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# Articles of Association of

# Partner Communications
Company Ltd.

# Table of Contents

|                                               |                                                                                 |   
|---------------------------------------------- | ------------------------------------------------------------------------------- | --
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|Chapter One - General                          | 3                                                                              
|1.                                             | Definitions and Interpretation                                                  | 3 
|2.                                             | Public Company                                                                  | 5 
|3.                                             | The Purpose of the Company                                                      | 5 
|4.                                             | The Objectives of the Company                                                   | 5 
|5.                                             | Limited Liability                                                               | 5 
|Chapter Two - The Share Capital of the Company | 5                                                                              
|6.                                             | Share Capital                                                                   | 5 
|7.                                             | The Issuance of Shares and Other Equity Securities                              | 6 
|8.                                             | Calls for Payment                                                               | 6 
|9.                                             | The Shareholder Registers of the Company and the Issuance of Share Certificates | 8 
|10.                                            | Transfer of Shares of the Company                                               | 9 
|10A.                                           | Limitations on Transfer of Shares                                               | 12
|10B.                                           | Required Minimum Holdings                                                       | 13
|11.                                            | Bearer Share Certificate                                                        | 14
|12.                                            | Pledge of Shares                                                                | 14
|13.                                            | Changes in the Share Capital                                                    | 14
|Chapter Three - General Meetings               | 17                                                                             
|14.                                            | The Authority of the General Meeting                                            | 17
|15.                                            | Kinds of General Meetings                                                       | 18
|16.                                            | The Holding of General Meetings                                                 | 19
|17.                                            | The Agenda of General Meetings                                                  | 20
|18.                                            | Discussions in General Meetings                                                 | 20
|19.                                            | Voting of the Shareholders                                                      | 22
|20.                                            | The Appointment of a Proxy                                                      | 24
|21.                                            | Deed of Vote                                                                    | 26
|Chapter Four - The Board of Directors          | 29                                                                             
|22.                                            | The Authority of the Board of Directors                                         | 29
|23.                                            | The Appointment of Directors and the Termination of Their Office                | 29
|24.                                            | Actions of Directors                                                            | 34
|25.                                            | Committees of the Board of Directors                                            | 37



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|                                                                               |                                                                                |   
|------------------------------------------------------------------------------ | ------------------------------------------------------------------------------ | --
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|26                                                                             | Chairman of the Board of Directors                                             | 39
|Chapter Five - Officers who are not Directors and the Auditor                  | 40                                                                            
|27.                                                                            | The General Manager                                                            | 40
|28.                                                                            | The Corporate Secretary, Internal Controller and Other Officers of the Company | 42
|29.                                                                            | The Auditor                                                                    | 43
|Chapter Six - The Share Capital of the Company and its Distribution            | 44                                                                            
|30.                                                                            | Permitted Distributions                                                        | 44
|31.                                                                            | Dividends and Bonus Shares                                                     | 44
|32.                                                                            | The Acquisition of Shares                                                      | 48
|Chapter Seven - Insurance, Indemnification and Release of Officers             | 48                                                                            
|33.                                                                            | Insurance of Officers                                                          | 48
|34.                                                                            | Indemnification of Officers                                                    | 49
|35.                                                                            | Release of Officers                                                            | 50
|Chapter Eight - Liquidation and Reorganization of the Company                  | 50                                                                            
|36.                                                                            | Liquidation                                                                    | 50
|37.                                                                            | Reorganization                                                                 | 51
|Chapter Nine - Miscellaneous                                                   | 51                                                                            
|38.                                                                            | Notices                                                                        | 51
|Chapter 10-Transitional Rules until the Companies Law shall be Effective       | 52                                                                            
|39.                                                                            | Applicability                                                                  | 52
|40.                                                                            | Indemnification of Officers                                                    | 53
|41.                                                                            | Exemption for Officers                                                         | 53
|42.                                                                            | Interpretation                                                                 | 54
|Chapter 11 - Compliance with the License/ Limitations on Ownership and Control | 54                                                                            
|43.                                                                            | Compliance                                                                     | 54
|44.                                                                            | Limitations on Ownership and Control                                           | 54

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# Chapter One 
General

|1. | Definitions
and Interpretation
|-- | ------------------------------

| | 1.1. | The
following terms in these Articles of Association bear the meaning appearing
          alongside them below:
| | ---- | ---------------------------------------------------------------------------------------------------------------

| | Articles of Association 
                            
Business Day 
                            
Companies Law 
Companies Ordinance 
Companies Regulations 
Director 
                            
                            
Document 
                            
                            
                            
Founding Shareholder 
                            
Founding Israeli Shareholder
                            
Financial Statements 
                            
Law 
License 
                            
                            
Linkage | The  Articles  of  Association  of the  Company,  as set  forth  herein  or as
amended, whether explicitly or pursuant to any Law.
Sunday to  Thursday,  inclusive,  with the  exception of holidays and official
days of rest in the State of Israel.
The Companies Law, 1999.
The Companies Ordinance [New Version], 1983.
Regulations issued pursuant to the Companies Ordinance or Companies Law.
A Director of the Company in  accordance  with the  definition in Section 1 of
the  Companies   Law,   including  an  Alternate   Director  or  an  empowered
representative.
A  printout  and any  other  form  of  written  or  printed  words,  including
documents transmitted in writing, via facsimile,  telegram,  telex, e-mail, on
a computer  or through  any other  electronic  instrumentation,  producing  or
allowing the production of a copy and/or an output of a document.
A "founding  shareholder or its  substitute" as defined in Section 21.8 of the
License.
A Founding  Shareholder  who also qualifies as an "Israeli  Entity" as defined
for purposes of Section 22A of the License.
The balance  sheet,  profit and loss  statement,  statement  of changes in the
share capital and cash flow statements, including the notes attached to them.
The provisions of any law ("din") as defined in the Interpretation Law, 1981.
The  Company's  General  License for the  Provision of Mobile Radio  Telephone
Services  using the  Cellular  Method in Israel  dated April 7, 1998,  and the
permit issued by the Ministry of Communications dated April 7, 1998.
Payments  with respect to changes in the Israeli  consumer  price index or the
representative  exchange rate of NIS vis-a-vis the U.S.  dollar,  as published
by the Bank of Israel, or any other rate which replaces such rate.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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3

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| | Minimum Founding Shareholders 
Holding 
Minimum Israeli Holding 
                              
NIS 
Office 
Ordinary Majority 
                              
                              
Periodic Statement 
                              
                              
Qualified Israeli Director 
                              
                              
                              
                              
Securities 
                              
                              
Securities Law 
Securities Regulations 
Shares 
Shareholder 
Special Majority | The  minimum  shareholding  in the  Company  required  to be held by  Founding
Shareholders pursuant to Section 22A.1 of the License.
The  minimum  shareholding  in the  Company  required  to be held by  Founding
Israeli Shareholders pursuant to Section 22A.2 of the License.
New Israeli Shekel
The registered office of the Company.
A simple majority of the  shareholders  who are entitled to vote and who voted
in a General  Meeting in person,  by means of a proxy or by means of a deed of
voting.
According  to  its  definition  in  Chapter  B of the  Securities  Regulations
(Periodic  and  Immediate  Reports),  1970,  or  such  Securities  Regulations
replacing them.
A  director  who at all times  (i) is a citizen  of  Israel  and  resident  in
Israel,  (ii)  qualifies to serve as a director  under  applicable  law, (iii)
qualifies as a Director with  Clearance as defined in section 25A, and (iv) is
appointed to the Board of Directors of the Company  pursuant to section 23.2.6
of these Articles.
Shares,  bonds,  capital  notes  or  securities  negotiable  into  shares  and
certificates,  conferring  a right in such  securities,  or  other  securities
issued by the Company.
The Securities Law, 1968.
Regulations issued pursuant to the Securities Law.
shares in the share capital of the Company.
Anyone registered as a shareholder in the Shareholder Register of the Company.
A majority of at least three  quarters  of the votes of  shareholders  who are
entitled to vote and who voted in a general meeting,  in person, by means of a
proxy or by means of a deed of voting.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.2. | The
provisions of Sections 3 through 10 of the Interpretation Law, 1981, shall           also
apply to the interpretation of these Articles of Association, mutatis           mutandis,
unless the context otherwise requires.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1.3. | Except
as otherwise provided in this Article, each word and expression in these
          Articles of Association shall have the meaning given to it in accordance with
          the Companies Law, and to the extent that no meaning is attached to it in the
          Companies Law, the meaning given to it in the Companies Regulations, and if
they           lack reference thereto, as stated, the meaning given to it in the
Securities Law           or Securities Regulations, and in the absence of any meaning, as
stated, the           meaning given to it in another Law, unless it contradicts the
relevant provision           or its contents.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|2. | Public
Company
|-- | --------------

| | The
Company is a public company.
| | --------------------------------

|3. | The
Purpose of the Company
|-- | --------------------------

| | The
purpose of the Company is to operate in accordance with business considerations to
generate profits; provided, however, the Board of Directors is entitled to donate
reasonable amounts to worthy causes, even if such a donation is not within the framework
of business considerations, as stated.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | The
Objectives of the Company
|-- | -----------------------------

| | The
Company shall engage in any legal business.
| | -----------------------------------------------

|5. | Limited
Liability
|-- | -----------------

| | The
liability of the Shareholders of the Company is limited, each one up to the full amount
he undertook to pay for the Shares allotted to him, at the time of the allotment.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Chapter Two  The
Share Capital of the Company

|6. | Share
Capital
|-- | -------------

| | 6.1. | The
authorized share capital of the Company is NIS 2,350,000, divided into
          235,000,000 ordinary shares at a par value of NIS 0.01 each (hereinafter: the
          Ordinary Shares).
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.2. | Each
Ordinary Share shall confer upon its holder the right to receive notices           of,
and to attend and vote in, general meetings, and to one vote for each           Ordinary
Share held by him.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.3. | Each
class of Shares shall also confer equal rights to each holder in the class           with
respect to the amounts of equity which were paid or credited as paid with
          respect to their par value, in all matters pertaining to dividends, the
          distribution of bonus shares and any other distribution, return of capital and
          participation in the distribution of the balance of the assets of the Company
          upon liquidation.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6.4. | The
provisions of these Articles of Association with respect to Shares, shall           also
apply to other Securities issued by the Company, mutatis mutandis.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

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|7. | The
Issuance of Shares and Other Securities
|-- | -------------------------------------------

| | 7.1. | The
Board of Directors of the Company may issue Shares and other equity           Securities
of the Company, up to the limit of the registered share capital of           the Company.
In the event that the share capital of the Company includes several           classes of
Shares and other equity Securities, no shares and other equity           Securities shall
be issued above the limit of the registered share capital for           its class.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.2. | The
Board of Directors of the Company may issue redeemable Securities, having           such
rights and subject to such conditions as will be determined by the Board of
          Directors.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.3. | Subject
to the provisions of these Articles of Association, the Board of           Directors may
allot Shares and other Securities according to such stipulations           and
conditions, at par value or by way of a premium, as it deems fit.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.4. | The
Board of Directors may decide on the issuance of a series of bonds or other
          debt securities within the framework of its authority or to take a loan on
          behalf of the Company and within the limits of the same authority.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.5. | The
Shareholders of the Company at any given time shall not have any preemption
          right or priority or any other right whatsoever with respect to the acquisition
          of Securities of the Company. The Board of Directors, in its sole discretion,
          may decide to offer Securities of the Company first to existing Shareholders or
          to any one or more of them.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.6. | The
Company is entitled to pay a commission (including underwriting fees) to any
          person, in consideration for underwriting services, or the marketing or
          distribution of Securities of the Company, whether reserved or unreserved, as
          determined by the Board of Directors. Payments, as stated in this Article, may
          be paid in cash or in Securities of the Company, or partly in one manner and
          partly in another manner.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | Calls
of Payment
|-- | ----------------

| | 8.1. | In
the event that according to the terms of a Share allotment, there is no fixed
          date for the payment of any part of the price that is to be paid for the
Shares,           the Board of Directors may issue from time to time calls of payment to
the           Shareholders with respect to the moneys which were not yet paid by them in
          relation to the Shares (hereinafter: Calls of Payment or a
          Call of Payment, as the case may be).
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.2. | A
Call of Payment shall set a date, which will not be earlier than thirty days
          from the date of the notice, by which the amount indicated in the Call of
          Payment must be paid, together with interest, Linkage and expenses incurred in
          consequence of the nonpayment, according to the rates and amounts set by
          the Board of Directors. The notice shall further specify that in the event of a
          failure to pay within the date fixed, the Shares in respect of which payment or
          the rate is required may be forfeited. In the event that a Shareholder fails to
          meet any of its obligations, under a Call of Payment, the Share in respect of
          which said notice was issued pursuant to the resolution of the Board of
          Directors may be forfeited at any time thereafter. The forfeiture of Shares
          shall include the forfeiture of all the dividends on same Shares which were not
          paid prior to the forfeiture, even if such dividends were declared.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 8.3. | Any
amount, which according to the terms of a Share allotment, must be paid at           the
time of issuance or at a fixed date, whether at the par value of the Share           or
at a premium, shall be deemed for the purposes of these Articles of           Association
to be combined in a duly issued Call of Payment. In the event of           non-payment of
any such amount, all the provisions of these Articles of           Association shall
apply with respect to such an amount, as if a proper Call of           Payment has been
made and an appropriate notice thereof was given.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.4. | The
Board of Directors, acting reasonably and in good faith, may differentiate
          among Shareholders with respect to amounts of Calls of Payment and/or their
          payment time.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.5. | The
joint holders of Shares shall be liable, jointly and severally, for the           payment
of Calls of Payment in respect of such Shares.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------

| | 8.6. | Any
payment for Shares shall be credited, pro rata, according to the par value           of
and according to the premium on such Shares.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------

| | 8.7. | A
Call of Payment may be cancelled or deferred to another date, as may be           decided
by the Board of Directors. The Board of Directors may waive any           interest,
Linkage and expenses or any part of them.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.8. | The
Board of Directors may receive from a Shareholder any payments for his           Shares,
in addition to the amount of any Call of Payment, and the Board of           Directors
may pay to the same Shareholder interest on amounts which were paid in           advance,
as stated above, or on same part of them, in excess of the amount of           the Call
of Payment, or to make any other arrangement with him which may           compensate him
for the advancement of the payment.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.9. | A
Shareholder shall not be entitled to a dividend or to his other rights as a
          Shareholder, unless he has fully paid the amounts specified in the Calls of
          Payment issued to him, together with interest, Linkage and expenses, if any,
          unless otherwise determined by the Board of Directors.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.10. | The
Board of Directors is entitled to sell, re-allot or transfer in any other
          manner any Share which was forfeited, in the manner it decides, with or without
          any amount paid on the Share or deemed as paid on it.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.11. | The
Board of Directors is entitled at all times prior to the sale, reallotment           or
transfer of the forfeited Share to cancel the forfeiture on the conditions it
          may decide.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.12. | A
person whose Shares have been forfeited shall, notwithstanding the forfeiture,
          remain liable to pay to the Company all moneys which, up until the date of
          forfeiture, were due and payable by him to the Company in respect of the
Shares,           including interest, Linkage and expenses up until the actual payment
date in the           same manner as if the Shares were not forfeited, and shall be
compelled to           fulfill all the requirements and claims which the Company was
entitled to           enforce with respect to the Shares up until the forfeiture date,
without any           decrease or discount for the value of the Shares at the time of
forfeiture. His           liability shall cease only if and when the Company receives the
full payment set           at the time of allotment of the Shares.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 8.13. | The
Board of Directors may collect any Calls of Payment which were not paid on           the
forfeited Shares or any part of them, as it deems fit, but it is not           obligated
to do so.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8.14. | The
forfeiture of a Share shall cause, as of the time of forfeiture, the
          cancellation of all rights in the Company and of any claim or demand against
the           Company with respect to that Share, and of other rights and obligations of
the           Shareholder in respect of the Company, save as otherwise provided by Law.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. | The
Shareholder Registers of the Company and the Issuance of Share           Certificates
|-- | -----------------------------------------------------------------------------------------

