile. |
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|   | 2.13.3. | In      addition, to secure the financing to be received from BLL, New Smile has      undertaken to comply with the covenants set out in Section 10.3 to the BLL      Agreement and Ampal American has undertaken vis-à-vis BLL, to comply with      the covenants set out in Appendix 11.15 to the BLL Agreement. Ampal      American and New Smile undertake to comply with the covenants agreed      between them and BLL and such shall mean that non-compliance with any of      the covenants listed above, which shall result in BLL making a demand for      immediate repayment of the loan extended by BLL to New Smile shall be      considered a breach of the commitments made by the Borrower in accordance      with this Agreement and such shall constitute cause for the issuing of a      demand for immediate repayment of the remaining balance of the loan, as      stipulated in Section 9 below. That      stated in this Section, shall also apply to any new agreement between New      Smile and BLL, pursuant to additional undertakings or more stringent      conditions to the undertakings listed in this Section      above. |
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|   | 2.14. |
|--------|-------|

|   | 2.14.1. | The      Borrower’s rights to the bank account, clear of all debt, commitment,      sequestration, mortgage and/or any third party rights of any type      whatsoever, including rights to set off and lien – without derogation from      the generality of that stated; the Borrower undertakes not to transfer      and/or sell and/or use as collateral and/or mortgage those rights to the      bank account. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.14.2. | There      is no restriction and/or prohibition and/or preclusion in accordance with      the provisions of all Law and/or any agreement whatsoever, either written      or verbal and no agreement from a third party whatsoever is required in      order to create a first mortgage to the benefit of the Lender covering all      Borrower’s rights to the Safety Cushionaccount. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.14.3. | The      banks where the accounts are managed shall have no rights to set off or      lien against the Borrower’s debts to those banks – from credit balances as      such shall be extant from time to time in the Bank Accounts and such in      accordance with the letters from the banks hereby attached as Appendix  2.13.4. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.14.4. | The      Borrower has no knowledge, which is not public knowledge, in connection      with New Smile or in connection with the Purchased Activities, which has      not been drawn to the attention of the Lender, when to the best of the      Borrower’s understanding, if that knowledge had been brought to the      Lender’s attention the Lender would have abstained from extending credit      to the Borrower in accordance with this  Agreement. |
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|   | 2.14.5. | There      is no significant information in reference to the Borrower, which does not      appear in the reports to the public made by Ampal American and which in      the Borrower’s opinion, if it had been brought to the attention of the      Lender, would have sufficed to have caused the Lender to abstain from      extending credit in accordance with this  Agreement. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.      The Declarations Made by the Lender |
|---------------------------------------------|

|   | 3.1. | The      Lender is a limited share company incorporated and in existence in      accordance with the Laws of the State of Israel and fit in accordance with      all Law to extend the Loan, to enter into an Agreement and to fulfill all      its obligations in accordance with that  Agreement. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.2. | The      Lender has taken in accordance with Law, all the decisions required in      accordance with the Lender’s articles of incorporation and in accordance      with all Law, in order to enter into this Agreement lawfully and to      fulfill all its obligations in accordance with this    Agreement. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.3. | The      Lender’s entry into this Agreement and the fulfillment of all the Lender’s      obligations in accordance with this Agreement do not contravene any Law or      agreement obliging the Lender. All the obligations imposed upon the Lender      in accordance with this Agreement are legal obligations and have the      validity, which obliges the Lender in accordance with the conditions      thereto. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.4. | The      Lender is aware that the exercise of the Lender’s rights in accordance      with the collateral pledged in accordance with this Agreement, including      their realization, shall be subject to all the limitations in Law and the      licenses in this context and as stipulated in Sections 2.2.5 and 2.12.6 to      the Agreement above. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.      Conditions to the Extension of the Loan Principal, the      Collateral |
|--------|--------------------------------------------------------------------------------|

