<PAGE>
                                                            EXHIBIT NO. 4.(a).41

                               AMENDING AGREEMENT
                            TO THE FACILITY AGREEMENT



         Made and entered into as of the 31st day of December 2002, by and
         between:

         (1)  PARTNER COMMUNICATIONS COMPANY LTD. ("PARTNER")


         and

         (2)  BANK LEUMI LE-ISRAEL B.M.; ISRAEL DISCOUNT BANK LTD; BANK
              HAPOALIM B.M.; THE FIRST INTERNATIONAL BANK OF ISRAEL LTD;
              UNITED MIZRAHI BANK LTD.; MERCANTILE DISCOUNT BANK LTD.; and
              CITIBANK N.A. (together, "THE PARTICIPATING BANKS")


         and

         (3)  BANK LEUMI LE-ISRAEL B.M., in its respective capacities as
              Arranger, Facility Agent and Security Trustee


         and

         (4)  BANK HAPOALIM B.M., in its capacity as Coordinating Agent


WHEREAS:      Partner, the Participating Banks, the Arranger, the Facility
              Agent and the Security Trustee are parties to a facility
              agreement dated



<PAGE>


              13 August 1998, as amended and restated through to 28 November
              2002 ("THE FACILITY AGREEMENT"); and

WHEREAS:      Partner and the Participating Banks have agreed: (i) that
              Facility A shall be reduced and that a new Facility, Facility
              C (as defined in the Restated Facility Agreement), shall be
              granted to Partner; (ii) that Bank Hapoalim shall act as
              Coordinating Agent under the Facility Agreement; and (iii) to
              make further amendments to the Facility Agreement, all the
              aforegoing subject to the terms and conditions set out in this
              Amending Agreement below,


NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1.     INTERPRETATION

1.1.     In this Agreement, including the Exhibits hereto:

1.1.1.        "AMENDING AGREEMENT" - means this Amending Agreement;

1.1.2.        "COMMENCEMENT DATE" - means the 5th (fifth) Business Day (or such
              other Business Day as the Instructing Group and Partner may agree)
              following the date on which the Instructing Group is satisfied
              that the condition precedent referred to in clause 3 below has
              been fulfilled in a form and substance reasonably satisfactory to
              the Instructing Group;

1.1.3.        "RESTATED
              FACILITY AGREEMENT" - means the Facility Agreement, as amended and
              restated by this Amending Agreement, the terms of which are set
              out in EXHIBIT 1 hereto and initialled, for the purposes of
              identification, by the parties hereto.

1.2.          Capitalised terms, words and expressions defined in the
              Facility Agreement not otherwise defined herein shall bear the
              same meaning as in the Facility Agreement and all provisions
              of the Facility Agreement concerning matters of construction
              and interpretation shall apply to this Amending Agreement.

1.3.          All references in this Amending Agreement to specific numbered
              clauses of the Facility Agreement are references to those
              numbered clauses as set forth in the conformed copy of the
              Facility Agreement signed on 7 August 2000, as amended by
              further amendments made thereafter to the Facility Agreement,
              (as referred to in the first recital to this Amending
              Agreement).


                                       (2)
<PAGE>


2.     AMENDMENT AND RESTATEMENT OF THE FACILITY AGREEMENT

       With effect from the Commencement Date, the Facility Agreement (including
       the Schedules attached thereto) shall be amended and restated so that it
       shall be read and construed for all purposes as set forth in Exhibit 1
       hereto (which Exhibit shall, for the avoidance of doubt, constitute the
       definitive and binding version of the Facility Agreement as amended by
       this Amending Agreement).

3.     CONDITION PRECEDENT

       This Amending Agreement is subject to the condition precedent that the
       Facility Agent shall have received all of the following documents:

3.1.          a copy, certified a true copy by a duly authorised officer of
              Partner, of the Charter of Partner;

3.2.          copies, certified as true copies by a duly authorised officer of
              Partner, of a Board resolution, audit committee resolution and
              shareholders' resolution of Partner approving the execution,
              delivery and performance of this Amending Agreement and the terms
              and conditions thereof and a board resolution authorising a named
              person or persons to sign each of such Facility Documents and any
              other documents to be delivered by it pursuant thereto;

3.3.          a certificate of a duly authorised officer of Partner setting out
              the names and signatures of the persons authorised to sign on its
              behalf, this Amending Agreement and any other documents to be
              delivered by it pursuant thereto;

3.4.          an opinion of Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.,
              external Israeli counsel to Partner.

       In the event that such condition precedent shall not have been fulfilled
       to the Instructing Group's satisfaction on or before 10:00 a.m., on 5
       January 2003 or such later date as the Facility Agent (upon the
       instructions of the Instructing Group) may agree in writing, then, other
       than clause 7 below, this Amending Agreement shall cease to have any
       force or effect and none of the parties hereto shall have any liability
       in respect therewith and the provisions of the Facility Agreement shall
       remain in full force and effect, unchanged.


                                       (3)
<PAGE>



4.     REPRESENTATIONS AND WARRANTIES

4.1.          Partner hereby represents and warrants to each of the Finance
              Parties: (i) that it has power to enter into this Amending
              Agreement and to perform its obligations hereunder and has taken
              all necessary action to authorise the entry into and performance
              of the transactions contemplated hereunder; and (ii) that this
              Amending Agreement constitutes its legal, valid, binding and
              enforceable obligations.

4.2.          Partner, in respect of itself and each other Obligor, hereby makes
              the representations and warranties set out in clauses 15.2 to
              15.20 of the Facility Agreement to each of the Finance Parties (as
              if, for the avoidance of doubt, each reference in such
              representations and warranties to "the Facility Documents"
              includes a reference to "this Amending Agreement" and "the
              Restated Facility Agreement") and such representations and
              warranties, together with the representations and warranties set
              out in clause 4.1 above, shall be deemed repeated, on the
              Commencement Date and, subject to the provisions of the Restated
              Facility Agreement relating to repetition of representations and
              warranties, also on each date that a Drawdown Request (as defined
              in the Restated Facility Agreement) is made.

4.3.          Without derogating from the generality of the aforegoing, Partner
              hereby represents and warrants that the period of the Licence has
              been extended until 1 February 2022.

5.     COMMISSION

       Partner shall, on the Commencement Date, or if the Commencement Date
       shall occur before 1 January 2003, on 1 January 2003, pay: (i) to each of
       the Participating Banks an upfront fee in an amount equal to the
       proportion which such Participating Bank's aggregate Commitments bears to
       the aggregate Commitments of all the Participating Banks as at 31
       December 2002, of US $450,000 (four hundred and fifty thousand United
       States Dollars); and (ii) to the Arranger the fee specified in the letter
       dated 8 December 2002 from the Arranger to Partner.

6.     GOVERNING LAW AND JURISDICTION

       This Amending Agreement shall be governed by and shall be construed in
       accordance with Israeli law and the competent court of Tel-Aviv-Jaffa
       shall have exclusive jurisdiction to hear any matters, provided that the
       Facility Agent and the Participating Banks shall be entitled to sue
       Partner in any jurisdiction in which it has an office or holds assets.

7.     COUNTERPARTS



                                       (4)
<PAGE>


       This Amending Agreement may be executed in any number of counterparts and
       all of such counterparts taken together shall be deemed to constitute one
       and the same instrument.

8.     COPY TO THE MINISTRY

       Partner shall, as soon as practicable, but not later than 30 (thirty)
       days after the Commencement Date, deliver to the Ministry, for
       information purposes, a copy of the Restated Facility Agreement.

9.     INCORPORATION OF TERMS

       The provisions of clauses 29 (Partial Invalidity), 30 (Amendments) and 37
       (Notices) of the Facility Agreement shall be incorporated into this
       Amending Agreement as if set out in full in this Amending Agreement and
       as if reference in those clauses to the "Facility Documents" or
       "hereunder" are references to this Amending Agreement.


IN WITNESS WHEREOF, THE PARTIES HAVE SIGNED THIS AMENDING AGREEMENT EFFECTIVE AS
OF THE DATE FIRST MENTIONED ABOVE.


PARTNER:

for:   PARTNER COMMUNICATIONS
       COMPANY LTD.

By:
   -------------------------------
Title:
      ----------------------------


THE PARTICIPATING BANKS:

for:  BANK LEUMI LE-ISRAEL B.M.               for:  ISRAEL DISCOUNT BANK LTD.

By:                                           By:
   -------------------------------               -------------------------------
Title:                                        Title:
      ----------------------------                  ----------------------------


for:  BANK HAPOALIM B.M.                      for:  THE FIRST INTERNATIONAL
                                                    BANK OF ISRAEL LTD.

By:                                           By:
   -------------------------------               -------------------------------
Title:                                        Title:
      ----------------------------                  ----------------------------



                                       (5)
<PAGE>



for:  UNITED MIZRAHI BANK LTD.                for:  MERCANTILE DISCOUNT
                                                    BANK LTD.

By:                                           By:
   -------------------------------               ------------------------------
Title:                                        Title:
      ----------------------------                  ----------------------------


for:  CITIBANK N.A.

By:
   -------------------------------
Title:
      ----------------------------


for:  BANK LEUMI LE-ISRAEL B.M.               for:  BANK HAPOALIM B.M.
      (in its capacity as Security Trustee,         (in its capacity as
      Arranger and Facility Agent)                   Coordinating Agent)

By:                                           By:
   -------------------------------               ------------------------------
Title:                                        Title:
      ----------------------------                  ---------------------------



                                       (6)
<PAGE>


                                   Exhibit "1"
                              AMENDED AND RESTATED
                               FACILITY AGREEMENT





                              DATED 13 AUGUST 1998





                 (AS AMENDED AND RESTATED BY THE PARTIES THROUGH
                 31 DECEMBER 2002), BETWEEN, INTER ALIA, PARTNER
                       COMMUNICATIONS COMPANY LTD., AS THE
                      BORROWER AND THE PARTICIPATING BANKS





                                       (7)
<PAGE>




                                TABLE OF CONTENTS

<Table>
<Caption>
CLAUSE NO.                                                                                          PAGE
===============================================================================================================================

<S>                                                                                                   <C>
1.                INTERPRETATION.......................................................................1
1.1.                     Definitions...................................................................1
1.2.                     Accounts......................................................................1
1.3.                     Interpretation................................................................1
1.4.                     Currency Symbols..............................................................1
1.5.                     Statutes......................................................................1
1.6.                     Agreements....................................................................1

2.                THE FACILITIES.......................................................................1
2.1.                     The Facilities................................................................1
2.2.                     Conversion of Outstanding Advances--Deleted...................................1
2.3.                     Lenders' Rights and Obligations...............................................1
2.4.                     Purpose.......................................................................1

3.                CONDITIONS PRECEDENT--Deleted........................................................1

4.                DRAWDOWNS............................................................................1
4.1.                     First Drawdown Request--Deleted...............................................1
4.2.                     Drawdown Request..............................................................1
4.3.                     Participating Bank's Participation............................................1
4.4.                     Notification of Advance--Deleted..............................................1
4.5.                     Outstandings in Proportion to Commitments.....................................1

5.                REPAYMENT............................................................................1
5.1.                     Repayment of Facility A Loan..................................................1
5.2.                     Repayment of Facility B Loan..................................................1
5.3.                     Repayment of Facility C Loan..................................................1
5.4.                     Currency of Repayment.........................................................1

6.                VOLUNTARY PREPAYMENT AND REBORROWING.................................................1
6.1.                     Prepayment....................................................................1
6.2.                     Conditions to Prepay..........................................................1
6.3.                     Effects of Notice of Prepayment...............................................1
6.4.                     Reborrowing...................................................................1

7.                MANDATORY PREPAYMENT.................................................................1
7.1.                     Non-Compliance with Corrective Milestones--Deleted............................1
7.2.                     Disposals.....................................................................1
7.3.                     Investment by Partner in Subsidiaries.........................................1
7.4.                     Terms for Mandatory Prepayment................................................1

8.                INTEREST.............................................................................1
8.1.                     Interest Rate.................................................................1
8.2.                     Payment of Interest...........................................................1
8.3.                     Default Interest..............................................................1

9.                SUBSTITUTE INTEREST RATES............................................................1
9.1.                     Unavailable or Indeterminable Interest Rate...................................1
9.2.                     Negotiations for Determining Alternative Basis................................1
9.3.                     Agreed Alternative Basis......................................................1
9.4.                     Failure to Agree on Alternative Basis.........................................1
9.5.                     Return to Regular Determination Basis.........................................1

10.               COMMISSIONS, FEES AND EXPENSES.......................................................1
</Table>


<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
CLAUSE NO.                                                                                          PAGE
===============================================================================================================================

<S>                                                                                                   <C>
10.1.                    Commitment Commission--Facility A and Facility B..............................1
10.2.                    Applicable Percentage.........................................................1
10.2A.                   Commitment Commission--Facility C............................................67
10.3.                    Annual Payment to Security Trustee............................................1
10.4.                    Facility Agent's Fee..........................................................1
10.5.                    Payment of Upfront Fee--Deleted...............................................1
10.5A                    Coordinating Agent's Fee.....................................................68
10.6.                    Expenses......................................................................1
10.7.                    Stamp Taxes...................................................................1
10.8.                    Customary Commissions and Charges.............................................1

11.               TAXES................................................................................1
11.1.                    Tax Gross-Up..................................................................1
11.2.                    Notification of Requirement to Deduct Tax.....................................1
11.3.                    Evidence of Payment of Tax....................................................1
11.4.                    Tax Saving....................................................................1

12.               INCREASED COSTS......................................................................1
12.1.                    Increased Costs...............................................................1
12.2.                    Exceptions....................................................................1

13.               ILLEGALITY...........................................................................1

14.               MITIGATION...........................................................................1
14.1.                    Mitigation....................................................................1
14.2.                    Replacement of a Bank.........................................................1

15.               REPRESENTATIONS AND WARRANTIES.......................................................1
15.1.                    Representations and Warranties................................................1
15.2.                    Status........................................................................1
15.3.                    Powers and Authority..........................................................1
15.4.                    Legal Validity................................................................1
15.5.                    Non-Conflict..................................................................1
15.6.                    No Default...................................................................76
15.7.                    Consents......................................................................1
15.8.                    Accounts......................................................................1
15.9.                    Litigation....................................................................1
15.10.                   Tax Liabilities...............................................................1
15.11.                   Encumbrance...................................................................1
15.12.                   Business Plan.................................................................1
15.13.                   Ownership of Assets...........................................................1
15.14.                   Documents.....................................................................1
15.15.                   Intellectual Property Rights..................................................1
15.16.                   Environmental Matters.........................................................1
15.17.                   Ranking of Security...........................................................1
15.18.                   Material Contracts............................................................1
15.19.                   Ownership of Partner..........................................................1
15.20.                   Borrowings....................................................................1
15.21.                   Repetition....................................................................1

16.               UNDERTAKINGS.........................................................................1
16.1.                    Duration......................................................................1
16.2.                    Financial Information........................................................83
16.3.                    Information-Miscellaneous.....................................................1
</Table>


                                      (b)
<PAGE>


                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
CLAUSE NO.                                                                                          PAGE
===============================================================================================================================

<S>                                                                                                   <C>
16.4.                    Audit and Accounting Dates....................................................1
16.5.                    Accounting Standards..........................................................1
16.6.                    Negative Pledge...............................................................1
16.7.                    Sale and Leaseback............................................................1
16.8.                    Disposals.....................................................................1
16.9.                    Pari Passu Ranking............................................................1
16.10.                   Loans and Guarantees.........................................................94
16.11.                   Operating Leases..............................................................1
16.12.                   Receivables Discounting.......................................................1
16.13.                   Investments...................................................................1
16.14.                   Restricted Distributions......................................................1
16.15.                   Share Capital.................................................................1
16.16.                   Intellectual Property Rights..................................................1
16.17.                   Environmental Matters.........................................................1
16.18.                   Insurance.....................................................................1
16.19.                   Notification of Default.......................................................1
16.20.                   Change of Business............................................................1
16.21.                   Acquisitions and Mergers......................................................1
16.22.                   Borrowings....................................................................1
16.23.                   Arm's-Length Terms............................................................1
16.24.                   Compliance with Laws..........................................................1
16.25.                   Consents and Authorisations.................................................107
16.26.                   Licence.......................................................................1
16.27.                   Material Contracts and Constitutional Documents...............................1
16.28.                   Auditors......................................................................1
16.29.                   Hedging Agreements............................................................1
16.30.                   Subsidiaries..................................................................1
16.31.                   Taxation......................................................................1
16.32.                   Financial Undertakings........................................................1
16.33.                   Access........................................................................1
16.34.                   Interconnection...............................................................1
16.35.                   Reserve Account...............................................................1
16.36.                   Utilisation of Proceeds of Facilities.........................................1
16.37.                   Loans, Guarantees and Investments in Subsidiaries.............................1
16.38.                   Share Pledges.................................................................1
16.39.                   Non-Acquisition by Subsidiary.................................................1

17.               DEFAULT............................................................................118
17.1.                    Events of Default.............................................................1
17.2.                    Non-Payment...................................................................1
17.3.                    Breach of Obligations.........................................................1
17.4.                    Misrepresentation/Breach of Warranty..........................................1
17.5.                    Cross-Acceleration and Cross-Default..........................................1
17.6.                    Invalidity....................................................................1
17.7.                    Insolvency and Rescheduling...................................................1
17.8.                    Winding-Up....................................................................1
17.9.                    Execution or Distress.........................................................1
17.10.                   Analogous Events..............................................................1
17.11.                   Governmental Intervention.....................................................1
17.12.                   Cessation.....................................................................1
</Table>


                                      (c)


<PAGE>


                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
CLAUSE NO.                                                                                          PAGE
===============================================================================================================================

<S>                                                                                                   <C>
17.13.                   Proceedings...................................................................1
17.14.                   Breach of the Licence or any Authorisation....................................1
17.15.                   Material Adverse Change.......................................................1
17.16.                   Breach of Material Contracts..................................................1
17.17.                   Repudiation...................................................................1
17.18.                   Counterparties................................................................1
17.19.                   Shareholders..................................................................1
17.20.                   Change of Ownership...........................................................1
17.21.                   Balance in Reserve Account....................................................1
17.22.                   Mandatory Prepayment..........................................................1
17.23.                   No Trading in Securities......................................................1
17.24.                   Non-Compliance with any Securities Authority..................................1
17.25.                   Acceleration..................................................................1
17.26.                   Advances Due on Demand........................................................1
17.27.                   Indemnity.....................................................................1

18.               AGENCY PROVISIONS....................................................................1
18.1.                    Appointment...................................................................1
18.2.                    Facility Agent's Obligation...................................................1
18.2A                    Coordinating Agent's Obligation.............................................130
18.3.                    Discretions...................................................................1
18.4.                    Excluded Obligations..........................................................1
18.5.                    Indemnification...............................................................1
18.6.                    Exclusion of Liabilities......................................................1
18.7.                    No Actions....................................................................1
18.8.                    Participating Bank's Responsibility...........................................1
18.9.                    Resignation...................................................................1
18.10.                   Successor Agent.............................................................134
18.11.                   Rights and Obligations........................................................1
18.12.                   Business with the Group.......................................................1

19.               BROKEN FUNDING INDEMNITY.............................................................1
19.1.                    Broken Funding Indemnity for US Dollars and Euros.............................1
19.2.                    Broken Funding Indemnity for NIS..............................................1
19.3.                    Partner's Indemnity...........................................................1

20.               CURRENCY OF ACCOUNT..................................................................1
20.1.                    Currency of Account...........................................................1
20.2.                    Currency Indemnity............................................................1

21.               PAYMENTS WITHOUT SET-OFF.............................................................1

22.               SET-OFF..............................................................................1

23.               APPLICATION AND REDISTRIBUTION OF PAYMENTS...........................................1
23.1.                    Application of Payments.......................................................1
23.2.                    Partial Payments..............................................................1
23.3.                    Redistribution on or after Default Date.......................................1
23.4.                    Repayable Recoveries..........................................................1
23.5.                    Recoveries Through Legal Proceedings..........................................1

24.               CALCULATIONS AND EVIDENCE OF DEBT....................................................1
24.1.                    Basis of Accrual..............................................................1
24.2.                    Evidence of Debt..............................................................1
24.3.                    Prima Facie Evidence..........................................................1
</Table>


                                      (d)


<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
CLAUSE NO.                                                                                          PAGE
===============================================================================================================================

<S>                                                                                                   <C>
24.4.                    Certificates of Participating Banks...........................................1

25.               GUARANTEE AND INDEMNITY..............................................................1
25.1.                    Guarantee.....................................................................1
25.2.                    Indemnity.....................................................................1
25.3.                    Additional Security...........................................................1
25.4.                    Continuing Obligations........................................................1
25.5.                    Obligations not Discharged....................................................1
25.6.                    Settlement Conditional........................................................1
25.7.                    Exercise of Rights............................................................1
25.8.                    Deferral of Guarantor's Rights................................................1
25.9.                    Suspense Accounts.............................................................1
25.10.                   Waiver by Guarantor...........................................................1

26.               ADDITIONAL GUARANTORS AND SECURITY...................................................1
26.1.                    Additional Guarantors.........................................................1
26.2.                    Security......................................................................1

27.               ASSIGNMENTS AND TRANSFERS............................................................1
27.1.                    Binding Agreement.............................................................1
27.2.                    No Assignments and Transfers by the Obligors..................................1
27.3.                    Assignments and Transfers by Participating Banks..............................1
27.4.                    Assignments by Participating Banks............................................1
27.5.                    Transfers by Participating Banks..............................................1
27.6.                    Disclosure of Information.....................................................1
27.7.                    No Increased Costs............................................................1

28.               COSTS AND EXPENSES...................................................................1
28.1.                    Agents' Costs.................................................................1
28.2.                    Amendment Costs...............................................................1
28.3.                    Participating Banks' Liabilities for Costs....................................1

29.               PARTIAL INVALIDITY...................................................................1

30.               AMENDMENTS...........................................................................1

31.               INFORMATION..........................................................................1

32.               RELEASE OF SHARE PLEDGES.............................................................1
32.1.                    Share Pledges.................................................................1
32.2.                    Release of Share Pledges......................................................1
32.3.                    Distribution of Tapuz Shares--Deleted.........................................1

33.               RESPONSE TO REQUESTS FOR APPROVAL OR CONFIRMATION....................................1

34.               COUNTERPARTS.........................................................................1

35.               GOVERNING LAW AND JURISDICTION.......................................................1

36.               REMEDIES AND WAIVERS.................................................................1

37.               NOTICES..............................................................................1
37.1.                    Communications through Facility Agent.........................................1
37.2.                    Manner of Delivery............................................................1

38.               CONFIDENTIALITY......................................................................1

39.               ENTIRE AGREEMENT.....................................................................1
</Table>


                                      (e)

<PAGE>



<Table>
<Caption>
   SCHEDULES                  DESCRIPTION
========================================================================================================================
<S>                           <C>

   SCHEDULE 1                 Participating Banks' respective Commitments

   SCHEDULE 2                 Form of Drawdown Request

   SCHEDULE 3                 List of Facility Documents

   SCHEDULE 4                 Form of Guarantor Accession Agreement

   SCHEDULE 5                 List of Material Contracts

   SCHEDULE 6                 Shareholder Loans Subordination Conditions

   SCHEDULE 7                 Reservations

   SCHEDULE 8                 List of Security Documents

   SCHEDULE 9                 Principal Shareholders in Partner

   SCHEDULE 10                Form of Transfer Certificate

   SCHEDULE 11                Deleted

   SCHEDULE 12                Deleted

   SCHEDULE 13                Deleted

   SCHEDULE 14                Deleted

   SCHEDULE 15                Part A--Schedule for Reduction of Facility A
                              Part B--Schedule for Reduction of Facility C

   SCHEDULE 16                Certificate by Partner's Chief Financial Officer permitting prepayment from Permitted
                              Sources

   SCHEDULE 17                Pending Legal Actions concerning Partner

   SCHEDULE 18                Tax Liabilities

   SCHEDULE 19                Quarterly report to be submitted to the Participating Banks and the Facility Agent

   SCHEDULE 20                Form of letter by Partner to the Auditors

   SCHEDULE 21                Deleted

   SCHEDULE 22                Deleted

   SCHEDULE 23                Documents required in relation to Acceding Guarantors
</Table>



<PAGE>



              THIS AGREEMENT was made on 13 August 1998 and amended and restated
              by the parties through 31 December 2002, the parties hereto, as at
              31 December 2002, being:

              (1) PARTNER COMMUNICATIONS COMPANY LTD. ("PARTNER")


              AND

              (2) BANK LEUMI LE-ISRAEL B.M., ISRAEL DISCOUNT BANK LTD., BANK
                  HAPOALIM B.M., THE FIRST INTERNATIONAL BANK OF ISRAEL LTD.,
                  UNITED MIZRAHI BANK LTD., MERCANTILE DISCOUNT BANK LTD. and
                  CITIBANK N.A.
                  (together, "THE PARTICIPATING BANKS")


              AND

              (3) BANK LEUMI LE-ISRAEL B.M., in its respective capacities as
                  Arranger, Facility Agent and Security Trustee


              AND

              (4) BANK HAPOALIM B.M., in its capacity as Coordinating Agent



10.    INTERPRETATION

10.1.    DEFINITIONS

         In this Agreement, the following terms have the meanings given to them
         in this clause 1.1:

10.1.1.           "ACCOUNTING PERIOD" in relation to any person means any
                  period of approximately 3 (three) months, 6 (six) months or 1
                  (one) year for which Accounts of such person are prepared;


                                      (1)


<PAGE>


                                       -2-


10.1.2.           "ACCOUNTS" means at any time and from time to time:

                  (a)  the latest audited non-consolidated annual financial
                       statements of Partner;

                  (b)  the latest audited annual financial statements of each
                       Subsidiary of Partner;

                  (c)  the latest unaudited reviewed non-consolidated half-
                       yearly financial statements of Partner;

                  (d)  the latest unaudited reviewed half-yearly financial
                       statements of each Subsidiary of Partner;

                  (e)  the latest audited consolidated annual financial
                       statements of Partner;

                  (f)  the latest unaudited reviewed quarterly consolidated
                       financial statements of Partner,

                  delivered or required to be delivered to the Participating
                  Banks hereunder (together with all those notes thereto and
                  certificates required to be attached thereto), or such of
                  those accounts as the context requires;

10.1.3.           "ACQUISITION" means the acquisition directly or indirectly
                  (whether by one transaction or by a series of related
                  transactions) of any interest whatsoever in the share capital
                  (or equivalent) or the business or undertaking (including any
                  franchise rights) or assets constituting a separate business
                  or undertaking of any company or other person;

10.1.4.           "ADDITIONAL GUARANTOR" means any entity which becomes party to
                  this Agreement as a Guarantor by virtue of its execution of a
                  Guarantor Accession Agreement;

10.1.5.           "ADSCR" means EBITDA after SAC/Debt Service;

10.1.6.           "ADVANCE" means an advance made or to be made under the
                  Facilities or the principal amount thereof (for the removal
                  of doubt, together with any Linkage Differentials in
                  respect of such principal) outstanding from time to time;

10.1.7.           "AFFILIATE" means in relation to a Participating Bank, and to
                  any other company or any corporation, the Holding Company of
                  that


<PAGE>


                                       -3-


                  Participating Bank, company or corporation and any person over
                  20% (twenty percent) of whose capital is beneficially owned,
                  or the majority of whose voting rights are exercised, directly
                  or indirectly by that Participating Bank, company or
                  corporation or any Holding Company of that Participating Bank,
                  company or corporation provided that, for the purpose of
                  clause 27.3 (Assignments and Transfers by Participating Banks)
                  below the reference to 20% (twenty percent) shall be deemed to
                  be a reference to 50% (fifty percent);

10.1.8.           "AGENTS" means the Facility Agent, the Coordinating Agent, the
                  Security Trustee and the Arranger;

10.1.9.           "AMENDING AND RESCHEDULING AGREEMENT" means the Amending and
                  Rescheduling Agreement dated 9 July 2000 between the parties
                  to this Agreement, amending the Original Facility Agreement
                  with effect from the Effective Date;

10.1.10.          "APPLICABLE ACCOUNTING PRINCIPLES" means in relation to
                  Partner or any Subsidiary of Partner, the accounting
                  principles and practices generally accepted in its
                  jurisdiction of incorporation and/or where its securities are
                  listed for trading, reconciled to the extent necessary in
                  accordance with the generally accepted accounting principles
                  in the United States of America;

10.1.11.          "ARRANGER" means Bank Leumi Le-Israel B.M.;

10.1.12.          "AUDITORS" means any internationally recognised firm of
                  accountants or a leading firm of independent Israeli auditors
                  affiliated to an internationally recognised firm of
                  accountants;

10.1.13.          "AUTHORISATIONS" means at any time all consents, approvals,
                  authorisations, concessions, permits and licences (including
                  Environmental Licences but excluding the Licence), and all
                  filings, registrations and agreements with any government or
                  other regulatory authority necessary in order to enable the
                  Group to install, establish, maintain and operate the Network
                  at such time;

10.1.14.          "AVAILABLE COMMITMENT" means the Available Facility A
                  Commitment, the Available Facility B Commitment and the
                  Available Facility C Commitment or any of them, as the context
                  may require;

10.1.15.          "AVAILABLE FACILITY A COMMITMENT" means, in relation to a
                  Participating Bank at any time, its Commitment under Facility
                  A at such time, less the difference between: (i) the aggregate
                  Original

<PAGE>


                                       -4-

                  Dollar Amount of all Advances made by such Participating Bank
                  (and taking into account, where relevant, any Advances not yet
                  made but Drawdown Requests in respect of which have been
                  submitted to such Participating Bank) under Facility A at such
                  time; and (ii) the Original Dollar Amount of all Advances
                  under Facility A prepaid or repaid by Partner to such
                  Participating Bank, which are capable of being reborrowed
                  under clauses 5.1.2.(c), 6.4.1, 7.2.2 or 7.3 (Investment by
                  Partner in Subsidiaries) below;

10.1.16.          "AVAILABLE FACILITY B COMMITMENT" means, in relation to a
                  Participating Bank at any time, its Commitment under Facility
                  B at such time less the Dollar Amount of the aggregate amount
                  of all outstanding Advances (for the removal of doubt,
                  together with any Linkage Differentials on such Advances) made
                  by such Participating Bank (and taking into account, where
                  relevant, any Advances not yet made but Drawdown Requests in
                  respect of which have been submitted to such Participating
                  Bank) under Facility B at such time;

10.1.17.          "AVAILABLE FACILITY C COMMITMENT" means, in relation to a
                  Participating Bank at any time, its Commitment under Facility
                  C at such time, less the difference between: (i) the aggregate
                  Original Dollar Amount of all Advances made by such
                  Participating Bank (and taking into account, where relevant,
                  any Advances not yet made but Drawdown Requests in respect of
                  which have been submitted to such Participating Bank) under
                  Facility C at such time; and (ii) the Original Dollar Amount
                  of all Advances under Facility C prepaid or repaid by Partner
                  to such Participating Bank, which are capable of being
                  reborrowed under clauses 5.3.2.(c), 6.4.1, 7.2.2 or 7.3
                  (Investment by Partner in Subsidiaries) below;

10.1.18.          "AVAILABILITY PERIOD FACILITY A" means the period ending on
                  31 March 2003;

10.1.19.          "AVAILABILITY PERIOD FACILITY C" means the period ending on
                  December 31, 2004;

10.1.20.          "BANK HAPOALIM" means Bank Hapoalim B.M.;

10.1.21.          "BEZEQ" means Bezeq, Israel Telecommunication Corporation
                  Ltd., a company incorporated under the laws of Israel;

10.1.22.          "BEZEQ INTERCONNECTION AGREEMENT" means the Interconnection
                  Agreement entered into or to be entered into with Bezeq or any
                  other agreement with Bezeq (whether written or expressed by
                  conduct)


<PAGE>


                                       -5-


                  pursuant to which Bezeq provides interconnection
                  infrastructure and services to Partner;

10.1.23.          "BLL" means Bank Leumi Le-Israel B.M.;

10.1.24.          "BOND RATE" means the rate which is the aggregate of:

                  (a)   the arithmetic mean of the Average Daily Yield; the
                        "AVERAGE DAILY YIELD" being the arithmetic mean of the
                        gross yield to maturity (rounded upwards, if necessary,
                        to four decimal places) as published by the Tel-Aviv
                        Stock Exchange Ltd. ("TASE"), of six series of fixed
                        rate bonds issued by the State of Israel and listed on
                        the TASE and having a remaining period until maturity
                        the same as, or closest to, the average duration (taking
                        account of repayments) of the relevant Advance during
                        the Duration Period of such Advance, denominated in NIS
                        and fully linked to the Cost of Living Index, in each of
                        the 10 (ten) (or, in the event that under clause
                        1.1.105(b) below the minimum prior notice for Drawdown
                        of the relevant Advance is 5 (five) Business Days, then
                        5 (five)) trading days of the TASE immediately preceding
                        the beginning of the Duration Period of such Advance;
                        all as determined by the Participating Bank by which
                        such Advance is to be made on the first day of such
                        Duration Period; and

                  (b)   0.60% (nought point sixty percent);

10.1.25.          "BORROWING" means any Indebtedness in respect of or pursuant
                  to:

                  (a)   monies borrowed or monies raised which are in the nature
                        of borrowings or having the commercial effect of
                        borrowing (including monies raised by the sale of
                        receivables, invoices, bills or notes or other financial
                        assets on terms that recourse may be had to the vendor
                        in the event of non-payment of such receivables,
                        invoices, bills or financial assets when due) and monies
                        raised under acceptance credit facilities and through
                        the issue of bonds, notes, debentures, bills, loan
                        stocks and other debt securities (including any debt
                        security convertible, but not at the relevant time
                        converted, into share capital);

                  (b)   the acquisition cost of assets or services to the extent
                        payable on deferred payment terms more than 180 (one
                        hundred and eighty) days after the time of acquisition
                        or possession thereof by the party liable (whether or
                        not evidenced by any bond, note, debenture, loan stock
                        or other debt security), excluding any such


<PAGE>


                                       -6-


                        cost payable on deferred payment terms which are treated
                        as trade creditors in accordance with the Applicable
                        Accounting Principles;

                  (c)   monies received in consideration for the supply of goods
                        and/or services to the extent received more than 6 (six)
                        months before the due date for such supply (but
                        excluding any liability in respect of bona fide progress
                        payments and deposits received from customers in the
                        ordinary course of trade or any other liability treated
                        as trade creditors in accordance with the Applicable
                        Accounting Principles) where such arrangement is entered
                        into primarily as a method of raising finance;

                  (d)   leases (whether in respect of land, machinery, equipment
                        or otherwise) and hire purchase agreements, conditional
                        sale agreements, sale and lease back, sale and
                        repurchase and similar agreements and instruments,
                        provided in the case of leases they are treated as
                        finance leases in accordance with Applicable Accounting
                        Principles; and/or

                  (e)   any guarantee, indemnity or other legally binding
                        instrument to assure payment of, or against loss in
                        respect of non-payment of, any of the indebtedness
                        specified in this definition and any counter-indemnity
                        in respect of any thereof or in respect of any letter of
                        credit or guarantee issued by any bank or other
                        financial institution in respect of any indebtedness
                        referred to in this definition;

                  provided that in computing an amount of Borrowings of any
                  person or persons:

                  (i)   in respect of paragraph (d) only the liability for
                        future payments under the finance lease as determined in
                        accordance with the Applicable Accounting Principles
                        shall be included;

                  (ii)  any item falling within paragraph (e) shall be included
                        only to the extent that the same is required by the
                        Applicable Accounting Principles to be quantified in the
                        consolidated balance sheet included in consolidated
                        Accounts of the Group, or in any notes to those
                        Accounts, were any then to be prepared;

                  (iii) any item falling within paragraph (e) shall not be
                        included if it relates to indebtedness of another
                        member of the Group already taken into account for the
                        purposes of such calculation; and


<PAGE>


                                       -7-


                  (iv)  such computation shall exclude any double counting;

10.1.26.          "BUSINESS" means the business of installing, establishing,
                  maintaining and operating a wireless telephony service in
                  Israel as contemplated by the License and any other related
                  business or activity which may be conveniently or
                  advantageously carried on in connection or conjunction with
                  such business;

10.1.27.          "BUSINESS DAY" means:

                  (a)   with respect to payment or purchase of sums denominated
                        in:

                        (i)  US Dollars, as a reference to a day (other than a
                             Saturday or Sunday) on which banks generally are
                             open for business in New York and Tel-Aviv;

                        (ii) Euros, as a reference to a day on which the
                             Trans-European Automated Real-Time Gross Settlement
                             Express Transfer payment system is open for
                             settlement of payments in Euros and on which banks
                             generally are open for business in Tel-Aviv and

                       (iii) NIS, as a reference to a day (other than a
                             Saturday) on which banks generally are open for
                             business in Tel-Aviv; and

                  (b)   in all other cases, as a reference to a day (other than
                        a Saturday) on which banks generally are open for
                        business in Tel Aviv;

10.1.28.          "BUSINESS PLAN" means the business plan (including the long
                  term management forecasts contained therein) of Partner dated
                  7 July 2002, a copy of which was delivered to the Facility
                  Agent and to the Coordinating Agent on 11 July 2002, as such
                  business plan is updated from time to time pursuant to this
                  Agreement;

10.1.29.          "CAPITAL ADEQUACY REQUIREMENT" means a request or requirement
                  relating to the maintenance of capital from any central bank
                  or other fiscal, monetary or other authority;

10.1.30.          "CAPITAL EXPENDITURE" means any expenditure which should be
                  treated as capital expenditure in the audited non-consolidated
                  Accounts of Partner in accordance with the Applicable
                  Accounting Principles;


<PAGE>


                                       -8-


10.1.31.          a "CHANGE OF OWNERSHIP" shall occur when:

                  (a)   the HTL Group ceases to hold, directly or indirectly,
                        a portion of Partner's equity share capital which
                        carries at least 30% (thirty percent) of the voting
                        rights in Partner; or

                  (b)   the HTL Group, Matav, Elbit, Eurocom Communications
                        Limited, Hapoalim Electronic Communication Ltd. and
                        Tapuz Cellular Systems Ltd. taken together, cease to
                        hold, directly or indirectly, a portion of Partner's
                        equity share capital which carries at least 51%
                        (fifty-one percent) of the voting rights in Partner; or

                  (c)   HWL ceases to hold, directly or indirectly, at least 51%
                        (fifty-one percent) of the equity share capital of HTL.

                  For the avoidance of doubt, in calculating any indirect
                  percentage ownership interest, account shall be taken of any
                  intermediate holding companies which are not wholly-owned
                  Subsidiaries and the indirect percentage ownership interest
                  shall be reduced on a proportionate basis accordingly;

10.1.32.          "CHARGOR" means any Shareholder which is party to a Share
                  Pledge and "CHARGORS" means all of them;

10.1.33.          "CHARTER" means, in respect of any company, corporation,
                  partnership, governmental agency or other enterprise, its
                  founding act, articles of incorporation and by-laws,
                  memorandum and articles of association, articles of
                  partnership, statute or similar instrument and other founding
                  documents;

10.1.34.          "COMMITMENT" means, in relation to a Participating Bank and a
                  Facility at any time, the amount in US Dollars set opposite
                  its name in SCHEDULE 1 (Participating Banks' respective
                  Commitments) in relation to such Facility as reduced or
                  cancelled from time to time in accordance with this Agreement;

10.1.35.          "COMMENCEMENT DATE" shall have the same meaning ascribed to
                  such term in the Amending Agreement to the Facility Agreement
                  dated as of 31 December 2002 made between: (1) Partner; (2)
                  the Participating Banks; (3) BLL, in its respective capacities
                  as, Arranger, Facility Agent and Security Trustee; and (4)
                  Bank Hapoalim, in its capacity as Coordinating Agent;


<PAGE>


                                       -9-


10.1.36.          "CONTRIBUTION" means, in relation to a Participating Bank at
                  any time, the aggregate Dollar Amount of all Advances (for the
                  removal of doubt, together with any Linkage Differentials on
                  such Advances) made by such Participating Bank under each of
                  Loan A, Loan B and Loan C outstanding at such time or, as the
                  context may require, the aggregate Dollar Amount of all such
                  Advances;

10.1.37.          "COORDINATING AGENT" means Bank Hapoalim or, in the event Bank
                  Hapoalim shall resign as Coordinating Agent pursuant to clause
                  18.9 (Resignation) below, the Facility Agent and its
                  respective successors as referred to in clause 18.10
                  (Successor Agent) below;

10.1.38.          "COST OF LIVING INDEX" means the index known as the Consumer
                  Price Index (Cost of Living Index) including fruit and
                  vegetables and published by the Israeli Central Bureau of
                  Statistics, including such index even if published by any
                  other official Israeli institution, and also including every
                  official index in substitution therefor, whether based on the
                  same data on which the existing index is based or not. If such
                  index be substituted by another index published by any such
                  body or institution and such body or institution has not
                  prescribed the relationship between the former and the
                  substitute index, such relationship shall be prescribed by the
                  Israeli Central Bureau of Statistics and, in the event such
                  relationship has not been so prescribed, the Facility Agent
                  shall determine the relationship between such index and the
                  substitute index in consultation with economic experts
                  selected by it and applied by the Facility Agent to its other
                  linked accounts;

10.1.39.          "COUNTERPARTY" means each party to a Material Contract set out
                  in paragraphs (a), (c) and (d) of Schedule 5 (Material
                  Contracts) hereto) and Bezeq or any successor providing
                  equivalent interconnection services to Bezeq, in each case
                  other than an Obligor;

10.1.40.          "CURRENCY HEDGE PROVIDER" means any counterparty to any
                  Currency Hedging Agreement entered into by Partner.