| | 9.1. | The
Company shall maintain a Shareholder Register and a Register of Significant
          Shareholders, together with a notation of any Exceptional Holdings in
accordance           with the provisions set forth in Article 10A below, to be
administered by the           corporate secretary of the Company, subject to the
oversight of the Board of           Directors.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.2. | A
Shareholder is entitled to receive from the Company, free of charge, within           two
months after an allotment or the registration of a transfer (unless the
          conditions of the allotment fix a different period) one or several certificates
          with respect to all the Shares of a certain class registered in his favor,
which           certificate must specify the number of the Shares, the class of the
Shares and           the amount paid for them and also any other detail deemed important
by the Board           of Directors. In the event a Share is held jointly, the Company
shall not be           obligated to issue more than one certificate for all the joint
holders, and the           delivery of such a certificate to any of the joint holders
shall be viewed as if           it was delivered to all of them.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.3. | Each
and every Share certificate shall be stamped with the seal or the stamp of           the
Company or bear the Companys printed name, and shall also bear the
          signature of one Director and of the corporate secretary of the Company, or of
          two Directors or of any other person appointed by the Board of Directors for
          this purpose.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9.4. | The
Company is entitled to issue a new Share certificate in place of an issued
          Share certificate which was lost or spoiled or corrupted, following evidence
          thereto and guarantees and indemnities, as may be required by the Company and
          the payment of an amount determined by the Board of Directors.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 9.5. | Where
two people or more are registered as joint holders of Shares, each of them           is
entitled to acknowledge the receipt of a dividend or other payments in
          connection with such jointly held Shares, and such acknowledgement of any one
of           them shall be good discharge of the Companys obligation to pay such
          dividend or other payments.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10. | Transfer
of Shares
|--- | ------------------

| | 10.1. | The
Shares are transferable. The transfer of Shares shall not be registered           unless
the Company receives a deed of transfer (hereinafter: Deed of           Transfer)
or other proper Document or instrument of transfer. A Deed of           Transfer shall be
drawn up in the following manner or in any substantially           similar manner or in
any other manner approved by the Board of Directors.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Deed of Transfer

| | I,
 _________________,  (hereinafter:  "The  Transferor")  of  ____________,  do hereby
 transfer  to                  ___________  (hereinafter:  "The Transferee") of
__________,  for valuable  consideration paid to me,                  _________  Share(s)
having a par value of NIS 0.01 each,  numbered ________ to ________  (inclusive),
                 of Partner  Communications  Company Ltd.  (hereinafter:  the "Company")
to hold unto the  Transferee,                  his executors,  administrators and
assigns,  subject to the same terms and conditions on which I held                  the
same at the time of the execution  hereof;  and I, the said  Transferee,  do hereby agree
to take                  the said Share(s) subject to the aforesaid terms and conditions.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
witness whereof we have hereunto set our hands this _____ day of _________, _____.
| | -------------------------------------------------------------------------------------

| | The Transferor              
Name: _______________       
Signature: ____________     
Witness to the Signature of:
The Transferor              
Name: _____________         
Signature: ____________ | The Transferee
Name: _______________
Signature: ____________
The Transferee
Name: _____________
Signature: ____________
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------

| | 10.2. | The
transfer of Shares which are not fully paid, or Shares on which the Company           has
a lien or pledge, shall have no validity unless approved by the Board of
          Directors, which may, in its absolute discretion and without giving any
          reasoning thereto, decline the registration of such a transfer. The Board of
          Directors may deny a transfer of Shares as aforesaid and may also impose a
          condition of the transfer of Shares as aforesaid an undertaking by the
          transferee to meet the obligations of the transferor with respect to the Shares
          or the obligations for which the Company has a lien or pledge on the Shares,
          signed by the transferee together with the signature of a witness,
          authenticating the signature of the transferee.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.3. | The
transfer of a fraction of a Share shall lack validity.
| | ----- | ----------------------------------------------------------

| | 10.4. | A
transferor of Shares shall continue to be regarded as the holder of the
          transferred Shares, until the name of the transferee of the Shares is
registered           in the Shareholder Register of the Company.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.5. | A
Deed of Transfer shall be filed with the Companys office for
          registration, together with the Share Certificates for the Shares which are to
          be transferred (if such are issued) and also any other evidence which the
          Company may require with respect to the proprietary right of the transferor or
          with respect to his right to transfer the Shares. Deeds of Transfer which are
          registered shall remain with the Company. The Company is not obligated to
retain           the Deeds of Transfer and the Share Certificates, which may be
cancelled, after           the completion of a seven-year period from the registration of
the transfer.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 10.6. | A
joint Shareholder may transfer his right in a Share. In the event the
          transferring Shareholder does not hold the relevant Share Certificate, the
          transferor shall not be obligated to attach the Share Certificate to the Deed
of           Transfer, so long as the Deed of Transfer shall indicate that the transferor
          does not hold the Share Certificate, that the right he has in the Shares
therein           is being transferred, and that the transferred Share is held jointly
with           others, together with their details.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.7. | The
Company may require payment of a fee for the registration of the transfer,           at
an amount or a rate determined by the Board of Directors from time to time.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.8. | The
Board of Directors may close the Shareholder Register for a period of up to
          thirty days in each year.
| | ----- | -------------------------------------------------------------------------------------------------------------------

| | 10.9. | Subject
to Article 10.10, upon the death of a Shareholder, the Company shall           recognize
the custodians or administrators of the estate or executors of the           will, and in
the absence of such, the lawful heirs of the Shareholder, as the           only holders
of the right for the Shares of the deceased Shareholder, after           receipt of
evidence to the entitlement thereto, as determined by the Board of           Directors.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.10. | In
the event that a deceased Shareholder held Shares jointly with others, the
          Company shall acknowledge each survivor as a joint Shareholder with respect to
          said Shares, unless all the joint holders in the Share notify the Company in
          writing, prior to the death of any of them, of their will that the provisions
of           this Article shall not apply to them. The foregoing shall not release the
estate           of a joint Shareholder of any obligation in relation to a Share which is
held           jointly.
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.11. | A
person acquiring a right in Shares in consequence of being a custodian,
          administrator of the estate, the heir of a Shareholder, a receiver, liquidator
          or a trustee in a bankruptcy of a Shareholder or according to another provision
          of the Law, is entitled, after providing evidence to his right, to the
          satisfaction of the Board of Directors, to be registered as the Shareholder or
          to transfer such Shares to another person, subject to the provisions of these
          Articles of Association with respect to transfers.
| | ------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.12. | A
person becoming entitled to a Share because of the death of a Shareholder           shall
be entitled to receive, and to give receipts for, dividends or other           payments
paid or distributions made, with respect to the Share, but shall not be
          entitled to receive notices with respect to General Meetings of the Company or
          to participate or vote therein with respect to that Share, or to exercise any
          other right of a Shareholder, until he has been registered in the Shareholder
          Register as the holder of that Share.
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.13. | Notwithstanding
anything to the contrary in Articles 10.5 and 10.7, the transfer           of Shares as a
result of a realization of a share pledge entered into by a           Shareholder of the
Company in connection with the Companys $650 million           credit facility
dated August 13, 1998, as amended from time to time, will not           require
additional evidence with respect to the proprietary right of the           transferor or
with respect to his right to transfer the shares other than a           properly
completed deed of transfer and valid Share Certificate (if issued), nor           will
the Company require a fee for the registration of said transfer.
| | ------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|10A. | Limitations
on Transfer of Shares
|---- | ---------------------------------

| | 10A.1. | Exceptional
Holdings shall be registered in the Register of Members (Shareholder           Register)
together with a notation that such holdings have been classified as           Exceptional
Holdings, immediately upon the Companys learning           of such matter.
Notice of such registration shall be sent by the Company to the           registered
holder of the Exceptional Holding and to the Minister of           Communications.
| | ------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10A.2. | Exceptional
Holdings, registered in the manner set forth in Article 10A.1, shall           not
entitle the holder to any rights in respect to his holdings, and such           holdings
shall be considered Dormant Shares within the meaning of           Section
308 of the Companies Law, except, however, that the holder of such           shares shall
be entitled to receive dividends and other distributions to           shareholders
(including the right to participate in a rights offering calculated           on the
basis of Means of Control of the Company (as defined in the License),           provided,
however, that such additional holdings shall be considered Exceptional
          Holdings). Therefore, any action taken or claim made on the basis of a right
          deriving from an Exceptional Holdings shall have no effect, except for the
          receipt of dividends or other distribution as stated above.
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Without
derogating from the above:
| | ----------------------------------

| | 10A2.1 | A
Shareholder participating in a vote of the General Meeting will certify to the Company
prior to the vote or, if the vote is by Deed of Vote, on the Deed of Vote, as to whether
or not his holdings in the Company or his vote require consent pursuant to Sections 21
and 23 to the License; in the event the shareholder does not provide notification as
aforesaid, he shall not vote and his vote shall not be counted.
| | ------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10A.2.2 | No
Director shall be appointed, elected or removed on the basis of Exceptional Holdings. In
the event a Director is appointed, elected or removed from his position as a Director as
set forth above, such appointment, election or removal shall have no effect.
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10A.2.3 | Exceptional Holdings
shall have no voting rights at a General Meeting of the Company.
| | ------- | -------------------------------------------------------------------------------------

| | For
the purposes of this Article 10A, Exceptional Holdings means the
holdings of Traded Means of Control held without the cnnsent of the Minister of
Communications pursuant to Section 21 to the License or as a result of a breach of the
provisions of Section 23 to the License, and all holdings of a holder of Traded Means of
Control who acted contrary to the provisions of Section 24 to the License; and as long as
the consent of the Minister of Communications is required but has not been obtained
pursuant to Section 21 to the License, or the circumstances exist which constitute a
violation of the provisions of Sections 23 or 24 to the License.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

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| | For
the purposes of this Article 10A, Traded Means of Control means Means
of Control (as defined in the License) including Global or American Depositary Shares
(GDRs or ADRs) or similar certificates, registered for trade on a securities exchange in
Israel or abroad or which have been offered to the public in connection with a
prospectus, and are held by the public in Israel or abroad.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10A.3. | The
provisions of Article 10A shall not apply to those who were Shareholders of
               the Company on the eve of the first registration of the Companys
Shares                for trade.
| | ------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10B. | Required
Minimum Holdings
|---- | -------------------------

| | 10B.1. | Our
License requires that Founding Shareholders hold Shares constituting at           least
the Minimum Founding Shareholders Holding and that Founding Israeli
          Shareholders hold Shares constituting at least the Minimum Israeli Holding.
| | ------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10B.2. | Shares
held by Founding Shareholders, to the extent such Shares constitute all           or a
portion of the Minimum Founding Shareholders Holding, shall be registered
          directly in the name of the Founding Shareholder in the shareholder register of
          the Company, with a note indicating that such Shares are Minimum Founding
          Shareholders Shares. Minimum Founding Shareholders Shares that are held
by           Founding Israeli Shareholders, to the extent such Shares constitute all or a
          portion of the Minimum Israeli Holding, shall also be recorded in the
          shareholder register with a note indicating that such Shares are Minimum
          Israeli Holding Shares.
| | ------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10B.3. | No
transfer by a Founding Shareholder of Minimum Founding Shareholder Shares or           by
a Founding Israeli Shareholder of Minimum Israeli Holding Shares shall be
          recorded in the Companys shareholder register, or have any effect, unless
          the Companys Secretary shall have received written confirmation from the
          Ministry of Communications that the transfer complies with section 21.8 of the
          License. The Company Secretary may, in his or her discretion, refer any
question           in connection with the recording of Minimum Founding Shareholders
Shares or           Minimum Israeli Holding Shares, or their transfer, to the Companys
audit           committee whose decision shall be binding on the Company. As a condition
to any           transfer of Minimum Founding Shareholders Shares or Minimum Israeli
Holding           Shares, the transferee shall be required to deliver to the Companys
          Secretary (a) a share transfer deed that includes an undertaking by the
          transferee to comply with all requirements of section 22A of the License and
(b)           all information requested with respect to the transferees
qualification as           a Founding Shareholder and/or a Founding Israeli Shareholder.
| | ------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

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|11. | Bearer
Share Certificate
|--- | ------------------------

| | The
Company shall not issue bearer Share Certificates which grant the bearer rights in the
Shares specified therein.
| | --------------------------------------------------------------------------------------------------------------------

|12. | Pledge
of Shares
|--- | ----------------

| | 12.1. | The
Company shall have a first degree pledge on, and a right to create a lien           on,
all Shares which are not fully paid and registered in the name of any
          Shareholder, and the proceeds of their sale, with respect to moneys (which
          payment time is due or not) whose payment was already called or are to be paid
          up within a fixed time. Furthermore, the Company shall have a first degree
          pledge right on all the Shares (other than Shares which were fully paid)
          registered in the name of any Shareholder to secure the payment of moneys which
          are due from him or from his property, whether with respect to his own debts or
          debts jointly with others. The said pledge shall also apply to dividends,
          declared from time to time, with respect to these Shares.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 12.2. | For
purposes of the realization of any such pledge and or lien, the Board of
          Directors is entitled to sell the Shares which are the subject of the pledge or
          lien, or any part of them, as it deems fit. No sale, as aforesaid, shall be
          carried out, until the date fixed for the payment has passed and a notice in
          writing was transferred to same Shareholder with respect to the intention of
the           Company to sell them, on condition that the amounts were not paid within
          fourteen days after the notice.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 12.3. | The
proceeds of any such sale, after deduction for the payment of the sale
          expenses, shall serve for the covering of the debts or obligations of said
          Shareholder, and the balance (if any) shall be paid to him.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 12.4. | In
the event that a sale of Shares was carried out pursuant to the realization           of
a pledge or a lien, pursuant to the presumptive authority conferred above,           the
Board of Directors is entitled to register such Shares in the Shareholder
          Register in favor of the buyer, and the buyer shall not be under the obligation
          to examine the fitness of such actions or the manner in which the purchase
price           paid for such Shares was used. After the said Shares are registered in
the           Shareholder Register in favor of the buyer, no person shall have the right
to           object to the validity of the sale.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13. | Changes
in the Share Capital
|--- | ----------------------------

| | The
General Meeting is entitled to take any of the following actions at all times, so long as
the resolution of the General Meeting is adopted by a Special Majority.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.1. | Increasing
the Share Capital
| | ----- | ----------------------------

| | To
increase the share capital of the Company, regardless of whether all the Shares
registered at such a time were issued or not. The increased share capital shall be
divided into Shares having ordinary rights or preference rights or deferred rights or
other special rights (subject to the special rights of an existing class of Shares) or
subject to conditions and restrictions with respect to entitlement to dividend, return of
capital, voting or other conditions, as may be instructed by the General Meeting in a
resolution with respect to the increase of the share capital, and in the absence of a
special provision, according to the terms determined by the Board of Directors.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14