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|   | 4.1. | On      the date on which this Agreement is signed, the Borrower or New Smile, as      appropriate, shall create (shall sign) for the Lender, the collateral      listed below. It      is agreed that the Borrower shall register the collateral in any register      required by Law and shall provide the Lender with confirmation of that      registration in accordance with Law by no later than the date on which the      Loan is extended, subject to that stated in reference to the mortgages,      which are the subject of Sections 4.1.2 – 4.2.4  below. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1.1. | Fixed mortgage on New      Smile shares The Borrower shall mortgage to the benefit of the      Lender, as a first, fixed mortgage to an unlimited sum, all the rights to      the shares held by the Borrower in New Smile, including additional shares      in New Smile, which shall be allocated to the Borrower from time to time      and including all the fruits wherefrom, the revenues and rights linked to      the shares; including if such are generated and/or bestowed after the      creation of this mortgage and as stipulated in the bond hereby attached as      Appendix      4.1.1. To avoid doubts: For as long as the aforementioned      collateral has not been realized, dividends received from New Smile by the      Borrower shall not be mortgaged and the Lender shall be entitled to make      any use of them whatsoever, but such shall be subject to the provisions to      Section 4.1.5 below. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1.2. | Current mortgage on      all New Smile assets and rights New      Smile shall mortgage to the benefit of the Lender, through second floating      mortgage unlimited in sum, all New Smile’s existing and future assets and      rights and the fruits wherefrom, including rights vis-à-vis customers and      rights to monies and/or rights to securities deposited in New Smile’s bank      accounts and through second fixed mortgage unlimited in sum on the unpaid      equity capital and New Smile reputation, as such is stipulated in the bond      hereby attached as Appendix      4.1.2. Agreement      from BLL for the extension of the second mortgage that is the subject of      this Section is hereby attached as Appendix      4.1.2a. The      Lender is aware that the creation of the second mortgage that is the      subject of this Section is subject to the receipt of agreement to such      from the Minister of Communications and as such is stipulated in Section      2.2.5 above. Therefore, it is agreed that the aforementioned mortgage      shall be registered and extended to the benefit of the Lender by no later      than sixty (60) days from the date on which this Agreement is signed. The      Borrower undertakes to submit a request for approval from the Minister of      Communications as stated, immediately after the date on which the Loan is      extended and to make every effort to bring about its registration in the      records kept by the Registrar of Companies at the earliest possible      time. It      is agreed that if by the end of the sixty (60) day period the      aforementioned mortgage is not registered, then the sum for the Safety      Cushion stated at the beginning of Section 4.1.3 below shall increase to      NIS 30,000,000 instead of NIS 20,000,000 and the ratio stated there shall      increase to 30/220 instead of 20/220. It is clarified that this shall be      the only relief for non-registration, on condition that the      non-registration is due to the refusal of the Minister of Communications      to approve that registration. No other change shall be made to the      provisions to Section 4.1.3. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 4.1.3. | If      the Safety Cushion sum rises to NIS 30,000,000 as stated above and then      afterwards, the second current mortgage is registered in the Companies      Register, the Borrower shall be entitled to withdraw immediately, all the      balance of monies in the Safety Cushion until after that withdrawal, the      sum remaining in the Safety Cushion account shall be the sum equal to the      20/220 ratio of the remaining principal and as such is defined in Section      4.1.3 below: Safety      Cushion. The      sum of NIS 20,000,000 (the Safety Cushion Sum) out      of the sum total of the Loan, shall be deposited by the Lender with the      extension of the Loan, in a deposit account, which shall be opened by the      Borrower as part of the Designated Bank Account, which shall be opened      solely for that purpose and which is the Safety Cushion Account as such is      defined in Section 1.4 above (hereinafter: The Safety Cushion and the      Bank      Account). At      all times during the Loan Period, the Safety Cushion Sum shall stand at a      sum, which shall be no less than the ratio 20/220 of the remaining      un-discharged balance of the Loan Principal indexed to the CPI      (hereinafter in this Section: the Balance of the Principal). The      following provisions shall apply to the Safety Cushion and the Bank      Account: |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1.3.1. | The      Borrower shall mortgage to the benefit of the Lender, as a first fixed      mortgage unlimited by sum, all the rights to the Bank Account and the      monies it shall contain from time to time and as stipulated in the bond      hereby attached as Appendix      4.1.1. |
|--------|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1.3.2. | On      the last day of each calendar quarter (the Examination Date) the      Borrower shall conduct an examination of the un-discharged balance of the      Loan Principal, compared with the sums and the value of the assets (to the      extent that investments have been made as stated in sub-section 5 below)      deposited in the Bank Account as of the date of the examination. On the      date of that examination, the Borrower shall provide the Lender with a      report on the results of that examination, signed on behalf of the      Borrower by the Borrower’s CFO or CEO. If      the total of sums and assets in the Bank Account as of the date of the      examination is higher than the ration of 20/220 of the Balance of the      Principal on the date of the examination, then the Borrower shall      be  entitled to withdraw the difference between the two, subject      to prior written notice to the Lender, in a manner ensuring that after the      withdrawal, the aforementioned ratio shall be no less than 20/220 and to      make any use of that sum at the Borrower’s discretion. If the sum in the      Bank Account is lower than the ratio of 20/220 of the Balance of the      Principal, then the Borrower shall be obliged to deposit the difference      between them immediately. The reference to the Safety Cushion Sum in      sub-section 4 below shall refer to the updated Safety Cushion Sum as      extant immediately after the examinationdate. |
|--------|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 4.1.3.3. | In any circumstances in which the Borrower does not fulfill the      Borrower’s obligations to make a particular payment in accordance with the      provisions to this Agreement and/or if a demand is made for immediate      repayment of the Loan in accordance with this Agreement, the Lender shall      be entitled to withdraw any sum from the Safety Cushion and deposit that      sum in the Lender’s account – for the purposes of discharging the      Borrower’s remaining balance of debt to the Lender. To expedite that      purpose, the Borrower shall provide the Lender with an irrevocable order      for the Bank to pay to the Lender on demand; all the sums extant in and      which shall accumulate in the Bank Account as such is explained in Appendix    4.1.3. |
|--------|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1.3.4. | If the Lender uses the Safety Cushion during the Loan Period as stated      in sub-section 4.1.3.3 above, any sum transferred by New Smile to the      Borrower, shall serve first and foremost to replenish the Safety Cushion      up to the Safety Cushion Sum. It is clarified that nothing in that stated      shall derogate from the Lender’s rights to demand immediate payment of the      Loan. |
|--------|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 4.1.3.5. | The Lender shall be entitled to invest the monies in the Bank Account      in short term bank deposits or in securities or in certificates of      indebtedness issued by the State of Israel and/or in securities rated      using the local rating system as at least A grade by Standard and Poors,      Maalot ltd. or the parallel grade used by Midrug Ltd. (with the exception      of debentures and securities from the Ampal American  Group. |
|--------|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1.4.  | Mortgage of      Owners’ Loans Extended or which Shall be Extended to New  Smile |
|--------|--------------|----------------------------------------------------------------------------------------|

|   | 4.1.5. | In addition to the collateral mentioned above, the following      provisions shall apply: |
|--------|--------|-------------------------------------------------------------------------------------------|