10.1.41.          "CURRENCY HEDGING AGREEMENT" means any agreement entered into
                  by Partner for the purposes of entering into one or more
                  Currency Hedging Transactions.

10.1.42.          "CURRENCY HEDGING TRANSACTION" includes any foreign exchange
                  transaction, currency swap transaction, cross currency rate
                  swap


<PAGE>
                                      -10-


                  transaction, currency option or other similar transaction
                  (including any option with respect thereto and any combination
                  in respect thereof);

10.1.43.          "DANGEROUS SUBSTANCE" means any radioactive or electromagnetic
                  emissions and any natural or artificial substance (whether in
                  the form of a solid, liquid, gas or vapour) the generation,
                  transportation, storage, treatment, use or disposal of which
                  (whether alone or in combination with any other substance) and
                  including (without limitation) any controlled, special,
                  hazardous, toxic, radioactive or dangerous waste, gives rise
                  to a risk of causing harm to man or any other living organism
                  or damaging the Environment or public health;

10.1.44.          "DEBENTURE" means the debenture dated 10 September 1998
                  between Partner and the Security Trustee, as amended;

10.1.45.          "DEBT SERVICE" means, in relation to each Ratio Period. the
                  sum of: (i) Financial Costs in respect of such Ratio Period;
                  (ii) the scheduled repayments of principal under the
                  Facilities (together with any Linkage Differentials (to the
                  extent not taken into account in the Financial Costs in
                  respect of any preceding Ratio Period (provided that such
                  preceding Ratio Period commences from 1 January 2002 or
                  thereafter)) in respect of such principal), in respect of such
                  Ratio Period; and (iii) scheduled repayments of principal
                  under Permitted Borrowings (together with any Linkage
                  Differentials in respect of such principal), in respect of
                  such Ratio Period;

10.1.46.          "DEFAULT DATE" means the first date on which the Facility
                  Agent serves a notice under clause 17.26 (Advances Due on
                  Demand) below or the date after an Event of Default which an
                  Instructing Group determines is the Default Date;

10.1.47.          "DOLLAR AMOUNT" means at any time:

                  (a)   in relation to an Advance denominated in US Dollars, the
                        outstanding amount of such Advance at such time;

                  (b)   in relation to an Advance denominated in NIS, the Dollar
                        equivalent of the outstanding NIS amount of such Advance
                        at such time, together, for the removal of doubt, with
                        all Linkage Differentials on such Advance;

                  (c)   in relation to an Advance denominated in Euros, the
                        Dollar equivalent of the outstanding Euro amount of such
                        Advance at such time;


<PAGE>
                                      -11-


10.1.48.                "DORMANT COMPANY" means any Subsidiary of Partner
                        designated as a dormant company provided that (and for
                        so long only as) it does not trade (whether for itself
                        or as agent for another) or does not own legally and/or
                        beneficially any property or assets;

10.1.49.                "DOUBLE TAXATION TREATY" means any convention or
                        agreement between the government of Israel and any other
                        government for the avoidance of double taxation;

10.1.50.                "DRAWDOWN DATE" means, in respect of any Drawdown
                        Request, the proposed date for the making of the
                        relevant Advance as set out in the relevant Drawdown
                        Request;

10.1.51.                "DRAWDOWN REQUEST" means a notice substantially in the
                        form set out in SCHEDULE 2 (Drawdown Request) hereto;

10.1.52.                "DURATION PERIOD" means:

                        (a) in relation to an Advance made under Facility A or
                            Facility C, the period commencing on the date on
                            which the relevant Advance is made and expiring on
                            the expiry date designated in the relevant Drawdown
                            Request; provided that: (i) such expiry date shall
                            not be less than 12 (twelve) months after the date
                            such Advance is to be made under the relevant
                            Drawdown Request; (ii) such period is a period
                            customary at the relevant Participating Bank, having
                            regard to the currency, amount and type of Advance
                            requested under the relevant Drawdown Request; (iii)
                            in the case of an Advance under Facility A, such
                            expiry date shall not be later than the Facility A
                            Maturity Date and, in the case of an Advance under
                            Facility C, such expiry date shall not be later than
                            the Facility C Maturity Date; and (iv) such expiry
                            date shall be the last Interest Payment Date for
                            such Advance; and

                        (b) in relation to an Advance made under Facility B, the
                            period commencing on the date on which the relevant
                            Advance is made and expiring on the expiry date
                            designated in the relevant Drawdown Request;
                            provided that: (i) such expiry date shall not be
                            more than 12 (twelve) months after the date such
                            Advance is to be made under the relevant Drawdown
                            Request; (ii) such expiry date shall be the last
                            Interest Payment Date for such Advance; (iii) such
                            period is a period customary at the relevant
                            Participating Bank, having regard to the currency,
                            amount and


<PAGE>
                                      -12-


                            type of Advance requested under the relevant
                            Drawdown Request; and (iv) such expiry date shall
                            not be later than June 30, 2008;





<PAGE>
                                      -13-



10.1.53.          "EBITDA AFTER SAC" means, in respect of any Ratio Period:

                  (1)   the sum of the following, all as appearing in Partner's
                        non-consolidated Accounts for such Ratio Period:

                        (a) the net profit of Partner before extraordinary
                            items; provided that, for the removal of doubt:
                            (i) all expenses other than Capital Expenditure
                            shall be costs for the purposes of determining
                            EBITDA; and (ii) Capital Expenditure as referred to
                            above does not include SAC;

                        (b) the amount of Taxes set against the net profits of
                            Partner in the Accounts and (without double
                            counting) any provision by Partner for Taxes;

                        (c) any amortisation and depreciation reflected in such
                            Accounts;

                        (d) any Net Financial Expenses,

                        less:

                  (2)   any non-cash profits included in Partner's non-
                        consolidated Accounts in respect of such Ratio Period.

                  For the purposes of the aforegoing, "NET FINANCIAL EXPENSES"
                  means, for any Ratio Period, the Financial Costs for such
                  Ratio Period, less the Interest receivable for such Ratio
                  Period (as certified by Partner's Auditors and specified in
                  the notes to the Accounts to be delivered pursuant to the
                  provisions of this Agreement);

10.1.54.          "THE EFFECTIVE DATE" means 7 August 2000;

10.1.55.          "ELBIT" means Elbit Limited, a company incorporated in Israel
                  with registered number 52-002750-9;

10.1.56.          "ENCUMBRANCE" means: (a) a mortgage, charge, pledge, lien or
                  other security interest securing any obligation of any person,
                  (b) any arrangement under which money or claims to, or the
                  benefit of, a bank or other account may be set-off or made
                  subject to a combination of accounts so as to effect payment
                  of sums owed or payable to any person or (c) any other type of
                  preferential arrangement (including title transfer and
                  retention arrangements) having a similar effect;


<PAGE>
                                      -14-


10.1.57.          "ENVIRONMENT" means all, or any of, the following media, the
                  air (including the air within buildings and the air within
                  other natural or man-made structures above or below ground),
                  water (including ground and surface water) and land (including
                  surface and sub-surface soil);

10.1.58.          "ENVIRONMENTAL CLAIM" means any claim by any person:

                  (a)   in respect of any loss or liability suffered or incurred
                        by that person as a result of or in connection with any
                        violation of Environmental Law; or

                  (b)   that arises as a result of or in connection with
                        Environmental Contamination and that could give rise to
                        any remedy or penalty (whether interim or final) that
                        may be enforced or assessed by private or public legal
                        action or administrative order or proceedings including
                        any such claim that arises from injury to persons or
                        property;

10.1.59.          "ENVIRONMENTAL CONTAMINATION" includes each of the following
                  and their consequences:

                  (a)   any release, emission, leakage or spillage of any
                        Dangerous Substance at or from any site owned or
                        occupied by any member of the Group or from any cell
                        phone or accessory supplied by any member of the Group
                        into any part of the Environment; or

                  (b)   any accident, fire, explosion or sudden event at any
                        site owned or occupied by any member of the Group which
                        is directly caused by or attributable to any Dangerous
                        Substance; or

                  (c)   any other pollution of the Environment arising at or
                        from any site owned or occupied by any member of the
                        Group.

                  For the purposes of this definition, for the removal of doubt,
                  a site occupied by any member of the Group shall be deemed to
                  include also any site on or in which an antenna for
                  transmitting or receiving signals has been erected or placed
                  by or on behalf of any member of the Group;

10.1.60.          "ENVIRONMENTAL LAW" means all applicable laws and regulations
                  concerning pollution, the Environment or Dangerous Substances;


<PAGE>
                                      -15-


10.1.61.          "ENVIRONMENTAL LICENCE" means any permit, licence,
                  authorisation, consent or other approval required by any
                  Environmental Law applicable to the Group;

10.1.62.          "ESCROW ACCOUNT" means the account with such Israeli bank as
                  Partner elects, with the prior consent of the Facility Agent
                  (which consent shall only be given if an Encumbrance can be
                  granted over such account in favour of the Security Trustee
                  and no other Encumbrance exists over such account) in the name
                  of Partner pledged in favour of the Security Trustee pursuant
                  to the Debenture;

10.1.63.          "EVENT OF DEFAULT" means any circumstances described as such
                  in clause 17 (Default) below;

10.1.64.          "EXCESS CASH FLOW" means, for any Ratio Period, EBITDA after
                  SAC for such Ratio Period, less the following:

                  (a)   Taxes payable by Partner in respect of such Ratio
                        Period;

                  (b)   Capital Expenditure paid during such Ratio Period;

                  (c)   all Interest payable (whether or not paid) on any
                        Advance, Partner being deemed to have drawn all the
                        Facilities in full, provided by a Participating Bank
                        under the Facilities and commissions or other charges
                        arising from any banking or other financial services
                        provided by the Participating Banks to Partner for such
                        Ratio Period, plus all Linkage Differentials and
                        similar amounts payable, including accrued (whether or
                        not paid) in respect of principal of all Advances in
                        such Ratio Period to the extent such Linkage
                        Differentials and similar amounts were not already
                        taken into account for the purpose of computing Excess
                        Cash Flow in a prior Ratio Period;

                  (d)   all scheduled payments (whether or not paid) of
                        Advances, Partner being deemed to have drawn all the
                        Facilities in full (including all Linkage Differentials
                        in respect of such Advances), but without double
                        accounting in respect of Linkage Differentials referred
                        to in (c) above; and

                  (e)   all scheduled payments (whether or not paid) of
                        Interest and principal in respect of all Permitted
                        Borrowings (other than under the Facilities) for such
                        Ratio Period, plus all Linkage Differentials and similar
                        amounts payable, including accrued (whether or not paid)
                        in respect of such Permitted Borrowings in


<PAGE>
                                      -16-


                        such Ratio Period to the extent such Linkage
                        Differentials and similar amounts were not already taken
                        into account for the purpose of computing Excess Cash
                        Flow in a prior Ratio Period;

                  (f)   losses during the relevant Ratio Period constituting
                        extraordinary items and payable in cash;

10.1.65.          "FACILITIES" means Facility A, Facility B and Facility C and
                  "FACILITY" means any one of them as the context so requires;

10.1.66.          "FACILITY A" means the fixed-term Dollar, NIS and/or Euro loan
                  facility granted to Partner pursuant to clause 2.1.1(a) below;

10.1.67.          "FACILITY A MATURITY DATE" means 30 June 2008, or if the day
                  determined in accordance with the aforegoing is not a Business
                  Day, the immediately preceding Business Day;

10.1.68.          "FACILITY AGENT" means BLL or any successor Facility Agent
                  appointed in accordance with clause 18.10 (Successor Agent)
                  below;

10.1.69.          "FACILITY B" means the revolving Dollar, NIS and/or Euro loan
                  facility granted to Partner pursuant to clause 2.1.1(b) below;

10.1.70.          "FACILITY C" means the fixed-term NIS loan facility granted to
                  Partner pursuant to clause 2.1.1(c) below;

10.1.71.          "FACILITY C MATURITY DATE" means 30 June 2009;

10.1.72.          "FACILITY DEBT COVER RATIO" means, in relation to each Ratio
                  Period, EBITDA after SAC for such Ratio Period, divided by the
                  aggregate Contributions as at the last day of the Ratio
                  Period;

10.1.73.          "FACILITY DOCUMENTS" means those documents listed in SCHEDULE
                  3 (Facility Documents);

10.1.74.          "FACILITY OFFICE" means, in relation to a Finance Party, the
                  office designated by it for service of notices in clause 37.2
                  (Manner of Delivery) below or such other address as may be
                  designated by it, from time to time, to Partner and the
                  Coordinating Agent for the purposes of this Agreement (or, in
                  the case of a Transferee, at the end of the Transfer
                  Certificate to which it is a party as Transferee). For the
                  purposes of clause 14.1 (Mitigation) and clause 27.7 (No
                  Increased Costs) below, a change in, or substitution of, a
                  Facility


<PAGE>
                                      -17-


                  Office shall only be deemed to occur where such change or
                  substitution is to an office located outside the State of
                  Israel;

10.1.75.          "FINANCE PARTY" means the Facility Agent, the Arranger, the
                  Coordinating Agent, each Participating Bank and the Security
                  Trustee;

10.1.76.          "FINANCIAL COSTS" means, for any Ratio Period, all Interest
                  expenses (whether or not capitalised) of Partner during such
                  Ratio Period, as well as all other costs, expenses,
                  commissions (including credit card commissions) and other
                  charges of whatsoever nature appearing in the item "Financial
                  Expenses" in the Accounts for such Ratio Period (all the above
                  as certified by Partner's Auditors and specified in the notes
                  to the Accounts to be delivered pursuant to the provisions of
                  this Agreement); save for:

                  (a)   Interest accrued during such Ratio Period on
                        Shareholder Loans which is not permitted to be paid
                        pursuant to this Agreement;

                  (b)   amounts accrued during such Ratio Period in respect of
                        the principal outstanding on the Senior Secured Notes,
                        due 2010, issued by Partner on August 10, 2000, as a
                        result of a change in the rate of exchange between the
                        US Dollar and the NIS; and

                  (c)   all fees and expenses paid by Partner to the
                        Participating Banks on or before 31 December 2000,
                        pursuant to the terms of this Agreement, in respect of
                        the Facilities and which were deducted during such Ratio
                        Period;

10.1.77.          "FINANCIAL YEAR" means in relation to Partner, the accounting
                  year commencing on 1 January and ending on the following 31
                  December, or such other annual Accounting Period of Partner as
                  Partner may, with the consent of an Instructing Group,
                  designate as its accounting year;

10.1.78.          "FIXED CHARGE COVERAGE RATIO" means for any Ratio Period: (a)
                  EBITDA after SAC for such Ratio Period, divided by: (b) the
                  sum of: (i) Debt Service for such Ratio Period; (ii) Capital
                  Expenditure actually paid during such Ratio Period, less
                  equity and/or loan capital and/or income not deriving from the
                  ordinary course of Business of Partner; in each case received
                  by Partner and designated at the time of such receipt, for use
                  in financing such Capital Expenditure only, and in fact
                  utilised for such designated Capital Expenditure during such
                  Ratio Period; provided that, for the removal of doubt, loan
                  capital as referred to herein shall not include any amount
                  received by Partner


<PAGE>
                                      -18-


                  within the framework of the Facilities; and (iii) Tax payments
                  actually made by Partner during such Ratio Period;

10.1.79.          "GROUP" means Partner and its Subsidiaries from time to time;

10.1.80.          "GUARANTOR" means each Additional Guarantor;

10.1.81.          "GUARANTOR ACCESSION AGREEMENT" means an agreement
                  substantially in the form of SCHEDULE 4 (Guarantor Accession
                  Agreement) to this Agreement made pursuant to clause 26.1
                  (Additional Guarantors) below;

10.1.82.          "HEDGING AGREEMENT" means any Interest Rate Hedging Agreements
                  and any Currency Hedging Agreements.

10.1.83.          "HEDGING TRANSACTIONS" means any Interest Rate Hedging
                  Transactions and any Currency Hedging Transactions;

10.1.84.          "HOLDING COMPANY" of a company or corporation means any
                  company or corporation of which the first-mentioned company or
                  corporation is a Subsidiary;

10.1.85.          "HTL" means Telecommunications Limited, a company incorporated
                  in Hong Kong under registered number 166461;

10.1.86.          "HTL GROUP" means HTL and its Subsidiaries;

10.1.87.          "HWL" means Hutchison Whampoa Limited, a company incorporated
                  in Hong Kong under registered number 054532;

10.1.88.          "HWL GROUP" means HWL and its Subsidiaries;

10.1.89.          "HWL HEDGING SUBSIDIARY" means any wholly owned Subsidiary of
                  HWL which may from time to time enter into Interest Rate
                  Hedging Transactions with Partner in accordance with clause
                  18.29(h) (Hedging Agreements) below;

10.1.90.          "IDB PERFORMANCE BOND" means the performance guarantee in the
                  maximum amount of NIS, equal, in accordance with the
                  representative rate of exchange of the US Dollar published by
                  the Bank of Israel, known on the date of actual payment, to
                  US $10,000,000 (ten million United States Dollars) issued or
                  to be issued by Israel Discount Bank Ltd. in favour of the
                  Ministry at the request of Partner;


<PAGE>
                                      -19-


10.1.91.          "IDB PERFORMANCE BOND COUNTER INDEMNITY" means an agreement
                  entered into or to be entered into between Israel Discount
                  Bank Ltd. and Partner, pursuant to which Partner undertakes to
                  indemnify Israel Discount Bank Ltd. in respect of any amounts
                  payable under or in connection with the IDB Performance Bond;

10.1.92.          "INCREASED COSTS" shall bear the meaning ascribed thereto in
                  clause 12.1 (Increased Costs) below;

10.1.93.          "INDEBTEDNESS" means any obligation (whether incurred as
                  principal or as surety) for the payment or repayment of money,
                  whether present or future, actual or contingent;

10.1.94.          "INSTRUCTING GROUP" means: (a) prior to any acceleration
                  pursuant to clauses 17.25(c) (Acceleration) or (d) or clause
                  17.26 (Advances Due on Demand) below, but including with
                  respect to a decision to declare such acceleration, a
                  Participating Bank or group of Participating Banks whose
                  Commitments as at the Commencement Date amount in aggregate to
                  more than 67% (sixty-seven percent) of the aggregate
                  Commitments; and (b) after a decision to accelerate as
                  aforesaid, a Participating Bank or group of Participating
                  Banks whose Contributions amount in aggregate to more than 67%
                  (sixty-seven percent) of the aggregate Contributions;

10.1.95.          "INSURANCE ADVISER" means Sedgwick Limited acting through its
                  trading division Sedgwick Bankrisk;

10.1.96.          "INSURANCE REPORT" means the insurance report dated 8 July
                  1998 prepared by the Insurance Adviser addressed to Chase
                  Manhattan International Ltd. on behalf of the Banks and the
                  Arrangers (as such terms were defined in the Original Facility
                  Agreement);

10.1.97.          "INTELLECTUAL PROPERTY RIGHTS" means all know-how, patents,
                  trademarks, designs, trading names, copyrights and other
                  intellectual property rights (in each case whether registered
                  or not and including all applications for the same);

10.1.98.          "INTERCONNECTION AGREEMENT" means each bilateral
                  interconnection agreement to be entered into between Partner
                  and each of Bezeq and the other telecommunications operators
                  in Israel;

10.1.99.          "INTEREST" means:


<PAGE>
                                      -20-


                     (a)    interest and amounts in the nature of interest
                            (including the interest element of finance leases,
                            Linkage Differentials and any similar payment in
                            respect of indexation in each case with respect to
                            such interest);

                     (b)    prepayment penalties or premiums incurred in
                            repaying or prepaying any Borrowing (including, for
                            the avoidance of doubt, amounts payable pursuant to
                            clause 19 (Broken Funding Indemnity) below));

                     (c)    discount fees and acceptance fees payable or
                            deducted in respect of any Borrowing (including all
                            commissions payable in connection with any letter of
                            credit); and

                     (d)    any net payment (or, if appropriate in the context,
                            receipt) under any interest rate hedging agreement
                            or instrument, taking into account any premiums
                            payable;


<PAGE>
                                      -21-


10.1.100.         "INTEREST PAYMENT DATE" means the last day of an Interest
                  Period;

10.1.101.         "INTEREST PERIOD" means:

                  (i)   in relation to an Advance under Facility A, successive
                        periods of 3 (three) months, during the Availability
                        Period Facility A, and successive Quarters during the
                        period after the Availability Period Facility A;
                        provided that any Interest Period commencing before the
                        last day of the Availability Period Facility A shall end
                        no later than the last day of the Availability Period
                        Facility A;

                  (ii)  in relation to an Advance under Facility B, the period
                        commencing on the date of the making of such Advance and
                        ending on the date on which Interest of the type payable
                        on such Advance would be paid or capitalised in
                        accordance with the customary practice of the relevant
                        Participating Bank; and

                  (iii) in relation to an Advance under Facility C, successive
                        periods of 3 (three) months during the Availability
                        Period Facility C and successive Quarters during the
                        period after the Availability Period Facility C;
                        provided that any Interest Period commencing before the
                        last day of the Availability Period Facility C shall end
                        no later than the last day of the Availability Period
                        Facility C;

                  provided that:

                  (a)   each subsequent Interest Period shall commence on the
                        expiry of the previous one;

                  (b)   any Interest Period which would otherwise end on a
                        non-Business Day shall end on the preceding Business
                        Day;

                  (c)   an Interest Period for any Advance shall not extend
                        beyond: (A) the Repayment Date for such Advance; or (B)
                        the Termination Date applicable to its Facility; and

                  (d)   in relation to any sums due and payable but unpaid by an
                        Obligor under the Facility Documents, "INTEREST PERIOD"
                        shall mean each period determined in accordance with
                        clause 8.3.1 below;

10.1.102.         "INTEREST RATE HEDGE PROVIDER" means any counterparty to any
                  Interest Rate Hedging Agreement entered into by Partner;


<PAGE>
                                      -22-


10.1.103.         "INTEREST RATE HEDGING AGREEMENT" means any agreement entered
                  into by Partner for the purposes of entering into one or more
                  Interest Rate Hedging Transactions;

10.1.104.         "INTEREST RATE HEDGING TRANSACTION" includes any rate swap
                  transaction, basis swap, forward rate transaction, commodity
                  swap, commodity option, equity or equity index swap, equity or
                  equity index option, interest rate option, cap transaction,
                  floor transaction, collar transaction or other similar
                  transaction (including any option with respect thereto and any
                  combination in respect thereof);

10.1.105.         "LATEST DRAWDOWN REQUEST DATE" means:

                  (a)   subject to paragraph (c) below, in respect of an Advance
                        denominated in NIS, the rate of Interest on which is
                        based on an on-call rate, prime rate or a fixed unlinked
                        rate: (i) for Advances, the aggregate amount of which
                        for any Participating Bank on any Drawdown Date does not
                        exceed the NIS equivalent of US $50,000,000 (fifty
                        million United States Dollars), the date falling 5
                        (five) Business Days prior to such Drawdown Date; and
                        (ii) for Advances, the aggregate amount of which for any
                        Participating Bank on any Drawdown Date equals or
                        exceeds the NIS equivalent of US $50,000,000
                        (fifty million United States Dollars), the date falling
                        10 (ten) Business Days prior to such Drawdown Date;

                  (b)   in respect of an Advance denominated in NIS, the rate of
                        Interest on which is based on a fixed linked rate
                        (including the Bond Rate): (i) for Advances, the
                        aggregate amount of which for any Participating Bank on
                        any Drawdown Date does not exceed the NIS equivalent of
                        US $25,000,000 (twenty-five million United States
                        Dollars), the date falling 5 (five) Business Days prior
                        to such Drawdown Date; (ii) for Advances, the aggregate
                        amount of which for any Participating Bank on any
                        Drawdown Date equals or exceeds the NIS equivalent of
                        US $25,000,000 (twenty-five million United States
                        Dollars) but does not exceed the NIS equivalent of US
                        $50,000,000 (fifty million United States Dollars), the
                        date falling 10 (ten) Business Days prior to such
                        Drawdown Date; and (iii) for Advances, the aggregate
                        amount of which for any Participating Bank on any
                        Drawdown Date exceeds the NIS equivalent of US
                        $50,000,000 (fifty million United States Dollars), the
                        date falling 20 (twenty) Business Days prior to such
                        Drawdown Date;


<PAGE>
                                      -23-


                  (c)   in respect of an Advance under Facility B denominated in
                        NIS, the Interest rate on which is based on an on-call
                        rate or prime rate: (i) for Advances, the aggregate
                        amount of which for any Participating Bank on any
                        Drawdown Date does not exceed the NIS equivalent of US
                        $25,000,000 (twenty-five million United States Dollars),
                        such Drawdown Date; (ii) for Advances, the aggregate
                        amount of which for any Participating Bank on any
                        Drawdown Date equals or exceeds the NIS equivalent of US
                        $25,000,000 (twenty-five million United States Dollars),
                        the Business Day prior to such Drawdown Date;

                  (d)   in the case of an Advance denominated in US Dollars or
                        Euros:(i) for Advances, the aggregate amount of which
                        for any Participating Bank on any Drawdown Date does not
                        exceed the NIS equivalent of US $10,000,000 (ten million
                        United States Dollars), such Drawdown Date; (ii) for
                        Advances, the aggregate amount of which for any
                        Participating Bank on any Drawdown Date equals or
                        exceeds the NIS equivalent of US $10,000,000 (ten
                        million United States Dollars) but does not exceed the
                        NIS equivalent of US $25,000,000 (twenty-five million
                        United States Dollars), the date falling 3 (three)
                        Business Days prior to such Drawdown Date; (iii) for
                        Advances, the aggregate amount of which for any
                        Participating Bank on any Drawdown Date equals or
                        exceeds the NIS equivalent of US $25,000,000
                        (twenty-five million United States Dollars) but does not
                        exceed the NIS equivalent of US $50,000,000 (fifty
                        million United States Dollars), the date falling 5
                        (five) Business Days prior to such Drawdown Date; and
                        (iv) for Advances, the aggregate amount of which for any
                        Participating Bank on any Drawdown Date equals or
                        exceeds the NIS equivalent of US $50,000,000 (fifty
                        million United States Dollars), the date falling 10
                        (ten) Business Days prior to such Drawdown Date;

10.1.106.         "LIBOR" means, with respect to each Advance, the rate per
                  annum (rounded upward, if necessary, to the nearest whole
                  multiple of 1/8% (one-eight of one percent)) for Dollar
                  deposits or Euro deposits, as the case may be, for a period
                  equal to 1 (one) month, 3 (three) months, 6 (six) months or 1
                  (one) year (as selected by Partner in the Drawdown Request for
                  such Advance (provided that, the period selected as aforesaid
                  does not exceed the term of such Advance) offered in the
                  London Interbank market, as quoted at or about 11:00 a.m.
                  (London time) on the Business Day falling 2 (two) Business
                  Days prior to the Drawdown Date for such Advance and if the
                  period of LIBOR selected by Partner as aforesaid is shorter
                  than the term of such


<PAGE>
                                      -24-


                  Advance, then also on the Business Day falling 2 (two)
                  Business Days prior to each 1 (one) month (in the case of
                  selection of a period of 1 (one) month) or, in other cases,
                  each subsequent Interest Period, falling within the term of
                  such Advance following expiry of each period selected by
                  Partner as aforesaid ("THE INTEREST DETERMINATION DATE") on
                  the display designated as page LIBOR 01 <Frasett> to
                  subscribers of the REUTERS service ("REUTERS") or, in the
                  absence of such page or pages, or if Reuters shall, for any
                  reason whatsoever, amend, change or otherwise alter the data
                  basis or the reference banks used by it on the date of
                  signature of this Agreement, for quotations under said page
                  LIBOR 01 <Frasett>, the rate of Interest as quoted at or about
                  11:00 a.m. London time on the relevant Interest Determination
                  Date on such other page or pages of Reuters as shall be
                  determined by an Instructing Group for a period equal to such
                  1 (one), 3 (three), 6 (six) or 12 (twelve) month period, as
                  the case may be (rounded upward, if necessary, to the nearest
                  whole multiple of 1/8% (one-eight of one percent));

10.1.107.         "LICENCE" means the Licence dated 7 April, 1998 (and
                  terminating on 1 February 2022) granted to Partner for
                  providing mobile radio telephone services using the cellular
                  method together with a permit to install and use equipment in
                  the network and frequency allocation as, without derogating
                  from clause 16.26 (Licence) below or any other provision
                  hereof, may be amended from time to time;

10.1.108.         "LINKAGE DIFFERENTIALS" means any amount to be added to the
                  principal of, or Interest in respect of, any Advance
                  denominated in NIS as a result of any increase in the Cost of
                  Living Index;

10.1.109.         "LOAN" means, at any time, the aggregate Dollar Amount of Loan
                  A, Loan B and Loan C for the time being outstanding hereunder
                  or any of them as the context so requires and "LOANS" shall be
                  construed to mean each of them respectively;

10.1.110.         "LOAN A" means at any time, the aggregate Dollar Amount for
                  the time being outstanding in relation to all Advances under
                  Facility A (including, for the removal of doubt, all Linkage
                  Differentials, if any, on such Advances);

10.1.111.         "LOAN B" means at any time, the aggregate Dollar Amount for
                  the time being outstanding in relation to all Advances under
                  Facility B (including, for the removal of doubt, all Linkage
                  Differentials, if any, on such Advances);


<PAGE>
                                      -25-


10.1.112.         "LOAN C" means, at any time, the aggregate Dollar Amount for
                  the time being outstanding in relation to all Advances under
                  Facility C (including, for the removal of doubt, all Linkage
                  Differentials, if any, on such Advances);

10.1.113.         "MAINTENANCE AGREEMENT" means the system services contract
                  dated 29 May 1998 between Partner and Ericsson Radio Systems
                  A.B. as annexed to the Principal Supplier Contract;

10.1.114.         "MARGIN" means:

                  (A) with respect to Facility A and Facility B:

                        (a) in relation to the Availability Period Facility A,
                            0.9% (nought point nine percent) per annum;

                        (b) in relation to the period from the expiry of the
                            Availability Period Facility A until the date on
                            which all amounts owing under the Facilities have
                            been repaid, 0.9% (nought point nine percent) per
                            annum; provided that: (1) in the event that for any
                            one year Ratio Period: (I) each of the Facility Debt
                            Cover Ratio, Total Debt Cover Ratio, Fixed Charge
                            Coverage Ratio and ADSCR for such one year Ratio
                            Period equals at least 135% (one hundred and
                            thirty-five percent) of such minimum ratio required
                            for such one year Ratio Period pursuant to clause
                            16.32 below; and (II) by the end of such Ratio
                            Period, Partner shall have repaid (disregarding, for
                            this purpose, any amount which has been repaid or
                            prepaid and is capable of being reborrowed under the
                            terms of this Agreement) to the Participating Banks
                            on account of the Facilities, an amount equal to at
                            least 50% (fifty percent) of the Total Commitments,
                            then, for the period from the Interest Payment Date
                            following receipt by the Participating Banks of the
                            Accounts for such year and confirmation by the
                            Coordinating Agent to Partner that the Margin may be
                            reduced in the manner set out in this subclause (A)
                            below until the date of publication of the Accounts
                            for the next succeeding one year Ratio Period only,
                            the Margin shall be 0.7% (nought point seven
                            percent); and (2) in the event that for any one year
                            Ratio Period: (I) each of the Facility Debt Cover
                            Ratio, Total Debt Cover Ratio, Fixed Charge Coverage
                            Ratio and ADSCR for such one year Ratio Period
                            equals at least 175% (one hundred and seventy-five


<PAGE>
                                      -26-


                            percent) of such minimum ratio required for such one
                            year Ratio Period pursuant to clause 16.32 below;
                            and (II) by the end of such Ratio Period, Partner
                            shall have repaid (disregarding, for this purpose,
                            any amount which has been repaid or prepaid and is
                            capable of being reborrowed under the terms of this
                            Agreement) to the Participating Banks on account of
                            the Facilities, an amount equal to at least 50%
                            (fifty percent) of the Total Commitments, then, for
                            the period from the Interest Payment Date following
                            receipt by the Participating Banks of the Accounts
                            for such year and confirmation by the Coordinating
                            Agent to Partner that the Margin may be reduced in
                            the manner set out in this subclause (A) below until
                            the date of publication of the Accounts for the next
                            succeeding one year Ratio Period only, the Margin
                            shall be 0.45% (nought point four five percent).



<PAGE>



                                      -27-


                            Provided that:

                            (i)    if and for so long as an Event of Default
                                   (including the non-payment of any amount when
                                   due) has occurred and is continuing, the
                                   Margin during such period shall be 2.9% (two
                                   point nine) percent per annum; provided that,
                                   if such Event of Default does not relate to
                                   non-payment of any amount when due and the
                                   Participating Banks waive their rights to
                                   declare the Advances due and payable as a
                                   result of such Event of Default, the Margin,
                                   for so long as such Event of Default is
                                   continuing, shall be 1.9% (one point nine
                                   percent) per annum;

                            (ii)   for the removal of doubt, the Margin may
                                   increase and decrease in accordance with the
                                   above; and

                            (iii)  with regard to the Margin for the one year
                                   Ratio Period of 2007 and, thereafter, the
                                   Margin shall not be decreased unless it shall
                                   have been decreased for the one year Ratio
                                   Period of 2006.

                            The Coordinating Agent shall, within 10 (ten)
                            Business Days after receipt by it from Partner of
                            the Accounts for any one year Ratio Period, together
                            with all information required to determine the
                            ratios referred to above, deliver to Partner, with a
                            copy to the Participating Banks, a notice confirming
                            that the Margin shall be decreased, increased or
                            remain constant, all in accordance with (b) above;
                            provided that, if it transpires after delivery of
                            confirmation by the Coordinating Agent as aforesaid
                            that the Margin as specified in such confirmation is
                            in fact incorrect, then the correct Margin (as
                            determined in accordance with (b) above) shall be
                            applied retroactively with effect from the first
                            Interest Payment Date in respect of which the
                            correct Margin should have been applicable in
                            accordance with (b) above and each of the
                            Participating Banks shall reimburse Partner or, as
                            the case may be, Partner shall pay any shortfall to
                            each of the Participating Banks, resulting from such
                            incorrect Margin as aforesaid;



<PAGE>
                                      -28-



                  and

                  (B)   with respect to Facility C, 1.25% (one point two five
                        percent) per annum; provided that, if and for so long as
                        an Event of Default (including the non-payment of any
                        amount when due) has occurred and is continuing, the
                        Margin during such period shall be 3.25% (three point
                        two five percent) per annum; provided further that, if
                        such Event of Default does not relate to non-payment of
                        any amount when due and the Participating Banks waive
                        their rights to declare the Advances due and payable as
                        a result of such Event of Default, the Margin, for so
                        long as such Event of Default is continuing, shall be
                        2.25% (two point two five percent) per annum;

10.1.115.         "MATAV" means Matav-Cable Systems Media Limited, a company
                  incorporated in Israel with registered number 52-004007-2;

10.1.116.         "MATERIAL ADVERSE EFFECT" means any effect which is or is
                  likely to be materially adverse to:

                  (a)   the business or financial condition of the Group taken
                        as a whole; or

                  (b)   the ability of any Obligor to perform its obligations in
                        any material respect under any of the Facility
                        Documents;

10.1.117.         "MATERIAL CONTRACTS" means those Material Contracts set out in
                  SCHEDULE 5 (Material Contracts) hereto;

10.1.118.         "MINISTRY" means the Ministry of Communications of the Israeli
                  Government;

10.1.119.         "NET PROCEEDS" means the aggregate value of consideration
                  received by any Obligor or Obligors in respect of a sale,
                  transfer, loan or other disposal of assets (including shares
                  in other Group members) from an Obligor to any third party
                  which is not an Obligor after deduction of:

                  (a)   all amounts paid or provided for or on account of
                        Taxes applicable to, or to any gain resulting from, the
                        disposal or the discharge of any liability secured on
                        the relevant assets; and

                  (b)   all costs, fees, expenses and the like properly incurred
                        by continuing members of the Group in arranging and
                        effecting that disposal;


<PAGE>
                                      -29-


10.1.120.         "NETWORK" means any network operated by the Group and operated
                  or run by it pursuant to the Licence (including all apparatus,
                  equipment and telecommunication systems of every description
                  which it is authorised to operate or run under the Licence);

10.1.121.         "NUMBER OF SUBSCRIBERS" means, for any Ratio Period, the
                  actual number of Partner subscribers as at the last day of
                  such Ratio Period (for the removal of doubt, disregarding any
                  subscriber which shall have ceased to be a subscriber prior to
                  the end of such Ratio Period), as certified in writing by the
                  Auditors;

10.1.122.         "OBLIGOR" means Partner and each Guarantor;

10.1.123.         "ORIGINAL DOLLAR AMOUNT" means, in relation to:

                  (a)   an Advance denominated in US Dollars, the amount thereof
                        as at the date of the making of such Advance; and

                  (b)   an Advance denominated in NIS or Euros, the Dollar
                        equivalent thereof as at the date of the making of such
                        Advance;

10.1.124.         "ORIGINAL FACILITY AGREEMENT" means the Facility Agreement
                  dated 13 August 1998 (as amended and restated by an Amendment
                  and Waiver Letter dated 21 October 1999 and by a letter dated
                  20 June 2000, but not by the Amending and Rescheduling
                  Agreement or any subsequent amendment) between, inter alia,
                  Partner and the Banks;

10.1.125.         "PARTICIPATING BANKS" means:

                  (a)   BLL, Israel Discount Bank Ltd., Bank Hapoalim, The First
                        International Bank of Israel Ltd., United Mizrahi Bank
                        Ltd. Mercantile Discount Bank Ltd. and Citibank N.A.;
                        and

                  (b)   any financial institution which has become a party to
                        this Agreement in accordance with the provisions of this
                        Agreement

                  (in each case, other than one which has ceased to be a party
                  to this Agreement in accordance with the terms hereof and the
                  term "PARTICIPATING BANK" shall mean any of them) and any
                  reference to a "Participating Bank" shall, unless the context
                  otherwise requires, be deemed to include reference to such
                  Participating Bank, in its capacity as a Secured Interest Rate
                  Hedge Provider and, in the case of Israel


<PAGE>
                                      -30-


                  Discount Bank Ltd., as the Counterparty to the IDB Performance
                  Bond Counter Indemnity;

10.1.126.         "PERMITTED BORROWING" means:

                  (a)   Borrowing arising pursuant to the Facility Documents;

                  (b)   Permitted Loan Capital;

                  (c)   Borrowing or otherwise incurring Indebtedness by Partner
                        from banks and/or other financial institutions of up to
                        US $50,000,000 (fifty million United States Dollars),
                        otherwise than as permitted pursuant to paragraphs (a),
                        (b), (d)-(f) (inclusive) in respect of loans and
                        credits, performance guarantees and letters of credit;
                        provided that, the aggregate amount of such loans and
                        credits do not exceed US $25,000,000 (twenty-five
                        million United States Dollars) or its equivalent at any
                        time;

                  (d)   Borrowing arising pursuant to Hedging Transactions
                        permitted pursuant to this Agreement;

                  (e)   Borrowing created or subsisting with the prior written
                        consent of an Instructing Group; and

                  (f)   Borrowing arising pursuant to the IDB Performance Bond
                        Counter Indemnity;

                  provided that, with respect to Borrowings referred to in
                  paragraphs (c), (d) (other than with respect to Borrowings
                  pursuant to Interest Rate Hedging Agreements with


<PAGE>
                                      -31-


                  counterparties which are Participating Banks and are thus
                  secured under the Security Documents) and (e) above:

                  (i)   all such Borrowings received from any of the
                        Participating Banks shall be subordinated to the
                        Facilities as to collateral but may be secured by way of
                        second ranking collateral over those assets secured by
                        the Security Documents (ranking subordinate to the
                        rights of the Participating Banks, Israel Discount Bank
                        Ltd. (in respect of Borrowing arising pursuant to the
                        IDB Performance Bond Counter Indemnity) and the Security
                        Trustee in respect of the collateral created pursuant to
                        the Security Documents); and

                  (ii)  Borrowings as aforesaid received from any source other
                        than from a Participating Bank shall not be secured by
                        any collateral whatsoever;

                  (iii) no payment shall be made in respect of Borrowings
                        referred to in paragraphs (c) (other than with respect
                        to performance guarantees and letters of credit) and (e)
                        above unless the conditions referred to in (b), (c), (d)
                        and (f) of clause 16.14 (Restricted Distribution) below
                        (provided that, for this purpose, the words "Potential
                        Event of Default" shall be deleted from (f) of the
                        definition of "Permitted Distribution" in clause 16.14
                        (Restricted Distribution) below) are fulfilled, it being
                        agreed that any such payment, for the purpose hereof, is
                        deemed to be a distribution for the purpose of clause
                        16.14 (Restricted Distribution) below; and

                  (iv)  Partner shall notify all providers of such Borrowings of
                        the subordination conditions referred to in paragraphs
                        (i) to (iii) (inclusive) above;

10.1.127.         "PERMITTED DISPOSALS" means:

                  (a)   disposals in the ordinary course of business on or on
                        terms no less favourable to the Group than arm's-length
                        terms;

                  (b)   disposals of assets in exchange for or for investment in
                        other assets performing substantially the same function
                        which are comparable or superior as to type, value and
                        quality;

                  (c)   (i) disposals of shares of a Subsidiary on arm's length
                            terms where the business of that Subsidiary is not
                            carried on


<PAGE>
                                      -32-


                            pursuant to the Licence or required for the
                            efficient operation of the business of an Obligor
                            and such business has been, or is in the process of
                            being, terminated;