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| | 13.2. | Classes
of Shares
| | ----- | -----------------

| | To
divide the share capital of the Company into various classes of Shares, and to set and
change the rights attaching to each class of Shares, according to the conditions
specified below:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.2.1. | So
long as it was not otherwise set in the Share allotment conditions, the
               rights of any class may be changed pursuant to a resolution of the General
               Meeting of the Shareholders of each class of Shares, separately, or upon
the                written consent of all the Shareholders of all classes.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.2.2. | The
rights conferred on the holders of Shares of a certain class shall not be
               deemed to have been changed as a result of the creation or allotment of
other                Shares having identical rights, unless it was otherwise stipulated
in the                allotment conditions of said Shares.
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.3. | Amalgamation
and Redivision of the Share Capital
| | ----- | ------------------------------------------------

| | To
amalgamate and redivide the share capital of the Company, entirely or partially, into
Shares having a higher or lesser par value than that stated in these Articles of
Association. In the event that in consequence of such amalgamation, there are
Shareholders left with fractions of Shares, the Board of Directors if approved by the
Shareholders at a General Meeting in adopting the resolution for amalgamation of the
capital, may agree as follows:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.3.1. | To
sell the total of all the fractional shares and to appoint a trustee for this
               purpose, in whose name Share Certificates representing the fractions shall
be                issued, who will sell them, with the proceeds received after the
deduction of                commissions and expenses to be distributed to those entitled.
The Board of                Directors shall be entitled to decide that Shareholders who
are entitled to                proceeds which are below an amount determined by it, shall
not receive the                proceeds of the sale of the fractional shares, and their
share in the proceeds                shall be distributed among the Shareholders who are
entitled to proceeds, in an                amount greater than the amount that was
determined, relative to the proceeds to                which they are entitled;
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.3.2. | To
allot to any Shareholder, who is left with a fractional Share following the
               amalgamation, Shares of the class of Shares prior to the amalgamation,
which are                fully paid, in such a number, the amalgamation of which together
with the                fractional Share shall complete a whole Share, and an allotment
as stated shall                be viewed as valid shortly before the amalgamation;
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15

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| | 13.3.3. | To
determine that Shareholders shall not be entitled to receive a Share in
               exchange for a fractional Share resulting from the amalgamation of a half
or                smaller fraction of the number of Shares, whose amalgamation creates a
single                Share, and they shall be entitled to receive a whole Share in
exchange for a                fractional Share, resulting from the amalgamation of more
than a half of the                number of Shares, whose amalgamation creates a whole
Share.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the event that an action pursuant to Articles 13.3.2 or 13.3.3 above requires the
allotment of additional Shares, their payment shall be effected in a manner similar to
that applicable the payment of Bonus Shares. An amalgamation and redivision, as
aforesaid, shall not be regarded as a change in the rights attaching to the Shares which
are the subject of the amalgamation and redivision.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.4. | Cancellation
of Unissued Share Capital
| | ----- | --------------------------------------

| | To
cancel registered share capital which has not yet been allotted, so long as the Company
is not under an obligation to allot these Shares.
| | --------------------------------------------------------------------------------------------------------------------------------------------

| | 13.5. | The
Division of the Share Capital
| | ----- | ---------------------------------

| | To
divide the share capital of the Company, entirely or partially, into Shares having a
lower par value than those stated in these Articles of Association, by way of dividing
the Shares of the Company at such a time, entirely or partially.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 13.6. | The
provisions specified in this Article 13 shall also apply to other equity
          Securities of the Company, mutatis mutandis.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------

16

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# Chapter Three 
General Meetings

|14. | The
Authority of the General Meeting
|--- | ------------------------------------

| | 14.1. | Subjects
within the authority of the General Meeting
| | ----- | ----------------------------------------------------

| | The
following matters shall require the approval of the General Meeting:
| | ------------------------------------------------------------------------

| | 14.1.1. | Changes
in the Articles of Association, if adopted by a Special Majority.
| | ------- | -------------------------------------------------------------------------

| | 14.1.2. | The
exercise of the authority of the Board of Directors, if resolved by a
               Special Majority that the Board of Directors is incapable of exercising
its                authority, and that the exercise of any of its authority is essential
to the                orderly management of the Company.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 14.1.3. | The
appointment or reappointment of the Companys auditor, the termination
               or non-renewal of his service, and to the extent required by Law and not
               delegated to the Board of Directors, the determination of his fee.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 14.1.4. | The
appointment of Directors, including external Directors.
| | ------- | -----------------------------------------------------------

| | 14.1.5. | To
the extent required by the provisions of Section 255 of the Companies Law,
               the approval of actions and transactions with interested parties and also
the                approval of an action or a transaction of an officer which might
constitute a                breach of the duty of loyalty.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 14.1.6. | Changes
in the share capital of the Company, if adopted by a Special Majority as
               set forth in Article 13 above.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------

| | 14.1.7. | A
merger of the Company, as defined in the Companies Law.
| | ------- | ---------------------------------------------------------

| | 14.1.8. | Changes
in the objectives of the Company as set forth in Article 4 above, if
               adopted by a Special Majority.
| | ------- | --------------------------------------------------------------------------------------------------------------------------

| | 14.1.9. | Changes
in the name of the Company, if adopted by a Special Majority.
| | ------- | ---------------------------------------------------------------------

| | 14.1.10. | Liquidation,
if adopted by a Special Majority.
| | -------- | ----------------------------------------------

| | 14.1.11. | Settlements
or Arrangements pursuant to Section 233 of the Companies Ordinance.
| | -------- | -------------------------------------------------------------------------------

| | 14.1.12. | Any
other matters which applicable Law requires to be dealt with at General
               Meetings of the Company.
| | -------- | -------------------------------------------------------------------------------------------------------------------

| | 14.2. | The
authority of the General Meeting to transfer authorities between corporate
               organs.
| | ----- | -----------------------------------------------------------------------------------------------------

17

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| | The
General Meeting, by a Special Majority, may assume the authority which is given to
another corporate organ, and may transfer the authority which is given to the General
Manager to the Board of Directors.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
taking or transferring of authorities, as aforesaid, shall be with regard to a specific
issue or for a specific period of time, all as stated in the resolution of the General
Meeting.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15. | Kinds
of General Meetings
|--- | -------------------------

| | 15.1. | Annual
Meetings
| | ----- | ---------------

| | A
General Meeting shall be convened at least once a year, within fifteen months of the last
general meeting. The meeting shall be held at the registered offices of the Company,
unless otherwise determined by the Board of Directors. These General Meetings shall be
referred to as Annual Meetings.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 15.1.1. | An
Annual Meeting shall be convened to approve the following:
| | ------- | -------------------------------------------------------------

| | (One) | The
Financial Statements and the Report of the Board of Directors, as of
               December 31st of the calendar year preceding the year of the annual
meeting.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (Two) | The
Report of the Board of Directors with respect to the fee paid to the
               Companys auditor.
| | ----- | ----------------------------------------------------------------------------------------------------------

| | 15.1.2. | The
Annual Meeting shall be convened to adopt resolutions on the following
               matters:
| | ------- | --------------------------------------------------------------------------------------------------

| | (One) | The
appointment of Directors and the termination of their office in accordance
               with Article 23 below.
| | ----- | --------------------------------------------------------------------------------------------------------------------

| | (Two) | The
appointment of an auditor or the renewal of his office, and authorization of
               the Board of Directors to determine his fee, subject to the provisions of
               Article 29 below.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 15.2. | Extraordinary
Meetings
| | ----- | ----------------------

| | General
Meetings of the Shareholders of the Company which are not convened in accordance with the
provisions of Article 15.1 above, shall be referred to as Extraordinary Meetings.
An Extraordinary Meeting shall discuss and decide in all matters which are not discussed
and decided in the Annual Meeting, and for which the Extraordinary Meeting was convened.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18

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| | 15.3. | Class
Meetings
| | ----- | --------------

| | The
provisions of these Articles of Association with respect to General Meetings shall apply,
mutatis mutandis, to meetings of a class of Shareholders of the Company.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|16. | The
Holding of General Meetings
|--- | -------------------------------

| | 16.1. | The
Convening of the Annual Meeting
| | ----- | -----------------------------------

| | The
Board of Directors shall convene Annual Meetings in accordance with the provisions of
Article 15.1 above.
| | -------------------------------------------------------------------------------------------------------------

| | 16.2. | The
Convening of an Extraordinary Meeting
| | ----- | -----------------------------------------

| | The
Board of Directors may convene an Extraordinary Meeting, as it decides, provided,
however, that it shall be obligated to convene an Extraordinary Meeting upon the demand
of one of the following:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 16.2.1. | Any
two Directors or a quarter of the Directors, whichever is lower; or
| | ------- | -----------------------------------------------------------------------

| | 16.2.2. | any
one or more Shareholders, holding alone or together at least 4.99% of the
               issued share capital of the Company.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------

| | 16.3. | Date
of Convening an Extraordinary Meeting Upon Demand
| | ----- | ------------------------------------------------------

| | The
Board of Directors, which is required to convene a general meeting in accordance with
Article 16.2 above shall announce the convening of the General Meeting within twenty-one
(21) days from the receipt of a demand in that respect, and the date fixed for the
meeting shall not be more than thirty-five (35) days from the publication date of the
announcement of the General Meeting.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the event that the Board of Directors shall not have convened an Extraordinary Meeting,
as required in this Article, those demanding its convening or half of the Shareholders
which demand it subject to Article 16.2.2, are entitled to convene the meeting
themselves, so long as it is convened within three months from the date on which the
demand was filed, and it shall be convened, inasmuch as possible, in the same manner by
which meetings are convened by the Board of Directors. In the event that a General
Meeting is convened as aforesaid, the Company shall bear the reasonable costs and
expenses incurred by those demanding it.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 16.4. | Notice
of Convening a General Meeting
| | ----- | -------------------------------------

| | Unless
otherwise prescribed by Law, a notice of a general meeting shall be sent to each
registered Shareholder of the Company at least twenty-one (21) days prior to the date
fixed for the meeting. A General Meeting may be convened following a shorter notice
period, if the written consent of all the Shareholders who are entitled at such time to
receive notices has been obtained. A waiver by a Shareholder can also be made in writing
after the fact and even after the convening of the General Meeting.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

19

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| | 16.5. | Contents
of the Notice
| | ----- | ----------------------

| | Subject
to the provisions of any Law, a notice with respect to a general meeting shall specify
the agenda of the meeting, the location, the proposed resolutions and also the
arrangements for voting by means of a deed of voting or a deed of authorization, and the
requirements of Article 10A.2.1.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Any
notice to be sent to the Shareholders shall also include a draft of the proposed
resolutions or a concise description of their particulars.
| | -----------------------------------------------------------------------------------------------------------------------------------------------

|17. | The
Agenda of General Meetings
|--- | ------------------------------

| | 17.1. | The
agenda of the General Meeting shall be determined by the Board of Directors           and
shall also include issues for which an Extraordinary Meeting is being           convened
in accordance with Article 15.2 above, or demanded in accordance with           Article
17.2 below.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 17.2. | One
or more Shareholders holding alone or in the aggregate, 4.99% or more of the
          share capital of the Company may request that the Board of Directors include an
          issue on the agenda of a general meeting to be convened in the future. The
Board           of Directors shall incorporate such issue on the agenda of such a future
general           meeting, provided that the Board of Directors determines, in its
discretion,           such issue is suitable to be discussed in the General Meeting of
the Company.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 17.3. | The
General Meeting shall only adopt resolutions on issues which are on its           agenda.
| | ----- | ---------------------------------------------------------------------------------------------

| | 17.4. | So
long as it is not otherwise prescribed by Law, the General Meeting is           entitled
to accept or reject a proposed resolution which is on the agenda of the           General
Meeting, the draft or concise description of the particulars of which           were
published by the Company, including slight alterations, however, it is not
          entitled to take a resolution, which is materially different than the proposed
          resolution.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|18. | Discussions
in General Meetings
|--- | -------------------------------

| | 18.1. | Quorum
| | ----- | ------

| | No
discussion shall be held in the General Meeting unless a lawful quorum is present.
Subject to the requirements of the applicable Law in force at the time these Articles of
Association come into force, the rules of the Nasdaq National Market, the London Stock
Exchange and any other exchange on which the Companys securities are or may become
quoted or listed, and the provisions of these Articles, any two Shareholders, present by
themselves or by means of a proxy, or who have delivered to the Company a Deed of Voting
indicating their manner of voting, and who hold or represent at least one-third of the
voting rights in the Company shall constitute a lawful quorum. A Shareholder or his
proxy, who may also serve as a proxy for other Shareholders, shall be regarded as two
Shareholders or more, in accordance with the number of Shareholders he is representing.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20

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| | 18.2. | Deferral
of the General Meeting in the Absence of Lawful Quorum
| | ----- | ---------------------------------------------------------------

| | In
the event that a legal quorum is not present after the lapsing of 30 minutes from the
time specified in the convening notice for the commencement of the meeting, the meeting
may be adjourned to the same day of the following week (or the first business day
thereafter) at the same time and venue, or to another time and venue, as determined by
the Board of Directors in a notice to the Shareholders, and the adjourned meeting shall
discuss the same issues for which the original meeting was convened. If at the adjourned
meeting, a legal quorum is not present at the time specified for the commencement of the
meeting, then and in such event one or more Shareholders holding or representing in the
aggregate at least 10% of the voting rights in the Company shall be deemed to form a
proper quorum, subject to the provisions of Section 79 of the Companies Law.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 18.3. | The
Chairman of the General Meeting
| | ----- | -----------------------------------

| | The
chairman of the Board of Directors (if appointed) shall preside at each General Meeting.
In the absence of the chairman, or if he fails to appear at the meeting within 15 minutes
after the time fixed for the meeting, the Shareholders present at the meeting shall
choose any one of the Directors of the Company as the chairman, and if there is no
Director present at the meeting, one of the Shareholders shall be chosen to preside over
the meeting. The chairman shall not have an additional vote or casting vote.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 18.4. | Adjourned
Meeting
| | ----- | -----------------

| | Upon
adoption of a resolution at a General Meeting at which a lawful quorum is present, the
chairman may and upon demand of the General Meeting shall adjourn the General Meeting
from time to time and from venue to venue, as the meeting may decide (for the purpose of
this Article: an Adjourned Meeting). In the event that a meeting is adjourned
for fourteen days or more, a notice of the Adjourned Meeting shall be given in the same
manner as the notice of the original meeting. With the exception of the aforesaid, a
Shareholder shall not be entitled to receive notice of an Adjourned Meeting or of the
issues which are to be discussed in the Adjourned Meeting. The Adjourned Meeting shall
only discuss issues that could have been discussed at the General Meeting which was
adjourned. The provisions of Articles 17.1, 17.2 and 17.3 of the Articles of Association
shall apply to an Adjourned Meeting.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21