----

|   | 4.1.6. | As a precondition to the extension of the Loan Principal, on the date      on which the Loan is extended, the Borrower shall provide the Lender with      perpetual, irrevocable guarantees from Ampal American, to guarantee the      repayment of the Loan and signed by Ampal at the end of this  Agreement. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 4.2. | Simultaneous      with the pledging of the collateral listed in Section 4.1 above, together      with certificates of registration of the mortgages with the Registrar of      Companies for the purposes of the mortgages, which are the subject of      Sections 4.1.1, 4.1.3, the guarantees from Ampal American, the empowering      in reference to the Designated Account and the irrevocable instructions      stipulated above in Section 4.1.3; the Lender shall extend the Loan      Principal  to the Borrower through bank transfer to the account      in the name of 012 Smile Communications Ltd. in the following manner (and      divided up as stipulated in Appendix 4.2 to this    Agreement): |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.3. | It      is agreed that if and to the extent that New Smile shall be entitled to      sums from Old Smile by dint of Section 11.4 to the Purchase Agreement,      then the Lender shall be entitled to demand repayment of the Loan by the      Borrower, to the same level as the reduction of payment for the purchase      as aforementioned, Thus, and solely for the purposes of example – if by      dint of the aforementioned Section, New Smile receives sums from Old Smile      and thereby, the payment for the Purchase in accordance with the Purchase      Agreement is reduced by 10%, then the Lender shall  be entitled      to demand early repayment to the sum that is 10% of the Loan (it is      clarified that in the circumstances described here, the Safety Cushion      shall be reduced by the same rate). |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.      Repayment of the Loan |
|-------------------------------|

|   | 5.1. | The      Loan shall be repaid throughout the Loan Period as stipulated      below: |
|--------|------|------------------------------------------------------------------------------------|

|   | 5.1.1. | The      interest, with additional indexing differentials shall be paid in half      yearly installments, beginning on January 31, 2011 and on the 31st      of each of the months of July and January in each year, beginning on the      date on which the Loan was extended and ending with the date on which the      Loan was repaid. The      calculation of the interest on the Loan shall take into account 365 days      in a year (and if there are 366 days in a year, the formula shall be      amended to include 366 instead of365). |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 5.1.2. | The      Loan Principal, with additional index differentials, shall be paid in      equal half yearly installments beginning on January 31, 2012 and on the      31st      day of each of the months of July and January in each year, beginning on      the date on which the Loan was extended and ending with the date on which      the Loan was repaid. Precise      details of the sums to be paid are to be found in the Repayment Schedule      attached to this Agreement as Appendix      5.1. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5.2. | In      addition to that stated above, the Borrower shall bear the payments listed      in Appendix 5 to this Agreement. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------|

|   | 5.3. | The      Borrower undertakes to pay to each of the Lender Individuals, all those      payments due to each Lender Individual, through bank transfer to the bank      accounts listed in Appendix 4.2.      The Lender shall inform the Borrower of any change to the data listed in      that Appendix, if there shall be any changes, fourteen (14) days before      the date for the making of any payment in accordance with the Repayment      Schedule. The      Lender shall credit the Borrower for any payment whatsoever, only on the      date on which the Lender shall be actually credited for that payment in      the bank accounts stipulated above. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5.4. | In      any circumstance in which the date for any payment whatsoever, on account      for the repayment of a Loan Principal and interest sum or another payment      due to the Lender in accordance with this Agreement, shall fall on a day      that is not a business day, the payment of that sum shall be delayed until      the first business day that follows the payment  date. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.      Accompanying Payments |
|-------------------------------|

|   | 6.1. | The      cost of registering the collateral, to the extent that they shall be borne      by the Lender. |
|--------|------|---------------------------------------------------------------------------------------------------------|

|   | 6.2. | Legal      fees to the Lender’s attorneys, for the drawing up of this Agreement and      those fees shall be paid by the Borrower directly to the Lender’s      attorneys within seven (7) days from the date on which this Agreement is      signed and against the receipt of a tax invoice as required by      Law. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 6.3. | All      the costs incurred by the Lender in connection with the realization of      collateral, to the extent that there shall be realization, including legal      fees, Court fees, Execution Office fees, the appointment of an official      receiver and/or manager and/or trustee and/or liquidator and their      salaries. All      the collateral, which shall be provided in accordance with this Agreement,      shall also serve to guarantee the payment of all the aforementioned      sums. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.      Order for Making Payments |
|-----------------------------------|

|   | 7.1. | On      account for the costs and expenses listed in Section 6 above, if and to      the extent that they shall be paid by the  Borrower. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.2. | On      account for the early repaymentfee. |
|--------|------|---------------------------------------------|

|   | 7.3. | On      account for late payment interest. |
|--------|------|--------------------------------------------|

|   | 7.4. | On      account for index differentials on late payment  interest. |
|--------|------|--------------------------------------------------------------------|

|   | 7.5. | On      account for Loan interest |
|--------|------|-----------------------------------|

|   | 7.6. | On      account for index differentials on the interest on the    Loan. |
|--------|------|-------------------------------------------------------------------------|

|   | 7.7 | On      account for the Loan Principal and index differentials on the Loan      Principal. |
|--------|-----|--------------------------------------------------------------------------------------------|

| 8.      The Commitments Made by the Borrower and New  Smile |
|-------------------------------------------------------------|