                        (ii)disposals of surplus, obsolete or redundant plant
                            and equipment or other assets, or of land or
                            buildings in connection with the termination of any
                            business or operation not carried on pursuant to the
                            Licence or not required for the efficient operation
                            of its business, in each case on arm's length terms;

                  (d)   the expenditure of cash in payment for assets or
                        services acquired on arm's length terms in the course of
                        its business carried on in compliance with the terms of
                        the Facility Documents;

                  (e)   the payment of Permitted Distributions in compliance
                        with the Facility Documents;

                  (f)   the disposal of Intellectual Property Rights, in
                        compliance with clause 16.16 (Intellectual Property
                        Rights) below;

                  (g)   disposals in connection with sale and leaseback
                        transactions permitted by clause 16.7 (Sale and
                        Leaseback) below;

                  (h)   disposal of assets on arm's length terms not otherwise
                        permitted pursuant to (a) to (g) (inclusive), the Net
                        Proceeds of which aggregated with the Net Proceeds of
                        all other such disposals in any annual Accounting Period
                        do not exceed US $3,000,000 (three million United States
                        Dollars) or its equivalent; or

                  (i)   any other disposal with the prior written consent of the
                        Facility Agent (acting on the instructions of an
                        Instructing Group);

10.1.128.         "PERMITTED DISTRIBUTIONS" shall bear the meaning assigned to
                  such term in clause 16.14 (Restricted Distributions) below;

10.1.129.         "PERMITTED ENCUMBRANCES" means any Encumbrance:

                  (a)   constituted or evidenced by the Security Documents;

                  (b)   arising by operation of law in the ordinary course of
                        business;


<PAGE>
                                      -33-


                     (c)    over goods and documents of title to goods arising
                            in the ordinary course of letter of credit
                            transactions entered into in the ordinary course of
                            trade and not prohibited under the Facility
                            Documents;

                     (d)    existing at the time of acquisition on or over any
                            asset acquired by it in the ordinary course of
                            business on arm's length terms after the Effective
                            Date, where such Encumbrance was not created in
                            contemplation of, or in connection with, the
                            acquisition, provided always that the amount secured
                            by such Encumbrance: (i) if a Borrowing, is a
                            Permitted Borrowing; and (ii) shall not increase
                            after the date of acquisition;

                     (e)    constituting operating leases or hire purchase
                            arrangements affecting assets of any Obligor as
                            permitted by the Facility Documents;

                     (f)    rising by way of rights of set-off arising by
                            operation of law;

                     (g)    arising in relation to the netting of bank account
                            balances;

                     (h)    arising by way of any retention of title of goods
                            supplied where such retention is agreed in the
                            ordinary course of its business;

                     (i)    created (other than by way of a floating charge)
                            over specific assets or rights otherwise than
                            pursuant to paragraphs (a) to (h) above (inclusive)
                            securing Borrowings not exceeding an aggregate
                            amount of US $1,000,000 (one million United States
                            Dollars) (or its equivalent in other currencies);

                     (j)    created, to the extent permitted, under paragraph
                            (i) of the definition of "Permitted Borrowings" as
                            referred to in clause 1.1.126 above;

10.1.130.            "PERMITTED INVESTMENTS" means investments in the following:

                     (a)    a demand or time deposit of any Participating Bank
                            or any other depositary institution or trust company
                            whose short term unsecured obligations are rated at
                            least "A1" by Standard & Poor's ("S&P") or at least
                            "P1" by Moody's Investors Service Inc. ("MOODY'S");


<PAGE>
                                      -34-


                     (b)    commercial paper issued by any Participating Bank or
                            rated on the date of acquisition thereof at least
                            "A1" by S&P or at least "P1" by Moody's;

                     (c)    bonds, notes and/or securities issued or guaranteed
                            by either the Government of Israel or the Government
                            of the United States of America;

                     provided that, any investment made pursuant to paragraphs
                     (a) and (b) above:

                     (i)    in or guaranteed by a single bank or other body
                            corporate in excess of US $20,000,000 (twenty
                            million United States Dollars) shall not be
                            permitted provided that this paragraph (i) shall not
                            apply to deposits; and

                     (ii)   shall be denominated in either NIS or US Dollars;

10.1.131.            "PERMITTED LOAN CAPITAL" means the aggregate amount of
                     Shareholder Loans and debentures (including, notes and
                     other similar debt instruments) issued privately or
                     publicly by Partner, all subject to the following
                     conditions:

                     (a)    such Shareholder Loans and debentures shall be
                            subordinated to the rights of the Participating
                            Banks under the Facilities and to the rights of the
                            Participating Banks with respect to Borrowings
                            referred to in clause 1.1.126(c), (d), (e) and (f),
                            with respect to principal, Interest and all other
                            amounts payable under this Agreement, such
                            subordination, in the case of the debentures, to be
                            on terms and conditions satisfactory to an
                            Instructing Group and, in the case of the
                            Shareholder Loans, to be on the terms and conditions
                            set out in SCHEDULE 6 (Shareholder Loans) hereto;

                     (b)    the aggregate maximum Dollar amount (or if not
                            denominated in US Dollars, the Dollar equivalent
                            thereof (from time to time)) of such debentures
                            shall at no time exceed US $300,000,000 (three
                            hundred million United States Dollars);

                     (c)    the terms and conditions of such debentures
                            (including relating to covenants) shall be subject
                            to the prior written approval of an Instructing
                            Group, given through the Facility Agent. The
                            Participating Banks shall be entitled to withhold
                            their approval of any such terms and conditions in
                            their sole discretion, provided that, if an
                            Instructing Group is reasonably satisfied that


<PAGE>
                                      -35-


                            all of the restrictions imposed on Partner under the
                            proposed terms and conditions of such debentures are
                            less harsh to Partner than those applying under this
                            Agreement and the subordination of such debentures
                            is on terms and conditions satisfactory to an
                            Instructing Group as referred to in (a) above, then
                            the Participating Banks shall, subject to compliance
                            with the other provisions of this clause 1.1.131,
                            consent thereto. The Participating Banks shall,
                            within 10 (ten) Business Days of receipt of
                            documentation relating to the debentures as
                            aforesaid, which includes all the terms and
                            conditions of such debentures, respond to a request
                            from Partner for approval of such terms and
                            conditions;

                     (d)    such Shareholder Loans and debentures shall:

                            (i) not contain any financial covenants, save for a
                                covenant enabling Partner to incur additional
                                indebtedness under such Shareholder Loans and
                                debentures (subject at all times to the maximum
                                amount specified in (b) above and, for the
                                removal of doubt, subject at all times to the
                                provisions of this Agreement restricting the
                                ability of Partner to incur Indebtedness), in
                                the event that the ratio of Partner's aggregate
                                Indebtedness to its consolidated EBITDA for its
                                most recent 4 (four) fiscal Quarters or for its
                                most recent 2 (two) fiscal Quarters (annualised)
                                meets the minimum ratio specified in such
                                Shareholder Loans or debentures; and

                            (ii)provide that if an event of default shall occur
                                under such debentures, no amount shall be
                                payable by Partner under the debentures until
                                such time as all amounts owing by Partner under
                                the Facilities have been paid in full;

                     (e)    save by way of Permitted Distribution, no repayment
                            of whatsoever nature on account of Interest or
                            principal of any such Shareholder Loans or principal
                            of any such debentures shall be made prior to full
                            payment of all amounts owing by Partner under the
                            Facilities and of all amounts owing to the
                            Participating Banks with respect to Borrowings
                            referred to in clause 1.1.126(c), (d), (e) and (f);

                     (f)    immediately following issue of any such debentures
                            and thereafter from time to time, Partner shall
                            deduct from the proceeds of each such debentures and
                            deposit in an account


<PAGE>
                                      -36-


                            ("THE RESERVE ACCOUNT") with one of the
                            Participating Banks, duly pledged in favour of the
                            Security Trustee (as trustee for itself and the
                            Secured Creditors pursuant to the Debenture), as
                            security for payment of all amounts under the
                            Facilities, such amounts so that at all times the
                            Reserve Account contains an aggregate amount equal
                            to scheduled Interest payments in respect of such
                            debentures for the immediately following 12 (twelve)
                            month period, all the aforegoing until the earlier
                            of: (i) 31 December 2003; or (ii) the date of
                            receipt by the Participating Banks of Accounts for
                            the first one year Ratio Period (if any) in respect
                            of which all the conditions have been met for
                            reducing the Margin with respect to Facility A and
                            Facility B to 0.45% (nought point four five percent)
                            per annum, in accordance with clause 1.1.114(A)(b)
                            above; and

                     (g)    any such Shareholder Loans shall be subordinated to
                            any such debentures as aforesaid in this clause
                            1.1.131, on terms and conditions satisfactory to an
                            Instructing Group;

10.1.132.            "PERMITTED SOURCES" means Permitted Borrowings referred to
                     in paragraphs (b), (c) and (e) of the definition of
                     "Permitted Borrowings", the proceeds from the issue by
                     Partner of share capital and Excess Cash Flow;

10.1.133.            "POTENTIAL EVENT OF DEFAULT" means any event which would
                     (but for the passage of time, the giving of notice, the
                     making of any determination hereunder or any combination
                     thereof in each case as specified in clause 17 (Default)
                     below) be an Event of Default;

10.1.134.            "PRINCIPAL SUPPLIER CONTRACT" means the turnkey contract
                     between Partner and Ericsson Radio Systems A.B. dated 29
                     May 1998 for the provision of the transmission and
                     switching equipment, cell site construction and value added
                     services platform and including, for the avoidance of
                     doubt, the terms and conditions of civil works annexed
                     thereto;

10.1.135.            "PROPORTION" means, in relation to a Participating Bank at
                     any time, the proportion borne by its Contribution to the
                     aggregate Contributions outstanding at such time or, as the
                     case may be, its Contribution with respect to Facility A,
                     Facility B or Facility C, as the context requires, to the
                     aggregate Contributions under Facility A, Facility B or
                     Facility C at such time;


<PAGE>
                                      -37-


10.1.136.            "QUARTER" means each period commencing on the day after a
                     Quarter Day and ending on the next following Quarter Day;

10.1.137.            "QUARTER DAY" means 31 March, 30 June, 30 September and 31
                     December in any year and "QUARTER DAY" means any of them;

10.1.138.            "RATIO PERIOD" means: (i) each period of 6 (six) calendar
                     months ending on June 30, during the period of this
                     Agreement; and (ii) each period of 1 (one) calendar year
                     during the period of this Agreement; the periods referred
                     to in (i) are also referred to as "SIX MONTH RATIO PERIODS"
                     and the periods referred to in (ii) are also referred to as
                     "ONE YEAR RATIO PERIODS";

10.1.139.            "REPAYMENT DATE" means in relation to an Advance, the date
                     on which the Duration Period for such Advance expires;

10.1.140.            "REPRESENTATIVE RATE" means, with respect to any currency
                     other than NIS, the representative rate of exchange of the
                     NIS and such currency, last published by the Bank of Israel
                     immediately prior to the relevant date of payment or
                     calculation (as the case may be) and, if the Bank of Israel
                     shall cease to publish a representative rate, then any
                     other rate of exchange of the NIS and such currency,
                     officially published which comes in place of such
                     representative rate, last published immediately prior to
                     the relevant date of payment or calculation (as the case
                     may be) and in the absence of any such official rate, then
                     the average of the selling and buying rates of exchange of
                     such currency, for NIS (for cheques and remittances)
                     prevailing at the Facility Agent at the end of the last
                     Business Day prior to the relevant date of payment or
                     calculation (as the case may be);

10.1.141.            "RESERVATIONS" means the reservations set out in SCHEDULE 7
                     (Reservations);

10.1.142.            "RESERVE ACCOUNT" shall have the meaning ascribed to such
                     term in clause 1.1.131(f) above;

10.1.143.            "RESTRICTED PERSON" means:

                     (a)    the Shareholders, any Affiliate of a Shareholder or
                            any partnership in which any of the Shareholders or
                            any of their Affiliates is a partner (either
                            directly or through any intermediate partnerships);
                            or


<PAGE>
                                      -38-


                     (b)    any person of which a Shareholder is an Affiliate or
                            any partnership in which any such person is a
                            partner (either directly or through intermediate
                            partnerships); or

                     (c)    any Subordinated Creditor or any Affiliate of a
                            Subordinated Creditor or any partnership in which a
                            Subordinated Creditor or any of their Affiliates is
                            a partner (either directly or through any
                            intermediate partnerships);

10.1.144.            "RESTRICTED PURCHASE" means any payment (whether in cash,
                     property, securities or otherwise) on account of the
                     purchase, redemption, reduction or other acquisition or
                     retirement of any of the share capital of any member of the
                     Group not held by a member of the Group;

10.1.145.            "SAC" means, for any Ratio Period, Partner's subscriber
                     acquisition costs paid or accrued during such Ratio Period,
                     being the sum of: (i) the costs paid or accrued during such
                     Ratio Period of acquisition by Partner of handsets and
                     accessories, less revenues received or receivable by
                     Partner during such Ratio Period from the sale of such
                     handsets and accessories; (ii) dealers' commissions and
                     other payments of a similar nature paid or accrued during
                     such Ratio Period in respect of the sale of handsets and
                     accessories; and (iii) preparation and distribution costs
                     paid or accrued during such Ratio Period for handsets and
                     accessories;

10.1.146.            "SECURED CREDITORS" means the Security Trustee, the
                     Facility Agent, the Coordinating Agent, the Participating
                     Banks, the Arranger, Israel Discount Bank Ltd. (in respect
                     of the IDB Performance Bond Counter Indemnity), any Secured
                     Interest Rate Hedge Provider and any other persons who
                     shall have acceded to the Security Trust Deed (other than a
                     party which has ceased to be a party thereto in accordance
                     with the terms of the Security Trust Deed);

10.1.147.            "SECURED INTEREST RATE HEDGE PROVIDER" shall bear the
                     meaning assigned to such term in clause 16.29(d) (Hedging
                     Agreements) below;

10.1.148.            "SECURED INTEREST RATE HEDGING AGREEMENT" means each
                     Interest Rate Hedging Agreement where the counterparty is a
                     Participating Bank;


<PAGE>
                                      -39-


10.1.149.            "SECURITY DOCUMENTS" means those documents listed in
                     paragraphs (a)-(f), or contemplated by paragraph (g), of
                     SCHEDULE 8 (Security Documents);

10.1.150.            "SECURITY TRUST DEED" means the security trust and
                     intercreditor agreement dated 18 August 1998;

10.1.151.            "SHAREHOLDER LOANS" means the aggregate amount of
                     subordinated debt made available by way of loans from the
                     Shareholders (or any Affiliate thereof) from time to time
                     to Partner, which loans, in each case, are subordinated in
                     accordance with the provisions of Schedule 6 (Shareholder
                     Loans) hereto;

10.1.152.            "SHAREHOLDERS" means the shareholders in Partner listed in
                     SCHEDULE 9 (Principal Shareholders in Partner) hereto or
                     their permitted successors or assigns (as permitted
                     pursuant to the terms of the Facility Documents);

10.1.153.            "SHAREHOLDERS AGREEMENT" means the relationship agreement
                     between the shareholders of Partner dated 10 October, 1999;

10.1.154.            "SHARE PLEDGES" means the pledges over shares and
                     Shareholder Loans granted by each of the Shareholders in
                     favour of the Security Trustee prior to the Commencement
                     Date, together with any other pledge given by any
                     Shareholder or any Affiliate at any time in favour of the
                     Security Trustee pursuant to the terms of any Facility
                     Document and "SHARE PLEDGE" means any of them;

10.1.155.            "STRATEGIC INVESTOR" shall bear the meaning ascribed to
                     such term in clause 16.15 (Share Capital) below;

10.1.156.            "SUBORDINATED CREDITOR" means any provider of Subordinated
                     Debt;

10.1.157.            "SUBORDINATED DEBT" means Borrowing made available by any
                     person (other than Shareholders or their respective
                     Affiliates) from time to time to any Obligor which is
                     subordinated to the Facilities and all other obligations
                     secured under the Security Documents on terms and
                     conditions reasonably satisfactory to the Facility Agent
                     (acting on the instructions of an Instructing Group)
                     (including (if necessary) any consequential amendments
                     approved by an Instructing Group to the financial ratios
                     and covenants set out in this Agreement occasioned by the
                     nature of such Subordinated Debt) other than Shareholder
                     Loans;


<PAGE>
                                      -40-


10.1.158.            "SUBSIDIARY" of a company or corporation means any company
                     or corporation:

                     (a)   which is controlled, directly or indirectly, by the
                           first-mentioned company or corporation;

                     (b)   at least half the issued share capital of which is
                           beneficially owned, directly or indirectly, by the
                           first-mentioned company or corporation; or

                     (c)   which is a Subsidiary of another Subsidiary of the
                           first-mentioned company or corporation

                     and, for these purposes, a company or corporation shall be
                     treated as being controlled by another if that other
                     company or corporation is able to direct its affairs and/or
                     to control the composition of its board of directors or
                     equivalent body;

10.1.159.            "SUPPLIER CONTRACTS" means the Principal Supplier
                     Contract and the Maintenance Agreement and "SUPPLIER
                     CONTRACT" means any of them;

10.1.160.            "TAX ON OVERALL NET INCOME" of a person shall be construed
                     as a reference to Tax (other than Tax deducted or withheld
                     from any payment) imposed on that person by any
                     jurisdiction on:

                     (a)   the net income, profits or gains of that person
                           worldwide; or

                     (b)   such of its income, profits or gains as arise in or
                           relate to the jurisdiction in which it is resident or
                           in which its principal office (and/or its Facility
                           Office) is located;

10.1.161.            "TAXES" means all income and other taxes and levies,
                     imposts, duties, charges, deductions and withholdings in
                     the nature or on account of tax together with interest
                     thereon and penalties and fees with respect thereto, if
                     any, and any payments made on or in respect thereof, and
                     "TAX" and "TAXATION" shall be construed accordingly;

10.1.162.            "TELECOMMUNICATIONS LAWS" means the Telecommunications Law
                     1982 of Israel (as amended) and all other Israeli laws,
                     statutes, regulations and judgments and all other laws
                     having effect in Israel relating to telecommunications
                     applicable to Partner and/or the business carried on by
                     Partner;


<PAGE>
                                      -41-



10.1.163.            "TERMINATION DATE" means: (a) in relation to Facility A,
                     the Facility A Maturity Date or, if earlier, the date upon
                     which the Available Facility A Commitment for each of the
                     Participating Banks is cancelled in full or reduced to
                     zero; (b) in relation to Facility B, 30 June 2008 or, if
                     earlier, the date upon which the Available Facility B
                     Commitment for each of the Participating Banks is cancelled
                     in full or reduced to zero; and (c) in relation to Facility
                     C, the Facility C Maturity Date or, if earlier, the date
                     upon which the Available Facility C Commitment for each of
                     the Participating Banks is cancelled in full or reduced to
                     zero;

10.1.164.            "TOTAL COMMITMENTS" means the aggregate Commitments of all
                     the Participating Banks for all the Facilities;



<PAGE>
                                      -42-



10.1.165.            "TOTAL DEBT" means, for any Ratio Period, the sum of:

                     (i)   the sum of the aggregate Contributions and
                           outstanding Interest under the Facilities, both as at
                           the last day of the Ratio Period;

                     (ii)  the excess (if any) of supplier's credit over
                           current assets, as appearing in the Accounts for
                           such Ratio Period. For the removal of doubt, nothing
                           herein contained shall derogate from the provisions
                           of this Agreement prohibiting Borrowing, other than
                           Permitted Borrowing; and

                     (iii) the balance on the last day of the Ratio Period of:
                           (a) all Permitted Borrowings (other than as referred
                           to in clause 1.1.126(d) above and other than
                           Shareholder Loans (including, for the avoidance of
                           doubt, any Linkage Differentials in respect of such
                           balance)) and any Interest or other amounts payable
                           on account of such Permitted Borrowings, all or any
                           part of the principal of which Permitted Borrowings
                           is payable or repayable by Partner prior to the date
                           by which the Facilities shall have been repaid in
                           full pursuant to clause 5 (Repayment) below; and (b)
                           that amount of the principal of all Shareholder
                           Loans (including, for the avoidance of doubt, any
                           Linkage Differentials in respect of such amount)
                           which is payable or repayable by Partner prior to
                           the date by which the Facilities shall have been
                           repaid in full pursuant to clause 5 (Repayment)
                           below and any Interest or other amounts payable on
                           account of such Shareholder Loans; all the above as
                           set out in the Accounts in respect of such Ratio
                           Period to be delivered pursuant to the provisions of
                           this Agreement.

10.1.166.            "TOTAL DEBT COVER RATIO" means in relation to each Ratio
                     Period, EBITDA after SAC for such Ratio Period, divided by
                     Total Debt;

10.1.167.            "TRANSFER CERTIFICATE" means a certificate substantially in
                     the form set out in SCHEDULE 10 (Transfer Certificate)
                     signed by a Participating Bank and a Transferee whereby:

                     (a)   such Participating Bank seeks to procure the transfer
                           to such Transferee of all or a part of such
                           Participating Bank's rights, benefits and obligations
                           hereunder as contemplated in clause 27.3 (Assignments
                           and Transfers by Participating Banks) below; and


<PAGE>
                                      -43-


                     (b)   such Transferee undertakes to perform the
                           obligations it will assume as a result of delivery
                           of such certificate to the Facility Agent as is
                           contemplated in clause 27.5 (Transfers by
                           Participating Banks) below;

10.1.168.            "TRANSFER DATE" means, in relation to any Transfer
                     Certificate, the date for the making of the transfer as
                     specified in the schedule to such Transfer Certificate;

10.1.169.            "TRANSFEREE" means a bank or other financial institution to
                     which a Participating Bank seeks to transfer all or part of
                     such Participating Bank's rights, benefits and obligations
                     hereunder and under the Facility Documents;

10.1.170.            "UNUTILISED CASH ACCOUNT" means each account opened by
                     Partner for the purpose of payments contemplated under the
                     2.7 Letter; provided that, Partner shall maintain a
                     separate Unutilised Cash Account in relation to each
                     Shareholder, and "RELEVANT UNUTILISED CASH ACCOUNT" shall
                     be construed accordingly;

10.1.171.            "VENTURE SUBSIDIARY" shall bear the meaning ascribed to
                     such term in clause 16.15 (Share Capital) below.

10.2.         ACCOUNTS

10.2.1.              All accounting expressions which are not otherwise defined
                     herein shall be construed in accordance with the Applicable
                     Accounting Principles.

10.2.2.              Each of "ADSCR", "CAPITAL EXPENDITURE", "DEBT SERVICE",
                     "EBITDA AFTER SAC", "EXCESS CASH FLOW", "FACILITY DEBT
                     COVER RATIO", "FIXED CHARGE COVERAGE RATIO", "FINANCIAL
                     COSTS", "INTEREST", "SAC", "TOTAL DEBT" and "TOTAL DEBT
                     COVER RATIO" for any Ratio Period, shall be determined from
                     the non-consolidated Accounts of Partner for the period of
                     6 (six) months or 1 (one) year, as the case may be, ending
                     on the last day of such Ratio Period and delivered pursuant
                     to this Agreement (adjusted to the extent necessary to
                     determine compliance with clause 16.32 (Financial
                     Undertakings) below), or if not included in the Accounts,
                     shall be determined from a certificate signed by the
                     Auditors delivered to the Participating Banks together with
                     the Accounts. Without limiting the generality of the
                     aforegoing, Partner shall procure that the Accounts shall
                     include notes detailing all defined terms referred to above
                     and all elements of such terms, to the extent not
                     customarily detailed in the Accounts,


<PAGE>
                                      -44-


                     including: (i) all expenses which have been capitalised;
                     (ii) all Interest scheduled to be paid during the relevant
                     Ratio Period to which such Accounts relate; (iii) all
                     scheduled repayments of principal of Borrowings; (iv)
                     supplier's credit; and (v) those Taxes paid during the
                     relevant Ratio Period and reserves made for Taxes but not
                     paid during such Ratio Period (without derogating from any
                     rights the Participating Banks may have arising from the
                     failure to comply with the aforegoing, in the event that
                     the Auditors fail to distinguish in a set of such Accounts
                     between Taxes paid and reserves for Taxes not paid during a
                     Ratio Period, then, for the purposes of any calculation to
                     be made in connection with clause 16.32 (Financial
                     Undertakings) below, all Taxes referred to in any such
                     Accounts shall be deemed to have been paid during the Ratio
                     Period in respect of which such Accounts were prepared).
                     All of the terms referred to in this clause 1.2.2 shall be
                     expressed in NIS (and if stated in another currency, the
                     equivalent thereof in NIS) unless the context otherwise
                     requires.

10.3.         INTERPRETATION

              Any reference in this Agreement to:

10.3.1.              the "EQUIVALENT" on any given date in one currency (the
                     "FIRST CURRENCY") of an amount denominated in another
                     currency (the "SECOND CURRENCY") means the amount of the
                     first currency which could be purchased with the amount of
                     the second currency at: (i) in the case that one of the two
                     relevant currencies is NIS, the Representative Rate for the
                     other currency; or (ii) in the case that neither of the
                     relevant currencies is NIS, the rate equal to a fraction,
                     the numerator of which is the Representative Rate of the
                     second currency and the denominator of which is the
                     Representative Rate of the first currency;

10.3.2.              the "FACILITY AGENT", "COORDINATING AGENT", "SECURITY
                     TRUSTEE", "ARRANGER", any "SECURED Creditor" or any
                     "PARTICIPATING BANK" shall be construed so as to include
                     its and any subsequent permitted successors, Transferees
                     and permitted assigns in accordance with their respective
                     interests;

10.3.3.              a "LAW" includes any regulation, rule, official directive,
                     request or guideline (having the force of law) of any
                     governmental body, agency, department or regulatory,
                     self-regulatory or other authority or organisation,
                     including, without limitation, the position (guidelines) of


<PAGE>
                                      -45-


                     the Examiner of Banks with respect to proper conduct of
                     bank affairs ("Nihul Bankai Takin");

10.3.4.              a "MONTH" is a reference to a period starting on one day in
                     a calendar month and ending on the numerically
                     corresponding day in the next succeeding calendar month
                     save that, where any such period would otherwise end on a
                     day which is not a Business Day, it shall end on the next
                     succeeding Business Day, unless that day falls in the
                     calendar month succeeding that in which it would otherwise
                     have ended, in which case it shall end on the immediately
                     preceding Business Day provided that, if a period starts on
                     the last Business Day in a calendar month or if there is no
                     numerically corresponding day in the month in which that
                     period ends, that period shall end on the last Business Day
                     in that later month;

10.3.5.              a "PERSON" shall be construed as a reference to any person,
                     firm, company, corporation, government, state or agency of
                     a state or any association or partnership (whether or not
                     having separate legal personality) or two or more of the
                     foregoing;

10.3.6.              any "SHAREHOLDER" shall be construed so as to include its
                     permitted and any subsequent permitted successors in
                     accordance with its respective interests;

10.3.7.              "VAT" shall be construed as a reference to value added tax
                     including any similar tax which may be imposed in place
                     thereof from time to time;

10.3.8.              a "WHOLLY-OWNED SUBSIDIARY" of a company or corporation
                     shall be construed as a reference to any company or
                     corporation which has no other members except that other
                     company or corporation and that other company's or
                     corporation's wholly-owned Subsidiaries or persons acting
                     on behalf of that other company or corporation or its
                     wholly-owned Subsidiaries;

10.3.9.              the "WINDING-UP", "DISSOLUTION" or "ADMINISTRATION" of a
                     company or corporation shall be construed so as to include
                     any equivalent or analogous proceedings under the law of
                     the jurisdiction in which such company or corporation is
                     incorporated or any jurisdiction in which such company or
                     corporation carries on business including the seeking of
                     liquidation, winding-up, reorganisation, dissolution,
                     administration, arrangement, adjustment, protection or
                     relief of debtors;


<PAGE>
                                      -46-



10.3.10.             "INCLUDING" and "INCLUDES" means, including, without
                     limiting the generality of any description preceding such
                     terms.

10.4.         CURRENCY SYMBOLS

10.4.1.              "EURO" means the single currency introduced in the third
                     stage of economic and monetary issues pursuant to the
                     Treaty establishing the European Community, as amended from
                     time to time; and

10.4.2.              "$", "USD", "DOLLARS", "US DOLLARS" and "DOLLARS" denote
                     the lawful currency of the United States of America. "NIS"
                     and "SHEQELS" denote the lawful currency of Israel.

10.5.         STATUTES

              Any reference in this Agreement to a statute shall be construed as
              a reference to such statute as the same may have been, or may from
              time to time be, amended or re-enacted.

10.6.         AGREEMENTS

              Save where the contrary is indicated, any reference in this
              Agreement to this Agreement or any other agreement or document
              shall be construed as a reference to this Agreement or, as the
              case may be, such other agreement or document as the same may have
              been, or may from time to time be, amended, varied, assigned,
              novated or supplemented in accordance with the terms hereof.



<PAGE>



                                      -47-

11.    THE FACILITIES

11.1.      THE FACILITIES

11.1.1.              The Facilities granted to Partner hereunder by the
                     Participating Banks shall, with effect from the
                     Commencement Date and subject to the terms and conditions
                     of this Agreement, be as follows:

                     (a)    a NIS and, subject to clause 2.1.2 below, US Dollar
                            and Euro multicurrency term loan facility in an
                            aggregate amount equal to the total Facility A
                            Commitments;

                     (b)    a NIS and, subject to clause 2.1.2 below, US Dollar
                            and Euro multicurrency revolving loan facility in an
                            aggregate amount equal to the total Facility B
                            Commitments; and

                     (c)    a NIS term loan facility in an aggregate amount in
                            NIS equivalent to the total Facility C Commitments.

11.1.2.              For the purpose of this clause 2.1.2, "AMOUNT OF THE
                     OUTSTANDING A AND B ADVANCES" shall mean the aggregate
                     outstanding from time to time of: (i) the aggregate
                     Original Dollar Amounts of all outstanding Advances under
                     Facility A; and (ii) the aggregate of the Dollar Amounts
                     under Facility B of all Advances, including any Linkage
                     Differentials.

                     Notwithstanding anything contained in this Agreement to the
                     contrary, Partner shall procure that:

                     (a)    not less than 60% (sixty percent) of an amount equal
                            to the Amount of the Outstanding A and B Advances
                            shall, at any time, be denominated and owing in NIS;
                            and

                     (b)    not more than 40% (forty percent) of an amount equal
                            to the Amount of the Outstanding A and B Advances
                            shall, at any time, be denominated and owing in
                            Dollars or Euros; provided that not more than 35%
                            (thirty-five percent) of such amount which may be
                            denominated and owing in Dollars or Euros as
                            aforesaid, shall, at any time, be denominated and
                            owing in Euros.

                     For the removal of doubt, no Participating Bank shall be
                     bound to monitor or verify compliance by Partner with the
                     above. The failure

<PAGE>
                                      -48-




                     by Partner to comply with the above provisions shall
                     constitute an Event of Default as referred to in clause 17
                     (Default) below.

11.2.         CONVERSION OF OUTSTANDING ADVANCES

              [Deleted.]

11.3.         LENDERS' RIGHTS AND OBLIGATIONS

11.3.1.              The obligations of each Participating Bank under this
                     Agreement shall be several.

11.3.2.              The obligations of each Participating Bank (acting as such)
                     under this Agreement shall be to contribute its Available
                     Commitment in respect of each Facility to be advanced
                     hereunder. The failure by any Participating Bank to perform
                     any of its obligations under this Agreement, shall not
                     affect the obligations of Partner or any other
                     Participating Bank towards any other party hereto, nor
                     shall the Facility Agent, the Security Trustee, the
                     Arranger, the Coordinating Agent or any other Participating
                     Bank be liable or responsible for the failure by such
                     Participating Bank to perform its obligations under this
                     Agreement.

11.4.         PURPOSE

              Partner shall, subject to the terms of this Agreement, apply all
              amounts borrowed by it under the Facilities for the purposes of:

11.4.1.              financing the purchase of equipment, maintenance expenses,
                     operating losses and daily operating expenses properly
                     incurred in the establishment and operation of a wireless
                     telephone service, as contemplated by the Licence,
                     including capitalised financial expenses (if there is a
                     shortfall in Partner's cash flow after financial expenses)
                     and the financing of Partner's working capital needs for
                     its Business, as well as for the establishment and
                     operation of second and-a-half and third generation (known
                     as 2.5 and 3G) wireless telephone services, all as
                     contemplated in the version of the Business Plan dated 7
                     July 2002 delivered to the Facility Agent and the
                     Coordinating Agent on 11 July 2002; and

11.4.2.              the subscription or acquisition of such share or loan
                     capital in companies which carry on business in the
                     telecommunications sector in accordance with and subject to
                     the limitations and restrictions set

<PAGE>
                                      -49-


                     out in clause 16.37(a)
                     (Loans, Guarantees and Investments in Subsidiaries) below.

              No Participating Bank shall be bound to monitor or verify the
              application of any amount borrowed pursuant to this Agreement.

12.    CONDITIONS PRECEDENT

       [Deleted.]

13.    DRAWDOWNS

13.1.         FIRST DRAWDOWN REQUEST

              [Deleted.]

13.2.         DRAWDOWN REQUEST

              A drawdown under the Facilities (including a drawdown constituting
              a reborrowing permitted under this Agreement) shall be made by way
              of delivery by Partner to the Participating Bank from whom it
              wishes to receive an Advance (with, in the case of a Drawdown
              under Facility A or Facility C, a copy thereof being
              simultaneously delivered to the Coordinating Agent), of a duly
              completed Drawdown Request. A Drawdown Request is irrevocable and
              shall not be regarded as having been duly completed and delivered
              unless:

13.2.1.              it identifies the Facility to be utilised;

13.2.2.              it identifies the Participating Bank from whom Partner
                     wishes to receive an Advance;

13.2.3.              the amount of the Advance requested does not exceed the
                     Available Commitment in relation to the Facility requested
                     of the relevant Participating Bank;

13.2.4.              it is received not later than 12 noon (Tel-Aviv time) on
                     the Latest Drawdown Request Date;

13.2.5.              the proposed date for the making of such Advance is a
                     Business Day and, in the case of: (i) Facility A (other
                     than a drawdown in respect of a reborrowing permitted under
                     this Agreement) is within the Availability Period Facility
                     A; or (ii) Facility C (other than a


<PAGE>
                                      -50-


                     drawdown in respect of a reborrowing permitted under this
                     Agreement) is within the Availability Period Facility C;

13.2.6.              with respect to Facility A and Facility B, without
                     derogating from clause 2.1.2 above, the currency of the
                     Advance requested is Dollars, Euros or NIS and, with
                     respect to Facility C, the currency of the Advance
                     requested is NIS;

13.2.7.              in the case of a Facility A Advance or a Facility C
                     Advance, the proposed Original Dollar Amount of such
                     Advance is a minimum amount of US $10,000,000 (ten million
                     United States Dollars);

13.2.8.              in the case of a Facility B Advance, the proposed Original
                     Dollar Amount of such Advance is a minimum amount of US
                     $3,000,000 (three million United States Dollars); provided
                     that: (a) in the case of a Facility B Advance drawn for the
                     purposes only of paying Interest (whether in respect of
                     Facility A or Facility B) during the Availability Period
                     Facility A or of paying Interest in respect of Facility C
                     during the Availability Period Facility C which, in each
                     case, is applied immediately after such drawing in payment
                     of such Interest, such minimum requirement shall not be
                     applicable; and (b) any Participating Bank may, with
                     respect to any Facility B Advance, agree with Partner that
                     such Advance shall be in an amount less than the minimum as
                     aforesaid;

13.2.9.              no Event of Default or Potential Event of Default hereunder
                     has occurred and is continuing which has not been waived by
                     an Instructing Group in accordance with the terms of this
                     Agreement and no Event of Default or Potential Event of
                     Default shall occur as a result of such Advance and the
                     representations and warranties referred to in clause 15
                     (Representations and Warranties) below which are deemed to
                     be repeated pursuant to the terms thereof are true and
                     accurate in all respects on and as of the proposed date for
                     the making of such Advance by reference to the facts and
                     circumstances then existing;

13.2.10.             no Change of Ownership has occurred.

13.3.         PARTICIPATING BANK'S PARTICIPATION

              If the conditions set out in clause 4.2 (Drawdown Request) above
              have been met in relation to a Drawdown Request, then, subject to
              the provisions of this Agreement, the Participating Bank from whom
              such Advance was requested under such Drawdown Request shall
              advance (subject to the


<PAGE>
                                      -51-


              proviso set out in this clause 4.3) to Partner the amount
              requested in such Drawdown Request under its Available Facility A
              Commitment, Available Facility B Commitment or Available Facility
              C Commitment, as applicable, such Advance to be governed by the
              terms of this Agreement and by such other terms and conditions,
              including relating to types of Advances, commissions and other
              terms relating to banking facilities (to the extent that such
              other terms and conditions are not inconsistent with the terms and
              conditions of this Agreement) as are agreed to between Partner and
              such Participating Bank with respect to such Advance; provided
              that, for the avoidance of doubt, if the relevant Available
              Commitment of the relevant Participating Bank is reduced in
              accordance with the provisions hereof after the relevant
              Participating Bank has received such Drawdown Request, then the
              amount of such Advance shall be reduced accordingly.

13.4.         NOTIFICATION OF ADVANCE

              [Deleted.]

13.5.         OUTSTANDINGS IN PROPORTION TO COMMITMENTS

              Notwithstanding anything to the contrary in this Agreement,
              Partner shall procure that its drawdowns of Advances from each
              Participating Bank under each of the Facilities and its repayments
              and prepayments to each Participating Bank under each of the
              Facilities, are made in proportion to such Participating Bank's
              Commitment with respect to such Facility, such that: (a) with
              respect to each of Facility A and Facility C, at all times, the
              Proportion of such Participating Bank with respect to such
              Facility is equal to the proportion which such Participating
              Bank's Commitment in respect of such Facility constitutes of the
              aggregate Commitments for such Facility; and (b) with respect to
              Facility B, as at the last day of each Quarter, the Proportion of
              such Participating Bank with respect to Facility B is equal to the
              proportion which such Participating Bank's Commitment in respect
              of Facility B constitutes of the aggregate Commitments for
              Facility B. For the removal of doubt, no Participating Bank shall
              be bound to monitor or verify compliance by Partner with the
              above.

14.    REPAYMENT

14.1.         REPAYMENT OF FACILITY A LOAN

14.1.1.              As from the expiry of the Availability Period Facility A,
                     each Participating Bank's Commitment for Facility A shall
                     be reduced, on each Quarter Date, to the amount set out
                     opposite its name, in relation to such Quarter Date, in
                     PART A of SCHEDULE 15 (Reduction of


<PAGE>
                                      -52-


                     Facility A) (each such Quarter Date, "A FACILITY A
                     COMMITMENT REDUCTION DATE").

                     (a)    Partner shall, on or before each Facility A
                            Commitment Reduction Date, repay to each
                            Participating Bank Advances in an aggregate amount,
                            such that after such repayment, the aggregate
                            Original Dollar Amount of all outstanding Advances
                            made by such Participating Bank under Facility A,
                            equals or is less than the amount set out opposite
                            such Participating Bank's name in Part A of Schedule
                            15 (Reduction of Facility A) on such Facility A
                            Commitment Reduction Date. For the removal of doubt:
                            (i) all Advances repaid as aforesaid shall be repaid
                            together with Interest, Linkage Differentials and
                            other amounts (if any) payable to each such
                            Participating Bank under such Facility in respect of
                            such Advances; and (ii) Partner, in making all
                            repayments, shall comply with clause 4.5(a)
                            (Outstandings in Proportion to Commitments--Facility
                            A) above.

                     (b)    Without derogating from clause 5.1.2(a) above,
                            Partner shall repay to each Participating Bank that
                            has made an Advance under Facility A, such Advance
                            (together with Interest thereon, Linkage
                            Differentials and other amounts (if any) payable to
                            such Participating Bank in relation to such Advance
                            under this Agreement) on the Repayment Date for such
                            Advance.

                     (c)    Subject to clause 5.1.1 above, Partner shall be
                            entitled to reborrow under Facility A, an amount up
                            to the Original Dollar Amount (or, if such
                            reborrowing shall be denominated in NIS or Euro, the
                            equivalent thereof at the date of such reborrowing)
                            of all Advances repaid pursuant to clause 5.1.2(b)
                            from the Participating Bank to whom such repayment
                            was made; provided that, such reborrowing is within
                            such Participating Bank's Available Commitment for
                            Facility A at the time of such reborrowing.

                     (d)    Any part of any Commitment under Facility A of a
                            Participating Bank which remains undrawn at the end
                            of the Availability Period Facility A, shall be
                            automatically and immediately cancelled.

14.2.         REPAYMENT OF FACILITY B LOAN

14.2.1.              Partner shall repay to each Participating Bank each
                     outstanding Advance made by a Participating Bank under
                     Facility B (together with


<PAGE>
                                      -53-


                     Interest, Linkage Differentials and other amounts (if
                     any) payable to each such Participating Bank under
                     Facility B with respect to such Advance) on its
                     Repayment Date. For the removal of doubt, all
                     outstanding Advances under Facility B (together with
                     Interest, Linkage Differentials and other amounts (if
                     any) payable with respect to such Advances) shall be
                     repaid by no later than 30 June 2008.