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|19. | Voting
of the Shareholders
|--- | --------------------------

| | 19.1. | Resolutions
| | ----- | -----------

| | In
any General Meeting, a proposed resolution shall be adopted if it receives an Ordinary
Majority, or any other majority of votes set by Law or in accordance with these Articles
of Association. For the avoidance of doubt, any proposed resolution requiring a Special
Majority under the Companies Ordinance shall continue to require the same Special
Majority even after the effective date of the Companies Law.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the event of a tie vote, the resolution shall be deemed rejected.
| | --------------------------------------------------------------------

| | 19.2. | Checking
Majority
| | ----- | -----------------

| | 19.2.1. | The
checking of the majority shall be carried out by means of a count of votes,
               at which each Shareholder shall be entitled to vote in each case in
accordance                with rights fixed for such Shares, subject to Articles 10A
above and Article 44                below. A Shareholder shall be entitled to a single
vote for each share he holds                which is fully paid or that Calls of Payment
in respect of which was fully paid.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 19.2.2. | The
announcement of the chairman that a resolution in the General Meeting was
               adopted or rejected, whether unanimously or with a specific majority,
shall be                regarded as prima facie evidence thereof.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 19.3. | Written
Resolutions
| | ----- | -------------------

| | Subject
to the provisions of applicable Law, a written resolution signed by all of the
Shareholders of the Company holding Shares which entitle their holders to participate in
General Meetings of the Company and vote therein, or of the same class of Shares to which
the resolution refers, as the case may be, shall be regarded as a valid resolution for
all purposes, and as a resolution adopted at a General Meeting of the Company or at a
class meeting of the relevant class of Shares, as the case may be, which was properly
summoned and convened, for the purpose of adopting such a resolution.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Such
a resolution could be stated in several copies of the same document, each of them signed
by one Shareholder or by several Shareholders.
| | --------------------------------------------------------------------------------------------------------------------------------------------

| | 19.4. | The
Determining Date with Respect to Participation and Voting
| | ----- | -------------------------------------------------------------

| | In
the event that a General Meeting was summoned more than twenty-one (21) days prior to the
date fixed for its convening, the Shareholders who are entitled to participate and vote
in same General Meeting shall be those Shareholders who are registered in the Shareholder
Register of the Company on the date twenty-one (21) days prior to the date of the
meeting. In the event that a General Meeting was summoned 21 days or less prior to the
date fixed for its convening, the Shareholders who are entitled to participate and vote
in the same General Meeting shall be those shareholders who are registered in the
Shareholder Register of the Company on the date determined by the Board of Directors but
in no event shall the date be less than four days prior to the date of the meeting.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22

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| | 19.5. | A
Right to Participate and Vote
| | ----- | -------------------------------

| | A
Shareholder shall not be entitled to participate and vote in any General Meeting or to be
counted among those present, so long as (i) he owes the Company a payment which was
called for the Shares held by him, unless the allotment conditions of the Shares provide
otherwise, and/or (ii) his holdings are registered in the Shareholder Register together
with a notation that such holdings have been classified as Exceptional Holdings, as
defined in Article 10A or Affected Shares, as defined in Article 44.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 19.6. | Personal
Interest in Resolutions
| | ----- | --------------------------------

| | A
Shareholder seeking to vote with respect to a resolution which requires that the majority
for its adoption include at least a third of the votes of all those not having a personal
interest (as defined in the Companies Law) in the resolution shall notify the registered
office of the Company at least two business days prior to the date of the General
Meeting, whether he has a personal interest in the resolution or not, as a condition for
his right to vote and be counted with respect to such resolution.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | A
Shareholder voting on a resolution, as aforesaid, by means of a Deed of Vote, may include
his notice with regard to his personal interest on the Deed of Vote.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 19.7. | The
Disqualification of Deeds of Vote
| | ----- | -------------------------------------

| | Subject
to the provisions of applicable Law, the corporate secretary of the Company may, in his
discretion, disqualify Deeds of Vote and Deeds of Authorization and so notify the
Shareholder who submitted a Deed of Vote or Deeds of Authorization in the following cases:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 19.7.1. | If
there is a reasonable suspicion that they are forged;
| | ------- | --------------------------------------------------------

| | 19.7.2. | If
there is a reasonable suspicion that they are falsified, or given with
               respect to Shares for which one or more Deeds of Vote or deeds of
authorization                have been given and not withdrawn; or
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 19.7.3. | If
there is no note on the Deed of Vote or Deed of Authorization as to whether
               or not his holding in the Company or his vote require the consent of the
               Minister of Communications pursuant to Sections 21 and 23 to the License.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

---

---



| | 19.7.4. | With
respect to Deeds of Vote:
| | ------- | ------------------------------

| | (One) | If
more than one choice is marked for the same resolution; or
| | ----- | -------------------------------------------------------------

| | (Two) | With
respect to resolutions which require that the majority for their adoption
               includes a third of the votes of those not having a personal interest in
the                approval of the resolution, where it was not marked whether the
relevant                Shareholder has a personal interest or not, as aforesaid.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Any
Shareholder shall be entitled to appeal on any such disqualification to the Board of
Directors at least one business day prior to the relevant General Meeting.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 19.8. | The
Voting of a Person without Legal Capacity
| | ----- | ---------------------------------------------

| | A
person without legal capacity is entitled to vote only by means of a trustee or a legal
custodian. Such trustee or legal custodian may vote in person, by Deed of Vote or by
means of a proxy.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 19.9. | The
Voting of Joint Holders of a Share
| | ----- | --------------------------------------

| | Where
two or more Shareholders are registered joint holders of a Share, only the first named
joint holder shall vote, either in person or by means of a proxy or by means of a Deed of
Vote, without taking into account the other registered joint holders of the Share. For
this purpose, the first named joint holder shall be the person whose name is registered
first in the Shareholder Register.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 19.10. | Minutes
of the General Meeting
| | ------ | ------------------------------

| | The
chairman of the General Meeting shall cause that the minutes of each General Meeting
shall be properly maintained and shall include the following:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | 19.10.1. | The
name of each Shareholder present in person, by Deed of Vote or by proxy and
               the number of Shares held or represented by him;
| | -------- | -----------------------------------------------------------------------------------------------------------------------------------------------

| | 19.10.2. | The
principal issues of the discussion, all the resolutions which were adopted
               or rejected at the General Meeting, and if adopted  according to
what                majority.
| | -------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|20. | The
Appointment of a Proxy
|--- | --------------------------

| | 20.1. | Voting
by Means of a Proxy
| | ----- | --------------------------

| | A
Shareholder registered in the Shareholder Register is entitled to appoint by deed of
authorization a proxy to participate and vote in his stead, whether at a certain General
Meeting or generally at General Meetings of the Company, whether personally or by means
of a Deed of Vote, so long as the deed of authorization with respect to the appointment
of the proxy was delivered to the Company at least two Business Days prior to the date of
the General Meeting.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24

---

---



| | In
the event that the deed of authorization is not limited to a certain General Meeting,
then the deed of authorization, which was deposited prior to a certain General Meeting,
shall also be good for other General Meetings thereafter. This Article 20 shall also
apply to a Shareholder which is a corporation, appointing a person to participate and
vote in a General Meeting in its stead. A proxy is not required to be a Shareholder of
the Company.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 20.2. | The
Draft of the Deed of Authorization
| | ----- | --------------------------------------

| | The
deed of authorization shall be signed by the Shareholder and shall be in or substantially
in the form specified below or any such other form acceptable to the Board of Directors
of the Company. The corporate secretary, in his discretion, may accept a deed of
authorization differing from that set forth below provided the changes are immaterial.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
corporate secretary shall only accept either an original deed of authorization, or a copy
of the deed of authorization which is certified by a lawyer having an Israeli license or
a notary.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Deed of Authorization

Date: ________

|To: | Partner
Communications Company Ltd.
|--- | -----------------------------------

|Attn.: | Corporate
Secretary
|------ | -------------------

Re:
[Annual/Extraordinary] General Meeting of the Company to be Held On __________________

I,
the undersigned _________________, Identification No. / Registration No. _____________, of
________________, being the registered holder of ________ (*) Shares [Ordinary Shares
having a par value of NIS 0.01, each], hereby authorize ___________, Identification No.
___________ (**) and/or ___________, Identification No. ___________ and/or ___________,
Identification No. ___________ to participate and vote in my stead and on my behalf at the
referenced meeting and in any adjournment of the referenced meeting of the Company / at
any General Meeting of the Company, until I shall otherwise notify you .

---

Signature

---

|(*) | A
Shareholder is entitled to give several deeds of authorization, each of which
               refers to a different quantity of Shares of the Company held by him, so
long as                he shall not give deeds of authorization with respect to an
aggregate number of                Shares exceeding the total number he holds.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(**) | In
the event that the proxy does not hold an Israeli Identification number,
               indicate a passport number, if any, and the name of the country which
issued the                passport.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

25

---

---



| | 20.3. | A
vote in accordance with a deed of authorization shall be lawful even if prior
               to it, the appointer died or became incapacitated or bankrupt, or if it is
a                corporation  was liquidated, or if he cancelled the deed of
authorization                or transferred the Share in respect of which it was given,
unless a notice in                writing was received at the Office of the Company prior
to the meeting with                respect to the occurrence of such an event.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21. | Deed
of Vote
|--- | ------------

| | 21.1. | A
Shareholder may vote in a General Meeting by means of a Deed of Vote on the
               issues specified below, unless the Company is entitled by Law to a partial
or                full exemption from the requirement for the delivery of Deeds of Vote,
either                generally or specifically:
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 21.1.1. | The
appointment and dismissal of Directors.
| | ------- | -------------------------------------------

| | 21.1.2. | The
approval of actions with interested parties, subject to sections 268-275 of
               the Companies Law.
| | ------- | -----------------------------------------------------------------------------------------------------------------

| | 21.1.3. | The
approval of an action by an officer which conflicts with his duty of loyalty
               toward the Company, subject to Section 255 of the Companies Law.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 21.1.4. | A
merger subject to Section 320 of the Companies Law.
| | ------- | -----------------------------------------------------

| | 21.1.5. | Any
issue which the Articles of Association provide can be voted thereon by
               means of a Deed of Vote.
| | ------- | -------------------------------------------------------------------------------------------------------------------

| | 21.1.6. | Other
issues prescribed by Law.
| | ------- | -------------------------------

| | 21.2. | The
Draft of the Deed of Vote
| | ----- | -----------------------------

| | The
Deed of Vote shall be signed by the Shareholder and shall be in or substantially in the
form specified below, or any such other form acceptable to the Board of Directors of the
Company. The corporate secretary or any one authorized by the Board of Directors to
convene the meeting, shall be entitled to amend the form of the Deed of Vote in
accordance with the resolutions on the agenda.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

26

---

---



# Deed of Vote

Date: ________

Partner Communications
Company Ltd.[Address of the Company]

Re: [Annual/Extraordinary] General Meeting of the Shareholders
                                             to be on ___________________

I, the undersigned _________________,
Identification No. / Registration No. _____________, of ________________, being the
registered holder / the holder an appropriate Deed of Authorization, attached hereto (*)
of ________ (**) Ordinary Shares having a par value of NIS 0.01 each, hereby notify you
that my vote in the General Meeting and in any adjourned meeting of the Company is as
specified below.

|Item No. of the
Resolution on the
Agenda | Subject of the
Resolution | Vote (***) | Personal Interest of the Shareholder in the Resolution (****)
|---------------------------------------- | ------------------------- | ---------- | -------------------------------------------------------------
|                                         |                           | In Favor   | Abstain                                                      
|                                         |                           |            |                                                              
|                                         |                           |            |                                                              
|                                         |                           |            |                                                              

|o | I,
the undersigned,  hereby declare that either my holdings or my vote require the consent
of         the Minister of Communications pursuant to Sections 21 or 23 to the License.
(*****)
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o | I, the
undersigned,  hereby declare that neither my holdings nor my vote, require the consent of
        the Minister of Communications pursuant to Sections 21 or 23 to the License.
(*****)
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Signature

---

|(*) | In
the event that the Shares are held by means of a Registration Company, a
               power of attorney on behalf of the Registration Company should be enclosed
and                the Deed of Vote should be signed.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(**) | In
the event that a Shareholder wishes to vote in a different manner with
               respect to each part of his Shares, a separate Deed of Vote should be
filed for                each quantity of Shares in respect of which he intends to vote
differently.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

27

---

---



|(***) | An
X should be marked in the appropriate column and with respect to
               each resolution. In the event that more than one choice are marked for a
certain                resolution, the vote in respect of that resolution shall be
disqualified.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(****) | In
resolutions for which a majority which includes a third of the votes of those
               not having a personal interest in the transaction is required for
adoption, an X                should be marked in the appropriate column. If an X is not
marked in either                column, the vote in respect of the same resolution shall
be disqualified.
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*****) | An X should
be marked in the appropriate column. If an X is not marked in either column, or if an X
is marked in both column, the vote shall be disqualified.
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 21.3. | The
Sending of a Deed of Vote
| | ----- | -----------------------------

| | The
Deed of Vote shall be sent by the Company to the Shareholders who are registered in the
Shareholder Register of the Company and who are entitled to vote in the General Meeting,
together with the notice with respect to General Meetings.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Deed of Vote shall be sent by the Company and at its expense.
| | -----------------------------------------------------------------

| | 21.4. | Manner
of Use of the Deed of Vote
| | ----- | ---------------------------------

| | A
duly executed Deed of Vote which was received at the Office of the Company at least two
Business Days prior to the date of the General Meeting shall constitute the participation
and voting of the Shareholder who has delivered it, for each and every purpose, including
for the purpose of determining the lawful quorum at a meeting. A Deed of Vote received by
the Company, in accordance with this Article, with respect to a certain issue, at which
voting in the General Meeting did not take place, shall be viewed as an abstain with
respect to the resolution to adjourn the meeting and, at the adjourned meeting, shall be
voted in accordance with the manner set forth therein.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 21.5. | Board
Recommendation
| | ----- | --------------------

| | The
Board of Directors and any other person lawfully demanding the holding of an
extraordinary General Meeting may send to the Shareholders a recommendation in order to
persuade the Shareholders with respect to the items which are on the agenda of said
meeting. The recommendation shall be delivered at the expense of the Company together
with the Deed of Vote. In the event that a General Meeting is convened with respect to
any of the issues specified in Article 21.1 above, a Shareholder may submit to the
Company a request that a recommendation be delivered on his behalf to the other
Shareholders. Unless it is otherwise prescribed by Law, the said recommendation shall be
delivered at the expense of the Shareholder, and only if it was received at the
registered office of the Company at least 10 days prior to the General Meeting.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Board of Directors of the Company may send to the Shareholders a recommendation in
response to a recommendation delivered in accordance with the provisions of this Article,
or in response to any other submission to the Shareholders. Such recommendation shall be
delivered at the expense of the Company.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

28

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# Chapter Four 
The Board of Directors

|22. | The
Authority of the Board of Directors
|--- | ---------------------------------------

| | 22.1. | The
authority of the Board of Directors is as specified both in the Law and in
               the provisions of these Articles of Association.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------

| | 22.2. | Signature
Authority and Powers of Attorney
| | ----- | ------------------------------------------

| | 22.2.1. | The
Board of Directors shall determine the person(s) with authority to sign for
               and on behalf of the Company with respect to various issues. The signature
of                such person(s), appointed from time to time by the Board of Directors,
whether                generally or for a specific issue, whether alone or together with
others, or                together with the seal or the stamp of the Company or its
printed name, shall                bind the Company, subject to the terms and conditions
set by the Board of                Directors.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 22.2.2. | The
Board of Directors may set separate signature authorities with respect to
               different issues and different amounts.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------

| | 22.2.3. | The
Board of Directors may, from time to time, authorize any person to be the
               representative of the Company with respect to those objectives and subject
to                those conditions and for that time period, as the Board of Directors
deems fit.                The Board of Directors may also grant any representative the
authority to                delegate any or all of the authorities, powers and discretion
given to the Board                of Directors.
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 22.3. | The
Registered Office of the Company
| | ----- | ------------------------------------

| | The
Board of Directors shall fix the location of the Office of the Company.
| | ---------------------------------------------------------------------------

|23. | The
Appointment of Directors and the Termination of Their Office
|--- | ----------------------------------------------------------------

| | 23.1. | The
Number of Directors
| | ----- | -----------------------

| | The
number of Directors in the Company shall not be less than seven (7) or more than
seventeen (17).
| | ----------------------------------------------------------------------------------------------------

| | 23.2. | The
Identity of a Director
| | ----- | --------------------------

| | 23.2.1. | A
member of the Board of Directors may hold another position with the Company.
| | ------- | ------------------------------------------------------------------------------