|   | 8.1. | Without      derogation from the undertaking to comply with the covenants vis-à-vis BLL      as stipulated in Section 2.13.3 above, Ampal American and New Smile      undertake to comply with the covenants listed here  below: |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.1.1. | Ampal      American undertakes that Ampal American’s solo, tangible equity capital      (pro forma) shall at no time be less than the total of USD 150      million. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 8.1.2. | In      addition, Ampal American undertakes that the total sum of Ampal American’s      equity capital shall at no time be less than a total of USD 150      million. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.1.3. | Ampal      American undertakes that the ratio between net debt and net CAP at Ampal      American (pro forma) shall not rise above 75%. For the purposes of this      Section, the aforementioned ratio shall mean the portion received from      financial commitments after deduction of cash and cash equivalent,      deposits and negotiable securities (net debt) divided by the      equity capital with the addition of the net debt (net CAP). Financial Institution –      shall mean – Each of the following bodies: Banks, including Auxiliary      Corporations, as such are defined in the Banking Law (Licensing) 5741 –      1981; corporations to which the Joint Investments Trust Law,      5754 - 1994      applies; corporations to which the Control of Financial Services Law      (Provident Funds) 5765 – 2005 applies; an insuring corporation, as such is      defined in the Control on Insurance Business Law 5741 – 1981, or any      corporation similar to those mentioned above, which was incorporated      outside Israel and is under the supervision of the competent authority in      the country of incorporation and the holders of debentures. Financial Commitments –      shall mean – The balance of debts and commitments to Financial      Institutions as such appear in the financial reports for Ampal American      (pro forma). Equity Capital – shall      mean – The equity capital presented in the financial reports on a combined      basis for Ampal American. Financial Reportsfor Ampal American (pro      forma) – shall mean – The financial reports for Ampal American,      including the combined reports for companies which are either directly or      indirectly, wholly owned by Ampal American and when their entire      activities are the holdings in or the investment in corporations      (including but without derogation from partnerships or projects) or in      financial assets. True of the date of the signing of this document, the      companies included in the Financial Reports (pro forma) are as listed in      Appendix      8.1 to this Agreement. It      is hereby clarified that in reference to the Financial Reports drawn up in      accordance with US GAAP standards, the definition for equity capital (in      reference to combined reports) does not include the minority rights that      appear as part of the equity capital. Furthermore,      it is hereby clarified that in reference to the Financial Reports drawn up      in accordance with the IFRS standard for the purposes of defining equity      capital: |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | A. | Such      shall not include minority rights that appear as part of the equity      capital (in reference to combined reports) and furthermore    – |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | B. | The      equity capital shall also include options when the realization addition      for those options is indexed (they shall appear as part of the      commitments) and furthermore – |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | C. | The      equity capital shall also include the conversion component for convertible      bonds, when their realization price is indexed (if they appear separately      as part of the commitments in the balance) and furthermore    – |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | D. | They      shall not include the re-evaluation principal for fixed assets created due      to the adoption of the re-evaluation model during the period after the      formulation of the financialconditions. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | A. | Such      shall not include minority rights that appear as part of the equity      capital (in reference to combined reports) and furthermore    – |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | The      equity capital shall also include options when the realization addition      for those options is indexed (they shall appear as part of the      commitments) and furthermore – |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | C. | The      equity capital shall also include the conversion component for convertible      bonds, when their realization price is indexed (if they appear separately      as part of the commitments in the balance) and furthermore    – |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | D. | They      shall not include the re-evaluation principal for fixed assets created due      to the adoption of the re-evaluation model during the period after the      formulation of the financialconditions. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.1.4. | The      debt to EBIDTA ratio at New Smile shall be no more than 3.7  |
|--------|--------|----------------------------------------------------------------------------|

|   | 8.1.5. | Management      fees to be paid by New Smile to those in control of New Smile, directly      and/or indirectly shall not rise above, collectively, the sum of NIS      15,000,000 per year, indexed to the CPI; if the aforementioned sum is not      paid in a specific year, it shall be paid out only during the following      year. If      Ampal American and/or New Smile do not comply with any of the covenants      stated in Sections 8.1.1 to 8.1.5 above, such shall be considered a breach      of the Borrower’s commitments in accordance with this Agreement and shall      constitute cause to demand immediate repayment of the balance of the Loan      and as such is stipulated in Section 9 below. To remove doubt it is hereby      clarified that non-compliance with the financial relationship vis-à-vis      BLL (which is not mentioned in Sections 8.1.1 to 8.1.5 above) shall not      constitute cause for the demand of immediate payment of the Loan, unless      if BLL demands the immediate repayment of the credit extended to New Smile      by BLL as aforementioned in Section 2.13.3  above. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 8.2. | With      the exception of that stated explicitly in this Agreement (and in the      floating mortgage bond), not to sell and/or transfer and/or assign and/or      mortgage the collateral provided to the Lenders in accordance with this      Agreement, including at an equal or lowerlevel. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.3. | The      Borrower does also undertake not to mortgage the Borrower’s shares in the      EMG Company, without the Lender’s prior permission for    such: |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.3.1. | If      the Borrower sells or transfers more than 50% of the Borrower’s shares in      EMG, the Borrower shall inform the Lender of such in writing and within      thirty (30) days from the date on which the Lender received that notice,      the Lender shall be entitled to inform the Borrower that the Lender is      interested in the execution of immediate repayment of the net sum received      by the Borrower for the aforementioned sale (but no more than the Balance      of Loan Principal not yet discharged, hereinafter: The Net Return). If the      Lender demands early repayment as aforementioned, no early repayment fee      shall be paid. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.3.2. | If      the Borrower sells up to 50% of the Borrower’s shares in the EMG Company,      then that stipulated in sub-section 8.3.1 above shall apply only to 10% of      the Net Return. If the Borrower sells in blocks, after each sale the      Lender shall be able to demand immediate repayment as stipulated in this      sub-section. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.3.3. | Notwithstanding      that stated in sub-section 8.3.2 above, if the Borrower sells the      Borrower’s shares in blocks that accumulate to constitute more than 50% of      the Borrower’s shares, then that stipulated in sub-section 8.3.1 shall      apply to the Net Return. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.3.4. | Early      repayment monies as aforementioned, shall be divided up among the Lender      individuals in accordance with the division which shall be stipulated in      the Lender’s notice mentioned above (to avoid doubt – the monies shall not      necessarily be distributed equally among the Lender      individuals). |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 8.3.5. | The      sale or transfer of EMG shares in lieu of rights to shares in another      company (share swopping), as differentiated from the sale of shares in      lieu of cash, shall be subject the Lender’s Board of Directors’ approval      that the shares in the other company constitute economic benefit befitting      the value of the EMG shares. The Lender shall give the Borrower prior,      written notice concerning the aforementioned share swop. If shares are      exchanged as aforementioned in this sub-section, the provisions to this      sub-section 8.3 shall apply to the shares in the other      company. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.3.6. | It      is clarified that early repayment (when such is lower than the      un-discharged Balance of the Loan Principal) shall be paid on account for      the un-discharged Balance of the Loan Principal and it shall reduce      equally the payments of Loan Principal remaining according to the      Repayment Schedule and therefore, the Loan Period shall not      change. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.4. | To      verify that all the sums paid to the Borrower by New Smile and/or for the      Borrower shall be transferred into the Designated  Account. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.5. | To      inform the Lender in writing without delay, of any incident involving      application of lien, execution of Court Execution Office instructions, the      appointment of a receiver or the institution of any similar process      whatsoever, which might have a significant negative effect on the      Borrower’s ability to fulfill the conditions to the Agreement or on the      ability of New Smile to fulfill its commitments and without delay to take      at the Borrower’s expense, all the steps required for the purposes of      cancelling the lien, execution of Court Execution Office instructions, the      appointment of a receiver or institution of any similar process in      connection with the Borrower as soon as possible and no later than up to      sixty (60) days from the date on which the lien was applied, the Execution      Order was implemented, the receiver was appointed, or another process was      instituted. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.6. | To      inform the Lender in writing without delay of any suit, mediation,      regulatory or administrative processes against the Borrower or concerning      the Borrower (including notice of any threat of suit, mediation or      processes as aforementioned) or against New Smile or concerning New Smile,      which in the Borrower’s opinion, based on the Borrower’s assessment of the      risks associated with the aforementioned process, will have a significant      negative effect on the Borrower’s ability to fulfill the conditions to the      Agreement. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.7. | To      send to the Lender without delay, written notice of every event in which      there is a significant breach of this Agreement, along with reasonable      explanation of the details of that event and the steps taken (if taken) to      rectify the situation. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.8. | Not      to perform knowingly, any act which might have any significant negative      effect whatsoever on the Borrower’s ability to fulfill the Borrower’s      commitments. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 8.9. | To      comply with all the rules, instructions and guidelines applicable to the      Borrower’s activities. |
|--------|------|--------------------------------------------------------------------------------------------------------------------|