14.2.2.              Subject to the provisions of this clause 5.2.2 below, if
                     before 12 noon Tel-Aviv time on the Latest Drawdown Request
                     Date before the Repayment Date of an Advance made by a
                     Participating Bank under Facility B ("THE ORIGINAL
                     ADVANCE"), Partner has not:

                     (a)    delivered a Drawdown Request to the relevant
                            Participating Bank under Facility B in accordance
                            with clause 4.2 (Drawdown Request) above, for a new
                            Advance in respect of the Original Advance made by
                            such Participating Bank; or

                     (b)    notified the relevant Participating Bank that it
                            proposes to repay the Original Advance on its
                            Repayment Date without requesting such Participating
                            Bank for a new Advance under Facility B in respect
                            of the Original Advance made by such Participating
                            Bank,

                     then a duly completed Drawdown Request shall be deemed to
                     have been delivered to the relevant Participating Bank, in
                     accordance with clause 4.2 (Drawdown Request), for an
                     Advance ("THE NEW ADVANCE") under Facility B and in the
                     same principal amount (together with all Linkage
                     Differentials in respect thereof, if applicable), Duration
                     Period and currency of denomination and based on the same
                     type of rate of Interest as the Original Advance, save
                     that:

                     (i)    that part of the rate of Interest of the New Advance
                            based on Cost of Funds (as referred to in clause 8.1
                            (Interest Rate) below) of the relevant Participating
                            Bank shall be determined by such Participating Bank
                            in relation to such Participating Bank's Cost of
                            Funds for making Advances of the same type, amount,
                            duration and currency denomination as the deemed New
                            Advance as at the date such New Advance is deemed to
                            have been made and, for the removal of doubt, the
                            Margin shall be that prevailing during such new
                            Duration Period;

                     (ii)   if, on the date such New Advance is made, the
                            Original Dollar Amount of such New Advance exceeds
                            the Available Commitment of the relevant
                            Participating Bank under


<PAGE>
                                      -54-


                            Facility B, Partner shall,
                            on such date, pay to the relevant Participating
                            Bank, an amount equal to the amount by which such
                            New Advance would (but for the operation of this
                            paragraph (ii)) exceed such Available Commitment and
                            the New Advance shall be the amount of the Available
                            Facility B Commitment of such Participating Bank;
                            and

                     (iii)  no Advance shall be made pursuant to this clause
                            5.2.2 if the Duration Period in respect of such
                            Advance shall extend beyond 30 June 2008; and

                     (iv)   no Advance shall be made pursuant to this clause
                            5.2.2, unless the provisions of clause 4.2.9 above
                            have been complied with in respect of such Advance.

14.3.         REPAYMENT OF FACILITY C LOAN

14.3.1.              As from the expiry of the Availability Period Facility C,
                     each Participating Bank's Commitment for Facility C shall
                     be reduced, on each Quarter Date, to the amount set out
                     opposite its name, in relation to such Quarter Date, in
                     Part B of Schedule 15 (Reduction of Facility C) (each such
                     Quarter Date, "A FACILITY C COMMITMENT REDUCTION DATE").


                     (a)    Partner shall, on or before each Facility C
                            Commitment Reduction Date, repay to each
                            Participating Bank Advances in an aggregate amount,
                            such that after such repayment, the aggregate
                            Original Dollar Amount of all outstanding Advances
                            made by such Participating Bank under Facility C,
                            equals or is less than the amount set out opposite
                            such Participating Bank's name in PART B of SCHEDULE
                            15 (Reduction of Facility C) on such Facility C
                            Commitment Reduction Date. For the removal of doubt:
                            (i) all Advances repaid as aforesaid shall be repaid
                            together with Interest, Linkage Differentials and
                            other amounts (if any) payable to each such
                            Participating Bank under such Facility in respect of
                            such Advances; and (ii) Partner, in making all
                            repayments, shall comply with clause 4.5(a)
                            (Outstandings in Proportion to Commitments--Facility
                            C ) above.

                     (b)    Without derogating from clause 5.3.2(a) above,
                            Partner shall repay to each Participating Bank that
                            has made an Advance under Facility C, such Advance
                            (together with Interest thereon, Linkage
                            Differentials and other amounts (if any) payable to
                            such


<PAGE>
                                      -55-


                            Participating Bank in relation to such Advance
                            under this Agreement) on the Repayment Date for such
                            Advance.

                     (c)    Subject to clause 5.3.1 above, Partner shall be
                            entitled to reborrow under Facility C, an amount up
                            to the NIS equivalent of the Original Dollar Amount
                            as at the date of such reborrowing, of all Advances
                            repaid pursuant to clause 5.3.2(b) from the
                            Participating Bank to whom such repayment was made;
                            provided that, such reborrowing is within such
                            Participating Bank's Available Commitment for
                            Facility C at the time of such reborrowing.

                     (d)    Any part of any Commitment under Facility C of a
                            Participating Bank which remains undrawn at the end
                            of the Availability Period Facility C, shall be
                            automatically and immediately cancelled.

14.4.         CURRENCY OF REPAYMENT

              All repayments shall be made in the currency in which the relevant
Advance was made.

15.    VOLUNTARY PREPAYMENT AND REBORROWING

15.1.         PREPAYMENT

              Partner may, in the manner set out below, prepay a Participating
              Bank in whole or in part, any outstanding Advances made by such
              Participating Bank; provided that such prepayments are made in
              such a manner so as to ensure compliance by Partner with clause
              4.5 (Outstandings in Proportion to Commitments) above.

15.2.         CONDITIONS TO PREPAY

              No prepayment may be made under clause 6.1 (Prepayment) above
unless:

15.2.1.              Partner shall have given due notice to the relevant
                     Participating Bank (with a copy thereof being sent
                     simultaneously to the Facility Agent and the Coordinating
                     Agent). Such notice must specify the date or dates upon
                     which the prepayment is to be made, the amount of the
                     prepayment and the currency of the outstanding Advance to
                     be prepaid as aforesaid and must be given at least:


<PAGE>
                                      -56-


                     (i)    in respect of a prepayment to a Participating Bank
                            of up to US $25,000,000 (twenty-five million United
                            States Dollars) (or the Dollar equivalent thereof),
                            10 (ten) days prior to such prepayment;

                     (ii)   in respect of a prepayment to a Participating Bank
                            of between US $25,000,000 (twenty-five million
                            United States Dollars) and US $50,000,000 (fifty
                            million United States Dollars) (or the Dollar
                            equivalent thereof), 15 (fifteen) days prior to such
                            prepayment;

                     (iii)  in respect of a prepayment to a Participating Bank
                            of between US $50,000,000 (fifty million United
                            States Dollars) and US $75,000,000 (seventy-five
                            million United States Dollars) (or the Dollar
                            equivalent thereof), 25 (twenty-five) days prior to
                            such prepayment; or

                     (iv)   in respect of a prepayment to a Participating Bank
                            in excess of US $75,000,000 (seventy-five million
                            United States Dollars) (or the Dollar equivalent
                            thereof), 30 (thirty) days prior to such prepayment;

15.2.2.              in the event that such prepayment is to be funded from
                     Permitted Sources, there is attached to such notice a
                     certificate of Partner, in the form set out in SCHEDULE 16
                     (Certificate by Partner's Chief Financial Officer) signed
                     by the Chief Financial Officer of Partner, confirming that
                     all the monies to be utilised by Partner to make the
                     relevant prepayment are from Permitted Sources and
                     specifying details of the relevant Permitted Source; and

15.2.3.              such prepayment shall be in a minimum amount of US
                     $5,000,000 (five million United States Dollars) or the
                     Dollar equivalent thereof, as applicable.

15.3.         EFFECTS OF NOTICE OF PREPAYMENT

15.3.1.              A notice of prepayment given by Partner to a Participating
                     Bank, as referred to in clause 6.2 (Conditions to Prepay)
                     above, shall be irrevocable and shall oblige Partner to
                     make the relevant prepayment on the date specified therefor
                     in such notice of prepayment.

15.3.2.              All prepayments shall be made together with: (a) any
                     accrued but unpaid Interest on the amount being prepaid
                     (including all amounts payable on account of broken funding
                     as referred to in clause 19


<PAGE>
                                      -57-


                     (Broken Funding) below); (b) a prepayment commission equal
                     to 0.1% (nought point one percent) of the amount of the
                     Advance prepaid, for each 12 (twelve) months by which the
                     date of prepayment is earlier than the relevant Repayment
                     Date, pro rata for part of 12 (twelve) months; and (c) if
                     such prepayment is made other than from Permitted Sources:
                     (i) with respect to Advances under Facility A or Facility
                     B, a commission at a rate equal, if prepaid during the
                     Availability Period Facility A, to 0.5% (nought point five
                     percent) of the amount being prepaid; or if prepaid after
                     the Availability Period Facility A, such percentage reduced
                     annually by 0.1% (nought point one percent) per annum, such
                     that if prepayment is made during the first year after the
                     Availability Period Facility A, such commission will be
                     0.4% (nought point four percent) of the amount of the
                     prepayment, if a prepayment is made during the second year
                     after the Availability Period Facility A, such commission
                     will be 0.3% (nought point three percent) and so on and so
                     forth; provided that, such percentage shall in no event be
                     less than 0.1% (nought point one percent); and (ii) with
                     respect to Advances under Facility C, a commission at a
                     rate equal, if prepaid during the Availability Period
                     Facility C, to 0.5% (nought point five percent) of the
                     amount being prepaid; or if prepaid after the Availability
                     Period Facility C, such percentage reduced annually by 0.1%
                     (nought point one percent) per annum, such that if
                     prepayment is made during the first year after the
                     Availability Period Facility C, such commission will be
                     0.4% (nought point four percent) of the amount of the
                     prepayment, if a prepayment is made during the second year
                     after the Availability Period Facility C, such commission
                     will be 0.3% (nought point three percent) and so on and so
                     forth; provided that, such percentage shall in no event be
                     less than 0.1% (nought point one percent).

15.3.3.              A prepayment of an Advance shall be made in the currency in
                     which such Advance was made.

15.3.4.              A prepayment of an Advance shall be made together with all
                     Linkage Differentials and other amounts, if any, accrued in
                     connection with such Advance.

15.3.5.              Partner shall not repay all or any part of the Loans,
                     except at the times and in the manner expressly provided in
                     this Agreement.

15.4.         REBORROWING

15.4.1.              Subject to clause 4.5 above, Partner shall be entitled: (a)
                     until the Facility A Maturity Date, to reborrow, under
                     Facility A, the Original


<PAGE>
                                      -58-


                     Dollar Amount of all Advances prepaid from Permitted
                     Sources, from the Participating Bank to whom such
                     prepayment was made; provided that, such reborrowing is
                     within such Participating Bank's Available Facility A
                     Commitment at the time of such reborrowing; and (b) until
                     the Facility C Maturity Date, to reborrow, under Facility
                     C, the Original Dollar Amount of all Advances prepaid from
                     Permitted Sources, from the Participating Bank to whom such
                     prepayment was made; provided that, such reborrowing is
                     within such Participating Bank's Available Facility C
                     Commitment at the time of such reborrowing.

15.4.2.              Save as expressly set out in clause 6.4.1 above and clause
                     7.2.2 below, Partner may not reborrow any part of Facility
                     A or Facility C which is prepaid.

15.4.3.              (a)    Partner may, by giving to the Facility Agent not
                            less than 5 (five) Business Days' prior notice to
                            that effect, cancel the whole or any part of any
                            Facility, any such cancellation to reduce the
                            Available Commitments of each of the Participating
                            Banks under such Facility pro rata to their
                            respective Commitments under such Facility.

                     (b)    Any notice of cancellation given by Partner as
                            aforesaid shall be irrevocable and shall specify the
                            date upon which such cancellation is to be made, the
                            Facility to be cancelled and the amount of such
                            cancellation.

                     (c)    Partner shall not be entitled to borrow any amount
                            of a Facility which has been cancelled.

15.4.4.              Any part of Facility B which is prepaid or repaid may be
                     reborrowed in accordance with the terms of this Agreement;
                     provided that, such reborrowing is within such
                     Participating Bank's Available Facility B Commitment at the
                     time of such reborrowing.

16.    MANDATORY PREPAYMENT

16.1.         NON-COMPLIANCE WITH CORRECTIVE MILESTONES

              [Deleted.]

16.2.         DISPOSALS


<PAGE>
                                      -59-


16.2.1.              If Partner sells, transfers, lends, leases or otherwise
                     disposes of any of its assets (including securities Partner
                     holds (directly or indirectly) in any Subsidiary (for the
                     removal of doubt, subject to any such disposal being
                     permitted under the Facility Documents)), Partner shall
                     prepay an amount equal to the Net Proceeds resulting from
                     such sale, transfer, loan, lease or disposal (provided such
                     Net Proceeds are greater than US $1,000,000 (one million
                     United States Dollars) or its equivalent and, when
                     aggregated with any other Net Proceeds received during the
                     Financial Year in which the relevant Net Proceeds are
                     received, exceed an aggregate amount equal to US $2,500,000
                     (two million five hundred thousand United States Dollars)
                     or its equivalent) on the next Business Day after receipt
                     of Net Proceeds from such sale, transfer, loan, lease or
                     disposal.

                     For the purposes of this clause 7.2.1, in the event that
                     any such sale of assets is made for full value for cash and
                     that the proceeds of such sale have been applied within 30
                     (thirty) days after such sale in the acquisition or
                     improvement of assets of the Business, then such sale of
                     assets shall not constitute a disposal.

16.2.2.              A mandatory prepayment made under clause 7.2.1 above, shall
                     be capable of being reborrowed; provided that, such
                     reborrowing is within the relevant Participating Bank's
                     Available Facility A Commitment or Available Facility C
                     Commitment, as applicable, at the time of such reborrowing.

16.3.         INVESTMENT BY PARTNER IN SUBSIDIARIES

              In the event Partner makes any investment, whether by way of share
              or loan capital (including guarantees) in any Subsidiary in the
              manner permitted under 16.37(a) (Loans, Guarantees and Investments
              in Subsidiaries) below which exceeds, in the aggregate, US
              $5,000,000 (five million United States Dollars) or its equivalent,
              and: (i) such investment was funded, directly or indirectly, from
              the proceeds of the Facilities; and (ii) Partner raises financing,
              at any time, by way of Permitted Loan Capital comprising
              debentures, Partner shall, within 10 (ten) Business Days after
              raising any such Permitted Loan Capital comprising debentures,
              mandatorily prepay to the Participating Banks all amounts raised
              as aforesaid until an amount equal to such excess over US
              $5,000,000 (five million United States Dollars) (together with all
              Interest, Linkage Differentials and other amounts accrued in
              connection therewith) has been prepaid. For the removal of doubt,
              a mandatory prepayment made under this clause 7.3 shall be capable
              of being reborrowed, provided that, such reborrowing is within the
              relevant Participating Bank's Available Facility A Commitment or
              Available Facility C Commitment, as the case may be, at the time
              of such reborrowing.


<PAGE>
                                      -60-



16.4.         TERMS FOR MANDATORY PREPAYMENT

16.4.1.              Unless specifically otherwise stated in this Agreement,
                     Partner shall not be entitled to reborrow any amount
                     mandatorily prepaid.

16.4.2.              In making a mandatory prepayment under this clause 7,
                     Partner shall:

                     (a)    make proportional prepayments to each of the
                            Participating Banks in accordance with clause 4.5
                            (Outstandings in Proportion to Commitments) above;

                     (b)    without derogating from (a) above, be at liberty to
                            choose on account of which Facility or Facilities
                            any such mandatory prepayment is being made,
                            provided that:

                            (i)    Partner shall give notice to the Facility
                                   Agent and to each of the Participating Banks
                                   as soon as reasonably practicable (and, in
                                   any event, at least 1 (one) Business Day
                                   before the date Partner is obliged to make
                                   any such prepayment) containing details of
                                   all amounts to be prepaid as aforesaid and
                                   the amount and currency of the Advances to be
                                   prepaid to the Participating Banks on a
                                   Facility-by-Facility basis;

                            (ii)   in effecting any such mandatory prepayment,
                                   Partner shall ensure that the amount of any
                                   Advances outstanding to any Participating
                                   Bank under any Facility is not greater than
                                   such Participating Bank's Available Facility
                                   A Commitment, Available Facility B Commitment
                                   or Available Facility C Commitment (as the
                                   case may be); and

                            (iii)  any mandatory prepayment shall be made
                                   together with any accrued but unpaid Interest
                                   on the amount being prepaid (including
                                   amounts payable on account of broken funding
                                   as referred to in clause 19 (Broken Funding)
                                   below), Linkage Differentials and all other
                                   amounts accrued in connection with such
                                   amount being prepaid; and

                     (c)    in the event that Partner shall fail to elect to
                            make a choice as referred to in clause 7.4.2 above
                            in respect of any particular mandatory prepayment,
                            then any such prepayment shall be paid to the
                            Participating Banks pro rata to, and on account of,
                            the


<PAGE>
                                      -61-


                            Original Dollar Amount of their respective
                            outstanding Advances under each of Facility A and
                            Facility C and pro rata as amongst each of such
                            Advances, as at the date immediately before such
                            mandatory prepayment is payable under the
                            Facilities.

16.4.3.              A mandatory prepayment of an Advance shall be made in the
                     currency in which such Advance was made.

17.    INTEREST

17.1.         INTEREST RATE

              The rate of Interest on each Advance made under the Facilities for
              each Interest Period will be the percent per annum which is the
              aggregate of:

17.1.1.              the Margin (with respect to the relevant Facility); and

17.1.2.              the Cost of Funds of the applicable Participating Bank in
                     providing the relevant Advance.

              "COST OF FUNDS" shall mean, in relation to an Advance, the rate of
              Interest which is deemed by the relevant Participating Bank,
              providing such Advance, as reflecting such Participating Bank's
              cost, before the application of any margin, for the purpose of
              determining the rate of Interest to be charged by such
              Participating Bank in respect of loans of the same type as the
              Advance requested under the relevant Drawdown Request, to its
              customers in amounts similar to the amount requested as aforesaid
              and for similar periods as such drawing; provided that, with
              respect to NIS denominated Advances requested from a Participating
              Bank under a Drawdown Request designating that the applicable
              Interest rate be a fixed linked Interest rate, Partner shall be
              entitled on the date that it is notified by such Participating
              Bank of its Cost of Funds for such Advance, to notify such
              Participating Bank that instead of such Cost of Funds, as
              notified, the Cost of Funds shall be the Bond Rate. For the
              removal of doubt, in the event that a Participating Bank shall
              determine its Cost of Funds for any Advance under Facility A or
              Facility B on the basis of LIBOR, "LIBOR" shall have the meaning
              assigned to such term in clause 1.1.106 above.

17.2.         PAYMENT OF INTEREST

              Partner shall pay to each Participating Bank in respect of each
              Advance made by such Participating Bank all Interest accruing on
              such Advance


<PAGE>
                                      -62-


              during any Interest Period on the Interest Payment Date for such
              Interest Period.

17.3.         DEFAULT INTEREST

17.3.1.              If Partner fails to pay any sum payable by it to a
                     Participating Bank under a Facility Document on account of
                     repayment or prepayment of an Advance, Interest thereon or
                     Linkage Differentials or otherwise any other sum payable
                     under any Facility Document (any such sum, "AN UNPAID SUM")
                     on its due date, Interest shall accrue, notwithstanding
                     that any Event of Default arising from such failure may be
                     subsequently waived by the Participating Banks, on such
                     unpaid sum from the due date up to the date of actual
                     payment at the rate of Interest referred to in clause 8.1
                     (Interest Rate); provided that, if such unpaid sum is on
                     account of:

                     (a)    an Advance, or Linkage Differentials thereon (not
                            constituting Interest), the Margin shall, for the
                            removal of doubt, be, in relation to an Advance (or
                            Linkage Differentials, as aforesaid, thereon) under
                            Facility A or Facility B (or Linkage Differentials,
                            as aforesaid, thereon), 2.9% (two point nine
                            percent) or, if such Event of Default does not
                            relate to the non-payment of monies and the
                            Participating Banks waive their rights to declare
                            the Advances due and payable as a result of such
                            Event of Default as aforesaid, then 1.9% (one point
                            nine percent) or, in relation to an Advance under
                            Facility C (or Linkage Differentials, as aforesaid,
                            thereon), 3.25% (three point two five percent) or,
                            if such Event of Default does not relate to the
                            non-payment of monies and the Participating Banks
                            waive their rights to declare the Advances due and
                            payable as a result of such Event of Default as
                            aforesaid, then 2.25% (two point two five percent);
                            or

                     (b)    Interest, then such unpaid sum shall be deemed, for
                            the purposes of calculating Interest as aforesaid,
                            an Advance of the same type and currency and from
                            the same Facility as that on which such Interest had
                            accrued; or

                     (c)    any amount payable under any Facility Document (save
                            for repayment or prepayment of an Advance, Interest
                            thereon or Linkage Differentials), then such unpaid
                            sum shall be deemed, for the purpose of calculating
                            Interest as aforesaid, an Advance under Facility B,
                            denominated in the same currency in which such
                            unpaid sum is payable and of such type as the
                            relevant Participating Bank, acting reasonably, may
                            elect);


<PAGE>
                                      -63-


                     provided that, if such unpaid sum, failed to be paid as
                     aforesaid, remains owing after the relevant Repayment Date,
                     Interest Payment Date or due date, as the case may be, or
                     if such unpaid sum is, pursuant to this Agreement due and
                     payable, then the relevant Participating Bank shall be
                     entitled to determine its Cost of Funds (as referred to in
                     clause 8.1 (Interest Rate) above) on the unpaid sum as at
                     the date such sum became due and payable, as if the unpaid
                     sum had, during the period of non-payment, constituted an
                     Advance made by such Participating Bank of the same type,
                     in the same currency and under the same Facility as such
                     unpaid sum is on account of (or if such unpaid sum is not
                     on account of any Advance, Linkage Differentials or
                     Interest thereon, then such unpaid sum shall be deemed to
                     be on account of an Advance under Facility B, denominated
                     in the currency and of such type as referred to in
                     paragraph (c) above of this clause 8.3.1) on such date and
                     on the first day of each Interest Period (as defined below)
                     therefor. The period beginning on such due date and ending
                     on the date of actual payment shall be divided into
                     successive periods, each of which (other than the first)
                     shall start on the last day of such preceding period and
                     the duration of which shall be selected by the relevant
                     Participating Bank (such periods, "INTEREST PERIODS"). Any
                     Interest accruing under this clause 8.3 shall be
                     immediately due and payable by Partner on demand of the
                     relevant Participating Bank.

17.3.2.              Default Interest (if unpaid) arising on an overdue amount
                     will be compounded with the overdue amount at the end of
                     each Interest Period applicable to that overdue amount but
                     will remain immediately due and payable.

17.3.3.              Reference to a "Participating Bank" and/or "the
                     Participating Banks" in this clause 8.3 shall also be
                     deemed to include a reference to such Participating Bank,
                     whether in its capacity as such and whether in its capacity
                     as Facility Agent and/or Arranger and/or Security Trustee
                     and/or a Secured Creditor (as applicable).

17.3.4.              Any unpaid sum (together with all Linkage Differentials in
                     respect thereof) shall (for the purposes of this clause
                     8.3, clause 12.1 (Increased Costs) and clause 19 (Broken
                     Funding Indemnity) together with any indemnities of Partner
                     in this Agreement) be treated as an advance and accordingly
                     in this clause 8.3, clause 12.1 (Increased Costs) and
                     clause 19 (Broken Funding Indemnity) the term "ADVANCE"
                     includes any unpaid sum (together with all Linkage
                     Differentials in respect thereof) and the term "INTEREST
                     PERIOD", in


<PAGE>
                                      -64-


                     relation to an unpaid sum, includes each such period
                     relating thereto as is mentioned in this clause 8.3.

18.    SUBSTITUTE INTEREST RATES

18.1.         UNAVAILABLE OR INDETERMINABLE INTEREST RATE

              If and whenever, with respect to any Advance and any Interest
              Period relating thereto, at any time prior to such Interest
              Period, a Participating Bank determines that any rate determined
              pursuant to clause 8.1.2 above is not available or that such rate
              does not constitute an accurate base for the determination of the
              cost to such Participating Bank of such Advance, then such
              Participating Bank shall forthwith give notice ("A DETERMINATION
              NOTICE") of such event to Partner and to the Facility Agent (a
              Determination Notice to contain particulars of the relevant
              circumstances giving rise to its issue) and the Cost of Funds for
              such Advance for such Interest Period shall be determined in
              accordance with this clause 9 below.

18.2.         NEGOTIATIONS FOR DETERMINING ALTERNATIVE BASIS

              Within 5 (five) Business Days of receipt of such notification, the
              relevant Participating Bank and Partner shall enter into
              negotiations in good faith for a period of up to 30 (thirty) days
              with a view to agreeing an alternative basis for determining the
              Cost of Funds applicable to such Advance for such Interest Period.


<PAGE>
                                      -65-



18.3.         AGREED ALTERNATIVE BASIS

              Any alternative basis agreed under clause 9.2 (Negotiations for
              Determining Alternative Basis) above will be binding on Partner
              and such Participating Bank once agreed and effective from the
              commencement of the Interest Period concerned.

18.4.         FAILURE TO AGREE ON ALTERNATIVE BASIS

              If no alternative basis is agreed in accordance with clause 9.2
              (Negotiations for Determining Alternative Basis) above, such
              Participating Bank shall certify on or before the last day of the
              Interest Period to which the notification relates, or, if earlier,
              within 10 (ten) days after the expiry of the 30 (thirty) day
              period referred to in clause 9.2 (Negotiations for Determining
              Alternative Basis) above an alternative basis for determining the
              Cost of Funds for such Interest Period of such Advance and so long
              as this clause 9 applies and no alternative basis has been agreed
              in accordance with clause 9.2 (Negotiations for Determining
              Alternative Basis) above, the Cost of Funds applicable to such
              Advance for the relevant Interest Period shall be the rate
              notified by such Participating Bank in accordance with this clause
              9.4 above.

18.5.         RETURN TO REGULAR DETERMINATION BASIS

              So long as any alternative basis is in force in accordance with
              this clause 9, the relevant Participating Bank shall, from time to
              time, but not less frequently than monthly, review with Partner
              whether or not the circumstances referred to in clause 9.1
              (Unavailable or Indeterminable Interest Rate) still prevail with a
              view to returning to the normal provisions of this Agreement in
              relation to determining Cost of Funds as soon as reasonably
              practicable.

19.    COMMISSIONS, FEES AND EXPENSES

19.1.         COMMITMENT COMMISSION--FACILITY A AND FACILITY B

              Partner shall pay to each Participating Bank, with respect to
              Facility A and Facility B (taken together), a commitment
              commission of the Applicable Percentage (as defined in clause 10.2
              (Applicable Percentage) below) per annum of the daily amount of
              the undrawn aggregate Commitments of the relevant Participating
              Bank with respect to Facility A and Facility B. For the removal of
              doubt, such commitment commission shall be calculated on the
              aggregate undrawn Commitments for Facility A and Facility B, taken
              together. The commitment commission under such Facilities shall be

<PAGE>
                                      -66-


              payable quarterly, in arrears, until the Termination Date. If the
              Termination Date shall not be a Quarter Day, then the Commitment
              commission in respect of the period commencing from the preceding
              Quarter Day to the Termination Date shall be paid on the
              Termination Date.

19.2.         APPLICABLE PERCENTAGE

              The Applicable Percentage shall be:

19.2.1.              0.125% (nought point one two five percent), in relation to
                     the aggregate Commitments of a Participating Bank, with
                     respect to Facility A and Facility B, of which at least 80%
                     (eighty percent) thereof is being utilised by Partner;

19.2.2.              0.25% (nought point two five percent), in relation to the
                     aggregate Commitments of a Participating Bank, with respect
                     to Facility A and Facility B, of which less than 80%
                     (eighty percent) but more than 50% (fifty percent) thereof
                     is being utilised by Partner;

19.2.3.              0.375% (nought point three seven five percent), in relation
                     to the aggregate Commitments of a Participating Bank, with
                     respect to Facility A and Facility B, of which 50% (fifty
                     percent) or a lower percentage thereof is being utilised by
                     Partner.

10.2A.        COMMITMENT COMMISSION--FACILITY C

              Partner shall pay to each Participating Bank a commitment
              commission at the rate of 0.35% (nought point three five percent)
              per annum of the daily amount of the undrawn Commitment of the
              relevant Participating Bank under Facility C. The commitment
              commission shall accrue from the Commencement Date and shall be
              payable quarterly, in arrears, until the Termination Date. If the
              Termination Date shall not be a Quarter Day, then the Commitment
              commission in respect of the period commencing from the preceding
              Quarter Day to the Termination Date shall be paid on the
              Termination Date.


<PAGE>
                                      -67-



19.3.         ANNUAL PAYMENT TO SECURITY TRUSTEE

              Partner shall pay to the Security Trustee for its own account the
              fees specified in the letter dated 9 July 2000 from the Security
              Trustee to Partner at the times and in the amounts specified in
              such letter.

19.4.         FACILITY AGENT'S FEE

              Partner shall pay to the Facility Agent for its own account the
              fees specified in the letter dated 9 July 2000 from the Facility
              Agent to Partner at the times and in the amounts specified in such
              letter.

19.5.         PAYMENT OF UPFRONT FEE

              [Deleted.]

10.5A         COORDINATING AGENT'S FEE

              Partner shall pay to the Coordinating Agent the fees specified in
              the letter dated as of 31 December 2002 from the Coordinating
              Agent to Partner at the times and in the amounts specified in such
              letter.

19.6.         EXPENSES

19.6.1.              Partner shall pay to the Facility Agent on demand all costs
                     and expenses (including, without limitation, legal fees for
                     external counsel and of an independent engineer and other
                     out-of-pocket expenses) incurred by the Agents in
                     connection with the negotiation, preparation and execution
                     of the Facility Documents and all amendments or
                     restatements to any of the Facility Documents and the
                     completion of the transactions therein contemplated,
                     subject to such limits (if any) agreed in writing between
                     Partner and the Facility Agent. All expenses payable
                     pursuant to this clause 10.6.1 shall be paid together with
                     VAT (if any) thereon.

19.6.2.              Partner shall, from time to time, on demand, reimburse each
                     Agent or Participating Bank for all costs and expenses
                     (including, without limitation, legal fees for external
                     counsel and other out-of-pocket expenses) incurred in
                     connection with the preservation and/or enforcement of any
                     of the rights of the Participating Banks and the Agents
                     under the Facility Documents. All expenses payable pursuant
                     to this clause 10.6.2 shall be paid together with VAT (if
                     any) thereon.


<PAGE>
                                      -68-


19.7.         STAMP TAXES

              Partner shall pay all stamp, documentary, registration or other
              like duties or Taxes imposed on or payable in connection with the
              this Agreement or any of the Facility Documents and shall
              indemnify the Agents and the Participating Banks against any
              liabilities, costs, claims and expenses resulting from any failure
              to pay or any delay in paying any such duties or Taxes.

19.8.         CUSTOMARY COMMISSIONS AND CHARGES

              Partner shall pay to each Participating Bank their respective
              commissions, fees and reasonable expenses usually payable to banks
              in connection with banking transactions to be performed by the
              relevant Participating Banks, in connection with the Facilities.

20.    TAXES

20.1.         TAX GROSS-UP

              All payments to be made by each Obligor to any Finance Party
              hereunder shall be made free and clear of and without deduction
              for or on account of Tax unless the relevant Obligor is required
              by law to make such payment subject to the deduction or
              withholding of Tax, in which case the sum payable by such Obligor
              in respect of which such deduction or withholding is required to
              be made shall be increased to the extent necessary to ensure that,
              after the making of the required deduction or withholding, such
              Finance Party receives and retains (free from any liability in
              respect of any such deduction or withholding) a net sum equal to
              the sum which it would have received and so retained had no such
              deduction or withholding been made or required to be made.

20.2.         NOTIFICATION OF REQUIREMENT TO DEDUCT TAX

              If, at any time, any Obligor is required by law to make any
              deduction or withholding from any sum payable by it hereunder (or
              if thereafter there is any change in the rates at which or the
              manner in which such deductions or withholdings are calculated),
              such Obligor shall as soon as reasonably practicable notify the
              relevant Finance Party.



<PAGE>
                                      -69-



20.3.         EVIDENCE OF PAYMENT OF TAX

              If any Obligor makes any payment hereunder in respect of which it
              is required to make any deduction or withholding, it shall pay the
              full amount required to be deducted or withheld to the relevant
              taxation or other authority within the time allowed for such
              payment under applicable law and shall deliver to the Facility
              Agent and to the Finance Party, to whom a payment has been made,
              which required any such deduction or withholding, as soon as
              reasonably practicable after it has made such payment to the
              applicable authority, an original receipt (or a certified copy
              thereof) issued by such authority evidencing the payment to such
              authority of all amounts so required to be deducted or withheld in
              respect of the payment made to such Finance Party.

20.4.         TAX SAVING

                     (a)    In the event that, following the imposition of any
                            Tax on any payment by any Obligor in consequence of
                            which the relevant Obligor is required under clause
                            11.1 (Tax Gross-Up) above to pay such tax or to pay
                            any additional amount in respect of it, any Finance
                            Party shall in its sole opinion and based on its own
                            interpretation of any relevant laws or regulations
                            (but acting in good faith) receive or be granted a
                            repayment of Tax or a credit against or remission
                            for or deduction from or in respect of any Tax
                            payable by it, taking into account all tax
                            jurisdictions applicable to the Finance Party and
                            any direct or indirect controlling shareholders of
                            the Finance Party (any of the foregoing, to the
                            extent so reasonably identifiable and quantifiable,
                            being referred to as a "SAVING"), such Finance Party
                            shall, to the extent that it can do so without
                            prejudice to the retention of the relevant saving
                            and subject to the relevant Obligor's obligation to
                            repay the amount to such Finance Party if the
                            relevant saving is subsequently disallowed or
                            cancelled (which repayment shall be made promptly on
                            receipt of notice by the relevant Obligor from such
                            person of such disallowance or cancellation),
                            reimburse the relevant Obligor promptly after
                            receipt of such saving by such person with such
                            amount as such person shall in its sole opinion but
                            in good faith have concluded to be the finally
                            determined amount or value of the relevant saving.

                     (b)    Nothing contained in this Agreement shall interfere
                            with the right of any Finance Party to arrange its
                            tax and other affairs in whatever manner it thinks
                            fit and, in particular, no Finance Party shall be
                            under any obligation to claim relief from Tax on its
                            corporate profits, or from any similar Tax
                            liability, in respect of the Tax, or to claim relief
                            in priority to any other claims, reliefs, credits or
                            deductions available


<PAGE>
                                      -70-


                            to it or to disclose details of its Tax affairs. No
                            Finance Party shall be required to disclose any
                            confidential information relating to the
                            organisation of its affairs.

                     (c)    Each Finance Party will notify the relevant Obligor
                            promptly of the receipt by such person of any saving
                            and of such Finance Party's opinion as to the amount
                            or value of that saving.

21.    INCREASED COSTS

21.1.         INCREASED COSTS

              Subject to clause 12.2 (Exceptions) below, if, by reason of:

              (a)           any change in or the introduction of, or any change
                            in the interpretation, administration or application
                            by any competent court, authority or organisation in
                            the relevant jurisdiction generally of, any law,
                            regulation or treaty or in or of any official
                            directive, guideline or official request from, or
                            the rules of, any governmental, fiscal, monetary or
                            regulatory (including self-regulatory) authority,
                            organisation or agency (including, position
                            (guidelines) of the Examiner of Banks with respect
                            to proper conduct of bank affairs ("Nihul Bankai
                            Takin") (whether or not having, in any such case,
                            the force of law but, if not having the force of
                            law, being a regulation, treaty, official directive,
                            guidelines, official request or rule which it is the
                            practice of banks in the relevant jurisdiction to
                            comply with) after the date of this Agreement which
                            affects banks or financial institutions of the same
                            type as any Finance Party in that jurisdiction; or

              (b)           compliance by any Finance Party (or its Holding
                            Company) with any such change or introduction;

              including, in each case, those relating to Taxation, reserves,
              special deposit, cash ratio, liquidity or capital adequacy
              requirements or other forms of banking, fiscal, monetary or
              regulatory controls:

              (i)           any Finance Party (or any Holding Company of such
                            Finance Party) incurs an increased cost as a result
                            of its (or such Holding Company's) having entered
                            into, and/or performing and/or maintaining and/or
                            funding its (or such Holding Company's) obligations
                            under, any Facility Document; or


<PAGE>
                                      -71-


              (ii)   any Finance Party (or any Holding Company of such Finance
                     Party) incurs an increased cost in making, funding or
                     maintaining all or any Advances comprised in a class of
                     Advances formed by or including its (or such Holding
                     Company's) participation in some or all of the Advances
                     made or to be made under this Agreement; or

              (iii)  any amount receivable by any Finance Party under any
                     Facility Document is reduced (save to the extent matched by
                     a reduction in the cost of providing the Facilities) or the
                     effective rate of return to any Finance Party (or any
                     Holding Company of such Finance Party) under any Facility
                     Document or on its (or such Holding Company's) capital
                     employed for the purposes of this Agreement is reduced; or

              (iv)   any Finance Party (or any Holding Company of such Finance
                     Party) makes any payment or forgoes any Interest or other
                     return on or calculated by reference to any amount received
                     or receivable by it (or by such Holding Company) from any
                     Obligor or the Facility Agent or the Security Trustee or
                     any other Finance Party under any Facility Document;

              and such increased cost (or the relevant proportion thereof),
              reduction, payment, forgone Interest or other return is not
              compensated for by any other provision of this Agreement, then and
              in each such case:

              (A)           such Finance Party shall notify Partner of that
                            event promptly upon its becoming aware of the event
                            including, in reasonable detail, particulars of the
                            event; and


              (B)           within 5 (five) Business Days after receipt by
                            Partner of a demand from time to time by such
                            Finance Party accompanied by a certificate of such
                            Finance Party specifying the amount of compensation
                            claimed and setting out the calculation of the
                            amount in reasonable detail, Partner shall pay to
                            such Finance Party (or, as the case may be, Holding
                            Company of such Finance Party) such amount as shall
                            compensate such Finance Party (or such Holding
                            Company) for such increased cost (or, in the case of
                            (iii) above, the portion of such increased cost as
                            is attributable to its making, funding or
                            maintaining Advances), reduction, payment or forgone
                            Interest or other return. Nothing in this clause
                            12.1 shall oblige any Finance Party (or any Holding
                            Company of such Bank) to disclose any confidential
                            information relating to the organisation of its
                            affairs.

<PAGE>
                                      -72-


21.2.         EXCEPTIONS

              Clause 12.1 (Increased Costs) above shall not apply so as to
              oblige Partner to compensate any Finance Party for any increased
              cost, reduction, payment or forgone Interest or other return
              resulting from any change in or the introduction of, or any change
              in the interpretation or application of, any law, regulation,
              treaty, directive, request or rules relating to, or any change in
              the rate of, Tax on Overall Net Income of such Finance Party.

22.    ILLEGALITY

       If any change in, or the introduction of, any law, regulation, treaty or
       official directive, guideline, official request or rule of any
       governmental, fiscal, monetary or regulatory (including self regulatory)
       authority, organisation or agency (including, position (guidelines) of
       the Examiner of Banks with respect to proper conduct of bank affairs
       ("Nihul Bankai Takin") having jurisdiction (whether or not having, in any
       such case, the force of law but, if not having the force of law, being
       one with which it is the practice of banks in the relevant jurisdiction
       to comply) (together "LAWS"), or any change in the interpretation,
       administration or application of Laws by a competent court or the
       relevant authority, organisation or agency or compliance by any Finance
       Party with any such change or introduction of Laws or change in
       interpretation, administration or application of Laws, shall make it (or
       make it apparent that it is) unlawful or a breach of Laws for any Finance
       Party to make available or fund or maintain the Advances or any part of
       the Advances under this Agreement or to give effect to its obligations
       and exercise its rights as contemplated by this Agreement, that Finance
       Party may, by notice to Partner, with a copy sent to the Facility Agent,
       declare that to the extent necessary to avoid any such illegality or
       breach of Laws its obligations to Partner under the Facility Documents
       shall be terminated forthwith or, if later, on the latest date to which
       the obligations may remain in effect without causing such Finance Party
       to be in breach of Laws, whereupon:

       (a)    PREPAY: Partner will forthwith, or by such later date as shall be
              immediately prior to the illegality or breach in question taking
              effect, prepay all outstanding Advances made by such Finance Party
              together with all Interest and other charges accrued thereon to
              the date of the prepayment (as well as amounts payable under
              clause 19 (Broken Funding Indemnity) below) and all other amounts
              payable to such Finance Party under the Facility Documents as
              shall be necessary to avoid any such illegality or breach by such
              Finance Party of any Laws; and

       (b)    COMMITMENTS: to the extent necessary to avoid any such illegality
              or breach of Laws such Finance Party's Commitments shall be
              cancelled and reduced to nil.


<PAGE>
                                      -73-


23.    MITIGATION

23.1.         MITIGATION

              If circumstances arise in respect of any Finance Party which
              would, or upon the giving of notice would, result in the operation
              of clause 9 (Substitute Interest Rates), 11 (Taxes), 12 (Increased
              Costs) or 13 (Illegality) to the detriment of Partner, such
              Finance Party shall promptly upon becoming aware of the same
              notify Partner and, upon the written request of Partner, shall
              enter into discussions with Partner with a view to determining
              what mitigating action might be taken by such Finance Party,
              including transfer of its participation in the Facilities and its
              Commitments to another bank or financial institution.