29

---

---



| | 23.2.2. | A
corporation may serve as a Director in the Company, subject to the provisions
               of Article 23.6 below.
| | ------- | ---------------------------------------------------------------------------------------------------------------------

| | 23.2.3. | For
as long as any individual or an entity which is an Interested Party in the
               Company is also an Interested Party in Cellcom (Israel) Ltd. (hereinafter
               Cellcom), such Interested Party or an Office Holder of an
Interested                Party in Cellcom or an Office Holder of any entity controlled
by an Interested                Party in Cellcom (other than Elron Electronic Industries
Ltd (Elron)                or an entity controlled by Elron) will not serve
as an Office Holder of the                Company, and no Interested Party in Cellcom or
any entity controlled by such                Interested Party, may appoint more than two
Directors to the Board of Directors                of the Company. For the purposes of
this Article, the terms control,                Interested Party and
Office Holder shall bear the same                meaning as in, and shall be
interpreted in accordance with, the License.
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.2.4. | The
Board of Directors shall include independent and/or external Directors
               required to comply with the applicable requirements of any Law, the Nasdaq
Stock                Market, the London Stock Exchange and any other investment exchange
on which the                securities of the Company are or may become quoted or listed.
The requirements                of the Companies Law applicable to an external Director (Dahatz)
shall                prevail over the provisions of these Articles of Association to the
extent these                Articles of Associations are inconsistent with the Companies
Law, and shall                apply to the extent these Articles of Associations are
silent.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.2.5. | At
least 10% of the members of the Board of Directors of the Company shall be
               comprised of Qualified Israeli Directors. Notwithstanding the above, if
the                board is comprised of up to 14 members, one Qualified Israeli Director
shall be                sufficient, and if the board is comprised of between 15 and 24
members, two                Qualified Israeli Directors shall be sufficient.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.2.6. | Notwithstanding
any other provision of these Articles, a Qualified Israeli                Director shall
be appointed as a member of the Board of Directors, and may be                removed
from such office, only upon written notice to the Company Secretary of                his
or her appointment or removal by the Founding Israeli Shareholders holding
               Minimum Israeli Holding Shares. For purposes of this section, a notice
signed by                at least two of the Founding Israeli Shareholders who are the
record holders of                at least 50% of Minimum Israeli Holding Shares shall be
deemed to be sufficient                notice on behalf of all holders of Minimum Israeli
Holding Shares.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.3. | The
Election of Directors and their Terms of Office
| | ----- | ---------------------------------------------------

30

---

---



| | 23.3.1. | The
Directors shall be elected at each Annual Meeting and shall serve in office
               until the close of the next Annual Meeting, unless their office becomes
vacant                earlier in accordance with the provisions of these Articles of
Association. Each                Director of the Company shall be elected by an Ordinary
Majority at the Annual                Meeting; provided, however, that external Directors
shall be elected in                accordance with applicable law and/or any relevant
stock exchange rule                applicable to the Company. The elected Directors shall
commence their terms from                the close of the Annual Meeting at which they
are elected, unless a later date                is stated in the resolution with respect
to their appointment.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.3.2. | In
each Annual Meeting, the Directors that were elected in the previous Annual
               Meeting, and thereafter, in any Extraordinary Meeting shall be deemed to
have                resigned from their office. A resigning Director may be reelected.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.3.3. | Notwithstanding
the other provisions of these Articles of Association and                without
derogating from Article 23.4, an Extraordinary Meeting of the Company                may
elect any person as a Director, to fill an office which became vacant or to
               serve as an external Director (Dahatz) or an independent Director
and                also in any event in which the number of the members of the Board of
Directors                is less than the minimum set in the Articles of Association. Any
Director                elected in such manner (excluding an external Director (Dahatz)
shall                serve in office until the coming Annual Meeting, unless his office
becomes                vacant earlier in accordance with the provisions of these Articles
of                Association and may be reelected.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.3.4. | An
elected external Director (Dahatz) shall commence his term from the
               date of, and shall serve for the period stated in, the resolution of the
General                Meeting at which he was elected, notwithstanding Article 23.3
above, unless his                office becomes vacant earlier in accordance with the
provisions of the Companies                Law. A General Meeting may reelect an external
Director (Dahatz) for                additional term(s) as permitted by the
Companies Law.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.4. | The
election of Directors by the Board of Directors
| | ----- | ---------------------------------------------------

| | The
Board of Directors shall have the right, at all times, upon approval of at least 75% of
the Directors of the Company, to elect any person as a Director, to fill an office which
became vacant, and also in any event in which the number of the members of the Board of
Directors is less than the minimum set in the Articles of Association. Any Director
elected in such manner shall serve in office until the coming Annual Meeting and may be
reelected.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.5. | Alternate
Director
| | ----- | ------------------

31

---

---



| | Any
Director may, from time to time, appoint for himself an alternate Director (hereinafter:
the Alternate Director), dismiss such Alternate Director and also appoint
another Alternate Director instead of any Alternate Director, whose office becomes
vacant, due to whatever cause, whether for a certain meeting or generally. Anyone who is
not qualified to be appointed as a Director and also anyone serving as a Director or as
an existing Alternate Director shall not serve as an Alternate Director.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.6. | Representatives
of a Director that is a Corporation
| | ----- | ---------------------------------------------------

| | A
Director that is a corporation shall appoint an individual, qualified to be appointed as
a Director in the Company, in order to serve on its behalf, either generally or for a
certain meeting, or for a certain period of time and the said corporation may also
dismiss that individual and appoint another in his stead (hereinafter: Representatives
of a Director).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.7. | Manner
of Appointment or Dismissal of an Alternate Director or a Representative           of a
Director that is a Corporation
| | ----- | -----------------------------------------------------------------------------------------------------------------------------

| | Any
appointment or dismissal of Representatives of Directors, when such Directors are
corporations, or of Alternate Directors, shall be made by means of a notice in writing to
the corporate secretary, signed by the appointing or dismissing body and shall become
valid upon the date indicated in the appointment or dismissal notice or upon the date of
its delivery to the corporate secretary, whichever is the later.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.8. | Miscellaneous
Provisions with Respect to Alternate Directors and Representatives                of
Directors that are Corporations.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------

| | 23.8.1. | Any
person, whether he is a Director or not, may serve as the representative of
               a Director, and any one person may serve as the representative of several
               Directors.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.8.2. | The
Representative of a Director  in addition to his own vote, if he is
               serving as a Director  shall have a number of votes corresponding to
the                number of Directors represented by him.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.8.3. | An
Alternate Director and the Representative of a Director shall have all the
               authority of the Director for whom he is serving as an Alternate Director
or as                a representative, with the exception of the authority to vote in
meetings at                which the Director is present in person.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.8.4. | The
office of an Alternate Director or a representative of a Director shall
               automatically become vacant, if the office of the Director for whom he is
               serving as an Alternate Director or as a representative becomes vacant.
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

32

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| | 23.9. | Termination
of the Term of a Director
| | ----- | -------------------------------------

| | The
term of a Director shall be terminated in any of the following cases:
| | -------------------------------------------------------------------------

| | 23.9.1. | If
he resigns from his office by way of a signed letter, filed with the           corporate
secretary at the Company's Office;
| | ------- | ------------------------------------------------------------------------------------------------------------------------------

| | 23.9.2. | If
he is declared bankrupt or if he reaches a settlement with his creditors
               within the framework of bankruptcy procedures;
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------

| | 23.9.3. | If
he is declared by an appropriate court to be incapacitated;
| | ------- | --------------------------------------------------------------

| | 23.9.4. | Upon
his death and, in the event of a corporation, if a resolution has been
               adopted for its voluntary liquidation or a liquidation order has been
issued to                it;
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.9.5. | If
he is removed from his office by way of a resolution, adopted by the General
               Meeting of the Company, even prior to the completion of his term of
office;
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.9.6. | If
he is convicted of a crime, as stated in Section 232 of the Companies Law; or
| | ------- | --------------------------------------------------------------------------------

| | 23.9.7. | If
his term is terminated by the Board of Directors in accordance with the
               provisions of Section 231 of the Companies Law.
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------

| | 23.10. | The
Implications on the Board of Directors of the Termination of the Term of a
               Director.
| | ------ | -------------------------------------------------------------------------------------------------------

| | In
the event that an office of a Director becomes vacant, the remaining Directors are
entitled to continue operating, so long as their number has not decreased below the
minimum number of Directors set forth in Article 23.1.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
the event that the number of Directors decreased below that minimum number, the remaining
Directors shall be entitled to act solely for the convening of a General Meeting of the
Company for the purpose of electing additional Directors to the Board of Directors.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 23.11. | Compensation
of Members of the Board of Directors
| | ------ | -------------------------------------------------

| | Members
of the Board of Directors who do not hold other positions in the Company and who are not
external Directors shall not receive any compensation from the Company, unless such
compensation is approved by the General Meeting and according to the amount determined by
the General Meeting, subject to the provisions of the Law.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
compensation of the Directors may be fixed, as an all-inclusive payment or as payment for
participation in meetings or in any combination thereof.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------

33

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| | The
Company may reimburse expenses incurred by a Director in connection with the performance
of his office, to the extent provided in a resolution of the Board of Directors.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|24. | Actions
of Directors
|--- | --------------------

| | 24.1. | Convening
Meetings of the Board of Directors
| | ----- | --------------------------------------------

| | 24.1.1. | The
chairman of the Board of Directors may convene a meeting of the Board of
               Directors at any time.
| | ------- | ------------------------------------------------------------------------------------------------------------------

| | 24.1.2. | The
chairman of the Board of Directors shall convene a meeting of the Board of
               Directors at least four times a year, in a manner allowing the Company to
fulfil                the provisions of the Law with respect to the publication of
Financial                Statements and reporting to the public.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.1.3. | The
chairman of the Board of Directors shall convene a meeting of the Board of
               Directors on a specific issue if requested by at least two Directors or
one                Director, if he is an external Director, within no more than 14 days
from the                date of the request.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.1.4. | The
chairman of the Board of Directors shall act forthwith for the convening of
               a meeting of the Board of Directors, within 14 days from the time that a
               Director in the Company has informed him of a matter related to the
Company in                which there is an apparent violation of the Law or a breach of
proper management                of the business, or from the time that the auditor of
the Company has reported                to him that he had become aware of material flaws
in the accounting oversight of                the Company.
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.1.5. | In
the event that a notice or a report of the General Manager requires an action
               of the Board of Directors, the chairman of the Board of Directors shall
               forthwith convene a meeting of the Board of Directors, which should be
held                within 14 days from the date of the notice or the report.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.2. | Convening
of a Meeting of the Board of Directors
| | ----- | ------------------------------------------------

| | 24.2.1. | Any
notice with respect to a meeting of the Board of Directors may be given in
               writing, so long as the notice is given at least 14 days prior to the date
fixed                for the meeting, unless all the members of the Board of Directors or
their                Alternate Directors or their representatives agree on a shorter time
period. A                notice, as stated, shall be delivered in writing or transmitted
via facsimile or                E-mail or through another means of communication, to the
address or facsimile                number or to the E-mail address or to an address
where messages can be delivered                through other means of communication, as
the case may be, as the Director                informed the corporate secretary, upon
his appointment, or by means of a written                notice to the corporate
secretary thereafter.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

34

---

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| | A
notice, which was delivered or transmitted, as provided in this Article, shall be deemed
to be personally delivered to the Director on its delivery date.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.2.2. | In
the event that a Director appointed an Alternate Director or a
               representative, the notice shall be delivered to the Alternate Director or
the                representative, unless the Director instructed that the notice should
be                delivered to him as well.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.2.3. | The
notice shall include the venue, date and time of the meeting of the Board of
               Directors, arrangements with respect to the manner of management of the
meeting                (in cases where telecommunications are used), the details of the
issues on its                agenda and any other material that the chairman of the Board
of Directors                requests be attached to the summoning notice with respect to
the meeting.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.3. | The
Agenda of Meetings of Board of Directors
| | ----- | --------------------------------------------

| | The
agenda of meetings of the Board of Directors shall be determined by the chairman of the
Board of Directors and shall include the following issues:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.3.1. | Issues
determined by the chairman of the Board of Directors.
| | ------- | ------------------------------------------------------------

| | 24.3.2. | Issues
for which the meeting is convened in accordance with Article 24.1 above.
| | ------- | -------------------------------------------------------------------------------

| | 24.3.3. | Any
issue requested by a Director or by the General Manager within a reasonable
               time prior to the date of the meeting of the Board of Directors (taking
into                account the nature of the issue).
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.4. | Quorum
| | ----- | ------

| | The
quorum for meetings of the Board of Directors shall be a majority of the Directors, which
must include one external Director.
| | ---------------------------------------------------------------------------------------------------------------------------------

| | 24.5. | Conducting
a Meeting Through Means of Communication
| | ----- | ---------------------------------------------------

| | The
Board of Directors may conduct a meeting of the Board of Directors through the use of any
means of communications, provided all of the participating Directors can hear each other
simultaneously.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.6. | Voting
in the Board of Directors
| | ----- | --------------------------------

| | Subject
to Article 23.4 and Article 44, Issues presented at meetings of the Board of Directors
shall be decided upon by a majority of the votes of the Directors present (or
participating, in the case of a vote through a permitted means of communications) and
voting, subject to the provisions of Article 23.8 above, with respect to Alternate
Directors and representatives of Directors that are corporations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

35

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| | Each
Director shall have a single vote.
| | ---------------------------------------

| | 24.7. | Written
Resolutions
| | ----- | -------------------

| | A
written resolution signed by all the Directors shall be deemed as a resolution lawfully
adopted at a meeting of the Board of Directors. Such a resolution may be made in several
copies of the same Document, each of them signed by one Director or by several Directors.
Such a resolution may be adopted by signature of only a portion of the Directors, if all
of the Directors who have not signed the resolution were not entitled to participate in
the discussion and to vote on such resolution in accordance with any Law whatsoever, so
long as they confirm in writing that they are aware of the intention to adopt such a
resolution.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.8. | Resolutions
Approved by Means of Communications
| | ----- | -----------------------------------------------

| | A
resolution approved by use of a means of communications by the Directors shall be deemed
to be a resolution lawfully adopted at a meeting of the Board of Directors, and the
provisions of Article 24.6 above shall apply to the said resolution.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.9. | The
Validity of Actions of the Directors
| | ----- | ----------------------------------------

| | All
actions taken in good faith in a meeting of the Board of Directors or by a committee of
the Board of Directors or by any person acting as a Director shall be valid, even if it
subsequently transpires that there was a flaw in the appointment of such a Director or
person acting as such, or if any of them were disqualified, as if any such person was
lawfully appointed and was qualified to serve as a Director.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.10. | Minutes
of Meetings of the Board of Directors
| | ------ | ---------------------------------------------

| | The
chairman of the Board of Directors shall cause that the minutes of meetings of the Board
of Directors shall be properly maintained and shall include the following:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 24.10.1. | Names
of those present and participating at each meeting.
| | -------- | ---------------------------------------------------------

| | 24.10.2. | All
the resolutions and particulars of the discussion of said meetings.
| | -------- | -----------------------------------------------------------------------

| | Any
such minutes signed by the chairman of the Board of Directors presiding over that meeting
or by the chairman of the Board of Directors at the following meeting, shall be viewed as
prima facie evidence of the issues recorded in the minutes.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