|   | 8.10. | To      send the following reports (the confidentiality of which will be      maintained by the Lender, unless that information is made public knowledge      not due to the breach of the duty of confidentiality) to the      Lender: |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.10.1. | The      pro forma report for New Smile, which reflects the execution of the      purchase of the Purchased Activities in accordance with the Purchase      Agreement, by no later than thirty (30) days from the date for the      extension of the Loan as such is definedabove. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.10.2. | In      reference to Ampal American and NewSmile: |
|--------|---------|---------------------------------------------------|

|   | 8.10.2.1. | A      copy of the audited Financial Reports for each of them for each financial      year. |
|--------|-----------|---------------------------------------------------------------------------------------------|

|   | 8.10.2.2. | A      copy of every intermediate Financial Report and/or Quarterly Report for      each of them. |
|--------|-----------|---------------------------------------------------------------------------------------------------|

|   | 8.10.3. | A      copy of every audited Financial Report for the Borrower by no later than      fourteen (14) business days form the date determined in Law for its      submission to the tax authorities and under all circumstances, no later      than January 14 in the year following the year in which the report must be      submitted. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.10.4. | The      Borrower’s confirmation of compliance with the Covenants, which are the      subject of Section 8.1 above and compliance with the Covenants agreed with      BLL, up to and no later than the end of the second calendar month after      the end of each quarter. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.10.5. | Information      pertaining to the Borrower’s, or Smile’s, or Ampal American’s obligations      to BLL, in connection with the credit and/or the collateral provided to      and/or which shall be provided by BLL to New Smile for the purposes of      purchasing the Purchased Activities, including in reference to covenants,      waivers, changes to covenants, agreement from BLL for the those changes      and including any changes to the original conditions to the Loan with BLL      – the Repayment Schedule, interest rates, changes to the collateral, etc.      and all information pertaining to any event or misgivings inferring that      the Borrower shall not meet the Borrower’s obligations to comply with the      covenants with BLL. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 8.10.6. | Information      concerning every circumstance in which the Borrower shall not meet its      commitments to comply with the covenants made with a third party and due      to which that third party has asked for or warned that it intends to      demand immediate repayment of the Borrower’s debt to that third party, on      condition the size of the debt, to the extent that the matter pertains to      New Smile, is more than NIS 20 million and to the extent that the matter      pertains to Ampal American, is more than NIS 50  million. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.10.7. | All      information requested by the Lender concerning the Borrower’s and New      Smile’s business interests, rights, obligations and when that information      contains sufficient to constitute relevant information pertaining to the      Borrower’s ability to meet its obligations in accordance with this      Agreement. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.10.8. | Information      concerning any event, which constitutes cause to demand the immediate      repayment of the Loan, as stipulated in Section 9 below, with an almost      certain likelihood. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.10.9. | The      Borrower shall provide the Lender with a copy of assessment of the value      of New Smile drawn up by an independent evaluator, which shall be      delivered to BLL, to the extent that such shall be delivered, in      accordance with the provisions to the BLL Agreement and such on the date      on which it shall be delivered toBLL. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.11. | In      addition to that stated above, for as long as the balance of the loan has      not been discharged for the Lender in accordance with this Agreement, the      Borrower undertakes to maintain the following vis-à-vis the      Lender: |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.11.1. | Ampal American shall not distribute dividends to its shareholders      during the period up to the date for the first payment of the Loan      Principal. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.11.2. | A      transaction between Ampal American and the interested parties in Ampal      American to a sum greater than NIS 50 million shall require prior approval      from the Lender. However, that clause shall not apply for as long as Ampal      American is registered for trading on the NASDAQ, the Tel Aviv Stock      Exchange (or both). Interested Party – shall      mean – an interested party in the Company as that term is defined in the      Securities Law 5728 – 1968, not including a subsidiary company wholly      owned by the Borrower. Transactions with Interested      Parties, personal matter, transaction, relative, position holder, linked      company and control – shall have the meanings those terms were      given in the Companies Law 5759 –1999. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.11.3. | The      Ampal American Group, including all the companies within that Group and      all parties linked to the Group (with the exception of New Smile and its      owned corporations, to the extent that they are required for the purpose      of New Smile activities and subject to the covenants to which New Smile      has made commitments in this Agreement), have not taken and shall not take      other credit from BLL, guaranteed by the collateral provided for the      benefit of BLL and as stipulated in this Agreement. It is explicitly      clarified that solely for the purposes of the relationship between the      Lender and the Borrower, the provisions to this sub-section 8.11.3 take      precedence over any contradictory provision, if there be any such, in the      BLL agreements (Appendices 4.1.2a and 4.1.4a to this      Agreement). |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 9. Breach and Immediate      Repayment |
|----------------------------------------|