              Without limiting or reducing the obligations of the Obligors (or
              any of them) under clauses 9 (Substitute Interest Rates), 11
              (Taxes), 12 (Increased Costs) or 13 (Illegality), the relevant
              Finance Party shall, upon the written request of Partner, take
              such reasonable steps as may be practical and open to it to
              mitigate or remove the effects of such circumstances or transfer
              of its participation in the Facilities and its Commitment to
              another bank or financial institution reasonably acceptable to
              Partner or the restructuring of its participation in this
              Agreement in a manner which will avoid the circumstances in
              question and on terms acceptable to the Facility Agent,
              Participating Banks and Partner, provided that nothing in this
              clause 14.1 shall oblige any Finance Party to take any such step
              if, in the opinion of such Finance Party (such opinion being
              conclusive) any such step might reasonably be expected to have an
              adverse effect upon its business, operations or financial
              condition or the management of its Tax affairs or its return in
              relation to the outstanding Advances made by it or cause it to
              incur any material costs or expenses.

23.2.         REPLACEMENT OF A BANK

              If such circumstances as are referred to in clause 14.1
              (Mitigation) shall arise, the Facility Agent, at the request of
              Partner, will consult with Partner with a view to identifying and
              approaching bank(s) and financial institution(s) acceptable to
              Partner who may be willing to become party to this Agreement as
              Participating Bank(s) in replacement for the relevant
              Participating Bank(s).

24.    REPRESENTATIONS AND WARRANTIES

24.1.         REPRESENTATIONS AND WARRANTIES


<PAGE>
                                      -74-


              Partner, in respect of itself and each other Obligor, and each
              other Obligor in respect of itself, makes the representations and
              warranties set out in this clause 15 to each of the Finance
              Parties.

24.2.         STATUS

              It is a company limited by shares, duly incorporated and validly
              existing under the laws of the place of its incorporation and has
              the power to own its property and assets and carry on its business
              as it is now being and will be conducted. No event has occurred
              with respect of it which would constitute an Event of Default
              under clause 17.8 (Winding-Up) below were the proviso to such
              clause deleted.

24.3.         POWERS AND AUTHORITY

              It has the power to enter into and perform the Facility Documents
              and Material Contracts to which it is a party and the transactions
              to be implemented pursuant thereto and has taken all necessary
              action to authorise the entry into and performance of those
              documents and transactions. Without limiting the generality of the
              aforegoing, Partner represents and warrants that: (a) it has power
              to enter into all Facility Documents to which it is a party and to
              perform its obligations thereunder and hereunder and has taken all
              necessary action to authorise the entry into and performance of
              the transactions contemplated thereunder and hereunder; and (b)
              this Agreement constitutes its legal, valid, binding and
              enforceable obligations.



<PAGE>
                                      -75-



24.4.         LEGAL VALIDITY

              Each Facility Document and Material Contract to which it is at any
              time a party (when executed by it or on its behalf) constitutes
              its legal, valid, binding and enforceable obligations and (without
              limiting the generality of the foregoing) each Security Document
              to which it is a party validly and effectively creates the
              Encumbrances which that Security Document purports to create or,
              as the case may be, accurately evidences an Encumbrance which has
              been validly created, in each case subject to the Reservations.

24.5.         NON-CONFLICT

              The entry into and performance of each Facility Document and
              Material Contract to which it is a party and the transactions to
              be implemented pursuant thereto do not and will not conflict with:

              (a)    any law or regulation or any official or judicial order
                     applicable to it, in any respect, or

              (b)    its constitutional documents or any of its resolutions
                     (having current effect) in any respect, or

              (c)    any agreement or instrument to which it or any Subsidiary
                     of it is a party or which is binding upon any of them or on
                     its assets or those of any such Subsidiary, in such a
                     manner or to such an extent which would be reasonably
                     likely to have a Material Adverse Effect or in a manner or
                     to an extent which is reasonably likely to result in any
                     liability on the part of any of the Finance Parties to any
                     third party by reason of any such conflict,

              nor will it result in the creation or imposition of any
              Encumbrance on any of its assets or those of any of its
              Subsidiaries (save for any Encumbrance created pursuant to the
              Security Documents).

24.6.         NO DEFAULT

              (a)    No Event of Default has occurred and is continuing which
                     has not been waived; and



<PAGE>
                                      -76-



              (b)    No event has occurred and is continuing which has not been
                     waived and which constitutes or which, with the giving of
                     notice, expiry of any cure period, determination of
                     materiality or satisfaction of any other condition in each
                     case provided for in any such agreement or document, is
                     reasonably likely to constitute a default under or in
                     respect of any other agreement or document to which it or
                     any Subsidiary of it is a party in such a manner or to such
                     an extent which would be reasonably likely to have a
                     Material Adverse Effect.

24.7.         CONSENTS

              (a)    All Authorisations, exemptions and other matters required
                     by law (including, for the avoidance of doubt, the Licence)
                     for or in consequence of the entry into and performance by
                     it of and/or the validity of any of the Facility Documents
                     or Material Contracts to which it is a party or the
                     transactions to be implemented pursuant thereto, the
                     failure to obtain or effect which would be reasonably
                     likely materially to affect the interests of the
                     Participating Banks under the Facility Documents, have been
                     obtained or effected or will be obtained or effected prior
                     to the date required by law, save for registration with the
                     Pledges Registry, the Registrar of Companies, the Land
                     Registry and the Patents Registry, as applicable.

              (b)    The Licence is in full force and effect and each Obligor is
                     in compliance in all material respects with all provisions
                     thereof such that the Licence is not the subject of any
                     pending or, to the best of its knowledge, threatened
                     attack, suspension or revocation by any competent
                     authority. The period of the Licence is until 1 February
                     2022. All the Authorisations are in full force and effect,
                     it is in compliance in all material respects with all
                     provisions thereof and the Authorisations are not the
                     subject of any pending or, to the best of its knowledge,
                     threatened attack or revocation by any competent authority.
                     To the best of its knowledge, it is not aware of any
                     material breach of any Authorisation.

24.8.         ACCOUNTS

              (a)    Its Accounts most recently delivered to the Coordinating
                     Agent (or, if prior to the Commencement Date, to the
                     Facility Agent) and, where applicable, the Participating
                     Banks under clause 16.2.1 below, for the members of the
                     Group have been prepared, save as disclosed in notes to or
                     accompanying those Accounts, in accordance with the
                     provisions of clause 16.5 (Accounting Standards) below and
                     fairly present in all material respects its and (if
                     consolidated Accounts) its Subsidiaries'


<PAGE>
                                      -77-


                     financial position as at the date to which the same were
                     prepared and/or (as appropriate) the results of operations
                     and (in the case of annual Accounts) changes in financial
                     position during the Accounting Period, subject, in the case
                     of half yearly and quarterly Accounts, to normal year end
                     adjustments made in accordance with Applicable Accounting
                     Principles.

              (b)    Save for any disposal or acquisition of any interest in any
                     company or any business or any merger of any members of the
                     Group, or any dissolution or liquidation of any member of
                     the Group (in each case as permitted by the terms hereof),
                     each of the consolidated Accounts of the Group delivered to
                     the Coordinating Agent (or, if prior to the Commencement
                     Date, to the Facility Agent) and, where applicable, the
                     Participating Banks under clause 16.2.1 below includes or
                     consolidates into such Accounts the results of each member
                     of the Group for the relevant Accounting Period.

              (c)    All forecasts and projections contained in the Business
                     Plan delivered to the Coordinating Agent (or, if prior to
                     the Commencement Date, to the Facility Agent) and, where
                     applicable, the Participating Banks under clause 16.2.1
                     below were arrived at after careful consideration, were
                     fair and were based on reasonable grounds and as at the
                     date of their delivery to the Coordinating Agent (or, if
                     prior to the Commencement Date, to the Facility Agent) and,
                     where applicable, the Participating Banks were not
                     misleading in any material respect.

              (d)    Nothing has occurred since the date of signature of the
                     Amending and Rescheduling Agreement or, if later, the date
                     of the audited consolidated Accounts most recently
                     delivered to the Coordinating Agent (or, if prior to the
                     Commencement Date, to the Facility Agent) and, where
                     applicable, the Participating Banks pursuant to clause
                     16.2.1 below which would have a material adverse effect on
                     the business, operations or financial condition of the
                     Group (taken as a whole) (other than as contemplated in the
                     Business Plan) (for which purposes the Facility Agent shall
                     consult with Partner prior to any determination as to the
                     occurrence of such an effect).

24.9.         LITIGATION

              Except as described in SCHEDULE 17 (Claims served on Partner or
              any of its Subsidiaries) or specifically stated in the notes to
              the latest set of Accounts of Partner delivered to the Facility
              Agent before the Commencement Date, no litigation, arbitration or
              administrative or regulatory proceedings or investigations for
              which process or initiation claims have been served on it


<PAGE>
                                      -78-


              or any of its Subsidiaries are current and, to its knowledge, no
              litigation, arbitration, administrative or regulatory proceedings
              involving it or any of its Subsidiaries are pending or threatened
              which, if adversely determined, would have a Material Adverse
              Effect or which involves a liquidated claim or alleged liability
              which is likely to be in excess of US $15,000,000 (fifteen million
              United States Dollars) or its equivalent.

24.10.        TAX LIABILITIES

              Except as described in SCHEDULE 18 (Tax Claims asserted against
              Partner or any of its Subsidiaries) or specifically stated in the
              notes to the latest set of Accounts of Partner delivered to the
              Facility Agent before the Commencement Date, no claims are being
              asserted against it or any of its Subsidiaries with respect to
              Taxes which are reasonably likely to be determined adversely to it
              or to such Subsidiary, in each case, which, if so adversely
              determined, would have a Material Adverse Effect. It is not
              materially overdue in the filing of any Tax returns required to be
              filed by it (where such late filing might result in any material
              fine or penalty on it) and it has paid all Taxes shown to be due
              on any Tax returns required to be filed by it or on any
              assessments made against it for non-payment, or a claim for
              payment, non-payment of which would in each such case have a
              Material Adverse Effect.

24.11.        ENCUMBRANCE

              No Encumbrance exists over its or any of its Subsidiaries' assets
              which would cause a breach of clause 16.6 (Negative Pledge) below.



<PAGE>
                                      -79-



24.12.        BUSINESS PLAN

              Any factual information provided by an Obligor for the purposes of
              the Business Plan was true and accurate in all material respects
              as at the date it was provided or as at the date (if any) at which
              it is stated. All forecasts and projections contained in the
              Business Plan are fair and were prepared on the basis of recent
              historical information and on the basis of reasonable assumptions.
              Nothing has occurred or been omitted from the Business Plan and no
              information has been given or withheld that results in the
              information contained in the Business Plan being untrue or
              misleading in any material respect.

24.13.        OWNERSHIP OF ASSETS

              As at the time this representation is given or repeated, it has
              good title to or valid leases or licences of or is otherwise
              lawfully entitled to use all material assets necessary to conduct
              its business as and to the extent conducted by it at such time.

24.14.        DOCUMENTS

              The documents delivered to the Facility Agent by or on behalf of
              any Obligor pursuant to clause 3 (Conditions Precedent) of the
              Original Facility Agreement, clause 3 (Conditions Precedent) of
              the Amending and Rescheduling Agreement, clause 3 of the Amending
              Agreement dated as of 31 December 2002 and under any other
              provision of the Facility Documents were genuine and in the case
              of copy documents, were at the date of delivery true, complete and
              accurate copies in all material respects, of originals which had
              not been amended, varied, supplemented or superseded in any way
              which would be likely materially to affect the interests of the
              Finance Parties under the Facility Documents.

24.15.        INTELLECTUAL PROPERTY RIGHTS

              (a)    It (or another Obligor) owns or has the legal right to use
                     all the Intellectual Property Rights which are material to
                     the Business and the conduct of the business of any member
                     of the Group from time to time or are required by it in
                     order for it to carry on its business in all material
                     respects as it is then being conducted and as far as it is
                     aware it does not, in carrying on its business, infringe
                     any Intellectual Property Rights of any third party in any
                     way which would have a Material Adverse Effect.


<PAGE>
                                      -80-


              (b)    None of the Intellectual Property Rights which are material
                     in the context of the business of any member of the Group
                     is, to its knowledge, being infringed nor, to its
                     knowledge, is there any threatened infringement of those
                     Intellectual Property Rights, by any third party which
                     would be reasonably likely to have a Material Adverse
                     Effect.

              (c)    All registered Intellectual Property Rights owned by it and
                     which are material to the conduct of the business of any
                     member of the Group are subsisting and in full force and
                     effect.

24.16.        ENVIRONMENTAL MATTERS

              (a)    It: (i) has obtained all requisite Environmental Licences
                     required for the carrying on of its business as currently
                     conducted and (ii) has at all times complied with the terms
                     and conditions of such Environmental Licences and (iii) has
                     at all times complied with all other applicable
                     Environmental Law, which in each such case, if not obtained
                     or complied with, would have a Material Adverse Effect.

              (b)    There is no Environmental Claim pending or threatened
                     against that Obligor which is reasonably likely to be
                     decided against that Obligor and which, if so decided,
                     would have a Material Adverse Effect.

              (c)    So far as each Obligor is aware, no Dangerous Substance has
                     been used, disposed of, generated, stored, transported,
                     dumped, released, deposited, buried or emitted at, on, from
                     or under any premises (whether or not owned, leased,
                     occupied or controlled by any Obligor or any of its
                     Subsidiaries and including any offsite waste management or
                     disposal location utilised by any Obligor or any such
                     Subsidiary) in circumstances where this would be reasonably
                     likely to result in a liability on any Obligor which would
                     have a Material Adverse Effect.

24.17.        RANKING OF SECURITY

              The security conferred by the Security Documents constitutes a
              priority security interest of the type therein described over the
              security assets therein referred to which are not subject to any
              prior or pari passu Encumbrances except as permitted by clause
              16.6 (Negative Pledge) below.

24.18.        MATERIAL CONTRACTS

              (a)    The Material Contracts to which any Obligor is party are in
                     full force and effect.


<PAGE>
                                      -81-


              (b)    No Obligor is and, so far as it is aware (after having made
                     all reasonable enquiries within the relevant Obligor), no
                     Counterparty is, in breach of any material term of any
                     Material Contracts.

              (c)    There are no material disputes subsisting between any
                     Obligor and any other party to any Material Contract.

              (d)    No waivers have been granted by or in favour of any Obligor
                     pursuant to any material term of any Material Contract in
                     any respect which would be reasonably likely to be adverse
                     to the interests of the Participating Banks under the
                     Facility Documents.

              (e)    No material amendments have been made to any Material
                     Contract in any respect which would be reasonably likely to
                     be adverse to the interests of the Participating Banks
                     under the Facility Documents, save for amendments on or
                     prior to the date of signature of the Amending and
                     Rescheduling Agreement which have been disclosed to the
                     Facility Agent in writing prior to the date thereof.

              (f)    There are no other agreements which are material to the
                     Business (or any part thereof) and would be reasonably
                     likely to affect adversely the decision of a Participating
                     Bank when considering the provision of the Facilities on
                     the terms and subject to the conditions set out herein.

24.19.        OWNERSHIP OF PARTNER

              The share capital in Partner is owned by the Shareholders in the
              respective percentages as set out in Schedule 9 (Principal
              Shareholders of Partner) and Partner has no Subsidiaries save for
              the Guarantors.









<PAGE>
                                      -82-




24.20.        BORROWINGS

              No Obligor has any Borrowings other than Borrowings which qualify
              as Permitted Borrowings.

24.21.        REPETITION

              The representations and warranties set out in this clause 15 shall
              survive the execution of the Amending and Rescheduling Agreement
              and the making of each Advance hereunder and shall be deemed to be
              repeated on the Commencement Date and (except in the case of the
              second sentence of clause 15.2 (Status), clauses 15.7 (Consents),
              15.8(d) (Accounts), 15.9 (Litigation), 15.12 (Business Plan),
              15.14 (Documents), 15.18 (Material Contracts), 15.19 (Ownership of
              Partner) and 15.20 (Borrowings)) shall be deemed to be repeated on
              the date of delivery of each Drawdown Request hereunder and on
              each date on which Advance is made and on the first day of each
              Interest Period, with reference to the facts and circumstances
              then subsisting, as if made at each such time.

25.    UNDERTAKINGS

25.1.         DURATION

              The undertakings in this clause 16 shall remain in force so long
              as any amount is or may be outstanding under any Facility Document
              or any Commitment is in force.

25.2.         FINANCIAL INFORMATION

25.2.1.             Partner shall furnish or procure that there shall be
                    furnished to the Participating Banks and the Coordinating
                    Agent:

                     (a)    as soon as the Accounts referred to in (i) and (ii)
                            below are published (and in any event within 120
                            (one hundred and twenty) days) after the end of each
                            annual Accounting Period):

                            (i)    the audited consolidated Accounts of the
                                   Group for that financial year (which shall
                                   include notes setting out nominal NIS
                                   figures); and

                            (ii)   in the case of Partner and each Subsidiary of
                                   Partner, the non-consolidated audited
                                   Accounts for that financial year for Partner
                                   and for each Subsidiary of Partner;

<PAGE>
                                      -83-



                     (b)    as soon as practicable (and in any event within 70
                            (seventy days)) after the end of the first half-year
                            of each of its financial years, the unaudited
                            non-consolidated reviewed Accounts of Partner and of
                            each Subsidiary of Partner, for that half-year;

                     (c)    as soon as practicable (and in any event within 45
                            (forty-five) days after the end of each of the first
                            3 (three) Quarters), the unaudited non-consolidated
                            reviewed financial statements of Partner and the
                            unaudited consolidated reviewed Accounts of Partner,
                            for that Quarter;

                     (d)    as soon as practicable (and in any event within 45
                            (forty-five) days after the end of each Quarter, a
                            report in an agreed form setting out statistics
                            covering the level of, inter alia, subscribers,
                            subscriber penetration, build-out, revenue per
                            subscriber, churn and Capital Expenditure of Partner
                            for that Quarter and on a cumulative basis for the
                            calendar year in which such Quarter falls, such
                            reports to distinguish between subscribers for each
                            of GSM and 3rd Generation UMTS and Capital
                            Expenditure in the 3rd Generation UMTS network;

                     (e)    at the same time as the annual and semi-annual
                            Accounts are delivered pursuant to paragraph (a)
                            above, a certificate of the Auditors, in a form
                            reasonably satisfactory to the Instructing Group:

                           (i)      setting out in reasonable detail
                                    computations establishing, as at the date of
                                    such Accounts, whether each of the financial
                                    ratios set out in clause 16.32 (Financial
                                    Undertakings) below were complied with; and

                           (ii)     setting out in reasonable detail
                                    computations establishing the Excess Cash
                                    Flow as at the date of such Accounts; and

                           (iii)    stating that the Auditors did not, in the
                                    course of their audit or review, as
                                    applicable, discover any breach of the
                                    obligations set out in clause 16.32
                                    (Financial Undertakings) below;

                            All Accounts as aforesaid shall, in addition to any
                            other requirements under this clause 16.2.1, contain
                            all the notes and be accompanied by all the
                            certificates referred to in clause 1.2.2 above;

<PAGE>
                                      -84-



                           (f)      not less than 15 (fifteen) days nor more
                                    than 90 (ninety) days before the end of each
                                    annual Accounting Period, a revised business
                                    plan and revised cash flow projections
                                    approved by the Board of Directors of
                                    Partner containing cash flow projections to
                                    30 June 2009 in substantially the same form
                                    as in the Business Plan; provided that the
                                    obligation to provide the revised business
                                    plan and cash flow projections referred to
                                    in this paragraph (f) shall cease on the
                                    date on which Partner has repaid at least
                                    75% (seventy-five percent) of the
                                    Facilities, such that the aggregate
                                    Commitments shall be no more than 25%
                                    (twenty-five percent) of the aggregate
                                    Facilities as at the Commencement Date;
                                    provided that, in respect of the one year
                                    Ratio Period immediately preceding such
                                    date, the Margin for Facility A and Facility
                                    B has in accordance with clause 1.1.114
                                    above been reduced to 0.7% (nought point
                                    seven percent).

25.2.2.       Partner shall supply to the Coordinating Agent:

                  (a)      together with the quarterly Accounts specified in
                           clause 16.2.1 above; and

                  (b)      (in the case of paragraph (iii) below,) promptly at
                           any other time, if the Coordinating Agent so
                           reasonably requests,

                  a certificate signed by the Chief Financial Officer of Partner
                  on its behalf setting out in reasonable detail computations
                  establishing, as at the date of such Accounts, whether each of


<PAGE>
                                      -85-





                  the financial ratios set out in clause 16.32 (Financial
                  Undertakings) below were complied with and certifying that:

                  (i)      the relevant Accounts fairly present (in relation to
                           the relevant Accounting Period), the financial
                           position of the relevant Obligor;

                  (ii)     the relevant Accounts were prepared in accordance
                           with the Applicable Accounting Principles; and

                  (iii)    no Event of Default or Potential Event of Default is
                           outstanding or, if an Event of Default or Potential
                           Event of Default is outstanding, specifying the Event
                           of Default or Potential Event of Default and the
                           steps, if any, being taken to remedy it.

                  (c)      together with the quarterly Accounts specified in
                           clause 16.2.1 above, as to the amount of Partner's
                           Excess Cash Flow for such Quarter.

25.2.3.           If in the course of any annual Accounting Period Partner
                  updates or revises any of the assumptions underlying the
                  projections furnished to the Participating Banks pursuant to
                  clause 16.2.1(f) above in any material respect, Partner shall
                  furnish or procure that there shall be furnished to the
                  Participating Banks such updated assumptions.

25.2.4.           The format of any financial reports (including, annual audited
                  accounts, quarterly reports and the such like) to be delivered
                  under this clause 16.2.1 shall, in addition, be in a format
                  consistent with the Business Plan.

25.2.5.           As soon as practicable (and, in any event, within 5 (five)
                  Business Days after the end of each Quarter), Partner shall
                  send to the Coordinating Agent (with sufficient copies for
                  each of the Participating Banks):

                  (a)    a certificate signed by Partner's General Manager and
                         Chief Financial Officer certifying that Partner is in
                         full compliance with all of the terms and conditions of
                         each of the Facility Documents and if not so in
                         compliance, specifying the relevant non-compliance and
                         the steps, if any, being taken to remedy it;

                  (b)    a report certified by the General Manager and Chief
                         Financial Officer of Partner detailing the occurrences
                         of any of the following that have taken place during
                         the preceding Quarter:

<PAGE>
                                      -86-




                           (i)      a Permitted Investment made or resolved to
                                    be made by Partner in an aggregate amount
                                    equal to or in excess of US $10,000,000 (ten
                                    million United States Dollars);

                           (ii)     the receipt of any Permitted Borrowing (save
                                    for Permitted Borrowings as referred to in
                                    clauses 1.1.126(a) and (f)) that has taken
                                    place (including, the entering into of any
                                    agreement whereunder Partner may receive any
                                    Permitted Borrowing), the amount of which
                                    Permitted Borrowing equals or exceeds US
                                    $2,500,000 (two million five hundred
                                    thousand United States Dollars), as well as
                                    the receipt of any type of Permitted
                                    Borrowings, the cumulative aggregate of
                                    which equals or exceeds US $10,000,000 (ten
                                    million United States Dollars));

                           (iii)    a resolution of any organ of Partner to
                                    make, or evidencing any intention to make,
                                    whether conditionally or unconditionally,
                                    preparations for the issuance of a
                                    prospectus and/or any offer to the public
                                    (whether or not any such offer requires the
                                    approval or publication of a prospectus), in
                                    any jurisdiction, relating to the sale or
                                    offer of any securities or debentures of
                                    Partner;

                           (iv)     any loans, guarantees or investments made by
                                    Partner as referred to in clause 16.37
                                    (Loans, Guarantees and Investments in
                                    Subsidiaries) below;

                           (v)      any disposal as referred to in clause 7.2.1
                                    above, the Dollar Amount (or, if denominated
                                    in a currency other than US Dollars, the
                                    Dollar equivalent) of the Net Proceeds of
                                    which exceeds when aggregated with the Net
                                    Proceeds of all such other disposals in the
                                    Fiscal Year in which such Quarter occurs, US
                                    $2,500,000 (two million five hundred
                                    thousand United States Dollars).

25.2.6.              Partner's ability to make any Permitted Investment under
                     this Agreement will be conditional upon such Permitted
                     Investment being first pledged in favour of the Security
                     Trustee (acting as trustee for itself and for the Secured
                     Creditors) by way of a first pledge and charge under the
                     Debenture or any other charge, in a form satisfactory to
                     the Security Trustee.


<PAGE>
                                      -87-



25.2.7.              Without derogating from any other obligations imposed on
                     Partner under this Agreement to provide information,
                     Partner shall furnish to the Facility Agent and the
                     Coordinating Agent (with sufficient copies for each of the
                     Participating Banks):

                     (i)    promptly, all filings, documents, forms, reports and
                            notices filed by or on behalf of Partner, or by any
                            of its Shareholders with respect to Partner (to the
                            extent Partner is aware of such Shareholders'
                            filing), with the US Securities and Exchange
                            Commission, the London Stock Exchange, NASDAQ, any
                            other stock exchange or any securities regulatory
                            authority, from time to time; and

                     (ii)   promptly, all such other information as shall
                            reasonably be requested, from time to time, by any
                            of the Participating Banks.

                     (iii)  as soon as practicable (and in any event within 5
                            (five) Business Days) after each Quarter, a report
                            setting out in a form as set out in SCHEDULE 19
                            (Quarterly Report), details of:

                           (a)      with respect to each of Facility A and
                                    Facility C, all Drawdown Requests made
                                    during the preceding Quarter (such
                                    information to include the amount of the
                                    Advance requested by Partner under each such
                                    Drawdown Request, the currency of the
                                    Advance requested as aforesaid, the amount
                                    and/or currency advanced by a Participating
                                    Bank if different to that requested under
                                    the relevant Drawdown Request, the type of
                                    Advance and rate of Interest applicable and
                                    the identity of the Participating Banks to
                                    whom such Drawdown Requests were made) and,
                                    with respect to Facility B, the aggregate
                                    amount of Advances requested by Partner from
                                    each Participating Bank during the preceding
                                    Quarter (such information to include the
                                    aggregate of Advances classified also in
                                    accordance with each currency, each type of
                                    Advance and each type of rate of Interest
                                    applicable). Each Participating Bank shall
                                    after receipt of such report, advise Partner
                                    in writing (with a copy to the Coordinating
                                    Agent) as to whether such report, to the
                                    extent relating to such Participating Bank,
                                    is accurate and, if not, shall indicate
                                    which part of such report is inaccurate;

                           (b)      all payments made during the preceding
                                    Quarter by Partner under the Facilities (or,
                                    in the case of Facility B,

<PAGE>
                                      -88-




                                    the aggregate of such payments during such
                                    Quarter), specifying the identity of the
                                    Participating Banks to whom any such
                                    payments were made, the currency of such
                                    payment, the amount of such payment, whether
                                    such payments were made on account of
                                    Interest, Linkage Differentials, if
                                    applicable, principal of the outstanding
                                    Advances or on account of any other amount,
                                    whether, in the case of a prepayment
                                    pursuant to clause 6 (Voluntary Prepayment
                                    and Reborrowing) above, any of such payments
                                    were made from a Permitted Source (and, if
                                    so, a copy of the certificate referred to in
                                    clause 6 (Voluntary Prepayment and
                                    Reborrowing) above relating thereto shall be
                                    attached to such report), or a mandatory
                                    prepayment (together with details thereof)
                                    and which of the Facilities any of such
                                    payments were made on account of);

                           (c)      the outstanding amounts owed by Partner to
                                    each Participating Bank under each of the
                                    Facilities: (i) expressed in US Dollars (or,
                                    if denominated in NIS or Euros, in their
                                    Dollar equivalent); (ii) expressed in the
                                    currency of which such amounts are due; and
                                    (iii) specifying the percentage of the
                                    Amount of the Outstanding A and B Advances
                                    (as defined in clause 2.1.2 above)
                                    denominated in each of US Dollars, Euros and
                                    NIS as at the Quarter Day for such Quarter.



<PAGE>
                                      -89-






25.3.    INFORMATION-MISCELLANEOUS

         Partner shall furnish or procure that there shall be furnished to the
         Facility Agent in sufficient copies for each of the Participating
         Banks:

         (a)      promptly, all notices, reports or other documents required by
                  statute or any applicable rules to be despatched by any
                  Obligor to its shareholders generally (or any class of them)
                  and all notices, reports or other documents relating to the
                  financial difficulties or debt obligations of any Obligor
                  despatched by or on behalf of any Obligor to its creditors
                  generally (in their capacity as creditors);

         (b)      as soon as the same are instituted or, to its knowledge,
                  threatened, details of any litigation, arbitration or
                  administrative proceedings involving it or any of its
                  Subsidiaries which, if adversely determined, would have a
                  Material Adverse Effect or which involves a liquidated claim
                  or alleged liability which is likely to be in excess of US
                  $15,000,000 (fifteen million United States Dollars) or its
                  equivalent;

         (c)      promptly, such further information regarding its financial
                  condition, business and assets and that of the Group and/or
                  any member thereof (including any requested amplification or
                  explanation of any item in any Accounts, any business plan,
                  forecasts, projection or other material provided by any
                  Obligor hereunder) as the Facility Agent or any Participating
                  Bank may reasonably request from time to time provided that
                  where any information is subject to a confidentiality
                  agreement entered into by the relevant member of the Group in
                  the ordinary course of its business, it shall use its
                  reasonable endeavours to obtain, or shall procure that the
                  relevant member of the Group uses its reasonable endeavours to
                  obtain, consent to disclose such information but if such
                  consent is not forthcoming, this clause 16.3 will not be
                  breached by the failure to deliver the information subject to
                  the confidentiality agreement with someone other than a
                  Restricted Person;

         (d)      promptly, upon being notified of the same, details of the
                  occurrence of a Change of Ownership or details of any proposed
                  Change of Ownership of which it is aware;

         (e)      promptly on request by the Facility Agent, a copy of any
                  agreements and arrangements between the Shareholders (or any
                  Affiliates of the Shareholders) which may replace or amend the
                  Shareholders Agreement.


<PAGE>
                                      -90-




25.4.    AUDIT AND ACCOUNTING DATES

         Partner  will ensure that:

         (a)      the annual Accounts to be delivered to the Coordinating Agent
                  and the Participating Banks pursuant to clause 16.2.1 above
                  are audited by the Auditors;

         (b)      each Obligor shall at all times have duly appointed Auditors;
                  and

         (c)      Partner will not, and no Obligor will, change its financial
                  year end without the prior written consent of the Facility
                  Agent other than (in the case of any other Obligor) to conform
                  its financial year end to that of Partner.

25.5.    ACCOUNTING STANDARDS

         (a)      Partner will ensure that:

                  (i)      all Accounts shall be prepared in accordance with the
                           Applicable Accounting Principles (consistently
                           applied) or shall indicate in notes to or
                           accompanying such Accounts any material departures
                           from the Applicable Accounting Principles;

                  (ii)     each set of Accounts delivered to the Coordinating
                           Agent and the Participating Banks is prepared on
                           substantially the same basis (including, for the
                           avoidance of doubt, adopting the same treatment and
                           classification of items of income and expenditure) as
                           was used in the preparation of the Accounts
                           previously delivered to the Coordinating Agent (or,
                           prior to the Commencement Date, to the Facility
                           Agent) and the Participating Banks, provided that in
                           the case of the first set of Accounts so delivered
                           they shall be prepared on the same basis as was used
                           in the preparation of the financial statements
                           included in the Business Plan previously delivered to
                           the Coordinating Agent (or, prior to the Commencement
                           Date, to the Facility Agent) and the Participating
                           Banks, save to the extent that good practice or law
                           requires otherwise; and

                  (iii)    in the event that any Accounts are delivered which
                           are not prepared on a substantially consistent basis
                           (including, for the avoidance of doubt, a consistent
                           treatment and classification of items of income and
                           expenditure) to Accounts previously


<PAGE>
                                      -91-




                           delivered hereunder, such Accounts are accompanied by
                           an explanation of any changes to the accounting basis
                           used in respect of the accounting basis used in the
                           Business Plan and with a reconciliation of all
                           changes to allow for consistent testing of the
                           covenants in clause 16.32 (Financial Undertakings)
                           below.

         (b)      Partner will ensure that all Accounts shall fairly present in
                  all material respects (subject to adjustments which fall to be
                  made at the end of the financial year in accordance with
                  Applicable Accounting Principles) the consolidated financial
                  position and results of operations of the relevant member of
                  the Group and its Subsidiaries (in the case of consolidated
                  Accounts) or its financial position and results of operations
                  (in the case of unconsolidated Accounts), as at the end of and
                  for the Accounting Period to which they relate.

         (c)      Partner shall, at the same time as it delivers to the
                  Coordinating Agent any audited consolidated annual Accounts of
                  the Group pursuant to clause 16.2.1 above deliver to the
                  Coordinating Agent a letter explaining any differences between
                  the format, headings and characterisations used in such
                  audited consolidated annual Accounts of the Group and in the
                  half-yearly or quarterly consolidated Accounts of the Group
                  delivered pursuant to clause 16.2.1 above where those
                  differences would affect the ability of the Facility Agent to
                  calculate the components of the financial ratios in clause
                  16.32 (Financial Undertakings) below.

25.6.    NEGATIVE PLEDGE

         No Obligor will, and each Obligor will procure that none of its
         Subsidiaries will, without the prior consent of the Facility Agent,
         acting on the instructions of an Instructing Group, create or permit to


<PAGE>
                                      -92-





         subsist any Encumbrance on the whole or any part of its respective
         present or future business, assets or undertaking, except:

         (i)      that Partner may create or permit to subsist a Permitted
                  Encumbrance;

         (ii)     without derogating from the second sentence of clause 16.22
                  (Borrowings) below, that a Subsidiary (other than a Venture
                  Subsidiary and any Subsidiary of a Venture Subsidiary) may
                  create or permit to subsist a Permitted Encumbrance; and

         (iii)    that a Venture Subsidiary and any Subsidiary of a Venture
                  Subsidiary may create or permit to subsist an Encumbrance to
                  the extent, and only to the extent, any such Encumbrance
                  secures Borrowings that such Venture Subsidiary or Subsidiary,
                  as the case may be, is entitled to incur pursuant to the
                  second sentence of clause 16.22 (Borrowings) below;

         provided that any order of attachment or injunction restraining
         disposal of assets or similar legal process arising in connection with
         court proceedings being contested in good faith with a reasonable
         prospect of success which does not result from proceedings which would
         constitute an Event of Default pursuant to clause 17.9 (Execution or
         Distress) below shall not constitute a breach of this clause 16.6.

25.7.    SALE AND LEASEBACK

         No Obligor will, and each Obligor will procure that none of its
         Subsidiaries will sell, transfer or otherwise dispose of any of its
         assets or any interest therein on terms whereby such asset is or may be
         leased to or re-acquired or acquired by any member of the Group in
         circumstances where the transaction is entered into primarily as a
         method of raising finance or of financing the acquisition of an asset
         except pursuant to finance leases permitted under clause 16.22
         (Borrowings) below.

25.8.    DISPOSALS

         No Obligor will, and each Obligor will procure that none of its
         Subsidiaries will, either in a single transaction or in a series of
         transactions whether related or not and whether voluntarily or
         involuntarily, sell, transfer, lease or otherwise dispose of all or any
         part of or interest in its respective assets or undertaking to any
         person who is not an Obligor, other than a Permitted Disposal. Nothing
         in this clause 16.8, however, will permit the disposal of any assets
         which are the subject of fixed security created by any Security
         Document except in accordance with the relevant Security Document

<PAGE>
                                      -93-




         without the consent of all Participating Banks. Without derogating from
         the last sentence of this clause 16.8, without the consent of the
         Instructing Group, no such sale, transfer, lease or disposal of all or
         any part of or interest in any asset or undertaking shall be made to an
         Affiliate of Partner unless it is made on arm's length terms.

25.9.    PARI PASSU RANKING

         Each Obligor undertakes that its obligations under this Agreement rank
         and will at all times rank at least pari passu in right and priority of
         payment and in point of security (save by reason of and to the extent
         of the security afforded thereto by the Security Documents) with all
         its other present and future unsecured and unsubordinated obligations,
         other than obligations which are mandatorily preferred by law applying
         to companies generally.

25.10.   LOANS AND GUARANTEES

         No Obligor will, and each Obligor will procure that none of its
         Subsidiaries will:

         (a)      make any loans; or

         (b)      give any guarantee to or for the benefit of any person,

         other than loans or guarantees:

         (i)      arising under the Facility Documents;

         (ii)     arising in the ordinary course of its business;

         (iii)    to, or in respect of the obligations of, another Obligor; or

         (iv)     permitted under clause 16.37 (Loans, Guarantees and
                  Investments in Subsidiaries) below.

25.11.   OPERATING LEASES

         No Obligor will, and each Obligor will procure that none of its
         Subsidiaries will, after the date of this Agreement enter into any
         operating lease of or in respect of equipment, machinery or plant
         (other than any private circuits, leased lines and motor vehicles and
         other than any computer or information technology systems used in the
         ordinary course of business of any member of the Group) if the
         equipment, machinery or plant concerned is of such importance in the
         business of the Group taken as a whole that such business

<PAGE>
                                      -94-




         would be materially and adversely affected were the leases for such
         equipment, machinery or plant to be terminated early and the right to
         possession of the equipment, machinery or plant lost to the Group.

25.12.   RECEIVABLES DISCOUNTING

         No Obligor will, and each Obligor will procure that none of its
         Subsidiaries will sell or otherwise dispose of any of its receivables
         other than: (i) the sale, on arm's' length terms, of debts owing to the
         Group which are more than 90 (ninety) days' overdue; or (ii) the sale,
         on arm's length terms, of debts owing to the Group incurred in
         connection with the sales of handsets, provided the aggregate amount of
         receivables permitted to be sold pursuant to this paragraph (ii) shall
         not at any time exceed an aggregate amount equal to US $20,000,000
         (twenty million United States Dollars) or its equivalent.

25.13.   INVESTMENTS

         No Obligor will, and each Obligor will procure that none of its
         Subsidiaries will, make any investment with cash other than a Permitted
         Investment or in the business of the Group as permitted hereby or such
         other investments as are permitted under clause 16.37 (Loans,
         Guarantees and Investments in Subsidiaries) below.

25.14.   RESTRICTED DISTRIBUTIONS

         Partner will not and will procure that no member of the Group will:

         (i)      make or resolve to make any distribution (including, any
                  distribution defined as such under the Companies Law, 1999),
                  dividend or other similar payment (in cash or in kind) on or
                  in respect of any share capital or equivalent of a member of
                  the Group (except to Partner and, in the case of a Strategic
                  Investor in a Venture Subsidiary, except for distributions by
                  such Subsidiary to such Strategic Investor) or any repayment,
                  prepayment or payment (in cash or in kind) of the principal
                  of, or Interest (whether or not capitalised) or any other
                  amount on or in respect of Subordinated Debt or Shareholder
                  Loans (except to Partner and, in the case of a Strategic
                  Investor in a Venture Subsidiary, except for distributions by
                  such Subsidiary to such Strategic Investor), other than a
                  Permitted Distribution;

         (ii)     make or resolve to make any purchase, redemption, repurchase,
                  defeasance, retirement, return or repayment of any of its
                  share capital or equivalent or any loan capital or any
                  debenture of a member of the

<PAGE>
                                      -95-




                  Group (other than by way of a reduction of share capital
                  without any payment to Shareholders), except to or for the
                  benefit of Partner;

         (iii)    make or resolve to make any other transfer of assets to or
                  Restricted Purchases from any Shareholder or other Restricted
                  Person (except as permitted under clause 16.23 (Arm's-Length
                  Terms) below); or

         (iv)     exercise any right of set-off in respect of any Shareholder
                  Loans or Subordinated Debt.

         Where any payment is proposed to be made under this clause 16.14,
         Partner shall, prior to making such payment, provide to the Instructing
         Group not less than 10 Business Days before the proposed date for
         payment, a certificate signed by an authorised signatory of Partner
         showing:

         (x)      the date and amount of such proposed payment; and

         (y)      such calculations in reasonable details as are necessary to
                  show how the payment figure was arrived at and that the
                  provisions of the definition of 'Permitted Distributions' have
                  been complied with.