36

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|25. | Committees
of the Board of Directors
|--- | ------------------------------------

| | 25.1. | Subject
to the provisions of the Companies Law, the Board of Directors may           delegate its
authorities or any part of them to committees, as they deem fit,           and they may
from time to time cancel the delegation of such an authority. Any           such
committee, while utilizing an authority as stated, is obligated to fulfil           all
of the instructions given to it from time to time by the Board of Directors.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 25.2. | Subject
to the provisions of the Companies Law, each committee of the Board of
          Directors shall consist of at least two Directors, and it may include members
          who are not Directors, with the exception of the audit committee which shall
          consist of at least three (3) Directors, and all of the external Directors of
          the Company shall be members of it.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 25.3. | The
provisions with respect to meetings of the Board of Directors shall apply to
          the meetings and discussions of each committee of the Board of Directors, with
          the appropriate changes, provided that no other terms are set by the Board of
          Directors in this matter, and provided that the lawful quorum for the meetings
          of the committee, as stated, shall be at least a majority of the members of the
          committee, unless otherwise required by Law.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|25A. | Committee
for Security Matters
|---- | ------------------------------

| | 25A.1. | Notwithstanding
any other provision in these Articles, the Board of Directors                shall
appoint from among its members who have security clearance and security
               compatibility to be determined by the General Security Service (Directors
               with Clearance) a committee to be designated the Committee for
               Security Matters. The members of the Committee for Security Matters
shall                include at least four (4) Directors with Clearance including at
least one                external director. Subject to section 25A.2 below, security
matters shall be                considered only in the context of the Committee for
Security Matters. Any                decision of, or action by the Committee for Security
Matters shall have the same                effect as if it had been made or taken by the
Board of Directors. The Board of                Directors shall consider a security
matter only if required pursuant to section                25A.2 below, and subject to
the terms of that section. For purposes of this                section 25A, security
matters shall be defined in the same manner as                defined in the Bezeq
Order (Determination of Essential Service Provided by                Bezeq-The Israeli
Telecommunications Company Ltd.), 1997, as of March 9, 2005.
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 25A.2. | Security
matters which the audit committee or board of directors shall be                required
to consider in accordance with the mandatory rules of the Companies Law                or
other Law applicable to the Company, shall be considered to the extent
               necessary only by Directors with Clearance. Other Directors shall not be
               entitled to participate in meetings of the audit committee or board of
directors                dealing with security matters, or to receive information or
documents related to                these matters. A quorum for these meetings shall
include only Directors with                Clearance.
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

37

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| | 25A.3. | Any
director or officer of the Company who would otherwise be required to           receive
information or participate in meetings by virtue of his or her position           or
these Articles or any Law, but who is prevented from doing so by the           provisions
of this Article 25A, will be released from any liability for any           claim of
breach of duty of care to the Company which results from her or his           inability
to receive information or participate in meetings, and the Company           shall
indemnify any such director or officer and hold her or him harmless to the
          maximum extent permitted by law for any injury or damage she or he incurs as a
          result of the inability to receive such information or participate in such
          meetings.
| | ------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 25A.4. | The
shareholders at a general meeting shall not be entitled to assume,           delegate,
transfer or exercise any of the authorities granted to any other           corporate body
in the Company with respect to security matters.
| | ------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 25A.5. | (1)
The Minister of Communications shall be entitled to appoint an observer           (the
Security Observer) to all meetings of the board of directors           and
its committees. The Security Observer shall have the security clearance and
          security compatibility to be determined by the General Security Service.
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2)       
               The Security Observer shall be an employee of the State of Israel qualified to
               serve as a director pursuant to Chapter C of the Government Companies Law, 1975.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3)       
               In addition to any other obligations under Law, the Security Observer shall be
               bound to preserve the confidentiality of [information relating to] the Company,
               except as required to fulfill his responsibilities as an observer. The Security
               Observer will not act as an observer or in any other position at a competitor of
               the Company, and will avoid a conflict between his position as an observer and
               the interests of the Company. The Security Observer shall undertake not to serve
               as an observer or officer or director, and not serve in any other capacity or be
               employed, directly or indirectly, by any entity competing with the Company or in
               a position of conflict of interest with the Company during the period of his
               service as the Security Observer and for two years after termination of such
               period.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4)       
               Notices of meetings of the board of directors and its committees, including of
               the Committee for Security Matters, shall be delivered to the Security Observer,
               and he shall be entitled to participate in each such meeting.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

38

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| | (5)       
               The Security Observer shall have the same right to obtain information from the
               Company as that of a Director. If the Company believes that specific information
               requested is commercially sensitive and not required by the Security Observer
               for fulfillment of his duties, the Company may delay delivery of the information
               upon notice to the Security Observer. If the Security Observer still believes
               the information is needed for his duties, the matter shall be brought for
               decision to the head of the General Security Service.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6)       
               If the Security Observer believes that the Company has made a decision, or is
               about to make a decision, in a security matter, which conflicts with a provision
               of the License or section 13 of the Communications Law (Telecommunications and
               Broadcasting), 1982 or section 11 of the General Security Service Law, 2002, he
               shall promptly notify the Company in writing. Said notice shall be delivered to
               the chairman of the board of directors and chairman of the Committee for
               Security Matters and shall provide an appropriate defined period of time, in
               light of the circumstances, in which the Company shall be required to correct
               the violation or change the decision, to the extent possible.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. | In
order to avoid duplicative mechanisms with respect to our license
                    requirements regarding Israeli holdings and holdings of founding
shareholders                     and their substitutes, the following amendments to
section 44 are proposed:
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|26. | Chairman
of the Board of Directors
|--- | ----------------------------------

| | 26.1. | Appointment
| | ----- | -----------

| | 26.1.1. | The
Board of Directors shall choose one of its members to serve as the chairman
               of the Board of Directors, and shall set in the appointing resolution the
term                for his service.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 26.1.2. | Unless
otherwise provided in the appointing resolution, the chairman of the                Board
of Directors shall be chosen each and every calendar year at the first
               meeting of the Board of Directors held after the General Meeting in which
               Directors were appointed to the Company.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 26.1.3. | In
the event that the chairman of the Board of Directors ceases to serve as a
               Director in the Company, the Board of Directors in its first meeting held
               thereafter shall choose one of its members to serve as a new chairman who
will                serve in his position for the term set in the appointing resolution,
and if no                period is set, until the appointment of a chairman, as provided
in this Article.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

39

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| | 26.1.4. | In
the event that the chairman of the Board of Directors is absent from a
               meeting, the Board of Directors shall choose one of the Directors present
to                preside at the meeting.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 26.2. | Authority
| | ----- | ---------

| | 26.2.1. | The
chairman of the Board of Directors shall preside over meetings of the Board
               of Directors.
| | ------- | ------------------------------------------------------------------------------------------------------------

| | 26.2.2. | In
the event of a deadlock vote, the chairman of the Board of Directors shall
               not have an additional or casting vote.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------

| | 26.2.3. | The
chairman of the Board of Directors is entitled, at all times, at his
               initiative or pursuant to a resolution of the Board of Directors, to
require                reports from the General Manager in matters pertaining to the
business affairs                of the Company.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 26.3. | Reservations
with Regard to Actions of the Chairman of the Board of Directors
| | ----- | -----------------------------------------------------------------------------

| | 26.3.1. | The
chairman of the Board of Directors shall not serve as the General Manager of
               the Company, unless he is appointed in accordance with the provisions of
Article                27.2 below.
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 26.3.2. | The
chairman of the Board of Directors shall not serve as a member of the Audit
               Committee.
| | ------- | ---------------------------------------------------------------------------------------------------------

# Chapter Five 
Officers who are not Directors, and the Auditor

|27. | The
General Manager
|--- | -------------------

| | 27.1. | The
Appointment and Dismissal of the General Manager
| | ----- | ----------------------------------------------------

| | 27.1.1. | The
Board of Directors shall appoint a General Manager for a fixed period of
               time or for an indefinite period of time. The Board of Directors may
appoint                more than one General Manager.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 27.1.2. | The
compensation and employment conditions of the General Manager shall be
               determined by the Board of Directors in any manner it deems fit. Where the
               compensation of the General Manager is regarded by the Board of Directors
in                accordance with the Company Law as an exceptional transaction and
               also in cases of the granting of a release, insurance, liability for
               indemnification or indemnification given by a permit, said compensation
requires                the prior approval of the audit committee.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 27.1.3. | The
Board of Directors may from time to time remove the General Manager from his
               office or dismiss the General Manager and appoint another or others in his
               stead.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

40

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| | 27.2. | The
Chairman of the Board of Directors as the General Manager
| | ----- | -------------------------------------------------------------

| | 27.2.1. | The
General Meeting of the Company is entitled to authorize the chairman of the
               Board of Directors to fulfil the position of the General Manager and to
exercise                his authority, so long as the majority of the votes in the
General Meeting                adopting such a resolution include at least two thirds of
the votes of                Shareholders present and entitled to vote at the meeting who
are not controlling                Shareholders of the Company as defined in the
Companies Law or representatives                of any of them. Abstain votes
shall not be taken into account in the                counting of the votes of the
Shareholders.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 27.2.2. | The
validity of a resolution provided in Article 27.2.1 above is restricted to a
               maximum period of three years from the date of the adoption of the
resolution by                the General Meeting. In the event that no period was set in
the resolution, the                period shall be deemed to be for three years. Prior to
the completion of the                three year period, as aforesaid, and even after the
end of this period, the                General Meeting is entitled to extend the validity
of such resolution.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 27.2.3. | A
resolution, as stated, may relate to the authority of the chairman of the
               Board of Directors, generally, or to a specific person who is serving as
the                chairman of the Board of Directors.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 27.3. | The
Authority of the General Manager and Subordination to the Board of Directors
| | ----- | --------------------------------------------------------------------------------

| | 27.3.1. | The
General Manager is responsible for the day-to-day management of the affairs
               of the Company within the framework of the policy set by the Board of
Directors                and subject to its instructions.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
General Manager shall have all administrative and operational authority which were not
conferred by Law or pursuant to these Articles of Association to any other corporate
organ of the Company, and he shall be under the supervision of the Board of Directors and
subject to its instructions.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
General Manager shall appoint and dismiss officers of the Company, with the exception of
Directors, and he shall also determine the terms of their employment, unless otherwise
resolved by the Board of Directors and provided, however, that the appointment and
dismissal of senior managers of the Company shall require consultation with and approval
by the Board of Directors.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 27.3.2. | The
Board of Directors may instruct the General Manager on how to act with
               respect to a certain issue. If the General Manager fails to fulfil the
               instruction, the Board of Directors may exercise the required authority in
order                to act in the place of the General Manager.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

41

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| | The
Board of Directors may assume the authority granted to the General Manager, either with
respect to a certain issue or for a certain period of time.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | 27.3.3. | In
the event that the General Manager is unable to exercise his authority, the
               Board of Directors may exercise such authority in his stead, or authorize
               another to exercise such authority.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 27.4. | Reporting
Duties of the General Manager
| | ----- | ---------------------------------------

| | The
General Manager is obligated to notify the chairman of the Board of Directors of any
exceptional matter which is material to the Company, or of any material deviation by the
Company from the policy set by the Board of Directors. In the event that the Company
shall be without a chairman of the Board of Directors for whatever reason the General
Manager shall notify all the members of the Board of Directors, as aforesaid. The General
Manager shall deliver to the Board of Directors reports on issues, at such time and in
such scope, as is determined by the Board of Directors.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 27.5. | Delegating
Authority of the General Manager
| | ----- | -------------------------------------------

| | The
General Manager, upon approval of the Board of Directors, may delegate to his
subordinates any of his authority. However, such delegation of authority shall not
release the General Manager from his liability.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|28. | The
Corporate Secretary, Internal Controller and Other Officers of the                Company
|--- | ---------------------------------------------------------------------------------------------

| | 28.1. | The
corporate secretary
| | ----- | -----------------------

| | 28.1.1. | The
Board of Directors is entitled to appoint a corporate secretary on terms it
               deems fit, joint secretaries, subsecretaries and to determine the
areas of                their functions and authorities.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 28.1.2. | In
the event that no corporate secretary has been appointed, the General Manager
               or anyone authorized by him shall fulfil the functions assigned to the
corporate                secretary, in accordance with any Law, to these Articles of
Association and the                resolutions of the Board of Directors.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 28.1.3. | The
corporate secretary shall be responsible for all documents which are kept at
               the Office, as stated in Section 124 of the Companies Law, and he shall
manage                all the registries maintained by the Company in accordance with the
Law or                Companies Law.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

42

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| | 28.2. | Internal
Controller
| | ----- | -------------------

| | 28.2.1. | The
internal controller of the Company shall report to the chairman of the Board
               of Directors.
| | ------- | -------------------------------------------------------------------------------------------------------------

| | 28.2.2. | The
internal controller shall file with the Board of Directors a proposal for an
               annual or other periodic work plan, which shall be approved by the Board
of                Directors, subject to any changes it deems fit.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 28.3. | Other
Officers of the Company
| | ----- | -----------------------------

| | The
Board of Directors may decide that in addition to the General Manager and the corporate
secretary, other officers may be appointed, whether generally or for a specific issue. In
such event, the Board of Directors shall appoint the officer, define his position and
authority, and set his compensation and terms of employment.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Board of Directors is entitled to authorize the General Manager to fulfil any or all of
its authorities, as stated.
| | -----------------------------------------------------------------------------------------------------------------------

|29. | The
Auditor
|--- | -----------

| | 29.1. | The
Shareholders at the Annual Meeting shall appoint an auditor for a period           until
the close of the following Annual Meeting. The Annual Meeting may appoint           an
auditor for a period not to extend beyond the close of the third Annual           Meeting
following the Annual Meeting in which he was appointed. In the event           that the
auditor was appointed for said period, the Annual Meeting shall not           address the
appointment of the auditor during said period, unless a resolution           is adopted
with respect to the termination of his service.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 29.2. | The
General Meeting is entitled at all times to terminate the service of the
          auditor or to decide not to renew it.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------

| | 29.3. | The
Board of Directors shall determine the compensation of the auditor of the
          Company and it shall report in that respect to the Annual Meeting of the
          Company.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 29.4. | The
Board of Directors shall set the compensation of the auditor for additional
          services which are not regarded as oversight activities, and it shall report in
          this respect at the Annual Meeting of the Company.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

43

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# Chapter Six  The
Share Capital of the Company and its Distribution

|30. | Permitted
Distributions
|--- | -----------------------

| | 30.1. | Definitions
| | ----- | -----------

| | In
this Chapter, the following terms shall be construed, in accordance with their definition
in Sections 301 and 302 of the Companies Law: distribution, acquisition,
profits, profit test, adjusted financial statements and
balances.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 30.2. | Distribution
of Profits
| | ----- | -----------------------

| | The
Company shall not make any distribution except from its profits, provided that the
Company shall not make any distribution if there is a reasonable fear that such
distribution shall preclude the Company from having the ability to meet its present and
anticipated liabilities, as they become due. Notwithstanding the aforesaid, the Company,
with the approval of the Court, is entitled to make a distribution which fails to meet
the profit test.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 30.3. | Allotment
for a Consideration Below the Par Value
| | ----- | -------------------------------------------------

| | In
the event the Board of Directors decides to allot Shares having a par value, for
consideration which is less than their par value, including Bonus Shares, the Company
shall convert into share capital from its profits, premium on its Shares, or any other
source, included in its shareholders equity, as stated in its most recent Financial
Statements, an amount equal to the difference between the par value and the consideration.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Even
if the aforesaid is not done, with the approval of the Court, the Company shall be
entitled to make an allotment of Shares, for consideration which is less than their par
value.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|31. | Dividends
and Bonus Shares
|--- | --------------------------

| | 31.1. | Right
to Dividends or Bonus Shares
| | ----- | ----------------------------------

| | 31.1.1. | A
Shareholder of the Company shall have the right to receive dividends or Bonus
               Shares, if the Company so decides in accordance with Article 31.2 below,
               consistent with the rights attaching to such Shares.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.1.2. | Dividends
or Bonus Shares shall be distributed or allotted to those who are
               registered in the Shareholder Register on the date of the resolution
approving                the distribution or allotment or upon a latter date, if another
date is                determined for this purpose in same resolution (hereinafter: the
               Determining Date).
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