|   | 9.1. | The      Lender has breached one of the provisions to this Agreement and has not      rectified that breach within a period of twenty (20) business days from      the date on which the Borrower received written demand to rectify the      breach. It      is hereby clarified that even a breach, which cannot be rectified or      cannot be rectified within the aforementioned period, shall constitute a      breach. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.2. | Without      derogation from the generality of that stated above, if the Safety Cushion      Sum is less than the ratio determined in sub-section 4.1.3 above and the      Company has not made up the missing sum in the Safety Cushion Sum within      three business days. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.3. | If      it becomes apparent that a significant declaration made by the Borrower or      New Smile in accordance with this Agreement is untrue or incomplete and      the Borrower does not rectify that which must be rectified within twenty      (20) business days. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.4. | If      any debt owed by the Borrower, or New Smile or Ampal American is subject      to a demand for immediate repayment, on condition that the size of the      debt, to the extent that such shall refer to New Smile is more than NIS 20      million and to the extent that such shall refer to the Borrower and Ampal      American, more than NIS 50 million. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.5. | If      he Borrower or New Smile shall be unable to pay their debts on time, or      begin negotiations with their creditors, with the aim of reaching a debt      rescheduling arrangement with their creditors or any other similar      arrangement whatsoever, based on concerns that they might not be able to      meet their commitments. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 9.6. | If      the Borrower or New Smile or Ampal American have begun taking steps or      shall begin steps, or if processes instigated against them shall lead to      the granting of a winding up order, a liquidation order, a process      freezing order in accordance with the Section 350 to the Companies Law,      the cessation of payments, protection from creditors, the appointment of a      liquidator, a receiver, a managing receiver, special manager, or any      similar position holder, in connection with the Borrower or New Smile or      their assets, in whole or any significant part thereof; or if steps or      other similar processes are instigated in connection with the Borrower or      New Smile or their assets, in whole or any significant part thereof, or      another, similar order is granted against them, be such processes or      orders either temporary, for a given period or permanent and the      aforementioned steps, processes or orders were not cancelled within a      period of forty five (45) business days from the date on which they began,      if they refer to processes or from their granting if such refers to Court      orders. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.7. | If      a significant lien, including a temporary significant lien is imposed upon      assets belonging to the Borrower, New Smile or Ampal American, or if any      Execution Order whatsoever is applied to their assets and the lien or      Execution Order is not removed within forty five (45) business days from      the date of their imposition. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.8. | If      the Borrower or New Smile or Ampal American shall cease or notify that      they intend to cease managing theiraffairs. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------|

|   | 9.9. | If      a claim is submitted and/or mediation, regulatory or other processes, or      investigations in reference to or touching upon the Borrower or New Smile      or Ampal American begin and according to the assessment of the risks      associated with that process made by the Borrower or New Smile or Ampal      American as appropriate, it is reasonable to assume that they will have a      significant, negative effect on the ability of the Borrower or New Smile      to fulfill their commitments in accordance with this      Agreement. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.10. | If      Mr. Yossi Maiman is no longer the controlling party, indirectly, in the      Borrower and for the purposes of that matter, the term “controlling party”      shall have the meaning given to it in the Securities  Law. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.11. | If      there shall be changes to the Borrower’s holdings in New Smile, compared      with the situation extant on the date of this  Agreement. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.12. | If      credit extended to New Smile by BLL as stated above – is not be repaid      within seven (7) days from the date set for its  repayment. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.13. | If      securities issued by Ampal American are not repaid within seven (7) days      from the date set for their repayment or if there is almost certain doubt      that they shall not be repaid ontime. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.14. | If      the significant licenses required by New Smile for its activities are      cancelled or suspended. |
|--------|-------|------------------------------------------------------------------------------------------------------------|

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|   | 9.15. | If      there is a sale of or change are made to New Smile’s or the Borrower’s      principal assets or activities (including to the significant      licenses). |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.16. | If      the Borrower or New Smile takes a decision concerning structural change or      a merger, or splitting or concerning an arrangement. For      the purposes of this matter, “Merger” shall mean a      merger in accordance with the first Chapter to Part Eight or in accordance      with the third Chapter to Part Nine in the Companies Law or any other act,      the result from which shall be the purchase of most of or the majority of      the Borrower’s or New Smile’s assets by another. “Splitting” shall mean as      it is defined in Part 5(2) to the Income Tax Ordinance (New Version), or      as it shall be defined in any lawful provision that comes in its place.      “Arrangement”      shall mean as it is defined in Sections 350 and 351 to the Companies Law      5759 -1999), or as it shall be defined in any lawful provision that comes      in its place. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.17. | If      a significant change for the worse occurs to the detriment of the      Borrower’s or New Smile’s or Ampal American’s financial status or the      status of their commercial activities and consequential to which, in the      opinion of the Lender such shall have a detrimental effect on the      Borrower’s ability to pay on time the full sum due to the Lender in lieu      of the Loan, including the realization of the collateral and that      situation has not been rectified within seven (7) days from the date on      which the Lender informed the Borrower of such in writing. However, if in      the Lender’s opinion, waiting for the period stipulated above will incur      risk to the realization of the Lender’s rights, the waiting period shall      be cancelled. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9.18. | If      the rating for Ampal American rated securities drops to (BB+) or lower in      the local rating scale, or if ratings cease for the aforementioned      securities, on condition that the Lender shall make use of the Lender’s      rights within thirty (30) days from the date on which notice was given of      a drop in rating. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.      The Manner in Which Collateral Shall beRealized |
|----------------------------------------------------------|