         "PERMITTED DISTRIBUTION" means:

         (i)      a distribution of dividends on or in respect of any share
                  capital of Partner;

         (ii)     a distribution of principal, Interest or any other payments
                  under any Shareholder Loans;

         (iii)    a distribution of principal under any Subordinated Debt
                  (including, for the avoidance of doubt, debentures included in
                  Permitted Loan Capital);

         (iv)     a distribution of Interest under any Permitted Loan Capital
                  comprising debentures,

         on condition, with respect to (i)-(iii) (inclusive) above, that all the
         conditions referred to in (a)-(j) below are fulfilled and, on
         condition, with respect to (iv) above, that the conditions referred to
         in (b), (c), (d), (f) and (j) are fulfilled:

         (a)      Partner is able, in accordance with its Cash Flow as shown in
                  its most recent Accounts, to pay all outstanding operating
                  expenditure


<PAGE>
                                      -96-





                  requirements (including Taxes and investment requirements) and
                  would remain able to do so after such payment;

         (b)      no amount due to be paid to the Security Trustee or any other
                  Agent under the Facility Agreement, on or before the date of
                  payment of the distribution, is unpaid;

         (c)      no amount due to be paid to any Participating Bank, on or
                  before the date of payment of the distribution, on account of
                  Interest on any Advance provided by a Participating Bank under
                  the Facilities, or on account of commitment commissions or
                  other charges arising from any banking or other financial
                  services provided by a Participating Bank to Partner, is
                  unpaid;

         (d)      no amount due to any Participating Bank, on or before the date
                  of payment of the distribution, on account of any repayment of
                  any of the Facilities, is unpaid;

         (e)      Permitted Distributions may not, in a given Financial Year,
                  exceed, in aggregate, an amount equal to 50% (fifty percent)
                  of Excess Cash Flow arising in relation to the previous
                  Financial Year;

         (f)      no Event of Default or Potential Event of Default is
                  outstanding or would exist after such payment;

         (g)      such distribution is made no earlier than one year after the
                  expiry of the Availability Period Facility C;

         (h)      Partner has repaid (disregarding, for this purpose, any amount
                  which has been prepaid and is capable of being reborrowed
                  under the terms of this Agreement) to the Participating Banks
                  on account of the Facilities an amount equal to at least 50%
                  (fifty percent) of the Total Commitments;

         (i)      with respect to distributions to be made:

                     (a)    in any one year Ratio Period ("THE DISTRIBUTION
                            RATIO PERIOD") during the period 2003-2007
                            (inclusive), each of the Facility Debt Cover Ratio,
                            Total Debt Cover Ratio, Fixed Charge Coverage Ratio
                            and ADSCR for the one year Ratio Period immediately
                            preceding the Distribution Ratio Period, shall be
                            not less than 135% (one hundred and thirty-five
                            percent) of such minimum ratio required for such
                            immediately preceding one year Ratio Period pursuant
                            to the table in clause 16.32 below;

<PAGE>
                                      -97-






                     (b)    in the one year Ratio Period 2008, the Total Debt
                            Cover Ratio for the 2007 one year Ratio Period shall
                            be not less than 135% (one hundred and thirty-five
                            percent); and

                     (c)    in the one year Ratio Period 2009, the Total Debt
                            Cover Ratio for the 2008 one year Ratio Period shall
                            be not less than 280% (two hundred and eighty
                            percent)

         (j)      Partner shall have complied with the provisions of clause
                  1.1.131(f) above.

25.15. SHARE CAPITAL

         (a)      Save only as permitted pursuant to the provisions of this
                  clause 16.15 below, no Obligor, other than Partner, will and
                  Partner will procure that, none of its Subsidiaries will,
                  issue any new share capital or grant any option over any
                  shares to any person other than to Partner or any wholly-owned
                  Subsidiary of Partner. Any shares or options issued to Partner
                  or any wholly-owned Subsidiary of Partner as aforesaid shall
                  first be charged in favour of the Security Trustee (as trustee
                  for itself and the Secured Creditors), as security for, inter
                  alia, Partner's obligations under the Facility Documents, to
                  the reasonable satisfaction of the Security Trustee.
                  Notwithstanding the foregoing, in the event a Strategic
                  Investor agrees to subscribe for shares in a Subsidiary for an
                  aggregate issuance price, payable on allotment in cash that
                  reflects the fair market value of such shares and that, upon
                  such subscription, such Strategic Investor would, if an
                  Affiliate of Partner, hold 20% (twenty percent) or more or, if
                  not an Affiliate of Partner, 10% (ten percent) or more of the
                  issued share capital and voting rights of the Subsidiary,
                  then, provided that: (i) Partner provides the Participating
                  Banks with a certificate to the Instructing Group's
                  satisfaction from an independent appraiser reasonably
                  acceptable to an Instructing Group certifying that the issue
                  price for such shares is their fair market value; and (ii) in
                  the case that the Strategic Investor is an Affiliate of
                  Partner, the subscription is otherwise on arm's length terms,
                  Partner shall be entitled to request the Facility Agent,
                  acting on the instructions of an Instructing Group, to: (1)
                  waive the requirements under this clause 16.15 that: (a) do
                  not permit the issuance of shares in such Subsidiary agreed to
                  be subscribed for by such Strategic Investor; (b) require
                  security to be granted over the shares to be issued to the
                  Strategic Investor in favour of the Security Trustee (as
                  trustee for itself and the Participating Banks); and (c)
                  require security to be given to the Security Trustee (as

<PAGE>
                                      -98-





                  trustee for itself and the Secured Creditors) over the shares
                  of any Subsidiary of such Subsidiary; and (2) release such
                  Subsidiary from the obligation to guarantee the obligations of
                  Partner under the Facility Documents. Any such request shall
                  be signed by the General Manager of Partner and shall provide
                  all such information regarding any such proposed subscription
                  necessary, so as to enable the Participating Banks to
                  consider, on a case-by-case basis, whether to give such
                  consent, such consent not to be unreasonably withheld. Any
                  Subsidiary in respect of which the Participating Banks shall
                  have given a waiver and release in accordance with this clause
                  16.15 above (which, pursuant to this clause 16.15, has issued
                  shares to such Strategic Investor as aforesaid), shall
                  hereinafter be referred to as "A VENTURE SUBSIDIARY".

                  "STRATEGIC INVESTOR" shall mean a person or an Affiliate
                  thereof (which is not an Affiliate of Partner or any of its
                  substantial shareholders, as defined in the Companies Law,
                  1999) which is a reputable well-established company in the
                  telecommunications' or associated fields and can reasonably be
                  expected to add value to the business of the Venture
                  Subsidiary.

         (b)      Partner agrees that any rights of first refusal, limitations
                  on the transfer of Shares in Partner or other provisions of
                  the Shareholders Agreement which may restrict the pledge of
                  the Pledged Assets (as defined in the Share Pledges) (or any
                  of them in accordance with the Share Pledges) or which may
                  restrict the free transfer of any Pledged Assets in the course
                  of realisation of any security under the Share Pledges, shall
                  not apply to the Share Pledges or to any transfer made as part
                  of any realisation under the Share Pledges (except as
                  otherwise required under the Licence).

         (c)      Partner undertakes that it shall not issue any shares or other
                  securities convertible into shares which would cause a Change
                  of Ownership to occur.

25.16.   INTELLECTUAL PROPERTY RIGHTS

         Each Obligor will, and will procure that each of its Subsidiaries will:

         (a)      make such registrations and pay such fees and similar amounts
                  as are necessary to keep those registered Intellectual
                  Property Rights owned by the Group: (i) which are material to
                  the conduct of the business of any member of the Group from
                  time to time; or (ii) over which the Participating Banks have
                  been granted fixed security pursuant to the


<PAGE>
                                      -99-



                  Security Documents (if any) in force and to record its
                  interest in those Intellectual Property Rights;


         (b)      take such steps as are necessary and commercially reasonable
                  (including the institution of legal proceedings) to prevent
                  third parties infringing those Intellectual Property Rights
                  referred to in paragraph (a) above and (without prejudice to
                  paragraph (a) above) take such other steps as are reasonably
                  practicable to maintain and preserve its interests in those
                  rights;

         (c)      promptly upon being required to do so by the Security Trustee,
                  comply with all proper instructions of the Security Trustee
                  which the Security Trustee is entitled to give under the
                  Security Documents in respect of its Intellectual Property
                  Rights referred to in paragraph (a)(ii) above;

         (d)      not sell, transfer, lease, license on an exclusive basis or
                  otherwise dispose of all or any part of its interest in any of
                  the Intellectual Property Rights referred to in paragraph (a)
                  above (whether in a single transaction or in a series of
                  transactions whether related or not and whether voluntarily or
                  involuntarily) save:

                  (i)      as effected pursuant to any of the Security
                           Documents; or

                  (ii)     for any licence arrangements in respect of those
                           rights entered into with any Obligor for so long as
                           it remains an Obligor; or

                  (iii)    for any licence arrangements in respect of those
                           rights entered into with any third party, where those
                           licence arrangements are entered into on arm's length
                           terms and in the ordinary course of business and
                           which do not materially and adversely affect the
                           interests of the Participating Banks under the
                           Facility Documents or the conduct of business of any
                           member of the Group; and

         (e)      not permit any registration of any of the Intellectual
                  Property Rights referred to in paragraph (a) above to be
                  abandoned, cancelled or lapsed or to be liable to any claim of
                  abandonment for non-use or otherwise.

25.17.   ENVIRONMENTAL MATTERS

         Each Obligor will and will procure that each of its Subsidiaries will:


<PAGE>
                                     -100-





         (a)      (i) obtain all requisite Environmental Licences; (ii) comply
                  with the terms and conditions of all Environmental Licences
                  applicable to it; and (iii) comply with all other applicable
                  Environmental Law, in each case where failure to do so would
                  have a Material Adverse Effect; and

         (b)      promptly upon receipt of the same, notify the Coordinating
                  Agent and the Security Trustee of any claim, notice or other
                  communication served on it in respect of any alleged breach of
                  or corrective or remedial obligation or liability under any
                  Environmental Law which would, if substantiated have a
                  Material Adverse Effect.

25.18.   INSURANCE

         (a)      Each Obligor will, and will procure that each of its
                  Subsidiaries will, with effect from the date upon which the
                  first Advance is requested by Partner hereunder, insure and
                  keep insured all such properties and assets of such Obligor or
                  Subsidiary with insurance companies or underwriters (including
                  facultative reinsurance companies) approved by the Facility
                  Agent (such approval not to be unreasonably withheld or
                  delayed) to such extent, at such times and against such risks
                  as described in pages 29-31 of the Insurance Report (including
                  with respect to deductibles, exclusions and exceptions) (other
                  than departures from such basis which are not adverse in any
                  material respect (taking into account market availability and
                  cost and the views of any insurance advisers) to the interests
                  of the Finance Parties, or otherwise as the Facility Agent
                  (acting on the instructions of the Instructing Group) may
                  approve).

         (b)      Each Obligor will, and will procure that each of its
                  Subsidiaries will, with reasonable promptness after becoming
                  aware of the relevant requirement, effect and maintain all
                  insurances required by the terms of any applicable law or any
                  contract binding on it (including for the avoidance of doubt,
                  the Licence).

         (c)      Partner will ensure that it has such insurance coverage in
                  respect of any risks or liabilities other than those specified
                  in the Insurance Report as would from time to time generally
                  be insured by a prudent operator of a GSM telephony network
                  (including also 2.5 generation and 3rd generation) (financed
                  on a project finance basis) of a size, and with general
                  characteristics (including location) comparable to the
                  Business which does not self-insure (except by means of
                  reasonable deductibles required by insurers generally) and
                  having regard to all the circumstances (including the
                  interests of the Participating Banks), and taking into
                  account, among other things, market availability in respect
<PAGE>
                                     -101-





                  of risks, liabilities and amounts of insurance and the
                  financial position of Partner.

         (d)      Subject as hereinafter provided, Partner may, or any Obligor
                  may, at any time, effect such other insurances in addition to
                  or supplementing those referred to in this clause 16.18 as it
                  may think fit. Provided that such supplementary insurance
                  shall not adversely affect any insured party's rights or
                  ability to recover under the insurance referred to in this
                  clause 16.18 and Partner shall notify the Facility Agent at
                  least annually of any material insurances effected since the
                  previous such notification pursuant to this paragraph (d).

         (e)      Each Obligor will promptly supply to the Facility Agent on
                  request evidence reasonably satisfactory to the Facility Agent
                  of payment of all premiums and other amounts payable by it
                  under, and a certified copy of, each insurance policy required
                  to be taken out and maintained by it pursuant to this clause
                  16.18 (or, in the case of any marine cargo insurance policy
                  taken out by the Counterparty to the Principal Supplier
                  Contract, a certified summary of key terms) together with such
                  other information as to the insurance policies taken out
                  pursuant hereto (including regarding renewals thereof) as the
                  Facility Agent may reasonably request (except for
                  miscellaneous insurances as referred to in the schedule to the
                  Insurance Report).

         (f)      Partner shall ensure that, in respect of each policy of
                  insurance and reinsurance taken out by any Obligor pursuant to
                  this clause 16.18 (except for miscellaneous insurances as
                  referred to in the schedule to the Insurance Report):

                  (i)      a clause is endorsed upon such policy whereby the
                           insurer agrees that the insurance cover shall not be
                           invalidated so far as the Security Trustee is
                           concerned by any breach of the insuring conditions or
                           any other act or omission unknown to or beyond the
                           control of the Security Trustee on the part of the
                           relevant Obligor or any other person;

                  (ii)     an undertaking is endorsed upon such policy by the
                           insurer to notify the Security Trustee promptly in
                           writing if the premium or other moneys payable under
                           such policy are not paid when due and to refrain from
                           cancelling such policy by reason only of the
                           non-payment of such monies for a period of at least
                           30 (thirty) days from the due date;

<PAGE>
                                     -102-




                  (iii)    a provision is endorsed upon such policy to the
                           effect that the relevant insurance company waives any
                           rights of contribution arising against any other
                           insurance taken out by the Agents and the
                           Participating Banks (or any of them) in respect of
                           payments made by it and any rights of subrogation
                           arising in respect of the rights of the Agents and
                           the Participating Banks (or any of them) under the
                           Facility Documents,

                  (iv)     a notice of assignment is duly given to the brokers
                           or the underwriters and insurance companies in
                           accordance with the Debenture;

                  (v)      the Security Trustee (for the benefit of itself and
                           the Secured Creditors) is joined as an additional
                           insured thereunder and the interest of the Security
                           Trustee (for the benefit of itself and the Secured
                           Creditors) is duly noted and endorsed upon all slips,
                           cover notes, policies or other instruments of
                           insurance issued or to be issued in connection
                           therewith;

                  subject to each of such clauses, undertakings and provisions
                  being viable commercially in the Israeli and international
                  insurance market.

                  If facultative reinsurance is effected in relation to any
                  policy of insurance taken out pursuant hereto, Partner shall
                  use all reasonable endeavours to ensure that, if practicable
                  in the insurance market and achievable at no material extra
                  cost, a provision is endorsed thereon whereby each reinsurer
                  agrees that in the event of a claim under the policy of the
                  reassured, in lieu of payment to the reassured, their
                  successors in interest and assigns, the reinsurers shall pay
                  that portion of any loss due direct to the insured parties
                  (less the premium, if any, due to the reinsurers) and whereby
                  it is understood and agreed that any such payment shall fully
                  discharge the reinsurers from any and all further liability in
                  connection therewith. If Partner cannot effect reinsurance
                  with such a provision endorsed thereon, in place of
                  reinsurance it will: (i) place the relevant insurance on a
                  co-insured basis with insurers approved by the Facility Agent
                  (such approval not to be unreasonably withheld or delayed); or
                  (ii) obtain an assignment of facultative reinsurance by the
                  insurers to the Security Trustee.

         (g)      Each Obligor will ensure that (except for public liability and
                  miscellaneous insurances (as referred to in the schedule to
                  the Insurance Report)) all of the insurance policies required
                  to be taken out and maintained by it pursuant to this clause
                  16.18 shall contain loss payee provisions acceptable to the
                  Security Trustee noting the


<PAGE>
                                     -103-




                  Security Trustee's interest thereon and naming the Security
                  Trustee as the payee in circumstances where an Event of
                  Default has been notified in writing to the insurer or broker
                  as applicable by the Security Trustee and is continuing
                  unwaived.

         (h)      Save in the circumstances referred to in clause 16.18(i)
                  below, all moneys received or receivable under any insurances
                  in respect of property or assets damaged or destroyed or
                  business interruption shall promptly (subject to the rights
                  and claims of any person having prior rights thereto) be
                  applied: (i) subject to (ii) below, at the option of Partner,
                  either: (A) in repairing, replacing, restoring or rebuilding
                  the property or assets damaged or destroyed or (in the case of
                  business interruption insurance) in the Business as Partner
                  reasonably see fit as permitted pursuant to this Agreement or
                  (in the case of third party liability cover) in satisfaction
                  of the third party liability in question; or (B) in payment of
                  amounts due under the Facility Documents; or (ii) on and after
                  the occurrence of any Event of Default and for so long as such
                  event is continuing, at the option of the Security Trustee:
                  (A) to prepay the outstanding Advances in accordance with
                  clause 6 (Voluntary Prepayment and Reborrowing) above, as if
                  such prepayment was a voluntary prepayment; or (B) in
                  repairing, replacing, restoring or rebuilding the property or
                  assets damaged or destroyed or (in the case of business
                  interruption insurance) in the Business as the Security
                  Trustee reasonably see fit as permitted pursuant to this
                  Agreement or (in the case of third party liability cover) in
                  satisfaction of the third party liability in question and if
                  any such moneys shall be received by Partner where the
                  circumstances in sub-paragraph (ii) apply, Partner shall
                  (subject to the rights and claims of any person as aforesaid)
                  hold such moneys upon trust for the Security Trustee pending
                  payment to the Security Trustee for application in accordance
                  with the Security Trust Deed, or as the case may be,
                  application by Partner in repairing, replacing, restoring or
                  rebuilding the property or assets damaged or destroyed.

         (i)      All moneys received or receivable under any insurances whilst
                  a Potential Event of Default (but not an Event of Default) has
                  occurred and is continuing shall be placed to the credit of a
                  blocked account subject to an encumbrance in favour of the
                  Security Trustee until the Potential Event of Default ceases
                  to exist or is waived (in which case Partner may apply
                  insurance proceeds in accordance with clause 16.18(h)(i)
                  above) or the relevant Potential Event of Default becomes an
                  Event of Default (in which case the Security Trustee may apply
                  insurance proceeds in accordance with clause 16.18(h)(ii)
                  above).

<PAGE>
                                     -104-





         (j)      Partner shall:

                  (i)      promptly notify the Facility Agent of any insurance
                           claim where the amount of such claim exceeds US
                           $2,500,000 (two million five hundred thousand United
                           States Dollars) (or its equivalent, on the date on
                           which the claim is made, in the currency in which
                           such claim is made);

                  (ii)     take all action reasonably within its power to
                           procure that nothing is done or offered to be done
                           whereby any of the insurances taken out hereunder may
                           be rendered void, voidable, unenforceable, suspended
                           or impaired in whole or in part or to otherwise
                           render any sum paid out under any such policy
                           repayable in whole or in part.

         (k)      If, at any time, owing to changes in the Israeli or
                  international insurance market or in the capacity or
                  availability or cost of insurance coverage in those
                  markets or any other change in circumstances giving
                  rise to changes in the insurance coverage being
                  necessary or desirable, Partner or, as the case may
                  be, the Facility Agent serve notice upon one another
                  that it believes that the insurance provisions in
                  this Agreement no longer reflect the insurance
                  coverage of the risks or liabilities which would be
                  insured by a prudent operator of a GSM telephony
                  network (including also 2.5 generation and 3rd
                  generation) (financed on a project finance basis) of
                  a size, and with the characteristics (including, with
                  limitation, location), comparable to that of the
                  Group which does not self-insure (except by means of
                  reasonable deductibles required by insurers
                  generally) or that the premia for any insurances
                  effected pursuant hereto are unreasonably expensive
                  in the context of Partner's business and financial
                  condition, as soon as practicable thereafter, Partner
                  and the Facility Agent shall consult, in good faith,
                  and take reasonable steps to ensure that the
                  insurance arrangements to be effected by Partner are
                  revised such that the level of insurance of risks or
                  liabilities to be covered are those which would be
                  insured by a prudent operator of a GSM telephony
                  network (including also 2.5 generation and 3rd
                  generation) (financed on a project finance basis) of
                  a size, with the characteristics (including location)
                  comparable to that of Partner which does not
                  self-insure (except by means of reasonable
                  deductibles required by insurers generally).

25.19.        NOTIFICATION OF DEFAULT


<PAGE>
                                     -105-




         Each Obligor shall notify the Facility Agent of any Event of Default or
         Potential Event of Default of which it is aware (and the steps, if any,
         being taken to remedy it) promptly upon becoming aware of it.

25.20.   CHANGE OF BUSINESS

         (a)      No Obligor will, and each Obligor will procure that none of
                  its Subsidiaries will:

                  (i)      make or threaten to make any substantial change in
                           the nature of its respective business (save as
                           contemplated in the Business Plan or as may result
                           from a disposal of assets permitted by this
                           Agreement); or

                  (ii)     carry on any business other than the Business;
                           provided that, in respect of a Venture Subsidiary or
                           any Subsidiary thereof, such Venture Subsidiary or
                           Subsidiary thereof may carry on a business which is
                           in the telecommunications sector.

         (b)      No Obligor shall bid for any other telephone licence (other
                  than any licence for activities ancillary to its GSM business
                  and its business of establishing and operating second
                  and-a-half and third generation (known as 2.5 and 3G) wireless
                  telephone services (all as contemplated in the version of the
                  Business Plan dated 7 July 2002 delivered to the Facility
                  Agent on 11 July 2002 which would use existing infrastructure
                  and require no material Capital Expenditure) unless: (i) it
                  shall have received the prior written consent of an
                  Instructing Group (not to be unreasonably withheld); (ii) the
                  financing of such bid and all activities contemplated thereby
                  shall be financed from a source other than under the
                  Facilities; and (iii) the making of such bid, or the carrying
                  out of any activities contemplated by such bid, would not
                  result in a Material Adverse Effect.


<PAGE>
                                     -106-



25.21.   ACQUISITIONS AND MERGERS

         Neither Partner nor any of the Subsidiaries shall enter into or resolve
         to approve any merger or consolidation, scheme of reconstruction,
         liquidation, or to transfer its Business or part thereof to, or make
         any Acquisition, other than: (a) disposals permitted pursuant to clause
         16.8 (Disposals) above; (b) Acquisitions or mergers or consolidations
         to which the prior consent of all the Participating Banks has been
         obtained; (c) Acquisitions, the funding of which is from the Permitted
         Loan Capital or the sale by Partner of securities permitted hereunder;
         or (d) Acquisitions by Subsidiaries.

25.22.   BORROWINGS

         Partner shall not incur any Borrowings, other than Permitted
         Borrowings. A Subsidiary of Partner shall be entitled to incur
         Borrowings, provided that, the debt to equity ratio (as the terms
         "debt" and "equity" are defined in accordance with Applicable
         Accounting Principles; "equity" to include shareholder loans made to
         such Subsidiary) of such Subsidiary in accordance with such
         Subsidiary's consolidated Accounts shall at all times not exceed 60:40.

25.23.   ARM'S-LENGTH TERMS

         No Obligor will, and each Obligor will procure that none of its
         Subsidiaries will incur any liability to or for the benefit of any
         Restricted Person (other than in relation to Shareholder Loans or
         Paid-in Equity) otherwise than under agreements which are on terms no
         worse to the Group than on an arm's length terms in the ordinary course
         of business and, in respect of agreements entered into after the date
         of this Agreement, where there have been bona fide negotiations
         relating to such terms.

25.24.   COMPLIANCE WITH LAWS

         Each Obligor will, and will procure that each of its Subsidiaries will,
         comply in all respects material to the Participating Banks with all
         applicable laws, rules, regulations and orders of any governmental
         authority, having jurisdiction over it or any of its assets.


<PAGE>
                                     -107-





25.25.   CONSENTS AND AUTHORISATIONS

         (a)      Each Obligor will, and will procure that each of its
                  Subsidiaries will, obtain or cause to be obtained:

                  (i)      every consent, authorisation, licence or approval of,
                           or registration with or declaration to, governmental
                           or public bodies or authorities or courts; and

                  (ii)     every notarisation, filing, recording, registration
                           or enrolment in any court or public office in Israel,

                  in each case required by any Obligor to authorise, or required
                  by any Obligor in connection with, the execution, delivery,
                  validity, enforceability or admissibility in evidence of the
                  Facility Documents and Material Contracts or the performance
                  by any Obligor of its respective obligations under the
                  Facility Documents and Material Contracts to which it is a
                  party.

         (b)      Each Obligor will, and will procure that each of its
                  Subsidiaries will obtain or cause to be obtained every
                  Authorisation relevant to it and ensure that: (i) none of the
                  Authorisations is revoked, cancelled, suspended, withdrawn,
                  terminated, expires and is not renewed or otherwise ceases to
                  be in full force and effect; and (ii) no Authorisation is
                  modified and no member of the Group commits any breach of the
                  terms or conditions of any Authorisation which, in the case of
                  (i) or (ii), would or is reasonably likely to have a Material
                  Adverse Effect.

25.26.   LICENCE

         Partner:

         (a)      will notify the Facility Agent promptly upon the occurrence of
                  any breach of the Licence or upon the receipt of any notice or
                  communication between the Ministry and Partner or any other
                  member of the Group in connection with the Licence which
                  either: (i) claims a breach of the Licence; or (ii) which
                  could reasonably be expected to give rise to a revocation,
                  termination, amendment, suspension or withdrawal of the
                  Licence; or (iii) which otherwise may be likely to have a
                  Material Adverse Effect (including, for the avoidance of
                  doubt, any notice or communication regarding the non-extension
                  of the Licence or any reduction of frequency spectrum).
                  Partner will do all such things (at the expense of Partner) as

<PAGE>
                                     -108-




                  reasonably requested by the Facility Agent if the Facility
                  Agent reasonably believes: (x) the Licence to be in danger of
                  revocation, termination, amendment, suspension or withdrawal,
                  to mitigate the revocation, termination, amendment, suspension
                  or withdrawal of the Licence, or (y) that any such matters so
                  notified to it may be reasonably likely to have an adverse
                  effect upon the interests of the Finance Parties under the
                  Facility Documents. Partner shall, at the request of the
                  Facility Agent, consult with the Facility Agent in good faith
                  with a view to the making of any oral or written submissions
                  or responses to be made in relation to any matter or thing
                  which gives rise to the Facility Agent having any such
                  reasonable belief as referred to above and to the possibility
                  of representatives of the Finance Parties attending any
                  meetings with the Ministry in connection therewith. Following
                  the occurrence of an Event of Default or a Potential Event of
                  Default which is continuing, upon the request of the Facility
                  Agent, Partner shall use its reasonable endeavours to make
                  oral or written submissions to the Ministry on behalf of the
                  Finance Parties and, if required by the Facility Agent, seek
                  the Ministry's agreement to representatives of the Finance
                  Parties attending any meetings with the Ministry;

         (b)      will do all such things and take such steps as are necessary
                  to ensure the Licence remains in full force and effect and,
                  will not take any steps or action which would prejudice in any
                  material respect its ability to renew the Licence and will
                  notify the Facility Agent promptly upon the receipt of any
                  material notice or communication in connection with such
                  renewal;

         (c)      will not dispose of any of its rights under the Licence;

         (d)      will not agree to any material amendment to or material
                  variation of the Licence or waive any material right
                  thereunder;

         (e)      will deliver to the Facility Agent in sufficient copies for
                  the Agents and the Participating Banks any notice or
                  communications referred to in paragraph (a) of this clause
                  16.26 together with copies of all other material notices
                  between Partner and the Ministry.

<PAGE>
                                     -109-





25.27.   MATERIAL CONTRACTS AND CONSTITUTIONAL DOCUMENTS

         (a)      Each Obligor shall comply with the terms of each of the
                  Material Contracts to which it is party save to the extent
                  that failure to comply with any such term would not be
                  reasonably likely to result in a Material Adverse Effect.

         (b)      No Obligor shall, without the prior written consent of the
                  Facility Agent (acting on the instructions of an Instructing
                  Group), amend, cancel, supplement, supersede or waive any term
                  of a Material Contract to which it is a party in any respect
                  save to extent that the same is not materially adverse to the
                  interests of the Participating Banks under the Facility
                  Documents.

         (c)      Partner shall notify the Facility Agent promptly after the
                  entry into by any Obligor of any agreement, deed or contract
                  which it reasonably considers may constitute a Material
                  Contract.

         (d)      Each Obligor shall take all reasonable action necessary to
                  perfect, preserve and enforce all of its rights under the
                  Material Contracts (if any) to which it is a party.

         (e)      No Obligor shall amend its Charter in any respect materially
                  adverse to the interests of the Participating Banks without
                  the prior written consent of the Facility Agent (acting on the
                  instructions of an Instructing Group).

25.28.   AUDITORS

         (a)      If Partner wishes to change its Auditors it will notify the
                  Facility Agent as to the reasons for any such proposed change
                  and if the Facility Agent so requests, will instruct the audit
                  partner of each of the outgoing firm of Auditors and the
                  replacement firm of Auditors to discuss the financial position
                  of the Group with the Facility Agent.

         (b)      Partner will authorise the Auditors to discuss the Group's
                  and/or any Group member's financial position with the Facility
                  Agent on its reasonable request or at the reasonable request
                  of the Facility Agent, at the expense of Partner, pursuant to
                  a letter to be sent by Partner to the Auditors in the form set
                  out in SCHEDULE 20 (Letter to Auditors) hereto. If the
                  Facility Agent so requests any discussion with the Auditors,
                  the Facility Agent shall give Partner reasonable notice of any
                  meeting or other forum used for such discussion which shall
                  take place at a reasonable time and the Facility Agent shall
                  (if so requested


<PAGE>
                                     -110-




         by Partner) enable a representative of Partner to be present at the
         relevant discussion.

25.29.   HEDGING AGREEMENTS

         (a)      Partner shall ensure it manages its Interest rate and currency
                  exchange exposure in a prudent manner and shall on the last
                  Business Day of each month notify details of any Hedging
                  Transactions entered into during the preceding month to the
                  Facility Agent.

         (b)      Partner shall not enter into any Hedging Transaction other
                  than:

                  (i)      Interest Rate Hedging Transactions entered into for
                           the purposes of clause 16.29(a) (Hedging Agreements);

                  (ii)     spot foreign exchange contracts entered into in the
                           ordinary course of business; and

                  (iii)    foreign exchange transactions, currency swaps or
                           currency options entered into for the purposes of
                           hedging actual or projected foreign exchange
                           exposures arising in the ordinary course of business
                           carried on in compliance with the terms of this
                           Agreement.

         (c)      Partner shall not enter into any Hedging Transactions for any
                  speculative purpose.

         (d)      Partner shall only enter into Interest Rate Hedging Agreements
                  with Counterparties which are: (i) Participating Banks; (ii)
                  financial institutions rated at least "A-" by S&P or
                  equivalent by Moody's; (iii) the Arranger; or (iv) subject to
                  paragraph (g) below, HWL or any HWL Hedging Subsidiary. Such
                  Counterparties will be Secured Creditors provided that the
                  relevant Interest Rate Hedge Provider is a Participating Bank
                  (in such capacity a "SECURED INTEREST RATE HEDGE PROVIDER").

         (e)      Partner shall enter into Currency Hedging Agreements other
                  than spot foreign exchange contracts entered into in the
                  ordinary course of business with counterparties which are: (i)
                  Participating Banks; or (ii) other financial institutions
                  rated at least "A-" by S&P or "A3" by Moody's; or (iii) the
                  Arranger.

<PAGE>
                                     -111-




         (f)      Partner shall ensure that at all times its rights and benefits
                  under any Hedging Agreement are assigned by way of security to
                  the Security Trustee.

         (g)      Partner may only enter into Interest Rate Hedging Transactions
                  with HWL or any HWL Hedging Subsidiary provided that:

                  (i)      each Interest Rate Hedging Agreement is documented
                           pursuant to an 1992 ISDA Master Agreement
                           (Multi-currency-Cross Border) Agreement (together
                           with the applicable Schedule and confirmation);

                  (ii)     HWL is rated not less than "A" by S&P or equivalent
                           by Moody's at the time such Interest Rate Hedging
                           Transaction is entered into;

                  (iii)    Partner certifies that such Interest Rate Hedging
                           Transaction is on terms at least as favourable to
                           Partner as those available to Partner in the market,
                           which certificate shall attach quotes from two
                           leading banks which generally operate in the swap
                           market;

                  (iv)     for the avoidance of doubt HWL may not be a Secured
                           Interest Rate Hedge Provider; and

                  (v)      (1)    HWL and (in the case of any HWL Hedging
                                  Subsidiary), the relevant HWL Hedging
                                  Subsidiary, shall have first executed an
                                  undertaking in substantially the same form as
                                  was given, prior to its release on 3 November
                                  1999, by HWL under clauses 7.2 and 7.3 of the
                                  HWL Counter Guarantee (as defined in the
                                  Original Facility Agreement), save that HWL
                                  and, if applicable, the HWL Hedging
                                  Subsidiary, shall, in such undertaking, submit
                                  to the exclusive jurisdiction of the competent
                                  courts of Tel-Aviv-Jaffa and appoint, in
                                  connection therewith, an agent for service of
                                  proceedings located in Israel and that such
                                  undertaking shall otherwise be in form and
                                  substance satisfactory to the Facility Agent;

                           (2)    that, in the case of any HWL Hedging
                                  Subsidiary, HWL has executed a guarantee in
                                  favour of Partner in respect of the relevant
                                  HWL Hedging Subsidiary's obligations arising
                                  under the Interest Rate Hedging Transaction
                                  concerned;


<PAGE>
                                     -112-




                  (3)      that there has been provided to the Facility Agent
                           such constitutive board resolutions and certificates
                           in relation to paragraphs (1) and (2) above as it may
                           reasonably require, together with a legal opinion in
                           form and substance satisfactory to the Facility
                           Agent; and

                  (4)      that where any undertaking as referred to in (1)
                           above, has been given, that HWL and, if applicable,
                           any HWL Hedging Subsidiary that has given an
                           undertaking as aforesaid, are in full compliance with
                           the same.

25.30.   SUBSIDIARIES

         No Obligor shall, without the prior written consent of the Instructing
         Group, acquire (by subscription or otherwise) any shares or
         equity-related securities in any other entity and, in particular but
         without limitation, shall not acquire or establish any new Subsidiary
         unless such Subsidiary:

         (a)      is a Dormant Company; or

         (b)      is a Venture Subsidiary or a Subsidiary of a Venture
                  Subsidiary; or

         (c)      is a wholly-owned Subsidiary that becomes an Additional
                  Guarantor in accordance with clause 26.1 (Additional
                  Guarantors) and provides such Encumbrances in respect of the
                  Facilities as required pursuant to clause 26.2 (Security).

25.31.   TAXATION

         Each Obligor shall file or cause to be filed all tax returns required
         to be filed in all jurisdictions in which it is situated or carries on
         business or otherwise subject to pay Tax and will promptly pay all
         Taxes which are due and payable on such returns or any assessment made
         against it except for non-payment, or a claim for payment, non-payment
         of which would in each such case not have a Material Adverse Effect.

25.32. FINANCIAL UNDERTAKINGS

         The covenants set out in this clause 16.32 (Financial Undertakings)
         below for any Ratio Period shall be based on the Accounts (including
         the Auditors' certificates and notes referred to in clause 1.2.2 above)
         for such Ratio Period (whether Accounts for 6 (six) months, in the case
         of six month Ratio Periods, or for 1 (one) year, in the case of one
         year Ratio Periods), subject, with respect to six month Ratio Periods,
         to those adjustments set out below.

<PAGE>
                                     -113-




         Partner will procure that for each of the one year Ratio Periods set
         out below, and for each of the six month Ratio Periods set out below,
         each of the financial ratios set out in the table below shall be no
         less than the percentage set out in the table for such one year Ratio
         Period or six month Ratio Period, as the case may be, opposite such
         financial ratios:




<Table>
<Caption>
                      FACILITY DEBT                 TOTAL DEBT                FIXED CHARGE
                       COVER RATIO                 COVER RATIO               COVERAGE RATIO                 ADSCR YEAR
               ============================ =========================== ========================== =========================
                                                                          1st Six
                  1st Six       One Year      1st Six       One Year      Month      One Year        1st Six     One Year
                Month Ratio      Ratio       Month Ratio     Ratio        Ratio       Ratio          Month Ratio   Ratio
                  Period         Period        Period        Period       Period     Period           Period       Period
<S>             <C>             <C>           <C>           <C>           <C>        <C>             <C>         <C>

    2002                          33%                         25%                          83%                      200%

    2003            35%           37%           26%           27%            75%           75%          200%        200%

    2004            38%           40%           28%           29%            88%           95%          183%        172%

    2005            45%           50%           31%           33%            97%           99%          150%        150%

    2006            57%           65%           39%           45%           102%          105%          150%        150%

    2007            65%           65%           45%           45%           105%          105%          150%        150%

    2008            65%                         45%                         105%                        165%

</Table>


         Provided that, in the event that:

         (a)      for any Ratio Period there is, with respect to not more than 2
                  (two) ratios (and if there is a deviation with respect to 2
                  (two) ratios, one of which is ADSCR) a deviation from the
                  requirement set out in the above table for such ratio of not
                  more than 5% (five percent) (such that the actual ratio shall
                  not be less than 95% (ninety-five percent) of the ratio as
                  required in the table); and

         (b)      there has not been in respect of any one or both of the ratios
                  referred to in (a) above (in respect of which there is a
                  deviation of 5% (five percent) or less for such Ratio Period),
                  any deviation in any one of the 3 (three) Ratio Periods
                  (disregarding, for the avoidance of doubt, any Ratio Period
                  prior to the 2002 one year Ratio Period) preceding such Ratio
                  Period,

         then Partner shall be deemed to have complied with this clause 16.32.2
         in respect of such Ratio Period.


<PAGE>
                                     -114-




         For the purposes of all the conditions in this clause 16.32, insofar as
         applicable to six month Ratio Periods, in calculating EBITDA after SAC,
         the amount of EBITDA after SAC must be multiplied by 2 (two).

         For the removal of doubt, the permitted deviations referred to in this
         clause 16.32 (Financial Undertakings) above are permitted only for the
         purposes of this clause 16.32 (Financial Undertakings) and not for any
         other purpose under this Agreement.

25.33.   ACCESS

         At any time whilst a Potential Event of Default or Event of Default is
         continuing, or the Facility Agent reasonably believes a Potential Event
         of Default or Event of Default may be in existence: (a) Partner shall
         ensure, as far as it is able, that at reasonable times, on reasonable
         prior notice by the Facility Agent (acting upon the instructions of an
         Instructing Group), any professional adviser to the Facility Agent or
         representative of the Facility Agent or any other Agent be afforded
         access to, and be permitted to inspect or observe, all or any part of
         the Business subject to any reasonable confidentiality undertaking
         required by it; and (b) Partner shall permit any professional adviser
         to the Facility Agent or representative of the Facility Agent or the
         Agents, at reasonable times and on reasonable prior notice by the
         Facility Agent, to have access to books, records, accounts, documents,
         computer programmes, data or other information in the possession of or
         available to it subject to any reasonable confidentiality undertaking
         required by it and to take such copies as may be considered appropriate
         by such representative or professional adviser acting reasonably.

25.34.   INTERCONNECTION

         (a)      Partner shall keep the Facility Agent promptly informed of all
                  material developments relating to the entry into the Bezeq
                  Interconnection Agreement. Promptly following execution of any
                  Interconnection Agreement, Partner shall deliver to the
                  Facility Agent a copy of such Interconnection Agreement
                  (provided that Partner may delete any reference contained
                  therein which it reasonably believes to be commercially
                  sensitive price or tariff information prior to the supply of
                  such Interconnection Agreement).

         (b)      Each of the parties hereto agree that the Facility Agent may
                  only supply copies of any Interconnection Agreement delivered
                  to it under clause 16.34(a) (Interconnection) above to (i) the
                  Security Trustee if such Interconnection Agreement is assigned
                  by way of security in favour of the Security Trustee; and (ii)
                  any other Finance Party

<PAGE>
                                     -115-




                  (including the Security Trustee) if any Potential Event of
                  Default or Event of Default of whatsoever nature is
                  outstanding or if the Facility Agent reasonably believes that
                  a Potential Event of Default or Event of Default may have
                  occurred by reason of any event, matter or circumstance
                  occurring with respect to such Interconnection Agreement.

         (c)      Partner shall ensure that Interconnection Agreements are
                  entered into with such other persons (apart from Bezeq) and on
                  such terms as may in each case be reasonably necessary or
                  appropriate for the purposes of carrying out the Business as
                  contemplated by the Business Plan.

         (d)      Partner shall promptly notify the Facility Agent upon it
                  becoming aware of any action or inaction or intended action or
                  inaction of Bezeq which is reasonably likely to have a
                  materially adverse effect on the provision of interconnection
                  infrastructure and services by Bezeq to Partner.

25.35.   RESERVE ACCOUNT

         Partner shall, in accordance with clause 1.1.131(f) above, establish,
         maintain and supplement the Reserve Account, charged, in accordance
         with clause 1.1.131(f) above, in favour of the Security Trustee (as
         trustee for itself and the Secured Creditors pursuant to the
         Debenture), unless and until no longer required to do so pursuant to
         paragraphs (i) or (ii) of clause 1.1.131(f).

<PAGE>
                                     -116-




25.36.   UTILISATION OF PROCEEDS OF FACILITIES

         Partner shall not utilise the proceeds from any Advance received under
         the Facilities, except for those purposes referred to in clause 2 (The
         Facilities) of this Agreement.

25.37.   LOANS, GUARANTEES AND INVESTMENTS IN SUBSIDIARIES

         (a)      Partner shall be permitted to utilise the proceeds of Advances
                  under the Facilities in order to make loans, to give
                  guarantees in respect of, or to make investments in the share
                  capital of, a Subsidiary in which Partner holds, at least, 75%
                  (seventy-five percent) of the issued share capital and voting
                  rights, provided that: (i) the business of such Subsidiary is
                  exclusively in the field of the Business; (ii) the aggregate
                  amount of any such loans, guarantees or investments in any
                  such Subsidiary shall not exceed, individually, US $2,000,000
                  (two million United States Dollars); and (iii) the aggregate
                  amount, at any time, of any such investments, loans and
                  guarantees in all such Subsidiaries shall not exceed US
                  $5,000,000 (five million United States Dollars), all subject
                  to the provisions of clause 7.3 (Investment by Partner in
                  Subsidiaries) above.