44

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| | 31.1.3. | In
the event that the share capital of the Company consists of Shares having
               various par values, dividends or Bonus Shares shall be distributed in
proportion                to the par value of each Share.
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.1.4. | Subject
to special rights conferred upon Shares in accordance with the                conditions
of their allotment, profits of the Company which the Company decides                to
distribute as a dividend or as Bonus Shares shall be paid in proportion to
               the amount which was paid or credited on the account of the par value of
the                Shares, held by the Shareholder.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.1.5. | In
the event that it was not otherwise determined in the conditions applicable
               to the allotment of the Shares or in a resolution of the General Meeting,
all                the dividends or Bonus Shares with respect to Shares, which were not
fully paid                within the period in which the dividends or Bonus Shares are
paid, shall be paid                in proportion to the amounts which were actually paid
or credited as paid on the                par value of the Shares during any part of said
period (pro rata temporis).
| | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.2. | Resolution
of the Company with Respect to a Dividend or Bonus Shares
| | ----- | --------------------------------------------------------------------

| | 31.2.1. | The
Authority to Distribute Dividends or Bonus Shares
| | ------- | -----------------------------------------------------

| | The
resolution of the Company on the distribution of a dividend or Bonus Shares to be
distributed to the Shareholders according to their respective rights and benefits, and on
their time of payment, shall be made by the General Meeting, after the recommendation of
the Board of Directors is presented. The General Meeting may accept the recommendation or
diminish the amount, but it is not entitled to increase it, provided in each case the
distribution is a permitted distribution, as specified in Article 30.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.2.2. | Funds
| | ------- | -----

| | The
Board of Directors may, in its discretion, allocate to special funds any amount
whatsoever from the profits of the Company or from the revaluation of its assets or its
relative share in the revaluation of assets of branch companies, and also to
determine the designation of these funds.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.3. | The
Payment of Dividends
| | ----- | ------------------------

| | 31.3.1. | Manner
of Payment
| | ------- | -----------------

| | Unless
otherwise provided in the resolution with respect to the distribution of the dividend,
the Company may pay any dividend with the withholding of any tax required by Law, by way
of a cheque to the order of the beneficiary alone, which should be sent by means of
registered mail to the registered address of the Shareholder entitled thereto, or by way
of a bank transfer. Any cheque, as stated, shall be drawn up to the order of the person
to whom it is intended.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

45

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| | In
the event of registered joint holders, the cheque shall be passed to the same Shareholder
whose name is registered first in the Shareholder Register with respect to the joint
holding.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
sending of a cheque to a person whose name is registered in the Shareholder Register as
the holder of the Share upon the Determining Date or, in the case of joint holders, to
any of the joint holders, shall serve as evidence with respect to all the payments made
in connection with same Shares.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company may decide that a cheque under a certain amount shall not be sent and the amount
of the dividend which was supposed to be paid shall be deemed to be an unclaimed dividend.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.3.2. | An
Unclaimed Dividend
| | ------- | ---------------------

| | The
Board of Directors is entitled to invest the amount of any unclaimed dividend for one
year after it was declared or to utilize it in any other manner to the benefit of the
Company until it is claimed. The Company shall not be obligated to pay interest or
Linkage on an unclaimed dividend.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.3.3. | Specific
Dividend
| | ------- | -----------------

| | In
the event the Company declares a dividend, as provided in Article 31.2.1 above, it may
decide that same dividend shall be paid, entirely or partially, by way of the
distribution of certain assets, including fully paid Shares or bonds of any other company
or in any combination of these assets.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.4. | Manner
of Capitalization of Profits and the Distribution of Bonus Shares
| | ----- | ------------------------------------------------------------------------

| | 31.4.1. | Subject
to the provisions of Article 30 above in the event of a capitalization                of
profits and distribution of Bonus Shares, the undistributed profits of the
               Company, or premium on Shares, or funds derived from the revaluation of
the                assets of the Company, or funds derived on the basis of equity from
the profits                of branch companies, or from the revaluation of
assets of                branch companies and capital redemption funds shall
be capitalized                and distributed among the Shareholders entitled thereto, as
per the provisions                of Article 31.1 above, to be held by the shareholders
as capital, and that this                capital, entirely or partially, shall be used on
behalf of same Shareholders as                full payment, whether according to the par
value of the Shares or together with                premium decided upon, for Shares to
be distributed accordingly, and that this                distribution or payment shall be
received by same Shareholders as full                consideration for their portion of
the benefit in the capitalized amount, as                determined by the Board of
Directors.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

46

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| | The
provisions of this chapter six shall also apply to the distribution of bonds.
| | ---------------------------------------------------------------------------------

| | 31.4.2. | The
Company, in the resolution with respect to the distribution of Bonus Shares,           is
entitled in accordance with the recommendation of the Board of Directors, to
          decide that the Company shall transfer to a special fund, designated for the
          future distribution of Bonus Shares, an amount the capitalization of which
shall           be sufficient in order to allot to anyone having at such time a right to
acquire           Shares of the Company (including a right which can be exercised only
upon a           later date), Bonus Shares at the par value which would have been due to
him had           he exercised the right to acquire the Shares shortly before the
Determining           Date, at the price of the right in effect at such time. In the
event that after           the Determining Date, the holder of said right shall exercise
his right to           acquire the Shares or any part of them, the Board of Directors
shall allot to           him fully paid Bonus Shares at such par value and of such class,
which would           have been due to him had he exercised shortly before the
Determining Date the           right to acquire those Shares he actually acquired, by way
of an appropriate           capitalization made by the Board of Directors out of the
special fund, as           aforesaid. For the purpose of the determination of the par
value of the Bonus           Shares which are to be distributed, any amount transferred
to the special fund,           with respect to a previous distribution of previous Bonus
Shares shall be viewed           as if it had already been capitalized and that Shares
entitling the holders to           the right to acquire Shares of the Company were
already allotted as Bonus           Shares.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.4.3. | Upon
the distribution of Bonus Shares, each Shareholder of the Company shall           receive
Shares of a uniform class or of the class which confers on its holder           the right
to receive the Bonus Shares, as determined by the Board of Directors.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.4.4. | For
purposes of carrying out any resolution pursuant to the provisions of           Article
30, the Board of Directors may settle, as it deems fit, any difficulty           arising
with regard to the distribution of Bonus Shares, and, in particular, to           issue
certificates for fractions of Shares and sell such fractions of Shares, in
          order to pay their consideration to those entitled thereto, and also to set the
          value for the distribution of certain assets and to decide that cash payments
          shall be paid to the Shareholders on the basis of the value determined in such
a           way, or that fractions whose value is less than NIS 0.01 shall not be taken
into           account, pursuant to the adjustment of the rights of all parties. The
Board of           Directors may pay cash or convey these certain assets to trustees in
trust in           favor of those people who are entitled to a dividend or to a
capitalized fund,           as the Board of Directors shall deem beneficial.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

47

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|32. | Acquisition
of Shares
|--- | ---------------------

| | 32.1. | The
Company is entitled to acquire or to finance an acquisition, directly or
          indirectly, of Shares of the Company or securities convertible into Shares of
          the Company or which could be exercised into Shares of the Company, including
          incurring an obligation to take any of these actions, subject to the
fulfillment           of the conditions of a permissible distribution, as stated in
Article 30 above.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 32.2. | In
the event that the Company acquired any of its Shares, such a Share shall
          become a dormant Share, and shall not confer any rights, so long as it is in
the           holding of the Company.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 32.3. | A
subsidiary or another corporation in the control of the Company is entitled to
          acquire Shares of the Company or securities convertible into Shares of the
          Company or which can be exercised into Shares of the Company, including an
          obligation to take any of these actions, to the same extent the Company may
make           a distribution, so long as the board of directors of the subsidiary or the
          managers of the acquiring corporation have determined that had the acquisition
          of the Shares been carried out by the Company it would have been regarded as a
          permissible distribution, as specified in Article 30 above. Notwithstanding the
          foregoing, an acquisition by a subsidiary or by another corporation in the
          control of the Company, which is not fully-owned by the Company, will be
          considered a distribution of an amount equal to the product of the amount
          acquired multiplied by the percentage of the rights in the capital of the
          subsidiary or in the capital of said corporation which is held by the Company.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 32.4. | In
the event that a Share of the Company is acquired by a subsidiary or by a
          corporation in the control of the Company, the Share shall not confer any
voting           rights, for so long as said Share is held by the subsidiary or by said
          controlled corporation.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Chapter Seven 
Insurance, Indemnification and Release of Officers

|33. | Insurance
of Officers
|--- | ---------------------

| | 33.1. | The
Company shall not insure the liability of an officer in the Company, other           than
pursuant to the provisions of this Article.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------

| | 33.2. | The
Company may enter into an insurance contract or arrange and pay all premiums           in
respect of an insurance contract, for the insurance of the liability of an
          officer in the Company, resulting from the consequence of an action by him in
          his capacity as an officer in the Company, for any of the following:
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 33.2.1. | The
breach of the duty of care toward the Company or toward any other person;
| | ------- | -----------------------------------------------------------------------------

| | 33.2.2. | The
breach of the duty of loyalty toward the Company provided the officer has           acted
in good faith and had reasonable grounds to assume that the action would           not
harm the Company; and
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 33.2.3. | A
financial liability imposed on him in favor of another person.
| | ------- | ----------------------------------------------------------------

| | 33.3. | The
Company shall not enter into a contract for the insurance of the liability           of
an officer in the Company for any of the following:
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------

| | 33.3.1. | The
breach of the duty of loyalty toward the Company, unless the officer acted           in
good faith and had reasonable grounds to assume that the action would not           harm
the Company;
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 33.3.2. | The
breach of the duty of care made intentionally or recklessly           (pezizut),
unless otherwise permitted by law;
| | ------- | -------------------------------------------------------------------------------------------------------------------------

| | 33.3.3. | An
intentional act intended to unlawfully yield a personal profit;
| | ------- | ------------------------------------------------------------------

| | 33.3.4. | A
criminal fine or a penalty imposed on him.
| | ------- | --------------------------------------------

|34. | Indemnification
of Officers
|--- | ---------------------------

| | 34.1. | The
Company shall not indemnify an officer in the Company, other than pursuant           to
the provisions of this Article.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------

| | 34.2. | Indemnification
in Advance
| | ----- | --------------------------

| | The
Company may undertake in advance to indemnify an officer of the Company, provided the
undertaking is restricted to events of a kind which the Board of Directors believes can
be anticipated at the time of the making of the indemnification undertaking, with the
exception of the events stated in Article 33.3 above, and at an amount that the Board of
Directors determines is reasonable in the circumstances.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 34.3. | Indemnification
after the Fact
| | ----- | ------------------------------

| | The
Company may indemnify an officer in the Company for all kinds of events, retrospectively,
with the exception of the events specified in Article 33.3 above.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 34.4. | The
Company may indemnify an officer in the Company for liability or expense he
          incurs in consequence of an action made by him in the capacity of his position
          as an officer in the Company, as follows:
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

49

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| | 34.4.1. | Any
financial liability imposed on him in favor of another person in accordance
          with a judgment, including a judgment given in a settlement or a judgment of an
          arbitrator, approved by the Court.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 34.4.2. | Reasonable
litigation expenses, including legal fees, incurred by the officer or           which he
was ordered to pay by the Court, within the framework of proceedings           filed
against him by the Company or on its behalf or by another person, or in a
          criminal proceeding in which he was acquitted, or in a criminal proceeding in
          which he was convicted of a felony which does not require a finding of criminal
          intent.
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|35. | Release
of Officers
|--- | -------------------

| | 35.1. | The
Company shall not release an officer from his liability for a breach of the
          duty of care toward the Company, other than in accordance with the provisions
of           this Article.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 35.2. | The
Company may release an officer in the Company, in advance, from his           liability,
entirely or partially, for damage in consequence of the breach of the           duty of
care toward the Company.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 35.3. | Notwithstanding
the foregoing, the Company may not release an officer from his           liability,
resulting from any of the following events:
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------

| | 35.3.1. | The
breach of the duty of loyalty toward the Company.
| | ------- | -----------------------------------------------------

| | 35.3.2. | The
breach of the duty of care made intentionally or recklessly           (pezizut);
| | ------- | --------------------------------------------------------------------------------------

| | 35.3.3. | An
intentional act intended to unlawfully yield a personal profit;
| | ------- | ------------------------------------------------------------------

| | 35.3.4. | A
criminal fine or a penalty imposed on him.
| | ------- | --------------------------------------------

# Chapter Eight 
Liquidation and Reorganization of the Company

|36. | Liquidation
|--- | -----------

| | 36.1. | In
the event that the Company is liquidated, whether voluntarily or otherwise,           the
liquidator, upon the approval of an Extraordinary Meeting, may make a
          distribution in kind to the Shareholders of all or part of the property of the
          Company, and he may with a similar approval of the General Meeting, deposit any
          part of the property of the Company with trustees in favor of the Shareholders,
          as the liquidator with the aforementioned approval, deems fit.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 36.2. | The
Shares of the Company shall confer equal rights among them with respect to
          capital amounts which were paid or which were credited as paid on the par value
          of the Shares, in all matters pertaining to the refund of the capital and to
the           participation in the distribution of the balance of the assets of the
Company in           liquidation.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

50

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|37. | Reorganization
|--- | --------------

| | 37.1. | Upon
the sale of the property of the Company, the Board of Directors or the
          liquidators (in case of a liquidation), if they are so authorized by a
          resolution of the General Meeting of the Company adopted with a Special
          Majority, may receive fully or partially paid up Shares, bonds or securities of
          another company, either Israeli or foreign, whether incorporated or which is
          about to incorporated for the purpose of acquiring property of the Company, or
          any part thereof, and the Directors (if the profits of the Company allow for
it)           or the liquidators (in case of a liquidation) may distribute among the
          Shareholders the Shares or the securities mentioned above or any other property
          of the Company without selling them or depositing them with trustees on behalf
          of the Shareholders.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 37.2. | The
General Meeting may, pursuant to a resolution adopted by a Special Majority,
          decide on the valuation of the securities or of the aforementioned property at
a           price and in the same manner as it deems appropriate and all the Shareholders
          shall be obligated to accept any valuation or distribution, authorized in
          accordance with the foregoing and to waive their rights in this matter, unless
          the Company is about to liquidate or is in a liquidation process, of same
lawful           rights (if any) which according to the provisions of the Law should not
be           altered or denied.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Chapter Nine 
Miscellaneous

|38. | Notices
|--- | -------

| | 38.1. | A
notice or other document may be sent by the Company to any Shareholder
          appearing in the Shareholder Register of the Company either personally or by
way           of sending by registered mail, at the registered address of the Shareholder
in           the Shareholder Register, or at such address as the Shareholder shall have
          provided in writing to the Company as the address for the delivery of notices.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 38.2. | All
the notices to be given to Shareholders, shall, in respect of Shares held
          jointly, be given to the person whose name is mentioned first in the
Shareholder           Register, and any notice given in such a manner shall be viewed as
a sufficient           notice to all the joint Shareholders.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 38.3. | Any
Shareholder registered in the Shareholder Register, with an address, whether           in
Israel or overseas, is entitled to receive, at such address, any notice he is
          entitled to receive in accordance with the Articles of Association or according
          to the provisions of the Law. Unless otherwise stated above, no person who is
          not registered in the Shareholder Register shall be entitled to receive any
          notices from the Company.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 38.4. | Any
notice or other document which is sent to a Shareholder in accordance with
          these Articles of Association shall be considered lawfully sent with respect to
          all the Shares held by him (whether with respect to Shares held by him alone or
          held by him jointly with others) even if same Shareholder had died by that time
          or had become bankrupt or had received an order for its liquidation or if a
          trustee or a liquidator or a receiver was appointed with respect to his Shares
          (whether the Company was aware of it or not) until another person is registered
          in the Shareholder Register in his stead, as the holder thereof. The sending of
          a notice or other document, as aforesaid, shall be viewed as a sufficient
          sending to any person having a right in these Shares.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