|   | 10.1. | Subject      to the making of a demand for immediate repayment by the Lender in      accordance with the provisions to Section 9 above and subject to all Law;      for as long as the collateral, in whole or in part thereof, shall be      realizable, the Lender and/or any appointed by a Court (the Appointee) for the      purposes of realizing the collateral and collecting the return in lieu of      the collateral shall be entitled as they shall see fit and without any      derogation from their authority, to instigate any process in accordance      with the provisions in all Law and to instigate any other activity in      reference to the collateral, as they shall see fit and all such in order      to repay the un-discharged balance of the Loan to the Lender. To remove      doubt: Nothing stated in this Section shall derogate from the Lender’s      rights to be repaid directly from the Bank Account and the Safety Cushion,      without a realization process. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 10.2. | Subject      to the provisions in all Law, the Lender and the Appointee appointed as      aforementioned in sub-section 10.1 above, shall have full authority to      compromise and to execute any compromise for the purposes of achieving the      objectives stated above, in whole or in part thereof and they shall have      the authority to undertake and execute any activities and to sign any      documents that they shall see fit and all such after given written notice      to the Borrower and such shall include inter    alia: |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.2.1. | To      receive the collateral into their possession, for the purposes of its      realization and the repayment of the un-discharged balance of the Loan in      accordance with sub-section 10.1above. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.2.2. | To      manage or participate in the management of the  collateral. |
|--------|---------|---------------------------------------------------------------------|

|   | 10.2.3. | To      sell or to agree to the sale of the collateral or any part thereof and to      transfer the collateral in any other manner under the conditions they      shall see fit to impose. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.2.4. | To      sign in the name of the Borrower, any request or document required for the      purposes of the sale of collateral and such shall include the signing of      requests for tax exemptions. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.3. | All      costs incurred by the Lender in connection with the realization of      collateral in accordance with the provisions to this Agreement shall be      paid by the Borrower. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.4. | In      addition to all payments to be borne by the Borrower in circumstances in      which the Lender makes a demand for the immediate repayment of the Loan,      the Borrower shall pay the Lender early payment fees as defined in Section      11 below on the sum subject to immediate  repayment. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.5. | After      application of mortgage realization to the collateral in accordance with      this Agreement, at any time when so required by the Lender or the      Appointee appointed to realize the collateral, the Borrower shall execute      all the reasonable activities required in order to facilitate the      realization of the collateral. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6. | The      monies received from realization of collateral or collected shall be used      first and foremost and/or money shall be set aside to pay the costs of the      fees and costs expended, imposed or incurred due to or consequential to      the realization activities performed in connection with collection of the      Balance of the Loan (including salaries and expenses due to the      Appointee). The      remaining sum shall be used to pay the sums due in accordance with the      payment order stipulated in Section 7above. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11. Early      Repayment |
|--------------------------|

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| 12.      Late Payment Interest |
|--------------------------------|

|   | 12.1. | In      any instance in which the Borrower does not pay within fourteen (14)      business days from the stipulated date, any sum whatsoever so required      from the Borrower in accordance with this Agreement, late payment interest      shall apply to that sum and such beginning on the stipulated date for      payment of the unpaid sum until the date of its actual payment in full and      such shall not derogate from any other relief granted to the Lender in      accordance with the provisions to this Agreement or in all      Law. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.2. | The      Lender shall be entitled to charge the Borrower late payment interest      without prior notification of such to the Borrower and at all times and      without prior notification of such to the Borrower the Lender shall be      entitled to add the late payment interest to the late payment, at any      interest repayment date according to the Repayment Schedule and to apply      to the late payment interest, all the conditions to this Agreement      applicable to late payment. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 12.3. | The      Lender shall determine the manner for the calculation and the recording      for implementation of the provisions to this Section and the determination      made by the Lender shall constitute prima facie evidence of      the verity of the calculation. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 13.      Transfer of Rights and Obligations |
|---------------------------------------------|

|   | 13.1. | The      Borrower hereby undertakes not to transfer and/or endorse and/or assign      and/or mortgage the rights and obligations, in whole or in part thereof –      in accordance with this Agreement – to any third party whatsoever, in any      manner or fashion, without receipt of prior agreement to such from the      Lender. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 13.2. | The      Lender shall be entitled to assign all the Lender’s rights and obligations      in accordance with this Agreement, or part thereof, to the following      bodies, with receipt of the Borrower’s agreement: [a] Banks in Israel,      including auxiliary corporations as such are defined in the Banking Law      (Licensing) 5741 – 1981, to insuring corporations, as such are defined in      the Control on Insurance Business Law 5741 – 1981; [b] Corporations, to      which the Joint Investments in Trust Law 5754 – 1994 applies; corporations      to which the Control on Financial Services (Provident Funds) 5765 –2005      applies, when such manage funds to the sum of more than NIS 10      billion. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.      Repayment of the Loan and Release ofCollateral |
|---------------------------------------------------------|