         (b)      Partner shall be permitted to make loans, to give guarantees
                  in respect of, or make investments in, the share capital of:

                  (i)      any Subsidiary, after the Effective Date, from the
                           proceeds of Permitted Loan Capital or the issue of
                           shares in Partner;

                  (ii)     subject to clauses 16.22 (Borrowings) and 16.8
                           (Disposals) above, any Subsidiary, where such loan,
                           guarantee or investment is made for the purpose of
                           financing the purchase from Partner of assets;
                           provided that: (1) in the case of an asset which is
                           the subject of fixed security under any Security
                           Document (or an asset which comprises of any shares
                           held by Partner), such assets are acquired by such
                           Subsidiary subject to such fixed security under the
                           Security Documents, such security is duly registered
                           and valid and has the same priority as if such
                           Subsidiary had originally pledged such asset under
                           such Security Document in place of Partner and, (2)
                           in any other case, such Subsidiary shall have first
                           granted a first-ranking fixed charge over such assets
                           in favour of the Security Trustee (for the benefit of
                           itself and the Secured Creditors) in a form
                           substantially similar to the security granted by
                           Partner under the Debenture; and that (3) in the
                           event the consideration payable

<PAGE>
                                     -117-




                           for such assets is in excess of US $10,000,000 (ten
                           million United States Dollars) (or is in excess of
                           such amount when aggregated with other consideration
                           paid in respect of any other assets purchased from
                           Partner as aforesaid during the preceding 12 (twelve)
                           months), a certificate, in a form reasonably
                           acceptable to the Instructing Group, from an
                           appraiser certifying that the consideration paid for
                           all of such assets was its fair value, is provided to
                           the Participating Banks prior to such purchase.

                  (c)      Save as permitted under this clause 16.37 above,
                           Partner shall not be entitled to make loans to, give
                           guarantees in respect of, or make investments in the
                           share capital of, any Subsidiary.

25.38.   SHARE PLEDGES

         Subject to clause 34.2 (Release of Share Pledges) below, Partner shall
         procure that at all times not less than 51% (fifty-one percent) of
         Partner's issued share capital (including, for this purpose, any
         securities convertible or realisable into shares of Partner), from time
         to time, are pledged by the Chargors under the Share Pledges and
         Partner shall not issue any such shares or securities, unless
         immediately prior to such issue, the number of shares pledged by the
         Chargors as aforesaid is such that immediately after such issue,
         Partner shall comply with the provisions of this clause 16.38.

25.39.   NON-ACQUISITION BY SUBSIDIARY

         Partner shall procure that no Subsidiary of Partner shall acquire any
         share or other securities of Partner, nor the rights with respect to
         any Indebtedness owed to Partner.

26. DEFAULT

26.1.    EVENTS OF DEFAULT

         Each of the events set out in clause 17.2 (Non-Payment) to clause 17.24
         (Non-Compliance with any Securities Authority) (inclusive) below is an
         Event of Default (whether or not caused by any reason outside the
         control of any or all of the Obligors or any other person).

26.2.    NON-PAYMENT

         Any Obligor does not pay on the due date any amount payable by it under
         any Facility Document at the place and in the funds expressed to be
         payable,

<PAGE>
                                     -118-



         provided that this clause 17.2 (Non-Payment) shall not apply: (i) to
         unpaid amounts of principal which are paid in full within two Business
         Days of the due date for payment; or (ii) to unpaid amounts of Interest
         or other amounts (except principal) which are paid in full within 5
         (five) Business Days after the due date for payment.

26.3.    BREACH OF OBLIGATIONS

         (a)      There is any breach of any of clauses 2.1.2, 2.4 (Purpose),
                  4.5(b) (Outstandings in Proportion to Commitments--Facility
                  B), 16.6 (Negative Pledge), 16.7 (Sale and Leaseback), 16.8
                  (Disposals), 16.10 (Loans and Guarantees) to 16.15 (Share
                  Capital) (inclusive), 16.22 (Borrowings), 16.32 (Financial
                  Undertakings) or 16.35 (Reserve Account) to 16.39
                  (Non-Acquisition by Subsidiary) (inclusive), above.

         (b)      Partner fails to comply with the provisions of clause 4.5(a)
                  (Outstandings in Proportion to Commitments--Facility A and
                  Facility C) above and within 21 (twenty-one) days after the
                  earlier of Partner becoming aware of such default and receipt
                  by Partner of written notice from the Coordinating Agent
                  requiring the failure to be remedied, Partner shall have
                  failed to cure such default.

         (c)      Any Obligor fails to comply with any undertaking or obligation
                  contained in any Facility Document and, if such default is
                  capable of remedy within such period, within 30 (thirty) days
                  after the earlier of the Obligor becoming aware of such
                  default and receipt by the Obligor of written notice from the
                  Facility Agent requiring the failure to be remedied, that
                  Obligor shall have failed to cure such default.

26.4.    MISREPRESENTATION/BREACH OF WARRANTY

         (a)      Any representation or warranty contained in clauses 15.7
                  (Consents), 15.8(c) or (d) (Accounts), 15.10 (Tax
                  Liabilities), 15.12 (Business Plan), 15.13 (Ownership of
                  Assets), 15.14 (Documents), 15.15(a) (Intellectual Property
                  Rights), 15.16 (Environmental Matters) or 15.18 (Material
                  Contracts) is incorrect or misleading in any respect when made
                  or deemed repeated by reference to the facts and circumstances
                  then subsisting.

         (b)      Any representation or warranty contained in clauses 15.5(c)
                  (Non Conflict), 15.6(b) (No Default), 15.10 (Tax Liabilities)
                  or 15.15(b) (Intellectual Property Rights) is incorrect or
                  misleading in any respect when deemed repeated pursuant to
                  clause 15.21 (Repetition).

<PAGE>
                                     -119-




         (c)      Any other representation or warranty made or repeated by or on
                  behalf of any Obligor in any Facility Document, or in any
                  certificate or statement delivered by or on behalf of any
                  Obligor or other member of the Group under any Facility
                  Document, is incorrect or misleading in any material respect
                  when made or deemed to be made or repeated by reference to the
                  facts and circumstances then subsisting.

26.5.    CROSS-ACCELERATION AND CROSS-DEFAULT

         (a)      Any amount in respect of Borrowings of any one or more members
                  of the Group (taken together if more than one) which aggregate
                  US $5,000,000 (five million United States Dollars), or its
                  equivalent, or more at any one time outstanding:

                  (i)      becomes prematurely due and payable;

                  (ii)     becomes due for redemption before its normal maturity
                           date; or

                  (iii)    is placed on demand,

                  in each such case by reason of the occurrence of an event of
                  default (howsoever characterised) or any event having the same
                  effect resulting from a default by a member of the Group.

         (b)      Any amount in respect of such Borrowings which aggregate US
                  $5,000,000 (five million United States Dollars), or its
                  equivalent, or more, are not paid when due (whether falling
                  due by demand, at scheduled maturity or otherwise) or within
                  any applicable grace period provided for in the document
                  evidencing or constituting those Borrowings.

         (c)      Any Encumbrances over any assets of any one or more members of
                  the Group (taken together if more than one) securing an
                  aggregate of US $5,000,000 (five million United States
                  Dollars), or its equivalent, or more become enforceable and
                  steps are taken to enforce the same.

         (d)      Any Obligor fails to discharge in full any judgment debt
                  entered against it in excess of an aggregate amount of US
                  $5,000,000 (five million United States Dollars), or its
                  equivalent, within 30 (thirty) days of the relevant judgment
                  being entered against the relevant Obligor unless such
                  judgment is being contested in good faith on reasonable
                  grounds following external legal advice.

<PAGE>
                                     -120-




         (e)      For the purposes of this clause 17.5 only, "BORROWINGS" shall
                  include Indebtedness pursuant to Hedging Transactions and, in
                  any such case the "amount" in respect of such Hedging
                  Transactions shall be the amount under the relevant Hedging
                  Transaction which becomes prematurely due and payable, due for
                  redemption before its normal maturity date, placed on demand
                  or is not paid when due or within any applicable grace period.

         (f)      There is any event of default under any debenture comprising
                  Permitted Loan Capital.

26.6.    INVALIDITY

                  Any of the Facility Documents shall cease to be in full force
                  and effect in any material respect or shall cease to
                  constitute the legal, valid, binding and enforceable
                  obligation of any Obligor party to it or, in the case of any
                  Security Document, fail to provide effective perfected
                  security in favour of the Security Trustee (for the benefit of
                  itself and the Secured Creditors) over the assets over which
                  security is intended to be given by that Security Document
                  (save for any Reservations), or it shall be unlawful for any
                  Obligor to perform any of its material obligations under any
                  of the Facility Documents.


<PAGE>
                                     -121-



26.7.    INSOLVENCY AND RESCHEDULING

         Any Obligor is unable to pay its debts as they fall due or admits
         inability to pay its debts as they fall due, commences negotiations
         with any one or more of its creditors with a view to the general
         readjustment or rescheduling of its Indebtedness or makes a general
         assignment for the benefit of or a composition with its creditors.

26.8.    WINDING-UP

         Any Obligor takes any corporate action or other steps are taken or
         legal proceedings are started (or are consented to or any order is
         made) for its winding-up, liquidation, bankruptcy, dissolution,
         administration or re-organisation (or for the suspension of payments
         generally or any process giving protection against creditors) or for
         the appointment of a liquidator, receiver, administrator,
         administrative receiver, conservator, custodian, trustee or similar
         officer of it or of all or any material part of its revenues or assets
         or such a person is appointed provided that this clause 17.8 shall not
         apply to:

         (a)      any such action relating to a solvent reconstruction,
                  amalgamation, reorganisation or merger of such Obligor save
                  where the Facility Agent (acting on the instructions of an
                  Instructing Group) believes that such action will reasonably
                  be expected to have an adverse effect on the ability of that
                  Obligor to comply with its obligations under the Facility
                  Documents; or

         (b)      any such action which is frivolous or vexatious and which such
                  Obligor is contesting in good faith on reasonable grounds or
                  in respect of which an Instructing Group is satisfied that the
                  ability of that Obligor to comply with its obligations under
                  the Facility Documents will not be materially and adversely
                  affected and which in either case is discharged or dismissed
                  as soon as reasonably practicable.

26.9.    EXECUTION OR DISTRESS

         Any distress, execution, attachment, sequestration or other process
         arising out of any claim by any third party against any member of the
         Group for an aggregate amount of US $5,000,000 (five million United
         States Dollars) or its equivalent (taking all such members of the Group
         together) or more affects any material asset of any Obligor save where
         (i) that Obligor is, in good faith on reasonable grounds, contesting
         the distress, execution, attachment, sequestration or other process by
         appropriate proceedings diligently pursued and (ii) an Instructing
         Group is satisfied that the ability of

<PAGE>
                                     -122-





         that Obligor to comply with its obligations under the Facility
         Documents will not be materially and adversely affected whilst such
         distress, execution, attachment, diligence or other process is being so
         contested.

26.10.   ANALOGOUS EVENTS

         Any event occurs which has a similar or analogous effect or purpose to
         any of those events mentioned in clause 17.7 (Insolvency and
         Rescheduling), clause 17.8 (Winding-Up) or clause 17.9 (Execution or
         Distress).

26.11.   GOVERNMENTAL INTERVENTION

         By or under the authority of the Government of Israel or any other
         competent Israeli authority:

         (a)      all or the majority of the management of any Obligor is
                  displaced or the authority of any Obligor in the conduct of
                  its business is wholly or materially curtailed; or

         (b)      all or a majority of the issued shares of any Obligor or the
                  whole or any part (the book value of which is 10% (ten
                  percent) or more of the book value of the whole) of the
                  revenues or assets of any Obligor is seized, nationalised,
                  expropriated or compulsorily acquired; or

         (c)      any law is introduced after the date hereof imposing material
                  restrictions on the free transfer of funds out of Israel
                  and/or the exchange of sheqels for dollars or Euros in each
                  such case which will apply to payments made or to be made
                  under any of the Facilities.

26.12.   CESSATION

         Any Obligor ceases, or threatens to cease, to carry on all or a
         substantial part of its business (save in consequence of any
         reorganisation, reconstruction or amalgamation permitted under this
         Agreement and save as may result from any disposal of assets permitted
         by the terms of this Agreement or where such business or part thereof
         is carried on by another Obligor or for any solvent liquidation,
         dissolution or winding-up of any member of the Group previously
         approved in writing by an Instructing Group) or all or a material part
         of the Business is abandoned.

26.13.   PROCEEDINGS

         There is current or pending any litigation, dispute, arbitration,
         administrative, regulatory or other proceedings or enquiry concerning
         or

<PAGE>
                                     -123-




         involving any member of the Group which is reasonably likely to have a
         Material Adverse Effect.

26.14.   BREACH OF THE LICENCE OR ANY AUTHORISATION

         (a)      The Licence or any Authorisation necessary for any Obligor to
                  comply with its obligations under the Facility Documents is in
                  whole or in part:

                  (i)      surrendered, terminated, withdrawn, suspended,
                           cancelled or revoked or does not remain in full force
                           and effect or otherwise expires and is not renewed
                           prior to its expiry (in each case, without
                           replacement by a Licence(s) or Authorisation, as
                           applicable having substantially equivalent effect);
                           or

                  (ii)     modified in any material respect or breached (unless,
                           in the case of any Authorisation, such modification
                           or breach is reasonably likely not to have a Material
                           Adverse Effect);

                  provided that any change in the spectrum made available under
                  the Licence will be construed to be a modification of the
                  Licence for the purposes of this paragraph (a).

         (b)      Any event occurs which is reasonably likely to give rise to
                  the revocation, termination, cancellation or suspension of the
                  Licence (without replacement) in such circumstance where
                  Partner is unable to demonstrate to the reasonable
                  satisfaction of the Instructing Group within 30 (thirty) days
                  of such event occurring that such termination, suspension or
                  revocation will not occur.

         (c)      For the avoidance of doubt, nothing in this Agreement shall be
                  construed as a waiver by the Finance Parties of their rights
                  under this clause 17.14 arising from any breach of the
                  Licence.


<PAGE>
                                     -124-





26.15.   MATERIAL ADVERSE CHANGE

         Any event or series of events occur which in the reasonable opinion of
         an Instructing Group after discussion with Partner, is likely to have a
         material adverse effect on the business or financial condition of the
         Group (as a whole) or on the ability of any Obligor to perform its
         material obligations under the Facility Documents.

26.16.   BREACH OF MATERIAL CONTRACTS

         (a)      Any Obligor fails duly to perform or comply with any
                  obligation expressed to be assumed by it in any of the
                  Material Contracts to which it is a party (other than the
                  Licence), where such failure would be reasonably likely to
                  have a Material Adverse Effect.

         (b)      Any Authorisation necessary for any Obligor to comply with any
                  Material Contract or any Material Contract (other than the
                  Licence) is cancelled, suspended, withdrawn, revoked or
                  terminated or expires by effluxion of time in a manner or
                  circumstances (in whole or in part) without being replaced as
                  soon as reasonably practicable on terms not materially less
                  favourable than such Material Contract.

26.17.   REPUDIATION

         Any Obligor repudiates or purports to repudiate or threatens to
         repudiate any of the Facility Documents or Material Contracts to which
         it is a party.

26.18.   COUNTERPARTIES

         Any Counterparty:

         (a)      fails duly to perform or comply with any obligation expressed
                  to be assumed by it in any Material Contract to which it is a
                  party where such failure would be reasonably likely to have a
                  Material Adverse Effect; or

         (b)      repudiates, or purports or threatens to repudiate, any
                  Material Contract to which it is a party

         and (in the case of any Supplier Contract) a replacement contract on
         terms not materially less favourable with an internationally recognised
         equivalent supplier is not entered into by Partner within 90 (ninety)
         days from the date of such failure, repudiation or purported or
         threatened repudiation.

<PAGE>
                                     -125-




26.19.   SHAREHOLDERS

         (a)      (i)      The Shareholders Agreement ceases to be valid,
                           binding and enforceable; or

                  (ii)     the Shareholders Agreement is revoked, terminated,
                           cancelled or suspended without being at such time
                           replaced with a new shareholders agreement with all
                           material terms being acceptable to an Instructing
                           Group; or

                  (iii)    any material provision of the Shareholders Agreement
                           is amended or waivers granted in relation thereto or
                           any new provisions are included in the Shareholders
                           Agreement; or

                  (iv)     any party to the Shareholders Agreement is in breach
                           of any term thereof and if such breach is capable of
                           remedy, is not remedied within 30 (thirty) days

                  and such event or circumstance is reasonably likely to result
                  in a Material Adverse Effect.

        (b)       (i)      Any of the representations and warranties by any
                           Chargor in any Share Pledge to which it is a party
                           are incorrect or misleading in any material respect
                           when made by such Chargor by reference to the facts
                           and circumstances then existing if the fact, matter
                           or event giving rise to such representation being
                           incorrect or misleading is not remedied or cured to
                           the satisfaction of Facility Agent (acting on the
                           instructions of an Instructing Group) within 14
                           (fourteen) days after the earlier of the relevant
                           Chargor becoming aware of the same and receipt by the
                           relevant Chargor of written notice from Facility
                           Agent requiring the remedy of the relevant fact,
                           matter or event.

                  (ii)     Any Chargor fails to comply with any undertaking or
                           obligation contained in any Share Pledge to which it
                           is a party and, if such default is capable of remedy
                           within such period, within 30 (thirty) days after the
                           earlier of the Chargor becoming aware of such default
                           and receipt by the Chargor of written notice from
                           Facility Agent requiring the failure to be remedied,
                           that Chargor shall have failed to cure such default.

                  (iii)    Any Share Pledge shall cease to be in full force and
                           effect in any material respect or shall cease to
                           constitute the legal, valid, binding and enforceable
                           obligation of any Chargor party to it or

<PAGE>
                                     -126-




                           fail to provide effective perfected security in
                           accordance with the terms of the Share Pledge in
                           favour of the Security Trustee (for the benefit of
                           itself and the Secured Creditors) over the assets
                           over which security is intended to be given by that
                           Share Pledge (save for any Reservations), or it shall
                           be unlawful for any Chargor to perform any of its
                           material obligations under any of the Share Pledges.

                  (iv)     Any Chargor repudiates or purports to repudiate or
                           threatens to repudiate in writing the Share Pledge to
                           which it is a party.

26.20.   CHANGE OF OWNERSHIP

         Upon the occurrence of a Change of Ownership, unless Partner has
         received the prior consent of the Participating Banks to such
         occurrence.

26.21.   BALANCE IN RESERVE ACCOUNT

         If the balance standing to the credit of the Reserve Account shall at
         any time be less than the amount required under clause 1.1.131(f)
         above.

26.22.   MANDATORY PREPAYMENT

         In the event that Partner shall fail to make any mandatory prepayment
         in accordance with clause 7 (Mandatory Prepayment) above within the
         time limits respectively specified therefor under the relevant
         subsections of clause 7 (Mandatory Prepayment).

26.23.   NO TRADING IN SECURITIES

         In the event that with respect to any shares or other securities
         convertible into shares of Partner which are traded on a stock
         exchange, there is no trading in such shares or other convertible
         securities for a consecutive period of 10 (ten) or more days on which
         trading is conducted on such stock exchange.

26.24.   NON-COMPLIANCE WITH ANY SECURITIES AUTHORITY

         In the event that Partner breaches or fails to comply with any material
         undertakings or obligations entered into by it, or imposed on it, in
         favour of any securities authority in any country or state in which
         share, securities or debentures of Partner are traded or fails to
         comply with any material rules, regulations or other law of any such
         securities authority.


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                                     -127-




26.25.   ACCELERATION

         Upon the occurrence of an Event of Default and at any time thereafter
         while the same is continuing, the Facility Agent may, and shall if so
         directed by an Instructing Group, by notice to Partner:

         (a)      declare that an Event of Default has occurred; and/or

         (b)      declare that any undrawn portion of all or any of the
                  Available Facilities shall be cancelled forthwith, whereupon
                  the same shall be so cancelled and the applicable Available
                  Facility or Facilities shall be zero and all fees payable in
                  relation to the Available Facilities shall become immediately
                  due and payable; and/or

         (c)      declare that the Advances or any one or more of them (as
                  specified in such notice), together with all Interest and
                  Linkage Differentials accrued on those Advances and all other
                  amounts (including amounts due under clause 19.1 (Broken
                  Funding Indemnity), to the extent applicable) payable by
                  Partner (as specified in such notice) or any of them under the
                  Facility Documents from time to time, shall thenceforth be
                  repayable on demand being made by the Facility Agent (and in
                  the event of any such demand those Advances, such Interest and
                  such other amounts shall be immediately due and payable);
                  and/or

         (d)      declare the Advances or any one or more of them (as specified
                  in such notice) immediately due and payable, whereupon they
                  shall become immediately due and payable together with all
                  Interest and Linkage Differentials accrued on those Advances
                  and all other amounts payable by Partner under the Facility
                  Documents (including amounts due under clause 19.1 (Broken
                  Funding Indemnity), to the extent applicable).

26.26.   ADVANCES DUE ON DEMAND

         If, pursuant to clause 17.25 (Acceleration), the Facility Agent
         declares the Advances to be due and payable on demand then, and at any
         time thereafter so long as any Event of Default is continuing or has
         not been waived, the Facility Agent may by written notice to Partner
         (upon instruction from an Instructing Group) require repayment of the
         Advances on such date as the Facility Agent (upon instruction from an
         Instructing Group) may specify in such notice (whereupon the same shall
         become due and payable on such date together with accrued Interest and
         Linkage Differentials thereon and any other sums then owed by Partner
         hereunder) or withdraw such declaration with effect from such date as
         it may specify in such notice.


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                                     -128-




26.27.   INDEMNITY

         Partner shall indemnify each Finance Party against any losses, charges
         or expenses which such Finance Party may sustain or incur as a
         consequence of:

         (a)      the occurrence of any Event of Default or Potential Event of
                  Default; or

         (b)      the operation of clause 17.25 (Acceleration),

         including any losses, charges or expenses on account of funds acquired,
         contracted for or utilised to fund any amount payable under this
         Agreement, any amount repaid or prepaid or any Advance (as the case may
         be). A certificate of such Finance Party as to the amount of any such
         loss or expense shall be prima facie evidence in the absence of
         manifest error.

27.    AGENCY PROVISIONS

27.1.             APPOINTMENT

27.1.1.           Each Participating Bank hereby appoints the Facility Agent to
                  act as its agent in connection with the Facility Documents as
                  specified therein and authorises the Facility Agent to
                  exercise such rights, powers, authorities and discretions as
                  are specifically delegated to the Facility Agent,
                  respectively, by the terms thereof, together with all such
                  rights, powers, authorities and discretions as are reasonably
                  incidental thereto. The Facility Agent shall, however, not
                  have any duties, obligations or liabilities to the
                  Participating Banks or any of them beyond those expressly
                  stated in this Agreement. In acting in its capacity hereunder,
                  the Facility Agent acts solely as the agent of each of the
                  Participating Banks and shall not assume any obligations to,
                  or fiduciary relationship with, the Participating Banks.

27.1.2.           Each Participating Bank hereby appoints the Coordinating Agent
                  to act as its agent in connection with the Facility Documents
                  as specified therein and authorises the Coordinating Agent to
                  exercise such rights, powers, authorities and discretions as
                  are specifically delegated to the Coordinating Agent,
                  respectively, by the terms thereof, together with all such
                  rights, powers, authorities and discretions as are reasonably
                  incidental thereto. The Coordinating Agent shall, however, not
                  have any duties, obligations or liabilities to the
                  Participating Banks or any of them beyond those expressly
                  stated in this Agreement. In acting in

<PAGE>
                                     -129-




                  its capacity hereunder, the Coordinating Agent acts solely as
                  the agent of each of the Participating Banks and shall not
                  assume any obligations to, or fiduciary relationship with, the
                  Participating Banks.

27.2.    FACILITY AGENT'S OBLIGATION

         Without derogating from clause 18.8 (Participating Bank's
         Responsibility) below, the Facility Agent shall:

27.2.1.      promptly inform each Participating Bank of the contents of any
             notice or document received by it in its capacity as Facility Agent
             from Partner under any of the Facility Documents;

27.2.2.      monitor the compliance of Partner with the Facility Documents to
             which it is a party and promptly notify each Participating Bank of
             the occurrence of any Event of Default of which it becomes aware
             (including, monitor compliance with the financial undertakings
             specified in clause 16.32 (Financial Undertakings) above;

27.2.3.      receive from Partner and each of the Participating Banks reports
             regarding all Advances made, amounts prepaid, repaid and paid
             (whether on account of principal, Interest or otherwise), including
             details as to the currency and amount of each Advance and payment,
             and the dates thereof;

27.2.4.      collect from Partner and make the payments of the commissions,
             fees, expenses and stamp duties as referred to in clauses 10.6
             (Expenses) and 10.7 (Stamp Taxes) above.

18.2A    COORDINATING AGENT'S OBLIGATION

         Without derogating from clause 18.8 (Participating Bank's
         Responsibility) below, the Coordinating Agent shall:

18.2A.1.     deliver to the Facility Agent and the Participating Banks copies of
             any notice or document received by it in its capacity as
             Coordinating Agent under the Facility Documents; and

18.2A.2.     based, solely, on the documents provided to the Coordinating Agent
             by Partner under clauses 4.2, 6.2.1 and 16.2.7 above, monitor
             (provided that the Coordinating Agent shall be under no obligation
             to monitor more frequently than once per Quarter) the compliance of
             Partner with its obligations under clause 4.5(a) (Outstandings in


<PAGE>
                                     -130-




         Proportion to Commitments--Facility A and Facility C) and promptly
         notify the Facility Agent of any non-compliance therewith.

27.3.    DISCRETIONS

         Each of the Facility Agent and the Coordinating Agent may:

27.3.1.      assume, unless it has, in its capacity as agent for the
             Participating Banks received notice to the contrary from any other
             party to any of the Facility Documents, that: (a) any
             representation made by Partner in connection therewith is true; and
             (b) any right, power, authority or discretion vested therein upon
             an Instructing Group or any other person or group of persons has
             not been exercised;

27.3.2.      engage and pay for the advice or services of any lawyers,
             accountants or other experts whose advice or services may seem to
             it necessary, expedient or desirable and rely upon any advice so
             obtained;

27.3.3.      rely as to any matters of fact which might reasonably be expected
             to be within the knowledge of Partner upon a certificate signed by
             or on behalf of Partner;

27.3.4.      rely upon any communication or document believed by it to be
             genuine; and

27.3.5.      refrain from exercising any right, power of appointment or other
             power or discretion vested in it as agent under any of the Facility
             Documents or making any determination of acceptability, any
             judgment or agreement in the capacity as agent, unless and until
             instructed by an Instructing Group as to whether or not such right,
             power or discretion is to be exercised and, if it is to be
             exercised, as to the manner in which it should be exercised.

27.4.    EXCLUDED OBLIGATIONS

         Notwithstanding anything to the contrary expressed or implied in any of
         the Facility Documents, neither the Facility Agent nor the Coordinating
         Agent shall:

27.4.1.      be bound to enquire as to whether or not any representation made by
             Partner in connection with any of the Facility Documents is true;

27.4.2.      be bound to account to any Participating Bank for any sum or the
             profit element of any sum received by them for their own account;

<PAGE>
                                     -131-



27.4.3.      be bound to disclose to any other person any information relating
             to Partner if such disclosure would or might in their opinion
             constitute a breach of any law or regulation or be otherwise
             actionable at the suit of any person; or

27.4.4.      be under any obligations other than those for which express
             provision is made herein or any of the Facility Documents.

27.5.    INDEMNIFICATION

         To the extent that Partner does not do so on demand or is not obliged
         to do so, each Participating Bank shall, from time to time on demand by
         the Facility Agent or the Coordinating Agent, indemnify the Agents, in
         its Proportion against any and all costs, claims, losses, expenses
         (including legal fees) and liabilities, together with any VAT thereon
         which the Facility Agent or the Coordinating Agent may incur, otherwise
         than by reason of its own gross negligence or wilful misconduct, in
         acting in its capacity as the Facility Agent or the Coordinating Agent
         hereunder.

27.6. EXCLUSION OF LIABILITIES

         Neither the Facility Agent nor the Coordinating Agent accepts any
         responsibility for the accuracy and/or completeness of any information
         supplied by Partner in connection with any of the Facility Documents or
         for the legality, validity, adequacy or enforceability of any of the
         Facility Documents and the Facility Agent shall not be under any
         liability as a result of taking or omitting to take any action in
         relation to any of the Facility Documents, save in the case of gross
         negligence or wilful misconduct. Neither the Facility Agent nor the
         Coordinating Agent shall have any liability for any loss or damage
         arising from any act, default, omission or misconduct on the part of
         any persons whose services have been engaged as contemplated pursuant
         to clause 18.3.2 above, save where such loss or damage arises due to
         the gross negligence or wilful misconduct of such person and the
         Facility Agent or the Coordinating Agent (as the case may be) is
         considered by a final decision of a court or arbitral tribunal to have
         failed to have taken reasonable care in the selection of the person
         providing the services concerned.

27.7.    NO ACTIONS

         Each of the Participating Banks agrees that it will not assert or seek
         to assert against any director, officer or employee of the Facility
         Agent or the

<PAGE>
                                     -132-




         Coordinating Agent any claim it might have against any of them in
         respect of the matters referred to in clause 18.6 (Exclusion of
         Liabilities).

27.8.    PARTICIPATING BANK'S RESPONSIBILITY

         It is understood and agreed by each Participating Bank that it has
         itself been, and will continue to be, solely responsible for making its
         own independent appraisal of and investigations into the financial
         condition, creditworthiness, condition, affairs, status and nature of
         Partner and that (as between the Facility Agent and the Coordinating
         Agent, on the one hand and the Participating Banks on the other hand)
         each Participating Bank shall also be responsible for monitoring
         compliance by Partner with its obligations under this Agreement
         (including monitoring compliance with the financial undertakings
         specified in clause 16.32 (Financial Undertakings) above). Each
         Participating Bank warrants to the Facility Agent and the Coordinating
         Agent that it has not relied on and will not hereafter rely on the
         Facility Agent or the Coordinating Agent:

27.8.1.      to check or enquire on its behalf into the adequacy, accuracy or
             completeness of any information provided by Partner or its advisers
             in connection with the Facility Documents, this Agreement or the
             transactions therein contemplated (whether or not such information
             has been or is hereafter circulated to such Participating Bank by
             the Facility Agent or the Coordinating Agent or any of them); or

27.8.2.      to assess or keep under review on its behalf the financial
             condition, creditworthiness, condition, affairs, status or nature
             of Partner.

         In addition, each Participating Bank shall give to the Facility Agent
         and the Coordinating Agent notice regarding the occurrences of any
         Default of which such Participating Bank becomes aware (including
         non-compliance with the financial undertakings specified in clause
         16.32 (Financial Undertakings) above).

27.9.    RESIGNATION

         The Facility Agent may resign, provided that no such resignation shall
         be effective until a successor for the Facility Agent is appointed in
         accordance with the succeeding provisions of clause 18.10 (Successor
         Agent) below. Bank Hapoalim may resign as Coordinating Agent by giving
         notice to such effect to Partner and the Facility Agent, such
         resignation to become effective upon service of such notice as
         aforesaid. Upon such resignation by Bank Hapoalim, as aforesaid, the
         Facility Agent shall be appointed as the successor to the Coordinating
         Agent.

<PAGE>
                                     -133-




27.10.   SUCCESSOR AGENT

         If the Facility Agent gives notice of its resignation pursuant to
         clause 18.9 (Resignation) above, then any reputable and experienced
         bank or other financial institution may, with the prior written consent
         of Partner (such consent not to be unreasonably withheld), be appointed
         as a successor to the Facility Agent (such successor to the Facility
         Agent, for the avoidance of doubt, shall, in the event the Facility
         Agent is the Coordinating Agent pursuant to clause 18.9 (Resignation)
         above, also be appointed as successor to the Coordinating Agent) by an
         Instructing Group during the period of such notice but, if no such
         successor is so appointed, the Facility Agent may itself appoint as its
         successor any reputable and experienced bank or other financial
         institution.

27.11.   RIGHTS AND OBLIGATIONS

         If a successor to the Facility Agent or the Coordinating Agent (as the
         case may be) is appointed under the provisions of clause 18.10
         (Successor Agent), then: (a) the departing Facility Agent or the
         Coordinating Agent (as the case may be) shall be discharged from any
         further obligation under the Facility Documents, in its capacity as
         Facility Agent or the Coordinating Agent (as the case may be), but
         shall remain entitled to the benefit of the provisions of this clause
         18.11; and (b) its successors and each of the other parties hereto
         shall have the same rights and obligations amongst themselves as they
         would have had if such successor had been a party hereto.

27.12.   BUSINESS WITH THE GROUP

         The Facility Agent, the Arranger and the Coordinating Agent may accept
         deposits from, lend money to and generally engage in any kind of
         banking or other business with Partner.

28. BROKEN FUNDING INDEMNITY

28.1.    BROKEN FUNDING INDEMNITY FOR US DOLLARS AND EUROS

         If any Participating Bank receives or recovers all or any part of any
         Advance (not denominated in NIS) made by such Participating Bank
         otherwise than on the last day of the Duration Period relating to that
         Advance, Partner shall pay, on demand, to such Participating Bank an
         amount equal to the amount (if any) (but excluding, for the avoidance
         of doubt, any loss of margin) by which: (a) the additional Interest
         which would


<PAGE>
                                     -134-





         have been payable on the amount so received or recovered had it been
         received or recovered on the last day of such Duration Period exceeds
         (b) the amount of Interest which in the reasonable opinion of the
         relevant Participating Bank would have been payable to such
         Participating Bank on the last day of such Duration Period in respect
         of a deposit in the relevant currency of the amount so received or
         recovered equal to the amount so received or recovered placed by it
         with a prime bank in London for a period starting on the third Business
         Day following the date of such receipt or recovery and ending on the
         last day of such Duration Period.

28.2.    BROKEN FUNDING INDEMNITY FOR NIS

         If any Participating Bank receives or recovers all or any part of any
         Advance (denominated in NIS) made by such Participating Bank otherwise
         than on the scheduled date of repayment of such amount, Partner shall
         pay, on demand, to such Participating Bank:

         (a)      in the event that the rate of Interest on such Advance was
                  based on a prime rate or on an on-call rate and the payment to
                  the relevant Participating Bank was made without the giving to
                  such Participating Bank of at least seven Business Days' prior
                  written notice regarding such payment, an amount equal to the
                  Interest which would have been payable under this Agreement on
                  the amount so received or recovered in respect of the period
                  of 7 (seven) Business Days (or, if prior written notice was
                  given, the number of Business Days below 7 (seven) of which
                  prior written notice was in fact given) after the date of such
                  receipt or recovery;

         (b)      in the event that the rate of Interest on such Advance was
                  based on the Bond Rate or a fixed linked rate, and

                  (i)      the remaining average period (taking into account
                           scheduled repayments of such Advance) of the Duration
                           Period for such Advance is 1 (one) year or more, the
                           net present value of the amount, if any (excluding,
                           for the avoidance of doubt, any loss of margin) by
                           which: (1) the amount of Interest which would have
                           been payable under this Agreement on the amount so
                           received or recovered on the dates specified
                           therefore during such Duration Period, exceeds (2)
                           the amount of Interest which would be payable on the
                           amount so received or recovered at the Bond Rate less
                           0.6% (nought point six percent) as at the date or
                           dates of such receipt or recovery, for a period equal
                           to the remaining average period (taking into account
                           scheduled repayments of such Advance) of such
                           Duration Period; or


<PAGE>
                                     -135-




                  (ii)      the remaining average period (taking into account
                           scheduled repayments of such Advance) of the Duration
                           Period for such Advance is less than 1 (one) year,
                           the net present value of the amount, if any
                           (excluding, for the avoidance of doubt, any loss of
                           margin) by which: (1) the amount of Interest which
                           would have been payable under this Agreement on the
                           amount so received or recovered on the dates
                           specified therefor during such Duration Period
                           exceeds (2) the arithmetic mean of the Average Daily
                           Yield; "THE AVERAGE DAILY YIELD" being the arithmetic
                           mean of the gross yields to maturity (rounded
                           upwards, if necessary, to four decimal places) as
                           published by the Tel-Aviv Stock Exchange ("TASE") of
                           all of the series of fixed rate bonds issued by the
                           State of Israel listed on the TASE, with a remaining
                           period to maturity of between 6 (six) months and 1
                           (one) year which are denominated in NIS and fully
                           linked to the Cost of Living Index on the 5 (five)
                           trading days of the TASE immediately preceding the
                           date of actual payment, all as determined by the
                           Facility Agent;

         (c)      in the event that rate of Interest on such Advance was based
                  on a fixed unlinked rate and:

                  (i)      the remaining average period (taking into account
                           scheduled repayments of such Advance) of the Duration
                           Period for such Advance is 1 (one) year or less, the
                           net present value of the amount (excluding, for the
                           avoidance of doubt, any loss of margin) by which: (1)
                           the amount of Interest which would have been payable
                           under this Agreement on the amount so received or
                           recovered had it been received or recovered on the
                           dates specified therefore during such Duration
                           Period, exceeds (2) the amount of Interest which
                           would have been payable on the amount so received or
                           recovered at the Interest rate on short-term loan
                           notes issued by the Bank of Israel (Makam) for a
                           period equal to the remaining average period (taking
                           into account scheduled repayments of such Advance) of
                           such Duration Period; or

                  (ii)     the remaining average period (taking into account
                           scheduled repayments of such Advance) of such Rate
                           Period is more than one year, the net present value
                           of the amount, if any (excluding, for the avoidance
                           of doubt, any loss of margin) by which: (1) the
                           amount of Interest which would have been payable
                           under this Agreement on the amount so received or
                           recovered on the dates

<PAGE>
                                     -136-




                           specified therefor during the relevant Rate Period
                           exceeds (2) the arithmetic mean of the Average Daily
                           Yield; "THE AVERAGE DAILY YIELD" being the arithmetic
                           mean of the gross yields to maturity (rounded
                           upwards, if necessary, to four decimal places) as
                           published by the TASE of six, or if less, less,
                           series of fixed rate bonds issued by the State of
                           Israel listed on the TASE, with a remaining period to
                           maturity similar to the remaining average period
                           (taking into account scheduled repayments of such
                           Advance) of such Rate Period, which are denominated
                           in NIS and not linked to the Cost of Living Index, on
                           the 5 (five) trading days of the TASE immediately
                           preceding the date of actual payment, all as
                           determined by the Facility Agent;

              (d)    In each of paragraphs (i) and (ii) of (b) and (c) above,
                     the net present value shall be discounted at the rate
                     referred to in (2) of the relevant paragraph.

28.3.    PARTNER'S INDEMNITY

         Partner undertakes to indemnify each Participating Bank against any
         loss it may suffer or incur as a result of its funding or making
         arrangements to fund an Advance requested by Partner hereunder but not
         made by reason of the operation of any one or more of the provisions
         hereof (other than by reason of a default by such Participating Bank),
         upon provision by any Participating Bank claiming hereunder of a
         written statement setting out in reasonable detail the basis of the
         calculation.

29. CURRENCY OF ACCOUNT

29.1.    CURRENCY OF ACCOUNT

         With respect to all of the Facilities:

         (a)      each repayment of an Advance or part thereof shall be made in
                  the currency in which such Advance was made;

         (b)      each payment of Interest shall be made in the currency in
                  which the sum in respect of which such Interest is payable is
                  denominated;

         (c)      any amount expressed to be payable in another currency shall
                  be paid in that other currency;

         (d)      each payment in respect of costs and expenses shall be made in
                  the currency in which the same were incurred; and


<PAGE>
                                     -137-





         (e)      each payment pursuant to clause 13.1 (Increased Costs) shall
                  be made in the currency specified by the party claiming
                  thereunder.

29.2.    CURRENCY INDEMNITY

         If any sum due from Partner under any Facility Document or any order or
         judgment given or made in relation thereto has to be converted from the
         currency ("THE FIRST CURRENCY") in which the same is payable thereunder
         or under such order or judgment into another currency ("THE SECOND
         CURRENCY") for the purpose of: (a) making or filing a claim or proof
         against Partner; (b) obtaining an order or judgment in any court or
         other tribunal; or (c) enforcing any order or judgment given or made in
         relation thereto, Partner shall indemnify and hold harmless each of the
         persons to whom such sum is due from and against any loss suffered or
         incurred as a result of any difference between (i) the rate of exchange
         used for such purpose to convert the sum in question from the first
         currency into the second currency; and (ii) the rate or rates of
         exchange at which such person may in the ordinary course of business
         purchase the first currency with the second currency upon receipt of a
         sum paid to it in satisfaction, in whole or in part, of any such order,
         judgment, claim or proof.

30. PAYMENTS WITHOUT SET-OFF

         All payments required to be made by Partner under the Facility
         Documents shall be calculated without reference to any set-off or
         counterclaim and shall be made free and clear of and without any
         deduction for or on account of any set-off or counterclaim.

31.      SET-OFF

         Each Finance Party may (but shall not be obliged to) set-off against
         any obligation of any Obligor due and payable by it to or for the
         account of such Finance Party under this Agreement and not paid on the
         due date or within any applicable grace period any moneys held by such
         Finance Party for the account of such Obligor at any office of such
         Finance Party anywhere and in any currency, whether or not matured.
         Such Finance Party may effect such currency exchanges as are
         appropriate to implement the set-off and any usual charges in relation
         to such currency exchanges shall be paid by such Obligor. Any Finance
         Party which has set off shall give notice of that fact to the relevant
         Obligor as soon as reasonably practicable.