51

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| | 38.5. | Any
notice or other document which was sent by the Company via registered mail,           to
an address in Israel, shall be considered sent within 72 hours from its           posting
at the post office. In order to prove sufficient sending, it is enough           to show
that the letter containing the notice or the document was addressed to           the
correct address and was posted at the post office.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 38.6. | Any
accidental omission with respect to the giving of a notice of a General           Meeting
to any Shareholder or the non-receipt of a notice with respect to a           meeting or
any other notice on the part of whatever Shareholder shall not cause           the
cancellation of a resolution taken at that meeting, or the cancellation of
          processes based on such notice.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 38.7. | Any
Shareholder and any member of the Board of Directors may waive his right to
          receive notices or waive his right to receive notices during a specific time
          period and he may consent that a General Meeting of the Company or a meeting of
          the Board of Directors, as the case may be, shall be convened and held
          notwithstanding the fact that he did not receive a notice with respect to it,
or           notwithstanding the fact that the notice was not received by him within the
          required time, in each case subject to the provisions of any Law prohibiting
any           such waiver or consent.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Chapter
10-Transitional Rules until the Companies Law shall be Effective.

|39. | Applicability
|--- | -------------

| | The
provisions of this chapter shall apply solely during the period commencing on the day on
which the Articles of Association shall be effective until the day on which the Companies
Law shall be effective (hereinafter the Transitional Period).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following provisions shall not apply during the Transitional Period:
| | ------------------------------------------------------------------------

| | 39.1. | Article
14.2-titled The General Meetings authority to transfer           authority
between the organs
| | ----- | --------------------------------------------------------------------------------------------------------

| | 39.2. | Article
28.2-titled Internal Controller
| | ----- | -----------------------------------------

| | 39.3. | Article
32-titled Purchase of the Companys Shares
| | ----- | ----------------------------------------------------

52

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|40. | Indemnification of
Officers
|--- | ---------------------------

| | Notwithstanding
the provisions of Article 34 above, during the Transitional Period Article 34 shall read
as follows:
| | --------------------------------------------------------------------------------------------------------------------

| | 34 | Indemnification of Officers
| | --- | -----------------------------

| | 34.1 | The
Company is entitled to indemnify an Officer of the Company and/or an employee of the
Company for one of the following:
| | ---- | --------------------------------------------------------------------------------------------------------------------------

| | 34.1.1 | Financial
liability imposed by judgment upon him for the benefit of a third party, including a
settlement or arbitration decision certified by the Court, as a result of an act or
omission committed by him in his capacity as an officer and/or employee of the Company.
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 34.1.2 | Reasonable
litigation fees, including attorneys fees, incurred by the officer and/or the
employee of the Company or imposed upon him by a court, in a proceeding initiated against
him by the Company or in its name or by another person, or in a criminal proceeding from
which he is acquitted, provided that any such proceeding related to an act or omission
committed by him in his capacity as an officer and/or employee of the Company.
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 34.2 | These
instructions are not intended nor will they be intended to limit the Company in any way
in respect of the Company entering into an insurance contract and/or an indemnification
agreement:
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 34.2.1 | In
respect of anyone who is not an officer of the Company, including employees, contractors
or consultants of the Company who are not officers of the Company.
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 34.2.2 | In
respect of officers of the Company in the event that the insurance and/or the
indemnification are not explicitly forbidden by any law.
| | ------ | ------------------------------------------------------------------------------------------------------------------------------------------

|41. | Exemption
for Officers
|--- | ----------------------

| | The
words made intentionally or recklessly (pezizut) in Article
35.3.2 above shall not apply.
| | -------------------------------------------------------------------------------------------------

| | The
rules of the second schedule of the Companies Ordinance will not apply both during the
Transitional Period and thereafter, including with respect to matters that have not been
dealt with in the Articles of Association.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

53

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|42. | Interpretation
|--- | --------------

| | During
the Transitional Period, all of the provisions and/or definitions in the Articles of
Association that are incompatible with cognitive rules of the Companies Ordinance will be
cancelled and the rules of the Companies Ordinance shall apply.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Chapter 11 
Compliance with the License / Limitations on Ownership and Control

|43. | Compliance
|--- | ----------

| | The
Shareholders shall at all times comply with the terms of the License. Nothing herein
shall be construed as requiring or permitting the performance of any acts which are
inconsistent with the terms of the License. If any article of these Articles shall be
found to be inconsistent with the terms of the License, the provisions of such article
shall be null and void, but the validity, legality or enforceability of provisions of the
other Articles shall not be affected thereby.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|44. | Limitations
on Ownership and Control
|--- | ------------------------------------

| | 44.1. | This
Article is to ensure that so long as and to the extent that any Operating           Right
is conditional on or subject to any conditions or restrictions relating to
          ownership or control over the Company imposed by the Ministry, the Company is
so           owned and controlled. This Article shall not affect or influence in any way
the           interpretation or application of Article 10A.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.2. | In
this Article:
| | ----- | ----------------

| | Affected
Share means any Share determined to be dealt with as such pursuant to Article
44.4;
| | ----------------------------------------------------------------------------------------------

| | Affected
Share Notice means a notice in writing served in accordance with Article 44.5;
| | -----------------------------------------------------------------------------------------

| | Depositarymeans
a custodian or other person appointed under contractual arrangements with the Company (or
a nominee for such custodian or other person) whereby such custodian or other person
holds or is interested in Shares and which issues securities evidencing the right to
receive such Shares;
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Depositary
Receipts means receipts or similar documents of title issued by or on behalf of
a Depositary;
| | ----------------------------------------------------------------------------------------------------------

| | Depositary
Shares means the Shares held by a Depositary or in which a Depositary is
interested in its capacity as a Depositary;
| | ---------------------------------------------------------------------------------------------------------------------------------

54

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| | Intervening
Act means the refusal, withholding, suspension or revocation of any Operating
Right applied for, granted to or enjoyed by the Company, or the imposition of any
conditions or limitations upon any such Operating Right which materially inhibit the
exercise thereof, in either case by any state, authority or person (including the
Ministry) by reason of the activities of persons holding Shares in and/or controlling the
Company;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ministrymeans
the Ministry of Communications and/or Minister of Communications;
| | ---------------------------------------------------------------------------------

| | Operating
Right means all or any part of any authority, permission, licence or privilege
applied for, granted to or enjoyed by the Company, including the Licence, for the
establishment, subsistence, maintenance and operation of a mobile radio telephone system
using the cellular method and the provision of mobile radio telephone services to the
public in Israel;
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Permitted
Maximum means the maximum aggregate permitted number of Relevant Shares
specified by the Board of Directors in accordance with the terms of the Licence, any
other requirements of the Ministry and any relevant requirements of Law;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Relevant
Person  means:
| | -------------------------

| | (a) | any
person who, without the approval of the Ministry, acquires, directly or
               indirectly, any Means of Control (as defined in the Licence) in breach of
               Section 21 of the Licence other than a person who falls within Article
10A; or
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | any
Interested Party (as defined in the Licence) who, or who has an Officer
               Holder (as defined in the Licence) who, is in breach of Sections 23 or 24
of the                Licence other than a person who falls within Article 10A;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Relevant
Share means any Share (other than a Share removed from the Relevant Shares
Register (defined in Article 44.3.2) pursuant to Article 44.3.5), in which a Relevant
Person has an interest or which is declared to be a Relevant Share pursuant to Article
44.3.4;
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.3. | 
| | ----- | 

| | 44.3.1. | The
Board of Directors shall not register a person as a holder of a Share unless
               the person has given to the Board of Directors a declaration (in a form
               prescribed by the Board of Directors) signed by him or on his behalf,
stating                his name, nationality, that he is not a Relevant Person falling
within                paragraphs (c) or (d) of the definition of that term and other
information                required by the Board of Directors.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

55

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| | 44.3.2. | The
Board of Directors shall maintain a register (the Relevant Shares
               Register), in which shall be entered particulars of any Share which
has                been:
| | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (a) | acknowledged
by the holder (or by a joint holder) to be a Relevant Share;
| | --- | -------------------------------------------------------------------------

| | (b) | declared
to be a Relevant Share pursuant to Article 44.3.4; or
| | --- | --------------------------------------------------------------

| | (c) | determined
to be an Affected Share pursuant to Article 44.4.2.;
| | --- | ---------------------------------------------------------------

| | and
which has not ceased to be a Relevant Share. The particulars in the Relevant Shares
Register in respect of any Share shall include the identity of the holder or joint
holders and information requested by and supplied to the Board of Directors.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.3.3. | Each
registered holder of a Share which has not been acknowledged to be a           Relevant
Share who becomes aware that such Share is or has become a Relevant           Share shall
forthwith notify the Company accordingly.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.3.4. | The
Board of Directors may notify in writing the registered holder of a Share           which
is not in the Relevant Shares Register and appears to be a Relevant Share,
          requiring him to show that the Share is not a Relevant Share. Any person to
whom           such notice has been issued may within 21 clear days after the issue of
the           notice (or such longer period as the Board of Directors may decide)
represent to           the Board of Directors why such Share should not be treated as a
Relevant Share           but if, after considering such representations and other
relevant information,           the Board of Directors is not so satisfied, it shall
declare such Share to be a           Relevant Share and treat it as such.
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.3.5. | The
Board of Directors shall remove a Relevant Share from the Relevant Shares
          Register if the holder of the Relevant Share gives to the Board of Directors a
          declaration (in a form prescribed by the Board of Directors), together with
such           other evidence as the Board of Directors may require, which satisfies it
that           such Share is no longer, or should not be treated, as a Relevant Share.
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.4. | 
| | ----- | 

| | 44.4.1. | Article
44.4.2 shall apply for so long as the Company holds or enjoys any           Operating
Right where the Board of Directors determines that it is necessary to           take
steps to protect any Operating Right because an Intervening Act is
          contemplated, threatened or intended, may take place or has taken place;
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

56

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| | 44.4.2. | Where
a determination has been made under Article 44.4.1, the Board of Directors
          shall take such of the following steps as they consider necessary or desirable
          to overcome, prevent or avoid an Intervening Act:
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.4.2.1. | the
Board of Directors may remove any Director from office, by a resolution           passed
by a majority of 75 per cent or more of the other Directors present and           voting
at the relevant meeting;
| | --------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.4.2.2. | the
Board of Directors may seek to identify those Relevant Shares which gave           rise
to the determination under Article 44.4.1 and by a resolution passed by a
          majority of 75 per cent or more of the Directors present and voting at the
          relevant meeting deal with such Shares as Affected Shares; and
| | --------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.4.2.3. | when
the aggregate number of Relevant Shares in the Relevant Shares Register           exceeds
the Permitted Maximum, the Board of Directors may deal with the Relevant           Shares
which it decides, by a resolution passed by a majority of 75 per cent or           more
of the Directors present and voting at the relevant meeting, are in excess           of
the Permitted Maximum as Affected Shares.
| | --------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.5. | The
Board of Directors shall give an Affected Share Notice to the registered           holder
of any Affected Share and state that Article 44.6 is to be applied           forthwith in
respect of such Affected Share. The registered holder of the           Affected Share may
within 21clear days after the issue of the notice (or such           longer period as the
Board of Directors may decide) represent to the Board of           Directors why such
Share should not be treated as an Affected Share and if,           after considering such
representations and other relevant information, the Board           of Directors
considers that the Share should not be treated as an Affected Share           it shall
forthwith withdraw the Affected Share Notice and Article 44.6 shall no           longer
apply to the Share.
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.6. | An
Affected Share in respect of which an Affected Share Notice has been served
          shall be treated as a dormant share (as defined in section 308 of the Companies
          Law) except that the registered holder of the Affected Share shall continue to
          have the right to receive dividends and other distributions of the Company and
          participate in bonus or rights issues of the Company in respect of such Share.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

57

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| | 44.7. | In
deciding which Shares are to be treated as Affected Shares, the Board of
          Directors shall have regard to the Relevant Shares which in its opinion have
          directly or indirectly caused the determination under Article 44.4 and the
          chronological order in which Relevant Shares have been entered in the Relevant
          Shares Register (and accordingly treat as Affected Shares those Relevant Shares
          entered in the Relevant Shares Register most recently) except where such
          criterion would in their opinion be inequitable, in which event the Board of
          Directors shall apply such other criterion or criteria as they may consider
          appropriate.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.8. | Subject
to the other provisions of this Article 44, the Board of Directors shall           be
entitled to assume without enquiry that:
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------

| | 44.8.1. | all
Shares not in the Relevant Shares Register and not falling within clause           44.8.2
are neither Relevant Shares nor Shares which would be or be capable of           being
treated as Affected Shares; and
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.8.2. | all
or some specified number of the Shares are Relevant Shares falling within
          paragraphs (a)-(b) in the definition of that term if they (or interests in
them)           are held by a Depositary, trustee, registration or nominee company or
other           agent unless and for so long as, in respect of any such Shares, it is
          established to their satisfaction that such Shares are not Relevant Shares.
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.9. | Any
resolution or determination of, or any decision or the exercise of any
          discretion or power by, the Board of Directors or any one of the Directors
under           this Article 44 shall be final and conclusive.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.10. | 
| | ------ | 

| | 44.10.1. | On
withdrawal of the determination under Article 44.4.1, the Board of Directors
          shall cease to act pursuant to such determination and inform every person on
          whom an Affected Share Notice has been served that Article 44.6 no longer
          applies in respect of such Share. The withdrawal of such a determination shall
          not affect the validity of any action taken by the Board of Directors under
this           Article whilst that determination remained in effect and such actions
shall not           be open to challenge on any ground whatsoever.
| | -------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | 44.10.2. | The
Board of Directors shall, so long as it acts reasonably and in good faith,           be
under no liability to the Company or to any other person for failing to treat
          any Share as an Affected Share or any person as a Relevant Person in accordance
          with this Article and it shall not be liable to the Company or any other person
          if, having acted reasonably and in good faith it determines erroneously that
any           Share is an Affected Share, or any person is a Relevant Person or on the
basis           of such determination or any other determination or resolution, they
perform or           exercise their duties, powers, rights or discretions under this
Article in           relation to such Share.
| | -------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 44.11. | A
person who has an interest in Shares by virtue of having an interest in
          Depositary Receipts shall be deemed to have an interest in the number of Shares
          represented by such Depositary Receipts and not (in the absence of any other
          reason why he should be so treated) in the remainder of the Depositary Shares
          held by the relevant Depositary.
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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