| 15.      Miscellaneous |
|------------------------|

|   | 15.1. | The      Borrower shall have no right to set off or lien in reference to the sums      due to the Lender from the Borrower in accordance with this Agreement      under any circumstances whatsoever. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 15.2. | This      Agreement constitutes the full Agreement between the parties in reference      to the subject of this Agreement and it replaces any other previous      agreement or arrangement or understanding between the parties referring to      the subject of this Agreement. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 15.3. | Any      abstention by the Lender or the Borrower from exercising any right      whatsoever granted to the Lender or the Borrower in accordance with this      Agreement or in all Law, or any delay or postponement of the exercise of      any such right as aforementioned, shall not be considered waiver of that      right and any single or partial exercise of a right by the party entitled      to that right shall not prevent further or other exercise of that right or      the exercise of any other right whatsoever in that party’s good stead in      accordance with this Agreement or in all Law. The remedies and reliefs in      accordance with this Agreement are in addition to and do not derogate from      any other remedy or relief granted by all Law. Any extension or mitigation      granted, or waiver or compromise made by either the Lender or the Borrower      in any circumstances whatsoever, shall not be interpreted as a precedent      or waiver in a difference circumstance and shall not derogate from the      rights accruing to the Lender or the Borrower as appropriate, in      accordance with this Agreement or in accordance with all    Law. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 15.4. | The      Lender’s books and accounts shall be considered trustworthy by the      Borrower with all that implied thereby pertaining to the Loan, including      the balance of the Loan Principal, the accompanying payments, the      interest, the index differentials, the costs, recording of payments and      all other matters pertaining to this Loan and at all times, they shall      serve as prima      facie proof of that recordedtherein. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 15.5. | The      Lender shall be entitled to sue and/or to submit claims against the      Borrower for party of the Loan and/or part of the sums, which the Borrower      owes to the Lender, without such derogating from or derogating in the      future, from the Lender’s right to submit further claims in reference to      the balance of the sums. Any sum claimed by the Lender shall serve as      cause for a separate, independent claim in any other part of the Loan or      for any part of the Loan. |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 15.6. | The      Borrower undertakes to take any steps and conduct any activity; to appear      before any body and/or authority and to sign any document for the purposes      of the complete fulfillment of thisAgreement. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 15.7. | If      a Court or a qualified mediator determine in a final decision obliging the      parties that a commitment made in the Agreement, in whole or in part      thereof, has no validity or is not reasonable, then to the extent that it      shall be possible – the scale of that commitment shall be reduced in      accordance with the decision handed down by that Court or mediator and      that commitment shall be enforceable in accordance with the aforementioned      decision. Furthermore, such a determination as aforementioned, shall not      derogate from the other parts of the Agreement, which shall remain valid      and obliging with all that implied thereby, to the extent that such shall      not be a significant change to the economic significance of the      transaction, which is the subject of this  Agreement. |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 15.8. | The      Laws of the State of Israel shall apply to this Agreement and its      interpretation and the sole legal jurisdiction competent to hear any      matter in connection with this Agreement or arising from this Agreement is      hereby granted to the competent Court in Tel Aviv –  Jaffa. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 15.9. | Any      notice in accordance with this Agreement shall be given in writing and      sent to the parties addresses as stated in the preamble to this Agreement      and shall be considered notice delivered to the addressee, four (4)      business days after the date on which that notice was handed in for      sending by registered mail or the first business day after the sending of      that notice by fax; for the purposes of that delivery as aforementioned,      it shall suffice to prove that the notice was handed in for sending by      registered mail, addressed in accordance with  Law. |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   By:      /s/ Irit Eluz         /s/      Yoram FironMerhav Ampal Energy Ltd.   By:      /s/ Itzhak Tawil       /s/      Ofer Nargasi_________________________ | By:      /s/ Irit Eluz      /s/      Yoram Firon012      Smile Telecom Ltd.  By:      /s/ Yoni Tal        /s/      Haim Hoisman_________________________ |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Harel      Insurance Company Ltd                                                                                                                                                                                                                                             | Menora      Mivtachim Insurance Ltd.                                                                                                                                                                                                          |
|  By:      /s/ Itzhak Tawil       /s/      Ofer Nargasi_________________________                                                                                                                                                      | By:      /s/ Rami Armon       /s/      Israel Ezra_________________________                                                                                                                                |
| Manof      Pension Fund Management Ltd.                                                                                                                                                                                                                                      | Menora      Mivtachim Pension Ltd                                                                                                                                                                                                             |
|  By:      /s/ Itzhak Tawil       /s/      Ofer Nargasi_________________________                                                                                                                                                      | By:      /s/ Yoni Tal        /s/      Rami Armon_________________________                                                                                                                             |
| Savings      Fund for the Regular Army – Pension      Fund Management Company Ltd.                                                                                                                                                                                | Menora      Mivtachim Gemel Ltd.                                                                                                                                                                                                         |
|  By:      /s/ Itzhak Tawil       /s/      Ofer Nargasi_________________________                                                                                                                                                      |                                                                                                                                                                                                                                          |
| Dikla      Insurance Company Ltd.                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                          |
|  By:      /s/ Itzhak Tawil       /s/      Ofer Nargasi_________________________                                                                                                                                                      |                                                                                                                                                                                                                                          |
| Gilad      Comprehensive Pension Fund Ltd.                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                          |
|  By:      /s/ Itzhak Tawil       /s/      Ofer Nargasi_________________________                                                                                                                                                      |                                                                                                                                                                                                                                          |
| Harel      Pension Funds Management Ltd                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                          |
|  By:      /s/ Itzhak Tawil       /s/      Ofer Nargasi_________________________                                                                                                                                                      |                                                                                                                                                                                                                                          |
| Harel      Gemel Ltd.                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                          |
|  By:      /s/ Itzhak Tawil       /s/      Ofer Nargasi_________________________                                                                                                                                                      |                                                                                                                                                                                                                                          |
| Atidit      Pension Funds Ltd.                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                          |

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