32.    APPLICATION AND REDISTRIBUTION OF PAYMENTS

<PAGE>
                                     -138-




32.1.    APPLICATION OF PAYMENTS

         (a)      If after the Default Date the Security Trustee or any Receiver
                  appointed under any Security Document receives payment
                  insufficient to discharge all amounts then due and payable by
                  the Obligors under the Facility Documents, the Security
                  Trustee or Receiver, as applicable, shall apply such payment
                  towards the obligations of the Obligors under the Facility
                  Documents in the following order (after converting the payment
                  into the currency necessary to make payment of all amounts due
                  as aforesaid in the equivalent of the currencies in which such
                  amounts are due):

                  (i)      first, in or towards payment of any unpaid fees,
                           costs and expenses of the Facility Agent, the
                           Coordinating Agent, the Security Trustee and/or any
                           Receiver pro rata between the amounts of such unpaid
                           fees, costs and expenses;

                  (ii)     secondly, in or towards payment pro rata to the
                           Dollar equivalent of all amounts due to: (1) each
                           Participating Bank under the Facility Documents; and
                           (2) Israel Discount Bank Ltd., pursuant to the IDB
                           Performance Bond Counter Indemnity; and

                  (iii)    thirdly, in or towards payment, pro rata, to all
                           amounts due to each Participating Bank on account of
                           Borrowings, as referred to in paragraphs (c), (d) and
                           (e) of the definition of "Permitted Borrowings",
                           received by any Obligor from any such Participating
                           Bank.

         (b)      The Facility Agent shall, if so directed by all the Secured
                  Creditors, vary the order set out in sub-paragraphs (a)(i),
                  (ii) and (iii) above.

         (c)      Paragraphs (a) and (b) above will override any appropriation
                  made by any Obligor or Shareholder.

         (d)      For the purposes of this clause 23.1 any Dollar equivalent
                  shall be calculated as at the date 2 (two) Business Days prior
                  to the date the Security Trustee or the Receiver, as
                  applicable, makes any relevant application.

32.2.    PARTIAL PAYMENTS

         (a)      If a Finance Party receives before the Default Date a payment
                  that is insufficient to discharge all the amounts then due and
                  payable to such

<PAGE>
                                     -139-



                  Finance Party by an Obligor under the Facility Documents, then
                  that Finance Party shall apply such payment towards the
                  obligations of the Obligor to such Finance Party, under the
                  Facility Documents, in the following order:

                  (i)      first, in or towards payment of any unpaid fees,
                           costs and expenses of such Finance Party under the
                           Facility Documents;

                  (ii)     secondly, in or towards payment of any accrued
                           Interest or commission due to such Finance Party but
                           unpaid, under this Agreement;

                  (iii)    thirdly, in or towards payment of any principal,
                           together with Linkage Differentials, due to such
                           Finance Party but unpaid, under this Agreement; and

                  (iv)     fourthly, in or towards payment of any other sum due
                           to such Finance Party but unpaid, under the Facility
                           Documents.

         (b)      A Finance Party shall be at liberty to vary the order set out
                  in paragraphs (a)(i) to (iv) (inclusive) above.

         (c)      Paragraphs (a) and (b) above will override any appropriation
                  made by an Obligor.

32.3.    REDISTRIBUTION ON OR AFTER DEFAULT DATE

         Subject to clause 23.5 (Recoveries Through Legal Proceedings), if, at
         any time on or after the Default Date, the proportion which any Secured
         Creditor ("A RECOVERING SECURED CREDITOR") has received or recovered
         from any Obligor or any Shareholder (whether by payment, the exercise
         of a right of set-off or combination of accounts or otherwise) other
         than in accordance with the applicable priority at the relevant time
         set out in clause 23.1 (Application of Proceeds), in respect of its
         portion of all sums due from any Obligor or Shareholder under the
         Facility Documents on or after the Default Date is greater (the excess
         proportion being herein called "AN EXCESS SUM") than the proportion of
         such sum due so received or recovered by the Secured Creditor or
         Creditors receiving or recovering the smallest proportion thereof
         (including a nil receipt), then:

         (a)      such Recovering Secured Creditor shall inform the Security
                  Trustee of such receipt or recovery and pay to the Security
                  Trustee an amount equal to such Excess Sum;


<PAGE>
                                     -140-





         (b)      as between the relevant person and such Recovering Secured
                  Creditor, the Excess Sum shall be treated as not having been
                  paid; and

         (c)      the Security Trustee shall treat the amount received by it
                  from such Recovering Secured Creditor pursuant to paragraph
                  (a) above as if such amount had been received by it from the
                  relevant person on account of such sum and shall pay the same
                  to the persons entitled thereto (including such Recovering
                  Secured Creditor) pro rata to their respective entitlements
                  thereto in accordance with clause 23.1 (Application of
                  Proceeds).

32.4.    REPAYABLE RECOVERIES

         If any sum ("A RELEVANT SUM") received or recovered by a Recovering
         Secured Creditor in respect of any amount owing to it by any Obligor or
         Shareholder becomes repayable and is repaid by such Recovering Secured
         Creditor, then:

         (a)      each Secured Creditor (other than a Recovering Secured
                  Creditor) which has received a share of such Relevant Sum by
                  reason of the implementation of clause 23.3 (Redistribution on
                  or after Default Date) shall, upon request of the Security
                  Trustee, pay to the Security Trustee for account of such
                  Recovering Secured Creditor an amount equal to its share of
                  such Relevant Sum; and

         (b)      as between the relevant Obligor or Shareholder and each such
                  Secured Creditor, the amount repaid by such Secured Creditor
                  pursuant to paragraph (a) above shall be treated as not having
                  been paid.

32.5.    RECOVERIES THROUGH LEGAL PROCEEDINGS

         (a)      If any Participating Bank shall commence any action or
                  proceeding in any court to enforce its rights (if so permitted
                  or contemplated) under any of the Facility Documents after
                  consultation with the other Participating Banks and with the
                  consent of an Instructing Group (such consent not to be
                  unreasonably withheld) and, as a result thereof or in
                  connection therewith, shall receive any Excess Sum (as defined
                  in clause 23.3 (Redistribution on or after Default Date)),
                  then such Participating Bank shall not be required to share
                  any portion of such amount with any Participating Bank or
                  other Secured Creditor which has the legal right to, but does
                  not, join in such action or proceeding or commence and
                  diligently prosecute a separate action or proceeding to
                  enforce its rights in another court.

<PAGE>
                                     -141-




         (b)      Any Participating Bank may (upon giving to the other
                  Participating Banks no less than 10 (ten) Business Days'
                  notice to such effect) commence any action or proceeding in
                  any court to enforce its rights (if so permitted or
                  contemplated) under any of the Facility Documents without
                  consulting any other Participating Bank, but such
                  Participating Bank shall be required to share any Excess Sum
                  received with the other Participating Banks.

33. CALCULATIONS AND EVIDENCE OF DEBT

33.1.    BASIS OF ACCRUAL

         Interest and commitment commission shall accrue from day to day and
         shall be calculated on the basis of a year of 360 (three hundred and
         sixty) days in relation to amounts denominated in US Dollars or Euros
         (or 365 (three hundred and sixty-five days) in relation to Interest on
         amounts denominated in NIS) and the actual number of days elapsed.


<PAGE>
                                     -142-





33.2.    EVIDENCE OF DEBT

         Each Participating Bank shall maintain, in accordance with its usual
         practice, accounts evidencing the amounts from time to time lent by and
         owing to it hereunder.

33.3.    PRIMA FACIE EVIDENCE

         In any legal action or proceeding arising out of or in connection with
         this Agreement: (a) the entries made in the accounts maintained
         pursuant to clause 24.2 (Evidence of Debt) above shall, in the absence
         of manifest or proven error, be prima facie evidence of the existence
         and amounts of the specified obligations of Partner; and (b) a
         certificate of any Participating Bank signed by a relevant senior
         officer as to its Cost of Funds for the purpose of determining the
         Interest rate in respect of an Advance shall constitute prima facie
         evidence of such Cost of Funds.

33.4.    CERTIFICATES OF PARTICIPATING BANKS

         A certificate of a Finance Party as to: (a) the amount by which a sum
         payable to it hereunder is to be increased under clause 11.1 (Tax
         Gross-Up) above; or (b) the amount for the time being required to
         indemnify it against any such cost, payment or liability as is
         mentioned in clause 12.1 (Increased Costs) above shall, in the absence
         of manifest or proven error, be prima facie evidence of the existence
         and amounts of the specified obligations of Partner.

34.      GUARANTEE AND INDEMNITY

34.1.    GUARANTEE

         Each Guarantor irrevocably and unconditionally guarantees to the
         Agents, the Arranger and the other Secured Creditors the due and
         punctual observance and performance of all the terms, conditions and
         undertakings on the part of Partner contained in this Agreement and the
         other Facility Documents and agrees to pay to the Facility Agent, the
         Coordinating Agent and each Participating Bank from time to time on
         demand any and every sum or sums of money which Partner is at any time
         liable to pay to the Agents, the Arranger, the Coordinating Agent and
         the Participating Banks or any of them under or pursuant to this
         Agreement and the other Facility Documents (whether actual or
         contingent) and which has become due and payable but has not been paid
         at the time such demand is made.

34.2.    INDEMNITY

<PAGE>
                                     -143-





         Each Guarantor irrevocably and unconditionally agrees as a primary
         obligation and not merely as surety to indemnify the Agents, the
         Arranger and the Participating Banks from time to time on demand by the
         Facility Agent (upon instruction of an Instructing Group) from and
         against any loss incurred by the Agents, the Arranger and such
         Participating Bank or any of them as a result of any of the obligations
         of Partner under or pursuant to this Agreement or any other Facility
         Document being or becoming void, voidable, unenforceable or ineffective
         as against Partner for any reason whatsoever, whether or not known to
         the Agents, the Arranger and the Participating Banks or any of them or
         any other person, the amount of such loss being the amount which the
         person or persons suffering it would otherwise have been entitled to
         recover from Partner.

34.3.    ADDITIONAL SECURITY

         The obligations of each Guarantor herein contained shall be in addition
         to and independent of every other security held by the Security Trustee
         upon trust for the Agents, the Arranger and the Participating Banks or
         any of them may at any time hold in respect of any of Partner's
         obligations hereunder.

34.4.    CONTINUING OBLIGATIONS

         The obligations of each Guarantor herein contained shall constitute and
         be continuing obligations notwithstanding any settlement of account or
         other matter or thing whatsoever and shall not be considered satisfied
         by any intermediate payment or satisfaction of all or any of the
         obligations of Partner under this Agreement and shall continue in full
         force and effect until final payment in full of all amounts owing by
         Partner hereunder and total satisfaction of all Partner's actual and
         contingent obligations hereunder.

34.5.    OBLIGATIONS NOT DISCHARGED

         Neither the obligations of any Guarantor herein contained nor the
         rights, powers and remedies conferred in respect of any Guarantor upon
         the Agents, the Arranger and the Participating Banks or any of

<PAGE>
                                     -144-




         them by this Agreement or by law shall be discharged, impaired or
         otherwise affected by:

         (a)      the winding-up, dissolution, administration or re-organisation
                  of Partner or any other person or any change in its status,
                  function, control or ownership;

         (b)      any of the obligations of Partner or any other person
                  hereunder or under any other security taken in respect of any
                  of its obligations hereunder being or becoming illegal,
                  invalid, unenforceable or ineffective in any respect;

         (c)      time or other indulgence being granted or agreed to be granted
                  to Partner in respect of its obligations hereunder or under
                  any such other security;

         (d)      any amendment to, or any variation, waiver or release of, any
                  obligation of Partner hereunder or under any such other
                  security;

         (e)      any failure to take, or fully to take, any security
                  contemplated hereby or otherwise agreed to be taken in respect
                  of Partner's obligations hereunder;

         (f)      any failure to realise or fully to realise the value of, or
                  any release, discharge, exchange or substitution of, any
                  security taken in respect of Partner's obligations hereunder;
                  or

         (g)      any other act, event or omission which, but for this clause
                  25.5, might operate to discharge, impair or otherwise affect
                  any of the obligations of any Guarantor herein contained or
                  any of the rights, powers or remedies conferred upon the
                  Agents, the Arranger and the Participating Banks or any of
                  them by this Agreement or by law.

34.6.    SETTLEMENT CONDITIONAL

         Any settlement or discharge between any Guarantor and the Agents, the
         Arranger and the Participating Banks or any of them shall be
         conditional upon no security or payment to the Agents, the Arranger and
         the Participating Banks or any of them by Partner or any Guarantor or
         any other person on behalf of Partner or, as the case may be, any
         Guarantor being avoided or reduced by virtue of any provisions or
         enactments relating to bankruptcy, insolvency, liquidation or similar
         laws of general application for the time being in force and, if any
         such security or payment is so avoided or reduced, the Agents, the
         Arranger and the Participating Banks

<PAGE>
                                     -145-



         shall each be entitled to recover the value or amount of such security
         or payment from the relevant Guarantor subsequently as if such
         settlement or discharge had not occurred.

34.7.    EXERCISE OF RIGHTS

         Neither the Agents, the Arranger nor the Participating Banks nor any of
         them shall be obliged before exercising any of the rights, powers or
         remedies conferred upon them in respect of any Guarantor by this
         Agreement or by law:

         (a)      to make any demand of Partner;

         (b)      to take any action or obtain judgment in any court against
                  Partner;

         (c)      to make or file any claim or proof in a winding-up or
                  dissolution of Partner; or

         (d)      to enforce or seek to enforce any other security taken in
                  respect of any of the obligations of Partner hereunder.

34.8.    DEFERRAL OF GUARANTOR'S RIGHTS

         Each Guarantor agrees that, so long as any amounts are or may be owed
         by Partner hereunder or Partner is under any actual or contingent
         obligations hereunder, any rights which the relevant Guarantor may at
         any time have by reason of performance by it of its obligations
         hereunder or in respect of any other moneys for the time being due to
         the relevant Guarantor from the Partner:

         (a)      to claim payment from or be indemnified by Partner; and/or

         (b)      to claim any contribution from any other guarantor of
                  Partner's obligations hereunder or in respect of any such
                  other moneys; and/or

         (c)      to take the benefit (in whole or in part and whether by way of
                  subrogation or otherwise) of any rights of the Agents, the
                  Arranger and the Participating Banks hereunder or of any other
                  person in respect of such moneys or of any other security
                  taken pursuant to, or in connection with, this Agreement by
                  all or any of the Agents, the Arranger and the Participating
                  Banks or taken by any other person in respect of such moneys,


<PAGE>
                                     -146-



                  shall be exercised by the relevant Guarantor only if and to
                  the extent that the Facility Agent (upon instructions from an
                  Instructing Group) so requires and in such manner and upon
                  such terms as the Facility Agent (upon instructions from an
                  Instructing Group) may specify and the relevant Guarantor
                  further agrees to hold any moneys at any time received by it
                  as a result of the exercise of any such rights on trust for
                  and on behalf of, and to the order of, the Participating Banks
                  for application in or towards payment of any sums at any time
                  owed by Partner hereunder.

34.9.    SUSPENSE ACCOUNTS

         All moneys received, recovered or realised by a Participating Bank by
         virtue of clause 25.1 (Guarantee) or clause 25.2 (Indemnity) may, in
         that Participating Bank's discretion, be credited to a suspense or
         impersonal account and may be held in such account for so long as such
         Participating Bank thinks fit pending the application from time to time
         (as such Participating Bank may think fit) of such moneys in or towards
         the payment and discharge of any amounts owing by any of the Obligors
         to such Participating Bank hereunder.

34.10.   WAIVER BY GUARANTOR

         Without derogating from any other provisions of this Agreement which
         exclude the application of, or constitute a waiver by a Guarantor of,
         certain defences or rights under the Guarantee Law, 1967 ("THE
         GUARANTEE LAW") (which defences or rights would, but for such
         provision, have been available to such Guarantor), each Guarantor
         hereby waives all rights and defences under the Guarantee Law and
         confirms that the provisions of the Guarantee Law affording such rights
         or defences to a guarantor shall not apply to this Agreement.

35. ADDITIONAL GUARANTORS AND SECURITY

35.1.    ADDITIONAL GUARANTORS

         (a)      The Obligors shall procure that any Subsidiary (other than a
                  Venture Subsidiary or a Subsidiary of a Venture Subsidiary)
                  shall become, as soon as practicable and in any event within
                  30 (thirty) days of becoming a Subsidiary, an Additional
                  Guarantor by entering into a Guarantor Accession Agreement.

         (b)      On each date that a Guarantor Accession Agreement is entered
                  into Partner shall procure that certified copies of each of
                  the documents listed in SCHEDULE 23 (Documents Required for
                  Acceding Guarantors)

<PAGE>
                                     -147-




                  are delivered in respect of the Additional Guarantor, the
                  Guarantor Accession Agreement duly executed and any security
                  document required for the purposes of compliance with clause
                  26.2 (Security) each in form and substance reasonably
                  satisfactory to the Facility Agent.

35.2.    SECURITY

         The Obligors shall procure that on the date that a Guarantor Accession
         Agreement is delivered in accordance with clause 32.1 (Additional
         Guarantors) above, the Subsidiary shall grant security in favour of the
         Security Trustee (for the benefit of itself and the Secured Creditors)
         which is similar to the security granted by the Debenture.

36.      ASSIGNMENTS AND TRANSFERS

36.1.    BINDING AGREEMENT

         This Agreement shall be binding upon and enure to the benefit of each
         party hereto and its or any subsequent successors, Transferees and
         permitted assigns.

36.2.    NO ASSIGNMENTS AND TRANSFERS BY THE OBLIGORS

         No Obligor shall be entitled to assign or transfer all or any of its
         rights, benefits and obligations under any of the Facility Documents.

36.3.    ASSIGNMENTS AND TRANSFERS BY PARTICIPATING BANKS

         Any Participating Bank may with the consent of Partner (such consent
         not to be unreasonably withheld or delayed) unless such assignment or
         transfer is to an Affiliate of a Participating Bank or an Event of
         Default has occurred and is continuing (in which event no consents will
         be required), at any time, assign all or any of its rights and benefits
         under the Facility Documents or transfer in accordance with clause 27.5
         (Transfers by Participating Banks) all or any of its rights, benefits
         and obligations under the Facility Documents to any bank or financial
         institution. Subject to the aforegoing, a Participating Bank may assign
         to any person, in whole or in part, any of its rights, benefits and
         obligations under the Facility Documents. An assignment by a
         Participating Bank of the whole or part of its outstanding Advances
         shall be made together with an assignment of the Commitment in respect
         thereof. An assignment or transfer of any such Advance shall be in
         respect of at least a minimum amount of US $5,000,000 (five million
         United States Dollars) (or its equivalent). Where a Participating Bank
         has

<PAGE>
                                     -148-




         transferred to a Transferee any part of its Commitment under Facility A
         or Facility C, as the case may be, such Transferee's Commitment under
         such Facility (transferred to it as aforesaid) and, if applicable, the
         Commitment under Facility A or Facility C, as the case may be, of the
         relevant transferring Participating Bank (to the extent not transferred
         as aforesaid), shall be reduced, on each Facility A Commitment
         Reduction Date or Facility C Commitment Reduction Date, as the case may
         be, by the same percentage as the other Participating Banks' respective
         Commitments under such Facility are reduced under clause 5.1.1 or
         5.3.1, as applicable, of this Agreement.

36.4.    ASSIGNMENTS BY PARTICIPATING BANKS

         If any Participating Bank assigns all or any of its rights and benefits
         under the Facility Documents in accordance with clause 27.3
         (Assignments and Transfers by Participating Banks), then, unless and
         until the assignee has agreed with the Agents, the Arranger and the
         other Participating Banks that it shall be under the same obligations
         towards each of them as it would have been under if it had been an
         original party to each of the Facility Documents as a Participating
         Bank (whereupon such assignee shall become a party to the Facility
         Documents as a "PARTICIPATING BANK"), the Agents, the Arranger and the
         other Participating Banks shall not be obliged to recognise such
         assignee as having the rights against each of them which it would have
         had if it had been such a party to the Facility Documents. For the
         avoidance of doubt, a Participating Bank that has assigned all its
         interest and which is a counterparty to an Interest Rate Hedging
         Agreement shall, upon such assignment, cease to be a Secured Interest
         Rate Hedge Provider.

36.5.    TRANSFERS BY PARTICIPATING BANKS

         If any Participating Bank wishes to transfer all or any of its rights,
         benefits and/or obligations under the Facility Documents as
         contemplated in clause 27.3 (Assignments and Transfers by Participating
         Banks), then such transfer may be effected by the delivery to the
         Facility Agent of a duly completed and duly executed Transfer
         Certificate (together with a copy to Partner for information purposes
         only), accompanied by such other documentation as may be required for
         the purposes of such transfer under the Security Documents, in which
         event, on the later of the Transfer Date specified in such Transfer
         Certificate and the 5th (fifth) Business Day after (or such earlier
         Business Day endorsed by the Facility Agent on such Transfer
         Certificate falling on or after) the date of delivery of such Transfer
         Certificate to the Facility Agent:


<PAGE>
                                     -149-




         (a)      to the extent that in such Transfer Certificate the
                  Participating Bank party thereto seeks to transfer its rights,
                  benefits and obligations under the Facility Documents, each of
                  the Obligors and such Participating Bank shall be released
                  from further obligations towards one another hereunder and
                  their respective rights against one another shall be cancelled
                  (such rights and obligations being referred to in this clause
                  27.5 as "DISCHARGED RIGHTS AND OBLIGATIONS");

         (b)      the Obligors and the Transferee party thereto shall assume
                  obligations towards one another and/or acquire rights against
                  one another which differ from such discharged rights and
                  obligations only insofar as such Obligor and such Transferee
                  have assumed and/or acquired the same in place of such Obligor
                  and such Participating Bank;

         (c)      the Agents, the Arranger, such Transferee and the other
                  Participating Banks shall acquire the same rights and benefits
                  and assume the same obligations between themselves as they
                  would have acquired and assumed had such Transferee been an
                  original party to the Facility Documents as a Participating
                  Bank with the rights, benefits and/or obligations acquired or
                  assumed by it as a result of such transfer; and

         (d)      such Transferee shall become a party to the Facility Documents
                  as a "PARTICIPATING BANK".

36.6.    DISCLOSURE OF INFORMATION

         Any Participating Bank may at any time disclose to any actual or
         potential assignee or Transferee or subparticipant (or other party
         entering into contractual arrangements to assume risks in relation to
         the Facilities or any of them) in respect of the Facility Documents
         such information about the Business, the Facility Documents, the
         Material Contracts and the Obligors as such Participating Bank shall
         consider appropriate but only having first obtained from such potential
         assignee or Transferee or subparticipant or equivalent a
         confidentiality undertaking equivalent in effect to the confidentiality
         arrangements set out in clause 38 (Confidentiality) in writing
         addressed to the relevant Participating Bank and Partner.

36.7.    NO INCREASED COSTS

         If any assignment or transfer of all or any part of the rights or
         obligations of a Participating Bank pursuant to this clause 27 or if
         any change in or substitution of a Participating Bank's Facility Office
         would, but for this clause 27, result, as a consequence of
         circumstances prevailing or foreseeable at that time, in any Obligor
         having any obligation to pay any


<PAGE>
                                     -150-




         amount under clause 11.1 (Tax Gross-Up) or clause 12.1 (Increased
         Costs) then, unless such assignment, transfer or change in or
         substitution of Facility Office arises as a consequence of the
         provisions of clause 14.1 (Mitigation) or is made with the written
         consent of Partner, the assignee, or Transferee or Participating Bank
         acting through its new Facility Office shall be entitled to receive
         such amounts only to that extent that the relevant assignor, or
         transferor or Participating Bank acting through its relevant Facility
         Office would have been so entitled had there been no assignment, or
         transfer, change in or substitution of Facility Office (as the case may
         be).

37. COSTS AND EXPENSES

37.1.    AGENTS' COSTS

         Partner shall, from time to time on demand of the relevant Agent (and
         without prejudice to the provisions of clause 10.6.2 above and clause
         28.2 (Amendment Costs)) compensate the relevant Agent for all costs and
         expenses (including telephone, fax, copying, travel, personnel and
         legal costs) incurred by such Agent in connection with its taking such
         action as it may deem appropriate or in complying with any instructions
         from an Instructing Group or any request by any Obligor or in
         connection with:

         (a)      the granting or proposed granting of any waiver or consent
                  requested under any of the Facility Documents by any Obligor;

         (b)      any actual, potential or suspected breach by any Obligor of
                  its obligations under any of the Facility Documents;

         (c)      the occurrence of any event which is an Event of Default or a
                  Potential Event of Default; or

         (d)      any amendment or proposed amendment to any of the Facility
                  Documents requested by any Obligor.

37.2.    AMENDMENT COSTS

         If any amendment or waiver is requested, required or agreed by Partner
         in accordance with clause 30 (Amendments) then Partner shall, on demand
         of the Facility Agent (acting on its own motion or otherwise upon the
         request of the Arranger or a Participating Bank), reimburse the Agents,
         the Arranger and the Participating Banks for all reasonable costs and
         expenses submitted to Partner together with appropriate evidence
         thereof (including legal fees but excluding any charges for management
         time) together with any VAT

<PAGE>
                                     -151-





         thereon incurred by the Agents, the Arranger and the Participating
         Banks in responding to or complying with such requests.

37.3.    PARTICIPATING BANKS' LIABILITIES FOR COSTS

         If Partner fails to perform any of its obligations under this clause 28
         and clauses 10.6 (Expenses) and 10.7 (Stamp Taxes) above, each
         Participating Bank shall, in its Proportion (or, if the Loan has been
         repaid in full, immediately prior to the final repayment thereof),
         indemnify each of the Agents and the Arranger against any loss incurred
         by any of them as a result of such failure and Partner shall forthwith
         reimburse each Participating Bank for any payment made by it pursuant
         to this clause 28 and clauses 10.6 (Expenses) and 10.7 (Stamp Taxes)
         above.

38.      PARTIAL INVALIDITY

         If any provision of any of the Facility Documents is or becomes
         illegal, invalid or unenforceable in any respect under the law of any
         jurisdiction, neither the legality, validity or enforceability of the
         remaining provisions hereof nor the legality, validity or
         enforceability of such provision under the law of any other
         jurisdiction shall in any way be affected or impaired thereby.


<PAGE>
                                     -152-





39. AMENDMENTS

         The Facility Agent, if it has the prior written consent of an
         Instructing Group, and Partner may, from time to time, agree in writing
         to amend any of the Facility Documents or to waive, prospectively or
         retrospectively, any of the requirements of any of the Facility
         Documents and any amendments or waivers so agreed shall be binding on
         all the Participating Banks, the Arranger, the Facility Agent, the
         Coordinating Agent and the Obligors provided that:

         (a)      no such waiver or amendment shall subject any party hereto to
                  any new or additional obligations without the consent of such
                  party;

         (b)      without the prior written consent of all the Participating
                  Banks and Partner, no such amendment or waiver shall:

                  (i)      amend or waive any provision of clause 23
                           (Application and Redistribution of Payments) or this
                           clause 30;

                  (ii)     reduce the proportion of any amount received or
                           recovered (whether by way of set-off, combination of
                           accounts or otherwise) in respect of any amount due
                           from any Obligor hereunder to which any Participating
                           Bank is entitled;

                  (iii)    change the principal amount of or currency of any
                           Advance, or defer any payment date other than in
                           accordance with the terms of this Agreement;

                  (iv)     change the Margin, change the amount or currency or
                           defer the date for any payment of interest, fees or
                           any other amount payable hereunder to all or any of
                           the Agents, the Arranger and the Participating Banks;

                  (v)      defer the Termination Date;

                  (vi)     amend the definition of "Instructing Group"; or

                  (vii)    amend any provision which contemplates the need for
                           the consent or approval of all the Participating
                           Banks;

         (c)      the Security Trustee shall not release any security over any
                  asset or assets or any part thereof constituted pursuant to
                  any Security Document without the consent of all of the
                  Secured Creditors, if the relevant asset, assets or part
                  thereof over which such security is constituted will not be,
                  immediately following such release, disposed of or transferred
                  outside the Group

<PAGE>
                                     -153-





                  following such release or if the proceeds of sale or
                  replacement assets will not be subject to first ranking
                  security interests in favour of the Security Trustee (for the
                  benefit of itself and the Secured Creditors); and

         (d)      notwithstanding any other provisions hereof, the Facility
                  Agent shall not be obliged to agree to any such amendment or
                  waiver if the same would:

                  (i)      amend or waive any provision of this clause 30,
                           clauses 10.6 (Expenses), 10.7 (Stamp Taxes), 28
                           (Costs and Expenses) or 18 (Agency Provisions) above;
                           or

                  (ii)     otherwise amend or waive any of the Agents' rights
                           under any of the Facility Documents or subject the
                           Agents or the Arranger to any additional obligations
                           under any of the Facility Documents.

40.      INFORMATION

         Without derogating from clause 27.6 (Disclosure of Information) above,
         Partner hereby agrees that the Participating Banks may at any time,
         amongst themselves, disclose to each other any information in respect
         of: (i) Drawdown Requests received, Advances made and payments received
         from or by Partner, as the case may be, under the Facilities; and (ii)
         any other information in respect of the Business, the Facility
         Documents, the Material Contracts and obligations as the Participating
         Bank, disclosing the same, deems appropriate.

41. RELEASE OF SHARE PLEDGES

41.1.    SHARE PLEDGES

         In the event that in any one year Ratio Period ("THE DETERMINING RATIO
         PERIOD"):

41.1.1.       Partner shall (as of the end of the Determining Ratio Period) have
              made payment under the Facilities to the Participating Banks
              (disregarding for this purpose, any repayment or prepayment
              capable of being reborrowed under this Agreement) of an amount
              equal to half the amount of the Total Commitments; and


41.1.2.  (a)      if the Determining Ratio Period falls during the period
                  2003-2007 (inclusive), each of the Facility Debt Cover Ratio,
                  Total Debt Cover Ratio, Fixed Charge Coverage Ratio and ADSCR
                  for the one year Ratio Period immediately preceding the
                  Determining Ratio Period was not less than 135% (one hundred
                  and thirty-five percent) of such minimum ratio required for
                  such


<PAGE>
                                     -154-





                  immediately preceding one year Ratio Period pursuant to the
                  table in clause 16.32 below; or

         (b)      if the Determining Ratio Period is the one year Ratio Period
                  2008, the Total Debt Cover Ratio for the 2007 one year Ratio
                  Period was not less than 135% (one hundred and thirty-five
                  percent); or

         (c)      if the Determining Ratio Period is the one year Ratio Period
                  2009, the Total Debt Cover Ratio for the 2008 one year Ratio
                  Period was not less than 280% (two hundred and eighty
                  percent),

         then the Participating Banks shall, as soon as reasonably practicable
         after the publication and receipt by the Participating Banks of the
         Accounts for the Determining Ratio Period, procure the irrevocable
         release of the Share Pledges over the Chargors' shares in Partner.

41.2.    RELEASE OF SHARE PLEDGES

         Upon the release of all such Share Pledges, the provisions of clause
         17.19(b) (Shareholders) above shall thereupon cease to have any force
         or effect (except in relation to any antecedent breach thereof).

41.3.    DISTRIBUTION OF TAPUZ SHARES

         [Deleted.]

42.      RESPONSE TO REQUESTS FOR APPROVAL OR CONFIRMATION

42.1.    Save where expressly stated otherwise in this Agreement, the Facility
         Agent shall endeavour to respond promptly to any request by Partner for
         an approval or confirmation in accordance with this Agreement and
         shall, in any event, respond by not later than 14 (fourteen) Business
         Days after receipt of the said request, together with all reports,
         statements and other information required hereunder to be supplied by
         Partner, together with such request; failing which response, the
         Facility Agent shall be deemed not to have given its consent.

42.2.    Save where expressly stated otherwise in this Agreement, the
         Participating Banks shall endeavour to respond promptly to any request
         by Partner for an approval or confirmation in accordance with this
         Agreement and shall, in any event, respond by not later than 21
         (twenty-one) Business Days after receipt of the said request, together
         with all reports, statements and other


<PAGE>
                                     -155-



         information required hereunder to be supplied by Partner, together with
         such request; failing which response, the Participating Banks shall be
         deemed not to have given their consent.

43.      COUNTERPARTS

         This Agreement may be executed in any number of counterparts and all of
         such counterparts taken together shall be deemed to constitute one and
         the same instrument.

44.      GOVERNING LAW AND JURISDICTION

         This Agreement shall be governed by and shall be construed in
         accordance with Israeli law and the competent court of Tel-Aviv-Jaffa
         shall have exclusive jurisdiction to hear any matters, provided that
         the Facility Agent and the Participating Banks shall be entitled to sue
         Partner or any other Obligor in any jurisdiction in which it has an
         office or holds assets.

45.      REMEDIES AND WAIVERS

         No failure to exercise, nor any delay in exercising, on the part of the
         Agents, the Arranger and the Participating Banks or any of them, any
         right or remedy hereunder shall operate as a waiver thereof, nor shall
         any single or partial exercise of any right or remedy prevent any
         further or other exercise thereof or the exercise of any other right or
         remedy. The rights and remedies herein provided are cumulative and not
         exclusive of any rights or remedies provided by law.

46.      NOTICES

46.1.    COMMUNICATIONS THROUGH FACILITY AGENT

         Every notice, request, demand or other communication under this
         Agreement to be given by Partner to any other party shall be given to
         such party, with a copy to the Facility Agent, to be delivered in
         accordance with clause 37.2 (Manner of Delivery) below. Every notice,
         request, demand or other communication under this Agreement to be given
         to Partner shall be delivered to Partner in accordance with clause 37.2
         (Manner of Delivery) below, with a copy to be given to the Facility
         Agent.

46.2.    MANNER OF DELIVERY

         (a)      Notices to be given hereunder shall be in writing and may be
                  given personally, by facsimile or, if not available, as
                  required by clause 37.2(b) below. Any notice to be given
                  personally or by

<PAGE>
                                     -156-




                  facsimile to the Facility Agent, the Coordinating Agent or any
                  Participating Bank must be given during normal banking hours
                  of the Facility Agent, the Coordinating Agent or any
                  Participating Bank to the persons and at the addresses
                  respectively designated below. If notice is sent by facsimile,
                  it shall be deemed to have been served when confirmation of
                  receipt by the intended recipient has been received. All
                  notices given by facsimile shall be confirmed by letter
                  despatched in the manner provided in clause 37.2(b) within 24
                  (twenty-four) hours of transmission.

         (b)      Any other notices to be given hereunder shall be served on a
                  party by prepaid express registered letter (or nearest
                  equivalent) to its address given below or such other address
                  as may from time to time be notified for this purpose and any
                  notice so served shall be deemed to have been served within 5
                  (five) days after the time at which such notice was posted and
                  in proving such service, it shall be sufficient to prove that
                  the notice was properly addressed and posted:

                  to Partner at:               8 Amal Street
                                               Afeq Industrial Zone
                                               Rosh Haayin 48103
                                               Israel
                                               Facsimile: 067 815 282
                                               Attention: Mr. Meir Mulla,
                                                          Treasurer

                  with a copy to:              Gross, Kleinhendler, Hodak,
                                               Halevy, Greenberg & Co.
                                               Round Building, 40th Floor
                                               Azrieli Centre
                                               Tel-Aviv 67021
                                               Israel
                                               Facsimile: (03) 607 4422
                                               Attention:  Richard J. Mann, Adv.

                  to the Facility Agent at:    Bank Leumi Le-Israel B.M.
                                               Technology Section
                                               Corporate Division
                                               32 Yehuda Halevi Street
                                               Tel-Aviv
                                               Facsimile:   (03) 514 9514
                                               Attention:    Sector Manager

                  to the Coordinating
                  Agent at:                    Bank Hapoalim B.M.
                                               Telecommunications and
                                               Infrastructure Sector
                                               Corporate Division
                                               Zion Building
                                               45 Rothschild Boulevard

<PAGE>
                                     -157-





                                               Tel-Aviv
                                               Facsimile:    (03) 567 3849
                                               Attention:    Manager of
                                               Telecommunications and
                                               Infrastructure Sector

                  to the Participating
                  Banks at--

                  (i)    BLL:                  Technology Section
                                               Corporate Division
                                               32 Yehuda Halevi Street
                                               Tel-Aviv
                                               Facsimile:    (03) 514 9017
                                               Attention:    Sector Manager

                  (ii)   ISRAEL DISCOUNT
                         BANK LTD.:            29 Yehuda Halevi Street
                                               Tel-Aviv
                                               Facsimile:    (03) 514 6364
                                               Attention:    Senior Manager

                  (iii)  BANK HAPOALIM :       Telecommunications and
                                               Infrastructure Sector
                                               Corporate Division
                                               Zion Building
                                               45 Rothschild Boulevard
                                               Tel-Aviv
                                               Facsimile:    (03) 567 3849
                                               Attention:    Manager of
                                               Telecommunications and
                                               Infrastructure Sector



<PAGE>
                                     -158-





            (iv)   THE FIRST INTERNATIONAL
                   BANK OF ISRAEL LTD.:        The First International
                                               Bank of Israel Ltd.
                                               Haifa Main Branch
                                               3 Habankim Street
                                               Haifa
                                               Facsimile:     (04) 853 6269
                                               Attention:    Branch Manager

            (v)    UNITED MIZRAHI
                   BANK LTD.:                  48 Lilienblum Street
                                               Tel-Aviv
                                               Facsimile:    (03) 567 9916
                                               Attention:    Manager, Tel-Aviv
                                                              Main Branch

            (vi)   MERCANTILE
                   DISCOUNT BANK LTD.:         103 Allenby Street
                                               Tel-Aviv
                                               Facsimile:  (03) 566 6919
                                               Attention:  Head of Corporate
                                                                Division

            (viii) CITIBANK N.A.:              Tel-Aviv Branch
                                               Platinum Building
                                               21 Ha'arbah'a Street
                                               Tel-Aviv
                                               Israel
                                               Facsimile:  (03) 684 2402
                                               Attention:  Branch Manager


            (vii)  in the case                 the address designed by it to the
                   of a                        Facility Agent and Partner for
                   Transferee:                 such purpose at the end of the
                                               Transfer Certificate to which it
                                               is a party as Transferee;




            (viii) or, in respect              delivered to such other address
                   of a                        as may be designated by it for
                   Finance Party:              such purpose by notice to the
                                               Facility Agent and Partner.


47.    CONFIDENTIALITY

       Subject to clause 27.6 (Disclosure of Information) the Arranger, each
       Participating Bank and Agent shall keep confidential all confidential
       information concerning Partner, the Shareholders, the Business and the
       terms and conditions of the Facility Documents and the Material
       Contracts, and will not disclose any such information to any third party
       without the prior written consent of Partner unless such disclosure is:


<PAGE>
                                     -159-





       (a)    made in connection with any proceedings arising out of or in
              connection with any Facility Document, to the extent that such a
              party reasonably considers it necessary to protect its interests;
              or

       (b)    required by an order of a court of competent jurisdiction; or

       (c)    made or required pursuant to any law or legal process in
              accordance with which the relevant party concerned is required to
              act or otherwise required to be disclosed by any banking or other
              regulatory or examining authorities or enquirers (whether
              governmental or otherwise); or

       (d)    made to its auditors for the purpose of enabling them to undertake
              any audit or to its legal advisers when seeking bona fide legal
              advice in connection with the Facility Documents or otherwise to
              any of its officers and employees considered to need to know the
              information concerned.

       The restriction contained in this clause 38 shall continue to bind the
       Arranger, each Participating Bank and Agent after termination of, or
       after the termination of its participation in, the Facilities, without
       limit in time.

       For the purpose of the above, "CONFIDENTIAL INFORMATION" shall exclude:

       (i)    information which at the time of disclosure to the Arranger, any
              Participating Bank or Agent (or any of their advisers) is in the
              public domain (other than through a breach of this clause 38 by
              the Arranger, such Participating Bank or Agent);

       (ii)   information which, after such disclosure, becomes generally
              available to third parties or otherwise in the public domain by
              publication or through no fault of the Arranger, any Participating
              Bank or the Facility Agent (or any of their advisers); and

       (iii)  information which is lawfully in the possession of the Arranger,
              any Participating Bank or Agent (or any of their advisers) prior
              to such disclosure or subsequently comes into any of their
              respective possessions, other than by reason of any breach of any
              confidentiality undertaking in favour of Partner.

<PAGE>
                                     -160-





48.    ENTIRE AGREEMENT

       This document constitutes an amended and restated version of the Facility
       Agreement, as amended, rescheduled and restated through 31 December 2002
       and shall be deemed to be the binding version of the Facility Agreement.


IN WITNESS WHEREOF, THE PARTIES HAVE SIGNED THIS AGREEMENT ON THE DATE FIRST
MENTIONED ABOVE.

PARTNER:

for:   PARTNER COMMUNICATIONS
       COMPANY LTD.

By:
       ------------------------
Title:
       ------------------------

THE PARTICIPATING BANKS:

for:   BANK LEUMI LE-ISRAEL B.M.           for:   ISRAEL DISCOUNT BANK LTD.

By:                                        By:
       ------------------------                   -----------------------
Title:                                     Title:
       ------------------------                   -----------------------
for:   BANK HAPOALIM B.M.                  for:   THE FIRST INTERNATIONAL
                                                  BANK OF ISRAEL LTD.

By:                                        By:
       ------------------------                   -----------------------
Title:                                     Title:
       ------------------------                   -----------------------
for:   UNITED MIZRAHI BANK LTD.            for:   MERCANTILE DISCOUNT
                                                  BANK LTD.
By:                                        By:
       ------------------------                   -----------------------
Title:                                     Title
       ------------------------                   -----------------------
for:   CITIBANK N.A.

By:
       ------------------------
Title:
       ------------------------



for:   BANK LEUMI LE-ISRAEL B.M.           for:   BANK HAPOALIM B.M.
       (in its capacity as Security               (in its capacity as
       Trustee, Arranger and Facility             Coordinating Agent)
       Agent)

By:                                        By:
       ------------------------                   -----------------------
Title                                      Title
       ------------------------                   -----------------------